U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended September 30, 1998
Commission File Number 0-24940
PIONEER COMMERCIAL FUNDING CORP.
(Exact name of small business issuer as specified in its charter)
New York 13-3763437
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
21700 Oxnard Street, Suite 1650, Woodland Hills, California 91367
(Address and Zip Code of Principal Executive Offices)
(818) 346-1921
Issuer's Telephone Number
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No .
There were 5,542,272 shares of the registrant's common stock
outstanding as of November 18, 1998.
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Part I Financial Information
Item 1 - Financial Statements
PIONEER COMMERCIAL FUNDING CORP.
BALANCE SHEETS
- -------------------------------------------------------------------------------------------------------------------------
September 30 December 31
1998 1997
(unaudited) _____________
ASSETS
Cash and cash equivalents $ 3,598,666 $ 2,972,845
Mortgage warehouse loans receivable, net of allowance for loan losses 30,608,161 47,291,076
Loans held for resale, net of allowance for loan losses 795,990 4,504,231
Receivable for loans shipped 1,716,969 1,716,969
Accrued interest and fee receivable 1,224,442 930,656
Prepaid and other assets 149,055 99,907
--------------
Total Current Assets 38,093,283 57,515,684
----------------------
Fixed Assets
Furniture and equipment 247,828 119,882
Proprietary computer software 551,114 535,645
Leasehold improvements 151,855 26,855
-------- ---------
950,797 682,382
Less accumulated depreciation and amortization 555,383 448,853
-------- -------
Net Fixed Assets 395,414 233,529
--------- --------
Investment securities available for sale 581,250 1,032,000
Deposits on furniture and equipment 378,838 321,260
Other assets 762,923 484,130
------------------------ ---------------------
Total Assets $ 40,211,708 $59,586,603
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage warehouse loans payable 31,229,039 50,056,160
Accounts payable and accrued expenses 94,337 362,869
Accrued interest and fees 612,356 1,047,132
Due to mortgage banking companies 517,682 629,421
Accrued taxes based on income (829) -
Deferred loan fees 29,000 29,000
Deferred legal fees 64,217 60,683
-------------------------
Total Current Liabilities 32,545,802 52,185,265
----------------------
Subordinate debt 1,726,000 1,000,000
-----------------------
Total Liabilities 34,271,802 53,185,265
----------------------
Commitments & Contingencies:
Stockholders' Equity:
Common stock 55,423 54,423
Additional paid-in capital 14,556,952 14,316,952
Accumulated deficit (9,028,719) (8,777,037)
Accumulated other comprehensive income-
Unrealized gain on investment securities 356,250 807,000
------------------------
Total Stockholders' Equity 5,939,906 6,401,338
-----------------------
Total Liabilities and Stockholders' Equity $ 40,211,708 $ 59,586,603
===================== =================
The accompanying notes are an integral part of these statements.
- ---------------------------------------------------------------------------------------------------------------------
<PAGE>
PIONEER COMMERCIAL FUNDING CORP.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
Income: 1998 1997 1998 1997
------ ------ ------ -----
Interest income $ 1,051,828 $614,901 $ 3,740,403 $ 985,147
Commissions and facility fees 42,895 28,244 184,991 55,819
Processing fees 414,690 306,719 1,525,835 427,800
------------------------------------------------------------- ------------
Total Income 1,509,413 949,864 5,451,229 1,468,766
-------------------- --------------------- ----------------- ------------
Interest and Fee Costs:
Interest expense-warehouse and lines of credit 863,730 467,355 3,129,351 687,385
Bank charges and facility fees 37,500 4,591 112,500 13,819
Bank processing fees 20,131 20,532 73,919 31,500
--------------------------------------------------------------------------
Total Interest and Fee Costs 921,361 492,478 3,315,770 732,704
------------------------------------------------------------- -------------
Net interest and fee income 588,052 457,386 2,135,459 736,062
Loan loss provision 362,929 - 745,401 -
---------------------
225,123 457,386 1,370.058 736,062
-------
Other Operating Expense:
Compensation and benefits 302,647 113,269 790,803 260,022
Depreciation and amortization 51,000 29,662 116,530 95,415
Professional fees 21,751 33,146 127,271 177,235
Utilities 12,447 9,878 39,470 25,151
Rent 60,186 10,644 163,898 23,712
Repairs and maintenance 4,590 5,034 12,571 13,535
Other 134,877 126,149 397,786 235,580
