Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPFinancial_Report.xls
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR5.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR7.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR2.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR4.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR6.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR9.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR8.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR3.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR1.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR23.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR14.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR15.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR18.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR19.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR16.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR22.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR21.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR13.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR10.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR17.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR20.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR12.htm
XML - IDEA: XBRL DOCUMENT - CITIZENS CAPITAL CORPR11.htm
EX-31.1 - CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-15(F) AND 15D-15(F) - CITIZENS CAPITAL CORPex31-1.htm
EX-21.1 - SUBSIDIARIES OF THE COMPANY - CITIZENS CAPITAL CORPex21-1.htm
EX-32.1 - CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(B) AND 18 U.S.C. SECTION 1350 - CITIZENS CAPITAL CORPex32-1.htm


United States
Securities and Exchange Commission
Washington, D. C. 20549

FORM 10-K
(Mark One)

[x] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2011.

[  ]   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: 000-29830
Citizens Capital Corp.
(Name of Issuer as specified in its charter)
 
Texas
75-2368452
(State or other jurisdiction of incorporation organization)
(IRS Employer Identification No.)
 
 Mailing Address: P. O. Box 670406, Dallas, Texas 75367
(Address of principal executive offices)
 
Issuer’s telephone number, including area code:  (469) 359-3868
 
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Class A; no par; common stock

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [x]            No  [  ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes  [x]           No  [  ]
 
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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    [  ]          No   [x]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or  for such shorter period that the registrant was required to submit and post such files).        Yes    [  ]           No   [x]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter)   is not contained  herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information  statements incorporated  by reference in Part III of this Form 10-K or any amendment to Form 10-K.   [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting Registrant.  See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting Registrant” in Rule 12b-2 of the Exchange Act.
Large accelerated filer    [  ]   Accelerated filer    [  ]    Non-accelerated filer    [  ]   Smaller reporting Registrant     [x]

Indicate by check mark whether the registrant is a shell Registrant (as defined in Rule 12b-2 of the Act).   Yes [  ]    No [x]

The aggregate market value of common stock held by non-affiliates of the registrant, based on the closing price for the registrant’s common stock on the Pink OTC Markets Inc. on the last business day of the registrant’s most recently completed second quarter (June 30, 2011) was approximately $0.

The number of shares outstanding for the registrant’s common stock as of December 31, 2011 was:  48,022,500
 
 
1

 
 
CITIZENS CAPITAL CORP.
INDEX TO 10-K Annual Report
   
Cautionary Note on Forward-Looking Statements
Page No.
Explanatory Note
 
     
     
 
PART I
 
     
Item. 1. 
Description of Business
5
     
Item 1A.
Risk Factors
15
     
Item 1B.
Unresolved Staff Comments
21
     
Item 2.
Description of Property
21
     
Item 3.
Legal Proceedings
22
     
Item 4. 
Removed and Reserved
23
     
 
PART II
 
     
Item 5.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
23
     
Item 6. 
Select Financial Data
24
     
Item 7. 
Management’s Discussion and Analysis of Financial Conditions and Results of Operations
25
     
Item 7A.
Quantitative and Qualitative Disclosure About Market Risk
28
     
Item 8.
Financial Statements and Supplemental Data
28
     
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
56
     
Item 9A  Controls and Procedures
57
     
Item 9B.
Other Information
58
     
 
PART III
 
     
Item 10.
Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act.
58
     
Item 11.
Executive Compensation
60
     
Item 12.
Security Ownership of Certain Beneficial Owners and Management
61
     
Item 13.
Certain Relationships and Related Transactions
62
     
Item 14.
Principal Accounting Fees and Services
63
     
 
PART IV
 
   
64
Item 15.
Exhibits, Financial Statements,  Schedules
 

 
2

 
 
