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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
[ ] 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 0-18270
COMMAND CREDIT CORPORATION
(Exact name of the registrant as specified in its charter)
NEW YORK 11-2857523
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Garden City Plaza
Garden City, New York 11530
(Address of principal executive offices)
(516) 739-8800
(Registrant's telephone number)
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 X No
State the number of shares outstanding of each of the issuer's classes of common
equity: 990,463 shares as of November 10, 1995. (Reflects a One Hundred Fifty
(150) for One (1) reverse stock split effective October 26, 1995.)
Transitional Small Business Disclosure Format (check one):
Yes / / No /X/
Page 1 of 11 pages.
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PART I : Financial Information
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ITEM I: Financial Statements
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COMMAND CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
September 30
1995
------------
(Unaudited)
Current Assets:
Cash in Banks (Note 2) $184,430
Accounts Receivable (Note 3) 60,429
Note Receivable (Note 4) 360,000
Prepaid Expenses (Note 5) 488,900
Interest Receivable (Note 6) 120,900
Stock Subscriptions Receivable (Note 7) 597,332
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Total Current Assets 1,811,991
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Fixed Assets:
Equipment 548,058
Furniture & Fixtures 150,214
Leasehold Improvements 218,603
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916,875
Less: Accumulated Depreciation
and Amortization 666,722
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Total Net Fixed Assets 250,153
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Other Assets:
Investment in Subsidiaries (Note 8) 366,576
Investments (Note 9) 261,838
Organization Expenses 1,377
Computer Software 44,449
Goodwill 96,080
Security Deposits 34,241
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Total Other Assets 804,561
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Total Assets $2,866,705
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The accompanying notes are an integral part of this report.
F-1
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COMMAND CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
LIABILITIES & SHAREHOLDERS' EQUITY
September 30
1995
------------
(Unaudited)
Current Liabilities:
Accounts Payable & Accrued Expenses (Note 10) $608,611
Leases Payable 27,034
Taxes Payable (Note 11) 319,735
Notes Payable (Note 12) 41,236
Salaries Payable (Note 13) 144,167
Loans Payable (Note 12) 163,760
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Total Current Liabilities 1,304,543
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Long Term Liabilities:
Leases Payable 26,112
Notes Payable (Note 12) 483,909
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Total Long Term Liabilities 510,021
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Total Liabilities 1,814,564
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Shareholders' Equity:
Common Stock - Authorized
150 Mill. shares, $.0001 par
value, 145,625,577 issued
and outstanding at 9/95 14,562
Paid-In-Capital in Excess of
Par Value 28,782,505
Paid-In-Capital from
Treasury Stock 946,434
Paid-In-Capital from Warrants
Exercised 902,389
Translation Adjustment 5,525
Retained Earnings (Deficit) (28,874,574)
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Total Shareholders' Equity 1,676,841
Less: Treasury Shares at Cost 624,700
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Net Shareholders' Equity 1,052,141
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Total Liabilities and
Shareholders' Equity $2,866,705
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The accompanying notes are an integral part of this report.
F-2
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COMMAND CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
(UNAUDITED)
SEPTEMBER 30 SEPTEMBER 30
1995 1994
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Revenues:
Operating Revenue $142,060 $8,521
Interest Income 0 10,544
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Total Revenue 142,060 19,065
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Operating Expenses:
Selling Expenses:
Travel & Entertainment 51,099 59,997
Consulting 712,280 330,589
Commissions 59,299 11,221
Public Relations 785,454 818
Other 59,986 111,108
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Total Selling Expenses 1,668,118 513,733
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Administrative Expenses:
Salaries & Outside Services 273,197 223,739
Professional Fees 110,294 101,297
Rent 45,706 20,991
Insurance 32,726 15,083
Depreciation & Amortization 33,211 20,438
Other 52,807 34,118
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Total Administrative Expenses 547,941 415,666
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Taxes 30,466 25,529
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Total Operating Expenses 2,246,525 954,908
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Net (Loss) from Operations ($2,104,465) ($935,863)
Non-Operating & Non-Recurring:
(Loss) on Investment (1,907,793) (62,385)
Bad Debt Expense (618,313) 0
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Net (Loss) ($4,630,571) ($998,248)
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Net (Loss) per Outstanding
Common Share (Note 14) ($0.04) ($0.04)
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The accompanying notes are an integral part of this report.
