United States
Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[x] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1999.
[ ] 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: 0-24344
CIK number: 0000925535
Citizens Capital Corp.
(Name of Small Business Issuer as specified in its charter)
Texas 75-2368452
(State or other jurisdiction (IRS Employer
of incorporation organization) Identification No.)
8214 Westchester, Suite 500, Dallas, Texas 75225* Mailing Address: P. O. Box
670406, Dallas, Texas 75367
(Address of principal executive offices)
Issuer's telephone number, including area code: (972) 960-2643
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 [ ]
Number of shares outstanding of the issuer's common stock as of October 8, 1999:
40,500,000 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
Yes [ ] No [x]
2
<PAGE>
<TABLE>
<CAPTION>
INDEX TO FORM 10-QSB
Page No.
--------
PART I
<S> <C>
Item 1. Financial Statements 4
Item 2. Management's Discussion and Analysis 7
of Financial Condition
PART II
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of 9
Securities Holders
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
3
<PAGE>
PART I-FINANCIAL INFORMATION
The balance sheet as of September 30, 1999; statements of operations; statement
of cash flows for the third quarter ended September 30, 1999 and 1998 were taken
from the Company's books and records without audit. However, in the opinion of
management, such information includes all adjustments (consisting only of normal
recurring accruals) which are necessary to properly reflect the financial
position of the Company as of September 30, 1999 and results of operations for
the third quarter ended September 30, 1999 and 1998. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed and
omitted, although management believes the disclosures are adequate to make the
information presented not misleading. These interim unaudited financial
statements should be read in conjunction with the Company's audited annual
financial statements for the years ended December 31, 1998 and 1997 located in
the Company's Form 10-SB registration statement filed with the Securities and
Exchange Commission on March 19, 1999.
INDEX TO FINANCIAL STATEMENTS
Page No.
--------
Consolidated Balance Sheets 5
Consolidated Statements of Operations 6
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 7
4
<PAGE>
<TABLE>
<CAPTION>
Item 1. Financial Statements
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
For the Three Months Ended September 30, 1999 and 1998
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
SEPTEMBER 30, 1999
(Unaudited)
ASSETS
------
<S> <C>
CURRENT ASSET -
Cash $ 4,600
OFFICE EQUIPMENT, net of accumulated depreciation of $3,338 222
INTANGIBLE ASSETS, net 350
-------------
Total assets $ 5,172
=============
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
CURRENT LIABILITIES -
Accounts payable $ 2,320
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 stated value, 5,000,000 shares authorized;
1,000,000 shares issued and outstanding 1,000,000
Common stock, no par value, 100,000,000 shares authorized;
40,500,000 shares issued and outstanding ($.01 stated value) 405,000
Additional paid-in capital 48,798,359
Note receivable from ESOP (50,100,000)
Deficit accumulated during the development stage (100,507)
-------------
Total stockholders' equity 2,852
-------------
Total liabilities and stockholders' equity $ 5,172
=============
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the THREE Months Ended September 30, 1999 and 1998
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
SEPTEMBER 30, 1999
(Unaudited)
THREE Months Ended Period from
-------------------------- March 12,
September 30, 1991 to
-------------------------- SEPTEMBER
1999 1998 30, 1999
------------ ------------ -----------
<S> <C> <C> <C>
SALES $ 0 $ 0 $ 438
COST OF SALES 0 0 275
------------ ------------ -----------
0 0 163
GENERAL AND ADMINISTRATIVE EXPENSES 2,670 2,331 100,670
------------ ------------ -----------
NET LOSS $ (2,670) $ (2,331) $ (100,507)
============ ============ ===========
NET LOSS PER SHARE (BASIC AND DILUTED) $ -- $ --
Weighted Average Shares 40,500,000 22,500,000
============ ============
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the THREE Months Ended September 30, 1999 and 1998
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
SEPTEMBER 30, 1999
(Unaudited)
three months Ended
September 30, Period from
------------------ March 12, 1991 to
1999 1998 September 30, 1999
-------- -------- ---------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,670) $(2,331) $ (100,507)
=====================
Adjustments to reconcile net loss to cash
used byoperating activities:
Expenses paid by stockholder 2,002 1,163 81,784
Depreciation and amortization 98 168 3,486
Increase in accounts payable 570 1,000 2,320
-------- -------- ---------------------
Net cash used by operating activities - - (12,917)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office equipment - - (3,560)
Payment for intangible assets - - (250)
-------- -------- ---------------------
Net cash used by investing activities - - (3,810)
CASH FLOWS FROM FINANCING ACTIVITIES -
Sale of stock and contribution by stockholder 1,250 865 23,662
-------- -------- ---------------------
NET INCREASE (DECREASE) IN CASH 1,250 865 6,935
CASH, beginning of period 3,350 150 1,015
-------- -------- ---------------------
CASH, end of period $ 4,600 $ 1,015 7,950
======== ======== =====================
</TABLE>
Citizens Capital Corp.