---------------- ---------------------------------------- ------------
Total Other Operating Expenses 587,498 327,782 1,648,329 830,650
---------------- ---------------------------------------- ------------
Income (loss) from operations (362,375) 129,604 (258,271) (94,588)
--------------------
Other Income and (Expense):
Interest income - other 20,129 38,271 61,285 55,490
Interest expense-other (1,511) (1,178) (3,867) (3,534)
Miscellaneous income - - - 18,800
Non-operating expense - - (50,000) (446,576)
--------------------------------------------------------------------------
Total other income and (expense) 18,618 37,093 7,418 (375,820)
--------------------------------------------------------------------------
Income (loss) before taxes based on income (343,757) 166,697 (250,853) (470,408)
Provision for taxes based on income (9,171) 1,149 829 2,274
--------------------------------------------------------------------------
Net Income (Loss) $ (334,586) $ 165,548 $ (251,682) $ (472,682)
==========================================================================
Basic and Diluted Income (Loss)
Per Share of Common Stock $ (0.060) $ 0.030$ (0.045) $ (0.115)
==========================================================================
Weighted Average Number of Shares 5,542,272 5,442,272 5,534,580 4,116,265
==================== ======================================== ============
The accompanying notes are an integral part of these statements.
<PAGE>
PIONEER COMMERCIAL FUNDING CORP.
STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
------
Net income (loss) $ (334,586) $ 165,548 $ (251,682) $ (472,682)
Change in unrealized gain on investment in
securities available for sale (450,750)
Comprehensive net income (loss) $ (334,586) $ 165,548 $ (702,432) $ (472,682)
-------------------
The accompanying notes are an integral part of these statements.
<PAGE>
PIONEER COMMERCIAL FUNDING CORP.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(unaudited)
1998 1997
-----
Cash Flows from Operating Activities:
Net income (loss) $ (251,682) $ (472,682)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization 116,530 95,415
(Increase) decrease in --
Mortgage warehouse loans receivable 16,682,915 (15,754,006)
Loans held for resale 3,708,241
Accrued interest receivable (293,786) (170,124)
Prepaid expenses (49,148) 140,506
Other assets (4,170) 258,202
Increase (decrease) in --
Accrued interest payable (434,776) 90,056
Due to mortgage banking companies (111,739) 87,019
Accounts Payable and Accrued Expenses (279,361) (173,473)
--------------------
Net Cash provided (used) by operating activities 19,083,024 (15,899,087)
-------------------
Cash Flows from Investing Activities:
Purchase of fixed assets (268,415) (29,093)
Investment in and advances to joint venture (274,623) (40,000)
Deposits on furniture and fixtures (57,578) -
---------------------
Net cash used in investing activities (600,616) (69,093)
--------------------
Cash Flows from Financing Activities:
Net increase (decrease) in borrowings used in operations,
net of issuance costs (18,827,121) 14,582,690
Decrease in revolving line of credit and bridge financing (37,500)
Increase in deferred expenses 3,534 (401,721)
Increase in convertible note 726,000 1,800,000
Net proceeds from issuance of stock 241,000 2,292,134
---------------------
Net cash (used) provided by financing activities (17,856,587) 18,235,603
------------------
Net Increase in cash 625,821 2,267,423
Cash and Cash Equivalents at the Beginning of the Period 2,972,845 355,293
--------------------
Cash and Cash Equivalents at the End of the Period $ 3,598,666 $ 2,622,716
====================
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 3,750,546 $ 450,056
Income taxes paid - 3,169
============================
Non Cash Financing Activities
Cost of equity offering paid in prior years $ - $ 315,039
====================== ====
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
PIONEER COMMERCIAL FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying unaudited financial statements
for Pioneer Commercial Funding Corp. (the Company) contain all adjustments of a
recurring nature considered necessary for a fair presentation of its financial
position as of September 30, 1998, the results of operations for the three and
nine month periods ended September 30, 1998 and 1997 and its cash flows for the
nine month periods ended September 30, 1998 and 1997. The results of operations
for the three and nine month periods ended September 30, 1998 and 1997 are not
necessarily indicative of the Company's results of operations to be expected for
the entire year.
