U. S. SECURITIES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly year ended September 30, 2007
| o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
For the transition period from ___________ to __________
Commission file number: 000-25261
BANCORP INTERNATIONAL GROUP, INC.
(Name of small business issuer in its Charter)
NEVADA | | 88-0339817 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
3126 South Boulevard, Suite 264
Edmond, Oklahoma 73013
(Address of principal executive offices)
(405) 313-5535
(Issuer’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o No x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
CLASS | | OUTSTANDING |
Common Stock Par value $0.001 per share | | As of November 27, 2007, 1,075,084,637 shares of the issuer’s common stock, $.0001 par value, were outstanding. See the discussion set forth in this report under the Heading “Management’s Discussion and Analysis or Plan or Operation - Overview” and “Litigation Proceedings” for information regarding the issuer’s outstanding common stock. |
Transitional Small Business Disclosure Format: Yes o No x
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Our financial statements presented in this report were prepared and included in this report in accordance with Regulation S-X and Regulation S-B and appear in this report beginning on page F-1.
Item 2. Management’s Discussion and Analysis or Plan of Operation.
The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.
Throughout this report the first personal plural pronoun in the nominative case form “we” and its objective case form “us”, its possessive and the intensive case forms “our” and “ourselves” and its reflexive form “ourselves” refer collectively to Bancorp International Group, Inc., its executive officers and directors.
Cautionary Statement Relating to Forward Looking Information
We have included some forward-looking statements in this section and other places in this report regarding our expectations. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, levels of activity, performance or achievements, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Some of these forward-looking statements can be identified by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategies that involve risks and uncertainties. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future operating results or of our future financial condition, or state other “forward-looking” information.
We believe it is important to discuss our expectations; however, it must be recognized that events may occur in the future over which we have no control and which we are not accurately able to predict. Readers are cautioned to consider the specific business risk factors described under the caption “Risk Factors” appearing under “Item 1. Description of Business” of our Annual Report on Form 10-KSB filed with the United States Securities and Exchange Commission on May 1, 2007, and not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date of this report. We undertake no obligation to publicly revise forward-looking statements to reflect events or circumstances that may arise after the date of this report.
Overview
N.E.C. Properties, Inc. (“NEC”) was incorporated on September 16, 1995, under the laws in the State of Nevada. NEC was organized as a blank check company with no operations or plan of business. On September 30, 1995, NEC had 25,000 shares at no par value authorized and 18,600 shares outstanding, which were issued for $1,860 in cash. On November 19,1998, the amended and restated Articles of Incorporation were filed with the Secretary of State of Nevada that increased NEC’s authorized common shares from 25,000 to 25,000,000, and established a par value of $.001 per share. In November 1998, the NEC stockholders approved two forward stock splits. The first was a 100 for 1 split increasing the number of the outstanding common shares to 1,860,000 and the second was a 1.77 for 1 stock split resulting in 3,292,200 common shares outstanding.
On November 10, 1999, NEC acquired all of the outstanding stock of March Indy International, Inc. (“March”), in exchange for 7,706,575 shares of NEC (the “Share Exchange”). March was incorporated in Delaware on November 24, 1998 (“inception”). For accounting purposes, the transaction was accounted for as a reverse acquisition under the purchase method for business combinations, and accordingly the transaction was treated as a recapitalization of March, with March having acquired NEC.
On June 17,2000, March declared a one-for-three reverse stock split, effective September 26, 2000. This reverse stock split reduced the number of our outstanding common stock shares from 12,090,234 to 4,030,078.
From the Share Exchange through September 30, 2000, we were in the preliminary stages of engaging in the business of designing, building and racing cars for Formula One, Cart and Indy competition both in the United States and abroad. We also planned to develop an internet website to offer and sell merchandise products related to our racing efforts. In October 2000, because of our inability to successfully organize an Indy car race team and our failure to compete in the Indianapolis 500, we discontinued our racing and related promotional activities.
In 2001, we changed our name from March to Bancorp International Group, Inc.
