SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[ X ] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the period ended June 30, 1996
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 0-16819
National Capital Management Corporation
(Exact name of registrant as specified in its charter)
Delaware 94-3054267
(State or other jurisdiction of (I.R.S.Employer
Identification
incorporation or organization) Number)
50 California Street, San Francisco, CA 94111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(415) 989-2661
Former name, former address and former fiscal year, if
changed from last report
Check whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or
15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No
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
practical date.
Common 1,650,524
Class Outstanding at August 9, 1996
<PAGE>
PART 1. FINANCIAL INFORMATION
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Cash $ 76,141 $ 634,892
Restricted cash 120,000 120,000
Accounts receivable 123,999 39,730
Notes and subscription receivable 2,353,895 3,413,650
Accrued insurance proceeds 7,278,898 5,467,122
Purchased insurance policies 10,500,136 7,977,044
Property and equipment, less accumulated
depreciation of $73,050 and $65,400 at
June 30, 1996 and December 31, 1995, respectively 74,604 82,254
Net assets of discontinued operations -
Real estate segment 1,729,221 3,051,277
Deferred financing costs 254,167 305,000
Other assets 237,860 253,531
Total assets $ 22,748,921 $ 21,344,500
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $ 975,066 $ 1,770,789
Revolving credit facility 12,998,665 9,570,830
Advances due affiliates -- 500,000
Subordinated note payable 2,000,000 2,000,000
Finder's fee payable 100,000 150,000
Total liabilities 16,073,731 13,991,619
Common stock repurchase obligation 175,000 175,000
Shareholders' equity:
Preferred stock, $0.01 par value, 3,000,000 shares
authorized, no shares issued or outstanding -- --
Common stock, $0.01 par value, 6,666,666 shares
authorized, 1,790,390 shares issued 17,904 17,904
Additional paid-in capital 23,123,951 23,123,951
Accumulated deficit (16,417,448) (15,739,757)
Treasury stock, 139,866 shares at
June 30, 1996 and December 31, 1995 (224,217) (224,217)
Total shareholders' equity 6,500,190 7,177,881
Total liabilities and shareholders' equity $ 22,748,921 $ 21,344,500
</TABLE>
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30 Ended June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenue accrued and
received $ 1,271,624 $ 1,151,084 $ 4,364,084 $ 1,834,466
Cost of insurance policies 1,090,942 980,340 3,712,265 1,587,606
Earned discount 180,682 170,744 651,819 246,860
Interest expense 313,029 158,314 559,410 232,823
Earned discount after
interest expense (132,347) 12,430 92,409 14,037
Selling and administrative 398,811 316,476 767,003 644,584
Depreciation and amortization 31,260 28,735 66,901 88,647
Loss from continuing
operations before other
income and expense (562,418) (332,781) (741,495) (719,194)
Other (income) expense:
Corporate administrative
expense 180,306 191,073 354,190 406,790
Interest income (80,057) (12,520) (146,436) (19,929)
Other income (9,159) (1,313) (14,897) (6,313)
Loss from continuing
operations before
income taxes (653,508) (510,021) (934,352) (1,099,742)
Income taxes -- -- -- --
Net loss from continuing
operations (653,508) (510,021) (934,352) (1,099,742)
Discontinued operations:
Net operating income (loss):
Real estate segment (19,902) (73,991) (116,890) (135,826)
Industrial products segment -- (56,497) -- (135,237)
Net gain on sale of
real estate properties 373,551 -- 373,551 --
Net income (loss) from
discontinued operations 353,649 (130,488) 256,661 (271,063)
Net loss $ (299,859) $ (640,509) $ (677,691) $(1,370,805)
Net loss from continuing
operations per share $ (0.40) $ (0.31) $ (0.57) $ (0.67)
Net income (loss) from
discontinued operations
per share 0.21 (0.08) 0.16 (0.16)
Net loss per share $ (0.19) $ (0.39) $ (0.41) $ (0.83)