Cautionary Note on Forward-Looking Statements

Certain statements discussed in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Forward-looking statements include financial projections, statements of plans and objectives for future operations, statements of future economic performance, and statements of assumptions relating thereto. Forward-looking statements are often identified by future or conditional words such as “will”, “plans”, “expects”, “intends”, “believes”, “seeks”, “estimates”, or “anticipates”, or by variations of such words or by similar expressions. There can be no assurances that forward looking statements will be achieved. By their very nature, forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause our actual results or performance to differ materially from those expressed or implied by such forward-looking statements. Important risks, uncertainties, and other factors that could cause our actual results to differ materially from our forward-looking statements include, among others:

uncertainty regarding the impact of general economic conditions on our business;

risk that customers or partners delay or cancel orders or are unable to honor contractual commitments due to liquidity issues, challenges in their business, or otherwise;

risk that we will experience liquidity or working capital issues and related risk that financing sources will be unavailable to us on reasonable terms or at all;

uncertainty regarding the future impact on our business of the SEC’s administrative proceeding, including customer, partner, employee, and investor concern and potential customer and partner transaction deferrals or losses;

risk associated with current or future regulatory actions or private litigations relating to or delay in timely making required SEC filings;

risk that we will be unable to list or re-list our common stock on a national securities exchange, the Over- the- Counter bulletin board or other quotation service and maintain such listing;

risks due to aggressive competition in all of our markets, including with respect to maintaining sufficient levels of investment in the business and with respect to introducing quality products which achieve market acceptance;

risks created by competitors or introduction of large competitors in our markets with greater resources than our;

risks associated with our ability to recruit and retain qualified;

challenges in accurately forecasting revenue and expenses;

risks associated with acquisitions and related system integrations;

These risks and uncertainties, as well as other factors, are discussed in greater detail in “Risk Factors” under Item 1A of this report. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the filing date of this report. We make no commitment to revise or update any forward-looking statements in order to reflect events or other circumstances after the date any such statement is made, except as otherwise required under the federal securities laws. If we were in any particular instance to update or correct a forward-looking statement, investors and others should not conclude that we would make additional updates or corrections thereafter except as otherwise required under the federal securities laws.

 
3

 

Explanatory Note

For the December 31, 2011, December 31, 2010, December 31, 2009, December 31, 2008, December 31, 2007, December 31, 2006, December 31, 2005, December 31, 2004, December 31, 2003, December 31, 2002, and December 31, 2001 fiscal periods respectively, the Company was in an inactive entity pursuant to Rule 17 CFR 210.3-11. Rule 17 CFR 210.3-11 states that if a registrant is an inactive entity as defined below, the financial statements required by this regulation for purposes of reports pursuant to the Securities Exchange Act of 1934 may be un-audited. An inactive entity is one meeting all of the following conditions: (a) Gross receipts from all sources for the fiscal year are not in excess of $100,000;  (b) the registrant has not purchased or sold any of its own stock, granted options therefore, or levied assessments upon outstanding stock, (c) Expenditures for all purposes for the fiscal year are not in excess of $100,000; (d) No material change in the business has occurred during the fiscal year, including any bankruptcy, reorganization, readjustment or succession or any material acquisition or disposition of plants, mines, mining equipment, mine rights or leases; and (e) No exchange upon which the shares are listed, or governmental authority having jurisdiction, requires the furnishing to it or the publication of audited financial statements.

PART I

Description of Business

Item 1.  Business

General

Citizens Capital Corp. (the "Company") is a development stage holding company based in Dallas, Texas which seeks to acquire and/or develop those operating entities, assets and/or marketing rights which may provide the Company with an entrance into new market segments or serve as a complimentary addition to existing operations, assets, products or services.

For the purpose of entering into the residential mortgage loan market segment; the Company organized a subsidiary, Landrush Realty Corporation on August 15, 1995. Also on August 15, 1995, the Company sold the trademarks and exclusive marketing rights to two of its residential home equity brands, The Texas Home Equity ReFund® and The Cash-Out Mortgage ReFinancer® to Landrush in exchange for 19,000,000 shares of Landrush common stock. On June 13,1997, the Company sold the trademark and exclusive marketing rights to its third residential home equity brand: The Home Equity Cashier® to Landrush in exchange for 333,334 shares of Landrush common stock.

