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, 2001.
[ ] 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 (IRS Employer Identification No.)
of incorporation organization)
1223 E. Beltline Rd., Suite 116, Dallas, Texas 75115* 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 11, 2001:
48,022,500 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
Yes [ ] No [x]
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
PART I-FINANCIAL INFORMATION
The balance sheet as of March 31, 2001; statements of operations; statement of
cash flows for the first quarters ended March 31, 2001 and 2000 respectively and
the period from inception (March 12, 1991) to March 31, 2001 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, 2001 and results of operations for the
first quarter ended March 31, 2001 and 2000. 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, 2000 and 1999 located in
the Company's Form 10-KSB annual report filed with the Securities and Exchange
Commission on April 15, 2001.
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
Item 1. Financial Statements
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
AS OF March 31, 2001
ASSETS
------
CURRENT ASSETS:
Cash $ 192
Accounts receivable 3,179
-------------
Total current assets 3,371
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $7,059 27,447
INTANGIBLE ASSETS, net 320
-------------
Total assets $ 31,138
=============
LIABILITIES AND STOCKHOLDERS DEFICIT
CURRENT LIABILITIES:
Current portion of loans from stockholders $ 16,953
Accounts payable and accrued liabilities 16,189
Credit card cash advances 38,418
Advances from stockholder 8,270
-------------
Total current liabilities 79,830
LOANS FROM STOCKHOLDERS, net of current portion 14,361
STOCKHOLDERS' DEFICIT:
Preferred stock, $1.00 stated value, 5,000,000 shares authorized; 1,000,000 shares
issued and outstanding 1,000,000
Common stock, no par value, 100,000,000 shares authorized; 48,022,500 shares issued
and outstanding ($.01 stated value) 480,225
Additional paid-in capital 48,836,908
Stock held by subsidiary (5,000,000 common shares) (50,000)
Note receivable from ESOP (50,100,000)
Deficit accumulated during the development stage (230,186)
-------------
Total stockholders' deficit (63,053)
-------------
Total liabilities and stockholders' deficit $ 31,138
=============
4
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the THREE Months Ended march 31, 2001 and 2000
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
march 31, 2001
(Unaudited)
THREE Months Ended
--------------------------
March 31,
--------- Period from
2001 2000 March 12, 1991 to
------------ ------------ March 31, 2001
SALES $ 23,253 $ 0 $ 85,779
COST OF SALES 4,424 0 18,295
------------ ------------ ----------------
18,829 0 67,484
GENERAL AND ADMINISTRATIVE EXPENSES 51,297 3,333 297,670
------------ ------------ ----------------
NET LOSS $ (32,468) $ (3,333) $ (230,186)
============ ============ ================
NET LOSS PER SHARE (BASIC AND DILUTED) $ -- $ --
Weighted Average Shares 41,347,500 40,500,000
============ ============
5
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the THREE Months Ended march 31, 2001 and 2000
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
march 31, 2001
(Unaudited)
THREE MONTHS ENDED MARCH 31, Period from
---------------------------- March 12, 1991 to
2001 2000 March 31, 2001
------------- ------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (32,468) $ (3,333) $ (230,186)
==================
Adjustments to reconcile net loss to cash used by
operating activities:
Expenses paid by stockholder - - 95,083
Services paid for with stock and options 25,125 - 55,225
Depreciation and amortization - - 7,197
Increase in accounts receivable 308 - (3,179)
Increase (Decrease) in Prepaid Expenses - - -
Increase (Decrease) in accounts payable 2,250 - 16,189
Increase in credit card advance - - 38,418
Net cash used by operating activities (4,785) (3,333) (21,253)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office equipment - - (34,564)
Payment for intangible assets - - (400)
------------- ------------- ------------------
Net cash used by investing activities - - (34,964)
CASH FLOWS FROM FINANCING ACTIVITIES -
Sale of stock and contribution by stockholder - 1,126 16,825
Loan from shareholders 4,600 - 31,314
Stockholder advances - - 8,270
Net cash used by financing activities 4,600 1,126 56,409
NET INCREASE (DECREASE) IN CASH (185) (2,207) 192
CASH, beginning of period 377 2,221 -
------------- ------------- ------------------
CASH, end of period $ 192 $ 14 $ 192
============= ============= ==================
6
Citizens Capital Corp.