In September 2005, we entered into a non-binding joint venture agreement with an oil export concern pursuant to which we would acquire rights to sell and market the oil and natural gas production from the petroleum reserves of Papua, New Guinea. The conditions to this joint venture were not satisfied by the other party, and the prospective joint venture did not become effective.
On August 19, 2005, our Board of Directors approved and adopted the Certificate of Designation Preferences and Right of Preferred Stock (“Certificate of Designation”). The Certificate of Designation sets forth the preferences and rights of our 15,000,000 authorized shares of preferred stock, $.0001 par value, designated as the Series A Convertible Preferred Stock (“Series A Preferred Stock”).
On August 19, 2005, our stockholders voted to amend our Articles of Incorporation to increase the number of authorized shares of common stock from 25,000,000 at a par value of $.001 to 500,000,000 at a par value of $.0001. In a second amendment on August 19, 2005, effective January 6, 2006, our stockholders approved another amendment to our Articles of Incorporation that increased the number of our authorized shares of common stock from 500,000,000 at $.0001 par value to 2,000,000,000 at $.0001 par value.
On January 11, 2006, in accordance with a Settlement Agreement relating to a lawsuit brought by us against certain parties, the Company issued 269,773,000 shares of the Company’s common stock. The lawsuit and resulting Settlement Agreement are discussed under “Legal Proceedings.” These shares were issued in accordance with the registration exemption afforded under Section 3(a)(10) of the Securities Act of 1933.
In June 2006, we entered into a letter of intent with a Midwestern oil company in effort to enable us to acquire the working interest in producing wells and proven non-developed reserves. The conditions to the letter of intent were not satisfied by the oil company, and the letter of intent was abandoned.
As of September 30, 2007, we have no operations. However, we currently desire to pursue oil and gas exploration and development opportunities outside the United States, particularly in Papua New Guinea. We believe that any such undertaking (and the undertaking of any other significant business opportunity) is necessarily contingent upon the prior final determination of the number of shares our common stock that are outstanding.
There are currently 525,035,229 shares of our common stock validly issued and outstanding. As described in Part II, Item 1. “Legal Proceedings,” we were initially aware of approximately 243,842,000 additional shares of our common stock that we believe were wrongfully issued. We have also identified 306,207,408 shares of common stock that are currently held in brokerage accounts, which shares may be in addition to the shares noted above. Based on the foregoing, we estimate that a total of 1,075,084,637 shares are outstanding, whether validly issued or invalidly issued, comprised of 525,035,229 validly issued shares, 243,842,000 invalidly shares identified previously by us, and 306,207,408 additional invalidly issued shares held by brokerage firms on behalf of various beneficial owners. If our continued investigations reveal additional shares or reveal that the number of such shares is less than described above, we will report such conclusions by filing an appropriate Current Report on Form 8-K.
After consideration of various means to resolve the issues of the invalidly issued shares, we currently intend to undertake a reverse stock split of our common stock. If undertaken, we intend to base the reverse stock split on a ratio that would reduce the number of our outstanding shares of our common stock, whether validly or invalidly issued, to approximately 5,000,000 shares. Such action, if undertaken and completed, would also result in the reduction of the number of our shareholders. Following the reverse stock split, if undertaken and completed, we intend to recognize all then outstanding shares of our common stock as validly issued and outstanding.
Because we intend to recognize the 1,075,084,637 shares of our common stock described above in the proposed reverse stock split, the 243,842,000 invalidly shares identified previously by us and 306,207,408 additional invalidly issued shares held by brokerage firms on behalf of various beneficial owners are assumed to be outstanding for purposes of this report.
In connection with our desire to pursue energy exploration and development opportunities, we intend to change our name to Energy Source, Inc. to reflect our current business intent.
In order to undertake the contemplated reverse stock split and our name change, the Board of Directors intends to call a meeting of our shareholders as soon as practicable following the date that the Company becomes current in its reporting obligations under the Securities Act of 1934, which requires us to file this report, along with any other current reports on Form 8-K that may be required.
