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
Or
[ ] 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:
Future Carz, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 88-0431029
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8930 East Raintree, Suite 300, Scottsdale, AZ 85260
- --------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(480) 444-0080
--------------
(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13
or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a
court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date: 8,652,087
/1/
FUTURE CARZ, INC.
(A Development Stage Company)
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of March 31, 2001 3
Consolidated Statements of Operations For the Three Months 4
Ended March 31, 2001 and 2000 and for the Period From
Inception (July 13, 1999) to March 31, 2001
Consolidated Statements of Cash Flows For the Three Months 5
Ended March 31, 2001 and 2000 and for the Period From
Inception (July 13, 1999) to March 31, 2001
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Plan of Operation 7
PART II - OTHER INFORMATION
Item 6. Exhibits 9
SIGNATURES 10
/2/
Future Carz, Inc.
(A Development Stage Company)
Consolidated Balance Sheet
March 31, 2001
(unaudited)
Assets
Current assets:
Cash $ 6,453
Notes receivable - affiliates 51,596
-----------
Total current assets 58,049
-----------
Fixed assets, net 246,770
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$ 304,819
===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 106,755
Notes payable - stockholders 196,000
-----------
Total current liabilities 302,755
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Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 -
shares authorized, no shares issued and
outstanding
Common stock, $0.001 par value, 20,000,000 8,652
shares authorized, 8,652,087 shares issued
and outstanding
Additional paid-in capital 2,144,752
Deficit accumulated during the development stage
development stage (2,151,339)
-----------
2,065
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$ 304,819
===========
The accompanying notes are an integral part of these
consolidated financial statements.
/3/
Future Carz, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
For the Three Months Ended March 31, 2001 and 2000
and the Period From Inception (July 13, 1999) to March 31, 2001
(unaudited)
July 13, 1999
(Inception)
to
March 31, March 31, March 31,
2001 2000 2001
------------ ------------ ------------
Revenue $ 62,691 $ - $ 62,691
------------ ------------ ------------
Expenses:
General and administrative 1,994,501 6,303 2,177,156
Depreciation and amortization 14,285 1,424 16,633
------------ ------------- -------------
2,008,786 7,727 2,193,789
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Net operating (loss) (1,946,095) (7,727) (2,131,098)
------------ ------------- -------------
Other income (expenses):
Interest income 3,899 - 5,172
Interest expense (2,906) - (5,746)
Loss on writedown of assets - - (19,667)
------------ ------------- -------------
Net (loss) $ (1,945,102) $ (7,727) $ (2,151,339)
============ ============= =============
Weighted average number
of common shares outstanding
- - basic and fully diluted 7,474,309 5,328,087 5,503,932
============ ============= =============
Net loss per share - $ (0.26) $ (0.00) $ (0.39)
basic and fully diluted ============ ============= =============
The accompanying notes are an integral part of these
consolidated financial statements.
/4/
Future Carz, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2001 and 2000
and the Period From Inception (July 13, 1999) to March 31, 2001
(unaudited)
July 13, 1999
(Inception)
to
March 31, March 31, March 31,
2001 2000 2001
---------- ---------- ----------
Cash flows from operating activities
Net cash (used in) $ (82,585) $ (6,303) $ (250,531)
operating activities ---------- ---------- ----------
Cash flows from investing activities
Advances on notes receivable -
affiliates (85,076) - (223,076)
Purchase of fixed assets (39,143) - (74,460)
Web development costs - - (20,000)
---------- ----------- ----------
Net cash (used in) investing activities (124,219) - (317,536)
---------- ----------- ----------
Cash flows from financing activities
Proceeds from notes payable -
stockholders 136,000 2,000 196,000
Issuance of common stock - - 376,520
Advance from shareholder - - 2,000
---------- ---------- -----------
Net cash provided by financing
activities 136,000 2,000 574,520
---------- ---------- -----------
Net increase (decrease) in cash (70,804) (4,303) 6,453
Cash - beginning 77,257 5,082 -
---------- ---------- -----------
Cash - ending $ 6,453 $ 779 $ 6,453
========== ========== ===========
Supplemental disclosures:
Interest paid $ - $ - $ -
========== ========== ===========
Income taxes paid $ - $ - $ -
========== ========== ===========
Non-cash investing and financing
activities:
Common stock issued for
purchase of assets $1,750,000 $ - $ 1,750,000
========== ========== ===========
Advance from shareholder
converted to capital $ - $ - $ 2,000
========== ========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
/5/
Future Carz, Inc.
