FIRST CAPITAL INTERNATIONAL INC, 10KSB, 2000-03-30

FIRST CAPITAL INTERNATIONAL INC
10KSB, 2000-03-30
BLANK CHECKS

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION *
Washington, D.C. 20549

FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the Fiscal Year Ended: DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission File Number: 0-26271

FIRST CAPITAL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

Delaware 76-0582435
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)

5120 Woodway, Suit 9004, Houston, Texas 77056
(Address of principal executive offices, including zip code)
Voice: (713) 629-4866 Fax: (713) 629-4913
(Registrant's telephone number, including area code)

With copies to: Robert D. Axelrod, Attorney At Law
Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
Voice: (713) 861-1996 ext. 116 Fax (713) 552-0202

Securities registered under Section 12(b) of the Exchange Act:
Title of Each Class: N/A Name of Each Exchange on which
Registered: N/A

Securities registered pursuant to 12(g) of the Exchange Act:
Title of Each Class: Common Stock, $.001 par value

Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [ ]

<PAGE>
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

The Issuer's revenues for the year ended December 31, 1999 were $185,432.
The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant at March 20, 2000 was $7,922,282. As of March
27, 2000, there were 71,068,742 shares of common stock outstanding.

<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS

PART I

<S> <C> <C>
Item 1.. Business 1

Item 2.. Properties 12

Item 3.. Legal Proceedings 13

Item 4.. Submission of Matters to a Vote of Security Holders 13

PART II

Item 5.. Market for Registrant's Common Equity
and Related Stockholder Matters 13

Item 6.. Management's Discussion and Analysis
of Financial Condition and Results of Operations 15

Item 7.. Financial Statements 22 & F-1

Item 8.. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure 22

PART III

Item 9.. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a)
of The Exchange Act 23

Item 10. Executive Compensation 24

Item 11. Security Ownership of Certain Beneficial Owners
And Management 27

Item 12. Certain Relationships and Related Transactions 29

Item 13. Exhibits and Reports on Form 8-K 31
</TABLE>

<PAGE>
PART I

Item 1. Description of Business

INTRODUCTION

We presently operate in two business segments:

- e-Commerce. We own and operate an Internet retail shopping site
----------
called PlazaRoyal.com, located at www.PlazaRoyal.com, which went
active in March 1999. The main focus of this site is the marketing
of U.S. retailers to European consumers. We are presently seeking
additional cyber retail tenants to lease space at this web site and
to date PlazaRoyal.com has generated $15,244 in revenues since its
inception. We own and operate a legal directory and portal web site
called LegalClaims.com that provides consumers with listings of
providers of legal services, and markets the legal services of legal
service providers. We own and operate an upscale fashion accessory
and gift e-store at www. MarcheseDiGenin.com. We are presently
developing a web site at www.3dzip.com, which will provide services
for the design of 3-D web sites for others. We recently designed a
web site for a third party at www.FlamingoTravel.net.

- Leasing. We presently own a leasing subsidiary in the Republic of
-------
Estonia named EIPLiisingu AS ("EIP"), an Estonian corporation, which
Leases business and consumer items. Weacquired 100% of the capital
stock of EIP in 1998, pursuant to a recapitalization transaction
accounted for in a manner similar to a reverse merger.

References to the us include First Capital International, Inc. and our
subsidiary, EIP Liisingu AS.

HISTORY

In August, 1998, in anticipation of a business combination after being
dormant since 1997, we changed our name to First Capital International, Inc.,
increased the number of authorized shares to 100,000,000 shares of capital
stock. New directors and officers were appointed at that time. In September,
1998, we entered into a Stock Exchange Agreement with the two stockholders of
EIP, who were Eurocapital Group, Ltd. and United Capital Group Limited.
Pursuant to the Stock Exchange Agreement, we issued a total of 34,000,000 shares
of our common stock to the former EIP stockholders in exchange for all of the
outstanding shares of EIP. The terms and conditions of the Stock Exchange

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Agreement were determined by the parties through arms length negotiations and
approved by the Board of Directors. However, no appraisal was performed. We
treated the acquisition of EIP as a recapitalization whereby EIP was the
accounting acquiror. At the time of the acquisition, we estimated the market
value of our common stock at approximately $.005 per share, resulting in a
valuation of the acquisition of approximately $170,000. The former EIP
stockholders are presently the beneficial owners of 62.5% of our outstanding
common stock.

We have re-evaluated the operations of EIP and have determined not to
commit additional resources financial to expand EIP's leasing operations in
Estonia. We intend to grow through the continued development and
commercialization of our Internet businesses in the United States and Eastern
Europe. We will also consider the acquisition of Internet related businesses in
the same markets.

BUSINESS ACTIVITIES

Leasing Activities. Through our wholly owned subsidiary, EIP, we operate a
------------------
leasing business in Estonia, a nation which gained sovereign independence during
the fall of the Soviet Union. EIP was founded in 1994 by the Estonian
Innovation Bank, a bank in Estonia, and EIP was owned by the Estonian Innovation
Bank until 1998 at which time the Estonian Innovation Bank sold EIP to
Eurocapital Group, Ltd. and United Capital Group Limited.

EIP owns a portfolio of leases of apartments, appliances, equipment and
automobiles. These leases are made to consumers and businesses in Estonia. The
main service offered by EIP is direct financing lease (e.g., lease-to-own, or
option to purchase). EIP presently has no operating leases. A lease is
considered to be a direct financing lease if ownership of the leased asset is
transferred to the lessee at the end of lease term, or if the amount of the
lease payments or the duration of the lease, meet certain criteria. EIP's
investment in direct financing leases totaled $164,566 at December 31, 1999, and
$226,539 at December 31, 1998. At December 31, 1999, the typical lease term of
our direct financing leases was two to three years. See Consolidated Financial
Statements. EIP's advertises leasing services in newspapers other printed
media in Estonia.

We currently fund leasing operations using cash flows from EIP's operations
and debt financing from the Estonian Innovation Bank, the former owner of EIP.
EIP uses such funds to acquire the assets which EIP leases. The principal
balance on the Estonian Innovation Bank loan, which bears interest at 10% per
annum was is $333,641 at December 31, 1999. This loan is due in payments of
interest only with a final balloon payment of principal and interest due in May,
2002

We believe that the Estonian Innovation Bank, the sole lender to EIP, is
insolvent and does not represent a source of further financing. We have not
analyzed other financing sources in Estonia. We believe that additional
Estonia-based financing is not available or would be extremely costly to obtain.

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Lease Portfolio. We own leases that meet the criteria to be classified as
----------------
direct financing leases. Assets owned and leased under direct financing leases
are carried at our gross investment in the lease less unearned income. Unearned
income is recognized in such a manner as to produce a constant periodic rate of
return on the net investment in the lease.

In the year ended December 31, 1999 we entered into 18 leases. In the year
ended December 31, 1998 we entered into 37 leases. The average value of a new
lease was approximately $9,862 in 1999, and approximately $14,730 in 1998 . Our
operations in Estonia are conducted in transactions denominated in the local
currency of Estonia, the kroon or EEK, which is pegged at 8 EEK = 1 German Mark
(DM), and the calculation of these average lease values is based on the US$/DM
exchange rate at the end of each period calculated.

The average duration of the lease contracts was 3.25 years in 1999. The
average interest rate of the leases was approximately 15.6% per annum in1999.

The components of our investment in direct financing leases at December 31,
1999 were as follows:

Lease contracts receivable (net of
accounts reserved of $994 $239,457
Less unearned income $ 48,489
________
Investment in direct financing leases $190,968
=========

The value of our lease portfolio at December 31, 1999 was $164,515. The
value of our lease portfolio at December 31, 1998 was $226,539. EIP presently
has no operating leases.

Customers. EIP's current customer base is 63% consumer and 37% business.
---------
The portfolio can be characterized as approximately: 38% real estate related,
such as apartments; 48% automobile; 7% computers and office equipment; 4%
industrial equipment; and 3% miscellaneous.

Disposition at the end of the lease. At the end of a finance lease, EIP
--------------------------------------
disposes of the leased asset by transferring ownership of the leased asset to
the lessee. At the end of any operating lease, EIP would continue ownership of
the leased asset and take possession of the leased asset. EIP then would either
re-leases the asset to a different customer or sell the asset. EIP presently
has no operating leases.

Disposition upon customer default. If a customer defaults on a lease
------------------------------------
payment, we repossesses the property and then we either lease the asset to a
different customer or sell the asset. In 1999 one of EIP's leases went into
default. In 1998 approximately 3 of EIP's leases went into default. All of
these leases were direct finance leases.

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The leasing industry is relatively new in Estonia. We believe that there
are more than 10 other leasing companies in Estonia. Many of our competitors
are well established and have substantially greater capital resources and
greater marketing capabilities than us. We can give no assurance that we will
be competitive.

E-commerce Related Activities. We own and operate a multi-lingual cyber
-------------------------------
shopping mall at www.PlazaRoyal.com. PlazaRoyal.com provides U.S. retailers an
opportunity to be part of a cyber shopping mall. PlazaRoyal.com markets U.S.
branded products and retailers to European consumers. PlazaRoyal.com is a 3-D,
as well as a 2-D, virtual reality, fully interactive cyber shopping experience
with the capability to market to non-English speaking customers. PlazaRoyal.com
presently operates in six languages. The 3-D cyber shopping experience at
PlazaRoyal.com is designed to be entertaining to the consumer and to provide the
feeling of being in a shopping mall. We are presently seeking more cyber retail
tenants to occupy and sublease space on this web site. We have had $15,244 in
revenue from PlazaRoyal.com since its inception. We believe that PlazaRoyal.com
can create revenue from three sources:

- Revenues from rental fees paid by retail business who sell
from PlazaRoyal.com

- Revenues from others who advertise on PlazaRoyal.com

- Revenues from providing others with 3-D web site design services.

We have entered into e-commerce affiliated merchant programs with the
following companies: Dell Computers, CBS Sports Store, Sharper Image,
Amazon.com, Discover Nature, CarPrice.com, Reel.com, and Swiss Army Depot and
approximately 100 other companies. The merchant programs enable us to earn a
percentage of the sales generated when a visitor to PlazaRoyal.com links to the
web site of an affiliated merchant and makes a purchase. We will receive
between 1% and 20% as a sales commission on these types of transactions. We
obtain these merchant programs quickly and easily by applying for an
affiliation with a merchant program over the Internet, and then programming the
link (such as a banner or 3-D display stand) into the PlazaRoyal.com web site.
There has been no direct cost to set up these merchant programs. The sales
commission rates are established by the seller and are not subject to
negotiation. For example, Dell Computers gives a 1% sales commission and
Sharper Image gives a 20% commission. No single merchant program is material to
us.

We own and operate a legal directory portal at LegalClaims.com that
provides consumers with listings of providers of legal services, and also
markets legal services of subscribers to consumers, all in jurisdictions where
this type of activity is permitted, such as in Canada, Australia, New Zealand,
and nations in Central America, South America, the Caribbean, Europe, Africa and
Asia. Consumers can post a message with their legal questions at this web
site. Attorneys who subscribe to this web site have an opportunity to contact
the consumer directly. LegalClaims.com has not produced revenue yet, although
we expect revenue to come from advertising, subscribers, and the sharing in
legal fees in jurisdictions where this type of activity is permitted.

4
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We own and operate an upscale fashion accessory and gift e-store at www.
MarcheseDiGenin.com, which commenced operations in March, 2000. This e-store
offers fine watches, office gifts and fine writing instruments. This web site
has generated modest revenue of $1,250 to date.

We are presently developing a web site at www. 3Dzip.com, which will
provide services for the design of 3-D web sites for others.

FOREIGN OPERATIONS

EIP operates in a part of the world which could be viewed as having a high
potential for political, economic and military instability. For example,
Estonia is near Russia. If the political situation in Russia worsened, a spill
over effect into Estonia could have adverse consequences for EIP. Some other
nations which gained independence after the fall of the Soviet Union have
experienced instability. If such instability were to occur in Estonia, our
business could be adversely affected. We have no insurance to cover political
risks.