Litigation Regarding Common Stock Certificates
We filed a lawsuit on April 11, 2007, against approximately 1,500 purported shareholders alleging that they hold improperly issued stock certificates. A primary reason this litigation was pursued was to finally determine the number of shares of our common stock that should be recognized as outstanding. However, we dismissed this litigation without prejudice in May 2007, because the litigation was becoming cost-prohibitive. See “Legal Proceedings – Stock Certificate Litigation” for a discussion of the lawsuit.
Employees
As of the date of this report, we have one employee, Thomas Megas, our Chief Executive Officer and President, who does not receive any form of compensation or remuneration for his services.
Going Concern
As indicated in the notes to the financial statements included in this report, the financial statements have been prepared assuming that we will continue as a going concern. In the year ended December 31, 2006, we incurred a net loss of approximately $364,000. In addition, at December 31, 2006 and 2005, we had working capital deficiencies of approximately $288,000 and $267,000, respectively. These conditions raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary in the event we are unable to continue as a going concern.
Our budgeted overhead expenses for the 12 months ending December 31, 2007, are as follows:
Expenditures: | | Per Month | | 12 Months | |
| Travel expenses | | $ | 3,000 | | $ | 36,000 | |
| Hotel accommodations | | | 2,500 | | | 30,000 | |
| Rent and office expenses | | | 1,000 | | | 12,000 | |
| Legal expenses | | | 5,000 | | | 60,000 | |
| Accounting expenses | | | 7,500 | | | 90,000 | |
| Utilities and telephone | | | 3,000 | | | 36,000 | |
| Transfer agent | | | 625 | | | 7,500 | |
| Office supplies and equipment | | | 1,042 | | | 12,500 | |
| Miscellaneous expenses | | | 3,500 | | | 42,000 | |
| Total Administrative Expenditures | | $ | 27,167 | | $ | 326,000 | |
Except as set forth in the table above, we do not have any capital commitments. Because we do not have any assets, we are unable to fund such expenses without obtaining additional funding. We have not formalized any plans for obtaining the necessary additional capital resources and funding, and have not obtained any related commitments. We anticipate however that, on a short-term basis, Thomas Megas (our controlling shareholder and Chief Executive Officer and one of our directors) will provide the necessary capital resources and funding through loans. Unless the necessary capital resources are obtained, we may unable to proceed with our intentions to pursue oil and gas exploration and development opportunities.
Item 3. Controls and Procedures.
As a result and based upon his evaluation as of the end of the period covered by this report, our Chief Executive Officer and Acting Chief Financial Officer concluded that our disclosure controls and procedures are not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Pino Litigation
In August 2005, management became aware of the unauthorized issuance of approximately 243,842,000 shares of our common stock (the “Wrongfully Issued Shares”) to various entities and individuals for services and gifts, whereupon these entities and individuals attempted to sell the Wrongfully Issued Shares in the open market. Our current officers and directors had no relationship with the entities and individuals that issued the Wrongfully Issued Shares.
In September 2005, we filed a civil action (the “Pino Litigation”) in the District Court of Oklahoma County, Oklahoma, styled Bancorp International Group, Inc. v. Mario A. Pino, an individual, Sam Deeb, an individual, Jean Carlos Medina, an individual, Charles Weller, an individual, Barkev Kibarian, an individual, Felica Morales, an individual, Clearstock, Inc., a Texas corporation, DealFlo, L.L.C., a New York Limited Liability Company, The Grace Trust, a foreign trust, Global Consulting Group, a Maryland corporation, Intelligent Message Distributors, a Nevada corporation, and Wall Street Group, L.L.C., a Arizona limited liability company (the “Defendants”), Case No. CJ-2005-7459 (the “Civil Litigation”), seeking the return of the Wrongfully Issued Shares and the Defendants’ receipt of proceeds from the sale of those shares.
In the Civil Litigation we alleged that Mr. Pino individually and through various affiliated entities and co-conspirators, including the Wall Street Group, L.L.C., prepared or possessed 20 or more common stock certificates purportedly representing 235,000,000 shares of our common stock, the previously referred to Wrongfully Issued Shares, that were distributed to various individuals and entities, including the other Defendants. We could not determine if, in addition to the 235,000,000 shares, any additional shares were wrongfully issued.
