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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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COMMISSION FILE NUMBER
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INTEGRITY BANCSHARES, INC.
GEORGIA 58-2508612
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
11130 STATE BRIDGE ROAD, SUITE D-203, ALPHARETTA, GEORGIA 30022
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(770) 777-0324
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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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 [X]
NO [ ]
There were 5 shares of Common Stock outstanding as of August 1, 2000.
Transitional Small Business Disclosure Format (check one): Yes [ ]; No [X]
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INTEGRITY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2000
TABLE OF CONTENTS
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ITEM PAGE
NUMBER NUMBER
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PART I - FINANCIAL INFORMATION
1. Financial Statements................................................. 1
2. Management's Discussion and Analysis................................. 7
PART II - OTHER INFORMATION
1. Legal Proceedings.................................................... 7
2. Changes in Securities and Use of Proceeds............................ 7
3. Defaults Upon Senior Securities...................................... 7
4. Submission of Matters to a Vote of Security Holders.................. 7
5. Other Information.................................................... 8
6. Exhibits and Reports on Form 8-K..................................... 8
Signatures........................................................... 8
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
An audited balance sheet, audited statements of income, cash flows and
changes in stockholders' equity dated January 12, 2000 can be found in the
Registrant's prospectus, dated April 28, 2000, which has been made available to
its stockholders and is incorporated by reference herein. A copy of such
prospectus is filed as an exhibit to Part 1 of the report on this form. Below
please find unaudited interim financial statements dated March 31, 2000 which
include a balance sheet , income statements, and statements of cash flow. The
interim financial statements include all adjustments which in the opinion of
management are necessary in order to make the financial statements not
misleading.
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Integrity Bancshares, Inc.
(A Development Stage Company)
Balance Sheet
MARCH 31, 2000
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ASSETS
Cash $ 3,853
Equipment (net of accumulated depreciation of $5,786) 76,346
Earnest money deposit on land 10,000
Stock subscriptions held in escrow 3,130,000
Other assets 3,912
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Total assets $ 3,224,111
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LIABILITIES AND STOCKHOLDER'S DEFICIT
LIABILITIES
Line of credit $ 475,000
Note payable 30,458
Accrued expenses 11,464
Stock subscribers funds held in escrow 3,130,000
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Total liabilities 3,646,922
STOCKHOLDER'S (DEFICIT)
Common stock, no par value; 10,000,000 shares authorized
5 shares issued and outstanding 50
Deficit accumulated during the development state
Previous year (282,849)
Current year (140,011)
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Total stockholder's deficit (422,810)
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Total liabilities and stockholder's deficit $ 3,224,112
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See Notes to Financial Statements
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Integrity Bancshares, Inc.
(A Development Stage Company)
Statement of Loss
Three month period ending MARCH 31, 2000
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Income
Interest on escrow funds $ 3,912
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Total income $ 3,912
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Expenses
Personnel expenses $ 75,685
Interest 307
Equipment and occupancy expenses 8,639
Legal and consulting 35,795
Other expenses 23,497
Total expenses $ 143,923
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Net loss and deficit accumulated during the development stage $(140,011)
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See Notes to Financial Statements
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Integrity Bancshares, Inc.
(A Development Stage Company)
Statement of Cash Flows
Three month period ending MARCH 31, 2000
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OPERATING ACTIVITIES
Net Loss $(140,011)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation 4,417
Increase in other assets (interest receivable) (3,912)
Increase in accrued expenses 4,624
Net cash used in operating activities (134,882)
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INVESTING ACTIVITIES
Purchase of premises and equipment (18,474)
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Net cash used in investing activities (18,474)
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FINANCING ACTIVITIES
Proceeds from line of credit 150,000
Repayment of note payable (1,417)
Net cash provided by financing activities 148,583
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Net decrease in cash (4,773)
Cash at beginning of period 8,626
Cash at end of period $ 3,853
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See Notes to Financial Statements
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INTEGRITY BANCSHARES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
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Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
Integrity Bancshares, Inc. (the "Company") was incorporated on November
12, 1999 to operate as a bank holding company pursuant to the Federal Bank
Holding Act of 1956, as amended, and the Georgia Bank Holding Company Act. The
Company intends to acquire 100% of the issued and outstanding capital stock of
Integrity Bank (In Organization) (the "Bank"), a corporation to be organized
under the laws of the State of Georgia to conduct a general banking business in
Alpharetta, Georgia. On November 12, 1999, the organizers filed an application
for approval of the organization of the Bank with the Georgia Department of
Banking and Finance ("DBF") and also with the Federal Deposit Insurance
Corporation ("FDIC") for insurance of the Bank's deposits. The Company has
applied to the DBF to become a bank holding company and will apply to the
Federal Reserve Bank of Atlanta ("FRB") as soon as it receives preliminary
approval from the DBF. Upon obtaining regulatory approval, the Company will be a
registered bank holding company subject to regulation by the FRB and DBF.
Activities since inception have consisted primarily of the Company's
and the Bank's organizers engaging in organizational and preopening activities
necessary to obtain regulatory approvals and to prepare to commence business as
a financial institution. In addition, the Securities and Exchange Commission
made the company's stock offering effective March 7, 2000, and since that time
the Company's organizers have been engaged in the solicitation of subscribers
for the shares of Integrity Bancshares, Inc.
