What changed in this filing

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Item 1. Financial Statements

2020-05-11 compared with 2020-02-11 · 138 added, 120 removed, 599 unchanged (30% of the section changed)

1 unchanged sentence

CAPITAL CORPORATION

of June 30, 2019 and December 31, 2019 (Unaudited)

June 30, 2019

of June 30, 2019 and March 31, 2020 (Unaudited)

LIABILITIES & EQUITY

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Accounts Payable

Convertible Note Payable - Roran, net

of debt discount

Accrued Interest

Total Current Liabilities

Total Liabilities

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

authorized, 1,915,548 shares issued and outstanding

Additional Paid-In Capital

Accumulated Deficit

Note Payable - Roran, net of debt discount

Interest Payable

Current Liabilities

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

Paid-In Capital

(17,685,223 )

(17,772,365 )

TOTAL LIABILITIES & EQUITY

TOTAL LIABILITIES

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

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OF OPERATIONS

the Three and Six Months Ended December 31, 2019 and 2018

the Three and Nine Months Ended March 31, 2020 and 2019

Three Months Periods Ended

Six Months Periods Ended

Nine Months Periods Ended

Administrative Expenses

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Net Loss from Operations

Weighted Average Number of Common Shares Outstanding- Basic

Weighted Average Number of Common Shares Outstanding- Basic and Diluted

Net Loss Per Share- Basic and Diluted

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OF STOCKHOLDERS’

the Three and Six Months Ended December 31, 2019 and 2018

the Three and Nine Months Ended March 31, 2020 and 2019

($1 Par Value)

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$ (17,747,575 )

Beneficial conversion feature

Net Loss for the period

Balance at March 31, 2020

$ (17,772,365 )

Balance at June 30, 2018

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$ (10,708,597 )

Beneficial conversion feature

Net Loss for the period

Balance at March 31, 2019

$ (28,245,337 )

$ (10,753,309 )

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

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OF CASH FLOWS

the Six Months Ended December 31, 2019 and 2018

the Nine Months Ended March 31, 2020 and 2019

OPERATING ACTIVITIES

Adjustments to reconcile Net loss to net cash used in

Adjustments to reconcile Net loss to net cash used in operations:

Debt discount

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FINANCING ACTIVITIES

Proceeds from convertible Note

payable - from Roran Capital

Net cash provided by Financing

Proceeds from convertible Note payable - from Roran Capital

Net cash provided by Financing Activities

Net cash increase for period

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Supplemental Non-cash Investing and Financing Activities

Intrinsic value of embedded beneficial conversion option 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

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(“SBIC”).

The Company previously made equity investments in, and provided loans to, small businesses to finance

their growth, expansion, and development.

The Company previously made equity investments in, and provided loans to, small businesses to finance their

growth, expansion, and development.

Under applicable SBA regulations, the Company was restricted to investing only in qualified

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in a small business in October 1996.

May 28, 2014, with the Company’s consent, the court having jurisdiction over the action filed by the SBA (the “

Court ”)

entered a Consent Order and Judgment Dismissing Counterclaim, Appointing Receiver, Granting Permanent Injunctive Relief and Granting

Money Judgment (the “

May 28, 2014, with the Company’s consent, the United States District Court for the Eastern District of Virginia, having

jurisdiction over an action filed by the SBA (the “

Court ”), entered a Consent Order and Judgment Dismissing

Counterclaim, Appointing Receiver, Granting Permanent Injunctive Relief and Granting Money Judgment (the “

Order ”).

The Order appointed the SBA receiver of the Company for the purpose of marshaling

and liquidating in an orderly manner all of the Company’s assets and entered judgment in favor of the United States of America,

on behalf of the SBA, against the Company in the amount of $11,770,722.

The Court assumed jurisdiction over the Company and the

SBA was appointed receiver effective May 28, 2014.

The Order appointed the SBA receiver of the Company for the purpose of marshaling and liquidating in an orderly manner all of

the Company’s assets and entered judgment in favor of the United States of America, on behalf of the SBA, against the Company

in the amount of $11,770,722.

The Court assumed jurisdiction over the Company and the SBA was appointed receiver effective May

Company effectively stopped conducting an active business upon the appointment of the SBA as the receiver and the commencement

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

The Company is no longer operating as a registered investment company under the Investment Company Act.

The Company will now seek to either (i)

enter into a new business;

or, (ii) merge with, or otherwise acquire, an active business which would benefit from operating as

a public entity, and has undertaken a search to identify the best possible candidate(s) in order to provide value to the shareholders

of the Company.

The Company is no longer

operating as a registered investment company under the Investment Company Act.

The Company will now seek to either (i) enter into

a new business;

or, (ii) merge with, or otherwise acquire, an active business which would benefit from operating as a public entity,

and has undertaken a search to identify the best possible candidate(s) in order to provide value to the shareholders of the Company.

Company has filed with the SEC an application pursuant to Section 8(f) of the Investment Company Act of 1940 for an order declaring

that the Company has ceased to be a registered investment company.

