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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________________ to _________________
Commission file number: 000-26815
AUSTIN FUNDING.COM CORPORATION
(Exact name of registrant as specified in its charter)
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NEVADA 74-2923677
-------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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823 CONGRESS AVENUE, SUITE 515, AUSTIN, TEXAS 78701
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(Address of principal executive offices)
(512) 481-8000
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(Registrant's telephone number)
At December 31, 1999, 21,333,333 shares of registrant's $.01 par value Common
Stock were outstanding.
Transitional Small Business Issuer Format [ ] Yes [X] No
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FORM 10-QSB INDEX
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements.................................................................. 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation.................................................................. 6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings..................................................................... 7
Item 2. Changes in Securities................................................................. 7
Item 3. Defaults Upon Senior Securities....................................................... 7
Item 4. Submission of Matters to a Vote of Security Holders................................... 7
Item 5. Other Information..................................................................... 7
Item 6. Exhibits and Reports on Form 8-K...................................................... 7
SIGNATURES ...................................................................................... 9
EXHIBIT INDEX ...................................................................................... 10
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SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-QSB contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties that may cause the
Company's actual results to differ materially from the results discussed in the
forward-looking statements.
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AUSTIN FUNDING.COM CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED BALANCE SHEET
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December 31,
(unaudited)
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Current Assets
Cash $ 153,607
Inventory 7,603,673
Accrued interest receivable 72,149
Advances 62,388
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Total Current Assets 7,891,817
Deposits 446,696
Investments
Mortgage Receivables 1,286,423
Limited Partnership interest 745,284
Secured note receivable 500,000
Property and Equipment
Furniture, Fixtures & Equipment 74,013
Depreciation (26,337)
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Net Property and Equipment 47,676
Capitalized Public Offering Costs 117,977
Total Assets $11,035,873
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Current Liabilities
Accounts payable and accrued liabilities $ 212,531
Lines of credit 7,609,211
Total Current Liabilities 7,821,742
Long Term Debt 656,810
Total Liabilities 8,478,652
Stockholders' Equity 2,557,321
Total Liabilities and Stockholders' Equity 11,035,873
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AUSTIN FUNDING.COM CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
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Three months ended Nine months ended
December 31, December 31,
1999 1998 1999 1998
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Sales $ 9,120,963 6,494,916 $ 17,864,078 23,253,717
Cost of Sales 8,723,043 6,206,374 16,849,852 21,900,911
Gross Profit 397,920 288,542 1,014,226 1,352,806
Selling and administrative
Salaries and wages 359,791 231,597 719,790 871,688
Office expense and supplies 31,995 25,168 80,523 93,474
Occupancy 23,473 17,156 63,494 47,222
Travel and entertainment 32,333 36,452 84,604 78,991
Telephone 11,608 23,211 37,427 65,830
Automobile expenses 13,538 6,457 28,027 20,904
Professional fees 918,666 4,878 306,832 23,958
Insurance 10,026 10,389 30,120 33,319
Equipment rental and maintenance 5,981 3,683 14,438 10,445
Advertising and marketing 5,687 2,752 14,469 33,780
Telemarketing 4,617 4,007 14,059 27,377
Other expenses 71,740 20,096 122,438 42,348
Total selling and administrative 689,455 385,846 1,516,221 1,349,336
Operating Income (Loss) (291,535) (97,304) (501,995) 3,470
Other Income 68 7,782 13,832 14,091
Income, before income taxes (291,467) (89,522) (488,163) 17,661
Income Tax Expense 0 0 0
Net Income $ (291,467) $ (89,522) $ (488,163) $ 17,561
Earnings (Loss) Per Share $ (0.01) $ (44.76) $ (0.02) $ 8.78
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AUSTIN FUNDING.COM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
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Three months ended None months ended
December 31, December 31,
1999 1998 1999 1998
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CASH FLOWS FORM OPERATING ACTIVITIES:
Net loss (291,467) (89,522) (488,163) (41,799)
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Adjustments to reconcile net loss to net cash used in operations:
Depreciation 14,802 0 14,802
Changes in assets and liabilities:
Accounts receivable (246,628) (2,730,932)
Inventory (36,730) (5,744,145) 1,288,416
Accrued interest receivable (32,625) (72,149)
Accounts payable 85,938 (41,193) 124,635 (85,503)
Income taxes payable (44,811)
Deferred income 67,724 (73,476) 139,134
