United States
Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
(Mark One)
[x] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 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
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
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Class A; no par; common stock
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 [ ]
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
Form 10-KSB. [ ]
The issuers revenues for the fiscal year ended December 31, 1999 were $0.00.
The aggregate market value of the voting common equity held by non-affiliates of
the registrant on March 1, 2000, based on the closing bid price of the common
stock on the NASD Over-the-Counter Bulletin Board on that date was $2,960.
Indicated below is the number of shares outstanding of each class of the
issuer's common stock as of March 1, 2000: 40,500,000 shares of common stock,
no par value.
DOCUMENTS INCORPORATED BY REFERENCE
None of the following documents are hereby incorporated by reference into Part
I, Part II or Part III of Form 10-KSB herein: (1) annual report to security
holders; (2) proxy or information statement; or (3) any prospectus filed
pursuant to Rule 424(b) or (c ) of the Securities Act of 1933 ("Securities
Act").
Transitional Small Business Disclosure Format:
Yes [ ] No [x]
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CITIZENS CAPITAL CORP.
INDEX TO THE DECEMBER 31, 1999 FORM 10-KSB
Page No.
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PART I
Item. 1 Description of Business 3
Item 2. Description of Property 10
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters 11
Item 6. Management's Discussion and Analysis 12
Item 7. Financial Statements 13
Item 8. Changes in and Disagreements with Accountants on Accounting and 22
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance 22
Item 10. Executive Compensation 24
Item 11. Security Ownership of Certain Beneficial Owners and Management 25
Item 12. Certain Relationships and Related Transactions 27
Item 13. Exhibits, List and Reports on Form 8-K 28
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PART I
Item 1. Business
General
Citizens Capital Corp. (the "Company" ) is a development stage holding company
which seeks to acquire and/or develop those operating entities, assets and/or
marketing rights which may provide the Company with an entrance into new market
segments or serve as a complimentary addition to existing operations, assets,
products or services.
Through its three 97% owned subsidiaries: Landrush Realty Corporation
("Landrush"); Media Force Sports & Entertainment Inc. ("Media Force"); and SCOR
Brands Inc. ("SCOR"), the Company's plans contemplate operating in the following
three segments: 1) home equity loan marketing; commercial and residential real
estate investment and development; 2) publishing and 3) the design, marketing
and distribution of branded athletic shoes and apparel respectively. Operations
since inception have primarily included expenditures related to the organization
of the Company's proposed business ventures and the prototype development of its
branded products and services. Unless otherwise noted, references to the
Company relate to Citizens Capital Corp. and its subsidiaries Landrush; Media
Force and SCOR, collectively.
The Company was incorporated under the laws of the State of Texas on March 12,
1991 as Let Us, IncThe Company's articles of incorporation were amended in the
State of Texas on March 30, 1992 changing the issuer's corporate name from Let
Us, Inc. to Citizens Capital Corp
For the purpose of entering into the home equity loan market segment; the
Company organized a subsidiary, Landrush Realty Corporation on August 15, 1995.
Also on August 15, 1995, the Company sold the trademarks and exclusive marketing
rights to two of its residential home equity brands, The Texas Home Equity
ReFund(R) and The Cash-Out Mortgage ReFinancer(R) to Landrush in exchange for
19,000,000 shares of Landrush common stock. On June 13,1997, the Company sold
the trademark and exclusive marketing rights to its third residential home
equity brand: The Home Equity Cashier(R) to Landrush in exchange for 333,334
shares of Landrush common stock.
For the purpose of entering into the print media market segment, the Company
organized a subsidiary, Media Force Sports & Entertainment Inc. on June 13,
1997. Also on June 13, 1997, the Company sold the trademark, publishing and
exclusive marketing rights to its Black Financial~News print publication to
Media Force in exchange for 19,333,334 shares of Media Force common stock.
For the purpose of entering into the athletic shoe and apparel market segment,
the Company organized a subsidiary, SCOR Brands Inc. on June 13, 1997. On
November 20, 1997, the Company sold the trademark and exclusive marketing rights
to its SCOR(R) brand athletic shoe and apparel logo to SCOR in exchange for
19,333,334 shares of SCOR common stock.
Product and Research Development
The Company funds research and development activities as required to accomplish
its product research and development goals.
During its 1999 fiscal year, the Company did not undertake any material level
of expenditures for product research or development.
During its 1999 fiscal year, the Company's Landrush subsidiary furthered its
research related to its contemplated residential and commercial real estate
development ventures. Landrush has completed development of its Home Equity
Cashier(R) and Cash-Out Mortgage(R) branded home equity mortgage products.
During fiscal year 2000, Landrush intends to initiate marketing campaigns for
both the Equity Cashier(R) and Cash-Out Mortgage(R) branded products.
During its 1999 fiscal year, the Company's Media Force subsidiary did not
undertake any material level of product development cost. Media Force has
completed the development of its Black~Financial News(R) publication. During
fiscal year 2000, Media Force intends to initiate a marketing campaign in
conjunction with the initial publishing of its Black~Financial News(R)
publication.
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During its 1999 fiscal year, the Company's SCOR subsidiary did not undertake any
material level of product development cost. SCOR has completed the initial
development of its SCOR(R) brand line of basketball, golf, running and casual
shoes. During the second quarter of fiscal year 2000, SCOR intends to complete
the production of product samples for its initial basketball, golf and running
lines intended for market introduction during fiscal year 2000.
Acquisition of Plant and Equipment
During fiscal year 1999, neither the Company nor any of its subsidiaries
acquired any plant or equipment.
Change in Numbers of Employees
During fiscal year 1999, there was no change in the number of employees employed
by the Company or any of its subsidiaries. During fiscal year 2000, the Company
and its subsidiaries anticipates that it may have a material change in the
number of employees that are required to manage and support the planning,
administrative, finance and accounting, marketing, sales and the day to day
operational aspects of: 1) its current development stage operations or 2) any
operating entity which may be merged with the Company or its subsidiaries.
Financial Information About Industry Segments
The Company is a development stage company and to date has had no material
revenues nor assets. The Company intends to operate in the three industry
segments identified under "Business" above.
Narrative Description of Business
Principal Products Produced and Services Rendered
The Company, through its Landrush; Media Force; and SCOR subsidiaries intends to
offer products and/or services in each of the following three market segments:
1) home equity loan marketing; commercial and residential real estate investment
and development.
2) news publishing.
3) the design, marketing and distribution of branded athletic shoes.
The principal products intended to be offered by Landrush are: The Cash-Out
Mortgage ReFinancer(R) and The Home Equity Cashier(R) home equity loan products.
Landrush owns the registered trademarks and has the exclusive marketing and
distribution rights to each of the products.
The principal consumer for each of the two products are residential homeowners
whose home market value exceeds the remaining mortgage balance on their home.
The difference between a home's market value and the mortgage loan balance owed
on the home represents the homeowner's equity in their property. By obtaining a
new mortgage at a value which approximates a percentage of the home's current
market value, a homeowner may utilize the cash proceeds from a newly issued
mortgage to pay off their existing mortgage loan balance. The residual cash
balance remaining after the homeowner pays off of their existing mortgage loan
balance represents the homeowner's home equity. This residual cash balance may
be utilized by the homeowner for any personal or business purpose desired.
Each of Landrush's two branded home equity loan products are targeted for
primary distribution through both mortgage and residential real estate brokers.
For the fiscal years ended December 31, 1998 and December 31, 1999, Landrush's
home equity products had not been commercially marketed or distributed into the
their respective market segments and did not generate revenue.
Landrush also may acquire existing residential, commercial, industrial, retail
and hotel properties to lease and/or operate. Landrush may seek the purchase of
raw land to facilitate the development of mixed use projects to include
residential, commercial, industrial, retail and hotel sites. For the fiscal
years ended December 31, 1997; December 31, 1998 and December 31, 1999, Landrush
had not acquired nor developed any residential or commercial real estate assets
and did not contribute to the Company's consolidated revenue.
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The principal product planned for publishing and distribution by Media Force is
the Black Financial~News(R) publication. The Black Financial~News(R) is planned
to be a national weekly news publication whose topics provide an intersection
where people, production, commerce and investment have an opportunity to meet.
The principal market for Media Force's Black Financial~News(R) publication is
the African American community and those merchandisers who would like to target
and promote the sell of their products and/or services to the African American
consumer market.
Media Force intends to market its Black Financial~News(R) publication by direct
subscription, through news stands, newspaper/magazine distributors, and through
various retail chain establishments, churches and church based organizations.
For the fiscal years ended December 31, 1998 and December 31, 1999, Media
Force's Black Financial~News publication had not initiated publishing and
thereby did not generate any advertising receipts or generate revenue.