In response to that filing, the SEC issued to the Company comments

in a letter dated May 16, 2018.

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

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

resolution in the near future.

On April 22, 2020, the SEC issued an order under Section 8(f)

of the Investment Company Act of 1940, as amended, declaring that the Company has ceased to be an investment company.

the Company is now a reporting company under the Securities Exchange Act of 1934, as amended.

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

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Operating results

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

for the three and nine months ended March 31, 2020, are not necessarily indicative of the results that may be expected for the

year ending June 30, 2020.

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We are subject to the risks and uncertainties associated with a business with no operating business or assets and no revenue,

as well as limitations on our operating capital resources.

We have incurred operating losses and negative operating cash flows

since the Receivership, and we expect to continue to incur operating losses and negative operating cash flows at least through

the near future.

Roran, which is a related party to the Company, has agreed to advance our Company a limited amount of funding

in order to partially meet our most critical cash requirements.

For further discussion of the advances made by Roran, see Notes

as well as limitations on our capital resources.

We have incurred losses and negative operating cash flows since the Receivership,

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

Roran, which is

a related party to the Company, has agreed to advance our Company a limited amount of funding in order to partially meet our most

critical cash requirements.

The Company’s note payable to Roran, and related accrued interest, is due upon maturity in

June 2020, and the Company does not presently possess sufficient resources to satisfy these obligations.

For further discussion

of the advances made by Roran, see Notes 3 and 5.

CAPITAL CORPORATION

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under the outstanding judgment payable were owed to Roran rather than the SBA.

Upon purchase, the Company began to accrue

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

On May 16, 2019, Roran forgave the entire principal amount

and interest due thereon of $10,609,635.

Upon purchase, the Company began to accrue interest

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

On May 16, 2019, Roran forgave the entire principal amount and

interest due thereon of $10,609,635.

September 19, 2017, the Company entered into a Convertible Loan Agreement with Roran (the “Loan Agreement”).

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

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.

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 $190,768 as of December 31, 2019.

Pursuant to the Loan Agreement, Roran agreed to loan the Company an amount not to exceed a total of $150,000 in principal

over 18-months.

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%

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.

The Company recorded a BCF due to the conversion option of $116,800, which

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On December 13, 2019, the Company amended its Loan Agreement and Promissory Note with Roran as follows:

the total amount to be loaned was increased to $250,000, and (ii) the maturity date was extended to June 19, 2020.

total amount to be loaned was increased to $250,000, and (ii) the maturity date was extended to June 19, 2020.

18, 2019 and February 6, 2020, Roran loaned the Company $15,000 on each date, and recorded a total corresponding debt

discount of $20,000 for the intrinsic value of the BCF.

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

Company has incurred total obligations of $202,558 as of March 31, 2020 (net of debt discounts and exclusive of accrued

CAPITAL CORPORATION

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

December 31, 2019

March 31, 2020

Convertible Note Payable (See Note 3)

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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 Roran has agreed

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

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

has been deregistered as an investment company as referenced in these financial statements.

December 2019, a novel coronavirus disease (“COVID-19”) was initially reported, and in March 2020, the World Health

Organization characterized COVID-19 as a pandemic.

COVID-19 has had a widespread and detrimental effect on the global economy

as a result of the continued increase in the number of cases and affected countries and actions by public health and governmental

authorities, businesses, other organizations and individuals to address the outbreak, including travel bans and restrictions,

quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns.

The ultimate impact

of the COVID-19 pandemic on our business is unknown and will depend on future developments, which are highly uncertain and cannot

be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and

protective actions that governments may direct.

Management believes the capital markets have been negatively impacted by COVID-19,

which negatively impacts the Company's ability to consummate a merger transaction.

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

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except as required by law.

following discussion of the results of operations for the three and six months ended December 31, 2019, and 2018, respectively,

following discussion of the results of operations for the three and nine months ended March 31, 2020, and 2019, respectively,

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

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that continuing to operate as a registered investment company was impossible.

The Company and Roran entered in to a Convertible

Loan Agreement on September 19, 2017, as amended, to fund the Company’s expenses while it sought a new business to

undertake or to merge with an existing business.

The Company and Roran entered into a Convertible

Loan Agreement on September 19, 2017, as amended, to fund the Company’s expenses while it sought a new business to undertake

or to merge with an existing business.

The New Board has continued to work toward achieving that goal.

Company is no longer operating as a registered investment company under the Investment Company Act.

The Company has engaged and

intends to continue to engage, qualified professionals and personnel in order to bring the Company current in its SEC filings

The Company filed all delinquent SEC filings as a registered investment company.

The Company believes

that as of June 28, 2017, it ceased to be a registered investment company so it did not file as a registered investment company

for the period ended June 30, 2017.

Instead, the Company filed a Form 10-K for that period.

Prior to the filing of that 10-K,

on January 18, 2018, the Company filed with the SEC an application pursuant to Section 8(f) of the Investment Company Act of 1940

for an order declaring that the Company has ceased to be a registered investment company.