(a Development Stage Company)
Notes to Consolidated Financial Statements
(unaudited)
(1) Basis Of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with accounting principles
generally accepted in the United States of America ("GAAP")
for interim financial information and Item 310(b) of
Regulation S-B. They do not include all of the information
and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) considered
necessary for a fair presentation have been included. The
results of operations for the periods presented are not
necessarily indicative of the results to be expected for the
full year. For further information, refer to the audited
financial statements of the Company as of December 31, 2000
and for the two years then ended and the period from inception
to December 31, 2000, including notes thereto, included in the
Company's Form 10-KSB.
(2) Earnings Per Share
The Company calculates net income (loss) per share as required
by SFAS No. 128, "Earnings per Share." Basic earnings (loss)
per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding for the
period. Diluted earnings (loss) per share is calculated by
dividing net income (loss) by the weighted average number of
common shares and dilutive common stock equivalents
outstanding. During the periods presented, common stock
equivalents were not considered, as their effect would be anti-
dilutive.
/6/
Item 2. Management's Discussion and Plan of Operation
Forward Looking Statements
This Quarterly Report contains forward-looking statements
about our business, financial condition and prospects that
reflect our assumptions and beliefs based on information
currently available. We can give no assurance that the
expectations indicated by such forward-looking statements will
be realized. If any of our assumptions should prove
incorrect, or if any of the risks and uncertainties underlying
such expectations should materialize, our actual results may
differ materially from those indicated by the forward-looking
statements.
The key factors that are not within our control and that may
have a direct bearing on operating results include, but are
not limited to, the acceptance of our services, our ability to
close auto loans, our ability to raise capital in the future,
the retention of key employees and changes in the regulation
of our industry.
There may be other risks and circumstances that we are unable
to predict. When used in this Quarterly Report, words such
as, "believes," "expects," "intends," "plans,"
"anticipates," "estimates" and similar expressions are
intended to identify forward-looking statements, although
there may be certain forward-looking statements not
accompanied by such expressions. All forward-looking
statements are intended to be covered by the safe harbor
created by Section 21E of the Securities Exchange Act of 1934.
General
Future Carz, Inc. ("Future Carz" or the "Company"), a Nevada
corporation incorporated on July 13, 1999, is a development
stage company in the used automobile leasing industry with a
principal business objective to offer financial alternatives
to qualified individuals who do not meet traditional financing
terms. Through our wholly owned subsidiary formed in February
2001, AutoCarz, Inc. ("AutoCarz"), we have launched a dealer
network positioned to service the sub-prime credit segment of
the auto leasing market. AutoCarz applies a proven formula
with rigorous controls to qualify potential borrowers. The
result is a new type of leasing organization capable of
building highly profitable brand-name stores in a largely
untapped market within the used automobile industry.
The AutoCarz system is aimed at providing individuals with an
affordable lease on a quality pre-owned vehicle. While
consumers are using the AutoCarz system, they work towards
building back good credit, as the Company reports regularly to
credit bureaus.
Results of Operations
In early 2001, we completed the acquisition of certain assets
of Auto Central Discount, Inc. of San Diego, CA. We currently
have operations in San Diego, California; Mesa, Phoenix and
Glendale, Arizona; and Las Vegas, Nevada.
Additionally, our web site (www.futurecarz.com) has been
remodeled to offer an array of features aimed at informing and
educating interested parties about Future Carz, our products
and services, corporate concept and potential for success.