The principal products intended for production by SCOR are the SCOR(R) brand
line of basketball, golf, running and casual shoes. The SCOR(R) brand line of
shoes are primarily intended for both the urban and suburban teenage markets.
SCOR intends to initially utilize internet and mail order catalogs to market its
SCOR(R) brand line of shoes directly to consumers. SCOR also intends to market
its SCOR(R) brand line of products through local, regional and national retail
sporting goods and footwear stores. For the fiscal year ended December 31, 1998
and December 31, 1999, SCOR products had not yet been introduced or commercially
marketed and distributed and contributed $438 and $0 respectively to the
Company's consolidated revenue. The $438 contributed by SCOR for the fiscal
year ended December 31, 1998 represented 100% of the Company's consolidated
revenue during said fiscal year.
Description of the Status of Products or Services
As of December 31, 1999, the development of product prototypes have been
completed for each of the Company's three subsidiaries.
Development of Landrush's Cash-Out Mortgage ReFinancer(R) and Home Equity
Cashier(R) branded home equity mortgage loan products have been completed.
Landrush has the exclusive marketing rights for each of the two branded products
and plans initial market introduction during the second and third quarter of
fiscal year 2000.
Development of Media Force's Black Financial~News(R) publication has been
completed. Media Force has the exclusive marketing rights for the Black
Financial~News(R) publication and plans initial market introduction during the
second and third quarter of fiscal year 2000.
Development of SCOR's SCOR(R) brand basketball, golf, running and casual shoe
lines have been completed. SCOR , has the exclusive marketing rights for the
SCOR(R) brand products and plans initial market introduction during the second
and third quarter of fiscal year 2000.
Neither the Company nor any of its subsidiaries have made any public
announcement concerning the initial market introduction of its products or
services. However, during the second, third and fourth quarters of fiscal year
2000, the Company does anticipate making said public announcement as the
Company's subsidiaries move its products and services into the consumer market
place
Sources and Availability of Raw Materials
The intended operations of the Company's subsidiaries shall be dependent upon
sources and/or the availability of raw materials for the initiation and
completion of its contemplated business ventures.
Landrush's purposed residential and commercial development ventures are highly
dependent upon sources and the availability of raw materials. Landrush may
source and use such raw materials as: steel beams, wood, bricks, cement, and
plastic. Landrush's general building contractors may make direct use of said
raw materials during the course of any proposed, contracted building assignment.
All material sources of raw materials which may be needed by Landrush to carry
out its contemplated residential and commercial development ventures are
generally available in sufficient supply.
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Media Force's Black Financial~News(R) publication shall be dependent upon a
ready source of paper and ink for print production. Media Force intends to
initially utilize the printing services of third party commercial printer to
carry out the initial printing of its Black Financial~News(R) publication.
Sources of paper and ink are generally available through a number of third party
commercial printers which are available to Media Force.
SCOR's branded shoe lines shall be dependent upon a ready source of natural and
synthetic rubber, vinyl and plastic compounds, foam cushioning materials, nylon,
canvas, and leather. SCOR's proposed apparel products are dependent upon the
use of natural and synthetic fabrics, treads and specialized performance fabrics
designed to repel rain, retain heat, or efficiently transport body moisture.
SCOR's shoe lines shall be produced by third party, contract manufacturers
located in Mexico, South Korea, China, Canada and/or the United States. Contract
manufacturers typically buy raw materials in bulk, as needed for production.
Raw materials necessary to produce SCOR's branded footwear is generally
available in or is delivered to the countries where the manufacturing process
takes place. The contract manufacturers who have been identified to produce
SCOR's branded shoe lines have not experienced any material level of
difficulties in satisfying raw material requirements used for production.
Patents, Trademarks, Licenses, Franchises and Concessions
The Company utilizes trade and/or service marks on a substantial number of the
products and/or services proposed for offering by its Landrush; Media Force; and
SCOR subsidiaries. The Company believes that having distinctive marks that are
unique and readily identifiable is a very important factor in creating and
maintaining a market for its products and services, in identifying the Company
and its subsidiaries and in distinguishing its products and services from the
other products and services offered in the market place. The Company and its
subsidiaries consider its trade and service brands to be amongst its most
valuable assets.
The Cash-Out Mortgage ReFinancer(R) and The Home Equity Cashier(R); brand marks
are registered trademarks of the Company and/or its subsidiaries. The Company
and its subsidiaries have the exclusive right to use and market said trademarks
in the market place. The registrations in effect for each of the trademarks
expires in the year 2008.
The Black Financial~News(R) brand mark is a registered trademark of the Company
and/or its subsidiaries. As such, the Company and its subsidiaries have the
exclusive right to use and market said trademarks in the market place. The
registrations in effect for the trademark expires in the year 2008.
The SCOR(R) brand mark is a registered trademark of the Company and/or its
subsidiaries. As such, the Company and its subsidiaries have the exclusive
right to use and market said trademarks in the market place. The registrations
in effect for the trademark expires in the year 2008.
Seasonal Nature of Business
Demand for the products and services contemplated by the Company and its
subsidiaries are influenced by seasonal changes, as well as, changes in consumer
attitudes and demand. The Company and its subsidiaries may experience
fluctuations in sales volume during a given year as a result of seasonal changes
or changes in consumer attitudes.* The Company believes that the mix of its
proposed product for sale may vary considerably from time to time as a result of
changes in seasonal, gender and geographic demand.
The Company believe that the relative popularity of various sports and fitness
activities, as well as, changing design trends may affect the demand for SCOR's
planned shoes products. As such, SCOR believes that it must respond to trends
and shifts in consumer preferences by adjusting the mix of its contemplated
product offerings, develop new styles and categories and influence consumer
buying preferences through aggressive marketing and the utilization of efficient
production and inventory techniques.
The Company believes that changes or fluctuations in interest rates may
adversely impact Landrush's proposed home equity products as these products are
tied directly to the cost of money, as related to the rate of interest charged
to obtain a mortgage loan. The Company also believes that fluctuations in
interest rates may impact Landrush's ability to place home equity mortgage
financing necessary to funded loans.
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Inventory Requirements
The footwear industry that the Company's SCOR subsidiary proposes to operate in
is generally characterized by specialized shoe companies, apparel companies,
sports equipment companies and large companies having diversified lines of
products primarily serving the retail store market segment. Those companies who
have a large retail store customer base generally offer ordering programs which
allow their retailers to order product five to six months in advance of delivery
with the guarantee that a certain percentage of the orders will be delivered
within a preset time and at a fixed price. These companies generally maintain
strategically located distribution facilities in order to warehouse new products
prior to delivery to their retail customers. In order to better manage
inventory and working capital, several of the larger companies in the athletic
footwear and apparel industry maintain company operated retail outlets which
primarily carry b-grade and close out merchandise.
To maintain the lowest possible level of inventory and thereby better manage
working capital requirement, SCOR may market its proposed SCOR(R) brand line of
athletic shoes and apparel directly to customers utilizing mail order catalogs.
Sales generated by mail order catalog are generally pre-paid by the customer.
Prepaid sales generally allow a company to have a higher level of control over
inventory and correspondingly reduces working capital requirements.
SCOR may also pre-determine the initial styles, colors and categories of the
products it will offer for a given sport. Once the styles and categories are
determined, SCOR may warehouse and maintain a minimum 120 day inventory of those
products, style and color categories which are known to take up to 90 days to
design, produce and ship.
SCOR may warehouse and maintain a minimum 30 day inventory of those contemplated
apparel items which are known to take up to 14 days to design, produce and ship.
Said product and style categories shall require pre-payment and may be shipped
directly when ordered. All contemplated products to be produced may require
that SCOR make working capital investments in the production of said products
prior to delivery. Payment for recreational customer direct purchases shall
generally be due and payable to SCOR at the time that a given product is
ordered. SCOR may make thirty (30) day credit terms available to certain
institutional customers who are credit worthy and may provide all of its
customers with credits and/or refunds for merchandise returned due to product
defect.
Dependence of Segment on a Single Customer
For its fiscal year ended December 31, 1999, neither the Company nor any of its
subsidiaries were dependent upon a single customer or a few customers for the
generation of product sales.
Sales Order Backlog
For its fiscal year ended December 31, 1999, neither the Company nor any of its
subsidiaries currently have any firm or unfirm sales order backlog. Moreover,
neither the Company nor any of its subsidiaries have any firm or unfirm sales
order backlog for the fiscal years ended December 31, 1998 and 1999
respectively.
Renegotiation; Termination of Business or Contracts
During its fiscal year ended December 31, 1999, no portion of the Company's
contemplated business nor the contemplated business of any of its subsidiaries,
were subject to any form of renegotiation preceding nor were they subject to the
renegotiation or termination of any major or minor government contracts or
contracts otherwise.