Estonia does not have a highly inflationary economy now, although in the
recent past Estonia did have a highly inflationary economy. Estonia has
experienced a great amount of political and economic instability and inflation
increased, but then stabilized in 1999. The Estonian government's monetary
policy could come under pressure. If inflation increases, the outlook for
leasing operations and the effect of translation adjustments will negatively
impact our financial position and results of operations. The Estonian Consumer
Price Index growth rate has increased to 0.8% in December, 1999 from 0.2% in
December, 1998. The tight credit environment in Estonia has led to a reduction
in imports and an increase in unemployment, both of which tend to check
inflationary tendencies and lower consumer prices. However, Estonia's imports
in 1999 increased by approximately 3% over 1998. If Estonia should experience
growing inflation, then Estonia's economy could be classified as a highly
inflationary economy under generally accepted accounting principles. Under such
circumstances, declines in the value of the EEK would be reflected in operations
and would negatively impact our financial position and results of operations.

Estonia is a free market democracy with established commercial laws. Lease
agreements are governed by the Estonian Laws of Rent and Property. Under these
laws, if the lessee does not make a payment within three months of a due date,
or within such shorter period specified in the lease agreement, the lessor is
entitled to repossess the leased property under a legal theory of unilateral
anticipatory termination. A repossession causes no tax consequences to the
lessor or investors. At this time, Estonian law is unsettled as to whether a
lessor must first make a court claim of anticipatory termination against the
lessee.

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The local currency of Estonia is the Estonian kroon or EEK. Because the
EEK is the functional currency for our Estonian subsidiary under Financial
Accounting Standards Board Statement No. 52, "Foreign Currency Translation" (FAS
52), assets and liabilities denominated in foreign functional currencies are
generally translated at the exchange rate as of the balance sheet date.
Translation adjustments are recorded as a separate component of stockholders'
deficit. Revenues, costs and expenses denominated in foreign functional
currencies are translated at the weighted average exchange rate for the period.
We have exposure to Estonian foreign currency fluctuations and Estonian
government intervention such as a devaluation of the EEK, or a freeze of
international transfer of funds. The Estonian Central Bank does not have the
power to devalue the EEK, and technical fluctuations are restricted to 3%.
However, a devaluation of the German Mark (DM) or the Euro could occur, with a
resulting effect on the exchange rate of the EEK. The Estonian Central Bank has
officially pegged the EEK at 8 EEK = 1 DM. Consequently, we are also subject to
foreign currency risks related to the DM. Relative to the U.S. dollar, a
declining EEK or DM would negatively impact the value, in U.S. dollars, of our
transactions in Estonia. The Estonian Central Bank has also officially pegged
the EEK to the Euro at an exchange rate of 15.64 EEK = 1 Euro, which is
considered the equivalent of the DM peg. As a result of the Euro peg, we are
also subject to the same types of foreign currency risks related to the Euro.
Relative to the U.S. dollar, a declining Euro would negatively impact the value,
in U.S. dollars, of our transactions in Estonia.

EMPLOYEES

As of March 13, 2000, we had 13 employees in the USA, and EIP had four
employees in Europe. No employees are represented by a union. We believe that
our employee relations are good.

SUBSIDIARIES

We have two wholly-owned subsidiaries, EIP Liisingu AS ("EIP"), an Estonian
corporation, which operates a leasing business in Estonia, and Ranger Car Care
Corporation, a Texas corporation, which is presently dormant.

THE YEAR 2000 ISSUE

We have not had any Year 2000 deficiencies internally or externally. We do
not expect to have any Year 2000 deficiencies internally or externally. If a
Year 2000 deficiency occurs internally or externally, we will shift our internal
and external resources to fix the deficiency. We do not expect any Year 2000
deficiency to require an expenditure of more than $10,000.

MORE ABOUT US

Our principal executive offices are located at 5120 Woodway, Suite 9004,
Houston, Texas 77056; voice: (713) 629-4866 fax: (713) 629-4913.

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Our corporate web site is at www.FirstCap.net.

Our common stock is traded on the over-the-counter bulletin board ("OTCBB")
under the symbol "FCAI."

RISK FACTORS

Going Concern Risk

During 1999 and 1998, we were dependent on debt and equity raised from
individual investors and our related parties to sustain our operations. We
incurred net losses of $1,141,821 in 1999. We incurred net losses of $1,640,760
in 1998. During the year ended December 31, 1999, we had negative cash flows
from operations of $448,942These factors along with stockholders' equity of
$21,778 at December 31, 1999 raise substantial doubt about our ability to
continue as a going concern. See, Note 4 of the Consolidated Financial
Statements on Page F-14. 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 our
business operations

- Our ability of to acquire or internally develop viable businesses

- Our ability to ultimately achieve profitability and cash flows from
operations in amounts that would sustain our operations

As a result of these potential liquidity problems, our auditors, Ham,
Langston & Brezina, L.L.P. have added an explanatory paragraph in their opinion
on our financial statements for the year ended December 31, 1999, indicating
that substantial doubt exists about our ability to continue as a going concern.

Recent Losses and Accumulated Losses and Deficit, and Potential Deficiencies in
Liquidity

Our ability to achieve profitability depends on our ability to successfully
develop and market our Internet web sites. We can give no assurance that we
will be able to achieve commercial success. We are subject to all risks
inherent in a growing venture, including the need to develop marketing expertise
and produce significant revenue. We may incur losses for the foreseeable future
due to the significant costs associated with Internet web site operations. See,
Management Discussion and Analysis of Financial Condition and Results of
Operations.

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We incurred a net loss of $1,141,821 in 1999. We incurred a net loss of
$1,640,760 in 1998. At December 31, 1999, we had an accumulative deficit of
$2,820,817. Revenues for 1999 were $185,432, an increase of $128,258 over 1998
revenues of $57,174. Losses in 1998 and 1999 are attributable to our
commencement Internet and EIP activities. We believe that revenues will
increase, and ultimately we will be profitable, although we can give no
assurance that this will occur.

Lack of Financing for Future Acquisitions and Expenditures

Financing for our Internet operations. Until such time as our operating
----------------------------------------
results improve sufficiently, we must obtain outside financing to fund the
expansion of the business and to meet our obligations as they become due. Any
additional debt or equity financing may be dilutive to the interests of our
shareholders. Our financing must be provided from our operations, or from the
sale of equity securities, borrowing, or other sources of third party financing
in order for us to expand operations. The sale of equity securities could
dilute our existing stockholders' interest, and borrowings from third parties
could result in our assets of being pledged as collateral and loan terms which
would increase our debt service requirements and could restrict our operations.
We can give no assurance that financing will be available from any source, or,
if available, upon terms and conditions acceptable to us.

Financing for EIP. EIP funds leasing operations through cash flow from
-------------------
leasing operations and from long term debt financing which EIP presently has
from third parties. EIP utilizes these funds to acquire the assets which EIP
leases. EIP presently owes long term debt in the remaining principal balance of
$333,641, which is payable interest only on a monthly basis at 10% interest per
annum with a final balloon payment of principal and interest due in May, 2002.

We believe that the Estonian Innovation Bank, the sole lender to EIP, is
insolvent and does not represent a source of further financing. Estonian
Innovation Bank owned EIP at one time. We have not analyzed other financing
sources in Estonia but we believe that additional Estonia-based financing is not
available or would be extremely costly to obtain.

We have re-evaluated the operations of EIP and have determined not to
commit additional resources financial to expand EIP's leasing operations in
Estonia. If EIP does not raise new funds to finance new leases, EIP will
ultimately be in a self- liquidating mode, whereby EIP would ultimately have de
minimis cash and no leases. EIP presently has no operating leases and does not
possess any assets that were the subject of previous operating leases.

Foreign Political Risk

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Uninsured Political Risks

We do not have any political risk insurance to cover our foreign assets or
business. We can give no assurance that we may not be exposed to a complete
loss of our foreign assets and business due to foreign political events.

Foreign Currency Risk

Our leasing operations in Estonia are conducted in transactions denominated
in the local currency of Estonia. The local currency of Estonia is the Estonian
kroon or EEK. Because the EEK is the functional currency for our Estonian
subsidiary under Financial Accounting Standards Board Statement No. 52, "Foreign
Currency Translation" (FAS 52), assets and liabilities denominated in foreign
functional currencies are generally translated at the exchange rate as of the
balance sheet date. Translation adjustments are recorded as a separate
component of stockholders' deficit. Revenues, costs and expenses denominated in
foreign functional currencies are translated at the weighted average exchange
rate for the period. We have exposure to Estonian foreign currency fluctuations
and Estonian government intervention such as a devaluation of the EEK, or a
freeze of international transfer of funds. The Estonian Central Bank does not
have the power to devalue the EEK, and technical fluctuations are restricted to
3%. However, a devaluation of the German Mark (DM) or the Euro could occur,
with a resulting effect on the exchange rate of the EEK. The Estonian Central
Bank has officially pegged the EEK at 8 EEK = 1 DM. Consequently, we are also
subject to foreign currency risks related to the DM. Relative to the U.S.
dollar, a declining EEK or DM would negatively impact the value, in U.S.
dollars, of our transactions in Estonia. The Estonian Central Bank has also
officially pegged the EEK to the Euro at an exchange rate of 15.64 EEK = 1 Euro,
which is considered the equivalent of the DM peg. As a result of the Euro peg,
we are also subject to the same types of foreign currency risks related to the
Euro. Relative to the U.S. dollar, a declining Euro would negatively impact the
value, in U.S. dollars, of our transactions in Estonia.

Risk of Dilution Upon Conversion of Options and Shares Eligible for Future Sale

Risk of Dilution Upon Conversion of Options. At March 24, 2000, we had
-----------------------------------------------
outstanding a total of 6,010,000 options to purchase our common stock at
exercise prices ranging from of $.05 to $.75 per share, which near or below
market prices. If exercises or conversion occur, other shareholders will be
subject to an immediate dilution in per share net tangible book value.

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Risk of Dilution Related to Shares Eligible for Future Sale. At March 27,
------------------------------------------------------------
2000, we had outstanding approximately 71,068,742 shares of common of which
approximately 12,841,442 shares are free trading shares, and approximately
58,227,300 shares are restricted securities as that term is defined the
Securities Act of 1933. We believe that approximately 11,717,530 shares of our
restricted common stock has been held for more than two years, and may be sold
by non-affiliates of us without limitation. We believe that approximately
48,349,770 shares of our restricted common stock has been held for more than one
year, and may be sold subject to volume restrictions. We can make no prediction
as to the effect that resales of our restricted common stock, or the
availability of such shares for sale, will have on market prices. The
possibility that substantial amounts of common stock may be sold in the public
market would likely have a material adverse effect on prevailing market prices
for our common stock and could impair our ability to raise capital through the
sale of our securities.

Limited Operating History; No Assurance of Successful Implementation of Business
Strategy

We became active in August, 1998 after a dormant period. In addition to
the typical kinds of risks inherent in the establishment and growth new business
activities, profits from Internet commerce and Eastern-Europe related business
endeavors have been elusive. We can give no assurance that we ultimately will
be successful. Ownership of our securities must be regarded as the placing of
your money at a high risk.

Ability to Locate Suitable Combination Partners

We periodically enter into preliminary, non-binding discussions with other
firms in Internet related or Internet exploitable industries in the U.S.,
Eastern Europe and the Baltic region. These discussions could result in
business combinations. While we desire that such business combinations occur,
we can give no assurance that any future business combination can be structured
on terms acceptable to us. We seek to accomplish acquisitions on a stock
exchange basis only. This would enable us to acquire additional assets and
maintain our cash flow as well, but could result in substantial dilution in per
share net tangible book value to existing shareholders.

Control by Management

Alex Genin, our Chief Executive Officer and Chairman of the Board is the
beneficial owner approximately 69.2% of our common stock. As a practical
matter, he will be able to elect all of our directors and otherwise control our
business affairs in the foreseeable future.