Capital Growth Financial, L.L.C. and JH Darbie & Co., holders of our common stock, intervened in the Civil Litigation (the “Interveners”) and alleged that we negligently hired the Defendants and negligently supervised their actions and activities, and asserted Oklahoma and federal securities fraud and failure-to-register claims against the Defendants and us.
In conjunction with the Civil Litigation, we reached an agreement with JH Darbie & Co., under which we delivered 25,025,000 common stock shares to JH Darbie & Co. to be held pending settlement or conclusion of the Civil Litigation. These shares were delivered to JH Darbie & Co. to satisfy the requirements of Depository Trust Company (“DTC”) until common stock shares eligible to be resold without restriction could be delivered by JH Darbie & Co. to cover its short position in our common stock. Furthermore, JH Darbie & Co. placed in trust $72,500 to be used to pay the costs incurred by us in the litigation.
On January 11, 2006, the Court entered an Order Approving Settlement Agreement (the “Order”). As a result of issuance of the Order, a settlement agreement (the “Settlement Agreement”) became binding upon the Company and the Defendants Mario Pino, Barkev Kibarian, Juan Carlos Medina, Wall Street Group, L.L.C., Clearstock, Inc., Sam Deeb (“Deeb”), Global Consulting Group., DealFlo, L.L.C., and Intelligent Message Distributors (the “Settling Defendants”) and the Interveners with an effective date of December 8, 2005.
In accordance with the Settlement Agreement, our claims against the Settling Defendants and the claims of the Settling Defendants against us were resolved by the exchange of releases of claims, a release of the Wrongfully Issued Shares and payments to us in the aggregate sum of $171,546 from funds held at Capital Growth Financial, L.L.C. and the further agreement to pay an additional $277,093 by Capital Growth. Furthermore, the claims of the Interveners against us were released for the issuance of 25,025,000 shares of our common stock to JH Darbie & Co. and 219,723,000 shares of our common stock to Capital Growth Financial, L.L.C. for an aggregate sum of 244,748,000 common stock shares (the “Newly Issued Shares”). These shares were required to be deposited with DTC by JH Darbie & Co. and Capital Growth Financial, L.L.C. in satisfaction of their short positions with companies through which securities purchase and sale transactions are cleared on behalf of JH Darbie & Co. and Capital Growth Financial, L.L.C. The Newly Issued Shares were issued in accordance with the registration exemption afforded under Section 3(a)(10) of the Securities Act.
Defendants Pino, Medina, Kibarian, Global Consulting Group, Intelligent Message Distributors and Wall Street Group, L.L.C. agreed to indemnify and hold harmless the Company against all actions, suits, proceedings, demands, and assessments brought by any past, present or future holder of our common stock in connection with the Settlement Agreement and our various claims settled in the Settlement Agreement and any associated judgments, attorney’s fees, costs and expenses.
In addition, the Settlement Agreement Deeb, Intelligent Message Distributors, and Wall Street Group/Mario Pino acknowledged that they owed to BCIT approximately $16,500, $36,800, and $73,000, respectively, and agreed to pay such amounts to the Company as partial consideration for the issuance of the Newly Issued Shares to JH Darbie & Co. and Capital Growth Financial, L.L.C. Each of Deeb, Intelligent Message Distributors and Wall Street Group, L.L.C./Mario Pino have failed to pay such amounts, and the Company is pursuing collection of the same.
The Defendants, Grace Trust, Charles Weller, and Felica Morales (“Non-Settling Defendants”), did not execute the settlement agreement and accordingly did not settle the claims asserted against them in the Civil Litigation. In February 2006, we received judgments against the Non-Settling Defendants, other than The Grace Trust, and are currently pursuing collection of these judgments.