Competition
The Company's Landrush subsidiary, Home Equity Cashier(R) and Cash-Out Mortgage
ReFinancer(R) branded home equity loan products, contemplate operating in the
home equity loan market. The home equity loan market is a competitive and
widely disbursed market segment which generally consist of either large or
boutique financial institutions who provide wholesale mortgage loan underwriting
services through a network of regional and/or national retail mortgage loan
originators. These mortgage loan originators may be affiliated representatives
of the funding mortgage underwriter or they be independent mortgage brokers.
The industry is characterized by keen interest rate competition. The
underwriting institutions who have access to the capital markets are generally
able to secure funds at a more favorable overall cost. These cost factors,
manifested in the form of loan interest rates, are then passed to borrowers
through the underwriter's network of regional and/or national retail mortgage
loan originators.
Countrywide Home loans; Norwest Mortgage, North American, Fannie Mae; Freddie
Mac, Cityscape Financial Corporation, Conseco and Washington Mutual are amongst
the industry's leading market participants.
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Landrush believes that it may face competitive risk in its attempts to gain
market share from its more established competitors. However, Landrush believes
that through the utilization of various alternative methods of product creation;
marketing, distribution and gaining access to the capital markets it may achieve
a higher initial level of market results then would otherwise be likely.
The Company's Media Force subsidiary, Black Financial~News(R) branded product,
contemplates operating in the specialty news media market segment. The specialty
news media market segments is characterized by many niche market publishers
offering their publications to local, regional and/or national audiences. The
publications content attempts to appeal to the interests and/or needs of a
specific target market audience. The publication then provides merchandisers
with a captive readership audience in which the merchandiser's products and
services may be advertised, and sold.
Media Force anticipates that it will be in competition on a local level with
various non-financial, niche market publishers whose target audience is the
African American community. The USA Today; Wall Street Journal; Black Enterprise
Magazine publications are amongst the leading national specialty news market
participants who Media Force shall be in competition with on various levels.
The Company believes that Media Force may face tremendous competitive risk in
its attempts to gain market share from its more established competitors.
However, Media Force believes that through the utilization of various
alternative methods of marketing and distribution, it may achieve a higher
initial level of operational results then would otherwise be likely.
The Company's SCOR subsidiary, SCOR(R) brand line of shoes, contemplates
operating in the athletic footwear and apparel industry. The athletic footwear
and apparel industry is keenly competitive in the United States and on a
worldwide basis in the areas of new product development, price, product
identity, marketing, distribution, and customer service support. SCOR
anticipates that it will compete with an increasing number of specialized
athletic shoe and apparel companies. The intense competition and the rapid
changes in technology, as well as, consumer preferences for existing athletic
footwear and apparel brands may constitute significant risk factors for SCOR.
Nike, Reebok, Adidas, Converse, Puma and Fila are amongst the leading market
participants in the footwear and apparel industry. Given the proprietary nature
existing production, marketing and distribution processes, SCOR may face
tremendous competitive risk in its attempts to gain market share from its more
established competitors. However, SCOR believes that through the utilization of
various alternative methods of product production, marketing and distribution,
it may achieve a higher initial level of market results then would otherwise be
attainable.
Research & Development Expenditures
The Company had no research and development expenditures for its fiscal years
ended December 31, 1998 and 1999 respectively. However, most of the Company's
expenditures ($18,203 and $17,516 in 1999 and 1998 respectively) related to
business development matters. The Company and its Landrush, Media Force and
SCOR subsidiaries have completed the initial development of its products and
services. As such, the Company did not incur any product research and
development cost for fiscal year 1999.
The Company believes that research and development and other business
development efforts of the Company and its subsidiaries are key factors in its
future success. As such, the Company may increase the amount of manpower and
financial resources which are allocated to research and development as related
to the various products and services contemplated to be offered by the Company
and its subsidiaries.
Compliance with Federal, State, and Local Provisions
For the Company's fiscal year end December 31, 1998 and 1999 respectively, there
were no material or immaterial items or issues of federal, state or local
compliance as related to the developmental operations of the Company or of any
of its subsidiaries.
During the Company's 2000 fiscal year, the Company does not anticipate making
any material or immaterial capital expenditures on items or issues necessary for
federal, state or local compliance as related to the developmental operations of
the Company or of any of its subsidiaries.
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Number of Employees
The Company currently employs one active employee. Until the Company initiates
and expands the contemplated operations of its three subsidiary units and/or
consummates future acquisition transactions as they become available, the
Company's Chief Executive Officer, Billy D. Hawkins has served and will continue
to serve as the managing director of the Company and its subsidiaries. Mr.
Hawkins is currently in charge of the day to day operations of the Company. Mr.
Hawkins has not and does not currently receive any salary compensation in
exchange for his services on behalf of the Company and its shareholders.
During fiscal year 2000, both the Company and its subsidiaries anticipates
adding additional staff as its contemplated ventures are marketed and
distributed into the marketplace.
Financial Information about Foreign and Domestic Operations and Export Sales
The Company is a development stage company. The following table sets forth
domestic and foreign revenue; operating profit or loss; identifiable assets; and
export sales attributable to the Company's last two fiscal years. The initial
launch and availability of the Company's products and/or services into their
respective market segments is intended for implementation during the second;
third and fourth quarter of the Company's 2000 fiscal year. As such, the
Company's financial performance set forth in the table hereof for domestic
and/or foreign operations may not be indicative of future performance results.
Year
1998 1999
Sales to unaffiliated customers:
United States 438 0
Foreign 0 0
Sales or transfers between geographic areas:
United States 438 0
Foreign 0 0
Operating Profit or Loss:
United States: -17,353 -18,203
Foreign 0
Identifiable assets:
United States 1,685 3,601
Foreign 0 0
Export Sales: 0 0
Item 2. Description of Property
The Company maintains executive offices located at: 8214 Westchester Lane, Suite
500, Dallas, Texas 75225. In preparation for its anticipated growth and the
corresponding need for expanded office accommodations , the Company maintains
said executive offices on a monthly rental basis.
The operations of each of the Company's three subsidiaries are currently being
operated out of the Company executive offices located at: 8214 Westchester Lane,
Suite 500, Dallas, Texas 75225.
As growth and expansion require, the Company and each of its three subsidiaries
may relocate to larger executive facilities during the Company's 2000 fiscal
year.
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Item 3. Legal Proceedings
For the December 31, 1998 and 1999 fiscal years respectively, neither the
Company nor any of its subsidiaries are involved in, nor party to; any current
legal proceedings nor any pending litigation brought by any federal, state,
local court or regulatory agency.
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Item 4. Submissions of Matters to a Vote of Security Holders
The annual meeting of Citizens Capital Corp. shareholders was held on March 25,
1999.
The following persons were nominated and re-elected in their entirety to serve
as directors of the Citizens Capital Corp.:
Billy D. Hawkins
Dwight Washington
Hubert H. Hawkins
Enos Harris
At the annual meeting of Citizens Capital Corp. shareholders, the sole matter in
which shareholders voted on was the election of board directors. The total
common shares eligible to vote were 40,500,000.
Board Nominees
--------------
Votes For 40,378,350
Billy D. Hawkins
Dwight Washington Votes Against 0
Hubert H. Hawkins
Enos Harris Votes Withheld 0
Vote Abstentions 121,650
Broker Non-Votes 0
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's common stock has been listed for trading on the NASD
Over-the-Counter Bulletin Board under the symbol CAAP since December 1, 2000.
The Over-the-Counter Bulletin Board is an inter-dealer quotation system whose
price quotes do not reflect any retail mark-up, mark-down or commission and may
not represent actual transactions.
Stock
------------
High Low
---- ---
1999
- ----
First Quarter
Second Quarter
Third Quarter
Fourth Quarter .03 .02
2000
- ----
First Quarter .03 .02
As of March 1, 2000, there were approximately 50 record holders of the Company's
common stock.
The Company has not paid any dividends on its common stock since its inception.
Periodically, the Company will consider the payment of dividends in light of the
Company's earnings, capital requirements, financial condition and other factors,
but there is no assurance that the Company will decide to pay dividends in the
future.
The Company is not currently subject to any restrictions which would limit its
ability to pay dividends on its common equity, providing that sufficient
earnings to pay said dividends, were available.
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Item 6. Management's Discussion and Analysis
The following discussion of the financial condition and results of operations of
the Company for its fiscal year ended December 31, 1999 should be read in
conjunction with the Financial Statements and the related Notes thereto included
under Item 7, "Financial Statements" located in this document. Operations since
inception have primarily included expenditures related to the organization of
the Company's proposed business ventures, research and the development its
prototype branded products and services.
Liquidity And Capital Resources
Since its inception, the Company has financed its operations primarily from
contributions from its principal stockholder and private placements with related
parties. For the periods ending December 31, 1998 and 1999, contributions from
its principal stockholder totaled $15,563 and $17,319 respectively. The Company
had $2,221 in cash as of December 31, 1999.
