U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--- ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--- ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______.
COMMISSION FILE NUMBER 0-26777
-------
APTA HOLDINGS, INC.
------------------
(Exact name of business issuer as specified in its charter)
Delaware 22-3662292
-------- ----------
(State or other jurisdiction (IRS Employer Identification
of incorporation) number)
215 West Main Street, Maple Shade, New Jersey 08052
---------------------------------------------- -------
(Address of principal executive offices) (Zip code)
(856) 667-0600
--------------
(Issuer's telephone number)
Check whether the issuer (1) 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 XX No
---- ----
The Company had 1,518,000 shares of common stock, par value $.001 per share,
outstanding as of July 31, 2000.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [XX]
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<PAGE>
APTA HOLDINGS, INC. AND SUBSIDIARIES
INDEX
PAGE
PART 1. FINANCIAL INFORMATION ----
ITEM 1. FINANCIAL STATEMENTS
APTA HOLDINGS, INC. AND SUBSIDIARIES
-------------------------
CONSOLIDATED BALANCE SHEETS AS OF
JUNE 30, 2000 AND 1999................................3
CONSOLIDATED STATEMENT OF OPERATIONS FOR
THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999...........4
CONSOLIDATED STATEMENT OF CASH FLOWS FOR
THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999...........5
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY FOR THE SIX MONTHS
ENDED JUNE 30, 2000 AND 1999..........................6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS..................10
PART II. OTHER INFORMATION...........................................15
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.............15
SIGNATURES......................................................16
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APTA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 2000 AND 1999
(UNAUDITED)
ASSETS
2000 1999
---- ----
Cash $ 10,818 $ 55,797
Notes receivable 345,513 213,402
Prepaid expenses 13,191 4,945
Property and equipment, net 3,403 2,409
---------- ----------
TOTAL ASSETS $ 372,925 $ 276,553
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Notes payable $ 123,750 $ 92,500
Accrued expenses 1,500 49,536
Dealer holdbacks 23,207 8,252
Net liabilities of discontinued operations 281,006 227,471
---------- ----------
TOTAL LIABILITIES $ 429,463 $ 377,759
Minority Interest 27,151 25,231
Commitments and contingencies
Stockholders' Deficit
Common stock, $.001 par value
2,000,000 shares authorized,
1,518,000 and 1,000,000 shares issued
and outstanding 1,518 1,000
Additional paid in capital 282,482 149,000
Accumulated deficit (367,689) (276,437)
--------- ---------
Total stockholders' deficit ( 83,689) (126,437)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 372,925 $ 276,553
========== ==========
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APTA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
2000 1999
---- ----
Financial services revenues $ 34,147 $ 13,182
Operating expenses
Administrative expenses 48,499 4,840
Other general operating expenses 1,408 2,878
Depreciation and amortization 830 515
-------- --------
TOTAL OPERATING EXPENSES 50,737 8,233
-------- --------
Operating income (loss) from
continuing operations (16,590) 4,949
Other income (expense)
Interest income 227 59
Interest expense ( 10,325) ( 3,950)
--------- --------
Total other income (expense) ( 10,098) ( 3,891)
--------- --------
Gain (loss) from continuing operations
before minority interest (26,688) 1,058
Minority interest ( 1,243) ( 212)
-------- --------
Net gain (loss) from continuing operations ( 27,931) 846
Discontinued operations
Loss from discontinued operations (29,573) ( 43,332)
-------- --------
Net loss ($57,504) ($42,486)
========= =========
Basic net loss per share
Loss before minority interest ($.02) -0-
Minority interest -0- -0-
Loss from discontinued operations ($.02) ($.04)
--------- --------
Net loss ($.04) ($.04)
========= =========
Average number of common
shares outstanding - basic 1,312,978 1,000,000
========= =========
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APTA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
2000 1999
---- ----
Cash flows from operating activities