As of December 31, 2010, the Company continues to hold the exclusive marketing rights to both the Texas Home Equity ReFund® and the Cash-Out Mortgage ReFinancer® products. However, the Company is not actively marketing, licensing or operating either of its Texas Home Equity ReFund® or Cash-Out Mortgage ReFinancer® products in the consumer market place.

For the purpose of entering into the print media market segment, the Company organized a subsidiary, Media Force Sports & Entertainment Inc. on June 13, 1997.  Also, on June 13, 1997, the Company sold the trademark, publishing and exclusive marketing rights to its Black Financial Newsâ print publication to Media Force in exchange for 19,333,334 shares of Media Force common stock.

 
4

 

For the purpose of entering into the athletic footwear and apparel market segment, the Company organized a subsidiary, SCOR Brands Inc. on June 13, 1997.  On November 20, 1997, the Company sold the trademark and exclusive marketing rights to its SCOR® brand athletic shoe and apparel logo to SCOR in exchange for 19,333,334 shares of SCOR common stock.

On March 19, 1999, pursuant to the Exchange Act of 1934, as amended, the Company filed a Form 10 registration statement and thereby registered with the United States Securities and Exchange Commission, 39,500,000 shares of its Class A; common stock for secondary market trading.  Said Form 10 registration statement became effective on or about May 16, 1999. The 39,500,000 common shares included 15,000,000 common shares initially held by the Company’s ESOP Trust.

In 2000, the Company acquired the assets of a printing business for integration into its Media Force unit and the Company primarily through this unit began to generate revenues.

On January 5, 2001, the Company finalized a joint venture, research and development agreement with Far Reach Technologies Inc. (the “JV Group”) for the research and development of broadband video broadcast technologies and the development of a multi-channel, direct to home, broadcast TV platform to be deployed over existing internet protocol (IP) based broadband networks.

In order to facilitate its growth and working capital requirements, the Company entered into a funding agreement with SCOR on August 1, 2001. Pursuant to said agreement, the Company agreed to issue 5,000,000 shares of its common stock to SCOR in exchange for 10,000,000 shares of SCOR common stock. To facilitate Re-Marketing, pre-registration and pre-public market movement of SCOR shares between and amongst qualified institutional investors, 30,000,000 aggregate shares of the Company’s SCOR unit common stock outstanding were reclassified as a 144A security (CUSIP #784026106) and received a portal designation on November 8, 2001.

Facilitated by China based contract footwear manufacturers, the Company moved its SCOR brand athletic footwear into full production on January 24, 2002 with the production of 2,928 pairs of SCOR branded footwear in the basketball and running shoe categories to be sold at its SCOR online store at: http://scorbrands.com. Effective August 15, 2002, the Company elected to temporarily suspend all SCOR brand footwear marketing and production due to difficulties in securing sufficient working capital.  As of December 31, 2009, the Company continues to own the exclusive marketing and distribution rights to the SCOR brand footwear and apparel products, as well as, the scorbrands.com domain.  The Company holds 29,233,334 shares of SCOR 144A common stock or 97.4% of said common stock outstanding.

Due to a general decline in the commercial printing business specifically, and a decline in the United States economy generally, precipitated by the closing of the United States stock market for three (3) consecutive days subsequent to the terrorist attacks on the United States on September 11, 2001; combined with the introduction of new, self service consumer, as well as, new, in house business printing technologies, the Company’s commercial printing operation experienced multiple quarters of un-profitability. As such, the Company made the strategic decision to re-deploy its resources and discontinue its Media Force unit’s commercial printing operation effective the period ended December 31, 2003.

On January 1, 2008, the Company’s Media Force unit completed transformation and conversion of its Black Financial News® magazine publication into the Black Financial News® Network (BFNN) video based website, a digital, financial and general news, information and advertising platform located at the following Company owned, internet domain: bfnnetwork.com.

 
5

 

On February 5, 2008, the Company officially completed the internal development of the Dream League Football Association (DLFA), to include the design of its Dream League Football Association, league seal, the league brand and team logos for each of its twenty (20) initial teams.

