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 June 30, 2000.
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ____________ to ___________.
Commission file number: 0-29830
Citizens Capital Corp.
(Name of Small Business Issuer as specified in its charter)
Texas 75-2368452
(State or other jurisdiction of (IRS Employer
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 August 10,
2000: 40,500,000 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
Yes [ ] No [x]
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INDEX TO FORM 10-QSB
Page No.
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PART I
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 8
Item 4. Submission of Matters to a Vote of 8
Securities Holders
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 9
2
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PART I-FINANCIAL INFORMATION
The balance sheet as of June 30, 2000; statements of operations; statement of
cash flows for the second quarters ended June 30, 2000 and 1999 respectively and
the period from inception (March 12, 1991) to June 30, 2000 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 June 30, 2000 and results of operations for the
second quarters ended June 30, 2000 and 1999. 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, 1999 and 1998 located in
the Company's Form 10-KSB annual report filed with the Securities and Exchange
Commission on March 30, 2000.
INDEX TO FINANCIAL STATEMENTS
Page No.
--------
Consolidated Balance Sheets 4
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
3
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<TABLE>
<CAPTION>
Item 1. Financial Statements
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2000
ASSETS
------
CURRENT ASSETS -
<S> <C>
Cash $ 1,144
Account Receivable 4,300
-------------
Total current assets 5,444
EQUIPMENT, net of accumulated depreciation of $3,500 31,064
OTHER ASSETS
Intangible Assets, net 320
-------------
Total other assets 320
Total Assets $ 36,828
-------------
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
CURRENT LIABILITIES -
Accounts payable $ 4,798
Credit card cash advances 3,800
Sales tax payable 580
-------------
Total current liabilities 9,178
LONG TERM LIABILITIES
Notes Payable 54,594
Total Liabilities $ 63,772
-------------
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 48,805,285
Note receivable from ESOP (50,100,000)
Deficit accumulated during the development stage (138,833)
-------------
Total stockholders' equity (26,944)
-------------
Total liabilities and stockholders' equity $ 36,828
=============
</TABLE>
4
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<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the SIX Months Ended JUNE 30, 2000 and 1999
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
JUNE 30, 2000
(Unaudited)
THREE Months Ended SIX Months Ended
------------------ ---------------- Period from
June 30 June 30 March 12, 1991 to
------- ------- -----------------
2000 1999 2000 1999 March 31, 2000
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
SALES $ 9,374 $ 0 $ 9,374 $ 0 $ 9,812
COST OF SALES 1,577 0 1,577 0 1,852
------------ ------------ ------------ ------------ ---------------
7,797 0 7,797 0 7,960
GENERAL AND 32,813 5,717 36,146 5,556 146,793
------------ ------------ ------------ ------------ ---------------
ADMINISTRATIVE EXPENSES
NET LOSS $ (25,016) $ (5,717) $ (28,349) $ (5,556) $ (138,833)
============ ============ ============ ============ ===============
NET LOSS PER SHARE (BASIC AND DILUTED) $ -- $ -- $ -- $ --
Weighted Average Shares 40,500,000 40,500,000 40,500,000 40,500,000
============ ============ ============ ============ ===============
</TABLE>
5
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<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the SIX Months Ended JUNE 30, 2000 and 1999
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
JUNE 30, 2000
(Unaudited)
Period from
SIX months Ended JUNE 30, March 12, 1991 to
------------------------- -----------------
2000 1999 JUNE 30, 2000
------------ ----------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (28,349 ) $(5,556) $ (138,833)
=================
Adjustments to reconcile net loss to cash used by
operating activities:
Expenses paid by stockholder 0 3,693 94,460
Depreciation and amortization 0 98 3,580
Increase (Decrease) in Credit Cards advances 0 0 3,800
Increase (Decrease) in Prepaid Expenses 0 0 (1,000)
Increase (Decrease) in accounts receivable (4,300) 0 (4,300)
Increase (Decrease) in payable 5,378 750 5,378
------------ ----------- -----------------
Net cash used by operating activities 27,271 (1,015) (37,915)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Equipment and other assets (31,004) - (34,564)
Payment for intangible assets - - (400)
------------ ----------- -----------------
Net cash used by investing activities (31,004) - (34,964)
CASH FLOWS FROM FINANCING ACTIVITIES -
Notes payable 54,594 - 54,594
Sale of stock and contribution by stockholder 2,604 3,350 19,429
------------ ----------- -----------------
Net cash provided by financing activities 57,198 3,350 74,023
NET INCREASE (DECREASE) IN CASH (1,077) 2,335 1,144
CASH, beginning of period 2,221 1,015 0
------------ ----------- -----------------
CASH, end of period $ 1,144 $ 3,350 $ 1,144
============ =========== =================
</TABLE>
6
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CITIZENS CAPITAL CORP.