The Company's operating activities generated a net loss of ($17,353) and
($18,203) for the fiscal years ended December 31, 1998 and 1999 respectively.
Losses generated during these periods were due to administrative and operating
expenses exceeding revenue for the reported periods.
As a development stage company, the Company's products and services have not
been marketed and introduced into the market place and thus have not generated
sufficient revenues streams to offset administrative and operating expenses
through the Company's fiscal year ended December 31, 1999. During fiscal year
1999, the Company completed development on its current products and services
contemplated to be offered. During fiscal year 2000, the Company plans to
market and introduce its current branded products and services into the market
place.
For the fiscal year ended December 31, 1998 and 1999 respectively, the Company
used ($0) and ($0) net cash respectively for investing activities. As a
development stage company, the Company has not generated sufficient cash from
operations to initiate any investing activities. All of the Company's available
cash since inception has generally been utilized to pay administrative and
operating expense as incurred.
For the fiscal year ended December 31, 1998 and 1999, the Company generated a
net increase in cash of $1,015 and ($0) respectively from financing activities.
As a development stage company, the Company does not currently have any
significant cash reserves nor has it established any lines of credit or long
term borrowings as of December 31, 1999.
At December 31, 1999, the Company's level of cash reserves and working capital
was not sufficient to allow the Company to introduce its developed products and
services into the market place. During the second, third and fourth quarters of
fiscal year 2000, the Company intends to pursue lines of credit; short term
and/or long term borrowings necessary to fund its working capital requirements
and introduction of its branded products and services in to the consumer market
place.
As of the fiscal year ended December 31, 1999, the Company did not have any
material commitments for capital expenditures. During fiscal year 2000, the
Company anticipates making capital expenditures necessary to pursue and
consummate the acquisition of various operating entities as deemed suitable by
the Company. The Company anticipates that the capital necessary for its
acquisition initiatives shall be derived from short or long term borrowings.
Result of Operations
The Company is a development stage company whose branded products and services
have not been significantly introduced, advertised, promoted or established into
the market place as of the Company's fiscal year ended December 31, 1999. As
such, the Company has yet to generate any revenue streams. As such,
administrative and operating expenses have outpaced revenues resulting in net
losses of ($17,353) and ($18,203) for the Company's fiscal years ended December
31, 1998 and 1999 respectively.
It is the Company's opinion that at the event in which its products and services
are materially introduced, advertised, and distributed into the market place,
there shall be an increase in the Company's revenue and profitability. It is
the Company's objective to initiate a corporate mergers and acquisition program
which will allow the company to "buy in revenue".
12
<PAGE>
Item 7. Financial Statements and Supplementary Data
Index to Consolidated Financial Statements:
Page No.
--------
Independent Auditor's Report 14
Financial Statements 15
Consolidated Balance Sheets 15
Consolidated Statements of Operations 16
Consolidated Statement of Stockholder's Equity 17
Consolidated Statements of Cash Flows 18
Notes to Consolidated Financial Statements 19
13
<PAGE>
CITIZENS CAPITAL CORP.
(a development stage company)
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Citizens Capital Corp.
Dallas, Texas
We have audited the accompanying consolidated balance sheet of Citizens Capital
Corp. (a development stage company) as of December 31, 1999, and the related
consolidated statements of operations, changes in stockholders' equity (deficit)
and cash flows for the years ended December 31, 1999 and 1998 and the period
from inception (March 12, 1991) to December 31, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Citizens Capital Corp. as of
December 31, 1999, and the results of its operations and its cash flows for the
years ended December 31, 1999 and 1998 and the period from inception (March 12,
1991) to December 31, 1999 in conformity with generally accepted accounting
principles.
Hein + Associates LLP
Certified Public Accountants
Dallas, Texas
February 14, 2000
14
<PAGE>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED BALANCE SHEET
December 31, 1999
ASSETS
------
<TABLE>
<CAPTION>
<S> <C>
CURRENT ASSETS:
Cash $ 2,221
Prepaid expenses 1,000
=============
Total current assets 3,221
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $3,500 60
INTANGIBLE ASSETS, net 320
Total assets $ 3,601
=============
LIABILITIES AND STOCKHOLDERS' DEFICIT
=====================================
CURRENT LIABILITIES:
Accounts payable $ -
Credit card cash advances 3,800
Total current liabilities 3,800
=============
STOCKHOLDERS' DEFICIT:
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 48,805,285
Note receivable from ESOP (50,100,000)
Deficit accumulated during the development stage (110,484)
=============
Total stockholders' deficit (199)
Total liabilities and stockholders' deficit $ 3,601
=============
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Period from
Inception
(March 12, 1991)
Year Ended December 31, to
------------------------- -----------------
<S> <C> <C> <C>
1999 1998 December 31, 1999
================ ================= ================
SALES $ - $ 438 $ 438
COST OF SALES - 275 275
================ =================
GENERAL AND ADMINISTRATIVE EXPENSES 18,203 17,516 10,647
================ ================= ================
NET LOSS $ (18,203) $ (17,353) $ (110,484)
================ ================= ================
NET LOSS PER SHARE (basic and diluted) $ * $ *
================ =================
</TABLE>
* Less than $.01 per share
16
<PAGE>
CITIZENS CAPITAL CORP.
(a development stage company)
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Additional Note
Paid-in Receivable Accumulated
Capital From ESOP Deficit Totals
-------- --------- ---------- --------
Preferred Stock Common Stock
------------------ ----------------
Shares Amount Shares Amount
--------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common stock
issued founder
upon incorporation - $ - 300 $ 3 $ (3) $ - $ - $ -
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Common stock
issued founder
December 24,1993 - - 22,499,700 224,997 (224,997) - - -
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Preferred stock
issued November 1,
1994 1,000,000 1,000,000 - - (988,000) - - 12,000
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Contributions by
stockholder at
various dates prior
to 1997 - - - - 56,096 - - 56,096
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Cumulative net
loss through
December 31,
1996 - - - - - - (65,271) (65,271)
- --------------------- ========= ========== ========== =========== ============ ============= ========== =========
BALANCES,
December 31,
1996 1,000,000 1,000,000 22,500,000 225,000 (1,156,904) - (65,271) 2,825
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Common stock issued
for brand and service
marks
November 14, 1997 - - 3,000,000 30,000 (30,000) - - -
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Contributions
by stockholder
during 1997 - - - - 9,307 - - 9,307
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Net loss for the year - - - - - - (9,657) (9,657)
- --------------------- ========= ========== ========== =========== ============ ============= ========== =========
BALANCES,
December 31, 1997 1,000,000 1,000,000 25,500,000 255,000 (1,177,597) - (74,928) 2,475
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Common stock
issued to ESOP,
May 8, 1998 - - 15,000,000 150,000 49,950,000 (50,100,000) - -
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Contributions by
stockholder during
1998 - - - - 15,563 - - 15,563
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Net loss for the year - - - - - - (17,353) (17,353)
- --------------------- ========= ========== ========== =========== ============ ============= ========== =========
BALANCES,
December 31, 1998 1,000,000 1,000,000 40,500,000 405,000 48,787,966 (50,100,000) (92,281) 685
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Contributions by
stockholder during
1999 - - - - 17,319 - - 17,319
- --------------------- --------- ---------- ---------- ----------- ------------ ------------- ---------- ---------
Net loss for the year - - - - - - (18,203) (18,203)
- --------------------- ========= ========== ========== =========== ============ ============= ========== =========
BALANCES,
December 31, 1999 1,000,000 $1,000,000 40,500,000 $ 405,000 $48,805,285 $(50,100,000) $(110,484) $ (199)
- --------------------- ========= ========== ========== =========== ============ ============= ========== =========
</TABLE>
17
<PAGE>
CITIZENS CAPITAL CORP.
(a development stage company)
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period from
Inception
Year Ended December 31, (March 12, 1991) to
1999 1998 December 31, 1999
========================= ===================== ===================
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net loss $ (18,203) $ (17,353) $ (110,484)
========================= ===================== ===================
Adjustments to reconcile net loss to cash
used by operating activities:
Expenses paid by stockholder 17,319 15,563 93,460
Depreciation and amortization 290 790 3,580
Increase in prepaid expenses (1,000) - (1,000)
Increase (decrease) in accounts payable (1,000) 1,000 -
Increase in credit card cash advances 3,800 - 3,800
========================= ===================== ===================
Net cash (provided) used by operating activities 1,206 - (10,644)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of office equipment - - (3,560)
Payment for intangible assets - - (400)
========================= ===================== ===================
Net cash used by investing activities - - (3,960)
CASH FLOWS FROM FINANCING ACTIVITIES -
Sale of stock and contribution by stockholder - 1,015 16,285
========================= ===================== ===================
NET INCREASE IN CASH 1,206 1,015 2,221
CASH, beginning of period 1,015 - -
CASH, end of period $ 2,221 $ 1,015 $ 2,221
========================= ===================== ===================
</TABLE>
See accompanying notes to consolidated financial statements.