The Company, through each of its twenty (20) DLFA teams, holds the exclusive television and radio broadcast rights, product manufacturing, product marketing, product merchandising and product distribution rights for each of its twenty (20) uniquely branded teams and team logos. Each the Company’s named DLFA teams as they pertain to their team brands and current cities of operation, respectively, are listed as follows:

Stampede (Austin, TX); Rustlers (Dallas, TX); Drillers (Houston, TX); Warriors (Oklahoma City, OK); River Wranglers (San Antonio, TX); Blackjacks (Las Vegas, NV); Stars (Los Angeles, CA); Mountaineers (Salt Lake City, UT); Pioneers (Portland, OR); Silicons (San Jose, CA); Gamblers (Newark, NJ); Gotham Gladiators (New York, NY); Liberty (Philadelphia, PA); Rhinos (Toronto, CN); Vultures (Richmond, VA); Bulldogs (Chicago, IL); Condors (Columbus, OH); Roaddoggs (Detroit, MI); Stallions (Louisville, KY); Cheezheads (Milwaukee, WI).

On March 15, 2009, the Company’s Media Force unit completed the internal development of its Black Financial News TV Network®, a CNN (Cable News Network) styled, 24/7, daily, broadband video delivered, financial, business and general news broadcast center whose content is targeted towards the global, black consumer market. Black Financial News TV Network® content is delivered both direct to home, via television set top box and to the personal computer (PC) and  transmitted over traditional digital terrestrial, as well as, next generation Internet Protocol (IP) networks through Over the top (OTT) video service providers, and to the subscribers of various multi-channel video, pay-television distribution system operators.

On December 28, 2009, the Company entered into a Sell/Purchase Agreement (the “Purchase Agreement”) with DLFA Industries Inc. (“Industries”), a newly formed entity organized under the Laws of the State of Texas.  Pursuant to the terms of the Purchase Agreement, the Company agreed to sale, to Industries, all of the tangible and intangible assets (the “Assets”) of the Dream League Football Association, professional football league (the “League”) in exchange for the issuance of an aggregate of 250,000,000 shares of Industries’ common stock to the Company @ $0.20 per share or an aggregate common stock share value of $50,000,000, as payment in full, thereby causing Industries to hold 250,100,000 Industries common shares and thence become a 100% percent, wholly-owned subsidiary of the Company as of December 31, 2009.  Pursuant to a Form D; Notice of Securities Sales filed on January 7, 2010 with the Securities and Exchange Commission (File Number: 021-137524), Industries common stock, issued to the Company, were allocated in the following amounts and price per share pursuant to Regulation D; Rule 230.504 and 230.506 respectively, of the Securities Act of 1933, as amended.

1) 5,000,000 shares of DLFA Industries Inc. common stock @ $0.20 per share pursuant to Rule 230.504.

2) 245,000,000 shares of DLFA Industries Inc. common stock @ $0.20 per share pursuant to Rule 230.506.

For the period ended December 31, 2009, there was no public market value for Industries’ common stock. As such, the Company accounted for its aggregate 250,100,000 common share equity interest in Industries on the basis of the $0.0001 par value of Industries’ common stock at the close of the December 28, 2009 transaction between the Company and Industries. Thereby, for the period ended December 31, 2009, the Company recorded a value of $25,010 under the “Other Assets – Investments” section of its balance sheet representing its common stock, equity interest investment in Industries.

 
6

 

On Oct 21, 2010, the Company’s Black Financial News TV Network entered into a 10 year content licensing and distribution agreement with Memphis, Tennessee based Vivicast Media, LLC. (“Vivicast”). Vivicast is in the business of licensing television networks to third-party, multi-channel video pay-television distribution system owners that use CATV, SMATV, MMDS and alternative technology systems for distribution of television networks to their respective subscribers.

On Oct 21, 2010, the Company’s DLFA Industries Inc. unit’s Dream League TV Network entered into a 10 year content licensing and distribution agreement with Memphis, Tennessee based Vivicast Media, LLC. (“Vivicast”). Vivicast is in the business of licensing television networks to third-party, multi-channel video pay-television distribution system owners that use CATV, SMATV, MMDS and alternative technology systems for distribution of television networks to their respective subscribers.