Average number of shares
outstanding 1,650,524 1,651,989 1,650,524 1,652,919
</TABLE>
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (677,691) $(1,370,805)
Adjustment to reconcile net loss to net cash
provided by (used in) operating activities:
(Income) loss from discontinued operations (256,661) 271,063
Depreciation and amortization 66,901 88,647
Earned discounts on insurance policies (373,366) (57,827)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable (84,269) 1,133,928
Decrease in accounts payable
and accrued liabilities (795,723) (69,295)
Decrease in finders' fee payable (50,000) (50,000)
Net cash provided by (used in)
operating activities (2,170,809) (54,289)
Net cash related to discontinued operations 1,578,717 (407,297)
Cash flows from investing activities:
Purchased insurance policies (6,569,702) (2,970,215)
Proceeds from maturities of insurance
policies 2,608,200 808,000
Additions to property and equipment -- (5,212)
Increase in other assets 7,253 6,295
Net cash used in investing activities (3,954,249) (2,161,132)
Cash flow from financing activities:
Borrowings on revolving credit facility 6,036,035 2,887,343
Repayments on revolving credit facility (2,608,200) (808,000)
Addition to subordinated debt 2,000,000 --
Addition to note receivable (1,301,205) --
Repayment of notes receivable 360,960 --
Payments of advances due affiliates (500,000) --
Acquisition of treasury stock -- (9,675)
Net cash provided by financing activities 3,987,590 2,069,668
Decrease in cash and equivalents (558,751) (553,050)
Cash and equivalents at beginning of period 634,892 671,022
Cash and equivalents at end of period $ 76,141 $ 117,972
</TABLE>
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996 AND 1995
(Unaudited)
NOTE 1
The financial information for the three and six month periods
ended June 30, 1996 and 1995 presented in this Form 10-QSB has
been prepared from the accounting records without audit. The
information furnished reflects all adjustments (consisting of
only normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of the results of
interim periods. The results of operations for the three and six
months ended June 30, 1996 are not necessarily indicative of the
results to be expected for a full year. The consolidated balance
sheet as of December 31, 1995 has been derived from audited
financial statements. This report should be read in conjunction
with the consolidated financial statements included in the
Company's December 31, 1995 Annual Report to shareholders on Form
10-KSB as filed with the Securities and Exchange Commission.
Reverse Stock Split
Pursuant to the approval of the stockholders on June 28, 1995,
the Company implemented a reverse stock split which was effective
July 11, 1995, whereby each three shares of common stock was
converted into one share of Common Stock. As a result of the
reverse stock split, the Registrant has 6,666,666 shares of
authorized common stock, of which 1,650,524 are issued and
outstanding. All such shares are of the par value of $.01. All
per share amounts have been adjusted to reflect the reverse stock
split on a retroactive basis.
NOTE 2
Purchased insurance policies are stated at amortized cost. Costs
capitalized include the purchase price paid to the insured (or
"viator"), and certain direct and indirect costs related to the
acquisition of such policies. The insurance policies purchased
by the Company have been issued by various credit worthy
insurance carriers, none of which represent a significant
concentration of risk. National Capital Benefits Corp. ("NCBC"),
a majority-owned subsidiary of the Company, has an insurance
contract with NCB Insurance Ltd. ("NCB"), a wholly-owned
subsidiary of NCBC, which provides for payment of 90% of the face
value of the policies purchased at a specified period of time
after the expected maturity date, in accordance with the
contract. NCB, in turn, has reinsured this risk with several
large, non-affiliated international reinsurance companies. NCBC
retains the residual 10%.
