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, 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 of (IRS Employer
incorporation organization) Identification No.)
1223 E. Beltline Rd., Ste. 116, * DeSoto, 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 August 10,
2001: 48,022,500 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
Yes [ ] No [x]
1
INDEX TO FORM 10-QSB
Page No.
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PART I
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis 7
of Financial Conditions
PART II
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of 9
Securities Holders
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
2
PART I-FINANCIAL INFORMATION
The balance sheet as of June 30, 2001; statements of operations; statement of
cash flows for the second quarters ended June 30, 2001 and 2000 respectively and
the period from inception (March 12, 1991) to June 30, 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 June 30, 2001 and results of operations for the
second quarters ended June 30, 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, 2001 and 2000 located in
the Company's Form 10-KSB annual report filed with the Securities and Exchange
Commission on April 15, 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
Item 1. Financial Statements
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2001
ASSETS
------
CURRENT ASSETS -
Cash $ 10,735
Account Receivable 6,335
-------------
Total Current Assets 17,070
EQUIPMENT, net of accumulated depreciation of $7,059 27,447
OTHER ASSETS
Intangible Assets, net 320
Total Assets $ 44,837
-------------
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
CURRENT LIABILITIES -
Current portion of loans from stockholders $ 16,953
Accounts payable and accrued liabilities 42,424
Credit card cash advances 38,418
Advances from stockholder 8,270
-------------
Total Current Liabilities 106,065
Loans from stockholders, net of current portion 14,361
Total Liabilities 120,426
-------------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 stated value, 5,000,000 shares
authorized; 1,000,000 shares issued and outstanding 1,000,000
Common stock, no par value, 100,000,000 shares authorized;
48,022,500 shares issued and outstanding ($.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 (242,722)
-------------
Total stockholders' deficit (75,589)
-------------
Total liabilities and stockholders' deficit $ 44,837
=============
4
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND THE PERIOD FROM INCEPTION (MARCH 12, 1991) TO
JUNE 30, 2001
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED Period from
-------------------------- -------------------------- March 12, 1991
JUNE 30 JUNE 30 to
-------------------------- -------------------------- ---------------
2001 2000 2001 2000 June 30, 2001
------------ ------------ ------------ ------------ ---------------
SALES 17,564 $ 9,374 40,817 $ 9,374 $ 103,343
COST OF SALES 4,027 1,577 8,451 1,577 22,322
------------ ------------ ------------ ------------ ---------------
13,537 7,797 32,366 7,797 81,021
GENERAL AND ADMINISTRATIVE EXPENSES 26,073 32,813 77,370 36,146 323,743
------------ ------------ ------------ ------------ ---------------
NET LOSS $ (12,536) $ (25,016) $ (45,004) $ (28,349) $ (242,722)
============ ============ ============ ============ ===============
NET LOSS PER SHARE (BASIC AND DILUTED) $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------
Weighted Average Shares 43,022,500 40,500,000 42,185,000 40,500,000
============ ============ ============ ============
5
CITIZENS CAPITAL CORP.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the SIX Months Ended JUNE 30, 2001 and 2000
AND THE PERIOD FROM INCEPTION(MARCH 12, 1991) TO
JUNE 30, 2001
(Unaudited)
Period from
SIX MONTHS ENDED March 12, 1991
JUNE 30, to
----------------------- -------------
2001 2000 JUNE 30, 2001
---------- ----------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (45,004) $ (28,349) $ (242,722)
Adjustments to reconcile net loss to cash used by
operating activities:
Expenses paid by stockholder -- -- 95,083
Depreciation and amortization -- -- 7,197
Change in Credit Cards advances -- -- 38,418
Services paid for with stock and options 25,125 -- 55,225
Change in accounts receivable (2,848) (4,300) (6,335)
Change in accounts payable & sales tax 28,485 5,378 42,424
---------- ----------- -------------
Net cash (used by) provided by 5,758 (27,271) (10,710)
operating activities
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 --
Sale of stock and contribution by stockholder -- 2,604 16,825
Loan from shareholders 4,600 -- 31,314
Stockholders advances -- -- 8,270
---------- ----------- -------------
Net cash provided by financing activities 4,600 57,198 56,409
NET INCREASE (DECREASE) IN CASH 10,358 (1,077) 10,735
CASH, beginning of period 377 2,221 -
---------- ----------- -------------
CASH, end of period $ 10,735 $ 1,144 $ 10,735
========== =========== =============
6
CITIZENS CAPITAL CORP.
(a development stage company)
Notes to Consolidated Financial Statements
(Unaudited)
1. Unaudited Information
--------------------------
The consolidated balance sheet as of June 30, 2001 and the consolidated
statements of operations for the six month period ended June 30, 2001 and 2000
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, 2001
and the results of operations for the six month period ended June 30, 2001 and
2000 respectively.
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, 2001
REVENUES. Revenue of $17,564 for the second quarter of 2001 compares to $9,374
for the second quarter of 2000. During the second quarter end 2000, the
Company acquired and integrated Taylor Printing and Graphics into the newly
formed Media Force Signs Graphics & Media (MFSG&M) division of its Media Force
Sports & Entertainment, Inc. subsidiary effective June 1, 2000. The increase in
revenue during the second quarter end 2001 were a result of (MFSG&M) owning and
operating Taylor Printing & Graphics for a longer period of time then the
period ended June 30, 2000.
During the remainder of fiscal year 2001, the Company intends to seek
opportunities to expand (MFSG&M) by adding additional retail locations and
acquiring other media products and services companies.
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. (SCOR) subsidiary anticipates moving further into the production and
distribution 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. SCOR brand products are distributed through it SCOR Store retail
outlets. SCOR .intends to strategically open additional company owned and
licensed SCOR Store retail outlets in key markets.
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.
7
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.
GROSS PROFIT. Gross profit of $13,537 for the second quarter of 2001 compares
to $7,797 for the second quarter of 2000. The increase in gross profit for the
second quarter of 2001 was attributable to increased revenue generated as the
result of MFSG&M owning and operating Taylor Printing & Graphics for a longer
period of time then the period ended June 30, 2000.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expenses of $77,370 for the second quarter of 2001 compares to
$36,146 for the second quarter of 2000. The increase in selling, general and
administrative expenses primarily reflects the increase in general expenses
associated with the operation of it's MFSG&M unit subsequent to the Company's
acquisition and integration of Taylor Printing & Graphics during the second
quarter of 2000. For the remainder of its 2001 fiscal year, the Company expects
selling, general and administrative expenses to increase as it expands its
current operations and 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 2001 nor for the second quarter of 2000.
NET INCOME (LOSS). A net loss of $45,004 on revenue of $40,817 for the
second quarter of 2001 compares to a net loss of $28,349 on revenue of $9,374
for the second quarter of 2000. Although an increase in revenue, the net loss
reported by the Company for the second quarter of 2001 is attributable to an
increase of general and administrative expenses from its MFSG&M unit subsequent
to the integration of Taylor Printing & Graphics which was acquired during the
second quarter of 2000.
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 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, as well as, the capital markets in the amounts of $415,000; $200,000
and $750,000 respectively for each of its three subsidiaries.
8
PLAN OF OPERATION
The Company's plan of operation for the remainder of its 2001 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
None
Item 6. Exhibits and Reports on Form 8-K
None
EXHIBIT INDEX
SEE "EXHIBIT INDEX" ON PAGE 10
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 16, 2001
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.
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No Exhibits
[THE REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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