UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO 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: 0-1665
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DCAP GROUP, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 36-2476480
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(State or other jurisdiction of (I.R.S Employer Identification No.)
incorporation or organization)
90 Merrick Avenue, East Meadow, New York 11554
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(Address of principal executive offices) (Zip Code)
(516) 794-6300
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(Registrant's telephone number, including area code)
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(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. ( X ) Yes ( ) No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. ( )Yes ( ) No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 13,452,944 shares as of
October 18, 1999
<PAGE>
INDEX
DCAP GROUP, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheet - September 30, 1999 (Unaudited)
Condensed Consolidated Statements of Operations - Nine months
ended September 30, 1999 and 1998 (Unaudited)
Condensed Consolidated Statements of Operations - Three months
ended September 30, 1999 and 1998 (Unaudited)
Condensed Consolidated Statements of Cash Flows - Nine months
ended September 30, 1999 and 1998 (Unaudited)
Notes to Condensed Consolidated Financial Statements - Nine
months ended September 30, 1999 and 1998 (Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
2
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
DCAP GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
September 30, 1999
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,207,367
Accounts receivable 591,873
Prepaid expenses and
other current assets 63,407
----------
Total current assets 1,862,647
----------
PROPERTY AND EQUIPMENT, net 1,372,743
----------
OTHER ASSETS:
Receivable from stockholders 570,261
Goodwill, net 3,458,056
Other intangibles, net 192,939
Deposits and other assets 133,605
----------
Total other assets 4,354,861
----------
$7,590,251
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 997,467
Current portion of long-term debt 395,263
Debentures payable 154,200
Due to related party 31,800
----------
Total current liabilities 1,578,730
----------
OTHER LIABILITIES:
Long-term debt 598,564
Deferred revenue 188,814
----------
Total other liabilities 787,378
----------
MINORITY INTEREST 913,497
----------
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value; authorized,
25,000,000 shares; issued and outstanding,
13,452,944 shares 134,529
Capital in excess of par 8,914,827
Deficit (4,510,710)
----------
4,538,646
Subscription receivable (228,000)
----------
$4,310,646
----------
$7,590,251
==========
See notes to condensed consolidated financial statements.
3
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DCAP GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine months ended
September 30,
1999 1998
----------- -----------
Revenues:
Rooms $ 740,462 $ 641,494
Commissions and fees 5,185,085 -0-
Other 33,821 15,146
Interest 41,924 66,586
----------- ----------
Total revenues 6,001,292 723,226
----------- ----------
Costs and expenses:
General, administrative
and sundry 3,193,782 366,448
Departmental 220,670 219,505
Depreciation and amortization 471,794 29,625
Energy costs 14,250 15,638
Interest 145,830 -0-
Lease rentals 148,981 130,026
Marketing 2,094,226 14,232
Property operation
and maintenance 19,726 21,161
Provision for bad debt 1,800 1,700
----------- ----------
6,311,059 798,335
----------- ----------
Loss before income taxes
and minority interest (309,767) (75,109)
Provision for income taxes 22,957 -0-
----------- ----------
Loss before minority interest (332,724) (75,109)
Minority interest 63,760 -0-
----------- ----------
Net loss $ (396,484) $ (75,109)
=========== ==========
Net loss per common share:
Basic $ (.04) $ (.01)
=========== ==========
Diluted $ (.04) $ (.01)
=========== ==========
Weighted average number of shares outstanding:
Basic 11,225,865 5,591,367
========== ==========
Diluted 11,225,865 5,591,367
========== ==========
4
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DCAP GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
September 30,
1999 1998
---------- ---------
Revenues:
Rooms $ 216,301 $ 197,163
Commissions and fees 2,174,404 -0-
Other 18,658 4,942
Interest 14,798 24,370
---------- ----------
Total revenues 2,424,161 226,475
---------- ----------
Costs and expenses:
General, administrative
and sundry 1,295,954 107,580
Departmental 73,855 72,907
Depreciation and amortization 232,893 9,774
Energy costs 4,245 5,197
Interest expense 75,372 -0-
Lease rentals 43,337 39,553
Marketing 983,370 4,165
Property operation
and maintenance 6,560 7,984
Provision for bad debt 600 600
---------- ----------
2,716,186 247,760
---------- ----------
Loss before income taxes
and minority interest (292,025) (21,285)
Provision for income taxes 668 -0-
---------- -----------
Loss before minority interest (292,693) (21,285)
Minority interest 7,000 -0-
---------- ----------
Net loss $ (299,693) $ (21,285)
========== ===========
Net loss per common share:
Basic $ (.03) $ .00
========== ==========
Diluted $ (.03) $ .00
========== ==========
Weighted average number of shares outstanding:
Basic 13,452,944 5,591,367
========== =========
Diluted 13,452,944 5,591,367
========== =========
See notes to condensed consolidated financial statements.