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Market Liquidity of Our Securities and Penny Stock Securities Law Considerations

Our common stock is considered penny stock and subject to the penny stock
rules under the Securities Exchange Act of 1934. The penny stock rules require
broker-dealers to take steps under certain circumstances prior to executing any
penny stock transactions in customer accounts. A broker must advise purchasers
of penny stock of the lowest offer and highest bid. A broker or dealer must
disclose the broker's compensation for penny stock transactions. A broker who
recommends penny stocks to persons other than established customers must make a
special written suitability determination and receive the purchaser's prior
agreement. The effect of these regulations may be to delay transactions in
stocks that are penny stocks. This could have an adverse impact on your market
liquidity for our common stock if you decide to sell our common stock.

Possible Volatility of Common Stock Price

The market price of our common stock may be highly volatile, as has been
the case with the securities of many other small capitalization companies. The
securities markets have experienced a high level of price and volume volatility
and the market prices of securities for many companies, particularly small
capitalization companies, have experienced wide fluctuations which have not
necessarily been related to the operating performances or underlying asset
values of such companies.

Issuance of Preferred Stock

We presently have authorized 10,000,000 shares of preferred stock, par
value $.001 per share. There are presently no shares of preferred stock
outstanding. The shares of preferred stock, if issued, would be entitled to
preferences over our common stock. Our Board of Directors has the authority,
without action or consent by the stockholders, to issue the authorized but
unissued shares of preferred stock in one or more series, to fix the number of
shares in each series, and to determine the voting rights, preferences as to
dividends and liquidation rights, conversion rights, and other rights of any
series of preferred stock. The shares of preferred stock, if issued, could
adversely affect the rights of the holders of common stock, and could prevent
holders of common stock from receiving a premium upon the sale of the common
stock. For example, an issuance of preferred stock could result in a class of
securities outstanding that would have preferences with respect to voting rights
and dividends and in liquidation over our common stock, and could (upon
conversion or otherwise) enjoy all of the rights of holders of common stock.
Our Board's authority to issue preferred stock could discourage potential
takeover attempts and could delay or prevent a change in control of us through
merger, tender offer, proxy contest or otherwise, by making such takeover
attempts more difficult or costly to achieve. We may designate Series A
Convertible Preferred Stock in the near future in connection with a proposed
sale of securities. See, Preferred Stock--Description of Securities

No Cash Dividends

We have never paid cash dividends on our common stock and our Board of
Directors does not anticipate paying cash dividends in the foreseeable future.
We currently intend to retain future earnings to finance our growth.

Limitation on Director Liability

11
<PAGE>
Our Articles of Incorporation provide, as permitted by governing Delaware
law, that our directors shall not be personally liable to us or our stockholders
for monetary damages for breach of fiduciary duty as a director, with certain
exceptions. These provisions may discourage stockholders from bringing suit
against a director for breach of fiduciary duty and may reduce the likelihood of
derivative litigation brought by stockholders on our behalf.

Competition

There are many companies which are currently engaged in Internet commerce
and leasing. Many of our competitors are more established companies with
substantially greater capital resources and have substantially greater marketing
capabilities than us. We can give no assurances that we will be able to
successfully compete. The cost of entry into the Internet commerce marketplace
is low. We anticipate that the number of competitors will increase in the
future.

Dependence On, and Availability of Management; Management of Growth

Our success is substantially dependent upon the time, talent, and
experience of Alex Genin, our Chief Executive Officer and Chairman of the Board.
We have no employment agreement with Mr. Genin. The loss of the services of Mr.
Genin would have a material adverse impact on us. We can give no assurance that
a replacement for Mr. Genin could be located in the event of his unavailability.
Further, in order for us to expand our business operations, we must continue to
improve and expand the level of expertise of our personnel and we must attract,
train and manage qualified managers and employees to oversee and manage our
expanding operations. Demand for Internet and computer industry personnel is
high. We can give no assurance that the we will be in a position to offer
competitive compensation packages to attract or retain our personnel.

Ability to Manage Growth

Our intention is to expand by acquiring companies and starting new
businesses. We are subject to a variety of risks. Our growth may place a
significant strain on our day-to-day management and operations. We can give no
assurance that our systems, controls or personnel will be sufficient to meet
these demands. Inadequacies in these areas could have a material adverse effect
on us.

Item. 2 Description of Property

Our principal executive offices are located at 5120 Woodway, Suite 9004,
Houston, Texas 77056, in approximately 2,773 square feet of office space which
is subleased from a firm owned by Alex Genin, our Chief Executive Officer and
Chairman of the Board, and from a third party, on a month to month sublease for
$3,343 per month. EIP leases approximately 3,000 square feet of office space in
Estonia on a month to month lease for approximately $950 per month from a third
party. We believe that our offices are adequate for our present and future
needs.

12
<PAGE>
Item 3 Legal Proceedings

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Market for Common Equity and Related Stockholder Matters

Our common stock is traded on the over-the-counter bulletin board ("OTCBB")
under the symbol "FCAI." For a few weeks during November and December, 1999,
and January, 2000, our common stock was listed only on the over the counter pink
sheets of the National Quotation Bureau. The following table sets forth the
reported high and low closing bid quotations for our common stock. The bid
prices reflect inter-dealer quotations, do not include retail markups, markdowns
or commissions and do not necessarily reflect actual transactions.

QUARTER
ENDED HIGH BID LOW BID
<S> <C> <C>
March 31, 1998 . . $ (*) $ (*)
June 30, 1998. . . $ (*) $ (*)
September 30, 1998 $ (*) $ (*)
December 31, 1998. $ (**) $ (**)

March 31, 1999 . . $ .50 $ .25
June 30, 1999. . . $ 1.4375 $ .25
September 30, 1999 $ 1.00 $ .50
December 31, 1999. $ .9375 $ .10
<FN>
________________________________
(*) To the best of our knowledge, from January 1, 1996 through October,
1998, no broker-dealer made an active market or regularly submitted
quotations for our common stock. During this period there were only
an infrequent number of trades and virtually no trading volume.

(**) To the best of our knowledge, from November, 1998 through January,
1999, there were only an infrequent number of trades and little trading
volume.
</TABLE>

On March 20, 2000, the closing bid price on our common stock was $.75 per
share. As of March 20, 2000, there were approximately 1,021 shareholders of
record of our common stock.

13
<PAGE>
Our transfer agent is OTC Stock Transfer, Inc., 321 East 2100 South, Salt
Lake City, UT 84115; PO Box 65665, Salt Lake City, UT 84165; tel. (801) 485-555,
fax (801) 486-0562.

DIVIDEND POLICY

We have not paid, and we do not currently intend to pay, cash dividends on
our common stock in the foreseeable future. Our current policy is for us to
retain all earnings, if any, to provide funds for our operation and expansion.
The declaration of dividends, if any, will be subject to the discretion of the
Board of Directors, which may consider such factors as the our results of
operations, financial condition, capital needs and acquisition strategy, among
others.

RECENT SALES OF UNREGISTERED SECURITIES

During the quarter ended December 31, 1999, we made the following
transactions in reliance upon exemptions from registration under the Securities
Act of 1933 as amended (the "Act").

In December, 1999, we sold 500,000 shares of our common stock to United
Capital Group, Ltd., one of our principal shareholders, for a cash price of
$50,000. We believe that this investor was knowledgeable about our operations
and financial condition, and had knowledge and experience in financial and
business matters which allowed it to evaluate the merits and risk of the
purchase of these securities. We made this transaction pursuant to an exemption
from registration under Section 4(2) of the Act. Each certificate issued for
these 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 we pay any commissions or fees to any underwriter in connection with
this transaction. This transaction did not involve a public offering.

In December, 1999, we sold 1,000,000 shares of our common stock to one
investor for a cash price of $50,000. We believe that this investor was
knowledgeable about our operations and financial condition, and had knowledge
and experience in financial and business matters which allowed him to evaluate
the merits and risk of the purchase of these securities. We made this
transaction pursuant to an exemption from registration under Section 4(2) of the
Act. Each certificate issued for these 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 we pay any commissions or
fees to any underwriter in connection with this transaction. This transaction
did not involve a public offering.

14
<PAGE>
In December, 1999, we granted a total of 550,000 options to purchase our
common stock to five of our employees. These options are immediately
exercisable at an exercise price of $.10 per share and expire in December, 2001.
We believe that these persons were knowledgeable about our operations and
financial condition, and had knowledge and experience in financial and business
matters which allowed them to evaluate the merits and risk of the receipt of
these securities. We made these transactions pursuant to an exemption from
registration under Section 4(2) of the Act. Each certificate issued for these
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 we pay any commissions or fees to any underwriter in connection with
these transactions. These transactions did not involve a public offering.

Item 6. Management Discussion and Analysis

The following description of our financial position and results of
operations should be read in conjunction with the Financial Statements and the
Notes to Financial Statements, contained in this report as set forth beginning
on page F-1.

INTRODUCTION

We intend to make all of the acquisitions by issuing common stock in
exchange for the acquired businesses. However, we may need additional capital
to enter into acquisitions. In the event that capital is needed to effectuate
certain acquisitions, we will be required to raise substantially all of the
funds for such acquisitions. We anticipate that most, if not all, of any
acquisitions that we may make during the next 12 months will be of operating
entities that have current management in place.

Our first acquisition occurred in September, 1998 when we completed the
acquisition of 100% of the stock of EIP from the stockholders of EIP in exchange
for a total of 34,000,000 shares of our common stock.

15
<PAGE>
The operations of EIP are conducted in Estonia with transactions
denominated in the local currency of Estonia, the EEK. We have exposure to
foreign currency fluctuations and foreign government intervention such as a
devaluation of the local currency (see below for discussion of foreign currency
issues). We believes that EIP's existing cash flow is adequate to fund EIP's
existing lease portfolio. Our objective for the next 12 months is to maintain
the existing portfolio of leases.

We believe that the development and expansion of our Internet businesses,
PlazaRoyal.com, LegalClaims.com, MarcheseDiGenin.com and 3Dzip.com will require
additional capital. We will seek financing for our Internet businesses through
the sale of debt or equity. The sale of equity securities could dilute our
existing stockholders' interest, and borrowings from third parties could result
in restrictive loan terms which would increase our debt service requirements and
could restrict our operations. We do not know whether we will be successful in
raising capital on reasonable terms.

During late 1998 through March 13, 2000, we raised approximately $819,550
in cash through the sale of our common stock and options in private
transactions.

PLAN OF OPERATION

Our plan of operation involves the further development of all of our web
sites. At the present time we are actively seeking new merchants for the
PlazaRoyal.com. Among those already signed are Dell Computers, CBS Sport
Stores, Discover Nature Stores, the Sharper Image, Omaha Steaks, the Swiss Army
Depot, Office Max, Hickory Farms and Amazon.com.

Our web sites at LegalClaims.com and MarcheseDiGenin.com are active.

We are developing our new web site at 3Dzip.com which will provide others
with services for the design and operation of their own 3-D web sites. We are
in the process of developing a detailed marketing program, which will enable our
Internet shopping mall to function in many languages in many different
countries. PlazaRoyal.com presently operates in six languages. Various local
Internet providers in several countries have expressed an active interest in
supporting these activities in Europe.

ANALYSIS OF FINANCIAL CONDITION

We periodically enter into preliminary, non-binding discussions with other
firms in Internet related or Internet exploitable industries in the U.S. and
eastern Europe and the Baltic region. Such discussions could result in business
combinations. While we desires that business combinations occur, we can give no
assurance that any future business combination can be structured on terms
acceptable to us. We seek acquisitions on a stock exchange basis only. This
would enable us to acquire additional assets and maintain our cash flow as well.
However, this may be substantial dilution in per share net tangible book value
to existing shareholders.

16
<PAGE>
We operate an international legal directory portal at "LegalClaims.com."
This web site will enable us to expand our e-commerce services into this new
market segment, as well as, generate new revenue from the sale of memberships to
legal professionals, and advertising.

We currently plan to hire more employees such as a marketing manager and an
operations manager.