Stock Certificate Litigation
We filed a lawsuit (the “Stock Certificate Litigation”) on April 11, 2007, against approximately 1,500 shareholders alleging that they hold invalid stock certificates that were wrongfully issued and distributed by Mr. Pino and others, which represent the remaining outstanding Wrongfully Issued Shares that we are currently able to identify from the Pino Litigation. The style of the lawsuit is Bancorp International Group, Inc. v. Michael W. Cannan, et al., Case No. CJ-2007-3181, District Court of Oklahoma County, State of Oklahoma. The lawsuit requested the court to rule that the stock certificates held by the defendants representing the Wrongfully Issued Shares be declared void and that we be awarded damages and attorney’s fees and costs in connection with the Stock Certificate Litigation. It was our intent that the Stock Certificate Litigation would determine which certificates and related shares of common stock are valid and which are not valid. In May 2007, we dismissed the Stock Certificate Litigation without prejudice to the Company. The Board of Director determined that continuing the Stock Certificate Litigation was becoming cost-prohibitive.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the nine months ended September 30, 2007, we did not sell any unregistered shares of our common stock.
Item 3. Defaults Upon Senior Securities.
We are not in default on any senior securities.
Item 4. Submission of Matters to a Vote of Securities Holders. During the nine months ended September 30, 2007, no matters were submitted to the holder of our common stock shares, through the solicitation of proxies or otherwise.
Item 5. Other Information.
We do not have any information required to be disclosed in a repot on Form 8-K during the three months ended September 30, 2007 that has not been previously reported on Form 8-K.
Exhibit | | Description |
| 31 | | Rule 13a - 14(a)/15d - 14(a) Certification, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| | | |
| 32 | | Certification of the Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | BANCORP INTERNATIONAL GROUP, INC. |
| | |
| DATE: December 12, 2007 | /s/ THOMAS MEGAS |
| | Thomas Megas |
| | Chief Executive Officer |
| | Acting Chief Financial Officer |
Index to Consolidated Financial Statements
| Report of Independent Registered Public Accounting Firm - for the three months Ended June 30, 2007 and 2006 | | | F-1 | |
| | | | | |
| Balance Sheets | | | F-2 | |
| | | | | |
| Statements of Operations | | | F-3 | |
| | | | | |
| Statements of Shareholders' Equity (Deficit) | | | F-4 | |
| | | | | |
| Statements of Cash Flows | | | F-5 | |
| | | | | |
| Notes to Financial Statements | | | F-6-8 | |
LIEBERMAN & ASSOCIATES P.A.
CERTIFIED PUBLIC ACCOUNTANT
800 E. Cypress Creek Rd. Suite 200 Ft. Lauderdale, FL 33334 | Office (954) 491-0411 | Fax (954) 491-0211 |
| Auditing | Accounting | Taxes |
| Condominium Accounting | Financial Management | Consulting |
The Board of Directors
Bancorp International Group, Inc.
3126 South Blvd.
Suite 264
Edmond, OK 73013
Dear Board of Directors,
We have reviewed the accompanying Balance Sheet of Bancorp International Group, Inc. as of September 30, 2007, and September 30, 2006 and the related statements of income, stockholders’ equity and comprehensive income and cash flows for the six months then ended. These financial statements are the responsibility of the company’s management.
We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquires of persons responsible for the financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
/s/ Lieberman & Associates
Lieberman & Associates P.A.
Ft. Lauderdale, Florida
December 4, 2007
| |
American Institute of Certified Public Accountants ▪ Public Company Accounting Oversite Board Florida Institute of Certified Public Accountants ▪ Certified Fraud Examiners ▪ American Institute of Certified Bookkeepers |
Bancorp International Group, Inc.
