What changed in this filing

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Item 1. Financial Statements

2019-11-19 compared with 2019-05-20 · 79 added, 121 removed, 615 unchanged (25% of the section changed)

1 unchanged sentence

CAPITAL CORPORATION

of March 31, 2019 (Unaudited) and June 30, 2018

March 31, 2019

June 30, 2018

LIABILITIES & EQUITY

Current Liabilitites

Accounts Payable

Convertible Note Payable - Roran, net of debt discount

Accrued Interest Payable

Judgment Payable

Total Current Liabilities

Total Liabilities

Common Stock par value $1.00, 10,000,000 shared authorized,

1,915,548 shares issued and outstanding

Additional Paid-In Capital

Accumulated Deficit

(28,245,337 )

(28,110,948 )

of September 30, 2019 (Unaudited) and June 30, 2019

Note Payable - Roran, net of debt discount

Interest Payable

Current Liabilities

Stock $1.00 par value, 10,000,000 authorized, 1,915,548 shares issued and outstanding

Paid-In Capital

(17,685,223 )

(17,720,680 )

TOTAL LIABILITIES & EQUITY

LIABILITIES & EQUITY

the accompanying Notes, which are an integral part of these unaudited Financial Statements

1 unchanged sentence

OF OPERATIONS

the Three and Nine Months Ended March 31, 2019 and 2018

Three Month Periods Ended

Nine Month Periods Ended

the Three Months Ended September 30, 2019 and 2018

September 30,

Administrative Expenses

1 unchanged sentence

Total Expense

Net Loss from Operating Activities

Weighted Average Number of Common Shares Outstanding- Basic and Diluted

Net Loss Per Share- Basic and Diluted

Net Income (Loss) Per Share- Basic and Diluted

the accompanying Notes, which are an integral part of these unaudited Financial Statements

CAPITAL CORPORATION

STATEMENTS OF STOCKHOLDERS’

the Nine Months Ended March 31, 2019 and 2018 (Unaudited)

OF STOCKHOLDERS’

the Three Months Ended September 30, 2019 and 2018 (Unaudited)

($1 Par Value)

6/30/2017 Balance

$ (27,970,097 )

Balance at June 30, 2019

$ (17,685,223 )

1 unchanged sentence

Net loss for the period

3/31/2018 Balance

$ (28,053,854 )

Balance at September 30, 2019

$ (17,720,680 )

($1 Par Value)

7/1/2018 Balance

Balance at June 30, 2018

$ (28,110,948 )

2 unchanged sentences

Net loss for the period

3/31/2019 Balance

Balance at September 30, 2018

$ (28,140,336 )

3 unchanged sentences

OF CASH FLOWS

the Nine Months Ended March 31, 2019 and 2018

Nine Month Periods Ended

the Three Months Ended September 30, 2019 and 2018

OPERATING ACTIVITIES

Adjustments to reconcile Net Loss to net cash used in

Amortization of interest

Changes in assets and liabilities

Acounts Payable

Adjustments to reconcile Net

loss to net cash used in operations:

Debt discount

Accounts payable

Accrued Interest Payable

Net cash used by Operating Activities

Net cash used in Operating Activities

FINANCING ACTIVITIES

Proceeds from note payable from Roran Capital

from convertible Note payable - from Roran Capital

Net cash provided by Financing Activities

3 unchanged sentences

Supplemental Non-cash Investing and Financing Activities

Intrinsic value of embedded beneficial conversion feature on convertible note

Intrinsic value of embedded beneficial conversion option on convertible note payable

the accompanying Notes, which are an integral part of these unaudited Financial Statements

34 unchanged sentences

and returned to its shareholders c/o Roran Capital, LLC (“Roran”) upon notification of entry of this Order”.

Upon termination of the Receivership Roran took possession of all books and records made available to it by the SBA, and Roran

expended, and has continued to expend, its own funds to maintain the viability of the Company.

Upon termination of the Receivership Roran took possession of all books and records made available to it by the SBA.

Company has no operating assets of any value, and the Company no longer has the SBIC license from the SBA.

11 unchanged sentences

The Company responded to those comments with the filing of an Amended Application on June 4, 2018.

On October 30, 2018, in response to verbal comments from the SEC, the Company filed a Second Amended Application.

As of the date

of this Quarterly Statement, the Company has not received any formal response from the SEC in regard to the Second Amended Application.

As of the date of this Quarterly Statement, the Company has filed its Fourth Amended Application and expects to reach resolution

in the near future.

unaudited financial statements herein have been prepared by the Company pursuant to the rules and regulations of the United States

10 unchanged sentences

Operating results

for the three and nine months ended March 31, 2019, are not necessarily indicative of the results that may be expected for the

year ending June 30, 2019.

for the three months ended September 30, 2019, are not necessarily indicative of the results that may be expected for the year

ending June 30, 2020.