Since 1998, we have been dependent on outside financing from individuals
and related parties to fund our Internet web site development and general
corporate overhead. We are now in the process of building markets for
PlazaRoyal.com, and LegalClaims.com and MarcheseDiGenin.com, we will continue to
be dependent on outside financing for the foreseeable future. If we are unable
to achieve commercial success in a reasonable time , then we may be unable to
obtain adequate sources of long-term financing to continue operations.

GOING CONCERN ISSUE

- Our ability to obtain adequate sources of debt or equity funding to
meet current commitments and fund the continuation of our
business operations

- Our ability of to acquire or internally develop viable businesses

- Our ability to ultimately achieve profitability and cash flows
from operations in amounts that would sustain our operations

We have specific plans to address the financial situation as
follows:

- In the near term we plan a private placement of our common
stock to qualified investors to fund our current operations

17
<PAGE>
- We recently became a reporting company under the Securities
and Exchange Act of 1934. We believe this step will provide a
market for our common stock and provide a means of obtaining
future funds necessary to implement our business plan.

- In the long-term, we believe that cash flows from acquired
businesses and businesses that we are currently operating or
developing will provide the resources for our continued
operations. Our web sites at PlazaRoyal.com, LegalClaims.com. and
MarcheseDiGenin.com are active. We believe that revenue from these
web sites, if successfully marketed, will more than cover overhead
at the corporate level. We expect our web site at 3Dzip.com to be
active in the near future. Acquisition activities and our Internet
businesses resulted in corporate headquarters accounting for
substantially all of our total net loss for 1999.

COMPETITION

We believe that only a very limited number of web sites on the Internet
offer the same type of 3-D shopping experience that PlazaRoyal.com offers. We
also believes that, as technology and related Internet access speeds improve,
PlazaRoyal.com 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 web site that requires less graphic data
transfer and is better suited for current technology. This 2-D Internet site is
already subject to extreme competition and an inability by us to properly target
our customers and differentiate our Internet web site from the web sites of our
competitors could have a significant adverse impact on us. We plan to target
markets in Eastern Europe that we believe are either undeveloped or are not
adequately served.

We believe that EIP, our leasing operation in Estonia, is not subject to
severe competition in the markets that EIP serves because the leasing industry
is relatively new to Estonia. However, the financial systems in Estonia are not
as well developed as those in the United States and we intend to continue
leasing operations in Estonia only to the extent that they are supported by
EIP's current cash flows from operations.

FOREIGN CURRENCY TRANSLATION AND INFLATION ISSUES

18
<PAGE>
Foreign Currency Issues. EIP's functional currency is the Estonian kroon
-------------------------
("EEK") and substantially all business conducted by EIP is conducted within
Estonia. Small changes in the U.S. dollar/EEK exchange rate do not have a
significant impact on EIP's financial position or results of operations.
However, declines in the value of the EEK generally reduce the value of certain
of EIP's assets and cause deterioration our overall financial position. To
stabilize the EEK, the government of Estonia has enacted monetary policy that
"pegs" the exchange rate of the EEK to the German mark ("DEM") in the ratio of 8
EEK = 1 DEM. Because the exchange rate of the DEM is relatively stable against
the U.S. dollar, the exchange rate of the EEK should also be expected to be
relatively stable against the U.S. dollar.

The local currency of Estonia is the Estonian kroon or EEK. Because the
EEK is the functional currency of our Estonian subsidiary under Financial
Accounting Standards Board Statement No. 52, "Foreign Currency Translation"
(FAS 52), assets and liabilities denominated in foreign functional currencies
are generally translated at the exchange rate as of the balance sheet date.
Translation adjustments are recorded as a separate component of stockholders'
deficit. Revenues, costs and expenses denominated in foreign functional
currencies are translated at the weighted average exchange rate for the period.
Therefore, we have exposure to foreign currency fluctuations and foreign
government intervention such as a devaluation of the local currency, or a freeze
of international transfer of funds. The Estonian Central Bank does not have the
power to devalue the EEK, and technical fluctuations are restricted to 3%.
However, a devaluation of the German Mark (DM) or the Euro could occur, with a
resulting effect on the exchange rate of the EEK. The Estonian Central Bank has
officially pegged the EEK at 8 EEK = 1 DM. Therefore, we are also subject to
foreign currency risks related to the DM. Relative to the U.S. dollar, a
declining EEK or DM would negatively impact the value, in U.S. dollars, of our
transactions in Estonia. The Estonian Central Bank has also officially pegged
to the Euro at 15.64 EEK = 1 Euro, which is considered the equivalent of the DM
peg. Therefore, we are also subject to the same types of foreign currency risks
related to the Euro. Relative to the U.S. dollar, a declining Euro would
negatively impact the value, in U.S. dollars, of our transactions in Estonia.

Our results of operations were improved when our functional currency
changed from the U.S. dollar to the Estonian Kroon. Estonia's economy has a
historically higher inflation rate than the United States economy and all
currency losses associated with the translation of financial statements where
the U.S. dollar is considered the functional currency are reflected as losses
in operations rather than as charges against stockholders' equity as is the case
when the Estonian kroon is considered EIP's functional currency

19
<PAGE>
Estonian Inflation Issues. Estonia does not have a highly inflationary
---------------------------
economy now, although in the recent past Estonia did have a highly inflationary
economy. Estonia has experienced a great amount of political and economic
instability and inflation increased, but then stabilized in 1999. Accordingly,
the government's monetary policy could come under pressure. If inflation
increases, both the outlook for EIP's leasing operations and the effect of
translation adjustments will negatively impact our financial position and
results of operations. The Estonian Consumer Price Index growth rate has
increased to 0.8% in December, 1999 from 0.2% in December, 1998. The tight
credit environment has led to a reduction in imports and an increase in
unemployment, both of which act to reduce inflationary tendencies and to lower
consumer prices. However, Estonia's imports in 1999 increased by approximately
3% over 1998. If Estonia experiences growing inflation, then Estonia's economy
could be classified as a highly inflationary economy under generally accepted
accounting principles. Under such circumstances, declines in the value of the
EEK would be reflected in operations and would negatively impact our financial
position and results of operations.

SIGNIFICANT TRENDS

During 1999, EIP entered into 18 new finance leases as compared to 37 in
1998. Substantially all leases entered into by EIP are finance leases and the
average dollar amount of each lease was approximately $9,862 in 1999, and
$14,730 in 1998. This trend highlights the fact that our leasing operations
have been and are expected to continue to be adversely impacted by
underdeveloped Estonian financial markets and by our decision to employ
substantially all new capital resources in funding our Internet businesses. We
intend to continue servicing our existing lease portfolio but we intend to enter
into new leases only to the extent that such new leases are supported by EIP's
cash flows from operations.

RESULTS OF OPERATIONS

Year Ended December 31, 1999 Compared to the Year Ended December 31, 1998

During the year ended December 31, 1999, our revenue increased
approximately $128,258, or 224% as compared to the year ended December 31,
1998. Leasing revenues in EIP for 1999 and 1998 were similar as a result of
consistently weak leasing activity in EIP caused by a deterioration of the
financial markets in Estonia and related limitations on the availability of
capital to enter into new leases (See Significant Trends). However, during
1999 EIP earned approximately $114,805 in revenue for marketing research
services provided to a related entity. This revenue accounts for the
overall increase. The marketing research revenue is not expected to continue.

During 1999, our operating, general and administrative costs increased by
approximately $313,458 as compared to the 1998. This increase was made up of
an increase in personnel costs and in legal and other professional fees.
The increase was primarily attributable to the development of our
PlazaRoyal.com Internet site and to general business development.

During 1999, depreciation and amortization decreased by approximately
$2,000 as compared to 1998 due to lower levels of leasing activity in EIP.

During 1999 stock and option based compensation was $444,335 due to the
sale of common stock to officers and employees at below market prices and due
to the issuance of options for purchase of common stock with exercise prices
below the current price of our common stock at the date of issue. Such
sales resulted in charges to compensation expense for the difference
between the market price and the exercise/sales price at the date of
issue/sale. In 1998 there were similar sales of stock and options.

20
<PAGE>
Interest expense in 1999 was $267,654 compared to $97,001 in 1998. The
increase was the result of us issuing convertible debt with a below market
conversion rate during late 1998. The resulting discount on the debt has been
amortized to interest expense over the term of the debt and resulted in
substantially all of the increase in interest 1999.

During the 1999, we had a net loss of $1,141,821 compared to a net loss of
$1,640,760 in the 1998. The decrease in net loss was attributable a decrease
in loss for our operations in the United States, and a decrease in loss for our
operations in Estonia attributable not to EIP's leasing operations, but fees
paid to EIP for market research provided to a related company. As described in
above, the primary reasons for the losses were stock and option based
compensation charges, increases in interest expense and increases in
personnel, legal and professional fees in 1999.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1999, we had cash resources of approximately $115,838. We
estimate that during the year 2000, our cash requirements will be
approximately $150,000 per quarter. We will require approximately $150,000
from outside sources to fund our operations for each quarter of the year 2000.
At March 16, 2000, we had on hand cash resources of approximately $230,000. To
the extent that our cash on hand is otherwise fully allocated or disbursed, we
plan to obtain additional financing through the sale of our securities and by
obtaining debt financing. We plan to sell our securities to obtain financing
in the year 2000, until our cash flow from operations is adequate to fund our
ongoing cash requirements. We can give no assurance that capital will be
available from any of these sources, or, if available, upon terms and
conditions acceptable to us.

We have no material commitments for capital expenditures for our U.S.A.
operations, but we anticipate future material capital commitments for our 2000
U.S.A. operations as follows, but only if funds become available: $30,000 for
advertising the PlazaRoyal.com web site, $150,000 to purchase merchandise for
resale by MarcheseDiGenin.com and $20,000 for Internet activity operating
expenses.

We do not currently have any commitments for capital expenditures in
EIP. We intend to continue servicing EIP's existing lease portfolio but
intend to enter into new leases only to the extent that such leases are
supported by EIP's cash flows from operations. Those cash flows are not
expected to allow additional leases in 2000(See Significant Trends above).
We have no anticipated capital commitments for EIP.

We expect to be able to raise sufficient capital for 2000 operations
but raising the capital may cause dilution in per share net tangible book value
to existing shareholders. We will ultimately need to produce positive cash
flows from operations to meet our long-term capital needs. (See Going Concern
Issue above.)

THE YEAR 2000 ISSUE

21
<PAGE>
We have not had any Year 2000 deficiencies internally or externally. We do
not expect to have any Year 2000 deficiencies internally or externally. If a
Year 2000 deficiency occurs internally or externally, we will shift our internal
and external resources to fix the deficiency. We do not expect any Year 2000
deficiency to require an expenditure of more than $10,000.

Item 7. Financial Statements

The financial information required by this item is included as set forth
beginning on Page F-1.

Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.

(1) On July 2, 1998, we engaged Ham, Langston & Brezina, L.L.P. ("Ham,
Langston & Brezina") as our independent accountant. The decision to
engage Ham, Langston & Brezina was recommended and approved by Alex
Genin, our Chairman of the Board of Directors.

(2) In a report dated May 2, 1994, Darrell T. Schvaneveldt, Certified Public
Accountant, reported on our financial statements as of April 30, 1994,
December 31, 1993, 1992 and 1991, and the related statements of
operations, stockholders' equity and cash flows for the accumulated
period January 3, 1977 to April 30,1994, the period January 1, 1994
to April 30, 1994, and for the years ended December 31, 1993, 1992 and
1991. This report did not contain an adverse opinion or disclaimer of
opinion, nor was this report qualified or modified as to uncertainty,
audit scope, or accounting principles. Darrell T. Schvaneveldt,
Certified Public Accountant, understands that he was terminated as our
independent accountant effective May 2, 1994. Thereafter, we engaged
Ham, Langston & Brezina as our independent accountant on July 2, 1998.

(3) During our two fiscal years ended December 31, 1999 and 1998, and the
subsequent interim period, there were no "reportable events" requiring
disclosure pursuant to Item 304 of Regulation S-B.

