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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File No. 33-55254-28
FIRST CAPITAL RESOURCES.COM, INC.
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(Exact name of Registrant as specified in its charter)
NEVADA 87-0438641
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2650 McCormick Drive, Suite 185
Clearwater, Florida 33759
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (727) 791-6510
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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 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
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
Class Outstanding as of June 30, 2000
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$.001 PAR VALUE CLASS A COMMON STOCK 11,300,000 SHARES
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FIRST CAPITAL RESOURCES.COM, INC.
INDEX
Part I. Financial Information Page #
Item 1. Financial Statements
Condensed consolidated balance sheet - June 30, 2000 and
year ended December 31, 1999 3
Condensed consolidated statement of operations - Three
and Six months ended June 30, 2000, and three and
six months ended June 30, 1999 4
Condensed consolidated statement of cash flows - Six months
ended June 30, 2000, and six months ended June 30, 1999 5
Notes to condensed consolidated financial statements 6
Item 2. Management's Discussion and Analysis 7 - 8
Part II. Other Information 9
Signatures 10
See notes to condensed consolidated financial statements - unaudited
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST CAPITAL RESOURCES.COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000, AND DECEMBER 31, 1999
June 30, 2000 December 31, 1999
(Unaudited) (Audited)
ASSETS:
Finance receivables, net $ 1,142,927 $ 2,040,565
Cash 1,818,261 596,515
Loans Receivable 493,580 522,329
Property and equipment, net 14,001 20,450
Real Estate held for Sale 171,000 171,000
Other assets 27,768 73,274
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TOTAL ASSETS $ 3,667,537 $ 3,424,133
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LIABILITIES AND DEFICIENCY IN ASSETS:
Liabilities:
Accounts payable and other liabilities 177,900 168,655
Notes payable 185,407 188,880
Due to parent company 5,543,782 5,288,832
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TOTAL LIABILITIES 5,907,089 5,646,367
Stockholders' equity:
Common stock, par value $.001 per share;
100,000,000 shares authorized, 11,300,000
shares issued and outstanding 11,300 11,300
Additional paid-in capital 1,950,908 1,950,908
Accumulated Deficit (4,201,760) (4,184,442)
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Total Deficiency in Assets (2,239,552) (2,222,234)
TOTAL LIABILITIES AND DEFICIENCY IN
ASSETS $ 3,667,537 $ 3,424,133
=========== ===========
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FIRST CAPITAL RESOURCES.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDING JUNE 30
<TABLE>
<CAPTION>
6 months ended 3 months ended
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
REVENUES:
Loan interest and fee income $ 709,221 $ 374,313 $ 395,967 $ 223,664
Less: Interest expense (261,622) (132,434)
------------ ----------- ------------ -----------
Net Interest Income $ 447,599 $ 374,313 $ 263,533 $ 223,664
------------ ----------- ------------ -----------
OTHER INCOME:
Automobile Sales -- 344,938 -- 185,620
OPERATING AND OTHER EXPENSES:
Provision for credit losses -- 10,000 --
Cost of automobile sales -- 296,900 172,114
G & A expenses 464,917 363,350 265,586 204,174
------------ ----------- ------------ -----------
Total expenses 464,917 670,250 265,586 376,288
------------ ----------- ------------ -----------
Income (loss) before income taxes (17,318) 49,001 (2,053) 32,996
Income tax expense -- (7,350) --
Net income (loss) (17,318) 41,651 (2,053) 32,996
============ =========== ============ ===========
Net income (loss) per share $ 0.00 $ 0.01 $ 0.00 $ 0.00
Weighted average number of shares
outstanding 11,300,000 6,027,624 11,300,000 11,300,000
</TABLE>
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FIRST CAPITAL RESOURCES.COM, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999, THE THREE MONTHS ENDED MARCH 31,2000,
AND THE THREE MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Additional
Number of Common Paid-in
Shares Stock Capital Deficit Total
----------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 10,000,000 10,000 $ (9,000) (7,550) (6,550)
Acquisition of net assets of First
Capital Resources.Com (Note 2) 1,300,000 1,300 -- -- 1,300
Contributed capital -- -- 1,651,000 -- 1,651,000
Inputed interest on advances from
Parent (Note 8) -- -- 308,908 -- 308,908
Net loss -- -- -- (4,176,892) (4,176,892)
----------- -------- ----------- ----------- -----------
Balance at December 31, 1999 11,300,000 $ 11,300 $ 1,950,908 $(4,184,442) $(2,222,234)
Net Income (Loss) -- -- (15,265) (15,265)
----------- -------- ----------- ----------- -----------
Balance at March 31, 2000 11,300,000 $ 11,300 $ 1,950,908 $(4,199,707) $(2,237,499)
Net Income (Loss) (2,053) (2,053)
----------- -------- ----------- ----------- -----------
Balance at June 30, 2000 11,300,000 $ 11,300 $ 1,950,908 $(4,201,760) $(2,239,552)
=========== ======== =========== =========== ===========
</TABLE>
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FIRST CAPITAL RESOURCES.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
SIX MONTHS ENDING JUNE 30
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) (17,318) 41,651
