United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 14 or 15(d) of the Securities
Exchange Act of 1934 for the Period Ended September 30, 1999
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 : NOT ASSIGNED
FIRST AMERICAN CAPITAL CORPORATION
(exact name of registrant as specified in its charter)
Kansas 48-1187574
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) number)
3360 S.W. Harrison Street, Suite 100
Topeka, Kansas 66611
(Address of principal executive offices) (Zip Code)
(785) 267-7077
(Registrant's telephone number, including area code)
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 and Exchange
Act of 1934 during the preceding 12 months (or for such shorter periods 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 Corporate Insurers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, No Par Value - 5,468,860 shares as of November 10, 1999
FIRST AMERICAN CAPITAL CORPORATION
INDEX TO FORM 10-QSB
Part I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets at
September 30, 1999 and September 30, 1998 1
Condensed Consolidated Statements of Operations
for the three months ended September 30, 1999
and 1998 and for the nine months ended September
30, 1999 and 1998 3
Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 1999 and 1998 4
Notes to Condensed Consolidated Financial Statements 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II.
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1999 1998
(Unaudited)
Assets:
Investments:
Short-term investments $ 10,776,472 $ 10,718,261
------------- -------------
Total investments 10,776,472 10,718,261
Cash and cash equivalents 683,715 624,919
Accrued investment income 70,273 53,444
Deferred policy acquisition costs
(net of amortization of $116,483
in 1999 and $229 in 1998) 502,819 13,119
Federal income tax recoverable 15,072 -
Other prepaid expenses 20,422 7,921
Office furniture and equipment,
less accumulated depreciation of
$27,102 and $17,005 in 1999 and 1998,
respectively 34,783 30,843
Leasehold improvements (net of accumulated
amortization of $3,400 and $2,738 in 1999
and 1998, respectively) - 662
Advances to agents 117,935 54,585
Other assets (see note E) 32,417 5,257
------------- -------------
Total Assets $ 12,253,908 $ 1,509,011
============= =============
See notes to condensed consolidated financial statements.
FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
September 30, December 31,
1999 1998
(Unaudited)
Liabilities and Shareholders' Equity
Policy and contract liabilities:
Life policy reserves $ 277,228 $ 5,494
Deposits on pending policy applications 206,797 9,554
Policyholder premium deposits 59,273 -
Reinsurance premiums payable 13,496 -
------------- -------------
Total policy and contract liabilities 556,794 15,048
Federal income taxes payable 105,548 8,721
Commissions, salaries, wages and benefits
payable 46,374 2,832
Accounts payable to affiliate 12,719 15,129
Accounts payable and accrued expenses 33,764 26,443
------------- -------------
Total liabilities 755,199 68,173
Shareholders' equity:
Preferred stock, 6% non-cumulative
convertible callable, $5.00 par and
liquidation value; 550,000 shares
authorized; 160 and 541,506 outstanding
at September 30, 1999 and December 31,
1998, respectively - 2,707,530
Common stock, $.10 par value, 8,000,000
shares authorized; 2,720,000 shares issued
and 5,468,860 outstanding at September 30,
1999 and 2,720,000 shares issued and
3,261,500 outstanding at December 31, 1998 546,886 326,150
Additional paid in capital 12,237,925 9,600,478
Retained earnings-deficit (1,284,102) (1,191,320)
Less: 20,000 treasury shares held at cost (2,000) (2,000)
------------- -------------
Total shareholders' equity 11,498,709 11,440,838
------------- -------------
Total liabilities and shareholders' equity $ 12,253,908 $ 11,509,011
============= =============
See notes to condensed consolidated financial statements.
FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Premium Income $ 250,042 $ - $ 784,155 $ -
Net Investment Income 134,451 101,104 408,105 219,746
----------- ----------- ----------- -----------
Total revenue 384,493 101,104 1,192,260 219,746
Benefits and expenses
Increase in policy
reserves 55,091 - 271,734 -
Interest credited on
premium deposit funds 372 - 1,728 -
Commissions 147,857 - 457,066 -
Policy acquisition
costs deferred (213,372) - (655,955) -
Amortization of
deferred policy
acquisition costs 56,070 - 166,255 -
Agency expenses 35,414 - 74,393 -
Salaries, wages and
employee benefits 160,770 137,566 518,383 340,966
Professional fees 19,215 12,557 56,492 19,882
Administrative fees
- related party 14,413 6,000 43,837 18,000
Premium tax expense 5,241 - 13,488 -
Rent 8,237 7,917 24,073 23,753
Depreciation and
amortization 3,796 2,384 10,759 5,524
Other expenses 64,650 28,288 200,934 111,283
----------- ----------- ----------- -----------
Total benefits
and expenses 357,754 194,712 1,183,187 519,408
----------- ----------- ----------- -----------
Income from operations 26,739 (93,608) 9,073 (299,662)
----------- ----------- ----------- -----------
Federal income taxes 31,801 1,308 101,855 6,290
----------- ----------- ----------- -----------
Net income/(loss) $ (5,062) $ (94,916) $ (92,782) $ (305,952)
=========== =========== =========== ===========
Net income/(loss)
per common share
- basic and diluted $ - $ (0.03) $ (0.02) $ (0.10)
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
FIRST AMERICAN CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended
September 30, September 30,
1999 1998
(Unaudited) (Unaudited)
Cash flows provided/(used)
in operating activities:
Net loss $ (92,782) $ (305,952)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation 10,097 4,674
Amortization of leasehold improvements 662 850
Amortization of deferred acquisition
costs 166,255 -
Changes in operating assets and
liabilities
Accrued investment income (16,829) (66,386)
Prepaid expenses (12,501) 2,141
Advances to agents (63,350) (11,466)
Federal income tax recoverable (15,072) -
Other assets (27,160) (1,346)
Policy liabilities 541,746 -
Federal income taxes payable 96,827 (993)
Commissions, salaries, wages and
benefits payable 43,542 (107,687)
Accounts payable to affiliate (2,410) 13,406
Accounts payable and accrued expenses 7,321 (5,328)
------------ ------------
Net cash provided/(used) in operating
activities 636,346 (478,087)
Cash flows used in investing activities:
Deferred policy acquisition costs (655,955) -
Maturity of short-term investments - -
Purchase of short-term investments (58,211) (5,164,112)
Capital expenditures - office equipment (14,037) (17,559)
------------ ------------
Net cash used in investing activities (728,203) (5,181,671)
Cash flows provided by financing activities:
Proceeds from public stock offering 209,850 7,331,700
Cost of public stock offering (59,197) (771,491)
------------ ------------
Net cash provided by financing activities 150,653 6,560,209
Increase in cash and cash equivalents 58,796 900,451
Cash and cash equivalents beginning of
period 624,919 120,658
------------ ------------
Cash and cash equivalents at end of period $ 683,715 $ 1,021,109
============ ============
See notes to condensed consolidated financial statements.
FIRST AMERICAN CAPITAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
(A) Basis of Presentation
The accompanying condensed consolidated financial statements of First American
Capital Corporation and its Subsidiaries ( the "Company") for the nine month
period ended September 30, 1999 and 1998 are unaudited. However, in the
opinion of the Company, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been reflected
therein.
Certain financial information which is normally included in financial
statements prepared in accordance with generally accepted accounting
principles, but which is not required for interim reporting purposes, has
been omitted. The accompanying condensed consolidated financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-SB for the fiscal year ended December 31,
1998. Certain reclassifications have been made in the prior period financial
statements to conform with the current year presentation.
(B) Subsidiary Operations
The Company's wholly owned subsidiary, First Life America Corporation
("FLAC"), results of operations are included in the condensed consolidated
financial information for the nine month periods ending September 30, 1999
and 1998. The Company's venture capital subsidiary, First Capital Venture
Inc. ("FCVI"), has not been capitalized or commenced operations.