Net loss ($57,504) ($42,486)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Loss from discontinued operations 29,573 43,332
Minority interest in net income
(loss) of consolidated subsidiary 1,243 212
Depreciation and amortization expense 830 515
(Increase) decrease in:
Prepaid expenses ( 8,659) ( 1,345)
Increase (decrease) in:
Accrued expenses -0- ( 5,564)
-------- ---------
Net cash used in continuing operations (34,517) ( 5,336)
Net cash provided by discontinued operations 32,916 21,804
Net cash provided by (used in)
operating activities ( 1,601) 16,468
-------- ---------
Cash flows from investing activities:
Cash received from acquisition -0- 85,100
Purchases of property and equipment ( 2,302) ( 348)
Purchases of property and equipment
for discontinued operations (17,105) (10,816)
Collection of installment notes receivable 119,855 10,494
Loans made (115,725) (77,291)
------- -------
Net cash provided by (used in)
investing activities ( 15,277) 7,139
Cash flows from Financing Activities
Repayment of mortgage notes payable
of discontinued operations (18,553) (17,088)
Repayment of short term notes (45,000) (50,000)
Repayment of short term notes of
discontinued operations ( 2,258) ( 3,900)
Proceeds from notes payable -0- 62,500
Proceeds from notes payable of
discontinued operations 5,000 10,000
Issuance of common stock 74,500 -0-
Minority interest -0- 15,000
------- -------
Net cash provided by (used in)
financing activities 13,689 16,512
------- -------
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APTA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
2000 1999
---- ----
Increase (decrease) in cash ( 3,189) 40,119
Cash, beginning 14,007 15,678
------- -------
Cash, ending $ 10,818 $ 55,797
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non-cash investing and financing activities:
On June 28, 1999, assets and liabilities of ARCA Corp. were transferred to
the Company as follows:
Accrued expenses $ 55,100
Notes payable 30,000
--------
Cash received from predecessor $ 85,100
========
Issuance of common stock during the six months ended June 30, 2000 was as
follows:
Issuance of common stock
Issuance of common stock, net of
stock issuance costs of $30,000 $187,000
Satisfaction of note payable to stockholder
in exchange for common stock (17,500)
Satisfaction of accrued expenses (95,000)
--------
Net proceeds from issuance of common stock $ 74,500
========
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<PAGE>
APTA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Investment Additional Total
By Common Stock Paid-in Accumulated Stockholder's
Predecessor Shares Amount Capital Deficit Deficit
----------- ----------------- -------- ------------ -------------
Balance,
01/01/99 $( 83,951) 0 $ 0 $ 0 $ 0 $ ( 83,951)
Net loss
prior to
spin-off (42,486) 0 0 0 0 (42,486)
Initial
capitali-
zation
resulting
from
spin-off 126,437 1,000,000 1,000 149,000 (276,437) 0
Net loss
subsequent
to
spin-off 0 0 0 0 0 0
------------ --------- ----- -------- ----------- -------
Balance
06/30/99 $ 0 1,000,000 $1,000 $149,000 $(276,437) $(126,437)
============ ========= ===== ======== =========== =======
Balance
01/01/00 $ 0 1,084,000 $1,084 $95,916 $(310,185) $(213,185)
Issuance
of common
stock 0 434,000 434 186,566 0 187,000
Net loss 0 0 0 0 (57,504) ( 57,504)
------------ --------- ----- -------- ----------- -------
Balance
06/30/00 0 1,518,000 $1,518 $282,482 ($367,689) $( 83,689)
============ ========= ===== ======== =========== =======
</TABLE>
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<PAGE>
APTA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(UNAUDITED)
Note 1 - Organization
APTA Holdings, Inc. ("APTA"), a Delaware corporation, ("the Company") was
formed on June 4, 1999, as a subsidiary of ARCA Corp. ("ARCA"), a New Jersey
corporation, in connection with a transaction in which ARCA was merged into
Agate Technologies, Inc. ("Agate") on June 28, 1999. Immediately prior to
the closing of the merger, ARCA transferred all of its assets and liabilities
to APTA. On June 28, 1999, the common stock of APTA was spun off to the
common shareholders of ARCA. Eligible ARCA shareholders of record on June 28,
1999 ("Dividend Record Date") received one share of APTA's common stock for
each share of ARCA's common stock held on the Dividend Record Date. On June
28, 1999, 1,000,000 shares of $.001 par value APTA common stock was issued to
eligible ARCA shareholders.