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Adjustments to reconcile net loss to net cash
(used in ) operating activities:
Depreciation 7,218 18,896
Imputed interest on advances from Parent 261,622 --
Provision for Finance Credit Losses 10,000
Accretion of discount and unearned interest on
finance contracts (410,577) (37,723)
Inventory -- (241,874)
Decrease in other assets 45,506 (25,361)
Increase in accounts payable 9,245 166,709
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Total adjustments (86,986) (109,353)
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Net cash (used in) operating activities (104,304) (67,702)
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CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of property & equipment -- (69,026)
Amounts from the repayment of loans
receivable 28,749 20,000
Amounts from the repayment (purchase) of finance
contracts 627,528 (1,471,192)
Decrease (increase) in floor plan receivables 680,686 (2,099,354)
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Net cash provided by (used in) investing activities 1,336,963 (3,619,572)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Amounts advanced by (repaid to) Parent Company (7,440) 2,016,573
Repayments of notes payable (3,473) (3,788)
Capital contributed by Shareholder 1,995,675
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Net cash provided by (used in) financing activities (10,913) 4,008,460
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NET INCREASE IN CASH AND CASH EQUIVALENTS 1,221,746 321,186
CASH AND EQUIVALENTS - BEGINNING OF PERIOD 596,515 121,709
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CASH AND EQUIVALENTS - END OF PERIOD $ 1,818,261 $ 442,895
=========== ===========
</TABLE>
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NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated (unaudited) financial statements of
First Capital Resources.Com, Inc., have been prepared in accordance with the
instructions to Form 10-QSB and, therefore, do not include all information and
footnotes necessary for a complete presentation of financial position, results
of operations, cash flows and changes in stockholders' equity in conformity
with generally accepted accounting principles.
In the opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature. Operations
for the six months ended June 30, 2000, are not necessarily indicative of the
results that can be expected for the year ended December 31, 2000.
The financial data at December 31, 1999 is derived from audited financial
statements which are included in the Company's Annual Report of Form 10-KSB and
should be read in conjunction with the audited financial statements and the
notes thereto.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation - The condensed consolidated financial statements
include First Capital Resources.Com, Inc., and its subsidiaries Affordable
Dealer Services, Inc. (Affordable), Southeast Dealer Acceptance, Inc.
(Southeast), Carnet, Inc. (Carnet) and FC Holdings Corp. All material
intercompany accounts and transactions have been eliminated.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
3. GOING CONCERN UNCERTAINTIES
The Company sustained substantial operating losses and negative cash flows from
operations since inception through to December 31, 1999. It's indirect majority
shareholder, First American Capital Trust ("FACT") filed for relief under
Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the
Middle District of Florida, Tampa Division (the "Bankruptcy Court"). Although
the Company has not filed for bankruptcy protection, it is reasonably possible
that FACT, the principal source of liquidity for the Company, will not provide
any more capital to the Company. Further, the creditors of FACT or the
Bankruptcy Court could opt for FACT's assets, including the Company, to be
liquidated and cause the Company to cease its operations.
The management of the Company, along with the management and advisors of FACT
and the creditors of FACT have filed a joint plan of reorganization (the
"Plan") with the Bankruptcy Court on June 30. This Plan provides for the
transfer of the ownership of FACT South from FACT to a liquidating corporation
to be formed upon confirmation of the Plan by the Bankruptcy Court. The Plan
does not currently contemplate a specific action for the Company other than the
Company could be merged into another entity or the shares of the Company owned
by Fact South may be sold to a third party. The Plan further provides that the
shares of the Company could be distributed to the creditors of FACT. The future
business of the Company has not yet been ascertained.
4. EARNINGS PER SHARE
Basic and diluted earnings per share was computed by dividing the net income
(loss) by the weighted average number of shares of common stock.
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5. SEGMENT INFORMATION
At June 30, 1999, the Company principally operated as a finance company and a
used car dealership. The finance segment purchased automobile finance contracts
from pre-owned automobile dealerships and financed dealership floor plan loans,
while the used car dealership segment sold used automobiles, vans and light
trucks to consumers. The used car segment was sold on July 5,1999. At June 30,
2000, the Company only operated in one segment.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's
consolidated financial condition and results of operations and cash flows. The
discussion should be read in conjunction with the condensed financial
statements and notes thereto.
