UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 10-QSB
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------- --------
Commission File Number 333-91817
---------------------------------------
COMMERCEFIRST BANCORP, INC.
-------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-2180744
- -------------------------------------------------------------------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
705 Melvin Avenue, Suite 104, Annapolis MD 21401
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
410-280-6695
------------------------
(Registrant's telephone number, including area code)
-----------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 No X
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
As of March 31, 2000, registrant had outstanding 65,000 shares of Common
Stock.
<PAGE>
CommerceFirst Bancorp, Inc.
FORM 10-QSB
INDEX
PART I - FINANCIAL INFORMATION
PAGE(S)
- -------
Item 1 - Financial Statements
<TABLE>
<S> <C>
Balance Sheets - March 31, 2000 (Unaudited)
and December 31, 1999 (Audited) 1
Statements of Operations 2
o Three month period ended March 31, 2000 (Unaudited)
o For the period from July 9, 1999 to December 31, 1999 (Audited)
o For the period from July 9, 1999 to March 31, 2000 (Unaudited)
Statements of Changes in Stockholders' Equity 3
o Three month period ended March 31, 2000 (Unaudited)
o For the period from July 9, 1999 to December 31, 1999 (Audited)
o For the period from July 9, 1999 to March 31, 2000 (Unaudited)
Statements of Cash Flows 4
o Three month period ended March 31, 2000 (Unaudited)
o For the period from July 9, 1999 to December 31, 1999 (Audited)
o For the period from July 9, 1999 to March 31, 2000 (Unaudited)
Notes to Financial Statements 5-7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-9
</TABLE>
PART II - OTHER INFORMATION
SIGNATURES
<PAGE>
COMMERCEFIRST BANCORP, INC.
(A Development Stage Company)
BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
Mar 31, 2000 Dec 31, 1999
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
ASSETS
Cash $ 331,321 $ 143,774
Security deposit 15,000 --
Equipment (net) 8,406 7,012
--------- ---------
TOTAL ASSETS $ 354,727 $ 150,786
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 154,702 $101,969
--------- --------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common Stock
$.01 par value, 4,000,000 shares authorized,
32,500 shares issued & outstanding (12/31/1999) 325
65,000 shares issued & outstanding (3/31/2000) 650
Surplus 649,350 324,675
Deficit accumulated during the
development stage (449,975) (276,183)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 200,025 48,817
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 354,727 $ 150,786
======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
1
<PAGE>
COMMERCEFIRST BANCORP, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Period from For the Period from
Three Months July 9, 1999 July 9, 1999
Ended (Date of Inception) (Date of Inception)
March 31, 2000 to December 31, 1999 to March 31, 2000
-------------- -------------------- -------------------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
REVENUES:
Interest income $ 8,731 $ 3,991 $ 12,722
EXPENSES:
Depreciation 736 412 1,148
Legal and professional 49,291 116,460 165,751
Salaries 86,966 127,336 214,302
Rent 11,500 6,000 17,500
Marketing and consulting 15,137 17,870 33,007
Office supplies 15,229 4,012 19,241
Business development 1,241 1,739 2,980
Miscellaneous 2,423 6,345 8,768
-------- ------- --------
Total expenses 182,523 280,174 462,697
-------- ------- --------
LOSS BEFORE INCOME TAX BENEFIT (173,792) (276,183) (449,975)
INCOME TAX BENEFIT -- -- --
-------- ------- --------
NET LOSS $ (173,792) $ (276,183) $ (449,975)
=========== =========== ===========
EARNINGS (LOSS) PER SHARE
Basic net loss per share $ (3.21) $ (8.50) $ (11.33)
=========== =========== ===========
Diluted net loss per share $ (3.21) $ (8.50) $ (11.33)
=========== =========== ===========
Weighted average shares of
common stock outstanding 54,166 32,500 39,722
=========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
2
<PAGE>
COMMERCEFIRST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JULY 9, 1999
(DATE OF INCEPTION) TO MARCH 31, 2000
<TABLE>
<CAPTION>
Common Deficit Accumulated
Stock During the
(Par Value) Surplus Development Stage Total
----------- --------- -------------------- ---------