Note 2 - Summary of Significant Accounting Policies
The summary of significant accounting policies is included in the notes to
the consolidated financial statements for the years ended December 31, 1999
and 1998 which were audited and appear in the Form 10-KSB previously filed by
the Company.
Note 3 - Unaudited Financial Statements
The consolidated balance sheet as of June 30, 2000 and 1999 and the related
consolidated statements of operations, cash flows and stockholders' deficit
for the six months ended June 30, 2000 and 1999, and the related information
contained in these notes have been prepared by management without audit. In
the opinion of management, all accruals (consisting of normal recurring
accruals) which are necessary for a fair presentation of financial position
and results of operations for such periods have been made. Results for an
interim period should not be considered as indicative of results for a full
year.
Note 4 - Basis of Presentation
The consolidated financial statements for the six months ended June 30, 1999
include periods prior to the spin off and include only those assets and
liabilities contributed by ARCA as described above. These financial
statements have been prepared using ARCA's historical basis of the assets and
liabilities and the historical results of operations and have been prepared
in accordance with the rules and regulations of the Securities and Exchange
Commission applicable for subsidiaries which have been spun off. These rules
stipulated that statements shall be prepared as if the entity had existed
prior to the existence of the new company. Such statements are not those of
a real entity, but describe a hypothetical "accounting predecessor" to APTA
Holdings, Inc. The financial statements presented include all the operations
of the Company as well as the operations of the Company's predecessor prior
to the spin-off, and have been accounted for in a manner similar to that in a
pooling of interests.
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<PAGE>
APTA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(UNAUDITED)
Note 4 - Basis of Presentation (continued)
In management's opinion, the accompanying consolidated financial
statements include all common and corporate level expenses which would have
been incurred on behalf of the accounting predecessor by ARCA. Management has
allocated such expenses based on its best estimate of the actual time and
effort expended for the benefit of APTA, and believes such allocation to be
reasonable.
Net loss per Share
Net loss per share prior to the spinoff has been computed giving effect to
the distribution ratio of 1 common share of APTA for each common share of ARCA.
Accordingly, weighted average common shares outstanding for the accounting
predecessor, have been computed based on the shares outstanding of ARCA for the
respective period. Calculated earnings per share may not be representative of
earnings per share subsequent to the transfer of the assets and liabilities from
ARCA since the level of other expenses incurred by APTA may be higher than was
incurred on a historical basis.
Note 5 - Discontinued Operations
On August 7, 2000, APTA transferred all of the assets and liabilities of its
wholly owned subsidiary, Spring Village Holdings, Inc., to Gavella Corp., also
a wholly owned subsidiary of APTA formed for the purpose of effectuating the
spinoff of APTA's real estate operations, in exchange for 2,000,000 shares of
$.001 par value Gavella Corp. common stock. The operating results of Spring
Village Holdings, Inc. for the six months ended June 30, 2000 have been treated
as discontinued operations, and the 1999 financial statements have been restated
to conform with this presentation. No income tax expense or benefits were
recognized due to the Company's net operating loss carryforwards. Spring Village
Holdings, Inc. and its subsidiary recorded revenues of $416,111 and $396,554 for
the six months ended June 30, 2000 and 1999.
The components of the net liabilities of discontinued operations included in the
consolidated balance sheet as of June 30, 2000 and 1999 are as follows:
2000 1999
---- ----
Assets
Rental property, net $3,229,865 $3,282,045
Cash 75,931 61,399
Cash held in escrow 75,557 72,905
Accounts receivable 5,012 890
Prepaid expenses 26,944 24,686
Deferred financing costs 62,571 71,211
---------- ----------
3,475,880 3,513,136
---------- ----------
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APTA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(UNAUDITED)
Note 5 - Discontinued Operations (continued)
2000 1999
---- ----
Less liabilities
Mortgage notes payable (3,336,982) (3,373,341)
Notes payable ( 274,271) ( 225,000)
Accrued interest ( 41,636) ( 41,876)
Accounts payable ( 9,540) ( 14,091)
Accrued expenses ( 20,811) ( 24,914)
Security deposits payable ( 73,646) ( 61,385)
----------- ----------
(3,756,886) (3,740,607)
----------- ----------
Net liabilities from
discontinued operations ($ 281,006) ($ 227,471)
=========== ==========
Note 6 - Related Party Transactions
During the six months ended June 30, 2000, 125,000 shares of common stock
were issued to two officers/directors of the Company at $.50 per share for cash
of $62,500. In addition, 37,500 shares of common stock were issued to an
officer/director at $.50 per share in exchange for satisfaction of a $17,500
note payable plus accrued interest.