As of the Company’s fiscal period ended December 31, 2011, the Company’s plans contemplate an ongoing pursuit of both synergistic and unrelated assets and/or corporate merger and acquisition opportunities while operating in the following four market segments: 1) commercial and multi-family residential real estate investment and development; 2) (a) specialty news broadcast; (b) broadband sports, information and entertainment television programming; and (c) broadcasting distribution; 3) the design, marketing and distribution of branded athletic shoes and apparel and 4) professional sports entertainment and broadcasting, through its four wholly owned subsidiaries: Landrush Realty Corporation (“Landrush” - 97%); Media Force Sports & Entertainment, Inc. (“Media Force”- 97%); SCOR Brands, Inc. (“SCOR” - 97% ) and DLFA Industries, Inc. (“Industries”- 100%). Operations since inception have primarily included expenditures related to development of the Company’s proposed business ventures.

Bankruptcy, Receivership or Similar Proceeding

Neither the Company nor any of its subsidiary units are nor have bee subject to any bankruptcy, receivership or similar proceeds for the Company’s fiscal years ended December 31, 2009; 2010 or 2011 respectively.

Material Re-classification, Merger, Consolidation or Purchase or Sale of a Significant Amount of Assets

For the Company’s fiscal years ended December 31, 2009; 2010 or 2011 respectively, the Company was not subject to any re-classification, merger or consolidation transactions or proceedings.

On December 28, 2009, the Company entered into a Sell/Purchase Agreement (the “Purchase Agreement”) with DLFA Industries Inc. (“Industries”), a newly formed entity organized under the Laws of the State of Texas.  Pursuant to the terms of the Purchase Agreement, the Company agreed to sale, to Industries, all of the tangible and intangible assets (the “Assets”) of the Dream League Football Association, professional football league (the “League”) in exchange for the issuance of an aggregate of 250,000,000 shares of Industries’ common stock to the Company @ $0.20 per share or an aggregate common stock share value of $50,000,000, as payment in full, thereby causing Industries to hold 250,100,000 Industries common shares and thence become a 100% percent, wholly-owned subsidiary of the Company as of December 31, 2009.  Pursuant to a Form D; Notice of Securities Sales filed on January 7, 2010 with the Securities and Exchange Commission (File Number: 021-137524), Industries common stock, issued to the Company, were allocated in the following amounts and price per share pursuant to Regulation D; Rule 230.504 and 230.506 respectively, of the Securities Act of 1933, as amended.

1) 5,000,000 shares of DLFA Industries Inc. common stock @ $0.20 per share pursuant to Rule 230.504.

2) 245,000,000 shares of DLFA Industries Inc. common stock @ $0.20 per share pursuant to Rule 230.506.

 
7

 

For the period ended December 31, 2009, there was no public market value for Industries’ common stock. As such, the Company accounted for its aggregate 250,100,000 common share equity interest in Industries on the basis of the $0.0001 par value of Industries’ common stock at the close of the December 28, 2009 transaction between the Company and Industries.

Principal Products and Services

For the Company’s fiscal year ended December 31, 2011, the principal products and/or services engaged by the Company, separately and/or in conjunction with and/or on behalf of its Landrush; Media Force; SCOR and Industries’ subsidiaries are as follows:

The Company’s is engaged primarily in the research, evaluation and pursuit of: a) suitable merger and/or acquisition of existing corporate operating entities; b) the internal development and/or acquisition of those assets and/or product marketing and distribution rights which may provide an entry into new markets or serve as a complimentary addition to existing operations, assets, products and/or services.  The principal market for the Company’s products and services are: 1) its own current and future subsidiary units; 2) the corporate parent companies seeking to divest certain operating subsidiaries; divisions and/or operating assets; 3) M&A oriented investment banks, representing corporate parent companies seeking to divest certain operating subsidiaries; division and/or assets.