(4) Effective July 2, 1998, we engaged Ham, Langston & Brezina as our
independent accountant. During the two years ended December 31, 1999 and
1998, and the subsequent interim period, neither we nor anyone on our
behalf consulted Ham, Langston & Brezina regarding either the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be
rendered on our financial statements, nor has Ham, Langston & Brezina
provided to us a written report or oral advice regarding such principles
or audit opinion.

22
<PAGE>
Darrell T. Schvaneveldt, Certified Public Accountant, has provided us with a
letter pursuant to Rule 304 of Regulation S-B.

Item 9. Directors, Executive Officers, Promoters anc Control Person;
Compliance With Section 16(a) of the Exchange Act

OUR DIRECTORS AND EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
Name and Address Age Position
- -------------------------------- --- ------------------------------
<S> <C> <C>
Alex Genin 47 Director, Chairman, CEO, and
5120 Woodway, Suite 9004 President
Houston, Texas 77056

Joseph A. Bond 65 Director and
5120 Woodway, Suite 9004 Secretary
Houston, Texas 77056

Michael Dashkovsky 37 Director and
5120 Woodway, Suite 9004 Manager of European Operations
Houston, Texas 77056

Walter C. Wilson 51 Director
1900 West Loop South, Suite 2050
Houston, Texas 77027

Joselito H. Sangel 45 Vice President of
5120 Woodway, Suite 9004 Finance
Houston, Texas 77056
</TABLE>

Our Directors are elected annually and hold office until our next annual
meeting of stockholders, or until their successors are elected and qualified.
Officers serve at the discretion of the Board of Directors. There is no family
relationship between or among any of our directors and executive officers.

BIOGRAPHIES

Alex Genin has been our Director, Chairman, CEO and President, and our
major shareholder since August, 1998. Since 1992, Mr. Genin has been the
President of ECL Trading Company, which trades goods and commodities in Europe
and countries of the former Soviet Union. Since 1985, Mr. Genin has been the
President of Eastern Credit Ltd. Inc. which provides mortgage and financial
consulting services in Europe, Asia and the United States. Mr. Genin has
extensive experience in business activities in Europe, Asia and countries of the
former Soviet Union.

23
<PAGE>
Joseph A. Bond has been our Director and Secretary since August, 1998. For
more than 25 years, Mr. Bond has been an attorney in the private practice of law
in Texas. Mr. Bond has extensive experience in international tax law.

Michael Dashkovsky has been our Director since August, 1998. Since March,
1999 he has been our Manager of European Operations. Since 1990, Mr. Dashkovsky
has been employed by Eastern Credit Ltd., Inc. as a manager. He was the
President of the Estonian Innovation Bank until February, 1999. This bank owned
EIP at one time.

Walter C. Wilson has been our Director since January, 1999. Since 1974,
Mr. Wilson has been an attorney in private practice in Texas. Mr. Wilson is
licensed to practice law in Texas and Florida. Mr. Wilson has a J.D. degree,
1969, from the University of Florida Law School. Mr. Wilson practices in
international law and international taxation.

Joselito H. Sangel has been our Vice-President of Finance since September,
1998. Since 1996, Mr. Sangel has been an accountant with EC Group Companies, a
firm controlled by Alex Genin. From 1988 through 1995 Mr. Sangel was a
portfolio accountant with First Interstate Bank.

SECTION 16(B) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

We believe that all persons required to file reports pursuant to Section
16(b) of the Exchange Act have done so in a timely manner.

Item 10. Executive Compensation

THE FOLLOWING SETS FORTH ALL FORMS OF COMPENSATION IN EXCESS OF $100,000
PER YEAR PER PERSON THAT WE PAID OUR EXECUTIVE OFFICERS FOR OUR FISCAL YEARS
ENDED DECEMBER 31, 1999, 1998 AND 1997.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------

ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------- ------------------------
AWARDS PAYOUTS
------ -------
OTHER SECURITIES
NAME AND ANNUAL RESTRICTED UNDERLYING
PRINCIPAL FISCAL COMPEN- STOCK OPTIONS/ LTIP ALL
POSITION YEAR SALARY BONUS SATION AWARDS SARS PAYOUTS OTHER
- ------------------- ------ ----------- ----- ------------- ---------- ----------- ---------- --------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alex Genin 1999 $ 74,000 -0- -0- -0- 500,000 -0- $ 75,000 (7)
Chairman 1998 $37,000 (1) -0- -0- -0- 200,000 (2) -0- $684,420(3)(4)
Director 1997 $ -0- -0- -0- -0- -0- -0- -0-
CEO and
President

24
<PAGE>
Michael 1999 $ 13,200 -0- -0- -0- -0- -0- -0-
Dashkovsky 1998 $ -0- -0- -0- - 0- -0- -0- $483,360(5)(6)
Director and 1997 $ -0- -0- -0- -0- -0- -0- -0-
Manager of
European Operations
<FN>

_________________________________

(1) This $37,000 was indirect compensation paid to Mr. Genin. In addition,
businesses owned by Mr. Genin received $131,553 as reimbursement for
providing us with office space and business services (such as: secretarial
services, telecommunications services, and photostating services),
managerial and consultant staffing and travel expenses. See, Certain
Relationships and Related Transactions.

(2) In April , 1999, we awarded Mr. Genin with an immediately exercisable
option to purchase up to 200,000 shares of our common stock at an exercise
price of $0.25 per share expiring on March 31, 2002. This was compensation
for services rendered during 1998 through March 31, 1999. At the date of
the grant, the fair value of our common stock was approximately $0.5625 per
share and the option was valued at $62,500.

(3) In 1998, Mr. Genin purchased an immediately exercisable option to purchase
up to 2,500,000 shares of our common stock at an exercise price of $0.05
per share. The exercise price was below the fair value of our common stock
on the date the option was purchased and the option was valued at $187,500.

(4) In 1998, Mr. Genin purchased 4,000,000 shares of our common stock for
$0.0008 per share when the fair value of the stock was approximately
$0.1250 per share. This transaction resulted in compensation to Mr. Genin
of $496,920. In December, 1999, Mr. Genin purchased an immediately
exercisable option to purchase up to 500,000 shares of our common stock at
an exercise price of $0.10 per share that expires in December, 2001. In
January, 2000, Mr. Genin purchased an immediately exercisable option to
purchase up to 100,000 shares of our common stock at an exercise price of
$0.25 per share that expires in January, 2002.

(5) In 1998, Mr. Michael Dashkovsky, our Manager of Eastern Operations and our
Director, purchased an immediately exercisable option to purchase up to
1,500,000 shares of our common stock at an exercise price of $0.05 per
share. The exercise price was below the fair value of our common stock on
the date the option was purchased and the option was valued at $112,500.

(6) In 1998, Mr. Dashkovsky also purchased 3,000,000 shares of our common stock
for $0.0014 per share when the fair value of the stock was approximately
$0.1250 per share. This transaction resulted in compensation to Mr.
Dashkovsky of $370,860.

25
<PAGE>
(7) During 1999, we issued 700,000 immediately exercisable options as
compensation to Mr.Genin. Of these, 500,000 options have an exercise price
of$.10 per share and expire in December 2001, and 200,000 options have an
exercise price of $.25 per share and expire in March 2002.
</TABLE>

<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1999

Number of Percent of
Securities Total Options/SARs
Underlying Grant ed to All Per Share
Options/SARs Employees Exercise Expiration
Granted in 1999 In 1999 Price Date
--------------- ------------------- ---------- ----------------
<S> <C> <C> <C> <C>
Alex . . . 200,000 23.5% $ 0.25 March 3, 2002
Genin. . . 500,000 58.8% $ 0.10 December 6, 2001

Michael. . -0- -0- - --
Dashkovsky
</TABLE>

AGGREGATED OPTION/SAR EXERCISES IN 1999
AND 1999 YEAR END OPTION/SAR VALUES

$
Number of Value of
Unexercised Unexercised
Securities Underlying In-The-Money
Options/SARs Options/SARs
Share $ At the End of 1999 At the End of 1999
Acquired Value Exercisable / Exercisable /
On Exercise Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Alex . . . . . . . . . -0- -0- 3,300,000 / None. $282,500 / None.
Genin

Michael. . . . . . . . -0- -0- 1,500,000 / None. $112,500 / None.
Dashkovsky
</TABLE>

26
<PAGE>
EMPLOYMENT AGREEMENTS AND OTHER COMPENSATION PLANS

We do not have an employment contract with any of our employees. We
presently intend to negotiate an employment contract with Alex Genin which would
require be Board approval, however, no terms have been discussed at this time.

We presently do not have a long term incentive employee compensation plan.

DIRECTOR COMPENSATION

We do not currently pay any cash directors' fees.

EMPLOYEE STOCK OPTION PLAN

We believe that equity ownership is an important factor in our ability to
attract and retain skilled personnel, and our Board of Directors may adopt an
employee stock option plan in the future. The purpose of the stock option
program will be to further our interests by providing incentives in the form of
stock options to key employees and directors who contribute materially to our
success and profitability. The option grants will recognize and reward
outstanding individual performance and contributions and will give such persons
a proprietary interest in us, thus enhancing their personal interest in our
continued success and progress. This program will also assist us in attracting
and retaining key employees and directors.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information as of March 13, 2000,
with respect to the beneficial ownership of shares of common stock by: (i) each
person who is known to us to beneficially own more than 5% of our outstanding
shares of common stock, (ii) each of our directors, (iii) each of our executive
officers, and (iv) all of our executive officers and directors as a group.
Unless otherwise indicated, each stockholder has sole voting and investment
power with respect to the shares shown. At March 27, 2000, we had outstanding
71,068,742 shares of common stock, and no outstanding preferred stock.

Name and Address Shares of Common Percent of
of Beneficial Holder Stock Beneficially Owned Class
- -----------------------------------------------------------------------------

Alex Genin 52,620,000 (1,2,5,6) 69.2%
5120 Woodway, Suite 9004
Houston, Texas 77056

Eurocapital Group, Ltd 25,500,000 (2) 35.2%
19 Peel Road

27
<PAGE>
Douglas, Isle of Man
British Isles 1M1 4LS

United Capital Group Limited 19,820,000 (2,6) 27.3%
50 Town Range, Suite 7B
Gibraltar

Michael Dashkovsky 4,500,000 (3) 6.1%
5120 Woodway, Suite 9004
Houston, Texas 77056

Abrador, SA. 3,618,100 5.0%
48 East Street
Bella Vista, Sucre Building
Panama

Joseph A. Bond 400,000 .6%
5120 Woodway, Suite 9004
Houston, Texas 77056

Walter C. Wilson 100,000 0.1%
1900 West Loop South, Suite 2050
Houston, Texas 77027

Joselito H. Sangel 630,000 (4) 0.9%
5120 Woodway, Suite 9004
Houston, Texas 77056

All officers and directors as 58,250,000 74.9%
a Group--Five Persons
__________________________________

(1) Includes options to purchase up to 3,300,000 shares of our common stock
which are presently exercisable at excise prices of from $.05 to $.25
per share.

(2) Alex Genin currently holds powers of attorney from Eurocapital Group,
Ltd. and United Capital Group Limited pursuant to which Mr. Genin is
Granted voting and investment power with respect to our shares. Mr.
Genin is deemed to be the beneficial owner of these shares. Mr. Genin
does not own any stock of Eurocapital Group, Ltd. or United Capital
Group Limited.

28
<PAGE>
(3) Includes an option to purchase up to 1,500,000 shares of our common
stock which is presently exercisable at an exercise price of $0.05 per
share.

(4) Includes an option to purchase up to 230,000 shares of our common stock
which is presently exercisable at exercise prices ranging from $.05 to
$0.50 per share.

(5) Includes shares owned by Eurocapital Group, Ltd. and United Capital
Group Limited.

(6) Includes an option to purchase up to 300,000 shares of our common stock
which is presently exercisable at exercise prices ranging from $0.50 per
share.