A summary of related party transactions for the year ended December 31,
1999 appears in the Form 10-KSB previously filed by the Company and is hereby
incorporated by reference.
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<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and Notes thereto appearing elsewhere in
this Form 10-QSB and in the previously filed Form 10-KSB for the period ending
December 31, 1999.
General
-------
Apta Holdings, Inc. ("Apta" or the "Company") was incorporated on June 4, 1999
in the State of Delaware as a wholly owned subsidiary of ARCA Corp. On June 28,
1999, the Company acquired 100% of the assets and liabilities of the parent,
ARCA, as part of a merger by ARCA with Agate Technologies, Inc.
Included in the assets acquired by Apta were ARCA's wholly owned real estate
subsidiary, Spring Village Holdings, Inc. and ARCA's 80% owned finance company
subsidiary, Beran Corp. The following discussion of the business of the Company
includes the businesses of the two subsidiaries and incorporates the prior
activities of ARCA Corp.
The Company is currently engaged in two lines of business; owning and operating
income producing real estate, and the originating and servicing of loans to
businesses, generally secured by real estate or other business assets
("business lending"), and to individuals, generally secured by vehicles or other
personal property ("consumer lending"). The Company plans to spin off its real
estate business in order to focus on its business lending and consumer lending
subsidiary.
On December 31, 1995, the Company acquired through a subsidiary, for $50,000,
an 80% controlling interest in a 124 unit apartment complex located in Sharon
Hill, Pennsylvania. The Company secured bridge financing to make certain
improvements needed to refinance the property. Upon completion of the
improvements, rents, occupancy and net cash flow increased and the property was
successfully refinanced on September 19, 1997. Subsequent to the refinancing,
the Company has used its positive operating cash flow to reduce debt.
On March 31, 1998, Beran Corp. was incorporated in the State of Delaware, and
on May 28, 1998, entered into business lending through the acquisition of the
business lending operations of a real estate development company.
On November 24, 1998, Beran became a licensed lender in the State of New Jersey.
Beran started making secured consumer loans in the first quarter of 1999. Beran
reported $34,147 in financial services revenues for the six month period ending
June 30, 2000, and had $345,513 in loans outstanding.
On June 21, 2000, Apta incorporated Gavella Corp. ("Gavella") in the State of
Delaware as a wholly owned subsidiary. On August 7, 2000, APTA transferred all
of the assets and liabilities of its 100% wholly owned subsidiary, Spring
Village Holdings, Inc. to Gavella in exchange for 2,000,000 shares of $.001 par
value Gavella common stock. The transfer of Spring Village Holdings, Inc. to
Gavella
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was due to a decision by Apta's Board of Directors to separate the finance
business and the real estate business into two separate corporations. The Apta
Board of Directors has also authorized that the Apta shareholders will receive
one share of Gavella for each share of Apta owned by the shareholders. The
record date for such spin-off will be determined after the SEC and any other
relevant regulatory body has completed its review. It is anticipated that the
spinoff will occur before December 31, 2000, and that Apta will retain
approximately 20% of the Gavella shares after the spin-off.
After the proposed spin-off of the real estate business, Apta intends to focus
its efforts on the expansion of its consumer finance business.
Business
--------
The Company, through its 80% owned subsidiary Beran Corp., originates, sells and
services loans to businesses secured by real estate and other business assets
("Business Purpose Loans"), and consumer loans typically to credit impaired
borrowers, including automobile loans secured by the title to the automobile and
the unconditional guarantee of participating dealers or individual guarantors
pre-approved by Beran.
