SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Futurus Financial Services, Inc.
--------------------------------
(Exact name of registrant as specified in its charter)
Georgia 6711 58-2485661
------------------------- ------------------------- ----------------------
(State of Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation Industrial Classification Identification No.)
or organization) Code Number)
281 South Main Street, Suite 105A
Alpharetta, Georgia 30004
--------------------------------------- -------------------------
(Address of principal executive (Zip Code)
offices)
770-667-7899
------------
(Telephone Number)
Not Applicable
--------------
(Former name, former address
and former fiscal year,
if changed since last report)
Check whether the issurer: (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 NO XX
---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
One share of common stock, no par value per share was issued and
outstanding as of September 30, 2000. Registrant has recently registered an
offering of its stock pursuant to a Registration Statement on Form SB-2, which
the SEC declared effective on July 14, 2000.
Transitional Small Business Disclosure Format (check one): YES NO XX
--- ---
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FUTURUS FINANCIAL SERVICES, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements of Futurus Financial Services, Inc. (the
"Company") are set forth in the following pages.
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<TABLE>
<CAPTION>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 2000
Assets
------
<S> <C>
Cash $ 13,867
Premises and equipment, net 228,420
Other assets 58,978
-----------
$ 301,265
===========
Liabilities and Stockholder's Deficit
-------------------------------------
Accounts payable and accrued expenses $ 66,317
Note payable - line of credit 973,100
-----------
Total liabilities 1,039,417
-----------
Stockholder's deficit:
Preferred stock, no par value; 2,000,000 shares authorized; -
no shares issued and outstanding
Common stock, no par value; 10,000,000 shares authorized; 10
1 share issued and outstanding
Deficit accumulated during the development stage (738,162)
-----------
Total stockholder's deficit (738,152)
-----------
$ 301,265
===========
</TABLE>
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<TABLE>
<CAPTION>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000
AND THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO SEPTEMBER 30, 2000
Three Months Nine Months Cumulative
Ended Ended Through
Sept. 30, 2000 Sept. 30, 2000 Sept. 30, 2000
--------------- -------------- --------------
<S> <C> <C> <C>
Expenses:
Legal and consulting $ 60,792 162,809 253,604
Officer compensation 81,565 219,036 267,083
Other operating 105,572 173,439 217,475
--------------- -------------- --------------
Net loss $ 247,929 555,284 738,162
=============== ============== ==============
</TABLE>
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<TABLE>
<CAPTION>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
AND THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO SEPTEMBER 30, 2000
Nine Months Cumulative
Ended Through
September 30, 2000 March 31, 2000
-------------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (555,284) (738,162 )
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation 630 1,133
Change in other assets (45,395) (58,978)
Change in accounts payable and accrued expenses 31,295 66,317
-------------------- ---------------
Net cash used by operating activities (568,754) (729,690)
-------------------- ---------------
Cash flows from investing activities, consisting of
additions to premises and equipment ( 227,038) ( 229,553)
-------------------- ---------------
Cash flows from financing activities:
Proceeds from line of credit 803,100 973,100
Sale of organization share of common stock - 10
-------------------- ---------------
Net cash provided by financing activities 803,100 973,110
-------------------- ---------------
Net change in cash and cash equivalents 7,308 13,867
Cash and cash equivalents at beginning of period 6,559 -
-------------------- ---------------
Cash and cash equivalents at end of period $ 13,867 13,867
==================== ===============
Supplemental cash flow information:
Cash paid for interest $ 29,700 30,949
==================== ===============
</TABLE>
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FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
------------
Futurus Financial Services, Inc. (the "Company") was incorporated for the
purpose of becoming a bank holding company. The Company intends to acquire
100% of the outstanding common stock of Futurus Bank, N.A. (In
Organization) (the "Bank"), which will operate in northern Fulton County in
the metropolitan Atlanta, Georgia area. The organizers of the Bank filed a
joint application to charter the Bank with the Office of the Comptroller of
Currency and the Federal Deposit Insurance Corporation on October 15, 1999.
Provided that the application is timely approved and necessary capital is
raised, it is expected that operations will commence in the first quarter
of 2001.