<PAGE>
NOTE 2 (Continued)
Purchased insurance policies and accrued insurance proceeds
consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
Costs paid to viator $ 13,972,197 $ 10,487,660
Other direct and indirect
acquisition costs 1,008,557 1,051,510
Less amortized costs (4,480,618) (3,562,126)
Total purchased insurance policies $ 10,500,136 $ 7,977,044
Accrued insurance proceeds $ 5,512,625 $ 4,219,216
Insurance proceeds fully accrued:
Not yet matured 1,523,473 1,081,906
Matured not yet received 242,800 166,000
$ 7,278,898 $ 5,467,122
</TABLE>
NOTE 3
Appletree Townhouses. The Company's wholly-owned subsidiary,
Georgia Properties, Inc. ("GPI"), received a loan of $650,000 on
December 21, 1995 and an additional $500,000 on February 1, 1996
from the same individual that purchased The Mart Shopping Center,
in exchange for an option to purchase Appletree Townhouses for
$3,500,000, which was exercised on April 3, 1996.
The sales price of $3,500,000 consisted of the aforementioned
advances by the buyer totaling $1,150,000, assumption of the
existing first deed loan by the buyer in the amount of $1,048,795
and a purchase money note for the balance equal to $1,301,205.
The purchase money note bears interest from the date of sale at
8% per annum until it is due on December 31, 1996. In addition,
the buyer prepaid $250,000 of this note during April 1996. A
gain of approximately $374,000 has been reported during the
second quarter of 1996.
NOTE 4
Undeveloped land, 2.8 acres. The Company owns undeveloped land
in Ft. Lauderdale, Florida which is zoned for
commercial/industrial use. This parcel is currently under
contract to be sold for approximately $200,000 and is expected to
yield $57,000 of cash to the Company, after payment of the
related mortgage debt and other costs, upon its scheduled close
on August 30, 1996. The Company will report a gain of
approximately $200,000 during the third quarter of 1996 if the
transaction closes under existing terms.
NOTE 5
Discontinued Operations - Real Estate Segment. On November 27,
1995, the Company elected to discontinue operations of the Real
estate Segment to concentrate its efforts on its viatical
settlements business.
The results of the Real Estate Segment have been reported
separately as discontinued operations in these consolidated
statements of operations. Prior period financial statements have
been restated to present the Real Estate Segment as a
discontinued operation.
Summarized below are the operations of the Company's Real Estate
Segment for the six months ended June 30, 1996 and 1995.
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Total revenues $ 786,977 $ 1,216,223
Costs and expenses:
Operations and maintenance 443,741 655,876
Property taxes and insurance 90,221 150,525
Depreciation and amortization 220,421 301,680
Net interest 122,454 178,509
Corporate administrative expenses 27,030 65,459
Total costs and expenses 903,867 1,352,049
Loss from operations (116,890) (135,826)
Income taxes -- --
Net loss $ (116,890) $ (135,826)
</TABLE>
The components of the Real Estate Segment net assets from
discontinued operations in the consolidated balance sheet as of
June 30, 1996 and December 31, 1995 are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
Rental properties, less accumulated
depreciation of $1,017,173 and $1,758,246
as of June 30, 1996 and December 31,
1995, respectively $ 3,195,907 $ 6,481,587
Mortgage notes payable (1,430,519 (3,201,750)
Other, net (36,167) (228,560)
$ 1,729,221 $ 3,051,277
</TABLE>
<PAGE>
NOTE 6
Discontinued Operations - Industrial Products Segment. On
November 10, 1995, the Company sold 100% of the common stock of
Jensen Corporation ("Jensen"), located in Fort Lauderdale,
Florida to AMKO USA, Inc. ("AMKO"), an affiliate of AMKO
International B.V. which is based in The Netherlands, for
$1,726,000. The sale proceeds included cash of $415,000 and a
promissory note receivable in the amount of $1,311,000 which is
secured by Jensen's stock, accounts receivable and inventory.
The $1,311,000 note is guaranteed in its entirety by AMKO
International B.V., and the sole shareholder of AMKO
International B.V. guaranteed the first $585,000 of principal
payments.
AMKO also agreed to cause Jensen to pay to the Company a $765,000
obligation in the form of a note, which was loaned to Jensen,
$500,000 of which was prior to the sale and $265,000 which was
simultaneous with the sale, and an intercompany balance payable
by Jensen to the Company of $337,650, which are secured by the
assets of Jensen. The first $765,000 of principal payments under
these notes are guaranteed by AMKO International B.V.