Notes to Consolidated Financial Statements
(Unaudited)
1. Unaudited Information
- - --------------------------
See notes to the Company's audited financial statements included in the
Company's Form 10-SB registration statement filed with the Securities and
Exchange Commission on March 19, 1999.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
Citizens Capital Corp. (the "Company") is a development stage, acquisition
oriented, holding company whose objectives are to acquire and/or develop
operating entities, assets and/or marketing rights which provide the Company
with an initial entry into new markets or serve as complementary additions to
existing operations, assets and/or products.
Currently, the Company's plans contemplate operating and taking acquisition
initiatives in the following three market segments: 1) residential mortgage
loan marketing, commercial and residential real estate investment and
development; 2) news print publishing and 3) the design, marketing and
distribution of branded athletic shoes and apparel, through its three 97% owned
subsidiaries: Landrush Realty Corporation ("Landrush"); Media Force Sports &
Entertainment, Inc. ("Media Force"); and SCOR Brands, Inc. ("SCOR"). Operations
since inception have primarily included expenditures related to development of
the Company's planned business ventures.
Results of Operations
Three Months Ended September 30, 1999
REVENUES. Revenue of $0 for the third quarter of 1999 compares to $0 for the
third quarter of 1998. For the third quarter end 1999 and 1998 respectively,
the Company's products and services were not introduced into their respective
markets. As such, the Company generated no revenue for this period. While very
competitive, the Company believes that the markets for each of its products and
services remain strong. In order to facilitate the entry of its initial
products and services into their respective markets, the Company has implemented
a strategy of purchasing revenue streams through the acquisition of those
certain operating entities, assets and/or marketing rights which provide the
Company with an initial entry into new markets or serve as complementary
additions to existing operations, assets and/or products.
While the Company did not generate revenue for the comparative periods reported,
the Company believes that its strategy of pursuing the purchase of revenue
streams through the merger and acquisition process will allow the Company to
leverage those assets which may be acquired while maximizing use of the public
capital markets.
In addition to introducing its own products and services into their respective
markets, the Company intends to utilize the remainder of its 1999 fiscal year
focusing on identifying, evaluating and pursuing suitable merger and/or the
acquisition of those operating, revenue producing entities which offer products
and/or services similar to, or the same as, those proposed by the Company. The
Company continues in direct contact with various companies who may be suitable
acquisition candidates for the Company. Moreover, the Company maintains ongoing
relationship with investment banks and business intermediaries who represent
companies operating in various industries who are seeking to be acquired.
GROSS PROFIT. Gross profit of $0 for the third quarter of 1999 compares to $0
for the third quarter of 1998. The lack of gross profit for the comparative
periods is attributable to a the lack of revenue and cost of revenue for said
periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expenses of $2,670 for the third quarter of 1999 compares to
$2,331 for the third quarter of 1998. The increase in selling, general and
administrative expenses reflects a slight increase in the cost associated with
the Company's ongoing identification, evaluation and pursuit of suitable
acquisition candidates. As the Company intensifies its efforts for the
remainder of its 1999 fiscal year, the Company expects that cost associated with
the Company's ongoing identification, evaluation and pursuit of suitable
acquisition candidates will increase.