18
<PAGE>
CITIZENS CAPITAL CORP.
(a development stage company)
1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------------------------
Company Background
- -------------------
Citizens Capital Corp. (the "Company") is a development stage holding company
with plans 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 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 proposed business ventures.
During 1999, the Company registered with the United States Securities and
Exchange Commission, 39,500,000 shares of its Class A common stock for secondary
market trading. The 39,500,000 common shares include the 15,000,000 common
shares currently held by the Company's ESOP (see Note 4).
Principles of Consolidation
- -----------------------------
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany accounts and transactions have
been eliminated in consolidation.
Property and Equipment
- ------------------------
Property and equipment is carried at cost less accumulated depreciation.
Significant improvements and additions are capitalized. Maintenance and repair
costs are expensed as incurred. Depreciation is computed on the straight line
method over the useful lives of the assets, which range from five to seven
years. When property and equipment are retired or otherwise disposed of, the
related cost and accumulated depreciation are eliminated and any profit or loss
on disposition is reflected in income.
Intangible Assets
- ------------------
The Company, through its interest in Landrush Realty Corporation, owns the
registered trademark, distribution and exclusive marketing rights to The Texas
Home Equity ReFund(R), The Cash-Out Mortgage ReFinancer(R) and The Home Equity
Cashier(R) home equity product marks.
The Company, through its interest in Media Force Sports & Entertainment Inc,
owns the registered trademark, distribution and exclusive marketing rights to
the Black Financial-News(R) publication.
The Company, through its interest in SCOR Brands Inc., owns the registered
trademark, distribution and exclusive marketing rights to the SCOR(R) brand line
of athletic shoes and apparel.
The Company accounts for the value of the trademarked products and the
corresponding exclusive marketing and distribution rights based on the
registration costs, which totaled $400. This intangible asset is amortized on a
straight line basis over ten years.
Loss Per Share
- ----------------
Loss per share is calculated in accordance with Statement of Financial
Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share". Basic income
(loss) per share is computed based upon the weighted average number of common
shares outstanding during the period. Diluted income (loss) per share takes
common equivalent shares into consideration. However, common equivalent shares
are not considered if their effect is antidilutive. Common stock equivalents
consist of outstanding stock options and warrants. Common stock equivalents are
assumed to be exercised with the related proceeds used to repurchase outstanding
shares except when the effect would be antidilutive. Common equivalent shares
of the Company were antidilutive in all periods presented.
19
<PAGE>
CITIZENS CAPITAL CORP.
(a development stage company)
The weighted average number of shares outstanding used in the loss per share
computation was 40,500,000 and 35,212,500 for the years ended December 31, 1999
and 1998, respectively.
Income Taxes
- -------------
The Company accounts for income taxes under the liability method, which requires
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are
determined based on the difference between the financial statements and tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. The Company had deferred tax
assets of approximately $16,000 and $13,000 at December 31, 1999 and 1998,
respectively, resulting from a net operating loss carryforward (NOL) for tax
which were fully reserved. The Company had no material deferred tax
liabilities. The Company's NOL at December 31, 1999 was approximately $110,000
and it expires through the year 2019.
Statement of Cash Flows
- --------------------------
For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments purchased with an original maturity of three months or
less to be cash equivalents.
Use of Estimates
- ------------------
The preparation of the Company's consolidated financial statements in conformity
with generally accepted accounting principles requires the Company's management
to make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results could differ from
those estimates.
2. PLAN OF OPERATION FOR THE2000 FISCAL YEAR
-----------------------------------------------
The Company's plan of operation for the 2000 fiscal year is to: (1) market and
distribute the products and/or services developed by its three subsidiaries:
Landrush, Media Force and SCOR and (2) continue to evaluate and pursue suitable
mergers and/or acquisitions of existing operating entities. The Company's cash
requirements have been funded to date by its principal stockholder. The Company
anticipates approximately $400,000 of cash will be needed to fully implement the
start-up phase of its plans and cover working capital requirements over the next
year. The Company intends to attempt to borrow these funds from affiliates of
the Company and third party lenders. Should the Company be unable to borrow
these funds, it will be unable to implement its business plan. Regardless of
whether any funding is received, the Company's major stockholder has committed
to provide funding required to allow the Company to continue as a going concern.
3. CREDIT CARD CASH ADVANCES
----------------------------
The Company has a cash advance outstanding at December 31, 1999. This advance
bears interest at 18.4% per annum.
4. EMPLOYEE STOCK OWNERSHIP PLAN AND NOTE RECEIVABLE
-------------------------------------------------------
The Company has an Employees Stock Ownership Plan ("ESOP" or the "Plan"), which
covers all employees with at least a year of consecutive service that are not
covered by a collective bargaining agreement. The Plan provides for an
allocation of Company stock to each participant's account of the greater of 15%
or the maximum percentage allowable of participants' eligible compensation. No
shares have been allocated as of December 31, 1999 as there has been no
compensation to employees.
On May 11, 1998 the Company sold 15,000,000 shares of its Class A common stock
directly to the ESOP at $3.34 per share in exchange for a five year, 14.5%,
$50,100,000 promissory note. The promissory note was issued together with a
security agreement fully collateralized by 15,000,000 shares of the Company's
common stock held by the ESOP. The promissory note has a "liquidating call
provision" which may be invoked by the Company or the
20
<PAGE>
CITIZENS CAPITAL CORP.
(a development stage company)
noteholder. The liquidating call provision gives the Company or the noteholder
the "demand right" to request that up to 15,000,000 shares of Citizens Capital
Corp. common stock, held by the ESOP, be liquidated to pay down the outstanding
principal amount of the note and any accrued principal and interest thereof, any
time the common shares are selling in the public or private capital marketplace
at or above $5.00 per share. The initial face value of the promissory note has
been recorded in the stockholders' equity section of the accompanying balance
sheet.
5. STOCKHOLDERS' EQUITY
---------------------
Preferred Stock
- ----------------
On November 1, 1994, the Company issued 1,000,000 shares of its Class A, 7 1/4%,
$1.00 cumulative preferred stock. Each share of preferred stock includes a
warrant which entitles the holder to purchase one share of common stock at $0.01
per share.
The holders of the preferred stock are entitled to receive out of legally
available funds of the Company, dividends at an annual rate of $0.0725 per
share, payable quarterly in arrears, on a cumulative basis. Dividends on the
preferred stock have not been declared or paid and have not been accrued in the
accompanying financial statements because the Company has no surplus from which
dividends can legally be paid. Cumulative dividends in arrears as of December
31, 1999 are $386,664.
The preferred stock was initially scheduled to be repaid on December 31, 1999.
However, as permitted by the terms of the preferred stock, in excess of 66-2/3%
of the holders of the preferred stock elected to eliminate any repayment
requirement. The Company may, at its election, redeem the preferred stock in
whole, but not in part, at a 7-1/4% premium, so long as the cumulative dividends
have been declared and paid.
The Company has authorized, but unissued 4,000,000 shares of preferred stock
which may be issued in such series and preferences as determined by the
Company's board of directors.
Common Stock
- -------------
At December 31, 1996, the Company had 22,500,000 Class A, no par, $0.01 stated
value shares issued and outstanding.
On November 14, 1997, the Company issued 3,000,000 additional shares of its
Class A, no par, $0.01 stated value common stock, to three institutional
investors in exchange for the full conveyance of production, marketing,
distribution and trade rights to certain brand and service marks.
On May 3, 1998, the Company voted to split its shares of Class A common stock
then outstanding on a 3 for 1 basis. The aggregate number of Class A, no par
value common shares outstanding after the split were 25,500,000. All
information in the accompanying financial statements and notes is presented as
if the split occurred at the date of incorporation.
On May 8, 1998, the Company sold 15,000,000 shares of Class A, no par, $0.01
stated value common stock directly to its ESOP at $3.34 per share (see Note 4).
Stock Options
- --------------
Effective December 1, 1998, the Company adopted a stock option plan, which
provides for a maximum of 2,000,000 shares to be issued under the plan. The
Company granted options to four directors on December 1, 1998 to acquire a total
of 400,000 shares of common stock. The exercise price is $1.50 per share. The
options may be exercised based on the following schedule: 25% vest immediately,
25% vest after two years, 25% vest after three years, and 25% vest after four
years. No options had been exercised as of December 31, 1999. The Company has
estimated the fair value of the options to be immaterial at December 31, 1999.
21
<PAGE>
Item 8. Changes in and Disagreements with Accountants.