<S> <C> <C> <C> <C>
BALANCES AT JULY 9, 1999 $ -- $ -- $ -- $ --
Issuance of Common Stock 325 324,675 325,000
Net Loss (276,183) (276,183)
----------- --------- ----------- --------
BALANCES AT DECEMBER 31, 1999 325 324,675 (276,183) 48,817
=========== ========= =========== ========
(Audited)
Issuance of Common Stock 225 224,775 225,000
Net Loss (36,674) (36,674)
----------- --------- ----------- --------
BALANCES AT JANUARY 31, 2000 550 549,450 (312,857) 237,143
=========== ========= =========== ========
(Unaudited)
Issuance of Common Stock 100 99,900 100,000
Net Loss (61,826) (61,826)
----------- --------- ----------- --------
BALANCES AT FEBRUARY 29, 2000 650 649,350 (374,683) 275,317
=========== ========= =========== ========
(Unaudited)
Net Loss (75,292) (75,292)
----------- --------- ----------- --------
BALANCES AT MARCH 31, 2000 $ 650 $ 649,350 $ (449,975) $ 200,025
=========== ========= =========== ========
(Unaudited)
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
COMMERCEFIRST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Period from For the Period from
Three Months July 9, 1999 July 9, 1999
Ended (Date of Inception) (Date of Inception)
March 31, 2000 to December 31, 1999 to March 31, 2000
---------------- --------------------- -------------------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (173,792) $ (276,183) $ (449,975)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 736 412 1,148
Increase (decrease) in accounts payable
and accrued expenses 52,734 101,969 154,703
--------- ---------- ----------
Net cash used by
operating activities (120,322) (173,802) (294,124)
--------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Security deposit (15,000) (15,000)
Acquisition of equipment (2,131) (7,424) (9,555)
--------- ---------- ----------
Net cash used by
investing activities (17,131) (7,424) (24,555)
--------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of
common stock to organizers 325,000 325,000 650,000
--------- ---------- ----------
NET INCREASE IN CASH 187,547 143,774 331,321
CASH AT BEGINNING OF PERIOD 143,774 -- --
--------- ---------- ----------
TOTAL CASH 331,321 143,774 331,321
--------- ---------- ----------
CASH AT END OF PERIOD $ 331,321 $ 143,774 $ 331,321
========= ========== ==========
Supplemental Cash Flows Information:
Interest payments $ -- $ -- $ --
========= ========== ==========
Income tax payments $ -- $ -- $ --
========= ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
COMMERCEFIRST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. NATURE OF BUSINESS
CommerceFirst Bancorp, Inc. was incorporated on July 9, 1999, under the laws
of the State of Maryland to operate as a bank holding company. It is
intended that the Company will purchase all the shares of common stock to be
issued by CommerceFirst Bank (the "Bank"). An application to organize the
Bank was filed with the Maryland Department of Financial Regulation on
November 29, 1999. The Bank has not commenced operations and will not do so
unless the public offering of stock by the Company is completed and the Bank
meets the conditions of the Maryland Department of Financial Regulation to
receive its charter authorizing it to commence operations as a commercial
bank, and has obtained the approval of the FDIC to insure its deposit
accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not contain all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the results of operations for the periods presented have
been included.
The financial data at December 31, 1999 is derived from audited financial
statements that are included in the Company's Prospectus dated February 22,
2000 relating to its offering of 800,000 shares of common stock and should
be read in conjunction with the audited financial statements and notes
contained therein. Interim results are not necessarily indicative of results
for the full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates. It is
again suggested that these financial statements be read in conjunction with
the prospectus dated February 22, 2000.
3. DEVELOPMENT STAGE COMPANY
The Company is currently devoting substantially all of its efforts
establishing a new banking business and raising capital, accordingly, the
Company meets the criteria defined by Statement of Financial Accounting
Standards (SFAS) No. 7, "Accounting and Reporting by Development Stage
Enterprises."