OTHER INCOME (EXPENSES). The Company did not generate any other items of income
or expense for the third quarter of 1999 nor the third quarter of 1998.
NET INCOME (LOSS). A net loss of $2,670 on revenue of $0 for the third quarter
of 1999 compares to a net loss of $2,331 on revenue of $0 for the third quarter
of 1998. The net loss reported by the Company for the attributable periods is
due to a lack of revenue generated while administrative expenses remained
constant.
8
<PAGE>
Liquidity And Capital Resources
To continue its plan of operation for the remainder of its 1999 fiscal year, the
Company expects to undertake capital obligations in order to market, distribute
and expand the products and/or services proposed by its Landrush Realty
Corporation (Landrush); Media Force Sports & Entertainment Inc. (Media Force)
and SCOR Brands Inc. (SCOR) subsidiaries.
The Company expects to undertake initial capital obligations of $220,000 to hire
executive management and general administration personnel for itself.
Subsequently, the Company expects to incur additional capital obligations of
$290,000 to hire management, general administration, marketing and sales
personnel for each of Landrush; Media Force and SCOR. In order to fund the
continuance of its operations, the Company expects to undertake working capital
obligations of $100,000 for itself and $100,000 each for Landrush; Media Force
and SCOR.
The Company expects to expand the products and services proposed to be offered
by Landrush; Media Force and SCOR primarily by acquiring those existing, income
producing operating entities that offer products and services similar to, or the
same as, those offered by Landrush; Media Force and SCOR. To facilitate its
growth and expansion plans for Landrush; Media Force and SCOR, the Company
intends to obtain loans from affiliates of the Company in the amounts of
$415,000; $750,000 and $400,000 respectively for each of its three subsidiaries.
Plan of Operation
The Company's plan of operation for the remainder of its 1999 fiscal year is to:
(1) introduce into the consumer marketplace the products and/or services
proposed by its three subsidiaries: Landrush, Media Force and SCOR and (2)
continue to identify, evaluate and pursue suitable merger and/or acquisition of
those operating, income producing entities which offer products and/or services
similar to, or the same as, those proposed by the Company.
PART II-OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Securities Holders.
None
9
<PAGE>
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
EXHIBIT INDEX
SEE "EXHIBIT INDEX" ON PAGE 11
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: October 8, 1999
By:
-------------------------
Chief Executive Officer
By: /s/ Billy D. Hawkins
-------------------------
Chief Executive Officer
Citizens Capital Corp.
- - -----------------------
(Registrant)
10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No Description Page No.
- - ---------- ----------------------- --------
<C> <S> <C>
27.1 Financial Data Schedule 12
27.2 Financial Data Schedule 13
</TABLE>
11
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> SEP-30-1998
<CASH> 1015
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3350
<PP&E> 222
<DEPRECIATION> 3338
<TOTAL-ASSETS> 3922
<CURRENT-LIABILITIES> 1750
<BONDS> 0
0
1000000
<COMMON> 405000
<OTHER-SE> -50,100,000
<TOTAL-LIABILITY-AND-EQUITY> 3922
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2331
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (2331)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2331)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUN-30-1999
<PERIOD-END> SEP-30-1999
<CASH> 4600
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4600
<PP&E> 222
<DEPRECIATION> 3338
<TOTAL-ASSETS> 5172
<CURRENT-LIABILITIES> 2320
<BONDS> 0
0
1000000
<COMMON> 405000
<OTHER-SE> -50,100,000
<TOTAL-LIABILITY-AND-EQUITY> 5172
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2670
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (2670)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2670)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