Statement of Financial Position
As of September 30,
(Unaudited)
| | | 2007 | | 2006 | |
Assets | | | | | | | |
| | | | | | | | |
| Cash | | $ | 495 | | $ | 495 | |
| Subscription Receivable | | | 267,549 | | | 267,549 | |
Total Assets | | $ | 268,044 | | $ | 268,044 | |
Liabilities and Stockholders' Equity | | | | | | | |
| | | | | | | | |
| Accounts Payable and Accrued Expenses | | $ | 197,975 | | $ | 287,574 | |
| Current portion of Long Term Debt | | | 212,013 | | | 203,816 | |
Total Liabilities | | | 409,988 | | | 491,390 | |
| | | | | | | | |
Stockholders' Equity | | | | | | | |
| | | | | | | | |
| Preferred Stock Series A $.0001 par value, 15,000,000 share authorized, issued and outstanding at September 30, 2007 and September 30, 2006. | | | 1,500 | | | 1,500 | |
| | | | | | | | |
| Common Stock, $.0001 par value, 2,000,000,000 shares authorized, 1,075,084,637 shares issued and outstanding at September 30, 2007 and September 30, 2006. | | | 107,509 | | | 107,509 | |
| Treasury Common Stock | | | 4 | | | - | |
| Additional Paid in Capital | | | 4,617,515 | | | 4,617,519 | |
| Accumulated Deficit | | | (4,868,472 | ) | | (4,949,874 | ) |
Total Stockholders' Equity | | | (141,944 | ) | | (223,346 | ) |
| | | | | | | | |
Total Liabilities and Stockholders' Equity | | $ | 268,044 | | $ | 268,044 | |
The attached notes are an integral part of these financial statements
Bancorp International Group, Inc.
Statement of Operations
For the Nine Months Ended September 30,
(Unaudited)
| | | Quarter to date | | Year to date | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | | |
REVENUES | | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | |
COST OF GOOD SOLD | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | |
GROSS PROFIT | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | |
EXPENSES: | | | | | | | | | | | | | |
| Accounting Fees | | | 7,500 | | | - | | | 7,500 | | | 113,000 | |
| Legal Fees | | | 3,197 | | | - | | | 3,197 | | | 65,374 | |
| Consulting Fees | | | - | | | - | | | - | | | 70,389 | |
| Transfer Agent Fees | | | - | | | - | | | - | | | 4,000 | |
| Interest Expense | | | 1,752 | | | 1,686 | | | 5,258 | | | 5,125 | |
| Lodging and Travel | | | - | | | - | | | - | | | 52,656 | |
| Office Expense | | | - | | | - | | | - | | | 53,019 | |
Total Expenses | | | 12,449 | | | 1,686 | | | 15,955 | | | 363,562 | |
| | | | | | | | | | | | | | |
NET INCOME/(LOSS) | | $ | (12,449 | ) | $ | (1,686 | ) | $ | (15,955 | ) | $ | (363,562 | ) |
| | | | | | | | | | | | | | |
Earnings per Share: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic | | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | |
*Fully Diluted | | $ | - | | $ | - | | $ | - | | $ | - | |
* The Fully Diluted Earnings Per Share for the quarter ended September 30, 2007
The attached notes are an integral part of these financial statements
Bancorp International Group, Inc.
Statement of Changes in Cash Flow
For the Nine Months Ended September 30,
(Unaudited)
| | | 2007 | | 2006 | |
| | | | | | |
Cash flow from operating activities: | | | | | | | |
| Net Income / (Loss) | | $ | (15,955 | ) | $ | (358,805 | ) |
| | | | | | | | |
Non Cash Adjustments: | | | | | | | |
| Prior Year adjustment for interest | | | - | | | (47,292 | ) |
| Prior Year adjustments for unrecorded liabilities | | | - | | | (41,323 | ) |
| | | | | | | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | |
| Increase in Subscription Receivable | | | - | | | (267,549 | ) |
| Increase in Accounts Payable and Accrued Expenses | | | 7,759 | | | 38,663 | |
Net cash flow provided from operating activities: | | | (8,197 | ) | | (676,306 | ) |
| | | | | | | | |
Cash flow from investing activities: | | | | | | | |
| Stockholder Loans | | | 8,197 | | | (256,377 | ) |
Net cash flow used in investing activities: | | | 8,197 | | | (256,377 | ) |
| | | | | | | | |
Cash flow from financing activities: | | | | | | | |
| Proceeds from sale of common stock | | | - | | | 933,811 | |
Net cash flow from financing activities: | | | - | | | 933,811 | |
| | | | | | | | |
| Net increase in cash flow | | | - | | | 1,128 | |
| Beginning Cash | | | 495 | | | - | |
Ending Cash | | $ | 495 | | $ | 1,128 | |
| | | | | | | | |
Supplemental disclosures by financing activities: | | | | | | | |
| Interest Expense | | | 5,258 | | | 1,729 | |
The attached notes are an integral part of these financial statements
Bancorp International Group, Inc.