The accompanying unaudited interim financial statements have been prepared in
accordance with instructions to Form 10-Q and, therefore, do not include all
information and footnotes required to be in conformity with generally accepted
accounting principles. The financial information provided herein, including the
information under the heading, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," is written with the presumption
that the users of the interim financial statements have read, or have access to,
the Company's December 31, 1997 audited financial statements and notes thereto,
together with the Management's Discussion and Analysis of Financial Condition
and Results of Operations as of December 31, 1997 and for the year then ended
included in the Company's filings on March 31, 1998 with the SEC on Form 10-KSB.
2. LOANS HELD FOR RESALE
The Company in accordance with its loan and security agreement took possession
from a customer in the process of liquidating under Chapter 7 of the Bankruptcy
Code, 37 loans it funded having an aggregate value of $4.5 million. The Company
has a perfected interest in the loans and sold 32 of the loans in June and July
at a net discount of $72,070. The five loans unsold at September 30, 1998 with
an original loan amount of $825,990, together with holdback receivable on the
sold loans, are held at the lower of cost or market, which includes a reserve of
$149,000.
3. RECEIVABLE FOR LOANS SHIPPED
During October 1997 the Company warehoused $1.7 million in mortgages for the
same customer as described in Note 2 above, who used a third party conduit,
American Financial Mortgage Corporation, to sell its loans to an investor,
Norwest Funding, Inc. The Company provided instructions to the third party
conduit that the funds were to be wired by the investor to the Company's bank,
Corestates Bank, N. A.. The investor mis-wired the funds to the conduit's bank.
The conduit's bank has refused to return the funds. The Company is taking
actions, including legal action, to collect the funds from the conduit, the
conduit's guarantor, the investor and the conduit's bank. The Company's lender,
Bank One Texas, N.A. ("Bank One"), has joined the litigation as a co-plaintiff
in support of the Company's position. In addition the Company has a $5 million
personal guarantee from the third party conduit's primary shareholder and an
additional $2 million guarantee from the customer's primary shareholder.
Although it is impossible to assess with accuracy the ultimate outcome of this
matter, management is confident that it will recover the funds from either the
bank or the third party guarantors.
4. INVESTMENT IN AND ADVANCES TO PIONEER HOME FUNDING
On April 16, 1997 the Company entered into a joint venture agreement with
Maryland Financial Corporation ("MFC") to form Pioneer Home Funding, LLC, a
California Limited Liability Company, ("PHF"). The Company accounts for this
investment on the equity method. The agreement provides that the Company and MFC
would maintain 80% and 20% ownership interests, respectively, in PHF. An
amendment to the agreement was made on October 31, 1997. This amendment provides
that the Company would contribute $40,000 for a 20 percent interest in PHF. In
addition, the Company may from time to time, at its option, make loans to PHF as
needed. Under this agreement the Company has the option to convert loans made to
PHF into an 80% interest in PHF. As of September 30, 1998, the Company has
advanced as a loan receivable $474,100.
5. INVESTMENT IN FIDELITY FIRST MORTGAGE CORP. (FFIR)
On July 7, 1997 the Company purchased 300,000 shares at $.75 per share of
Fidelity First Mortgage Corp., NASDAQ (FFIR) for a total investment of $225,000.
FFIR shares closed on September 30, 1998 at $1.9375 per share. Fidelity First
Mortgage is based in Columbia, Maryland and funds conforming and non-conforming
single family residential mortgages in Maryland, Virginia, Delaware, Florida,
North and South Carolina.
6. LINE OF CREDIT AND CAPITAL MAINTENANCE AGREEMENT
On August 31, 1998 Bank One extended its line of credit to the Company through
October 30, 1998 reducing the credit limit to $50 million. Effective June 30,
1998 Leedan Business Enterprise Ltd. ("Leedan"), a 49% owner of the Company
entered into a Capital Maintenance Agreement with Bank One wherein Leedan will
cause capital contributions or subordinated debt advances, up to $2 million, to
be made to the Company in order to maintain an adjusted Company net worth of a
least $8 million, upon official written request by Bank One. This agreement will
continue in effect until the Company has paid its obligation to Bank One and
Bank One terminates its commitment to supply the Company credit. (See also Note
9).