Operations through September 30, 2000 relate primarily to expenditures by
the organizers for incorporating and organizing the Company. All
expenditures by the organizers are considered expenditures of the Company.
The Company plans to raise between $9,000,000 and $11,000,000 through an
offering of its common stock at $10 per share, of which $8,500,000 will be
used to capitalize the Bank. The organizers and directors expect to
subscribe for a minimum of approximately $2,232,500 of the Company's stock.
In connection with the Company's formation and initial offering, warrants
to purchase shares of common stock at $10.00 per share will be issued to
the organizing stockholders. Organizing stockholders who purchase 20,000 or
more shares of common stock in the initial offering will receive warrants
to purchase one share of common stock for each share they purchase.
Organizing stockholders who purchase less than 20,000 shares in the initial
offering will receive warrants to purchase one share of common stock for
each two shares they purchase. The warrants are exercisable on each of the
three succeeding anniversaries of the date of the close of the initial
offering at the initial offering price of $10.00 per share and expire ten
years after the date of grant. The Company also intends to reserve 110,000
shares for the issuance of options under an employee incentive stock option
plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------
ORGANIZATION COSTS
Costs incurred for the organization of the Company and the Bank (consisting
principally of legal, accounting, consulting and incorporation fees) are
being expensed as incurred.
DEFERRED OFFERING EXPENSES
Costs incurred in connection with the stock offering, consisting of direct,
incremental costs of the offering, are being deferred and will be offset
against the proceeds of the stock sale as a charge to additional paid in
capital.
PRE-OPENING EXPENSES
Costs incurred for overhead and other operating expenses are included in
the current period's operating results.
PROFORMA NET LOSS PER COMMON SHARE
Proforma net loss per common share is calculated by dividing net loss by
the minimum number of common shares (900,000), which would be outstanding
should the offering be successful, as prescribed in Staff Accounting
Bulletin Topic 1:B. The proforma net loss per share for the nine months
ended September 30, 2000 was $.62 with a cumulative net loss per share from
inception to September 30, 2000 of $.82.
(3) PREFERRED STOCK
----------------
Shares of preferred stock may be issued from time to time in one or more
series as established by resolution of the Board of Directors of the
Company. Each resolution shall include the number of shares issued,
preferences, special rights and limitations as determined by the Board.
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FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Since its inception on August 12, 1999, the Company's principal activities
have been related to its organization, the conducting of its initial public
offering, and the pursuit of approvals from the Office of the Comptroller of the
Currency (the "OCC") and Federal Deposit Insurance Corporation (the "FDIC") of
its application to charter a bank. The OCC and FDIC granted preliminary
approval of the application on February 14, 2000 and April 18, 2000,
respectively.
At September 30, 2000, the Company had total assets of $301,265. These
assets consisted principally of premises and equipment of $228,420, deferred
offering expenses of $55,206 and cash of $13,867.
The Company's liabilities at September 30, 2000 were $1,039,417, consisting
of advances under a line of credit from a bank of $973,100 and accounts payable
and accrued expenses of $66,317. The Company had a stockholder's deficit of
$738,152 at September 30, 2000.
The Company had a net loss of $555,284 for the nine months ended September
30, 2000, and $738,162 cumulatively from inception through September 30, 2000,
or a pro forma net loss of $.62 per share for the nine months ended September
30, 2000 and $.82 per share cumulatively since inception (assuming the sale of
the minimum number of shares in the offering were outstanding during the entire
period). This loss resulted from expenses incurred in connection with activities
related to the organization of the Bank. These activities included (without
limitation) the preparation and filing of an application with the OCC and the
FDIC to charter the Bank, responding to questions and providing additional
information to the OCC and the FDIC in connection with the application process,
preparing a Prospectus and filing a Registration Statement with the SEC, selling
the common stock, meetings and discussions among various organizers regarding
application and SEC filing information, target markets and capitalization
issues, hiring qualified personnel to work for the Bank, conducting public
relations activities on behalf of the Company, developing prospective business
contacts for the Company, and taking other actions necessary for a successful
Bank opening. Because the Company was in the organization stage, it had no
operations from which to generate revenues.