5
<PAGE>
COMMERCEFIRST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
4. COMMON STOCK SUBSCRIPTION FUNDS
As a result of the Company's prospectus dated February 22, 2000, the
Company, through an escrow agent, has been receiving subscriptions for the
Company's common stock. As of March 31, 2000, the amount received was
$2,273,500; these funds are invested in short-term government obligations
and investments that are permissible under Commission rule 15c2-4. If the
Company or the Bank does not receive all necessary regulatory approvals, the
subscription funds will be returned to the investors.
5. FUNDING OF ORGANIZATION EXPENSES
Organizational activities of the Company have been funded by the purchase of
organizer shares by each of the 13 organizers. Each organizer has purchased
50 shares of common stock at a price of $1,000 per share, or an aggregate
amount of $650,000 and 650 shares of common stock. Each of these shares will
be used for the purchase of 100 shares of common stock in the offering. The
shares to be purchased in the offering with the organizer shares will be
counted in determining whether the minimum number of shares is subscribed
for in the offering. In anticipation of the successful completion of the
offering, the share information presented in the equity section of the
balance sheet and in the earnings (loss) per share calculation displayed on
the statement of operations has been adjusted to reflect the conversion of
each organizer share into 100 shares of common stock.
6. USE OF PROCEEDS
On February 22, 2000, the Company's registration statement on Form SB-2 (No.
333-91817) relating to its initial offering of common stock, $0.01 par
value, was declared effective by the Securities and Exchange Commission, and
the offering commenced. As of March 31, 2000 and May 15, 2000, the offering
was in progress and no proceeds had been directly received by the Company.
7. CREDIT RISK
The Company has deposits in a financial institution in excess of amounts
insured by the FDIC; however, this institution is considered to be a sound
institution within the industry.
6
<PAGE>
COMMERCEFIRST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
8. INCOME TAXES
The Company uses the liability method of accounting for income taxes as
required by SFAS No. 109, "Accounting for Income Taxes." Under the liability
method, deferred-tax assets and liabilities are determined based on
differences between the financial statement carrying amounts and the tax
basis of existing assets and liabilities (i.e., temporary differences) and
are measured at the enacted rates that will be in effect when these
differences reverse. Deferred income taxes will be recognized when it is
deemed more likely than not that the benefits of such deferred income taxes
will be realized, accordingly, no deferred income taxes or income tax
benefits have been recorded by the Company.
9. NET LOSS PER COMMON SHARE
Net loss per common share has been computed (basic and diluted) for all
periods presented and is based on the weighted average number of shares
outstanding during the period. There are no common stock equivalents
resulting from dilutive stock options.
10. RELATED PARTY TRANSACTIONS
The Company has paid $20,000 during the first quarter of 2000 for legal
expenses to a law firm of which the Chairman of the Board of the Company is
also a principal. The Company also sub-leases office space in Annapolis,
Maryland for $1,500 per month from this law firm. The terms of the sub-lease
agreement appear to be at least as favorable as what could have been
attained from an unaffiliated party. Accounts payable and accrued expenses
include $25,206 payable to the law firm and $73,834 of unpaid officer
salaries.
11. COMMITMENTS
On February 17, 2000, the Company entered into a lease for a facility to
serve as the executive offices for the Company and as the main banking
office for the Proposed Bank and paid $7,000 in rent during the first
quarter of 2000. The facility, which is approximately 8,100 square feet and
located in Annapolis, Maryland, is leased by the Company for five years with
three five year renewal options, at an initial rent of $19 per square foot,
plus annual increases of 3%. Delivery of the premises is expected to occur
in June 2000. In the event that all regulatory approvals required for the
opening of the Proposed Bank are not received, the lease can be terminated
by the payment of a fee of $100,000 in addition to the forfeiture of a
$15,000 deposit.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with the prospectus
dated February 22,2000.