The Board of Directors selected Hein + Associates LLP as its independent
accountant for the audit of its financial statements for the fiscal years ending
December 31, 1999; and 1998 and the period from inception (March 12, 1991) to
December 31, 1999. Prior to selecting the independent accounting services of
Hein + Associates LLP, the Company did not have a previous independent
accountant. The Company has not had any disagreements with its current
independent accountant on any matters regarding accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
Item 9. Directors and Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
Identification of Directors
Management of the Company is vested in its Board of Directors and officers. The
directors are elected by the shareholders. The officers of the Company hold
office at the discretion of the Board of Directors. There currently are four
directors.
The table below lists the Company's current Directors. Each Director will serve
until the Company's next annual meeting of shareholders or until a successor
shall be elected and shall qualify. There are no current nominees to the
Company's Board of Directors.
21
<PAGE>
Item 8. Changes in and Disagreements with Accountants.
The Board of Directors selected Hein + Associates LLP as its independent
accountant for the audit of its financial statements for the fiscal years ending
December 31, 1999; and 1998 and the period from inception (March 12, 1991) to
December 31, 1999. Prior to selecting the independent accounting services of
Hein + Associates LLP, the Company did not have a previous independent
accountant. The Company has not had any disagreements with its current
independent accountant on any matters regarding accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
Item 9. Directors and Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
Identification of Directors
Management of the Company is vested in its Board of Directors and officers. The
directors are elected by the shareholders. The officers of the Company hold
office at the discretion of the Board of Directors. There currently are four
directors.
The table below lists the Company's current Directors. Each Director will serve
until the Company's next annual meeting of shareholders or until a successor
shall be elected and shall qualify. There are no current nominees to the
Company's Board of Directors.
Name Age Positions Held Term of Office
Billy D. Hawkins 36 D; CEO.; COB 8 years
Dwight Washington 34 D; CFO; Treasurer 2 year
Hubert H. Hawkins 67 D; V.P. Benefits; Secretary 2 year
Enos Harris 44 D; COO 2 year
(D)=Director
(CEO)=Chief Executive Officer
(COO)=Chief Operating Officer
(COB)=Chairman of the Board
(CFO)=Chief Financial Officer
Identification of Executive Officers
The table below lists the Company's current Executive Officers. Each Executive
Officer is chosen by the Company's Board of Directors and shall continue in
service as Officers until replaced or reassigned by said Board of Directors
Name Age Positions Held Term of Office
Billy D. Hawkins 36 D; CEO.; COB 8 years
Dwight Washington 34 D; CFO; Treasurer 2 years
Hubert H. Hawkins 67 D; V.P. Benefits; Secretary 2 years
Enos Harris 44 D; COO 2 years
Identification of Certain Significant Employees
Presently, the Company does not currently have any employees that are not
executive officers who are expected to make significant contributions to the
Company's business. As the Company enters new markets and expands its business
operations, it may add key personnel whose contributions it shall consider as
significant to meeting itsoverall contemplated business objectives.
Family Relationships
Billy D. Hawkins, a Director, Chief Executive Officer and Chairman of the Board
of the Company is the blood son of Hubert H. Hawkins, a Director and Secretary
of the Company.
22
<PAGE>
Enos Harris, a Director, and Chief Operating Officer of the Company is the first
cousin of Billy D. Hawkins, a Director, Chief Executive Officer and Chairman of
the Board of the Company. Mr. Harris is also the blood nephew of Hubert H.
Hawkins, a Director and Secretary of the Company.
Business Experience
Billy D. Hawkins, Chief Executive Officer-- Mr. Hawkins, 36, a director since
1991, is Chief Executive Officer and Chairman of the Board of Directors of the
Company. Mr. Hawkins founded and organized the Company in 1991. Since 1991,
Mr. Hawkins has had the lead role in the planning and development of the
Company's mergers and acquisition program. Prior to 1991, Mr. Hawkins was a
staff accountant with Mobil Oil Corporation in Dallas, Texas. Mr. Hawkins
attended Eastern New Mexico University where he received a bachelors degree in
finance 1986.
Dwight Washington, Chief Financial Officer--Mr. Washington, 34, a director since
1998, Mr. Washington intends to join the Company on a full time basis as Chief
Financial Officer and Treasurer in 1999. From 1994 to Present, Mr. Washington
serves as controller of Ross Aviation Inc. in Albuquerque, New Mexico. From 1992
to 1994, Mr. Washington served as Audit Senior at Arthur Anderson & Co., in
Albuquerque, New Mexico. For the period of 1989 thru 1992, Mr. Washington held
the positions of bank examiner and audit coordinator at Sunwest Bank in
Albuquerque, New Mexico and the position of junior auditor at Eastern New Mexico
University in 1987. Mr. Washington attended Eastern New Mexico University where
he received a bachelors degree in accounting in 1987 and attended the University
of Phoenix where he obtained his Masters of Business Administration in 1998.
Hubert H. Hawkins, Vice President of Benefits--Mr. Hawkins, 67, secretary and a
director since 1998, Mr. Hawkins intends to join the Company on a full time
basis as Vice President of Benefits in 1999. From 1979 to 1995, Mr. Hawkins
served as the director of personnel for the San Antonio Housing Authority in San
Antonio, Texas. Mr. Hawkins retired from the San Antonio Housing Authority in
January of 1995.
Enos Harris, Chief Operating Officer--Mr. Harris, 44, a director since 1998, Mr.
Harris is one of the Company's original investors and intends to join the
Company on a full time basis as an Operating Officer in 1999. From 1978 through
1998, Mr. Harris served as supervisor of up to 150 employees which included
clerks; carriers and route examiners for the United States Postal Service in
Houston, Texas. Prior to 1978, Mr. Harris attended San Jacinto College in
Pasadena, Texas from 1975 to 1976. From 1976 to 1978, Mr. Harris attended Texas
Southern University in Houston, Texas.
No person nominated nor serving in the role of director of the Company currently
holds any other directorship with any company with a class of securities
registered pursuant to section 12 of the Exchange Act of 1934 or any company
subject to the requirements of section 15(d) of said Act nor does any director
of the Company hold any directorship with any company registered as an
investment company under the Investment Company Act of 1940.
Involvement in Certain Legal Proceedings
(1) During the past five years, no petition under the federal bankruptcy laws or
any state insolvency law has been filed by or against any director, person
nominated to become a director or executive officer of the Company. Nor has any
receiver, fiscal agent or similar officer been appointed by a court for the
business or property of such person, or any partnership, corporation or business
association in which said person was a general partner or executive officer
within two years before the time of any such filings.
(2) During the past five years, no director, person nominated to become a
director or executive officer of the Company been convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding.
(3) During the past five years, no director, person nominated to become a
director or executive officer of the Company, the subject of any order,
judgment, or decree, not subsequently reversed, suspended or vacated by a court
of competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting him from the following activities:
(i) acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant or any other person regulated by the Commodity Futures Trading
Commission, or any associated person of any of the foregoing or as an investment
adviser, underwriter, broker or dealer in securities or as an affiliated person,
director or employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing any conduct or
practice in connection with such activity.
23
<PAGE>
(ii) no director, person nominated to become a director or executive officer
of the Company is the subject of any order, judgment, or decree, not
subsequently reversed, suspended or vacated by a court of competent
jurisdiction, permanently or temporarily enjoining him from, or otherwise
limiting him from engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or sale of any
security or commodity or in connection with any violation of Federal or State
securities laws or Federal commodities laws.
(4) During the past five years, no director, person nominated to become a
director or executive officer of the Company is the subject of any order,
judgment, or decree, not subsequently reversed, suspended or vacated by any
Federal or State authority barring, suspending or otherwise limiting said
persons for more than 60 days from engaging in any activity described in
paragraph (3)(i) of this section, or from being associated with persons engaged
in any such activity.
(5) During the past five years, no director, person nominated to become a
director or executive officer of the Company been found by a court of competent
jurisdiction in a civil action or by the Securities and Exchange Commission to
have violated any Federal or State securities law and no judgment in such civil
action or finding by the Securities and Exchange Commission been subsequently
reversed, suspended or vacated.
(6) During the past five years, no director, person nominated to become a
director or executive officer of the Company been found by a court of competent
jurisdiction in a civil action or by the Commodity Futures Trading Commission to
have violated any Federal commodities law, no judgment in such civil action or
finding by the Commodity Futures Trading Commission been subsequently reversed,
suspended or vacated.
Promoters and Control Persons
(1) Billy D. Hawkins, a Director, Chief Executive Officer and Chairman of the
Board of the Company is the only person of the Company who may be considered a
promoter and control person of the Company. During the past five years, Mr.
Hawkins has not and is not subject to any of the events which have been
enumerated in paragraphs (1) through (6) of the above section titled;
"Involvement in certain legal proceedings".
Item 10. Executive Compensation.