(C) Developmental Stage Activities
The Company was in the developmental stage until insurance operations
commenced in November of 1998. The Company raised $13,750,000 through a
Kansas intra-state public stock offering. The offering commenced on March 11,
1997 and was completed on January 11, 1999. Subsequent to the completion of
the offering, one stock subscription was refunded in the amount of $2,500 or
100 units. Test marketing of the insurance products began in November of
1998 and full insurance operations began upon the completion of the offering.
(D) Investments
The carrying value of short-term investments approximates their fair value.
At September 30, 1999 and December 31, 1998, the fair value of short-term
investments was $10,776,472 and $10,718,261, respectively.
(E) Other assets
Included in "Other assets" at September 30, 1999 is a $25,000 deposit that
the company placed in escrow with Columbian Title Insurance Company to
purchase approximately seven acres of land in Topeka, Kansas for $325,000.
Tests and surveys have been completed and closing will occur no later than
December 1, 1999. Management is currently considering the construction of a
home office building on a portion of the land, however, no definite plans
have been determined.
(F) Deferred Policy Acquisition Costs
Certain costs related to the acquisition of life insurance have been deferred
to the extent recoverable from future policy revenues and gross profits.
These acquisition costs are being amortized over the premium paying period
of the related policies.
(G) Net Loss Per Common Share
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share". SFAS
No. 128 replaced the calculation of primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of convertible
securities. Diluted earnings per share is very similar to fully diluted
earnings per share. The net loss per share amounts for all periods have been
presented to conform to the SFAS 128 requirements for basic earnings per
share. The diluted earnings per share amounts are not presented as the
effect of inclusion of the conversion of preferred stock to common stock
would be antidilutive.
Net loss per common share is based upon the weighted average number of common
shares outstanding each period. For the nine months ended September 30, 1999
and 1998, all shares are assumed to be outstanding for the entire period.
The weighted average outstanding common shares were 5,468,860 in 1999 and
2,993,683 in 1998.
(H) Federal Income Taxes
The company does not file a consolidated federal income tax return with FLAC.
FLAC is taxed as a life insurance company under the provisions of the
Internal Revenue Code and must file a separate tax return for its initial
six years of existence. At September 30, 1999 and 1998 estimated Federal
Income Tax expense was $101,855 and $6,290, respectively. The Federal Income
Tax expense at September 30, 1999 included $584 of current tax expense and
$101,271 of deferred tax expense, and September 30, 1998 included $6,290 of
current tax expense and no deferred tax expense. Deferred federal income
taxes reflect the impact of "temporary differences" between the amount of
assets and liabilities for financial reporting purposes and such amounts as
measured by tax laws and regulations.
(I) Related Party Transactions
Effective December 31, 1998, the Company entered into a service agreement
with FLAC to provide personnel, facilities, and services to FLAC. The
services to be performed pursuant to the service agreement are underwriting,
claim processing, accounting, processing and servicing of policies, and other
services necessary to facilitate FLAC's business. The agreement is in effect
until either party provides ninety days written notice of termination. Under
the agreement, FLAC pays monthly fees based on life premiums delivered by
FLAC. The percentages are 25% of first year life premiums; 40% of second
year life premiums; 30% of third year premiums 20% of fourth year life
premiums and 10% of life premiums in years five and thereafter. FLAC will
retain general insurance expenses related to its sales agency, such as agent
training and licensing, agency meeting expenses, and agent's health insurance.
Pursuant to the terms of the agreement, FLAC had incurred expenses of
$198,888 for the nine months ended September 30, 1999.