In response to that filing, the SEC

issued to the Company comments in a letter dated May 16, 2018.

The Company responded to those comments with the filing of an Amended

Application on June 4, 2018.

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

and expects resolution soon.

April 22, 2020, the SEC issued an order under Section 8(t) of the Investment Company Act 1940, as amended, declaring that the

Company has ceased to be an investment company.

As a result the Company is now a reporting company under the Securities Exchange

Act of 1934, as amended.

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

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The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly

observable as of the reporting date.

Pricing inputs that are generally unobservable inputs and not corroborated by market data.

market prices available in active markets for identical assets or liabilities as of the reporting date.

inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable

as of the reporting date.

inputs that are generally unobservable inputs and not corroborated by market data.

assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or

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or private offering, among other factors.

of Three and Six Months Ended December 31, 2019, And 2018

the three and six month periods ended December 31, 2019, and 2018, the Company did not have any operations, and therefore, there

of Three and Nine Months Ended March 31, 2020, And 2019

the three and nine months periods ended March 31, 2020, and 2019, the Company did not have any operations, and therefore, there

were no revenues.

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Administrative

fees totaled $19,655 and $21,876 for the three months ended December 31, 2019, and 2018.

fees totaled $11,747 and $12,265 for the three months ended March 31, 2020, and 2019.

The decrease in professional fee expense

was primarily due to more efficient use of professionals.

fees totaled $32,452 and $30,100 for the six months ended December 31, 2019, and 2018.

fees totaled $44,198 and $42,365 for the nine months ended March 31, 2020, and 2019.

The increase in professional fee expense

was primarily due to the fees expended in converting the issuer from a 1940 Act Company to a 1934 Act Company.

expense totaled $7,239 and $28,412 for the three months ended December 31, 2019, and 2018.

The decrease in interest expense was

due to the loan forgiveness of the judgement payable which reduced the amount of interest due.

expense totaled $29,900 and $49,577 for the six months ended December 31, 2019, and 2018.

expense totaled $13,043 and $42,447 for the three months ended March 31, 2020, and 2019.

The decrease in interest expense was

due to the loan forgiveness of the judgement payable which reduced the amount of interest due.

reported a net loss of $26,895 and $50,288 during the three months ended December 31, 2019, and 2018.

The decrease in net loss

was directly attributable to the decrease in interest expense.

reported a net loss of $62,352 and $79,677 during the six months ended December 31, 2019, and 2018.

expense totaled $42,944 and $92,024 for the nine months ended March 31, 2020, and 2019.

The decrease in interest expense was due

to the loan forgiveness of the judgement payable which reduced the amount of interest due.

reported a net loss of $24,790 and $54,712 during the three months ended March 31, 2020, and 2019.

The decrease in net loss was

directly attributable to the decrease in interest expense.

reported a net loss of $87,142 and $134,389 during the nine months ended March 31, 2020, and 2019.

The decrease in net loss was

directly attributable to the decrease in interest expense.

and Capital Resources

have incurred recurring operating losses and negative operating cash flows in fiscal 2018 and through December 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 $250,000 to meet our most critical cash requirements, and of this

amount, we have drawn approximately $190,768 as of December 31, 2019.

The loan facility matures on June

have incurred recurring operating losses and negative operating cash flows in fiscal 2018 and through March 31, 2020, and we expect

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

We have obtained funding through

a convertible loan facility of up to $250,000 to meet our most critical cash requirements, and of this amount, we have drawn approximately

$214,558 as of March 31, 2020.

The loan facility matures on June 19, 2020 and the Company does not presently possess

resources to repay related borrowings and accrued interest.

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

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Our financial statements as of and for the period ended

December 31, 2019, do not contain any adjustments for this uncertainty.

March 31, 2020, 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.

funding as described in Note 3 to 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

Management’s

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Business Targets.

December 31, 2019, we had only $10,333 cash on hand.

March 31, 2020, we had only $11,087 cash on hand.

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

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Also, related party obligations totaling $242,824, which includes

convertible note outstanding and accrued interest payable, are due and payable as of December 31, 2019.

convertible note outstanding and accrued interest payable, are outstanding as of March 31, 2020.

December 2019, a novel coronavirus disease (“COVID-19”) was initially reported, and in March 2020, the World Health

Organization characterized COVID-19 as a pandemic.

COVID-19 has had a widespread and detrimental effect on the global economy

as a result of the continued increase in the number of cases and affected countries and actions by public health and governmental

authorities, businesses, other organizations and individuals to address the outbreak, including travel bans and restrictions,

quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns.

The ultimate impact

of the COVID-19 pandemic on our business is unknown and will depend on future developments, which are highly uncertain and cannot

be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and

protective actions that governments may direct.

Management believes the capital markets have been negatively impacted by COVID-19,

which negatively impacts the Company's ability to consummate a merger transaction.

Sheet Arrangements

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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