A minimum of $9,000,000 will be raised in the Offering and used to
capitalize the Company and to provide working capital. The Company believes this
amount will be sufficient to fund the activities of the Bank in its initial
stages of operations, and that the Bank will generate sufficient income from
operations to fund its activities on an ongoing basis. For purposes of its
charter application with the OCC, the organizers estimate that the Company's
deficit when it opens to be approximately $1,160,000, although the actual
deficit may be significantly higher or lower. The Company believes that income
from the operations of the Bank will be sufficient to fund its activities on an
ongoing basis; however, there can be no assurance that the Company will achieve
any particular level of profitability. The Company has obtained a $1,200,000
line of credit guaranteed by the organizers to provide the necessary funding to
cover costs and expenses the Bank is expected to incur prior to the completion
of the Offering. In the event the proceeds of the Offering are insufficient to
provide the minimum initial funding needed for regulatory approval, the proceeds
from the Offering will be returned to the investors, the Offering withdrawn, and
the organizers will assume the obligations of the Company.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is a
party.
ITEM 2. CHANGES IN SECURITIES
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The Registrant's Registration Statement on Form SB-2 was declared
effective on July 14, 2000, which registered 1,100,000 shares of the
Registrant's common stock. Therefore, as of the period ended September
30, 2000 for which this Form 10-QSB relates, no offering proceeds had
been received by the Registrant.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
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. The following exhibits are filed with or incorporated by
reference into this Form 10-QSB pursuant to Item 601 of Regulation S-B:
Exhibit
No. Description
------ -----------
3.1 Articles of Incorporation, as amended and restated*
3.2 Bylaws*
4.1 Specimen Common Stock Certificate*
4.2 See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws defining rights of holders of Futurus
Financial Services, Inc.'s common stock
10.1 Lease Agreement by and between Futurus Financial Services,
Inc. and Pioneer Real Estate Development, Inc. dated March 9,
2000 and entered into on March 14, 2000 (permanent facility)*
10.2 Lease Agreement by and between Futurus Financial Services,
Inc. and Daniel B. Cawart d/b/a Alpharetta Square Shopping
Center dated February 15, 2000 (temporary facility)*
10.3 Promissory Note dated August 23, 1999 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty*
10.4 Form of Futurus Financial Services, Inc. Organizers' Warrant
Agreement*
10.5 Futurus Financial Services, Inc. 2000 Stock Incentive Plan*
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10.6 Project Development and Construction Agreement dated September
28, 1999 and accepted October 2, 1999 by and between Futurus
Financial Services, Inc. and KDA Financial, Inc.*
10.7 Project Agreement dated November 30, 1999 by and between
Futurus Financial Services, Inc. and The Compass Group d/b/a
Stern Marketing Group*
10.8 Amended and Restated Employment Agreement dated as of August
20, 2000 by and between Futurus Bank, N.A. (In Organization),
Futurus Financial Services, Inc. and William M. Butler*
10.9 Form of Employment Agreement by and between Futurus Bank,
N.A. (In Organization), Futurus Financial Services, Inc. and
R. Wesley Fuller*
10.10 Form of Employment Agreement by and between Futurus Bank, N.A.
(In Organization), Futurus Financial Services, Inc. and
Suzanne T. Phipps*
10.11 Promissory Note dated February 11, 2000 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty*
10.12 Letter of Agreement dated March 14, 2000 by and between
Futurus Financial Services, Inc. and KDA Financial, Inc.*
10.13 Project Agreement dated March 10, 2000 by and between Futurus
Financial Services, Inc. and The Compass Group d/b/a Stern
Marketing Group*
10.14 Promissory Note dated June 5, 2000 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty*
10.15 Form of Escrow Agreement*
27.1 Financial Data Schedule (for SEC use only).
------------------
* Registrant hereby incorporates by reference to the exhibits of identical
index number filed with, and made a part of, Registrant's Registration
Statement on Form SB-2, as amended (File No. 333-30144).
(b) Reports on form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FUTURUS FINANCIAL SERVICES, INC.
By:
-----------------------------------
William M. Butler
President, Chief Executive Officer
and Director
(Principal Executive Officer)
By:
-----------------------------------
R. Wesley Fuller
Chief Financial Officer
(Principal Financial and Accounting
Officer)
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