The following table sets forth all compensation paid or earned for services
rendered to the Company by its executive officers in all capacities during the
fiscal year ended December 31, 1999. No executive officer received total annual
salary, bonus, or other compensation in excess of $100,000 during the fiscal
year ended December 31, 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual compensation Long term compensation
Awards Payouts
Other Securities
annual Restricted underlying All other
Name and compensation stock options/ LTIP Compensations
principal position Year Salary($) Bonus ($) ($) award(s) SARs(#) Payouts ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CEO, Billy D. Hawkins 1999 $ 0.00(1) $ 0.00(1) $ 0.00(1) $ 0.00(1) 100,000(1) $ 0.00(1) $ 0.00(1)
CFO, Dwight Washington 1999 $ 0.00(2) $ 0.00(2) $ 0.00(2) $ 0.00(2) 100,000(2) $ 0.00(2) $ 0.00(2)
COO, Enos Harris 1999 $ 0.00(3) $ 0.00(3) $ 0.00(3) $ 0.00(3) 100,000(3) $ 0.00(3) $ 0.00(3)
V.P. Benefits,
Hubert H. Hawkins 1999 $ 0.00(4) $ 0.00(4) $ 0.00(4) $ 0.00(4) 100,000(4) $ 0.00(4) $ 0.00(4)
<FN>
(1) In order to conserve the Company's financial resources during the early stages of its growth and development, Billy D.
Hawkins elected to forgo any form of cash or non-cash salary or bonus as compensation for his role as the Company's Chief
Executive Officer for the fiscal year ended December 31, 1999.
(2) Mr. Washington did not receive any form of cash or non-cash salary or bonus as compensation during the Company's fiscal
year ended December 31, 1999. Mr. Washington in his role as Chief Financial Officer of the Company was granted an option to buy
100,000 shares of the Company's class A; common stock at $1.50 per share. Said option is for a period of four years beginning
December 31, 1998. No options have been exercised as of December 31, 1999.
(3) Mr. Harris did not receive any form of cash or non-cash salary or bonus as compensation during the Company's fiscal year
ended December 31, 1999. Mr. Harris in his role as Chief Operating Officer of the Company has an option to buy 100,000 shares
of the Company's class A; common stock at $1.50 per share. Unless or until extended, said option is for a period of four years
beginning December 31, 1998. No options have been exercised as of December 31, 1999.
(4) Mr. Hawkins did not receive any form of cash or non-cash salary or bonus as compensation during the Company's fiscal year
ended December 31, 1999. Mr. Hawkins in his role Vice President of Benefits of the Company has an option to buy 100,000 shares
of the Company's class A; common stock at $1.50 per share. Unless or until extended, said option is for a period of four years
beginning December 31, 1998. No options have been exercised as of December 31, 1999.
</TABLE>
24
<PAGE>
1998 Stock Option Plan
The Company's 1998 Stock Option Plan ("1998 Plan") is intended to serve as an
equity incentive program for management, qualified employees, non-employee
members of the Board of Directors, and independent advisors or consultants. The
1998 Plan became effective on December 1, 1998 upon adoption by the Board of
Directors, and was approved by shareholders at the March 1, 1999 annual
shareholders meeting. Under the 1998 Plan, the total number of shares of common
stock reserved for issuance is 2,000,000, which may be Incentive Stock Options
("ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, or non-qualified stock options.
The 1998 Plan provides participants with a four year vesting schedule. 25% of
the total options granted to participants may be vested immediately. 25% of the
total options granted to participants may be vested after 2 years. An
additional 25% of the total options granted to participants may be vested after
3 years. The final 25% of the total options granted to participants may be
vested after 4 years.
1998 ESOP Plan
The Company adopted an Employees Stock Ownership Plan ("ESOP" or the "Plan") on
May 1, 1998, which covers all employees with at least a year of consecutive
service that are not covered by a collective bargaining agreement. The purpose
of the Plan is to enable participating employees of the Company to share in the
development and growth of the Company and to provide participants with an
opportunity to build capital for their retirement, the Plan is designed to do so
without any deductions from the participants' paychecks and without any cash
investment by participants. The Plan provides for an allocation of Company
stock to each participant's account of the greater of 15% or the maximum
percentage allowable of participants' eligible compensation. Participants in
the Plan are vested after of three years of uninterrupted service with the
Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The total outstanding common stock of the Company as of December 31, 1999,
consists of 40,500,000 shares. All outstanding shares of common stock are
entitled to one vote per share.
Security Ownership of Certain Beneficial Owners
The following table sets forth as of December 31, 1999, each stockholder known
to the Company to beneficially own more than 5 percent of the Company's
outstanding shares of common stock.
<TABLE>
<CAPTION>
(1) Title of Class (2) Name and address of (3) Amount and nature (4) Percent of
beneficial owner of beneficial ownership class
<S> <C> <C> <C>
Common Stock The 3H Corporation 24,500,001(1) 60.5%
P.O. Box 671304
Dallas, Texas 75367
Common Stock Citizens Capital Corp. 15,000,000(2)(3) 37.0%
Employee Stock Ownership
Trust
P.O. Box 670406
Dallas, Texas 75367
<FN>
(1) The 3H Corporation directly owns 23,500,002 common shares of the Company and in its
role as the general partner of Brice Street Partners Ltd., has sole voting and
investment power over 999,999 additional common shares of the Company. Billy D.
Hawkins, Chief Executive Officer; Chairman of the Board and a Director of the Company,
has sole voting and investment control of The 3H Corporation. As a result, Mr. Hawkins
may be deemed to be the beneficial owner of the shares owned and/or controlled by The
3H Corporation.
(2) Billy D. Hawkins, Chief Executive Officer; Chairman of the Board and a Director of
the Company; Dwight Washington, a Director of the Company; and Hubert H. Hawkins, a
Director of the Company are members of the Citizens Capital Corp. Employee Stock
Ownership Plan Executive Committee. As a result, the Executive Committee consisting of
Mr. Hawkins; Mr. Washington and Mr. Hubert H. Hawkins may be deemed to have shared
investment power over the shares owned by the Citizens Capital Corp. Employee Stock
Ownership Trust. The address for each member of the Citizens Capital Corp. Employee
Stock Ownership Plan Executive Committee is: P. O. Box 670406, Dallas, Texas 75367.
(3) Pursuant to the trust agreement which governs the Citizens Capital Corp. Employee
Stock Ownership Trust, the trust has a duration of 10 years and expires November 11,
2007.
</TABLE>
25
<PAGE>
Security Ownership of Management
The following table sets forth certain information regarding the beneficial
ownership as of December 31, 1998, of the Company's common stock by (a) each
person known by the Company to be a beneficial owner of more than five percent
of the outstanding common stock of the Company, (b) each director of the
Company, and (c) all directors and executive officers of the Company as a group
(5 persons), owned beneficially 39,499,998 shares or 97.5% of the issued and
outstanding shares of common stock as set forth in the following table.
<TABLE>
<CAPTION>
(1) Title of Class (2)Name of (3) Amount and Nature (4) Percent of
Beneficial Owner of Beneficial Ownership Class
<S> <C> <C> <C>
Common Stock Billy D. Hawkins 24,500,001(1) 60.5%
Common Stock Dwight Washington 100,000(2) *
Common Stock Hubert H. Hawkins 100,000(3) *
Common Stock Enos Harris 100,000(4) *
Common Stock Directors and Executive 15,000,000 (5) 37.0%
Officers As A Group (5)
persons
<FN>
(*) Less than 1%
(1) The 3H Corporation directly owns 23,500,002 common shares and in its role as the
general partner of Brice Street Partners Ltd., has sole voting and investment power over
999,999 additional shares. Billy D. Hawkins, Chief Executive Officer; Chairman of the
Board and a Director of the Company, has sole voting and investment control over The 3H
Corporation. As a result, Mr. Hawkins may be deemed to be the beneficial owner of the
shares owned and/or controlled by both The 3H Corporation and Brice Street Partners Ltd
(2) Dwight Washington in his role as Chief Financial Officer of the Company has an
option to buy 100,000 shares of the Company's class A; common stock at $1.50 per share.
Unless or until extended, said option is for a period of four years beginning December
31, 1998. No options have been exercised as of December 31, 1999.
(3) Hubert H. Hawkins in his role as Vice President of Benefits of the Company has an
option to buy 100,000 shares of the Company's class A; common stock at $1.50 per share.
Unless or until extended, said option is for a period of four years beginning
December 31, 1998. No options have been exercised as of December 31, 1999.
(4) Enos Harris in his role as Chief Operating Officer of the Company has an option to
buy 100,000 shares of the Company's class A; common stock at $1.50 per share. Unless or
until extended, said option is for a period of four years beginning December 31, 1998.
No options have been exercised as of December 31, 1999.