Statement of Stockholders' Deficit
For the Nine Months Ended September 30, 2007
(Unaudited)
| | | Common Stock | | Preferred Stock Series A | | | | | | | |
| | Shares | | Par | | Shares | | Par | | Paid in Capital | | Accumulated Deficit | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | |
Balance December 31, 2005 | | | 4,030,078 | | $ | 4 03 | | | - | | $ | - | | $ | 3,792,314 | | $ | (4,488,887 | ) | $ | (696,170 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Expenses paid by Stockholders in exchange for equity - January 6, 2006 | | | 251,231,084 | | | 25,123 | | | - | | | - | | | 11,802 | | | - | | | 36,925 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of debt payable to Stockholders - January 6, 2006 | | | - | | | - | | | 15,000,000 | | | 1 ,500 | | | 446,747 | | | - | | | 448,247 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Settlement of lawsuit - January 15, 2006 | | | 244,748,000 | | | 24,475 | | | - | | | - | | | 424,164 | | | - | | | 448,639 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Shares identified as outstanding related to the January 15, 2006 settlement | | | 550,049,408 | | | 55,005 | | | - | | | - | | | (55,005 | ) | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Outstanding shares to be returned per January 15, 2006 settlement | | | 25,075,000 | | | 2 ,508 | | | - | | | - | | | (2,508 | ) | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Repurchase of treasury Stock Janury 15, 2006 | | | (48,933 | ) | | (5 | ) | | - | | | - | | | 5 | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net Loss - December 31, 2006 | | | - | | | - | | | - | | | - | | | - | | | (363,629 | ) | | (363,629 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance December 31, 2006 | | | 1,075,084,637 | | | 107,508 | | | 15,000,000 | | | 1,500 | | | 4,617,520 | | | (4,852,516 | ) | | (125,988 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Net Loss - September 30, 2007 | | | | | | | | | | | | | | | | | | (15,955 | ) | | (15,955 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Balance September 30, 2007 | | | 1,075,084,637 | | $ | 107,508 | | | 15,000,000 | | $ | 1,500 | | $ | 4,617,520 | | $ | (4,868,471 | ) | $ | (141,943 | ) |
The attached notes are an integral part of these financial statements
BANCORP INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2007
1. THE COMPANY
N.E.C. Properties, Inc. ("NEC") was incorporated on September 16 1995, under the laws in the State of Nevada. NEC was organized with no operations or plan of business. On September 30, 1995 the Company issued 18,600 shares of its then no par value and 25,000 authorized common stock, for $1,860 in cash. On November 19, 1998 the State of Nevada approved NEC's restated Articles of Incorporation, which increased their authorized common shares from 25,000 to 25,000,000, and established a par value of $.001 per share of common stock. In addition, in November 1998 NEC approved a forward stock split of 100:1, thus increasing the number of then outstanding common shares to 1,860,000. In addition, at that time the Company also authorized a 1.77 for 1 forward stock split in anticipation of a merger transaction with March Indy International, Inc. ("March" or "March Indy"). The previously issued 1,860,000 common shares were now 3,613,249 common shares.
On November 10, 1999, NEC acquired all the outstanding stock of March for 7,706,575 shares of NEC. March was incorporated in Delaware on November 24, 1998 ("inception"). For accounting purposes, the transaction has been accounted for as a reverse acquisition under the purchase method for business combinations, and accordingly the transaction has been treated as a recapitalization of March, with March as the acquirer. The shares issued in the Transaction were treated as being issued for cash and have been shown as outstanding for all periods presented in the same manner as for a stock split.
