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 March 31, 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 incorporation organization) (IRS Employer
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 May 5, 2000:
40,500,000 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
Yes [ ] No [x]
<PAGE>
INDEX TO FORM 10-QSB
Page No.
--------
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
<PAGE>
PART I-FINANCIAL INFORMATION
The balance sheet as of March 31, 2000; statements of operations; statement of
cash flows for the first quarters ended March 31, 2000 and 1999 respectively and
the period from inception (March 12, 1991) to March 31, 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 March 31, 2000 and results of operations for the
first quarter ended March 31, 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
<PAGE>
Item 1. Financial Statements
<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
AS OF March 31, 2000
ASSETS
------
<S> <C>
CURRENT ASSETS -
Cash $ 14
Prepaid Expenses 1,000
-------------
Total current assets 1,014
OFFICE EQUIPMENT, net of accumulated depreciation of $3,500 60
OTHER ASSETS
Intangible Assets, net 320
-------------
Total Assets $ 1,394
-------------
LIABILITIES AND STOCKHOLDER'S EQUITY
- ------------------------------------------------------------------
CURRENT LIABILITIES -
Accounts payable $ 0
Credit card cash advances 3,800
Total Current Liabilities 3,800
Total Liabilities _$__3,800
-------------
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 (113,817)
-------------
Total stockholders'equity (2,406)
-------------
Total liabilities and stockholders' equity $ 1,394
=============
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the THREE Months Ended march 31, 1999 and 1998
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
march 31, 2000
(Unaudited)
THREE Months Ended
march 31, Period from
-------------------------- March 12, 1991 to
2000 1999 March 31, 2000
------------ ------------ ----------------
<S> <C> <C> <C>
SALES $ 0 $ 0 $ 438
COST OF SALES 0 0 275
------------ ------------ ----------------
0 0 163
GENERAL AND ADMINISTRATIVE EXPENSES 3,333 5,556 113,398
------------ ------------ ----------------
NET LOSS $ (3,333) $ (5,556) $ (113,817)
============ ============ ================
NET LOSS PER SHARE (BASIC AND DILUTED) $ -- $ --
Weighted Average Shares 40,500,000 40,500,000
============ ============
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the THREE Months Ended march 31, 2000 and 1999
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
march 31, 1999
(Unaudited)
three months
Ended march 31, Period from
------------------ March 12, 1991 to
2000 1999 March 31, 2000
-------- -------- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,333) $(5,556) $ (113,817)
==================
Adjustments to reconcile net loss to cash used by
operating activities:
Expenses paid by stockholder 0 3,693 94,000
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)
0Increase (Decrease) in accounts payable 0 750 0
-------- -------- ------------------
Net cash used by operating activities (3,333) (1,015) (13,437)
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 1,126 3,350 17,411
-------- -------- ------------------
NET INCREASE (DECREASE) IN CASH (2,207) 2,335 14
CASH, beginning of period 2,221 1,015 0
-------- -------- ------------------
CASH, end of period $ 14 $ 3,350 $ 14
======== ======== ==================
</TABLE>
6
<PAGE>
------
Citizens Capital Corp.
(a development stage company)
Notes to Consolidated Financial Statements
(Unaudited)
1. Unaudited Information
- --------------------------
The consolidated balance sheet as of March 31, 2000 and the consolidated
statements of operations for the three month periods ended March 31, 2000 and
1999 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 March 31, 2000 and the
results of operations for the three months ended March 31, 2000 and 1999.
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
Citizens Capital Corp. (the "Company") is a development stage, acquisition
oriented, holding company whose objectives are to acquire and/or develop
operating entities, assets and/or marketing rights which provide the Company
with an initial entry into new markets or serve as complementary additions to
existing operations, assets and/or products.