Item 12. Certain Relationships and Related Transactions

Alex Genin currently holds powers of attorney from Eurocapital Group, Ltd.
and United Capital Group Limited pursuant to which Mr. Genin is granted voting
and investment power with respect to our shares. Mr. Genin is deemed to be the
beneficial owner of these shares. Mr. Genin does not own any stock of
Eurocapital Group, Ltd. or United Capital Group Limited.

We believe that the terms and conditions of all of the following
transactions were no less as favorable to us than terms attainable from
unaffiliated third parties. The terms of these transactions were determined by
the parties through arms length negotiations. These transactions were made at a
time when our common stock had a very low market value and there was only de
minimis and infrequent trading activity.

Effective September, 1998, we and United Capital Group Limited entered into
a loan agreement (since repaid). As part of the loan agreement, during 1998,
United Capital Group Limited, on behalf of us, reimbursed businesses owned by
Mr. Genin for services which Mr. Genin's businesses provided to us, including
office space and business services (such as: secretarial services,
telecommunications services, and photostating services), managerial and
consultant staffing (including payments to Mr. Genin of $37,000 in 1998) and
travel expenses. Mr. Genin's businesses provided these services on terms no
less favorable to us than terms obtainable from unaffiliated third parties. At
the time these transactions occurred, we had limited resources, and were unable
to find any alternative source of financing. In 1998, Mr. Genin's businesses
received $168,553 under this arrangement and the cumulative total was $186,000
as of January 31, 1999. In February, 1999, United Capital Group and us agreed
to exchange the $186,000 indebtedness for 7,440,000 shares of common stock.
Pursuant to the loan agreement, this debt was converted at a conversion price of
$0.025 per share, which, at the time of conversion, was below market value. In
August, 1999, United Capital Group Limited converted additional debt for shares
of our common stock pursuant to the loan agreement at an exchange price of $0.05
per share for 2,280,000 shares of our common stock. United Capital Group
Limited presently owns approximately 27.3% of our common stock.

29
<PAGE>
During 1998, Mr. Genin's businesses compensated Mr. Genin in the amount of
$37,000 for services he rendered related to us. During 1999, Mr. Genin's
businesses compensated Mr. Genin in the amount of $74,400 as compensation to him
for services he rendered related to us. Mr. Genin beneficially owns
approximately 69.2% of our common stock .

In September, 1998, we entered into a Stock Exchange Agreement with two
stockholders of EIP, who were Eurocapital Group, Ltd. and United Capital Group
Limited. We issued a total of 34,000,000 shares of our common stock to the EIP
stockholders in exchange for all of the outstanding shares of EIP. The terms
and conditions of the Stock Agreement Exchange were determined by the parties
through arms length negotiations and were approved by the Board of Directors.
However, there was no appraisal. As a result of these transactions, Eurocapital
Group, Ltd. now beneficially owns 35.2% of our common stock, and United Capital
Group Limited now beneficially owns 27.3% of our common stock. We treated the
acquisition of EIP as a recapitalization whereby EIP was the accounting
acquiror. At the time of the acquisition, we estimated the market value of our
common stock at approximately $.005 per share, resulting in a valuation of the
acquisition of approximately $170,000.

Estonian Innovation Bank, which previously owned EIP, made a loan to EIP in
1997. At December 31, 1999, the principal balance on this loan, which bears
interest at 10% per annum, was $333,641 which is payable interest only on a
monthly basis with a final balloon payment of principal and interest due in May,
2002. We do not believe that this funding source will provide any additional
financing. Eurocapital Group, Ltd. owns approximately 54% of Estonian
Innovation Bank and beneficially owns 35.2% of our common stock.

In October, 1998, we sold to Alex Genin 4,000,000 shares of common stock at
one-tenth cent per share and granted Mr. Genin an option to purchase 2,500,000
shares of our common stock which is exercisable at $0.05 per share and expires
August, 2001, for the total cash sum of $4,140. This option is presently
exercisable. These issuances were approved by the Board of Directors. This was
an incentive approved by the Board of Directors to persuade Mr. Genin to become
an officer and director and to devote virtually all of his time to us at a time
when there was no meaningful market for our common stock and when we had limited
financial resources. In April, 1999, we granted Mr. Genin an option to purchase
up to 200,000 of our common stock exercisable at $0.25 per share and expires in
March, 2002. In December, 1999, Mr. Genin purchased an immediately exercisable
option to purchase up to 500,000 shares of our common stock at an exercise price
of $0.10 per share that expires in December, 2001. In January, 2000, Mr. Genin
purchased an immediately exercisable option to purchase up to 100,000 shares of
our common stock at an exercise price of $0.25 per share that expires in
January, 2002.

30
<PAGE>
In October, 1998, we sold to Michael Dashkovsky 3,000,000 shares of common
stock at one-tenth cent per share and granted Mr. Dashkovsky an option to
purchase 1,500,000 shares of our common stock exercisable at $0.05 per share and
expires in August, 2001, for the total cash sums of $3,080. This option is
presently exercisable. These issuances were approve by the Board of Directors.
This was an incentive approved by the Board of Directors to persuade Mr.
Dashkovsky to become an officer and director and to devote substantially all of
his time to us at a time when there was no meaningful market for our common
stock and when the we had limited financial resources.

Item 13. Exhibits and Reports on Form 8-K

(a) Reports on Form 8-K.

None.

(b) Exhibits

Exhibit Index:

Exhibit
- -------
Number Description of Exhibit
- ------ ------------------------

3.1 (*) Certificate of Incorporation and Amendments thereto.
3.2 (*) By-Laws and Amendments thereto.
4.1 (*) Form of Common Stock Certificate.
10.1 (*) Stock Exchange Agreement by and among First Capital
International, Inc. and certain registered holders of
capital stock of EIP Liisingu AS, an Estonian corporation.
10.2 (*) Loan agreement between us and United Capital Group, Ltd
16.1 (*) Letter on change of certifying accountant.
21.1 (*) Subsidiaries of the registrant.
27.1 (**) Financial Data Schedule for the year ended December 31, 1999.
___________________________

(*) Previously provided in the Form 10-SB original submission and
amendments thereto.

(**) Provided here with.

31
<PAGE>
SIGNATURES

In accordance with the requirements of Section 13 of 15(d) of the Exchange
Act, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on March 28, 2000.

FIRST CAPITAL INTERNATIONAL, INC.

By: /s/ Alex Genin
Alex Genin
Director, CEO, and President

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated:

Signature Title Date
- --------- ----- ----

/s/ Alex Genin Director , March 28, 2000.
Alex Genin CEO and
President

/s/ Joseph A. Bond Director and March 28, 2000.
Joseph A. Bond Secretary

/s/ Michael Dashkovsky Director and March 28, 2000.
Michael Dashkovsky Manager of
European Operations

/s/ Walter C. Wilson Director March 28, 2000.
Walter C. Wilson

/s/ Joselito H. Sangel Vice President March 28, 2000.
Joselito H. Sangel of Finance

32
<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
__________

CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

F-1

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
TABLE OF CONTENTS
__________

PAGE(S)
-------

Report of Independent Accountants F-3

Audited Financial Statements

Consolidated Balance Sheet as of December 31,
1999 F-4

Consolidated Statement of Operations for the
years ended December 31, 1999 and 1998 F-5

Consolidated Statement of Stockholders' Deficit
for the years ended December 31, 1999 and
1998 F-6

Consolidated Statement of Cash Flows for the
years ended December 31, 1999 and 1998 F-8

Notes to Consolidated Financial Statements F-9

F-2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

Board of Directors and Stockholders
First Capital International, Inc.

We have audited the accompanying consolidated balance sheet of First Capital
International, Inc. as of December 31, 1999, and the related statements of
operations, stockholders' deficit and cash flows for each of the two years in
the period then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audit, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of First Capital International, Inc. as of December 31, 1999, and the
results of its operations and its cash flows for each of the two years in the
period then ended in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 4. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

As discussed further in Note 2, the accompanying financial statements for the
year ended December 31, 1998 have been restated.

/s/ Ham, Langston & Brezina, L.L.P.

Houston, Texas
March 22, 2000

F-3
<PAGE>
<TABLE>
<CAPTION>

FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
__________

DECEMBER 31,
ASSETS 1999
- --------------------------------------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 115,838
Short-term investments 15,650
Lease receivables, net 79,813
Accounts and notes receivable, net 15,248
Inventory 35,457
Prepaid expenses 7,650
------------

Total current assets 269,656

Lease receivables 111,155

Accounts and notes receivable, net 13,624

Property and equipment, net 13,202
------------

Total assets $ 407,637
============

LIABILITIES AND STOCKHOLDERS' DEFICIT
- ---------------------------------------------

Current liabilities:
Note payable-related party $ 11,372
Accounts payable and accrued liabilities 40,846
------

Total current liabilities 52,218

Long-term debt-related party 333,641
------------

Total liabilities 385,859
------------

Commitments and contingencies

Stockholders' equity:
Common stock, $0.001 par value; 100,000,000
shares authorized; 70,061,142 shares
issued and outstanding 70,061
Additional paid-in capital 2,794,371
Accumulated deficit (2,820,817)
Accumulated foreign currency translation
adjustments (21,837)
------------

Total stockholders' equity 21,778
------------

Total liabilities and stockholders'
equity $ 407,637
============
</TABLE>

See notes to consolidated financial statements.

F-4

FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
__________

YEAR ENDED DECEMBER 31,
--------------------------
1998
AS RESTATED
1999 (SEE NOTE 2)
------------ ------------
<S> <C> <C>
Revenue:
Merchandise sales $ 11,388 $ -
Interest income 36,057 43,822
Marketing research and consulting 114,805 -
Other operating revenue 23,182 13,352
------------ ------------

Total revenue 185,432 57,174
------------ ------------

Costs and expenses:
Cost of goods sold 4,103 -
Operating, general and administrative
expenses 571,203 257,745
Stock and option based compensation 444,335 1,334,322
Depreciation and amortization 6,657 8,563
Unrealized depreciation in value of
marketable equity securities 33,301 -
Interest expense 267,654 97,001
Other expense, net - 303
------------ ------------

Total costs and expenses 1,327,253 1,697,934
------------ ------------

Net loss $(1,141,821) $(1,640,760)
============ ============

Basic and dilutive net loss per
common share $ (0.02) $ (0.07)
============ ============

Weighted average shares outstanding 65,403,364 24,477,471
============ ============
</TABLE>
See notes to consolidated financial statements.