For further information, refer to the audited financial statements and notes for the year ended June 30,

207 unchanged sentences

The Court assumed jurisdiction over the Company and the SBA was appointed receiver effective May 28, 2014.

June 28, 2017, the Receivership was terminated and a final order entered by the Court provided Roran with control of the Company.

As of June 30, 2018, the Company’s outstanding judgment payable totaled $10,427,300, and interest payable totaled $156,933.

June 28, 2017, the Receivership was terminated and a final order entered by the Court provided Roran with control of

As of June 30, 2019, the Company’s outstanding judgment payable totaled $0, as the judgment had

been satisfied in full.

Company’s outstanding judgment payable owed to the SBA was purchased by Roran from the SBA in July 2017.

3 unchanged sentences

interest that was due under the original terms of the judgment payable.

The statutory interest rate is 0.094%.

The Company has

accrued $163,991 in interest on the judgment payable as of March 31, 2019.

On May 16, 2019, Roran forgave the entire principal

2 unchanged sentences

to the Loan Agreement, Roran agreed to loan to the Company an amount not to exceed a total of $150,000 in principal over 18-months.

Each advance under the Loan Agreement will be documented under a Convertible Promissory Note issued by the Company in favor of

Roran (the “Note”).

The Note bears interest at the rate of 12% per annum and is due in 18-months.

Roran has the right

to convert all or any portion of the Note into shares of the Company’s common stock at a conversion price equal to 60% of

the share price.

As a result of the advances made pursuant to the Loan Agreement, the Company has incurred total obligations of

$154,338 as of March 31, 2019.

The Company recorded a BCF due the conversion option of $96,800, which has been fully amortized

as of March 31, 2019.

The debt discount has been amortized as interest expense through the maturity date in March 2019.

is currently negotiating with Roran to extend the maturity date of the note which expired in March 2019 and provide additional

4 - INVESTMENTS AND NOTES RECEIVABLE

Company’s legacy assets primarily consisted of prior investments that were composed of equity and debt securities.

the Receivership, the investments were either in default or distressed in nature.

The Receiver liquidated the assets through negotiations

and the investments were written down to their estimated net realizable value through recognizing other-than-temporary impairment

During the year ended June 30, 2016, the Receiver liquidated the remaining investment assets and recognized a loss of

part of a settlement on an investment, during the year ended June 30, 2016, the Receiver exchanged part of an investment for two

$75,000 notes receivable with consecutive 1 year terms.

The first note receivable was repaid during the period ended September

The other $75,000 note receivable was transferred to the SBA to settle part of the accrued interest outstanding on the

SBA judgment later in the 2017 fiscal year.

On June 17, 2019 the Company amended the Loan Agreement increasing the loan amount to $200,000 and extending the maturity date

to September 19, 2019.

Each advance under the Loan Agreement will be documented under a Convertible Promissory Note issued

by the Company in favor of Roran (the “Note”).

The Note bears interest at the rate of 12% per annum and is due in

Roran has the right to convert all or any portion of the Note into shares of the Company’s common stock at a

conversion price equal to 60% of the share price.

As a result of the advances made pursuant to the Loan Agreement, the Company

has incurred total obligations of $184,338 as of September 30, 2019.

The Company recorded a BCF due the conversion option

of $116,800, which has been fully amortized as of September 30, 2019.

The debt discount has been amortized as interest

expense through September 30, 2019.

Roran has agreed to extend the loan and advance additional funds until further negotiations have been concluded.

CAPITAL CORPORATION

4 unchanged sentences

following amounts were owed to related parties, affiliated with the CEO and Chairman of the Board, at the dates indicated:

March 31, 2019

Judgment Payable (acquired by Roran from SBA)

Interest on Judgment Payable

September 30, 2019

Convertible Note Payable (See Note 4)

2 unchanged sentences

Company has evaluated all events that occurred after the balance sheet date through the date of the filing of this Quarterly Report

on Form 10-Q to determine if they must be reported, and there are no subsequent events to be reported except that on May 16, 2019,

Roran forgave the entire amount due on its judgment for both principal and interest of $10,609,635.

on Form 10-Q to determine if they must be reported, and there are no subsequent events to be reported except that Roran has

agreed to extend the convertible note payable until negotiations have been concluded.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

57 unchanged sentences

except as required by law.

following discussion of the results of operations for the three and nine months ended March 31, 2019 and 2018, respectively, should

following discussion of the results of operations for the three months ended September 30, 2019 and 2018, respectively, should

be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in

67 unchanged sentences

Application on June 4, 2018.

On October 30, 2018, in response to verbal comments from the SEC, the Company filed a Second Amended

As of the date of this Quarterly Statement, the Company has not received any response from the SEC in regard to the

Second Amended Application.