CommerceFirst Bancorp, Inc. (the "Company") is a proposed bank holding
company that is, as of March 31, 2000, in the process of offering up to
800,000 shares of its common stock at a price of $10.00 per share (the
"Offering"). CommerceFirst Bancorp may also sell up to an additional 200,000
shares of common stock if the number of shares subscribed for exceeds the
number of shares offered. As of March 31, 2000, the Company is devoting
substantially all of its efforts to establishing a new banking business and
raising capital and is therefore defined as a development stage company.
Organizational activities of the Company have been funded by the purchase of
organizer shares by each of the 13 organizers. Each organizer has purchased
50 shares of common stock at a price of $1,000 per share, or an aggregate
amount of $650,000 and 650 shares of common stock. Each of these shares will
be used for the purchase of 100 shares of common stock in the offering. The
shares to be purchased in the offering with the organizer shares will be
counted in determining whether the minimum number of shares is subscribed
for in the offering. This temporary funding source is expected to be
sufficient to meet the Company's needs until the sale of shares pursuant to
the Offering is completed.
It is anticipated that the Bank will incur approximately $300,000 in
expenses for furniture, fixtures and equipment and leasehold improvements
for its headquarters, branch and operations space. The Bank will contract
its data processing requirements to an outside vendor. The Company had two
full time employees and one part time employee at March 31, 2000, and
expects to have ten to twelve employees at the Bank level at opening.
SUBSCRIPTION FOR COMMON STOCK
As of March 31, 2000, the Company has received $2,273,500 in subscription
funds through as escrow agent as a result of the Offering. These funds are
invested in short-term government obligations and repurchase agreements and
do not include $650,000 of organizer shares. If the Company or Bank does not
receive all necessary regulatory approvals, the subscription funds will be
returned to the investors. As of May 11, 2000, the Company has received
(through the escrow agent for the Offering) $4,525,500 in subscriptions
funds. Including organizer shares, a total of $5,175,500 has been received.
RESULTS OF OPERATIONS
The Company reported a net loss of $(173,792) for the quarter ended March
31, 2000. From date of inception to March 31, 2000 the Company reports a
cumulative loss of $(449,975). The loss is attributable primarily to
start-up costs associated with filing fees, legal fees and salary expenses.
The Company did earn $8,731 in interest income from organizer and
subscription funds during the first quarter of 2000.
8
<PAGE>
COMMERCEFIRST BANCORP, INC.
PART II - OTHER INFORMATION
Item 2 - Changes in Securities and Use of Proceeds
On February 22, 2000, the Company's registration statement on Form SB-2 (No.
333-91817) relating to its initial offering of common stock, $0.01 par value,
was declared effective by the Securities and Exchange Commission, and the
offering commenced. As of March 31, 2000 and May 11, 2000, the offering was in
progress and no proceeds had been released to the Company.
Item 6 - Exhibits and reports on Form 8-K
a) Exhibit 27. Financial Data Schedule
b) Report on Form 8-K - No reports on Form 8-K were filed during the quarter.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMERCEFIRST BANCORP, INC.
Date: May 12, 2000 By: /s/ Richard J. Morgan
-------------------------
Richard J. Morgan, President
Date: May 12, 2000 By /s/ Lamont Thomas
-------------------------
Lamont Thomas, Executive Vice President
10
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0001098813
<NAME> CommerceFirst Bancorp, Inc.
<MULTIPLIER> 1
<CURRENCY> US DOLLAR
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 331,321
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 354,727
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 154,702
<LONG-TERM> 0
0
0
<COMMON> 650
<OTHER-SE> 199,375
<TOTAL-LIABILITIES-AND-EQUITY> 354,727
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 8,731
<INTEREST-TOTAL> 8,731
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 8,731
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 182,523
<INCOME-PRETAX> (173,792)
<INCOME-PRE-EXTRAORDINARY> (173,792)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (173,792)
<EPS-BASIC> (3.21)
<EPS-DILUTED> (3.21)
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