5
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DCAP GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended
September 30,
1999 1998
----------- -----------
Cash flows from operating activities:
Net loss $ (396,484) $ (75,109)
Adjustments to reconcile net loss to
net cash (used in) operating activities:
Depreciation and amortization 471,794 29,625
Provision for bad debts 1,800 1,700
Minority interest in net earnings 63,760 -0-
Decrease (increase) in assets:
Accounts receivable (182,777) (41,845)
Prepaid expenses and other
current assets 103,703 (31,780)
Deposits and other assets 9,548 (1,336)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (87,025) (34,524)
Deferred revenue (33,635) -0-
--------- ---------
Net cash (used in)
operating activities (49,316) (153,269)
Cash flows from investing activities:
Increase in notes and
other receivables (1,258,038) (468,860)
Acquisition of property and equipment (202,275) (11,985)
Other -0- -0-
--------- ---------
Net cash (used in)
investing activities (1,460,313) (480,845)
Cash flows from financing activities:
Proceeds from issuance of stock 2,342,565 -0-
Proceeds from issuance of long-term debt 21,000 -0-
--------- ---------
Net cash provided by
financing activities 2,363,565 -0-
Net increase (decrease) in cash and
cash equivalents 853,936 (634,114)
Cash and cash equivalents,
beginning of period 353,431 1,040,389
--------- ---------
Cash and cash equivalents,
end of period $1,207,367 $ 406,275
========= =========
See notes to condensed consolidated financial statements.
6
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DCAP GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
1. The Condensed Consolidated Balance Sheet as of September 30, 1999, the
Condensed Consolidated Statements of Operations for the three and nine
months ended September 30, 1999 and 1998 and the Condensed Consolidated
Statements of Cash Flows for the nine months ended September 30, 1999 and
1998 have been prepared by the Company without audit. In the opinion of the
Company, the accompanying unaudited condensed consolidated financial
statements contain all adjustments necessary to present fairly its
financial position as of September 30, 1999, results of operations for the
three and nine months ended September 30, 1999 and 1998 and cash flows for
the nine months ended September 30, 1999 and 1998. This report should be
read in conjunction with the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1998.
2. The results of operations and cash flows for the nine months ended
September 30, 1999 are not necessarily indicative of the results to be
expected for the full year.
3. DCAP Acquisition: Pro Forma Information. Since February 25, 1999, the
Company has been engaged in two lines of business. In one, the Company,
through its wholly-owned subsidiary, Dealers Choice Automotive Planning
Inc. ("DCAP"), and related entities (collectively, the "DCAP Companies"),
is engaged primarily in placing various types of insurance with insurance
underwriters on behalf of its customers. The categories of insurance placed
include automobile, motorcycle, boat, life, business and homeowner's
insurance. In addition, the DCAP Companies offer tax preparation services
and automobile club services for roadside emergencies. The DCAP Companies
also provide services with regard to obtaining insurance premium financing
and personal and automobile loans from third parties. The DCAP Companies
also intend to provide direct insurance premium financing services to their
clients. The Company has been in this business since its February 25, 1999
acquisition of the DCAP Companies.
In its other line of business, the Company, through its wholly-owned
subsidiary, IAH, Inc., operates the International Airport Hotel in San
Juan, Puerto Rico (the "Hotel"). The Hotel caters generally to commercial
and tourist travelers in transit.
As indicated above, on February 25, 1999, the Company acquired all of the
outstanding stock of DCAP as well as interests in the other DCAP Companies.
The Company's condensed consolidated statements of operations include the
revenues and expenses of the DCAP Companies from February 25, 1999.
The following pro forma results were developed assuming the acquisition of
the DCAP Companies had occurred as of January 1, 1998.
Nine Months Ended
September 30,
1999 1998
---------- ----------
Revenues $7,165,132 $6,371,248
Net loss $ (787,912) $ (992,936)
Loss per share $(.07) $(.07)
The pro forma net loss includes amortization of goodwill and other
purchased intangibles of $207,716 for the nine months ended September 30,
1999 and 1998. The above unaudited
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pro forma condensed consolidated financial information is presented for
illustrative purposes only and is not necessarily indicative of the
condensed consolidated results of operations in future periods or the
results that actually would have been realized had the Company and the DCAP
Companies been a combined company during the specified periods.