Landrush completed the internal development of the Texas Home Equity ReFund®, Cash-Out Mortgage ReFinancer® and Home Equity Cashier® home equity brands.  Landrush has the exclusive marketing rights for each of the brands and each brand may be marketed and/or licensed to the public at the discretion and timing of Landrush. For the Company’s fiscal year ended December 31, 2011, neither of the Texas Home Equity ReFund®, the Cash-Out Mortgage ReFinancer® nor the Home Equity Cashier® home equity brand products are actively being marketed or licensed for use by the Company.

Further, Landrush is engaged in the research, evaluation and pursuit of suitable merger and/or asset acquisition opportunities in the commercial, hotel and/or multi-family residential real estate market in order to operate and/or lease said assets.

The principal market for Landrush's contemplated residential real estate development ventures are current apartment residents who seek high quality, alternative housing solutions which are conveniently located and affordably priced. Landrush may utilize local and/or regional real estate professionals or hotel brand franchisors to market its proposed residential housing and/or hotel products and/or services.

The principal market for Landrush's contemplated commercial real estate developments are businesses whose principal activities involve the sale of retail products and/or services directly to the public; point to point distribution warehousing or light manufacturing businesses.  In order to market its contemplated commercial real estate projects, Landrush may work directly with potential tenants, as well as, with commercial real estate brokers to market its proposed commercial real estate properties and/or developments.

The principal products and/or services engaged in by Media Force are: a) its Black Financial News; video based specialty news, information and advertising based website located at the domain of; bfnnetwork.com; b) its contemplated Black Financial News; a broadband and digital terrestrial distributed TV network c) its contemplated 100+ channels; subscriber based; pay TV; sports and entertainment programming and distribution platform.

 
8

 

The principal market for Media Force's Black Financial News video based website and its contemplated Black Financial News; a broadband and digital terrestrial distributed TV Network, is the national African American community. The principal market for Media Force’s contemplated 100+ channels; sports and entertainment programming distribution platform is the general market consumer of sports and entertainment video content.

Media Force proposes to market both its Black Financial News video based website and its contemplated Black Financial News; broadband based TV Network through leading local, regional and nationally syndicated radio broadcast programs directed to the African American consumer market. Media Force intends to market its contemplated 100+ channels; sports and entertainment programming distribution platform to general market consumers of sports and entertainment content through various digital rights subscription resellers, as well as, through local, regional and nationally syndicated radio broadcast programs.

The principal products and services engaged by SCOR are the SCOR® brand line of athletic shoes and apparel.

The principal market for the SCOR® brand line of athletic shoes and apparel is the general athletic, casual and recreational sports consumer market, as well as, the Company’s Industries unit, contemplated Dream League Football Association, professional football league. The Company contemplates SCOR being the official shoe of the Dream League Football Association, as well as, each of its contemplated twenty (20) teams.

SCOR intends to primarily market its SCOR® brand line of athletic shoes and apparel directly to consumers through its contemplated E-Commerce based website store operating through its currently existing scorbrands.com, internet domain. Subsequently and secondarily, SCOR contemplates pursuing third-party distribution through various local, regional and national retail sporting goods and footwear stores.

The principal product and/or service contemplated by Industries is its Dream League Football Association (DLFA), a professional football league, with contemplated teams located in twenty (20) of the leading consumer markets in the United States.

The principal market for Industries’ DLFA professional football league are general sports consumers in those major and emerging growth metropolitan consumer markets which do not have professional football teams.

Industries’ intends to market its DLFA professional football league operations and games principally through its dreamleaguefootball.com league website, as well as, through its own Dream League TV network, a broadband and digital terrestrial distributed, sports programming network. Industries also contemplates re-distributing its DLFA sports content to consumers in its twenty (20) target markets through various television channels and networks.

Status of Any Publicly Announced New Product or Service

As of the Company’s fiscal year ended December 31, 2011, the status of the Company’s products and/or services and for that of each of its (4) subsidiaries are as follows:

The Company, separately and/or in conjunction with and/or on behalf of its subsidiaries, is currently engaged in the research, evaluation and pursuit of: a) suitable merger and/or acquisition of existing corporate operating entities; b) the development and/or acquisition of those assets and/or product marketing and distribution rights which may provide an entry into new markets or serve as a complimentary addition to existing operations, assets, products and/or services; c) the deployment, into the commercial marketplace, of those assets whose development has been completed.
 