F-3
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COMMAND CREDIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED
(UNAUDITED)
SEPTEMBER 30 SEPTEMBER 30
1995 1994
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Cash Flow from Operations:
Net (Loss) ($4,630,571) ($998,248)
Adjustments to Reconcile Net Loss
to Net Cash Provided by Operations
Depreciation & Amortization (296,064) 33,020
Increase (Decrease) in:
Accounts Payable (720,808) (146,019)
Leases Payable (53,726) (3,426)
Taxes Payable (173,325) 52,948
Notes Payable (145,929) 0
Salaries Payable 61,250 0
Loans Payable (7,866) 0
(Increase) Decrease in:
Prepaid Expenses (469,592) (78,308)
Interest Receivable 0 (10,452)
Accounts Receivable 224,685 31,907
Stock Subscriptions Receivable 0 287,850
Organization Expenses 29,148 (4,391)
Computer Software 2,963 0
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Net Cash Used (Provided) by Operations (6,179,835) (835,119)
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Cash Flow from Financing Activities:
Proceeds from Issuance of Common Stock 1,654,345 819,466
Purchase of Treasury Stock (5,000) 0
Retained Earnings Liquidated Subsidiaries 1,876,281 0
Investment in Subsidiaries 1,630,881 0
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Net Cash Flow from Financing Activities 5,156,507 819,466
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Cash Flow from Investing Activities:
Capital Expenditures Paid in Cash 420,090 (55,672)
Translation Adjustment (14,035) 140
Bank/Data Center Acquisition 260,993 0
Goodwill 306,311 3,390
Investments 6,301 99,907
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Net Cash (Used) Provided by
Investing Activities 979,660 47,765
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Net Increase (Decrease) in Cash and
Cash Equivalents (43,668) 32,112
Cash and Cash Equivalents Beginning
of Period 228,098 107,561
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Cash and Cash Equivalents End of Period $184,430 $139,673
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The accompanying notes are an integral part of this report.
F-4
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COMMAND CREDIT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Method of Accounting: Command Credit Corporation ("Command" or the
"Company") utilizes the accrual method of accounting in recording all
transactions.
B) Consolidation: Command Credit Acceptance Corporation ("Acceptance") was
incorporated in Florida on September 9, 1985. On October 12, 1988, Acceptance
was acquired by Video Plan International Corp. ("VPI"), a New York corporation
with virtually no business activity since 1980. Simultaneously, VPI changed its
name to Command Credit Corporation. Results of operations of Command and its
subsidiaries are reported on a consolidated basis.
C) Foreign Currency: Currency fluctuations resulting from the consolidation of
Foreign Offices are accumulated as prescribed by translation of foreign
operations under FASB 52. The resulting translation gains and losses are shown
as a component of Stockholders' Equity.
D) Depreciation & Amortization: Depreciation of fixed assets is being computed
on a straight line basis at rates adequate to allocate the cost of the assets
over their useful lives. Organization expense and Goodwill are being amortized
over five and thirty year periods, respectively.
E) Income taxes: Command recognizes taxes on income as the liability is
incurred. To date Command has accumulated net operating losses which can be
used to offset future earnings.
Command has a carryforward net operating loss of $27,684,127 for use in future
taxable years.
NOTE 2: CASH IN BANKS
Cash on hand represents amounts available for current operations held in cash,
checking accounts and interest bearing accounts.
NOTE 3: ACCOUNTS RECEIVABLE
Accounts receivable consists of trade receivables in connection with our credit
card division.
NOTE 4: NOTE RECEIVABLE
Note receivable consists of an amount due to Command as a result of a guaranteed
investment.
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NOTE 5: PREPAID EXPENSES
Prepaid expenses consists primarily of public relations, marketing and
consulting expenses incurred in connection with the development of the Company's
business plan.
NOTE 6: INTEREST RECEIVABLE
Interest receivable represents interest accrued on outstanding subscriptions.
NOTE 7: STOCK SUBSCRIPTIONS RECEIVABLE
Stock subscriptions receivable represent subscriptions outstanding at September
30, 1995.
NOTE 8: INVESTMENT IN SUBSIDIARIES
In June 1995, Command pursuant to an arbitration agreement contained in a
written contract, entered a Demand for Arbitration against Prime Source Total
Managed Care, Inc., ("Prime"). The nature of the dispute is fraud and
misrepresentation, and the relief sought is recision of the transaction and
return of the Company's investment. In addition, Command as the principle
shareholder of Prime, has brought a shareholder's derivative action against the
principal officers of Prime alleging fraud, misrepresentation and abuse of their
fiduciary duties to Prime.
In addition, on September 21, 1995, a wholly-owned subsidiary of Prime filed for
bankruptcy. (See Item 1, Part II)
In March 1995, Command through its wholly owned subsidiary, Command America
Corp., concluded the acquisition of 100% of Berwyn Holdings, Inc., a bank card
servicing company, located in Wilmington, Delaware.
NOTE 9: INVESTMENTS
Investments consist of two publicly held corporations.
NOTE 10: ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable consists of miscellaneous trade payables and amounts due to
vendors. Accrued expenses consist primarily of expenses incurred during the
period but invoiced after September 30, 1995.
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NOTE 11: TAXES PAYABLE
Taxes payable consists of amounts due to federal, state & local agencies for
payroll taxes withheld.