(5) Billy D. Hawkins, Chief Executive Officer; Chairman of the Board and a Director of
the Company; Dwight Washington, a Director of the Company; and Hubert H. Hawkins, a
Director of the Company are members of the Citizens Capital Corp. Employee Stock
Ownership Plan Executive Committee. As a result, the Executive Committee consisting of
Mr. Hawkins; Mr. Washington and Mr. Hubert H. Hawkins may be deemed to have shared
investment power over the shares owned by the Citizens Capital Corp. Employee Stock
Ownership Trust. The address for each member of the Citizens Capital Corp. Employee
Stock Ownership Plan Executive Committee is: P. O. Box 670406, Dallas, Texas 75367.
</TABLE>
Changes in Control
The Company has no knowledge of any arrangements whereby its securities or those
of its parent, have been pledged, the subsequent operation of which, would
result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
Transactions with Management and Others
On May 8, 1998, the Company sold 15,000,000 shares of its common stock to its
Employee Stock Ownership Plan (ESOP) Trust, the Citizens Capital Corp. Employee
Stock Ownership Trust for $3.34 per share or $50,100,000.
Billy D. Hawkins, a director, Chief Executive Officer and Chairman of the Board
of the Company; Dwight Washington, a director and Chief Executive Officer of the
Company; and Hubert H. Hawkins, a director and Vice President of the Company
serve on the Executive Committee of the Citizens Capital Corp. Employee Stock
Ownership Trust. While neither Mr. Billy D. Hawkins; Mr. Dwight Washington; nor
Mr. Hubert H. Hawkins separately hold any interest in the trust's assets, Mr.
Billy D. Hawkins; Mr. Dwight Washington; and Mr. Hubert H. Hawkins may be said
to have shared investment power over said assets.
26
<PAGE>
Certain Business Relationships
For the Company's 1997; 1998 and 1999 fiscal years respectively, Billy D.
Hawkins, a director, Chief Executive Officer and Chairman of the Board of the
Company also served as Chief Executive Officer for the Company's three (3) 97%
owned subsidiaries: Landrush Realty Corporation; Media Force Sports &
Entertainment, Inc. and SCOR Brands IncMr. Hawkins also currently maintains the
role of Chairman of the Board for each of said subsidiaries.
Indebtedness of Management
None of the following has been nor are they currently indebted to the Company or
its subsidiaries for any amount:
1) no director or executive officer of the Company;
2) no nominee for election as a director of the Company;
3) no member of the immediate family of any of the persons specified in
paragraph (1) or (2) of this subsection;
4) no corporation or organization, other than the Company or its subsidiaries,
of which any of the persons specified in paragraph (1) or (2) of this subsection
is an executive officer or partner or is directly or indirectly, the beneficial
owner of ten percent or more of any class of equity securities;
5) Billy D. Hawkins, a director, Chief Executive Officer and Chairman of the
Board of the Company; Dwight Washington, a director and Chief Executive Officer
of the Company; and Hubert H. Hawkins, a director and Vice President of the
Company serve on the Executive Committee of the Citizens Capital Corp. Employee
Stock Ownership Trust.
On May 8, 1998, the Company sold 15,000,000 shares of its common stock to the
Citizens Capital Corp. Employee Stock Ownership Trust pursuant to its1998
Employee Stock Ownership Plan (ESOP), for $3.34 per share or $50,100,000.
As payment for the 15,000,000 common shares, the Citizens Capital Corp. Employee
Stock Ownership Trust has executed a 5 year, $50,100,000 promissory note bearing
an annual interest rate of fourteen and one-half percent (14.5%). Said
promissory note is secured by a security agreement collaterializing 15,000,000
shares of Citizens Capital Corp.'s common stock held by the Citizens Capital
Corp. Employee Stock Ownership Trust.
Transactions with Promoters
As the sole founder and original investor of the Company, Billy D. Hawkins, a
Director, Chief Executive Officer and Chairman of the Board of the Company is
the only person who may currently be considered a promoter of the Company.
As sole founder of the Company, Billy D. Hawkins held 7,833,334 shares of the
Company's common stock, through the The 3H Corporation, at fiscal year end
December 31, 1997. Pursuant to a (3) for (1) stock split by the Company on May
3, 1998, Billy D. Hawkins, through The 3H Corporation, holds 23,500,002 shares
of the Company's common stock.
For the Company's 1997 and 1998 fiscal years respectively, Billy D. Hawkins, a
director, Chief Executive Officer and Chairman of the Board of the Company also
served as Chief Executive Officer for each of the Company's three (3) 97% owned
subsidiaries: Landrush Realty Corporation; Media Force Sports & Entertainment,
Inc. and SCOR Brands IncMr. Hawkins maintained the role of Chairman of the
Board for each of the Company's (3) subsidiaries during fiscal year 1999.
On August 15, 1995, the Company sold the trademarks and exclusive marketing
rights to two (2) of its residential home equity brand products: The Texas Home
Equity ReFund(R) and The Cash-Out Mortgage ReFinancer(R) to Landrush in exchange
for 19,000,000 shares of Landrush common stock.
On June 13, 1997, the Company sold the trademark and exclusive marketing rights
to its third residential home equity brand product: The Home Equity Cashier(R)
to Landrush in exchange for 333,334 shares of Landrush common stock.
On November 20,, 1997, the Company sold the trademark, publishing and exclusive
marketing rights to its Black Financial~News(R) print publication to Media Force
in exchange for 19,333,334 shares of Media Force common stock.
On November 20, 1997, the Company sold the trademark and exclusive marketing
rights to its SCOR(R) athletic shoe and apparel logo to SCOR in exchange for
19,333,334 shares of SCOR common stock.
27
<PAGE>
Item. 13. Exhibits, List and Reports on Form 8-K.
(a) Exhibits.
See Index to Exhibits.
(b) Reports on Form 8-K.
Not applicable.
EXHIBIT INDEX
SEE "EXHIBIT INDEX" ON PAGE 29
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.
Citizens Capital Corp. By: /s/ Billy D. Hawkins
- ------------------------ -------------------------
(Registrant) Chief Executive Officer
Date:______________________________
28
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C> <C>
Exhibit No Description Page No.
- ---------- ----------------------------------------------- --------
3.1 Amended Articles of Incorporation *
3.2 By-Laws *
4.1 Instrument Defining The Rights of Shareholder *
10.1 1998 Employee Stock Ownership Plan *
10.2 1998 Stock Option Plan *
10.3 Citizens Capital Corp. Employee Stock Ownership **
Trust Promissory Note and Security Agreement
21.1 Subsidiaries of the Registrant 30
27.1 Financial Data Schedule 31
<FN>
(1) The Exhibit required hereof is hereby incorporated by reference to the same
Exhibit number to the Company's Registration Statement on Form 10-SB as filed
with the Securities and Exchange Commission on March 19, 1999, File No. 0-24344.
(2) The Exhibit required hereof is hereby incorporated by reference to the same
Exhibit number to the Company's amended Registration Statement on Form 10-SB/A
as filed with the Securities and Exchange Commission on July 14, 1999, File No.
0-24344.
</TABLE>
29
<PAGE>
Type: Exhibit-21.1
Description: Subsidiaries of the Registrant
Exhibit-21.1
Citizens Capital Corp. (the "Company" ) is principally a holding company which
acquires and/or develops those operating entities, assets and/or marketing
rights which provide the Company with an initial entry into new markets or serve
as complimentary additions to existing operations, assets and/or products.
The Company currently operates through the following three (3) 97% owned
subsidiaries:
Landrush Realty Corporation ("Landrush"); a Texas corporation, organized to
operate in home equity loan marketing; commercial and residential real estate
investment and development.
Media Force Sports & Entertainment Inc. ("Media Force"); a Texas corporation,
organized to operate in print, graphic, broadcast and entertainment media
production.
SCOR Brands Inc. ("SCOR"), a Texas corporation, organized to operate in the
design, marketing and distribution of branded athletic shoes and apparel.
30
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANYS
CONSOLIDATED FINANCIAL STATEMENTS CONSISTING OF ITS BALANCE SHEET; STATEMENT OF
OPERATIONS; STATEMENT OF STOCKHOLDERS EQUITY; AND STATEMENT OF CASH FLOWS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED
HEREIN.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2221
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3221
<PP&E> 60
<DEPRECIATION> 3500
<TOTAL-ASSETS> 3601
<CURRENT-LIABILITIES> 3800
<BONDS> 0
0
1000000
<COMMON> 405000
<OTHER-SE> (50100000)
<TOTAL-LIABILITY-AND-EQUITY> 3601
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (18203)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18203)
<EPS-BASIC> 0 <F1>
<EPS-DILUTED> 0 <F2>
<FN>
<F1> Less than $.01 per share
<F2> Less than $.01 per share
</TABLE>