 
9

 

Landrush is currently engaged in the research, evaluation and pursuit of suitable commercial; multi-family residential real estate and/or hotel development and/or acquisition opportunities.

Landrush’s Texas Home Equity ReFund®, Cash-Out Mortgage ReFinancer® and Home Equity Cashier® home equity brands have been developed and previously announced publicly. Landrush has the exclusive marketing rights for each of the brands and each brand may be marketed and/or licensed to the public at the discretion and timing of Landrush. As of the Company’s fiscal year ended December 31, 2010, neither of the Texas Home Equity ReFund®, the Cash-Out Mortgage ReFinancer® nor the Home Equity Cashier® home equity brand products are actively being marketed or licensed for use on a commercial basis.
 
Media Force’s development of both its Black Financial News, video based, specialty news, information and advertising based interest website and it’s Black Financial News, broadband and digital terrestrial distributed TV network has been completed. Subject to the acquisition, by the Company, of the equipment necessary for broadcast, as well as, the acquisition of on air and production talent, the Black Financial News TV Network is market ready for implementation.  On October 21, 2010, the Company’s Black Financial News TV Network entered into a 10 year content licensing and distribution agreement with Memphis, Tennessee based Vivicast Media, LLC. (“Vivicast”). Vivicast is in the business of licensing television networks to third-party, multi-channel video pay-television distribution system owners that use CATV, SMATV, MMDS and alternative technology systems for distribution of television networks to their respective subscribers.

Media Force’s development of its 100+ channels, sports and entertainment programming and distribution platform has been completed. Subject to the acquisition of the equipment necessary for broadcast distribution, as well as, the acquisition of production talent, the Media Force 100+ channels, sports and entertainment programming and distribution platform is ready for market implementation.

SCOR's development of its SCOR® brand line of athletic shoes and apparel has been completed.  SCOR has arranged for the production of its SCOR® brand line of athletic shoes and apparel through China based contract manufacturers.  Currently, the production of its SCOR® brand line of athletic shoes and apparel may be initiated at the sole discretion of SCOR by submitting and executing product purchase orders with selected, China base contract manufacturers.  From the date a production order is submitted by SCOR to its China based contract manufacturers, it generally takes thirty (45) days, depending on the order size, to complete the production cycle. Further, an additional twenty (20) days is generally required for ocean shipping from China based production facilities to the port of Los Angeles and the subsequent transport by rail to warehouse storage facilities in Dallas, Texas.

The Company initiated development of the Dream League Football Association (DLFA), professional football league. To facilitate the further development of the DLFA, the Company has transferred all assets and the master broadcast, merchandising, marketing and team operating rights related to the DLFA, to Industries, for a previously disclosed financial consideration.  Industries’ is furthering the development and operations of the DLFA.  Currently, the development of the DLFA is complete and the DLFA operation is ready to begin to pursuit of players, coaches and otherwise begin to market its contemplated operations. On Oct 21, 2010, the Company’s DLFA Industries Inc. unit’s Dream League TV Network entered into a 10 year content licensing and distribution agreement with Memphis, Tennessee based Vivicast Media, LLC. (“Vivicast”). Vivicast is in the business of licensing television networks to third-party, multi-channel video pay-television distribution system owners that use CATV, SMATV, MMDS and alternative technology systems for distribution of television networks to their respective subscribers.

The Company, in conjunction with its Media Force, SCOR and Industries subsidiaries has made previous public announcements concerning its products and/or services. The Company, separately, and in conjunction with and/or on behalf of its current and future subsidiary units anticipates making additional public announcements as the Company and its subsidiaries continue to move its products and services into the public market place.