The $1,311,000 note bears interest at 2% over the prime rate per
annum and is payable in varying installments with the balance due
on June 1, 1997. The $765,000 note bears interest at 10% per
annum and is payable in varying installments with the balance due
on February 1, 1998. The $337,650 note bears interest at 2% over
the prime rate per annum and is payable in varying installments
with the balance due on May 1, 1997.
The Company believes that the assets securing the three notes,
and the operations of Jensen as they now exist, may not be
sufficient to provide for payment of the notes. The Company has
limited financial information concerning AMKO and the guarantors
of the notes. Consequently, no assurance can be given that the
principal or interest due on the notes will be realized in full.
As of August 9, 1996, AMKO had not paid its required principal
payments in full. The Company is currently in continuing
discussion with AMKO to assure that AMKO will pay all amounts in
arrears and make future payments on a timely basis. In the
interim, AMKO has made partial payments of $322,000 since January
1, 1996. AMKO, in conjunction with these discussions, has raised
certain claims concerning the financial operations of the Company
prior to sale. Management believes these claims have no merit
and current discussions will resolve these issues satisfactorily.
The Company provided a reserve of $1,000,000 as of December 31,
1995. Based upon the guarantees and estimated liquidation value
of Jensen's assets which were pledged as collateral for these
notes, the Company believes that this reserve is adequate.
The results of the Industrial Products Segment have been reported
separately as discontinued operations in these consolidated
statements of operations. Prior period financial statements have
been restated to present the Industrial Products Segment as a
discontinued operation.
<PAGE>
NOTE 6 (Continued)
Summarized below are the operations of the Company's Industrial
Products Segment for the three and six months ended June 30,
1995.
<TABLE>
<CAPTION>
For the Three For the Six
Months Ended Months Ended
June 30, 1995 June 30, 1995
<S> <C> <C>
Total revenues $ 1,091,228 $ 1,995,190
Costs and expenses:
Cost of sales 837,392 1,504,578
Selling and administrative 283,133 578,020
Depreciation and amortization 4,648 9,296
Interest expense 3,000 6,000
Corporate administrative expenses 19,552 32,533
Total costs and expenses 1,147,725 2,130,427
Loss from operations (56,497) (135,237)
Income taxes -- --
Net loss $ (56,497) $ (135,237)
</TABLE>
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The following is a discussion and analysis of the consolidated
financial condition of the Company as of June 30, 1996 and of the
results of operations for the Company for the three and six
months ended June 30, 1996 and 1995, and of certain factors that
may affect the Company's prospective financial condition and
results of operations. The following is supplemental to and
should be read in conjunction with the Company's December 31,
1995 Annual Report to shareholders on Form 10-KSB as filed with
the Securities and Exchange Commission, and the financial
information and accompanying notes beginning on page 1 of this
report.
Information contained in this discussion and analysis contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, which can be identified
by the use of forward-looking terminology such as "may", "will",
"expect", "plan", "anticipate", "estimate" or "continue" or the
negative thereof or other variations thereon or comparable
terminology. There are certain important factors that could
cause results to differ materially from those anticipated by some
of these forward-looking statements. Investors are cautioned
that all forward-looking statements involve risks and
uncertainty. The factors, among others, that could cause actual
results to differ materially include: cures and advances in
medical treatments for terminal illnesses; dependence on medical
consultants and an ability to predict life expectancy; the
Company's ability to execute its business plan; the availability
and cost of capital and competitive pressures on pricing for like
insurance policies.