7. SUBORDINATE DEBT
On November 26, 1997, the Company issued $1,000,000 in subordinated debt as part
of a $4 million private placement. The private placement provided for a minimum
purchase of $250,000 (1 unit) with each unit obtaining 7,500 Warrants that allow
for the purchase of 7,500 shares. The exercise price of the shares is equal to
the price of the Company's stock as of the date of issue of the subordinated
debt. The Company has 30,000 Warrants outstanding (7,500 per unit for 4 units).
The subordinated debt carries an interest rate of 10% per annum and matures on
November 25, 2002. The Company's stock price on November 26, 1997 was $2.875 On
September 11, 1998 three subordinated debt advances pursuant to the Leedan
Capital Maintenance Agreement (note 6) were made to the Company totaling
$726,000 secured by notes. The notes are due the later of December 11, 1998 or
when a replacement for the Bank One lending facility is in place, with interest
paid quarterly at 11% per annum.
8. YEAR 2000 COMPUTER READINESS
The Year 2000 ("Y2K") issue is the result of computer programs using a two-digit
format, as opposed to four digits, to indicate the year. Such computer systems
will be unable to interpret dates beyond the year 1999, which could cause a
system failure or other computer errors, leading to disruptions in operations.
The Company has two basic computer functions, accounting and collateral
tracking. Date sensitive calculations such as fees and interest charges and due
dates on loans comprising the Company's warehouse loans receivable and payable
would be negatively effected if the accounting and collateral tracking systems
were not compliant after the end of 1999. The Company, with the assistance of
outside software contractors, is in the process of changing its accounting and
collateral tracking computer systems from non-compliant systems run on AS400
hardware to a compliant system run on a Windows NT network. Final implementation
of fully tested and operationally Y2K compliant systems is projected to be
complete by the end of the first quarter of 1999. Cost incurred to date for
computer system enhancement, which includes work flow technology and collateral
document scanning for electronic storage as well as Y2K compliance, is
approximately $350,000 which is included in equipment and software fixed assets.
Additional cost to complete the project are expected to be less than $50,000.
The Company's banks and lender have communicated that they will be Y2K compliant
by the end of 1999. No other third party Y2K compliance is expected to have a
material impact on the operations of the Company.
9. SUBSEQUENT EVENTS
On October 30, 1998 the Company's line of credit with Bank One matured. The
Company and Bank One continue to discuss the terms of the credit line extension.
Bank One continues to fund the Company's mortgage loans on a discretionary basis
up to $40 million.
In November 1998 the Company discovered that a customer mortgage banker borrowed
$568,736 for the expressed purpose of funding 18 loans. The customer apparently
commingled said loan funds with operating funds and ultimately such funds were
not used to complete the loans. Accordingly, the loan collateral has diminished
and $300,000 has been reserved as of September 30, 1998. The Company
has enforceable guarantees from the customer's principals, an assigned
certificate of deposit and UCC claims on the assets of the customer. However, at
this time management is uncertain of the ultimate collectability of the
guarantees. Management will pursue the Company's rights under the claims and
guarantees to the full extent of the law.
In November 1998 the Company discovered that another customer mortgage banker
borrowed $1,288,934 for the expressed purpose of funding 43 loans. The customer
apparently commingled said loan funds with operating funds and ultimately such
funds were not used to complete the loans. The Company has enforceable
guarantees from the customer's principals, assigned certificate of deposit and
UCC claims on the assets of the customer. One of the customer's guarantors is a
stockholder of the Company. The stockholder guarantor has expressed interest in
fulfilling the requirements of the guarantee and the financial ability to do so.
The Company is negotiating terms of settlement of the amount due on the
uncollateralized loans and accrued interest and fees thereon with the
stockholder guarantor. Management is confident that the amount of the loans
funded and the accrued interest and fees thereon will ultimately be collected.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
On February 28,1997, the Company completed a private placement of securities
with eight investors who invested an aggregate of $4 million in the Company in
consideration for 2.2 million shares of Common Stock and $1.8 million principal
amount of convertible promissory notes of the Company. The Convertible Notes
were converted into 1.8 million shares of Common Stock on May 9, 1997. On
November 26, 1997 a private investor purchased an option for $9,000 to acquire
100,000 common shares at $2.41 per share. On January 21, 1998 the option was
exercised and 100,000 common shares were issued for a purchase price of
$241,000.