Currently, the Company's plans contemplate operating and taking acquisition
initiatives in the following three market segments: 1) residential mortgage
loan marketing, commercial and residential real estate investment and
development; 2) news print publishing and 3) the design, marketing and
distribution of branded athletic shoes and apparel, through its three 97% owned
subsidiaries: Landrush Realty Corporation ("Landrush"); Media Force Sports &
Entertainment, Inc. ("Media Force"); and SCOR Brands, Inc. ("SCOR"). Operations
since inception have primarily included expenditures related to development of
the Company's planned business ventures.
Results of Operations
Three Months Ended March 31, 2000
REVENUES. Revenue of $0 for the first quarter of 2000 compares to $0 for the
first quarter of 1999. For the first quarter end 2000 and 1999 respectively,
the Company's products and services were not introduced into their respective
markets. As such, the Company generated no revenue for this period. The Company
has completed primary development of its initial products and services and is
currently preparing said products and services for entry into their respective
markets. 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.
While the Company did not generate revenue for the comparative periods reported,
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 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 establishes and generates 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.
7
<PAGE>
GROSS PROFIT. Gross profit of $0 for the first quarter of 2000 compares to $0
for the first quarter of 1999. The lack of gross profit for the comparative
periods is attributable to a the lack of revenue and cost of revenue generated
for said periods. For the first quarter end 2000 and 1999 respectively, the
Company's products and services were not introduced into their respective
markets, as such, the Company did not report any gross profit for the respective
periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expenses of $3,333 for the first quarter of 2000 compares to
$5,556 for the first quarter of 1999. The decrease in selling, general and
administrative expenses reflects a reduction in the general expenses associated
with the Company's operations for the period. As the Company introduces its
products and services into the market place during the remainder of its 2000
fiscal year, the Company expects its selling, general and administrative cost
shall increase. In addition, for the remainder of its 2000 fiscal year, the
Company expects selling, general and administrative cost shall 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 first quarter of 2000 nor the first quarter of 1999.
NET INCOME (LOSS). A net loss of $3,333 on revenue of $0 for the first quarter
of 2000 compares to a net loss of $5,556 on revenue of $0 for the first quarter
of 1999. The net loss reported by the Company for the attributable periods is
due to a lack of revenue generated while general administrative expenses
associated with operations remained constant.
Liquidity And Capital Resources
To continue its plan of operation for the remainder of its 2009 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; $100,000 and $300,000 to hire management, general administration,
marketing and sales personnel for each of Landrush; Media Force and SCOR
respectively. 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.
Plan of Operation
The Company's plan of operation for the remainder of its 2000 fiscal year is to:
(1) introduce into the consumer marketplace the products and/or services
proposed by its three subsidiaries: Landrush, Media Force and SCOR and (2)
continue to identify, evaluate and pursue suitable merger and/or acquisition of
those operating, income producing entities which offer products and/or services
similar to, or the same as, those proposed by the Company.
8
<PAGE>
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
None
Item 6. Exhibits and Reports on Form 8-K
None
EXHIBIT INDEX
SEE "EXHIBIT INDEX" ON PAGE 11
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: May 8, 2000
By: _________________
Chief Executive Officer
Citizens Capital Corp.
- ------------------------
(Registrant) By: /s/ Billy D. Hawkins
-------------------------
Chief Executive Officer
[THE REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
9
<PAGE>
EXHIBIT INDEX
Exhibit No Description Page No.
---------- ----------- -------
27.1 Financial Data Schedule 12
27.2 Financial Data Schedule 13
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 14
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14
<PP&E> 60
<DEPRECIATION> 0
<TOTAL-ASSETS> 1394
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
1000000
<COMMON> 405000
<OTHER-SE> (50100000)
<TOTAL-LIABILITY-AND-EQUITY> 1394
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3333
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (3333)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3333)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 3350
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3350
<PP&E> 222
<DEPRECIATION> 0
<TOTAL-ASSETS> 3922
<CURRENT-LIABILITIES> 1750
<BONDS> 0
0
1000000
<COMMON> 405000
<OTHER-SE> (50100000)
<TOTAL-LIABILITY-AND-EQUITY> 3922
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5556
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (5556)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5556)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