On June 17, 2000 the Company declared a one for three (1:3) reverse stock split, effective June 26, 2000. The financial statements herein give retroactive effect to this, and all the above, related equity transactions. March had intended to engage in the business of designing, building and racing motor cars for Formula One, Cart and Indy competition both in the United States and abroad. March has also planned to develop an Internet website in order to merchandise products related to its racing efforts. From the time of its inception March had been a development stage enterprise through September 30, 2000. Subsequent to September 30, 2000, the management of March determined that due to the inability to successfully organize an Indy car race team and to compete in the Indianapolis 500 in the second quarter of the year ended December 31, 2000, that the Company's operations, as intended, would cease to operate. Due to the cessation of operations, management has determined that they are no longer a development stage enterprise commencing from the third quarter ended September 30, 2000.
During the quarter ended September 30, 2001, March changed its name to Bancorp International Group, Inc. ("Bancorp") in an attempt to effect a merger with a financial service oriented business. Bancorp has not merged with any financial service business. Henceforth NEC, March or Bancorp are to be referred to as the "Company", unless reference is made to the respective company for reference to events surrounding their acquisition by the Company.
The Company is subject to the reporting obligations under Section 12(g)of the Securities Exchange Act of 1934. The Company has not complied with the reporting obligations since December 31, 2001.
BANCORP INTERNATIONAL GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
For the Nine Months Ended September 30, 2007
2. GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net losses of approximately $4,856,472 and $4,945,117 for the nine months ended September 30, 2007 and September 30, 2007. Additionally, the Company has working capital deficiencies of approximately $397,043 and $486,138 at September 30, 2007 and 2006 respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with respect to these matters include restructuring its existing obligations, raising additional capital through future issuances of stock and or debentures, and to complete a business acquisition for future operations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Critical estimates include management's judgments associated with: other asset valuations and accrued expenses. Actual results could differ from those estimates.
(b) Loss Per Share - Basic earnings (loss) per share ("EPS") is determined by dividing net loss for the period by the weighted average number of common shares outstanding during the same period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock, which would then share in the earnings of the Company. For the year ended December 31, 2002 the Company had no potentially dilutive instruments outstanding that could potentially be exercised or converted into common stock.
(c) Impairment of Long-Lived Assets - The Company reviews long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. The recoverability of assets held and used in operations is measured by a comparison of the carrying amount of the assets to the future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of December 31, 2000 all Long-Lived assets have been deemed impaired and written down to -0-. This expense was included in discontinued operations for the year ended December 31, 2000.
(d) Fair Value of Financial Instruments - The Company's financial instruments consists of accounts payable and accrued expenses. The carrying amount of the financial instruments reported in the consolidated balance sheet approximates fair value based on the short-term maturity of these instruments.
(e) Income Taxes - The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of the assets and liabilities, using the effective tax rates in the years in which the differences are expected to reverse. A valuation allowance related to the deferred tax asset is also recorded when it is probable that some or all of the deferred tax asset will not be realized. Income tax expense consists of the tax payable for the period and the change during the period in deferred tax assets and liabilities.
The following is a reconciliation of income tax expense computed using the statutory Federal rate for the nine months ended September 30:
| | | 2007 | | 2006 | |
| | | | | | |
| Net Operating Loss Carryover | | $ | 4,868,472 | | $ | 4,949,117 | |
| | | | | | | | |
| Tax benefit at federal statutory rate of 15% | | $ | 700,879 | | $ | 701,254 | |
| | | (700,879 | ) | | (701,254 | ) |
| Deferred tax assets | | $ | -0- | | $ | -0- | |
As of September 30, 2007, the Company had net operating loss carry forwards available to offset future taxable income of approximately $4,856,000, which expire in various years through 2027. The Company uses the lowest marginal U.S. corporate tax rate of 15% to determine deferred tax amounts and the related valuation allowance.
4. COMMON STOCK
In April 2007, the Company file a law suit against approximately 1,500 shareholders alleging that they hold invalid stock certificates that were wrongfully issued and distributed. The approximate number of shares are 243,842,000. The lawsuit requested the court to rule that the stock certificates be declared void and that damages, attorney’s fees and costs be awarded to the Company in connection with the Litigation. In May 2007, the Company dismissed the litigation without prejudice because, the Board of Director determined that continuing the litigation was becoming cost-prohibitive.
In April 2007 the Management of the Corporation identified an additional 306,207,408 shares of common stock issued and held in various brokerage firms on behalf of various owners.