From March of 1997 to October 30, 1998, the Company had a credit agreement with
BankOne, Texas, N.A. (ABank One@). Pursuant to the Credit Agreement, most
recently amended September 9, 1998, Bank One provided the Company with up to a
$60,000,000 revolving line of credit. Subsequent to October 30, 1998 Bank One
has agreed to continue to fund the Company's customer loans on a discretionary
basis up to $40 million while the Company obtains a replacement line of credit.
As collateral security for its indebtedness to Bank One under the Credit
Agreement, the Company has granted to Bank One a security interest in various
assets including, but not limited to, all promissory notes acquired by the
Company with respect to any loans funded by the Company with proceeds of the
Bank One credit line and all mortgages or other forms of collateral securing the
funding of such loans. In addition, Leedan Business Enterprise Ltd., a 49.2%
shareholder of the Company, has guaranteed Bank One, that it will maintain the
Company's net worth (including subordinated debt) at a minimum level of $8
million, up to an additional investment or loan of $2 million.
Results of Operations
Nine Month Period Ended September 30, 1998 Compared with the Nine Month
Period Ended September 30, 1997.
Revenues. During the nine month period ended September 30, 1998 revenues
increased to $5,451,229 compared to $1,468,766 for the nine month period ended
September 30, 1997. The volume of loan fundings during the nine month periods
ended September 30, 1998 and 1997 totaled approximately $378 million and $183
million respectively. Such increases in revenues, loan funding, interest and
processing fees were due to the increase in loan activity experienced by the
Company during the latter period.
During the nine month period ended September 30, 1998, the Company financed a
total of 6,400 loans totaling $378,626,955 with a weighted average principal
amount of $59,160 for an average duration of 34 days per borrowing which amounts
included 6,264 loans funded through bank borrowings aggregating $373,352,488 in
weighted average principal amounts of $59,603. During the nine month period
ended September 30, 1997, the Company financed a total of 2,666 loans totaling
$183,463,720 with a weighted average principal amount of $68,816 for a duration
of 19 days per borrowing which amounts included 2,228 loans funded through bank
borrowings aggregating $161,220,552 in weighted average principal amounts of
$72,361.
Direct Costs. During the nine month periods ended September 30, 1998 and 1997,
interest expense and other bank charges accrued on the Company's revolving line
of credit amounted to $3,315,770 and $732,704, respectively. The increase in
interest expense and bank fees was due to an increase in the use of the
Company's bank credit facility engendered by the above-described increase in
loan activity.
Other Operating Expenses. The Company's other operating expenses of $1,648,629
during the nine month period ended September 30, 1998 consisted primarily of
salary and benefits of $790,803; accounting and legal fees of $127,271; rent of
$163,898 and depreciation of $116,530. The Company's other operating expenses of
$830,650 during the nine month period ended September 30, 1997 consisted
primarily of salaries and benefits of $260,022 and legal and accounting fees of
$177,235. The increase in other operating expenses for the nine month period
ended September 30, 1998 are due to the increase in lending activity.
Net Loss Versus Net Loss. During the nine month period ended September 30, 1998
the Company incurred a net loss of $251,682 primarily as a result of the
$745,401 reserves recorded to reflect management's estimate of the
uncollectability of stale warehouse loans and certain other undercollateralized
loans. During the nine month period ended September 30, 1997 the Company
incurred a net loss of $472,682 primarily as a result of increased costs of
$446,576 associated with the professional, financial consulting and similar
services which the Company incurred by reason of its change in status from a
privately owned to a publicly held company.
Three Month Period Ended September 30, 1998 Compared with the Three Month Period
Ended September 30, 1997.
Revenues. During the three month period ended September 30, 1998 revenues
increased to $1,509,413 compared to $949,864 for the three month period ended
September 30, 1997. The volume of loan fundings during the three month periods
ended September 30, 1998 and 1997 totaled approximately $114 million and $112
million, respectively. Such increases in revenues, loan funding, interest and
processing fees were due to the increase in loan duration experienced by the
Company during the latter period.