As of the date of this Quarterly Statement, the Company has submitted a Fourth Amended Application

and expects resolution soon.

time-to-time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other

114 unchanged sentences

of a public or private offering, among other factors.

of Three Months Ended March 31, 2019 And 2018

the three month periods ended March 31, 2019 and 2018, the Company did not have any operations and therefore there were no revenues.

of Three Months Ended September 30, 2019 And 2018

the three month periods ended September 30, 2019 and 2018, the Company did not have any operations and therefore there were no

Expenses were limited to maintaining the Company in good standing and staying current, respectively, in its filing obligations

1 unchanged sentence

Administrative

fees totaled $12,265 for the three months ended March 31, 2019 compared to $25,842 for the three months ended March 31, 2018.

The decrease was primarily due to less activity in the current period as the prior comparable period required more expenditures

fees totaled $12,796 for the three months ended September 30, 2019 compared to $8,223 for the three months ended September 30,

The increase was primarily due to more activity in the current period as the current comparable period required more expenditures

for professional services to bring the Company current in its SEC filings.

expense totaled $42,447 for the three months ended March 31, 2019 compared to $9,516 for the three months ended March 31, 2018.

The increase was primarily due to an increase in borrowing under the convertible loan facility.

reported a net loss of $54,712 during the three months ended March 31, 2019 compared to a net loss of $35,358 in the comparable

period of 2018.

The increase was due to higher interest expenses.

of Nine Months Ended March 31, 2019 And 2018

the nine month periods ended March 31, 2019 and 2018, the Company did not have any operations and therefore there were no revenues.

Expenses were limited to maintaining the Company in good standing and staying current, respectively, in its filing obligations

with the SEC.

Administrative

fees totaled $42,365 for the nine months ended March 31, 2019 compared to $69,593 for the nine months ended March 31, 2018.

decrease was primarily due to less activity in the current period as the prior comparable period required more expenditures for

professional services to bring the Company current in its SEC filings.

expense totaled $92,024 for the nine months ended March 31, 2019 compared to $14,164 for the nine months ended March 31, 2018.

expense totaled $22,661 for the three months ended September 30, 2019 compared to $21,165 for the three months ended September

The increase was primarily due to an increase in borrowing under the convertible loan facility.

reported a net loss of $134,389 during the nine months ended March 31, 2019 compared to a net loss of $83,757 in the comparable

reported a net loss of $35,547 during the three months ended September 30, 2019 compared to a net loss of $29,388 in the comparable

period of 2018.

The increase was due to higher interest expenses.

The increase was due to higher interest expenses and professional fees.

and Capital Resources

have incurred recurring operating losses and negative operating cash flows in fiscal 2018 and through March 31, 2019, and we expect

to continue to incur operating losses and negative operating cash flows at least through the near future.

We have obtained funding

through a convertible loan facility of up to $150,000 in order to partially meet our most critical cash requirements, and of this

amount, we have drawn approximately $154,338 as of March 31, 2019.

Amounts due under the loan facility are were due and payable

in March 2019.

The Company is currently negotiating with Roran to extend the due date and provide additional funding.

have incurred recurring operating losses and negative operating cash flows in fiscal 2018 and through September 30, 2019, and

we expect to continue to incur operating losses and negative operating cash flows at least through the near future.

We have obtained

funding through a convertible loan facility of up to $200,000 in order to partially meet our most critical cash requirements,

and of this amount, we have drawn approximately $184,338 as of September 30, 2019.

Roran has agreed to extend the loan

until negotiations have been concluded.

a result of the aforementioned factors, management has concluded that there is substantial doubt about our ability to continue

2 unchanged sentences

raised substantial doubt about our ability to continue as a going concern.

Our financial statements as of and for the three and

nine months ended March 31, 2019 do not contain any adjustments for this uncertainty.

In response to our Company’s cash

needs, we raised funding as described in our financial statements.

Any additional amounts raised will be used for our future investing

and operating cash flow needs.

However, there can be no assurance that we will be successful in raising additional amounts of

Our financial statements as of and for the three months

ended September 30, 2019 do not contain any adjustments for this uncertainty.

In response to our Company’s cash needs, we

raised funding as described in our financial statements.

Any additional amounts raised will be used for our future investing and

operating cash flow needs.

However, there can be no assurance that we will be successful in raising additional amounts of financing.

Management’s

28 unchanged sentences

Business Targets.

March 31, 2019, we had only $13,509 cash on hand.

Since we have no revenue or plans to generate any revenue, we will be dependent

upon loans to fund expenses incurred in excess of our cash.

September 30, 2019, we had only $11,197 cash on hand.

Since we have no revenue or plans to generate any revenue, we will

be dependent upon loans to fund expenses incurred in excess of our cash.

Also, Related party obligations totaling $212,541

are due and payable as of September 30, 2019.

Sheet Arrangements

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements