U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly Period Ended March 31, 2000
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
----------------- -------------------
Commission File Number: 000-26271
First Capital International, Inc.
(Name of small business issuer in its charter)
Delaware 76-0582435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5120 Woodway, Suite 9004, Houston, Texas 77056
(address of principal executive offices)
Issuer's telephone number: (713) 629-4866
Issuer's fax number: (713) 629-4913
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 2, 2000, 72,634,742 shares of common stock.
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Condensed Balance Sheet as of December 31,
1999 and March 31, 2000
Consolidated Condensed Statement of Operations for the
three months ended March 31, 2000 and 1999
Consolidated Condensed Statement of Stockholders' Equity
for the three months ended March 31, 2000
Consolidated Condensed Statement of Cash Flows for the
three months ended March 31, 2000 and 1999
Selected Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation
PART II - OTHER INFORMATION
Item 2. Changes in Securities
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST CAPITAL INTERNATIONAL, INC.
------------
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
F-1
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
TABLE OF CONTENTS
-------------
PAGE(S)
-------
Unaudited Condensed Consolidated Financial
Statements:
Condensed Consolidated Balance Sheet as of
March 31, 2000 and December 31, 1999 F-3
Unaudited Condensed Consolidated Statement
of Operations for the three months ended
March 31, 2000 and 1999 F-4
Unaudited Condensed Consolidated Statement
of Stockholders' Deficit for the three
months ended March 31, 2000 F-5
Unaudited Condensed Consolidated Statement
of Cash Flows for the three months ended
March 31, 2000 and 1999 F-6
Selected Notes to Unaudited Consolidated
Condensed Financial Statements F-7
F-2
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
-------------
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
ASSETS (UNAUDITED) (NOTE)
------ ----------- ---------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 280,760 $ 115,838
Short-term investments 18,750 15,650
Lease receivables, net 66,934 79,813
Inventory 33,230 35,457
Other 23,542 22,898
------------ ------------
Total current assets 423,216 269,656
Lease receivables 93,392 111,155
Accounts and notes receivable, net 10,648 13,624
Property and equipment, net 11,655 13,202
------------ ------------
Total assets $ 538,911 $ 407,637
------------ ------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
- -------------------------------------
Current liabilities:
Note payable to a related party $ 14,615 $ 11,372
Accounts payable and accrued liabilities 4,419 40,846
------------ ------------
Total current liabilities 19,034 52,218
Long-term debt to a related party 333,641 333,641
------------ ------------
Total liabilities 352,675 385,859
------------ ------------
Commitments and contingencies
Stockholders' deficit:
Common stock, $0.001 par value; 100,000,000
shares authorized; 72,431,142 and 70,061,142
shares issued and outstanding at March 31,
2000 and December 31, 1999, respectively 72,431 70,061
Additional paid-in capital 3,107,001 2,794,371
Accumulated deficit (2,970,628) (2,820,817)
Accumulated foreign currency translation
adjustments (22,568) (21,837)
------------ ------------
Total stockholders' equity (deficit) 186,236 21,778
------------ ------------
Total liabilities and stockholders'
equity (deficit) $ 538,911 $ 407,637
------------ ------------
</TABLE>
Note: The consolidated balance sheet at December 31, 1999 has been derived from
the audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. See accompanying notes.
F-3
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
-----------
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
2000 1999
------------ ------------
(RESTATED)
Revenue:
<S> <C> <C>
Merchandise sales $ 15,960 $ -
Interest income 15,560 10,470
Other operating revenue 682 2,476
------------ ------------
Total revenue 32,202 12,946
------------ ------------
Costs and expenses:
Cost of merchandise sales 6,387 -
Operating, general and administrative
expenses 157,068 65,656
Stock and option based compensation 10,000 320,850
Depreciation and amortization 1,547 2,057
Interest expense 7,011 128,770
Other expense, net - 2,863
------------ ------------
Total costs and expenses 182,013 520,196
------------ ------------
Net loss $ (149,811) $ (507,250)
------------ ------------
Basic and dilutive net loss per
common share $ (0.00) $ (0.01)
------------ ------------
Weighted average shares
outstanding 70,891,802 61,107,031
------------ ------------
</TABLE>
See accompanying notes.
F-4
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2000
----------
(UNAUDITED)
<TABLE>
<CAPTION>
FOREIGN
ADDITIONAL CURRENCY COMPREHENSIVE
COMMON PAID-IN ACCUMULATED TRANSLATION INCOME
STOCK CAPITAL DEFICIT ADJUSTMENT (LOSS)
--------- ------------ ------------- --------- ------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1999 $ 70,061 $ 2,794,371 $ (2,820,817) $(21,837) $(2,807,413)
Net loss - - (149,811) - (149,811)
Other comprehensive income-
foreign currency transla-
tion adjustment - - - (731) (731)
------------
Comprehensive income - - - - (150,542)
------------
Common stock issued,
(2,370,000 shares) 2,370 312,630 - - -
--------- ------------ ------------- --------- ------------
Balance at March 31, 2000 $ 72,431 $ 3,107,001 $ (2,970,628) $(22,568) $(2,957,955)
--------- ------------ ------------- --------- ------------
</TABLE>
See accompanying notes.
F-5
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
2000 1999
--------- ---------
(RESTATED)
<S> <C> <C>
Cash flows from operating activities $(27,288) $(12,840)
--------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock 305,000 42,104
Proceeds from notes payable to a
related party 3,243 -
--------- ---------
Net cash provided by financing
activities 308,243 42,104
--------- ---------
Effects of exchange rate changes on cash (195) 808
--------- ---------
Net increase in cash and cash equivalents 164,922 30,072
Cash and cash equivalents, beginning
of period 115,838 61,467
--------- ---------
Cash and cash equivalents, end of period $280,760 $ 91,539
--------- ---------
Non-cash investing and financing activities:
Conversion of note payable to a related
party to common stock $ - $186,000
--------- ---------
</TABLE>
See accompanying notes.
F-6
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-----------
1. INTERIM FINANCIAL STATEMENTS
------------------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month periods ended March 31,
2000 and 1999 are not necessarily indicative of the results that may be expected
for the respective full years.
A summary of the Company's significant accounting policies and other information
necessary to understand these consolidated interim financial statements is
presented in the Company's audited financial statements for the years ended
December 31, 1999 and 1998. Accordingly, the Company's audited financial
statements should be read in connection with these financial statements.
2. RESTATEMENT OF FINANCIAL STATEMENTS
--------------------------------------
During the three months ended March 31, 1999, the Company issued 22,000 shares
of its common stock for services at prices representing a discount from the
quoted market price of the Company's common stock at the dates of issue. The
Company also issued 300,000 non-qualified compensatory stock options for shares
of its common stock and convertible debt with a beneficial conversion feature.
The stock options bear exercise prices that represent a discount from the quoted
market price of the Company's common stock at the date of issue. The fair value
of the Company's common stock, for purposes of determining compensation expense
associated with stock and stock options and the value of the beneficial
conversion feature associated with convertible debt, was determined based upon
quoted market prices in an inactive market with discounts for trading
restrictions on such shares and a thin market for the Company's common stock.
Generally accepted accounting principles do not allow for such discounts from
the quoted market price.
The effect of correcting this error in application of generally accepted
accounting principles on the Company's financial statements at March 31, 1999
and for the three months then ended, was as follows:
F-7
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-----------
2. RESTATEMENT OF FINANCIAL STATEMENTS, CONTINUED
--------------------------------------------------
Decrease in total assets $ -
----------
Decrease in total liabilities $ -
----------
Increase in common and preferred stock
and additional paid-in capital $ 352,135
----------
Increase in accumulated deficit $ (352,135)
----------
Increase in net loss $ (352,135)
----------
Increase in basic and dilutive net
loss per common share $ (0.01)
----------
3. INCOME TAXES
-------------
The difference between the 34% federal statutory income tax rate shown in the
accompanying interim financial statements is primarily attributable to an
increase in the valuation allowance applied against the tax benefit from
utilization of net operating loss carryforwards.
4. STOCKHOLDERS' EQUITY
---------------------
During the three months ended March 31, 2000, the Company issued shares of
common stock and had other increases to stockholders' equity as follows:
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN
STOCK CAPITAL TOTAL
-------- -------- --------
<S> <C> <C> <C>
Common stock issued for cash
(2,350,000 shares) $ 2,350 $302,650 $305,000
Compensation recognized on
common stock issued to of-
ficers or employees at
below market value (20,000
shares) 20 9,980 10,000
-------- -------- --------
Total $ 2,370 $312,630 $315,000
-------- -------- --------
</TABLE>
5. SEGMENT AND GEOGRAPHIC INFORMATION
-------------------------------------
The Company currently operates in the equipment and real estate direct financing
lease business but is actively seeking qualified businesses to acquire. The
Company's two reportable segments are based upon geographic area and type of
business. All of the Company's foreign operations are currently conducted by
EIP in Estonia. EIP operates with the Estonian kroon as its functional
currency.
The corporate component of operating loss represents corporate general and
administrative expenses and expenses incurred in developing the Company's
internet site. Corporate assets include cash and cash equivalents.
F-9
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
5. SEGMENT AND GEOGRAPHIC INFORMATION, CONTINUED
-------------------------------------------------
Following is a summary of segment information:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
2000 1999
-------------- ----------
(RESTATED)
Net Revenue:
<S> <C> <C>
United States - Corporate $ 17,117 $ -
Estonia - Leasing 15,085 12,946
-------------- ----------
Total net revenue $ 32,202 $ 12,946
-------------- ----------
Loss from operations:
United States - Corporate $ (141,829) $(502,702)
Estonia - Leasing (7,982) (4,548)
-------------- ----------
Total loss from operations $ (149,811) $(507,250)
-------------- ----------
MARCH 31, DECEMBER 31,
2000 1999
-------------- ----------
Assets:
United States - Corporate $ 278,885 $ 108,446
Estonia - Leasing 260,026 299,191
-------------- ----------
Total assets $ 538,911 $ 407,637
-------------- ----------
</TABLE>
F-10
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FORWARD-LOOKING STATEMENT AND INFORMATION
The Company is including the following cautionary statement in this Form
10-QSB to make applicable and take advantage of the safe harbor provision of the
Private Securities Litigation Reform Act of 1995 for any forward-looking
statements made by, or on behalf of, the Company. Forward-looking statements
include statements concerning plans, objectives, goals, strategies,
expectations, future events or performance and underlying assumptions and other
statements which are other than statements of historical facts. Certain
statements contained herein are forward-looking statements and, accordingly,
involve risks and uncertainties which could cause actual results or outcomes to
differ materially from those expressed in the forward-looking statements. The
Company's expectations, beliefs and projections are expressed in good faith and
are believed by the Company to have a reasonable basis, including without
limitations, management's examination of historical operating trends, data
contained in the Company's records and other data available from third parties,
but there can be no assurance that management's expectations, beliefs or
projections will result or be achieved or accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are important
factors that, in the view of the Company, could cause actual results to differ
materially from those discussed in the forward-looking statements: the ability
of the Company's management to operate on a global basis; the ability of the
Company to effectuate and successfully operate acquisitions, and new operations;
the ability of the Company to obtain acceptable forms and amounts of financing
to fund current operations and planned acquisitions; the political, economic and
military climate in nations where the Company may have interests and operations;
the ability to engage the services of suitable consultants or employees in
foreign countries; and competition and the ever-changing nature of the Internet
and e-commerce. The Company has no obligation to update or revise these
forward-looking statements to reflect the occurrence of future events or
circumstances.
The following description of our financial position and results of
operations should be read in conjunction with our Financial Statements and the
Notes to Financial Statements contained in this report and in our annual
report on Form 10-KSB.
INTRODUCTION
It is our current intent to grow First Capital International, Inc. through
the continued development and commercialization of our internet based
businesses. We intend to make any business acquisitions by issuing common
stock; however, we may need additional cash to complete acquisitions. If
additional capital is needed, we will raise substantially all such funds
from outside sources. We anticipate that most acquisitions we make during the
next 12 months will be of operating entities with existing management
in place.
www.3Dzip.com. In April 2000 we launched the formal operation of our
-------------
www.3Dzip.com website and subsequently received our first contract to provide
3-D web design services. At present, we are developing bids for several
projects and are in the process of making proposals to various retail customers.
Additionally, we are planning to register with U.S. Government agencies to
explore 3D design possibilities.
AS MAINOR ANET. In April 2000, we acquired AS MAINOR ANET, an internet
----------------
service provider ("AISP") in Estonia. This ISP will contribute about $500,000 in
revenue to our consolidated income statement and will set the stage for
additional acquisitions in the e-commerce area in Eastern Europe. The
management of AS MAINOR ANET provides us with expertise and infrastructure for
not only present activities but also future activities and acquisitions in the
region.
www.FlamingoTravel.net. In April 2000, we also acquired Flamingo Travel,
-----------------------
Inc., an existing U.S. travel agency with online operations at
www.flamingotravel.net. This acquisition will add another $1,000,000 in revenue
and will improve our ability to cross-market promotions among our web sites. In
addition, this acquisition will allow us to enter into the lucrative e-travel
business and will provide increased exposure of our web sites to travel
consumers in various regions throughout the world.
www.MarchesediGenin.com: We are actively pursuing brand recognition of
------------------------
merchandise offered at this site. At present, the site generates gross sales of
$7,000 to $8,000 per month and has not increased our advertising costs. We have
completed the selection of vendors to supply our site and such vendors are now
prepared to provide our customers with luxury items that we have picked for
sale at our website. Our current plan requires additional marketing personnel,
as well as additional advertising expenditures. We plan to conduct showings
with certain major retail chains to promote our luxury goods and will be
attempting to negotiate formal agreements to sell "Marchese di Genin" branded
items through these major retail chains.
<PAGE>
www.LegalClaims.com. We are actively looking for partnerships and formal
-------------------
alliances with major law firms, in order to launch a marketing campaign and
membership drive. At the present time, our site is being actively visited by
the general public and our bulletin board is receiving a variety of legal
questions from all over the world. However, we are currently unable to answer
most of these postings due to a lack of the necessary legal specialists, who
have the experience to respond to these postings. We are proceeding with a
plan to build alliances with qualified law firms that are capable of
responding to the legal questions posted to our LegalClaims.com bulletin board.
Finally, due to poor financial results, we are seeking a buyer for EIP, our
leasing subsidiary.
ANALYSIS OF FINANCIAL CONDITION
We are actively seeking new acquisitions in the United States
and Europe. In the United States, negotiations currently are underway for
the acquisition of several E-commerce companies, as well as travel related
service companies, with E-commerce features. In Eastern Europe, we are
pursuing various acquisition opportunities, including certain ISP's in the
Baltic Region. We are seeking to accomplish any future acquisitions
through exchange of our common stock for target companies. This approach will
enable us to expand our asset base without using our cash resources.
Although, current stockholders may experience substantial dilution in per
share book value.
We currently plan to increase the number of our employees by hiring a
marketing manager and an operations manager. Expansion of our work force
and support of our current operations will be financed from sale of our common
stock. Accordingly, we expect that our existing stockholders will suffer
significant dilution in per share book value.
GOING CONCERN ISSUE
During the three months ended March 31, 2000 and the year ended December
31, 1999 we have been dependent on debt and equity raised from
individual investors and related parties to sustain its operations. During
those periods we have incurred significant net losses. For the three months
ended March 31, 2000 we had a net loss of $149,811 and for the year ended
December 31 1999, we had a net loss of $1,148,821.
Additionally, we had negative cash flows from operations of $27,288 during
the three months ended March 31, 2000, and $1,141,821 for the year ended
December 31, 1999. These factors along with am accumulated deficit of
$2,970,628 at March 31, 2000 raise substantial doubt about our ability to
continue as a going concern.
Our long-term viability as a going concern is dependent upon three key
factors as follows:
- - Our ability to obtain adequate sources of debt or equity funding to meet
current commitments and fund the continuation of its business operations.
- - Our ability to acquire or internally develop viable businesses.
<PAGE>
- - Our ability to ultimately achieve adequate profitability and cash flows
from operations to sustain its operations.
As a result of potential liquidity problems that we face, our auditors,
Ham, Langston & Brezina, L.L.P. have added an explanatory paragraph in their
opinion on the Company's financial statements for the year ended December 31,
1999 indicating that substantial doubt exists about our ability to continue as a
going concern.
We have specific plans to address the financial situation as follows:
- - In the near term we plan private placements of our common stock to
qualified investors to fund our current operations.
- - In the long-term, we believe that cash flows from acquired businesses and
businesses we are currently developing will provide the resources for our
continued operations. We have developed and launched several e-commerce
web sites.
We believe that revenues from these our web sites, as well as revenues from
newly acquired companies, will more than cover overhead at the corporate level
if our marketing is successful. Acquisition activities and development of our
internet projects resulted in corporate headquarters accounting for
approximately 95% of our total net loss for the three months ended March 31,
2000.
COMPETITION
We believe that only a very limited number of sites on the internet offer
the same type of 3-D shopping experience found at PlazaRoyal.com and
MarchesediGenin.com. We also believe that as technology and related internet
access speeds improve, that our 3-D web sites will attract both a greater number
of customers and more intense competition from other 3-D Internet shopping
sites. Such competition could ultimately make 3-D an ordinary feature of
internet shopping malls. We have developed a normal 2-D version of our sites
that requires less graphic data transfer and are better suited for current
technology. These 2-D internet web sites are already subject to extreme
competition and our inability to properly target our customers and differentiate
our internet web sites from the sites of our competitors could have a
significant adverse impact on our financial results. We plan to target markets
in Eastern Europe that we believe are either undeveloped or are not adequately
served.
Our 3Dzip.com web site has lessor competition because there are relatively
few companies marketing 3-D web site design and development. However, the 3-D
marketplace could become crowed in the future.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2000 as Compared to the Three Months Ended March
- --------------------------------------------------------------------------------
31, 1999:
- ----------
During the three months ended March 31, 2000, our revenues increased
approximately $19,000 or 148% as compared to the three months ended March 31,
1999. The increase was due primarily to sales of merchandise through
PlazaRoyal.com. Merchandise sales were not added until the fourth quarter of
1999.
<PAGE>
During the three months ended March 31, 2000 our operating, general and
administrative costs increased by approximately $91,000 as compared to the three
months ended March 31, 1999. This increase in costs was made up of increases in
personnel costs and in legal and other professional fees. The increases were
attributable to the development of our internal structure to support growing
operations.
During the three months ended March 31, 2000 depreciation and amortization
remained relatively constant as compared to the three months ended March 31,
1999.
During the three months ended March 31, 2000 we had stock and option based
compensation of $10,000 due to the sale of common stock to an employee at a
below market price. The sale resulted in a charge to compensation expense for
the difference between the sales price and the market price at the date of sale.
In the three months ended March 31, 1999 we had significant issuances of
compensatory stock options and stock issuances that resulted in charges to
expense totaling $320,850. As the Company becomes more established, it
anticipates fewer issuances of common stock and options for compensation.
Interest expense for the three months ended March 31, 2000 was $7,011 as
compared to $128,770 for the three months ended March 31, 1999. The
significant decrease in interest expense is the direct result of our conversion
of very high rate debt to equity in February 2000 and the elimination of the
interest charges associated with such debt.
During the three months ended March 31, 2000 we had a net loss of $149,811
as compared to a net loss of $507,250 in the three months ended March 31, 1999.
The primary reason for our decreased losses was reduced stock and option based
compensation charges. Our losses during both periods were attributable to our
operations in the United States, as the Company's operations in Estonia produced
minimal losses.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000 we had cash resources of approximately $280,000. We
estimate that during the year 2000, our cash requirements will be approximately
$150,000 per quarter and such requirements will need to be met from outside
sources. We plan to obtain additional financing through the sale of our common
stock and by obtaining debt financing. Such sales of our common stock will
continue until cash flow from operations is adequate to fund the Company's
ongoing requirements. There is no assurance that capital will be available from
any source, or, if available, upon terms and conditions acceptable to us.
We currently have no material commitments for capital expenditures for our
U.S. operations; however, we anticipate that the following near-term
expenditures will be made if funds are available: $20,000 for advertising our
Plaza Royal web site, $30,000 for merchandise to be offered for sale at our
Plaza Royal web site and $10,000 for Internet e-commerce operating expenses.
We currently have no commitments for capital expenditures in EIP and we
intend to continue servicing our existing lease portfolio and enter into new
leases only to the extent that such leases are supported by EIP's cash flows
from operations. EIP's cash flows are not expected to allow additional leases.
<PAGE>
We will ultimately need to produce positive cash flows from operations to
meet our long-term capital needs.
THE YEAR 2000 ISSUE
We experienced no year 2000 problems.
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
During the quarter ended March 31, 2000, the following transactions were
effected by the Company in reliance upon exemptions from registration under the
Securities Act of 1933 as amended as provided in Section 4(2) thereof. Each
certificate issued for unregistered securities contained a legend stating that
the securities have not been registered under the Act and setting forth the
restrictions on the transferability and the sale of the securities. No
underwriter participated in, nor did the Company pay any commissions or fees to
any underwriter in connection with any of these transactions. None of the
transactions involved a public offering. The Company believes that each of
these persons had knowledge and experience in financial and business matters
which allowed them to evaluate the merits and risk of the purchase or receipt of
these securities of the Company. The Company believes that each of these
persons were knowledgeable about the Company's operations and financial
condition.
In January 2000, four investors purchased a total of 2,050,000 shares of
our common stock for $.10 per share for the total consideration of $205,000. We
made these transactions in reliance upon exemptions under Section 4(2) of the
Securities Act of 1933.
In January 2000, we issued a total of 250,000 options to seven employees
and directors as in-kind payment for services rendered. The strike price of
these options is $.25 per share and the options expire on January 20, 2002. We
made these transactions in reliance upon exemptions under Section 4(2) of the
Securities Act of 1933. The value we allocated to these transactions was
$62,500.
In February 2000, we issued 20,000 to one vendor as payment in-kind for
services rendered. We made this transactions in reliance upon exemptions under
Section 4(2) of the Securities Act of 1933. The value we allocated to this
transactions was $10,000.
In March 2000, one investor purchased 300,000 shares of our common stock
for $.3333 per share for total consideration of $100,000. In connection with
this purchase, we also issued to the investor 300,000 options to purchase our
common stock at an exercise price of $.50 per share, expiring on May 3, 2004.
We made this transactions in reliance upon exemptions under Section 4(2) of the
Securities Act of 1933.
In March 2000, we issued a total of 720,000 options to eight employees as
in-kind payment for services rendered. The strike price of these options is
$.50 per share and the options expire on January 20, 2002. We made these
transactions in reliance upon exemptions under Section 4(2) of the Securities
Act of 1933. The value we allocated to these transactions was $360,000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
EXHIBIT NO. 27 - FINANCIAL DATA SCHEDULE
(B) REPORTS ON FORM 8-K
NONE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Capital International, Inc.
-------------------------------------
Date: May 15, 2000 By /s/ Alex Genin
Alex Genin
Chief Executive Officer
------------------------------------
Date: May 15, 2000 By /s/ Joselito H. Sangel
Joselito H. Sangel
Vice President of Finance
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
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0
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