(a development stage company)
Notes to Consolidated Financial Statements
(Unaudited)
1. Unaudited Information
--------------------------
The consolidated balance sheet as of June 30, 2000 and the consolidated
statements of operations for the six month period ended June 30, 2000 and 1999
respectively 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 consolidated financial position of the Company as of June 30, 2000
and the results of operations for the six month period ended June 30, 2000 and
1999 respectively.
On June 1, 2000, the Company acquired the operating assets of DeSoto, Texas
based Taylor Printing & Graphics which was integrated into the newly formed
Media Force Signs Graphics & Media division of its Media Force Sports &
Entertainment, Inc. subsidiary. The financial consideration for the purchase
of Taylor Printing & Graphics was $31,004 cash. The Company funded the $31,004
cash purchase price from $1,004 cash on hand; the proceeds of a 3 year, 11.5%,
$25,000 loan borrowed by its Landrush Realty Corporation subsidiary and a 2
year, 8.5%, $5,000 loan borrowed from its President, Billy D. Hawkins.
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) commercial and
residential real estate investment and development; 2) commercial printing and
publishing; 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
Six Months Ended June 30, 2000
REVENUES. Revenue of $9,374 for the second quarter of 2000 compares to $0 for
the second quarter of 1999. During the second quarter end 2000, the Company
acquired and integrated Taylor Printing and Graphics into the newly formed Media
Force Signs Graphics & Media division of its Media Force Sports & Entertainment,
Inc. subsidiary effective June 1, 2000. The increase in revenue for the second
quarter end 2000 was due entirely to the revenue which was generated by Taylor
Printing and Graphics subsequent to being acquired by the Company.
During the remainder of fiscal year 2000, the Company intends to cause the
addition of sign and other media products and services to its Media Force Signs
Graphics and Media division. Moreover, the Company intends to open and/or
acquire other locations to be designated as Media Force Signs Graphics & Media
retail outlets.
The Company has completed primary development of its initial products and
services and is currently preparing said products and services for production
and entry into their respective markets. The Company, through its SCOR Brands,
Inc. subsidiary anticipates moving into initial production of its SCOR Brand
line of athletic footwear and apparel. 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 may provide the Company with complementary additions to its existing
operations, assets, products and/or services.
7
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The Company believes that the initial introduction of its developed products and
services into the market place will establish and increase its ability to
generate revenue. In addition, the Company believes that its strategy of
pursuing the continued purchase of revenue streams through the merger and
acquisition process and/or the creation of various joint ventures will allow the
Company to accelerate the rate in which it generates increased revenue.