FINANCIAL CONDITION AND LIQUIDITY
Although the Company has historically engaged in Real Estate and
Industrial Products, since 1995 its primary focus has been as a
specialty financial service company that provides viatical
settlements for terminally ill persons. The Company has
conducted this activity through its wholly owned subsidiary,
National Capital Benefits Corporation. A viatical settlement is
the payment of cash in return for an ownership interest in, and
the right to receive the death benefit, or face value, from a
life insurance policy. The amount paid for a policy is
determined by the Company based on various factors, including the
Company's estimate of the life expectancy of the insured and the
estimated premiums payable by the Company under the policy over
the expected life of the insured. Through June 30, 1996,
approximately 88 percent of the policies purchased by the Company
have insured persons with terminal illnesses related to Acquired
Immune Deficiency Syndrome ("AIDS").
Recently announced studies indicate that certain existing
medications and medications presently under development may, when
used in combination, prolong the life expectancy of persons
previously diagnosed with AIDS. This treatment has been
generally referred to by the media as the AIDS "cocktail". In
particular, at a conference held in July 1996 in Vancouver,
British Columbia, a significant amount of attention was focused
on preliminary positive results for the AIDS cocktail. The
conference as well as the media coverage regarding this treatment
has had a significant impact on the viatical settlement industry.
Certain of the Company's competitors have indicated they have
temporarily stopped the purchase of these types of policies. The
Company's operations and financial results are dependent on the
ability of the Company, with the assistance of its medical
advisors, to predict accurately the life expectancy of the
insured individual. Life expectancy is a significant factor in
the Company's determination of the purchase price of a policy.
Since a large percentage of the Company's portfolio involves
individuals with terminal illnesses related to AIDS, the
development of a treatment of AIDS which extends the life
expectancy of such persons could materially reduce the Company's
future actual yield on its portfolio and materially adversely
affect the Company's future performance. The Company elected to
modify the experience modification factor which is used to
determine accrued revenue and amortized costs and, as a result,
reduced the current quarter's earned discount by approximately
$189,000.
The Company's cash decreased from approximately $755,000 as of
December 31, 1995 to $196,000 at June 30, 1996, principally as a
result of financing operating activities and a $500,000 repayment
of affiliates loans, offset by the receipt of $750,000 relating
to the sale of Appletree Townhouses and $181,000 relating to the
sale of Jensen Corporation. The Company's cash position has
decreased to $170,000 as of August 9, 1996, of which $120,000 is
restricted for use in the Viatical Settlement Division, resulting
from cash used to finance operating activities, offset by receipt
of $100,000 relating to the sale of Jensen Corporation. As of
August 9, 1996, NCBC would have been able to borrow, under the
terms of its revolving credit facility, an additional $769,000.
Other than in its Viatical Settlement Subsidiary, the Company
does not have any existing general credit facilities to fund its
ongoing working capital requirements. The Company may seek
additional financing through the issuance of securities on a
private or public basis, or through long or short-term
borrowings.
On March 17, 1994, NCBC entered into a revolving credit facility
("Old Facility") with a credit limit of $10,000,000. Interest on
borrowings under the Old Facility was at 2% over a composite of
several large bank prime rates or the rate on 90 day dealer
commercial paper, whichever is higher, (10-3/4% at December 31,
1995), and was subject to a commitment fee of .625% on the
average daily unused amount of the line.
Effective as of December 29, 1995, NCBC entered into a revolving
credit facility ("Facility") with a credit limit of up to
$15,000,000, which expires December 1998. The proceeds of the
loan were utilized to repay the Old Facility with another lender.
The closing of the transaction was January 8, 1996. The Facility
is secured by all the assets of NCBC, including purchased
insurance policies. The Facility bears interest at 1/2% over the
lender's prime rate or 2-7/8% over the 90 day London Inter-Bank
Offer Rate ("Libor") at the option of NCBC (8-2/5% and 8-3/8% at
June 30, 1996 and December 31, 1995, respectively), and is
subject to a commitment fee of 1/4% on the average daily unused
amount of the line. Because the interest rate on the Facility
adjusts quarterly based on Libor, the fair value of the
borrowings under the Facility approximates the carrying amount.
Under the terms of the Facility, the lender will loan NCBC a
specified percentage of the cost of the insurance policies
purchased. The insurance policies purchased by NCBC must meet
certain underwriting criteria as established in the Facility.