F-5
<TABLE>
<CAPTION>

FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
__________

FOREIGN COMPRE-
ADDITIONAL CURRENCY HENSIVE
COMMON STOCK PAID-IN ACCUMULATED TRANSLATION INCOME
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT (LOSS)
- ----------------------------------- ----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997, as
restated (See Note 2) 10 $ 7,390 $ 38,631 $ (41,361) $ - $ (1,120)
-------

Cumulative foreign currency trans-
lation adjustment at January 1,
1998, the date of change in
status of Estonia to non-highly
inflationary economy - - 3,125 (3,125) -

Net loss, as restated (See Note 2) - - (1,640,760) - (1,640,760)

Other comprehensive income-
foreign currency transla-
tion adjustment - - - 269 269
-----------

Comprehensive income (loss), as
restated (See Note 2) (1,640,491)
-----------

Common stock issued for cash
before recapitalization 30 21,314 376 - - -

Recapitalization effective
September 17, 1998 46,651,102 17,947 (17,947) - - -

Common stock issued for cash
and services after recapital-
ization 9,100,000 9,100 1,018,100 - - -

Stock options issued to
officers below fair market
value, as restated (See Note 2) - 330,000 - - -
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>
<TABLE>
<CAPTION>

FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT, CONTINUED
__________

FOREIGN COMPRE-
ADDITIONAL CURRENCY HENSIVE
COMMON STOCK PAID-IN ACCUMULATED TRANSLATION INCOME
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT (LOSS)
- ---------------------------------- ----------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Value of conversion feature on
convertible debt, as restated
(See Note 2) - - 166,810 - - -
----------- ------------ ------------ ------------ --------- ------------

Balance at December 31, 1998, as
restated (See Note 2) 55,751,142 55,751 1,535,970 (1,678,996) (2,856) (1,641,611)

Net loss - - - (1,141,821) - (1,141,821)

Other comprehensive income-
foreign currency translation
adjustment - - - - (18,981) (18,981)
------------

Comprehensive income (1,160,802)
------------

Common stock issued for cash and
services (14,310,000 shares) 14,310,000 14,310 1,016,869 - - -

Compensatory stock options issued
to employees, officers and
directors - - 91,250 - - -

Compensatory stock options issued
to vendors - - 17,092 - - -

Value of conversion feature on
convertible debt - - 133,190 - - -
----------- ------------ ------------ ------------ --------- ------------

Balance at December 31, 1999 70,061,142 $ 70,061 $ 2,794,371 $(2,820,817) $(21,837) $(2,802,413)
=========== ============ ============ ============ ========= ============
</TABLE>

See notes to consolidated financial statements.
F-7
<PAGE>
<TABLE>
<CAPTION>
FIRST CAPITAL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
__________

YEAR ENDED DECEMBER 31,
---------------------------
1998
AS RESTATED
1999 (SEE NOTE 2)
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,141,821) $ (1,640,760)
Adjustment to reconcile net loss to net
cash used in operating activities:
Gain on sale of property and equipment (9,978) -
Depreciation expense 6,657 8,563
Provision for bad debts - 53,148
Common stock and stock options issued for
services 444,335 1,334,322
Common stock and stock options issued in
payment of vendors 17,092 -
Amortization of discount on note payable-
related party 234,610 65,390
Unrealized depreciation on marketable
equity securities 33,301 -
Change in operating assets and liabilities:
Lease receivables 43,732 28,187
Accounts receivable (74,741) 14,612
Inventory (35,457) -
Prepaid expenses 27,144 67
Assets held for sale - (18,958)
Accounts payable and accrued liabilities 14,345 (35,138)
------------ -------------

Net cash used in operating activities (440,781) (190,567)
------------ -------------

Cash flows from investing activities:
Proceeds from sale of property and equipment 12,534 138
Capital expenditures (12,896) -
------------ -------------

Net cash provided by investing
activities (362) 138
------------ -------------

Cash flows from financing activities:
Proceeds from notes payable and related
conversion feature 144,562 166,810
Proceeds from sale of common stock 359,113 44,568
------------ -------------

Net cash provided by financing activities 503,675 211,378
------------ -------------

Effects of exchange rate changes on cash (8,161) (1,774)
------------ -------------

Net increase in cash and cash equivalents 54,371 19,175

Cash and cash equivalents, beginning
of year 61,467 42,292
------------ -------------

Cash and cash equivalents, end of year $ 115,838 $ 61,467
============ =============

Supplemental disclosure of cash flow information:

Cash paid for interest $ 26,959 $ 31,611
============ =============
</TABLE>

See notes to consolidated financial statements.
F-8
<PAGE>

FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
__________

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------

First Capital International, Inc. (the "Company"), formerly Ranger/USA,
Inc., assumed its current name in August 1998 when new management took over
the Company which, at the time, had no existing operations, and began
implementation of a new business plan. The Company is now involved
primarily in the identification, acquisition and operation of businesses
serving or focused on Central and Eastern European markets. To date, the
Company's initial business has been EIP Liisingu AS, an Estonian company
that provides lease financing of real estate, motor vehicles and equipment.
The Company is currently identifying additional acquisition targets that
are involved in internet related businesses, or businesses that compliment
PlazaRoyal.com, an internet site developed and operated by the Company.

PRINCIPLES OF CONSOLIDATION
-----------------------------

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries after elimination of all significant
intercompany accounts and transactions.

MANAGEMENT ESTIMATES
---------------------

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates. These estimates mainly involve the useful lives of
property and equipment, the valuation of deferred tax assets and the
realizability of accounts receivable.

REVENUE RECOGNITION
--------------------

Interest income is recognized using the interest method over the terms of
underlying leases. Other operating revenue is recognized at the time
services are provided.

CONCENTRATIONS OF CREDIT RISK
--------------------------------

Cash and accounts and lease receivables are the primary financial
instruments that subject the Company to concentrations of credit risk. The
Company maintains its cash in banks selected based upon management's
assessment of the bank's financial stability. Cash balances are currently
maintained in banks in Estonia and the United States. Cash balances in U.S.
banks may periodically exceed the $100,000 federal depository insurance
limit.

Continued
F-9

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------

CONCENTRATIONS OF CREDIT RISK, CONTINUED
--------------------------------------------

Accounts and leases receivable arise primarily from transactions with
customers in Estonia. The Company performs credit reviews of its customers
and provides a reserve for accounts where collectibility is uncertain.
Collateral is required for credit granted in connection with certain lease
transactions.

CASH EQUIVALENTS
-----------------

For purposes of reporting cash flows, the Company considers all short-term
investments with an original maturity of three months or less to be cash
equivalents.

INVENTORY
---------

Inventory consists of finished goods held for sale and are recorded at the
lower of aggregate cost or market. Cost is determined using the first-in,
first-out (FIFO) method.

MARKETABLE EQUITY SECURITIES
------------------------------

Marketable equity securities are classified as trading and are carried at
quoted market values. The change in unrealized gain or loss with respect to
these securities is recorded currently in operations.

PROPERTY AND EQUIPMENT
------------------------

Equipment is stated at cost. Depreciation is computed principally by the
straight-line method over the estimated useful lives of 3 to 5 years for
office equipment and 3 to 5 years for transportation equipment. Additions
or improvements that increase the value or extend the life of an asset are
capitalized. Expenditures for normal maintenance and repairs are expensed
as incurred. Disposals are removed from the accounts at cost less
accumulated depreciation, and any gain or loss from disposition is
reflected in operations currently.

IMPAIRMENT OF LONG-LIVED ASSETS
----------------------------------

In the event that facts and circumstances indicate that the carrying value
of a long-lived asset, including associated intangibles, may be impaired,
an evaluation of recoverability is performed by comparing the estimated
future undiscounted cash flows associated with the asset to the asset's
carrying amount to determine if a write-down to market value or discounted
cash flow is required.

Continued
F-10

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------

INCOME TAXES
-------------

The Company uses the liability method in accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and income tax carrying amounts of
assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to reverse.

FAIR VALUE OF FINANCIAL INSTRUMENTS
---------------------------------------

The Company includes fair value information in the notes to financial
statements when the fair value of its financial instruments is different
from the book value. When the book value approximates fair value, no
additional disclosure is made.

FOREIGN CURRENCY TRANSLATION
------------------------------

Effective January 1, 1998, the Company determined that the local currency
is the functional currency for its Estonian subsidiary under Financial
Accounting Standards Board Statement No. 52, "Foreign Currency Translation"
(FAS 52). Under FAS 52, assets and liabilities denominated in foreign
functional currencies are translated at the exchange rate as of the balance
sheet date. Translation adjustments are recorded as a separate component of
stockholders' deficit. Revenues, costs and expenses denominated in foreign
functional currencies are translated at the weighted average exchange rate
for the period.

Prior to 1998, Estonia was considered a "highly inflationary economy" under
("FAS 52") and the U.S. dollar was treated as the functional currency for
the Company's Estonian subsidiary. Accordingly, all translation adjustments
were reflected in the consolidated statement of operations in 1997. As
reflected in the consolidated statement of stockholders' deficit, at
January 1, 1998 the Company recorded an adjustment to accumulated deficit
of $3,125 to reflect cumulative translation adjustments in stockholders'
deficit at the date the Company's Estonian subsidiary changed its
functional currency to the Estonian kroon.

Continued
F-11

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------

COMPREHENSIVE INCOME
---------------------

Effective January 1, 1998 the Company adopted FAS 130, "Reporting
Comprehensive Income" ("FAS 130"). FAS 130 establishes standards for
Reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general-purpose
financial statements. It requires (a) classification of the components of
other comprehensive income by their nature in a financial statement
and (b) the display of the accumulated balance of the other
comprehensive income separate from retained earnings and additional paid-in
capital in the equity section of a statement of financial position. Prior
years financial statements have been reclassified to conform to these
requirements.

2. RESTATEMENT OF FINANCIAL STATEMENTS
--------------------------------------

During the year ended December 31, 1998, the Company issued certain
short-term debt with an associated beneficial conversion feature. The
beneficial conversion feature was assigned a value of zero, but should have
been assigned a value of approximately $167,000 and amortized as additional
interest expense over the term of the debt.

During the year ended December 31, 1998, the Company issued 9,100,000
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 4,250,000 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.

Continued
F-12

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

2. RESTATEMENT OF FINANCIAL STATEMENTS, CONTINUED
--------------------------------------------------

The effect of correcting these errors in application of generally accepted
accounting principles on the Company's financial statements at December 31,
1998 and for the year then ended, is as follows:

1998
-------

Decrease in total assets $ -
===========

Decrease in total liabilities $ (101,420)
===========

Increase in common and preferred stock
and additional paid-in capital $ 101,420
===========

Increase in accumulated deficit $ 852,890
===========

Increase in net loss $ 852,890
===========

Increase in basic and dilutive net
loss per common share $ (0.04)
===========

3. RECAPITALIZATION
----------------

On September 28, 1998 First Capital International, Inc. was acquired by EIP
Liisingu AS ("EIP"), an Estonian corporation, in a recapitalization
transaction accounted for similar to a reverse acquisition, except that no
goodwill was recorded. First Capital International, Inc. was the "acquired"
company in the transaction, but remains the surviving legal entity. Prior
to the acquisition First Capital International, Inc. was a non-operating
public shell corporation with no significant assets. Accordingly, the
transaction was treated as an issuance of stock by First Capital
International, Inc. for EIP's net monetary assets, accompanied by a
recapitalization. In connection with this transaction, First Capital
International, Inc. issued 34,000,000 shares of common stock in exchange
for all outstanding shares of EIP. Since this transaction is in substance,
a recapitalization of EIP and not a business combination, proforma
information is not presented and a valuation of the company was not
performed.

In connection with the recapitalization transaction described in the
previous paragraph, the outstanding common stock of First Capital
International, Inc. was essentially substituted for the common stock of EIP
and the difference was included in additional paid-in capital.

Continued
F-13

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

4. GOING CONCERN CONSIDERATIONS
------------------------------

During the years ended December 31, 1999 and 1998, the Company has been
dependent on debt and equity raised from individual investors and related
parties to sustain its operations. During the years ended December 31, 1999
and 1998, the Company incurred net losses of $1,141,821 and $1,640,760,
respectively, and had negative cash flows from operations of $448,942 and
$190,567. These factors raise substantial doubt about the Company's ability
to continue as a going concern.

Management has specific plans to address the Company's financial situation
as follows:

- In the near term Management plans private placements of the Company's
common stock to qualified investors to fund its operations.

- In the long-term, Management believes that cash flows from acquired
businesses and businesses that it is currently developing will provide
the resources for its continued operations. Acquisition activities and
development of the Company's internet-based business resulted in
corporate headquarters accounting for 99% and 95% of the Company's
total net loss in 1999 and 1998, respectively.

There can be no assurance that the Company's planned private placement of
equity securities status will be successful or that the Company will have
the ability to implement its business plan and ultimately attain
profitability. The Company's long-term viability as a going concern is
dependent upon three key factors, as follows:

- The Company's ability to obtain adequate sources of debt or equity
funding to meet current commitments and fund the continuation of its
business operations.

- The ability of the Company to acquire or internally develop viable
businesses.

- The ability of the Company to ultimately achieve adequate
profitability and cash flows from operations to sustain its
operations.