Key features of the site include an overview of auto leasing,
common terminology, detailed corporate information on the
operations of Future Carz and useful links such as a link to
the AutoCarz web site (www.autocarz.net) that allows potential
customers to obtain information on leasing operations, or to
access qualifications for leasing through AutoCarz.
/7/
We depend on the growing use and acceptance of the Internet as
an effective medium of commerce by merchants and customers.
Decreased levels of e-commerce transactions and the lack of
acceptance of the Internet as a medium of commerce could have
a material adverse effect on our operations.
Revenue for the three months ended March 31, 2001 was $62,691,
as compared to the three month period ended March 31, 2000 in
which no revenue was generated. The impact of the acquisition
of Auto Central Discount has been accretive to revenues at a
rate of approximately $10,000 per month and provided assets in
the form of automobiles and automobile lease agreements.
Operating expenses for the three months ended March 31, 2001
were $2,008,786, as compared to the three month period ended
March 31, 2000 in which we incurred $7,727 in operating
expenses. $1,994,501 of the operating expenses reflected in
the March 31, 2001 Statement of Operations are almost entirely
related to the asset purchase of Auto Central Discount. Upon
completion of the acquisition of certain assets of Auto
Central Discount, Inc. we had 13 full time employees. As of
May 21, 2001 we now have nine full time employees. After the
acquisition, management identified overlapping functions and
in an effort to cut costs reduced the total number of
employees by four.
Future Business
Over the next six to nine months we plan to solidify the
overall structure of the business plan. This will include
keeping the key employee's obtained in the acquisitions as
well as marketing our Auto Carz, Inc. brand through various ad
campaign's i.e. news paper, internet, etc. Our goal is to
become one of the leading alternative pre-owned auto- leasing
sources in the nation.
For various reasons, there will always be people with credit
problems. We believe that an opportunity exists to capitalize
on this built in segment of the automotive leasing industry.
As we attempt to capture the market for leased used vehicles
in a target price range of $5,000 to $8,000, we face the
uncertainty of the availability of these vehicles. Our focus
will be on developing and maintaining a consistent inventory
of used vehicles both in terms of cost and quality.
Liquidity and Capital Resources
Net Loss. Due to the significant administrative expense
related to the asset purchase of Auto Central Discount, we
experienced a net loss of $1,945,102 in the quarter ended
March 31, 2001, as compared to a net loss of $7,728 in the
three month period ended March 31, 2000. Our business is very
capital intensive. Our return on investment is greater than
in most other industries; however, we do need to close a
larger number of leases before we become profitable.
We estimate our capital requirements to total approximately
$68,000 per month for the next 12 to 24 months. We are
currently in the process of conducting a Rule 506 $1,000,000
Private Placement Offering to raise additional cash. It is
expected that the proceeds from this offering, in addition to
the roughly $10,000 in revenue being generated on a monthly
basis, will be sufficient to continue existing operations over
this period. In addition, the Company anticipates that short
term operational loans will be available from shareholders.
/8/
PART II - OTHER INFORMATION
Item 6. Exhibits
Exhibi Name and/or Identification of Exhibit
t
Number
3 Articles of Incorporation & By-Laws
(a)Articles of Incorporation of the Company filed
July 13, 1999. Incorporated by reference to the
exhibits to the Company's General Form For
Registration Of Securities Of Small Business
Issuers on Form 10-SB, previously filed with the
Commission.
(b)By-Laws of the Company adopted July 16, 1999.
Incorporated by reference to the exhibits to the
Company's General Form For Registration Of
Securities Of Small Business Issuers on Form
10-SB, previously filed with the Commission.
Reports on Form 8-K
Incorporated by reference Form 8-K filed on March 12, 2001 for
acquisition of assets.
Incorporated by reference Form 8-K filed on March 14, 2001 for
change in accountants.
/9/
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Future Carz, Inc.
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(Registrant)
Date: May 25, 2001
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By: /s/ Edward Heisler
----------------------
Edward Heisler, President, Secretary,
Treasurer and Director
/12/