During the three month period ended September 30, 1998, the Company financed a
total of 1,851 loans totaling $114,122,403 with a weighted average principal
amount of $61,654 for an average duration of 32 days per borrowing which amounts
included 1,830 loans funded through bank borrowings aggregating $112,828,150 in
weighted average principal amounts of $61,655. During the three month period
ended September 30, 1997, the Company financed a total of 1,749 loans totaling
$112,260,409 with a weighted average principal amount of $64,185 for a duration
of 17 days per borrowing which amounts included 1,606 loans funded through bank
borrowings aggregating $107,223,199 in weighted average principal amounts of
$66,764.
Direct Costs. During the three and nine month periods ended September 30, 1998
and 1997, interest expense and other bank charges accrued on the Company's
revolving line of credit amounted to $921,361 and $492,478, respectively. The
increase in interest expense and bank fees was due to an increase in the use of
the Company's bank credit facility engendered by the above-described increase in
loan duration.
Other Operating Expenses. The Company's other operating expenses of $587,498
during the three month period ended September 30, 1998 consisted primarily of
salary and benefits of $302,647; accounting and legal fees of $21,751; rent of
$60,186 and depreciation of $51,000. The Company's operating expenses of
$327,782 during the three month period ended September 30, 1997 consisted
primarily of salaries and benefits of $113,269 and legal and accounting fees of
$33,146. The increase in operating expenses for the three month period ended
September 30, 1998 are due to the increase in lending activity.
Net Loss Versus Net Income. During the three month period ended September 30,
1998 the Company incurred a net loss of $334,586 primarily due to the $362,929
reserve for estimated losses due to under collateralized loans. During the three
months the Company's volume of business was reduced as a result of the
tightening of investor cash available for customer loans, particularly "125"
loans which previously comprised a substantial portion of the number of loans
funded by the Company. 125 loans are bill consolidation loans with high loan to
value ratios that are more dependant on the borrower's credit than the
underlying real estate value. Loss from operations for the three months ended
September 30, 1998 of $362,375 compared to operating income of $129,604 as a
result of the aforementioned reserves and reduced volume of business in the
third quarter of 1998 versus the expansion of business in the third quarter of
1997. During the three month period ended September 30, 1997 the Company earned
a net income of $165,548 as a result of the introduction of the Bank One
warehouse credit facility and the increase in customer base.
Liquidity and Capital Resources.
At September 30, 1998 the Company had cash of $3,598,666, working capital of
$5,547,481 and a current ratio of 1.17 to 1. At the Company's year end of
December 31, 1997, it reflected cash of $2,972,845, working capital of
$5,330,419 and a current ratio of 1.1 to 1.
Cash Flow.
During the nine months ended September 30, 1998 the Company was able to provide
$625,821 net increase in cash flows, primarily as a result of reducing loans
receivable. For the nine months ended September 30, 1997, the Company generated
$2,267,423 of net cash primarily due to borrowings, issuances of stock and
convertible notes.
<PAGE>
The Company believes that its cash flows from operations and continuing lines of
credit will be sufficient to meet its financing requirements for at least the
next twelve month period.
Other:
This report contains forward-looking statements and information that is based on
management's beliefs and assumptions, as well as information currently available
to management. When used in this document, the words "anticipate," "estimate,"
"expect," "intend" and similar expressions are intended to identify
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Such statements are
subject to certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should the underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or expected. Among the key factors that may have a direct bearing on
the Company's operating results are fluctuations in the economy, the degree and
nature of competition, the risk of delay in product development and release
dates and acceptance of , and demand for, the Company's products.
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
The following document has been filed exclusively with the
Securities and Exchange Commission:
Exhibit No. Description
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed an 8-K on November 4, 1998 reporting changes
in Certifying Accountant.
<PAGE>
Signature
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.
Pioneer Commercial Funding Corp.
By: John O'Brien
Principal Financial Officer
Dated: November 25, 1998
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet and statements of operations filed as part of the Company's quarterly
report on Form 10-QSB/A and is qualified in its entirety by reference to such
report.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,598,666
<SECURITIES> 0
<RECEIVABLES> 34,345,562
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 38,093,283
<PP&E> 950,797
<DEPRECIATION> 555,383
<TOTAL-ASSETS> 40,211,708
<CURRENT-LIABILITIES> 31,229,039
<BONDS> 0
0
0
<COMMON> 55,423
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</TABLE>