The Company has contracted with First Alliance Corporation ("FAC") of
Lexington, Kentucky to provide underwriting and accounting services for FLAC
and the Company. Under the terms of the management agreement, the Company
pays fees based on a percentage of delivered premiums of FLAC. The
percentages are 5.5% for first year premiums; 4% of second year premiums; 3%
of third year premiums; 2% of fourth year premiums, 1% of fifth year premiums
and 1% for years six through ten for ten year policies and .5% in years six
through twenty for twenty year policies. Pursuant to the agreement, the
Company incurred $43,837 of management fees during the nine months ended
September 30, 1999. FAC also owns approximately 9.9% of the Company's
outstanding common shares.
(J) Concentrations of Credit Risk
The Company minimizes credit risk by investing in U.S. Treasury obligations
and certificates of deposit. Certain certificates of deposit exceed the
maximum insurance protection of $100,000 provided by the Federal Deposit
Insurance Corporation ("FDIC"). However, the principal of those certificates
of deposit which exceed $100,000 is protected through additional insurance.
The Company has not experienced any losses in such accounts and believes it
is not exposed to any significant credit risk on cash and cash equivalents.
(K) Conversion of Preferred Stock
The public offering was sold in units consisting of one share of common and
one share of preferred stock. Each preferred share was convertible into four
shares of common stock. A subscriber could elect, at the time of the sale,
to convert their shares of preferred stock to shares of common stock prior to
the issuance of stock certificates. The subscriber was allowed to revoke
this conversion during a six month period starting on the date the offering
was completed. The offering was completed on January 11, 1999 and conversions
were allowed until July 11, 1999. On July 11, 1999, substantially all of
the preferred shareholders converted their preferred shares to common shares.
(L) Segment Information
The segment data that follows has been prepared in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131. requires
a "management approach" (how management internally evaluates the operating
performance of its business units) in the presentation of business segments.
The operations of the Company and its subsidiaries have been classified into
two operating segments as follows: life and annuity insurance operations and
corporate operations. Segment information as of September 30, 1999 and
December 31, 1998 and for the nine months ended September 30, 1999 and 1998
is as follows:
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Life and annuity
insurance
operations $ 288,333 $ 17,442 $ 898,404 $ 51,752
Corporate
operations 96,160 83,662 293,856 167,994
----------- ----------- ----------- -----------
Total revenue $ 384,493 $ 101,104 $ 1,192,260 $ 219,746
=========== =========== =========== ===========
Investment Income:
Life and annuity
insurance
operations $ 38,292 $ 17,442 $ 114,242 $ 51,752
Corporate
operations 96,160 83,662 293,856 167,994
----------- ----------- ----------- -----------
Total revenue $ 134,452 $ 101,104 $ 408,098 $ 219,746
=========== =========== =========== ===========
Income (loss)before
income taxes:
Life and annuity
insurance
operations $ 120,777 $ 12,702 $ 329,401 $ 45,906
Corporate
operations (94,038) (106,310) (320,328) (345,568)
----------- ----------- ----------- -----------
Total revenue $ 26,739 $ (93,608) $ 9,073 $ (299,662)
=========== =========== =========== ===========
Depreciation and
amortization
expense:
Life and annuity
insurance
operations $ 56,070 $ - $ 166,255 $ -
Corporate
operations 3,796 2,384 10,759 5,524
----------- ----------- ----------- -----------
Total revenue $ 59,866 $ 2,384 $ 177,014 $ 5,524
=========== =========== =========== ===========
Segment asset information as of September 30, 1999 and December 31, 1998.