The Company's customers currently consist primarily of two groups. The first
category of customers includes credit impaired borrowers who are generally
unable to obtain financing from banks, savings and loan associations or other
finance companies that have historically provided loans only to individuals with
favorable credit characteristics. These borrowers generally have impaired or
unsubstantiated credit characteristics and/or unverifiable income, and respond
favorably to the Company's marketing efforts. The second category of customers
includes borrowers who would qualify for loans from traditional lending sources
but elect to utilize the Company's products and services. The Company's
experience has indicated that these borrowers are attracted to the Company's
loan products as a result of its marketing efforts, the personalized service
provided by the Company's staff, and the timely response to loan requests.
Historically, both categories of customers have been willing to pay the
Company's fees and interest rates which are generally higher than those charged
by traditional lending sources.
The Company markets its services primarily by "networking". With respect to
Business Purpose Loans, the Company obtains new borrowers from recommendations
of existing borrowers and business associates. With respect to automobile loans,
an officer of the Company meets with dealers, salesmen and finance managers, and
provides them with detailed information about the Company's auto loan program.
Through this "network", loan requests flow into the Company, which are promptly
accepted or rejected based on the Company's underwriting criteria. The Company
does no mass media advertising.
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<PAGE>
The Company began operations in 1998 and initially offered Business Purpose
Loans. The Company currently originates Business Purpose Loans in Pennsylvania
and New Jersey. The Company focuses its marketing efforts on small businesses,
including suppliers, vendors and subcontractors of Beran or Apta Holdings, Inc.
who do not meet all of the credit criteria of commercial banks.
The Business Purpose Loans originated by the Company generally are secured by
real estate, cash flow from investment real estate, or other assets. The
Company's Business Purpose Loans are generally originated with fixed rates and
typically have origination fees of 2%. The weighted average interest rate
received on the Business Purpose Loans originated by the Company was 12% for the
year ended December 31, 1999.
The Company is also in the business of underwriting, purchasing and servicing
high-yield retail automobile installment loan contracts. Contracts will be
acquired from approved dealerships and other financial institutions. Vehicle
loans purchased by the Company are generally made to first time buyers and
others with impaired credit ratings. Therefore, the original interest rates on
the loans range from 18% to 25% per annum, and require a minimum 20% down
payment by the automobile purchaser. Each loan must also be unconditionally
guaranteed by the automobile dealer or a pre-approved individual guarantor
acceptable to Beran.
In addition to the guarantee, the Company "holds back" 10% of each loan as
additional security for the loans purchased by the Company. The holdback is
retained by the Company as a reserve against possible loan defaults. Holdbacks
from automobile dealers by lenders are common in this industry, but vary in
amount and terms from lender to lender. The Company's holdback policy is
similar to other lenders with which the Company competes.
The Company does not anticipate any shortfalls in the reserve account. The
Company can, if necessary, sell repossessed automobiles at a price which
significantly reduces the potential losses on defaulted loans.
Currently the Company has $345,513 in loans outstanding. The Company intends
to increase the loans outstanding to $400,000 by December 31, 2000. In order
to meet its stated goal, the Company has been and anticipates that it will
originate approximately $15,000 per month in new consumer loans.
Results of Operations
----------------------
The following discussion is for the six months ending June 30, 2000 and 1999,
respectively. The real estate business has been accounted for as a discontinued
operation.
Financial services revenues increased by $20,965 or 259%, from $13,182 in 1999
to $34,147 in 2000, due to more loans outstanding.
Administrative expenses increased to $48,499 in 2000 from $4,840 in 1999,
primarily due to costs related to the start-up of our finance company and
professional fees related to becoming a reporting public company. Total
operating expense increased by $42,504, from $8,233 in 1999 to $50,737 in 2000.
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Operating income declined from $4,949 in 1999 to a loss of $16,590 in 2000,
primarily due to the increases in expenses discussed above, which were only
partially offset by the increase in revenues.
Interest expense, net of interest income, increased by $6,207 from $3,891 in
1999 to $10,098 in 2000.
Loss from continuing operations before minority interest increased by $27,746
from a profit of $1,058 in 1999 to a loss of $26,688 in 2000.