4. Segment and Related Information. In 1999, the Company adopted SFAS No. 131,
Disclosures About Segments of an Enterprise and Related Information, which
changes the way the Company reports information about its operating
segments. The Company has two business units with separate management teams
that provide different products and services. Prior to the acquisition of
the DCAP Companies, the Company was engaged in one line of business.
Accordingly, segment information has been omitted for 1998.
Summarized financial information concerning the Company's reportable
segments is shown in the following table:
Nine months ended
September 30, 1999
DCAP
Companies Hotel Other(1) Total
--------- -------- -------- ----------
Revenues $5,185,085 $776,612 $ 39,595 $6,001,292
Net income (loss) (236,724) 128,169 (287,929) (396,484)
------------
(1) Column represents corporate-related items and, as it relates to segment
net income (loss), income and expense not allocated to reportable segments.
5. On February 25, 1999, concurrently with the acquisition of the DCAP
Companies, Eagle Insurance Company ("Eagle") purchased 1,486,893 Common
Shares of the Company for an aggregate purchase price of approximately
$1,000,000 or $.67 per share. Eagle is a New Jersey insurance company
wholly-owned by The Robert Plan Corporation, an insurance holding company
that is engaged in providing services to insurance companies.
6. On June 2, 1999, the Company sold, through a placement agent, 33.5 Units
(consisting of Common Shares and warrants) at a purchase price of $50,000
per Unit (or aggregate gross proceeds of $1,675,000). The proceeds of the
offering have been used, and are intended to be used, for advertising, the
establishment of premium finance operations, computer upgrades and working
capital purposes.
The securities offered in the private placement have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold in the United States absent registration under
the Securities Act or an exemption from the registration requirements
thereof. Certain registration rights were granted to the purchasers of the
offered securities.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
---------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Background
During 1998 and prior to February 25, 1999, the sole business of DCAP
Group, Inc. (the "Company") was the operation, through a wholly-owned
subsidiary, IAH, Inc., of the International Airport Hotel in San Juan, Puerto
Rico (the "Hotel").
On February 25, 1999, the Company acquired all of the issued and
outstanding shares of Common Stock of Dealers Choice Automotive Planning Inc.
("DCAP") as well as interests in certain companies affiliated with DCAP
(collectively with DCAP, the "DCAP Companies"). The DCAP Companies are engaged
primarily in placing various types of insurance, including automobile,
motorcycle, boat, life, business and homeowner's insurance, with insurance
underwriters on behalf of their customers. In addition, the DCAP Companies offer
income tax return preparation services and automobile club services for roadside
emergencies. The DCAP Companies also provide services with regard to obtaining
insurance premium financing and personal and automobile loans from third
parties. The DCAP Companies also intend to provide direct insurance premium
financing services to their clients.
The DCAP Companies are compensated for their insurance-related services by
commissions paid by insurance companies and service fees paid by their clients.
The commission is usually a percentage of the premium paid by the insured; the
service fee is a flat fee. The DCAP Companies do not engage in underwriting
activities and therefore do not assume underwriting risks.
There are 59 "DCAP" offices in the New York metropolitan area. Four are
wholly-owned by the Company; 23 are owned partially by the Company (directly or
beneficially, generally ranging between 50% and 67%) and partially by other
persons who generally operate the location; and 32 are franchises in which the
Company has no equity interest; the franchisor, DCAP Management Corp., however,
is wholly-owned by the Company.
Concurrently with the closing of the DCAP acquisition, the Company issued
and sold to Eagle Insurance Company ("Eagle") 1,486,893 Common Shares for an
aggregate purchase price of approximately $1,000,000.
Eagle is a New Jersey insurance company wholly-owned by The Robert Plan
Corporation ("The Robert Plan"), an insurance holding company that is engaged in
providing services to insurance companies. Pursuant to separate agency
agreements between certain DCAP Companies and certain insurance company
subsidiaries of The Robert Plan, such DCAP Companies have been appointed agents
of the insurance companies with regard to the offering of automobile and other
insurance products.
On June 2, 1999, the Company sold, through a placement agent, 33.5 Units
(consisting of Common Shares and warrants) at a purchase price of $50,000 per
Unit (or aggregate gross proceeds of $1,675,000). The proceeds of the offering
have been used, and are intended to be used, for advertising, the establishment
of premium finance operations, computer upgrades and working capital purposes.
The securities offered in the private placement have not been registered
under the Securities
9
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Act of 1933, as amended (the "Securities Act"), and may not be offered or sold
in the United States absent registration under the Securities Act or an
exemption from the registration requirements thereof. Certain registration
rights were granted to the purchasers of the offered securities.