RESULTS OF OPERATIONS
Net revenues
Three Months ended June 30
Net interest income increased by 77% from $223,664 for the three month period
ended June 30, 1999 to $395,967 for the three months ended June 30, 2000. The
increase is due to the larger amount of loans outstanding this period as
compared to the same period last year. Additionally substantial collection
efforts are being made this year to ensure payments are made in full and on
time. The interest income for the three months was offset by $132,434 of
interest expense accrued on the intercompany loan to FACT as compared to
nothing in the same period last year.
There were no revenues from automobile sales for the three months ended June
30, 2000 as compared to $185,620 for the corresponding period last year.
Six months ended June 30
Net interest income increased by 89.5% from $374,313 for the six month period
ended June 30, 1999 to $709,221 for the six months ended June 30, 2000. The
increase is due primarily to the fact that revenues from Southeast Dealers
Acceptance were only $14,029 for the period last year as SEDA only commenced
operations on January 20, 1999 and did not start earning significant revenues
until the second quarter. SEDA had net revenues of $514,232 for the six month
period this year. The interest revenue in the period ended June 30, 2000 was
offset by interest expense that was imputed on the intercompany loan owing from
the Company to FACT.
SEDA currently has approximately 230 retail car loan accounts. These accounts
are being collected and no new loans are currently being made. Accordingly
revenues should remain steady for the next 2 to 3 quarters after which the
revenues will start to decline until they ultimately reduce to $0 by
approximately the end of next year.
Revenues from Affordable Dealer Services are also slowly declining as the
amount of Dealer loans currently outstanding has fallen from approximately
$1.4M at year end to approximately $630,000 at June 30, 2000. New Dealer loans
are being made however at a declining rate. Net revenues from ADS will slowly
decline over the course of the remainder of the fiscal year.
Revenues during the period ended June 30, 1999 include $344,938 in automobile
sales that were generated by the Company's subsidiary Carnet. There are no
comparable revenues this year as Carnet is inactive.
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Net expenses
Three months ended June 30
Net expenses for the three months ended June 30 were $265,586 as compared to
$376,288 for the same period last year. Included in the figure for the three
months last year is costs associated with automobile sales of $185,620 as
compared to nil this year. Selling, general and administrative expenses for the
three months this year include $38,780 in management fees paid to FACT as
compared to nil last year. Additionally the Company continues to aggressively
collect the retail loan portfolio that is outstanding thereby incurring another
$27,000 in repossession and related fees as compared to nil last year. Lastly,
the Company incurred approximately $50,000 in legal and accounting fees
relating to the Company's annual filings, corporate legal work and other
matters. This was unusually high due to the issues arising from the Bankruptcy
filing of the Company's ultimate parent, FACT. This expenditure will decline
for the remainder of the year.
Six months ended June 30
Net expenses for the six months ended June 30, 2000 were $464,917 as compared
to $670,250 for the comparable six months last year. Repossession and towing
expenses have increased significantly from $0 last year to approximately
$51,930 this period as the Company tries to aggressively protect and collect
the value of the retail car loan portfolio. Other selling, general and
administrative expenses are about the same as the comparable period last year.
Included in last years operating expenses were Costs related to automobile
sales in the amount of $296,900 from its Carnet subsidiary. There are no such
expenses this year as Carnet's operations have been discontinued.
General & Administrative expenses are about the same as last year. During the
first three months last year the Company had only just commenced operations
whereas during the comparable period this year the Company has been managing a
full Dealer and retail portfolio and has also been consolidating the Fort
Lauderdale office into the Clearwater office. Additionally an inordinate amount
of time has been spent during this period correcting many of the policies and
procedures of the former management.
Expenses are likely to fall slightly in the next quarter due to much of the
consolidation work being completed and the level of repossessions also falling
slightly as compared to this quarter. Thereafter expenses should remain steady
through the end of the fiscal year.
The net loss for the six months ended was $17,318 as compared to a profit of
$41,651 for the six month period last year. This is due to the fact that
although the increase in revenues exceeded the increase in general &
administrative expenses, the Company incurred a significant interest expense
during the period due to the size of the debt to FACT. The Company should
remain around the break even level for the remainder of the year until a Plan
of Reorganization is finalized and approved after which time the Company's
future will be known.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has $1,818,261 of cash on hand and another $1,636,507 in
other loans and receivables against approximately $363,000 in accounts and
notes payable. However the Company is currently indebted to its ultimate parent
Company, FACT in the amount of $5,543,782. As was disclosed in the previous
Report on Form 10-KSB, FACT has filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code. FACT is currently working on a Plan of
Reorganization. A preliminary Plan was filed prior to June 30 however further
details will not be known until the next quarter ended September 30, 2000 when
a final Plan is expected to be filed.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Effective June 30, 2000, Steven Miller resigned as an Officer and
Director of First Capital Resources.Com, Inc.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
The following exhibits are followed as part of this report:
Exhibits:
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
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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.
FIRST CAPITAL RESOURCES.COM, INC.
Date: August 12, 2000 By: /s/ Derri Davisson
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Derri Davisson, President
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