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31,385 (220,097) (5,750,333) (1,433,696)
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Net cash used in operations (260,082) (309,619) (6,238,496) (1,475,495)
--------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (28,211) (7,367) (28,211) (24,929)
Advances to employees (12,718) (5,275) (7,243) (11,585)
Deposits advanced (446,696) (442,137)
Capitalized deferred offering costs (117,977) (117,977)
Investments in mortgages (859,711) (1,286,423)
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Net cash used in investing activities 1,465,313) (12,642) (1,881,991) (36,514)
--------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock 1,852,785
Proceeds from notes payable 617,160 27,218 630,422 27,218
Proceeds from lines of credit 1,109,822 178,936 5,785,899 1,394,391
--------- ---------- ---------- ----------
Net cash provided by
Financing activities 1,726,982 206,154 8,269,106 1,421,609
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Increase (decrease) in cash 1,587 (116,107) 148,619 (90,400)
Cash at beginning of period 152,020 141,189 4,988 115,482
--------- ---------- ---------- ----------
Cash at end of period 153,607 25,082 153,607 25,082
========= ========== ========== ==========
SUPPLEMENTAL CASH FLOWS DISCLOSURES:
Interest paid 70,967.29 147,761.43 170,547.31 303,832.45
Income taxes paid 44,811
Non-cash investing and financing activities:
Issuance of preferred stock for
limited partnership interest 484,968 484,968
Issuance of preferred stock for
note receivable 500,000
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AUSTIN FUNDING.COM CORPORATION
AND ITS WHOLLY-OWNED SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. RELATED PARTY TRANSACTIONS
Note 2. LONG-TERM DEBT
Austin Funding.com Corporation ("AFCC") has a note with an individual. The
original amount of the note was $36,000 and was dated October 5, 1998. Payments
of $1,000 are due in monthly installments which include interest at 12.5%
beginning November 1, 1998. With this amortization schedule the balance will be
paid in full November 1, 2001. The note is secured by the assets of AFCC.
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September 30, 1999 September 30, 2000 September 30, 2001
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Current Portion $9,816
Long-term $11,112 $990
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Note 3. LINES OF CREDIT
AFCC has a $3,000,000 line of credit with a financial institution. The line of
credit expires March 22, 2000. Interest is calculated at prime plus 1%. The debt
is secured by the mortgage inventory. Subsequent to the close of the third
quarter of 1999, this line has increased to $10,000,000.
AFCC has a $5,000,000 line of credit with a financial institution. Interest is
calculated at prime plus 2 on draws up to 60 days, and increases to prime plus 3
after 60 days. The debt is secured by mortgage inventory and is personally
guaranteed by officers of AFCC. An additional $400,000 is pledged in deposits.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The following presentation of management's discussion and analysis of
the Company's financial condition and results of operation should be read in
conjunction with the Company's financial statements and notes contained herein
for the three and nine months ended December 31, 1999 and 1998.
RESULTS OF OPERATIONS
Comparison of Operating Results for the Nine Months Ended December 31,
1999, and December 31, 1998. Sales decreased from $23.3 million for the Nine
months ended December 31, 1998 to $17.9 million for the nine months ended
December 31, 1999. This percentage decrease of approximately 23% is the results
of decreased liquidity from the investors who purchase the loans underwritten by
the Company.
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Gross profits as a percentage of cost of goods sold remained virtually
unchanged over the comparison period from 17.8% for the nine months ended
December 31, 1998 to 16.9% for the nine months ended December 31, 1999. This
profit percentage demonstrates a consistent cost of sales independent of volume.
Selling and administrative expense increased $167,000 over the
comparison period. The most significant increase came in professional fees
stemming from the legal and accounting fees incurred in bringing the Company
public.
As a result of the foregoing, net income decreased from $17,561 for the
nine months ended December 31, 1998 to a loss of $488,163 for the nine months
ended December 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents were $153,607 as of December
31, 1999, compared to $152,020 as of September 30, 1999.
PART II - OTHER INFORMATION
ITEM I - LEGAL PROCEEDINGS
Previously reported.
ITEM 2 - CHANGES IN SECURITIES
Not applicable.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5 - OTHER INFORMATION
Not applicable.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT NO. DESCRIPTION
27.1 Financial Data Schedules
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(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended December
31, 1999.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AUSTIN FUNDING.COM CORPORATION
Dated: June 12, 2000 By: /s/ SHAWN STEWART
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President/CEO
Dated: June 12, 2000 By: /s/ JOE SHAFFER
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Vice President/Secretary
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EXHIBIT INDEX
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Exhibit
Number Description
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27.1 Financial Data Schedule
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