Results of Operations
The Company's net loss for the nine months ended September 30, 1999 was
$396,484 as compared to a net loss of $75,109 for the nine months ended
September 30, 1998. The results of operations for the nine months ended
September 30, 1999 included the results of operations of the DCAP Companies from
February 25, 1999, the date of the acquisition by the Company of the DCAP
Companies. The results of operations for the nine months ended September 30,
1998 do not reflect any of the operations of the DCAP Companies.
The increase in the loss for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998 was the result primarily of
the operations of the DCAP Companies from February 25, 1999 through September
30, 1999, which, on a stand-alone basis, generated a net loss of $236,724.
The operations of the Hotel during the nine months ended September 30,
1999, on a stand- alone basis, generated a net income of $128,169.
Corporate-level expenses of $287,929 for the nine months ended September 30,
1999, not allocable to either the DCAP Companies or the Hotel, contributed to
the net loss for the nine months ended September 30, 1999.
During the nine months ended September 30, 1999, the Company had higher
room rental revenues from the Hotel of $98,968 and lower general and
administrative expenses of $89,162 (without regard to the DCAP Companies), in
each case as compared to the nine months ended September 30, 1998. The above
factors were offset by higher rent expense of $18,955 (since the Hotel's rental
expense is based upon revenues received) and lower interest income of $24,662
(since, during the 1998 period, the Company recognized interest income from
loans made to DCAP and such interest income recognition ceased effective with
the closing of the DCAP acquisition). In addition, the Company incurred
amortization expenses for the nine months ended September 30, 1999 of $182,012
applicable to the DCAP acquisition that were not incurred in the 1998 period.
Liquidity and Capital Resources
As of September 30, 1999, the Company had $1,207,367 in cash and cash
equivalents and a working capital surplus of $251,628. As of December 31, 1998,
the Company had $353,431 in cash and cash equivalents and a working capital
surplus of $1,064,590.
Cash and cash equivalents increased between December 31, 1998 and September
30, 1999 due to the following: (i) on February 25, 1999, concurrently with the
closing of the DCAP acquisition, the Company received proceeds from the sale of
stock in the amount of $1,118,718 (substantially all of which was used to
satisfy accrued liabilities of the DCAP Companies), and (ii) on June 2, 1999,
the Company's received $1,675,000 in gross proceeds from the sale of its
securities in a private placement, as discussed under "Background."
The reduction in working capital between December 31, 1998 and September
30, 1999 was primarily the result of the following: (i) the Company's working
capital surplus as of December 31, 1998 included $846,362, which represented a
note receivable (including accrued interest) from DCAP; such amount was
eliminated in consolidation since DCAP is now a wholly-owned subsidiary
10
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of the Company; and (ii) as of February 25, 1999, the combined working capital
deficiency of the DCAP Companies (exclusive of amounts owed to the Company) was
approximately $888,000. The reduction was offset partially by the receipt of the
private placement proceeds discussed under "Background."
Year 2000
DCAP Companies
The Year 2000 ("Y2K") problem is the result of computer programs being
written using two digits, rather than four, to define the applicable year. Any
of the programs of the DCAP Companies that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000, which
could result in miscalculations or system failures. DCAP has implemented a Y2K
compliance program designed to ensure that its computer systems, applications
and embedded operating systems will function properly beyond 1999. DCAP believes
that all of its "mission critical" systems have been identified, and will be
brought into compliance in a timely fashion.
There are only two information technology ("IT") systems that require Y2K
analysis. One of these is in DCAP's headquarters and the Company believes that
it has been brought into compliance in all material respects. The compliance
work (including related verification and testing by an unrelated third party)
cost approximately $10,000.
The second IT system that requires Y2K analysis is the storefront point of
sale system, to which each DCAP store is connected. DCAP believes that this
second IT system is Y2K compliant in all material respects. The remediation of
the storefront computer system was accomplished in two steps. The first step
consisted of the installation of an entirely new system of leased computers. The
programs that have been installed in these computers have been tested by an
independent third party with whom DCAP has had a maintenance contract for the
past four years. The testing of the storefront computer system, which occurred
prior to installation, has been completed. The second step involved revisions to
the programs that structure and give access to the database that each of the
storefronts maintains. The revised program is currently being installed in the
various DCAP stores. DCAP does not anticipate any additional independent
verification of its Y2K readiness in this regard. The computer lease agreement
obligates DCAP to make payments totaling $92,000; the database work cost
approximately $20,000. It is anticipated that these costs will be expensed as
incurred and funded through cash from operations.