Significant Accounting Policies
The financial statements have been prepared on the accrual basis in
accordance with generally accepted accounting principles.
Organizational and Stock Offering Costs
Organizational costs will be expensed as incurred in accordance with
generally accepted accounting principles. Stock offering costs will be charged
to capital surplus upon completion of the stock offering. Additional costs are
expected to be incurred from organizational costs and stock offering costs.
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Equipment
Equipment is carried at cost less accumulated depreciation.
Depreciation is computed by the straight-line method over an estimated useful
life of three to five years.
Income Taxes
The Company will be subject to Federal and State income taxes when
taxable income is generated. No income taxes have been accrued because of
operating losses incurred during the preopening period.
Fiscal Year
The Company will adopt a calendar year for both financial reporting and
tax reporting purposes.
Note 2. LINE OF CREDIT
To facilitate the formation of the Company and the Bank, the organizers
have established a $500,000 line of credit with an independent bank for the
purpose of paying organization and preopening expenses for the Company and the
Bank and the expenses of the Company's common stock offering. The line of credit
bears interest at the lender's prime rate less 1/2% and matures on September 16,
2000. Interest is payable quarterly. The interest rate at March 31, 2000 was
8.50%. The organizers have personally guaranteed repayment of the line of
credit. All funds advanced on behalf of the Company and the Bank will be repaid
from the proceeds of the stock offering. The Company's ability to repay these
advances and relieve the organizers from their personal guarantees depends upon
the completion of the offering.
Note 3. NOTE PAYABLE
Note payable consists of a note used to finance the purchase of the
Company's vehicle. The note requires 48 monthly payments of 861.73 including
interest at 9.75%.
Note 4. COMMITMENTS AND RELATED PARTY TRANSACTIONS
The Company has entered into an agreement to purchase approximately 1.3
acres of land at a purchase price of $850,000. The land was purchased from a
director of the Company and will be used as the site for its main office. As of
March 31, 2000, the Company has made a $10,000 deposit on the land.
The Company is also leasing temporary office facilities on a
month-to-month basis for $900 from the aforementioned director. Total rental
expense included in the statement of loss under this agreement amounted to
$5,400.
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Note 5. COMMON STOCK OFFERING
The Company has filed a Registration Statement on Form SB-2 with the
Securities and Exchange Commission and was granted an effective date of March 7,
2000 offering for sale a minimum of 1,000,000 shares and a maximum of 1,200,000
shares of the Company's common stock at a price of $10 per share. As of March
31, 2000, subscriptions have been received and accepted for 313,000 shares.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Registrant's plan of operations can be found in its prospectus,
dated April 28, 2000, which has been made available to its stockholders and is
incorporated by reference herein. A copy of such prospectus is filed as an
exhibit to Part 1 of the report on this form.
Since March 7, 2000, which is the date on which the Registrant's Form
SB-2 Registration Statement was declared effective with the Securities and
Exchange Commission ("SEC"), the Registrant's sole activities have been selling
securities pursuant to such Registration Statement and engaging in other
organizational matters.
PART 11 - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings to which the Registrant is a
party or to which any of its properties are subject.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The instruments defining the rights of the holders of the Registrant's
common stock (its only class of securities) have not been modified in any way,
nor has there been any issuance of any security during the first quarter of
2000.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has not been any material default in the payment of principal,
interest, a sinking or purchase fund installment, or any other material default
which has not been cured within 30 days with respect to any indebtedness of the
Registrant exceeding five percent (5%) of the total assets of the Registrant.
Because the Registrant only has one class of securities, its common stock, it
has no material arrearage in the payment of preferential equity returns.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the period
covered by this report.
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ITEM 5. OTHER INFORMATION
There have been no material unscheduled events which require reporting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits listed below are filed as part of or are incorporated by
reference in this report. Where such filing is made by incorporation by
reference to a previously filed registration statement or report, such
registration statement or report is identified:
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Exhibit No. Description
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3.1 Articles of Incorporation (incorporated by reference to the
Registrant's Form SB-2 Registration Statement declared
effective by the SEC on March 7, 2000)
3.2 Bylaws (incorporated by reference to the Registrant's Form
SB-2 Registration Statement declared effective by the SEC on
March 7, 2000)
4 Instruments defining the rights of holders, including
indentures (incorporated by reference to the Registrant's Form
SB-2 Registration Statement declared effective by the SEC on
March 7, 2000)
10 Material Contracts (incorporated by reference to the
Registrant's Form SB-2 Registration Statement declared
effective by the SEC on March 7, 2000)
19 Prospectus dated April 28, 2000 (incorporated by reference to
the Registrant's 424(b) filing made on May 5, 2000)
27 Financial Date Schedule
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(b) The Registrant has filed no reports on Form 8-K.
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.
INTEGRITY BANCSHARES, INC.
Date: September 30, 2000 /s/ Clinton M. Day
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Clinton M. Day, Chairman of the Board
Date: September 29, 2000 /s/ Steven M. Skow
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Steven M. Skow, President
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