In addition to introducing its own products and services into their respective
markets, the Company intends to utilize the remainder of its 2000 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 $7,797 for the second quarter of 2000 compares to
$0 for the second quarter of 1999. The increase in gross profit for the second
quarter of 2000 was attributable entirely to gross profit generated by Taylor
Printing & Graphics subsequent to its acquisition by the Company on June 1,
2000. The lack of gross profit for the comparable period in 1999 was a result
of the Company's products and services not having been introduced into their
respective markets, as such, the Company did not report any gross profit for
the respective period.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expenses of $36,146 for the second quarter of 2000 compares to
$5,556 for the second quarter of 1999. The increase in selling, general and
administrative expenses primarily reflects the increase in general expenses
associated with the Company's acquisition and integration of Taylor Printing &
Graphics during the period. As the Company introduces its products and services
into the market place and hires additional personnel during the remainder of its
2000 fiscal year, the Company expects its selling, general and administrative
expenses to increase. In addition, for the remainder of its 2000 fiscal year,
the Company expects selling, general and administrative expenses may also
increase as it continues its ongoing identification, evaluation and pursuit of
suitable merger, acquisition and/or joint venture candidates.
OTHER INCOME (EXPENSES). The Company did not generate any other items of income
or expense for the second quarter of 2000 nor for the second quarter of 1999.
NET INCOME (LOSS). A net loss of $28,349 on revenue of $9,374 for the second
quarter of 2000 compares to a net loss of $5,556 on revenue of $0 for the second
quarter of 1999. The net loss reported by the Company for the second quarter of
2000 is attributable to an increase of both operational and general
administrative expenses resulting from the acquisition of Taylor Printing &
Graphics as compared to the second quarter of 1999.
Liquidity And Capital Resources
To continue its plan of operation for the remainder of its 2000 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
$100,000 and $100,000 to hire management, general administration, marketing and
sales personnel for Landrush and Media Force respectively and $550,00,000 in
order to initiate production of its SCOR Brand line of athletic footwear and
apparel. In order to fund the continuance of its operations, the Company
expects to pursue working capital lines of credit of $100,000 for itself and
$100,000 each for Landrush; Media Force and SCOR respectively.
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 pursue loans from affiliates of the Company and/or third party
lenders in the amounts of $415,000; $200,000 and $750,000 respectively for each
of its three subsidiaries.
8
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Plan of Operation
The Company's plan of operation for the remainder of its 2000 fiscal year is to:
(1) produce, promote, market and 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
Item 5. Other Information
As an initial entry into internet based web site design, hosting, video and
audio broadcast, the Company entered into a joint venture with Ormond Beach,
Florida based Far Reach Technologies, Inc. The joint venture activities shall be
operated through the formation of Citi Host Broadcasting, Inc., the joint
venture corporation. In contribution to the joint venture, Far Reach
Technologies, Inc. or its subsidiaries, divisions and/or affiliates shall
contribute consultant, technical, programming, initial equipment, fixes and
upgrade support in exchange for 1,500,000 shares of Citizens Capital Corp. stock
and a 20% percent common equity interest in Citi Host Broadcasting, Inc.
In contribution to the joint venture, the Company or its subsidiaries, divisions
and/or affiliates shall contribute overall strategy, marketing and sales
planning, project management, sales staff, initial paid in capitalization of
$5,000,000 in Citizens Capital Corp. stock valued to market at the time of
issuance in exchange for an 80% percent common equity interest in Citi Host
Broadcasting, IncUpon consummation and full execution of the joint venture
transaction between the Company and Far Reach Technologies, Inc., Citi Host
Broadcasting shall be a majority owned subsidiary of the Company.
The Company anticipates consummation and full execution of the joint venture to
occur sometime doing the third or fourth quarter of fiscal year 2000.
Item 6. Exhibits and Reports on Form 8-K
None
EXHIBIT INDEX
SEE "EXHIBIT INDEX" ON PAGE 11
9
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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: August 10, 2000
By:
-------------------------
Chief Executive Officer
Citizens Capital Corp. By: /s/ Billy D. Hawkins
------------------------ -------------------------
(Registrant) Chief Executive Officer
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EXHIBIT INDEX
Exhibit No Description Page No.
---------- ----------- -------
27.1 Financial Data Schedule 12
27.2 Financial Data Schedule 13
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