1999 1998
(unaudited)
Assets:
Life and annuity insurance operations $ 4,036,646 $ 3,113,186
Corporate operations 8,217,262 8,395,825
------------- -------------
Total $ 12,253,908 $ 11,509,011
============= =============
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This report includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934. All statements other
than statements of historical fact included in this Report regarding the
Company's financial position, business strategy, and plans and objectives of
management of the Company for future operations, are forward-looking
statements. Although the Company believes the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors that could
cause the results, performance (financial or operating) or achievements
expressed or implied by such forward-looking statements include, without
limitation, the market acceptance of the Company's newly-created annuity and
insurance products, the accuracy of the Company's assumptions as to expected
mortality, lapse rates and other factors in developing the pricing and other
terms of its life insurance products, interest rate fluctuations, its ability
to attract, train and retain agents to market its insurance products, its
ability to comply with all applicable governmental regulations, competition
in the insurance business and changes in general economic conditions. The
following discussion should be read in conjunction with the condensed
consolidated financial statements and notes thereto.
Results of Operations
The Company completed a Kansas intra-state offering on January 11, 1999
raising total capital of $13,750,000. The offering, which commenced on March
11, 1997, provided capital to form a wholly owned life insurance subsidiary,
First Life America Corporation ("FLAC"); form a venture capital subsidiary,
First Capital Venture, Inc. ("FCVI") and provide working and acquisition
capital. FLAC commenced insurance operations on a limited basis in November
of 1998. In January of 1999, FLAC began full insurance operations. Until
the marketing of life insurance began, the Company was in the development
stage. Comparisons of operations between the three month periods ended
September 30, 1999 and 1998 and the nine month periods ended September 30,
1999 and 1998 are not comparable since insurance operations did not begin
until November of 1998.
Revenues for the three months ended September 30, 1999 totaled $384,493 as
compared to $101,104 for the same period of 1998. For the nine months ended
September 30, 1999 and 1998, revenues totaled $1,192,260 and $219,746,
respectively. Revenues include life insurance premium and net investment
income. Premium income for the three months ended September 30, 1999 and the
nine month period ended September 30, 1999 totaled $250,042 and $784,155,
respectively. There was not any premium income during the nine months ended
September 30, 1998. Net investment income increased from $219,746 for the
nine months ended September 30, 1998 to $408,105 for the same period during
1999. Now that the public offering is completed, a larger invested asset
base exits which creates greater investment earnings. Additionally, cash
provided through the sale of insurance has also been invested.
Benefits and expenses totaled $1,183,187 for the nine months ended September
30, 1999. Results for 1999 included expenses related to insurance operations
such as reserves, agency expenses and premium taxes. There were not any
insurance related expenses incurred during 1998. For the nine months ended
September 30, 1999, the increase in life insurance reserves totaled $271,734.
These reserves are actuarially determined based on such factors as insured
age, life expectancy, mortality and interest assumptions. As more life
insurance is written these reserves will continue to increase. Commission
expense totaled $457,066 for the nine months ended September 30, 1999. The
commission expense is based on a percentage of premium and is determined in
the product design. Acquisition costs which are related to the sale of
insurance are capitalized and amortized over the premium paying period of the
associated policies. These costs include commissions and management fees
incurred in the first policy year. For the first nine months of 1999,
$655,955 of these costs have been capitalized as Policy Acquisition Deferred.
The related amortization for the same period totaled $166,255. Premium taxes,
which totaled $13,488 for the nine months ended September 30, 1999, are
incurred as a percentage of premium collected and payable to the Kansas
Department of Insurance. Agency expenses are costs associated with the
recruiting, training, development and incentives of the sales agents as well
as marketing costs. These costs totaled $74,393 for the nine months ended
September 30, 1999.
Salaries, wages and employee benefits increased from $340,966 to $518,383
for the nine month periods ended September 30, 1998 and 1999, respectively.
Additional personnel have been hired for the administration of life insurance
operations. Professional fees increased to $56,492 from $19,882 for the nine
months ended September 30, 1999 and 1998, respectively. This increase is
related to accounting and legal fees associated with the registration of the
Company's securities with the Securities and Exchange Commission.
Administrative fees- related party are fees paid to First Alliance Corporation,
a shareholder of the Company. These fees are for underwriting and accounting
services. During the first nine months of 1999, these fees totaled $43,837
as compared to $18,000 for the first nine months of 1998.