Minority interest, which represents the minority shareholder's share of the net
income of Beran Corp., increased from $212 in 1999 to $1,243 in 2000. Though
Beran Corp. runs at an operating profit, the consolidated results of Apta
Holdings, Inc. reflect operating losses due to public company corporate
overhead.
Net loss from continuing operations was $27,931 in 2000, compared to a net
profit of $846 in 1999.
Loss from discontinued operations decreased from $43,332 in 1999 to $29,573 in
2000. This reflects the net losses incurred by the real estate business the
Company intends to spin off.
Net loss increased by $15,037 from $42,486 in 1999 to $57,504 in 2000. Basic
net
loss per share was ($.04) in 1999 and ($.04) in 2000.
The Company is taxed as a C-corporation for federal and state income tax
purposes. As such, the Company will pay taxes on its net income as defined by
the Internal Revenue Code. No tax attributes of the Company flow through to
the shareholders except for the regular taxation of dividends paid, if any.
Liquidity and Capital Resources
--------------------------------
At June 30, 2000, the Company had working capital of $221,065. The Company
needs additional financing to expand its business and carry out its business
plan.
On January 1, 2000, the Company had $14,007 in cash.
During the six months ending June 30, 2000, the Company received $74,500 from
the sale of stock, and $5,000 proceeds from notes payable. The Company
collected $119,855 from installment notes receivable during the period.
Operations used $1,601. The Company used $19,407 to purchase property and
equipment, made $115,725 in loans, repaid $47,258 in short term debt, and
reduced mortgage debt by $18,553. The net decrease in cash for the period was
$3,189. The Company had $10,818 in cash on June 30, 2000.
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<PAGE>
The Company's balance sheet is highly leveraged. The Company plans to reduce
this leverage through future equity offerings as well as by funds generated from
operations. The Company believes it can support operations and planned capital
expenditures for at least twelve months. Thereafter, the Company's continued
success will be dependant upon its ability to expand and increase profitability
of its finance company.
In the event that the Company's plans change or its assumptions change or prove
to be inaccurate, the Company may be required to seek additional financing
sooner than currently anticipated. The Company has not identified any potential
sources of debt or equity financing and there can be no assurance that the
Company will be able to obtain additional financing if and when needed or that,
if available, financing will be on terms acceptable to the Company.
Forward Looking Statements
---------------------------
The Company is making this statement in order to satisfy the "safe harbor"
provisions contained in the Private Securities Litigation Reform Act of 1995.
The foregoing discussion includes forward-looking statements relating to the
business of the Company. Such forward-looking statements may be identified by
the use of terminology such as "plan", "may", "will", "expects", "intends",
"anticipates", "estimate", "should", or "continue", or the negative there of or
other variations thereon or comparable terminology. Forward-looking statements
contained herein or in other statements made by the Company are made based on
management's expectations and beliefs concerning future events impacting the
Company and are subject to uncertainties and factors relating to the Company's
operations and business environment, all of which are difficult to predict and
many of which are beyond the control of the Company, that could cause actual
results of the Company to differ materially from those matters expressed in or
implied by forward-looking statements. The Company believes that the following
factors, among others, could affect its future performance and cause actual
results of the Company to differ materially from those expressed in or implied
by forward-looking statements made by or on behalf of the Company: (a) the
effect of changes in interest rates; (b) regulatory changes or interpretations
of such regulations; (c) uninsurable risks; (d) unexpected loan losses, and (e)
general economic conditions.
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PART II
OTHER INFORMATION
------------------
ITEM 1 LEGAL PROCEEDINGS
NONE
ITEM 2 CHANGES IN SECURITIES
Recent Sales of Unregistered Securities
---------------------------------------
NONE
ITEM 3 DEFAULTS ON SENIOR SECURITIES
NONE
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5 OTHER INFORMATION
NONE
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27FDS - Financial Data Schedule
(b) Reports on Form 8-K
None
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
APTA HOLDINGS, INC.
Dated: August 14, 2000 /s/ Harry J. Santoro
----------------------------------------
Harry J. Santoro
President, Chief Executive Officer and
Chief Financial Officer
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