Repayment of outstanding principal is required as insurance
proceeds from matured policies are collected. As of August 9,
1996, NCBC would have been able to borrow, under the terms of the
Facility, an additional $769,000.
NCBC is required under the Facility to comply with covenants
relating to the maintenance of its business (including purchasing
a minimum level of insurance policies quarterly), insurance
coverage, tangible net worth, and limitations on dividends and
payments to affiliates. As of August 9, 1996, NCBC was in
compliance with the Facility covenants.
In addition, as of December 29, 1995, NCBC issued a $2,000,000
subordinated note (the "Note") bearing an interest rate of 14%
with interest payable monthly in arrears. The note is due
December 31, 1998, and is secured by NCBC's purchased insurance
policies, subject to the security interest granted to the
Facility lender. The purchaser of the Note was granted a warrant
to acquire 12% of the common stock of NCBC (68 shares) at a price
of $1.47 per share. The holder of the warrant can exercise a put
of the stock to NCBC under certain conditions. The warrant
expires December 31, 2000.
The proceeds from issuing the Note were received on January 8,
1996, and used to reduce the outstanding balance of the Facility.
On July 29, 1994, NCBC entered into an agreement and acquired
certain assets of CAPX Corporation ("CAPX"), including the rights
to certain service marks, trade names and proprietary computer
software. The purchase price of the assets was $125,000 and the
issuance of 33,333 shares of the $.01 par value of NCMC's common
stock, which was valued at $5.25 per share, adjusted to reflect
the reverse stock split. In addition, the agreement which was
amended in January 1996, provides that NCBC will pay CAPX a
commission of up to .875% of all death benefits recognized from
insurance policies in its active portfolio as of December 31,
1995 and on policies purchased during the period January 1, 1996
to July 28, 1998. As part of the agreement, NCMC was required by
CAPX to repurchase all of its shares at $5.25 per share on or
before July 29, 1996. The Company is currently discussing an
extension of the option with CAPX.
RESULTS OF OPERATIONS
During the three and six months ended June 30, 1996, National
Capital Benefits Corp. ("NCBC") had purchased at face value
(including those in escrow) approximately $4,093,000 and
$7,783,000 of policies, respectively.
During the three and six months ended June 30, 1996, $777,400 and
$2,608,200 of policies matured. These policies had related
direct costs of $658,600 and $2,262,000, respectively, and a
corresponding gross profit of $118,800 and $346,200,
respectively. During the three and six months ended June 30,
1995, $595,500 and $808,000 of policies matured. These policies
had related direct costs of $493,700 and $674,000, respectively,
and a corresponding gross profit of $101,800 and $134,000,
respectively.
NCBC had approximately $19.6 million at face value of such
policies remaining in its portfolio at June 30, 1996. Additional
gross revenues of $1,537,000 and $1,025,000 were accrued and
related costs of $1,450,000 and $952,000 were amortized during
the six months ended June 30, 1996 and 1995, respectively,
pursuant to NCBC's policy to accrete such revenue and costs over
the period from the purchase of the policy to the estimated date
of collection of the face value of the policy.
During the first six months of 1996, as a result of its
significant increase in purchased policies, NCBC's earned
discount increased to $652,000 during the first six months of
1996 after the adjustment of the experience modification factor
which is used to determine accrued revenue and amortized costs
which resulted in a reduction to the current quarter's earned
discount by approximately $189,000. This was an increase in
earned discount of $247,000 during the first six months of 1995.
NCBC incurred operating expenses of approximately $767,000 and
$645,000 for the first six months of 1996 and 1995, respectively,
primarily for wages, advertising, promotion and travel and
entertainment.
<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.
NATIONAL CAPITAL
MANAGEMENT CORPORATION
Date: August 20, 1996 By:/s/ Herbert J. Jaffe
Herbert J. Jaffe
President
By:/s/ John C. Shaw
John C. Shaw
Principal Financial Officer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF OPERATIONS
IN FORM 10QSB FOR THE PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
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0
0
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