NOTE 12: NOTES AND LOANS PAYABLE
Notes and loans payable consist primarily of amounts due to third party short
and long-term lenders.
NOTE 13: SALARIES PAYABLE
Salaries payable consists of amounts owed to the Chairman and Executive
Vice-President of Command. These officers have not drawn a salary for the past
several months and will continue not to draw a salary until such time when
sufficient revenues are generated from the imminent implementation of the
Company's programs.
NOTE 14: LOSS PER SHARE
Loss per share was computed by dividing the net loss by the weighted average
number of shares of common stock outstanding during the period. The weighted
average number of common shares outstanding during the three months ended
September 30, 1995 and 1994 were 123,890,242 and 28,495,920, respectively.
NOTE 16: SUBSEQUENT EVENT
In October 1995, Command signed a definitive agreement with Jetlease/Finance
Corp., a Florida corporation ("Jetlease"), to acquire 100% of the common stock
of Fidelity Holding Corp., a wholly owned subsidiary of Jetlease. Jetlease is
primarily engaged in the leasing of small, medium and large aircraft to
corporations and high net worth individuals.
This acquisition will add approximately Ten Million Dollars ($10,000,000) to
Command's asset base and net worth and is anticipated to generate approximately
One Million Two Hundred Thousand Dollars ($1,200,000) in annual revenue.
On October 4, 1995, Command's Board of Directors approved a reverse stock split
of its common shares, pursuant to which every One Hundred Fifty (150) shares of
the Company's issued and outstanding common stock was converted to One (1)
share. This reverse split became effective on October 26, 1995. In addition,
the Company will issue, to shareholders of record as of the close of business on
Wednesday, October 25, 1995, a warrant equivalent to a 300% common stock
dividend (post split), at no cost to the shareholder. The Company will register
these warrants under an applicable registration statement within 120 days.
Eighteen months from October 26, 1995, the warrants may be exercised at a price
of $3.50 per share and converted into common stock.
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ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Revenues for the three months ended September 30, 1995 were $142,060 compared
with $19,065 for the three months ended September 30, 1994. This increase in
revenues is primarily attributable to revenue received by our credit card
division.
Operating expenses for the three months ended September 30, 1995 and 1994 were
$2,246,525 and $954,928, respectively. The increase in operating expenses is
due primarily to the increase in consulting and public relations expenses
incurred in connection with the development of the Company's business plan.
For the three months ended September 30, 1995 and 1994 the Company had net
losses of $4,630,571 and $998,248, respectively. The increase in losses is due
primarily to an increase in consulting, public relations and marketing expenses
as well as an increase in non-operating and non-recurring expenses. These
non-operating and non-recurring expenses were incurred as a result of the
liquidation of two inactive subsidiaries as well as the write-off of the
Company's investment in Prime. (See Item 1, Part II)
Capital Resources and Liquidity
As of September 30, 1995 Command held cash and short-term investments of
$184,430. These funds along with revenues generated from the acquisition of
Fidelity Holding Corp., will enable the Company to meet its working capital
needs.
The Company continues to explore new means to increase the capital base to
finance current operations and to fund new programs.
The remainder of this page has been intentionally left blank.
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Part II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On September 21, 1995, Management Plus, Inc., a wholly owned subsidiary of Prime
Source Total Managed Care, Inc. ("Prime") filed a voluntary petition under
Chapter 7 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court (Utah,
District). The Company holds 88% of the Common Stock of Prime.
Pursuant to a Stock Purchase Agreement dated October 28, 1994, the Company filed
on June 15, 1995, a Demand for Arbitration before the American Arbitration
Association against Prime and the former selling shareholders of Prime seeking
recision of the contract and return of the Company's investment.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
The remainder of this page has been intentionally left blank.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: November 13, 1995 COMMAND CREDIT CORPORATION
(Registrant)
By: /s/ William G. Lucas
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William G. Lucas,
Chairman, President,
Chief Executive Officer
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
consolidated financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-START> JUL-1-1995
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 184,430
<SECURITIES> 0
<RECEIVABLES> 420,429
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,811,991
<PP&E> 916,875
<DEPRECIATION> 666,722
<TOTAL-ASSETS> 2,866,705
<CURRENT-LIABILITIES> 1,304,543
<BONDS> 0
<COMMON> 14,562
0
0
<OTHER-SE> 1,037,579
<TOTAL-LIABILITY-AND-EQUITY> 2,866,705
<SALES> 0
<TOTAL-REVENUES> 142,060
<CGS> 0
<TOTAL-COSTS> 1,668,118
<OTHER-EXPENSES> 578,407
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,104,465)
<DISCONTINUED> 0
<EXTRAORDINARY> (2,526,106)
<CHANGES> 0
<NET-INCOME> (4,630,571)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