(a development stage company)
Notes to Consolidated Financial Statements
(Unaudited)
1. Unaudited Information
--------------------------
The consolidated balance sheet as of March 31, 2001 and the consolidated
statements of operations for the three month periods ended March 31, 2001 and
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
consolidated financial position of the Company as of March 31, 2001 and the
results of operations for the three months ended March 31, 2001 and 2000.
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 is engaged in commercial printing. 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) media sales and print 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.
During fiscal year 2001, it is the Company's objective to pursue opportunities
to strategically expand its commercial printing operations by adding additional
locations.
The Company has completed development of its SCOR Brand footwear products and
expects to introduce said products into the consumer marketplace during fiscal
year 2001. The Company has placed orders for initial product inventories of
$1,622,135 to be delivered during fiscal year 2001.
Results of Operations
Three Months Ended March 31, 2001
REVENUES. Revenue of $23,253 for the first quarter of 2001 compares to $0 for
the first quarter of 2000. For the first quarter end 2000, the Company's
products and services had not been introduced into their respective markets. As
such, the Company generated no revenue for this period. The Company's
commercial printing operations, acquired June 1, 2000, was primarily responsible
for revenues generated for the quarter ended March 31, 2001. 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.
In addition to introducing its own products and services into their respective
markets, the Company intends to utilize the remainder of its 2001 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
GROSS PROFIT. Gross profit of $18,829 the first quarter of 2001 compares to $0
for the first quarter of 2000. The Company's commercial printing operations,
acquired June 1, 2000, was primarily responsible for gross profit generated for
the quarter ended March 31, 2001. The lack of gross profit for the comparative
period ended March 31, 2000 is attributable to a the lack of revenue and cost of
revenue generated for the period. For the first quarter ended 2000, 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 period.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expenses of $51,297 for the first quarter of 2001 compares to
$3,333 for the first quarter of 2000. The increase in selling, general and
administrative expenses for the period ended March 31, 2001 primarily reflects
the general expenses associated with the Company's acquisition, integration and
operation of its commercial printing operations, acquired June 1, 2000. As the
Company introduces its products and services into the market place during the
remainder of its 2001 fiscal year, the Company expects its selling, general and
administrative cost shall increase. In addition, for the remainder of its 2001
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 2001 nor the first quarter of 2000.
NET INCOME (LOSS). A net loss of ($32,468) on revenue of $23,253 for the first
quarter of 2001 compares to a net loss of ($3,333) on revenue of $0 for the
first quarter ended March 31, 2000. The net loss generated for the first
quarter ended March 31, 2001 is due to an increase in general and administrative
expenses associated with the Company's acquisition, integration and operation of
its commercial printing operations, acquired June 1, 2000. The net loss
reported by the Company for the period ended March 31, 2000 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 2001 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 consummate trade finance obligations during fiscal year
2001 of approximately $1,600,000 related to the production of initial footwear
inventories associated with its SCOR unit. The Company expects to incur
additional capital obligations of $100,000 and $100,000 to hire management,
general administration, marketing and sales personnel for its Media Force and
SCOR units respectively. In order to fund the continuance of its operations and
further the development of its respective units, the Company expects to pursue
working capital lines of credit of $50,000 for itself and $100,000 each for
Landrush; Media Force and SCOR respectively.
The Company expects to initiate and/or expand the products and services now
offered or 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 now offered or proposed
to be offered. 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; $100,000 and
$1,622,000 respectively for each of its three subsidiaries. The Company itself
or its subsidiary units separately may seek to raise capital through the sale of
equity in a private placement or public offering.
8
Plan of Operation
The Company's plan of operation for the remainder of its 2001 fiscal year is to:
(1) introduce its branded footwear products into the consumer marketplace
through its SCOR unit and to expand the commercial printing and media operations
of its Media Force unit (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
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 17, 2001
By:
-----------------------
Chief Executive Officer
Citizens Capital Corp. By: /s/ Billy D. Hawkins
------------------------ -----------------------
(Registrant) Chief Executive Officer
[THE REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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EXHIBIT INDEX
Exhibit No. Description Page No.
----------- ----------- -------
No Exhibits Filed
10