The only material non-IT system which might be impacted by the Y2K problem
is DCAP's telephone system. DCAP has been assured by the manufacturer of the
system that it has addressed its Y2K problems, and that it is prepared to
upgrade the DCAP phone system, at a cost of $5,000, in order to make the system
Y2K compliant. DCAP management has not yet determined whether to upgrade its
phone system through an agreement with the manufacturer, or otherwise, but it
anticipates that this single non-IT Y2K issue will be fully remediated by the
end of the fourth quarter of 1999. An inventory and assessment of other
potential non-IT systems, which could have an impact on the business,
operations, and financial position of the DCAP Companies, has been completed by
the management of DCAP. It was determined that no other non-IT systems will pose
any Y2K problem.
DCAP's executive management has been contacted by all of the major
insurance carriers with which it does a significant amount of business. Most of
these major carriers, such as Chubb
11
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and Travelers, have notified DCAP that their Y2K compliance programs are at or
near completion, and DCAP therefore anticipates no material Y2K problems with
these parties. The object of the contacts by these companies was to ensure that
DCAP itself would be Y2K compliant, in order to ensure the orderly continuation
of business with them. However, neither the Company nor the management of DCAP
can assure that the systems of these insurance carriers, upon which the business
of the DCAP Companies depends, will be Y2K compliant on a timely basis. DCAP is
developing contingency plans designed to enable it to continue its operations in
the event of the loss of business from one or more of these carriers or due to
other third party failures.
DCAP's management is developing a "worst-case scenario" with respect to Y2K
non- compliance and contingency plans designed to minimize the effects of such
scenario. Both the worst-case scenario and the contingency plan involve analysis
of (i) the use of alternative sources of insurance coverage (of which DCAP has
several) in the event of the loss of availability of one or more major carriers,
and (ii) the use of alternative, non-IT methods of processing applications,
including manual processing, in the event of IT-system failure on the part of
outside parties. The executive management of DCAP intends to have its worst-case
scenario and contingency plan fully developed and completely in place by the end
of the fourth quarter of 1999.
Hotel Operations
The Company's wholly-owned subsidiary, IAH, operates the International
Airport Hotel at San Juan International Airport, Puerto Rico. IAH does not have
any IT systems. Of the non-IT systems that comprise part of the Hotel's
operations, the switchboard is the only such system that contains imbedded
technology not Y2K - compliant. The Hotel has a plan in place, which is designed
to avoid any Y2K difficulties, both before and after January 1, 2000. The plan
consists primarily of a series of physical and practical alterations in the
Hotel's switchboard procedures, and does not involve any replacement of
equipment or any significant effort or cost. All other non-IT systems are
operated manually.
Forward Looking Statements
Certain information contained in the matters set forth above are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and is subject to the safe harbor created by that
act. The Company cautions readers that certain important factors may affect the
Company's actual results and could cause such results to differ materially from
any forward- looking statements which may be deemed to have been made above and
elsewhere in this Quarterly Report or which are otherwise made by or on behalf
of the Company. For this purpose, any statements contained above and elsewhere
in this Quarterly Report that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"intend," "could," "estimate," or "continue" or the negative variations of those
words or comparable terminology are intended to identify forward-looking
statements. Factors which may affect the Company's results include, but are not
limited to, the risks and uncertainties associated with undertaking different
lines of business, the lack of experience in operating certain new business
lines, the volatility of insurance premium pricing, government regulation,
competition from larger, better financed and more established companies, the
possibility of tort reform and a resultant decrease in the demand for insurance,
the uncertainty of the litigation with regard to the Hotel lease, the dependence
on the Company's executive management, uncertainties related to attempts to
achieve Y2K compliance and the ability of the Company to raise additional
capital which may be required in the near term. The Company is also subject to
other risks detailed herein or detailed from time to time in the Company's
Securities and Exchange Commission filings.
12
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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON 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
3(a) Certificate of Incorporation, as amended(1)
3(b) By-laws, as amended(2)
27 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter ended September 30, 1999, the following
Current Report on Form 8-K was filed by the Company:
(i) Date Filed: July 1, 1999
Item Reported: 7
--------
1 Denotes document filed as exhibits to the Company's Annual Reports on Form
10-KSB for the years ended December 31, 1993 and 1998 and incorporated
herein by reference.
2 Denotes document filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1998 and incorporated herein by
reference.
<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.
DCAP GROUP, INC.
Dated: November 14, 2000 By:/s/Kevin Lang
Kevin Lang
President
Dated: November 14, 2000 By:/s/Abraham Weinzimer
Abraham Weinzimer
Principal Financial Officer
<PAGE>