Continued
F-14

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

5. ACCOUNTS RECEIVABLE
--------------------

Accounts receivable at December 31, 1999 were as follows:

Trade accounts receivable $ 87,897
Accrued interest receivable 1,610
Other 6,041
--------

95,548
Less allowance for doubtful accounts 66,676
--------

28,872
Less current portion of accounts and notes
receivable 15,248
--------

$ 13,624
=========

6. INVESTMENT IN DIRECT FINANCING LEASES
-----------------------------------------

The Company owns and leases various buildings, transportation and other
equipment under leases that meet the criteria to be classified as direct
financing leases. Assets owned and leased under direct financing leases are
carried at the Company's gross investment in the lease less unearned
income. Unearned income is recognized in such a manner as to produce a
constant periodic rate of return on the net investment in the direct
financing lease.

The components of the Company's investment in direct financing leases at
December 31, 1999 were as follows:

Lease contracts receivable (net of
accounts reserved of $994) $239,457
Less unearned income 48,489
--------

Investment in direct financing leases $190,968
========

Continued
F-15

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

6. INVESTMENT IN DIRECT FINANCING LEASES, CONTINUED
-----------------------------------------------------

The minimum lease payment receivables under noncancellable leasing
Arrangements at December 31, 1999 were as follows:

YEAR ENDING
DECEMBER 31,
-------------

2000 $100,078
2001 86,399
2002 33,928
2003 11,372
2004 7,680
--------

Net minimum lease receipts 239,457

Less unearned income 48,489
--------

Net investment in direct financing
leases 190,968

Less current portion 79,813
--------

$111,155
========

7. PROPERTY AND EQUIPMENT
------------------------

Property and equipment at December 31, 1999 was as follows:

Transportation equipment $ 10,260
Office equipment 6,263
--------

16,523
Less accumulated depreciation (3,321)
--------

$ 13,202
=========

Continued
F-16
<PAGE>

FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

8. NOTE PAYABLE AND LONG-TERM DEBT-RELATED PARTY
--------------------------------------------------

Notes payable and long-term debt to related parties at December 31, 1999
were as follows:

Note payable to a related foreign corpora-
tion under a verbal loan agreement bearing
interest at 8.0% per year and on demand. $ 11,372

Note payable to EIP's former parent company,
bearing interest at 10% per year and due
in monthly payments of interest only
through May 2002, at which date the en-
tire principal balance is payable. This
note is collateralized by substantially
all of EIP's property and equipment and
leased assets excluding buildings and
transportation equipment. 333,641
--------

345,013

Less current portion 11,372
--------

$333,641
========

Future maturities of notes payable and long-term debt at December 31, 1999
were as follows:

YEAR ENDING
DECEMBER 31,
-------------

2000 $ 11,372
2001 -
2002 333,641
--------
$345,013
========

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
--------------------------------------------

Accounts payable and accrued liabilities at December 31, 1999 were as
follows:

Trade accounts payable $ 6,936
Accrued legal and professional fees 22,378
Accrued payroll and compensation 6,078
Other accrued liabilities 5,454
--------

$ 40,846
=========

Continued
F-17

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

10. INCOME TAXES
-------------

The Company has incurred losses since its inception and, therefore, has not
been subject to federal income taxes. As of December 31, 1999, the Company
had net operating loss ("NOL") carryforwards for income tax purposes of
approximately $1,080,000 which expire in 2008 through 2019. Under the
provisions of Section 382 of the Internal Revenue Code the greater than 50%
ownership change in the Company in connection with the reverse merger with
EIP (See Note 3) severely limits the Company's ability to utilize the NOL
carryforward to reduce future taxable income and related tax liabilities.
Additionally, because United States tax laws limit the time during which
NOL carryforwards may be applied against future taxable income, the Company
will not be able to take full advantage of its NOL for federal income tax
purposes should the Company generate taxable income.

The composition of deferred tax assets and the related tax effects at
December 31, 1999 are as follows:

Deferred tax assets:
Net operating losses $ 368,770
Allowance for doubtful accounts and
notes receivable 23,007
Unrealized depreciation in value of
marketable equity securities 11,322
Valuation allowance (403,099)
----------

Net deferred tax assets $ -
==========

The difference between the income tax benefit in the accompanying statement
of operations and the amount that would result if the U.S. Federal
statutory rate of 34% were applied to pre-tax loss is as follows (amounts
in thousands):

1999 1998
----------------- ----------------
AMOUNT % AMOUNT %
------- --- ------- ---
Benefit for income tax at
federal statutory rate $388,219 34.0 $557,858 34.0
Non-deductible compensation (151,074) (13.2) (476,002) (29.0)
Increase in valuation
(237,145) (20.8) (81,856) (5.0)
-------- ----- --------- -----

$ - - $ - -
========= ======= ========= =======

Continued
F-18

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

11. STOCKHOLDER'S EQUITY
---------------------

On April 1, 1999 the Company authorized 10,000,000 shares of serial
preferred stock for which the Company's Board of Directors may designate
voting power, preferences, limitations and restrictions.

During the year ended December 31, 1999, the Company sold and issued, above
the number of existing shares outstanding, a total of 14,310,000 shares of
common stock. Of the 14,310,000 total shares, 498,000 shares were issued as
compensation for employee and non-employee services at prices representing
a discount from the fair value of the Company's common stock at the date of
issue or measurement date. Such discount has been recognized as
compensation expense totaling $353,085 in the accompanying statement of
operations for the year ended December 31, 1999. In connection with the
issuance of shares for service, the fair value of the Company's common
stock was determined based upon the quoted market prices for the Company's
common stock. The Company has accounted for common stock issued to
non-employees for services in accordance with EITF Issue 96-18. In all
cases the measurement date for measurement of the fair value of the
Company's common stock was the date at which the service provider's
performance was complete because such date was before the commitment by the
service provider to earn the common stock.

In order to remain within the constraints of authorized shares, on August
28, 1998, the Company adopted amendments to its certificate of
incorporation to (i) increase the authorized capital stock of the
corporation from 50,000,000 shares to 100,000,000 shares and (ii) decrease
the par value of common stock from $0.01 to $0.001 per share.

Continued
F-19

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

12. STOCK OPTIONS
--------------

During the year ended December 31, 1999, the Company issued non-qualified
options to employees, officers and directors of the Company that will allow
them to immediately acquire a total of 850,000 shares of the Company's
common stock at prices ranging from $0.05 to $0.10 per share. The table
below summarizes the annual activity in the Company's stock options:

WEIGHTED
AVERAGE
EXERCISE
OPTIONS EXERCISE PRICE PRICE
---------------------------- -------------- --------------
<S> <C> <C> <C>
Balance at December 31, 1997 - $- $ -

Granted 4,250,000 $0.05 to $0.10 $ 0.05
Cancelled -
Exercised -
--------------

Balance at December 31, 1998 4,250,000 $ 0.05 $ 0.05

Granted to employees,
officers and directors 850,000 $0.10 to $0.25 $ 0.14
Granted to vendors 40,000 $0.68 to $0.75 $ 0.70
Cancelled - $ -
Exercised -
--------------

Balance at December 31, 1999 5,140,000 $0.05 to $0.75 $ 0.07
==============
</TABLE>

The Company utilizes the disclosure-only provisions of SFAS No. 123
"Accounting for Stock-Based Compensation" and applies Accounting Principles
Board ("APB") Opinion No. 25 and related interpretations in accounting for
its stock option plans. Under APB No. 25, because the exercise prices of
the Company's employee stock options were less than the fair value of the
Company's stock on the date of grant, compensation expense totaling $91,250
has been recognized in these financial statements to reflect the value of
stock options granted as compensation. The fair value of the Company's
common stock, for purposes of determining compensation expense associated
with stock options, was determined based upon the quoted market price of
the Company's common stock.

Had the Company elected to recognize compensation cost for stock options
based on the calculated fair value at the grant dates, consistent with the
method prescribed by SFAS No. 123, net income (loss) per share would have
reflected the proforma amounts indicated below:

Continued
F-20

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

12. STOCK OPTIONS, CONTINUED
--------------------------
1999 1998
------- -------

Net loss
as reported $(1,141,821) $(1,640,760)
proforma (1,179,511) (1,726,077)
Basic and diluted net loss per share (0.02) (0.07)

The fair values of the stock options are estimated on the dates of grant
using the Black-Scholes option-pricing model with the following weighted
average assumptions for options granted in 1999:

Dividend yield 0.0% 0.0%
Expected volatility 80.0% 70.0%
Risk-free interest rate 6.0% 4.9%
Expected holding period 2 years 2 years

All outstanding stock options are currently exercisable. A summary of
outstanding stock options at December 31, 1999 follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
NUMBER OF REMAINING
COMMON STOCK CONTRACTUAL EXERCISE
EQUIVALENTS EXPIRATION DATE LIFE (YEARS) PRICE
- ------------ --------------- ------------ ------

4,000,000 August 2001 1.7 $ 0.05
250,000 August 2001 1.7 0.10
100,000 January 2000 0.1 0.10
10,000 October 2000 0.8 0.75
30,000 October 2001 1.8 0.68
550,000 December 2001 2.0 0.10
200,000 March 2002 2.3 0.25
- ------------

5,140,000
============
</TABLE>

Continued
F-21

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

13. RELATED PARTY TRANSACTIONS
----------------------------

During the years ended December 31, 1999 and 1998, the Company engaged in
certain related party transactions as follows:

13. RELATED PARTY TRANSACTIONS, CONTINUED
----------------------------------------

1999 1998
------ ------

Direct financing leases with
officers and directors of EIP:

Total lease contract amount $ 3,792 $ 3,792
Balance of lease receivable at
year end $ 248 $ 1,050
Interest rate 15% 15%

Interest incurred on long-term debt
to former parent of EIP $ 27,044 $ 31,611

During 1999 the Company began subleasing office space from a company 100%
owned by the Company's president. The sublease is on a month-to-month basis
and provides for monthly payments of $2,343. Total rent expense recognized
with respect to this lease during 1999 and 1998 was $28,116 and $9,372,
respectively.

14. LITIGATION
----------

The Company is a party to certain litigation arising in the normal course
of business. Management believes that such litigation will not have a
material impact on the Company.

15. 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 currently operates with the
Estonian kroon as its functional currency.

The corporate component of operating income (loss) represents corporate
general and administrative expenses. Corporate assets include cash and cash
equivalents.

Continued
F-22

<PAGE>
FIRST CAPITAL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
__________

15. SEGMENT AND GEOGRAPHIC INFORMATION, CONTINUED
-------------------------------------------------

Following is a summary of segment information:

1999 1998
------- -------

Net Revenue:
United States - Corporate $ 13,689 $ -
Estonia - Leasing 171,743 57,174
----------- -----------

Total net revenue $ 185,432 $ 57,174
=========== ===========

Depreciation and Amortization:
United States - Corporate $ 238 $ -
Estonia - Leasing 6,420 8,563
----------- -----------

Total depreciation and
amortization $ 6,658 $ 8,563
=========== ===========

Loss from Operations:
United States - Corporate $(1,130,954) $(1,602,069)
Estonia - Leasing (10,867) (38,691)
----------- -----------

Total loss from operations $(1,141,821) $(1,640,760)
=========== ==========

Assets:
United States - Corporate $ 108,446 $ 906
Estonia - Leasing 299,191 334,495
----------- -----------

Total assets $ 407,637 $ 335,401
=========== ===========

Capital Expenditures:
United States - Corporate $ 3,701 $ -
Estonia - Leasing 9,195 138
----------- -----------

Total capital expenditures $ 12,896 $ 138
=========== ===========

<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 115838
<SECURITIES> 15650
<RECEIVABLES> 161737
<ALLOWANCES> 66676
<INVENTORY> 35457
<CURRENT-ASSETS> 269656
<PP&E> 16523
<DEPRECIATION> 3321
<TOTAL-ASSETS> 407637
<CURRENT-LIABILITIES> 52218
<BONDS> 333641
0
0
<COMMON> 70061
<OTHER-SE> (48283)
<TOTAL-LIABILITY-AND-EQUITY> 407637
<SALES> 11388
<TOTAL-REVENUES> 185832
<CGS> 4103
<TOTAL-COSTS> 1055469
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 267654
<INCOME-PRETAX> (1141821)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1141821)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1141821)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)

</TABLE>