Consolidated Financial Condition
The following comparisons involve capital transactions from December 31, 1998
to September 30, 1999:
Total assets increased from $11,509,011 at December 31, 1998 to $12,253,908
at September 30, 1999. Both short-term investments and cash and cash
equivalents have increased from December 31, 1998. This is due to the growth
of the insurance operations during the period from December 31, 1998 to
September 30, 1999. A significant portion of the cash and cash equivalents
is held in certificates of deposits with three month maturities. Deferred
policy acquisition costs, net of amortization, increased from $13,119 at
December 31, 1998 to $502,819 at September 30, 1999 resulting from the
capitalization of acquisition expenses related to the sale of life insurance.
Liabilities increased to $755,199 at September 30, 1999 from $68,173 at
December 31, 1998. Life insurance related policy liabilities are the primary
reason for this increase. Policy reserves established due to the sale of life
insurance totaled $556,794 at September 30, 1999. Policy reserves at
December 31, 1998 totaled $15,048 due to limited insurance marketing during
1998. Federal income taxes payable are primarily the due to deferred taxes
established based on timing differences between income recognized for
financial statements and taxable income for the Internal Revenue Service.
These deferred taxes are based on the operations of FLAC.
Liquidity
FLAC's insurance operations generally receive adequate cash flow from premium
collections and investment income to meet their obligations. Insurance
policy liabilities are primarily long-term and generally are paid from future
cash flows. The Company's invested assets are readily marketable and highly
liquid.
Year 2000 Concerns
A growing concern is the ability of computer systems to accurately process
date calculations in the year 2000 and beyond. The problem arises from the
initial design of date values which only recognize a two digit year value.
As a result, a computer may interpret a date entered for the year 2000 as the
year 1900. Any computer system that performs date comparisons and
calculations is exposed to such a problem. These systems are typically
referred to as information technology systems ("ITS") or computer based
systems. Another concern is microchips which may also be encoded with a two
digit date value. These microchips are typically found in such office
equipment as facsimile machines and telephone systems. These systems are
referred to as non-information technology systems ("NITS").
The Company's primary exposure to any business interruption would be the
result of an ITS failure. The life insurance industry relies heavily on date
sensitive calculations in daily operations. The inability to process
transactions could be detrimental to the Company's ability to continue
operations. The Company out-sources its primary computer processing system
through Navisys, Inc. of Saint Louis, Missouri. Navisys has assured the
Company that its hardware and software systems have been modified to
eliminate any potential year 2000 problems. Testing is scheduled to be
completed by mid year 1999. Evaluation of internal hardware and software is
being performed. However, management does not believe that a failure of
these internal systems would cause an interruption of business. Additionally,
a NITS failure would not substantially disrupt operations.
The costs to address year 2000 issues have been and will continue to be
relatively insignificant for the Company. All of the major costs related to
the insurance processing system have been borne by Navisys. Internally, year
2000 issues may require the replacement of such items as personal computers
and facsimile machines, however these are not expected to cause any
significant financial impact.
The ultimate risk of the year 2000 issue is the Company's inability to continue
as a going concern in the event of major computer system failure. The impact
could alter, not only the Company's ability to transact business, but also
global financial systems. Even though the Company is confident that these
issues will not cause significant internal problems, a danger exists
regarding the lack of preparedness of consumers and other institutions,
including federal and state government.
The Company has developed contingency plans to address any system failure
related to the year 2000. These plans are currently being tested.
Part II.
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities and Use of Proceeds
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
Exhibits - None
Form 8-K
The Company did not file any reports on Form 8-K during the nine months
ended September 30, 1999.
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 thereunto duly authorized.
First American Capital Corporation
(registrant)
/s/ Rickie D. Meyer Date November 12, 1999
Rickie D. Meyer, President
/s/ Chris J. Haas Date November 12, 1999
Chris J. Haas, Secretary/Treasurer