 
10

 

Competition

The Company is engaged in the internal development and/or operation of certain assets and seeks to pursue various external corporate mergers and acquisition (M&A) opportunities. The Company contemplates acquiring, owning and managing various corporate manufacturing, distribution and/or service companies for the purpose of both profit and the opportunity of capital appreciation.  Typically, the industry is characterized by the presence of small, medium and large private equity and/or venture capital firms.  Generally, said private equity and/or venture capital firms may be privately and/or publicly held with access to both the public and private equity and debt capital markets respectively. The principal method of acquisition of these private equity and/or venture capital companies is to utilize combinations of cash, equity and debt to consummate transactions with its merger and/or acquisition targets. The specific combination of cash, equity or debt utilized by each of the private equity and/or venture capital companies is generally dependent upon current conditions in the both the public and private capital market place.

KKR, Blackstone Group, Providence Equity Partners, Carlyle Group, Apollo Group, Fortress Investments, Cerberus Investment Group, Berkshire Hathaway, Valhi, and Hicks Acquisition Group are amongst the industry's leading market participants in the mergers and acquisition segments respectively. However, there are numerous other local and regional market participants that manage asset portfolios of various sizes.

The Company’s Landrush unit contemplates operating in the multi family residential; hotel and commercial real estate property segments. Landrush intends to acquire, own, manage and lease said properties. Both the multi family residential; hotel and commercial real estate property segments are very competitive and generally consist of entities structured as specialty, real estate investment trust (REIT).  Typically, the industry is characterized by the presence of large, publicly traded REIT’s with access to both the public and private equity and debt capital markets respectively. The principal method of acquisition of each of these REIT’s is to utilize combinations of cash, equity and debt to consummate said property acquisition transactions. The specific combination of cash, equity or debt utilized by each REIT is generally dependent upon current conditions in the multi family residential and commercial real estate industry, as well as, the capital markets.

Equity Residential, Vornado Realty Trust, Apartment Investment & Management Company, Lincoln Property Company, Fortress Investment Company and Equity Office Properties Trust are amongst the industries leading market participants in the multi family residential; hotel and commercial real estate segments respectively.

Landrush believes that it may face tremendous competitive risk and high barriers to entry in its attempts to gain market share from its more established competitors.  Consequently, gaining a leading market share position is not the objective of Landrush. However, Landrush believes that through the utilization of various alternative methods of property acquisition, re-deployment of assets, distressed real estate market conditions and access to the public and private capital markets it may achieve a higher initial level of competitive market results then would otherwise be likely.

The Company’s Media Force unit contemplates operating in the general broadband and digital terrestrial distributed video, specialty news, information, advertising; entertainment and sports programming distribution, industry segments.

The general broadband, digital terrestrially distributed, video sports and entertainment segment is characterized by television networks, media companies, film studios, sports networks, broadband content providers and syndicated, video distributors who generally distribute their video content over existing internet protocol (IP) networks and/or direct to home televisions in H.264, streaming format via set top box and/or personal computer. Further, the leading participants in the broadband video distribution market typically pursue competitive advantages by seeking alliances with leading digital content distributors, sports and entertainment content providers; content delivery networks and internet service providers.

 
11

 

The specialty video news, information and entertainment programming segment is characterized by niche market programmers who target their content to specific, demographic based audiences.  Through its specialty video content, each video programmer attempts to appeal to the interests of its target market audience. Subsequently, video programmers and distributors offer their content to their targeted audiences directly and through video distributors on both a commercial advertising and/or sponsorship supported basis.

The Company’s Media Force unit will generally be in competition with various broadband and digital, sports and entertainment video distribution platforms. The leading participants in the video distribution platform segment are: Hulu, Universal Sports Network, Fancast, MLB.com, NBA Broadband, ESPN3 and You tube.

The Company’s Media Force units’ BFN Network segment will generally be in competition with various specialty video news, information and entertainment content programmers. The leading participants in the content programming segment targeted towards the demographic based consumer markets for which Black Financial News TV Network contemplates operations are: TV One, CNN, MSNBC, BET News and Fox Business News.

The Company believes that both its Media Force unit and its Black Financial New TV Network segments respectively may face tremendous competitive risk in its attempts to gain market share from its more established specialty broadband, content programmers. However, Media Force and it Black Financial News TV Network segment believes that through the utilization of new technologies and the advent of new broadband, video channels and digital content distribution platforms direct to the home via set top box and directly to various mobile devices, that it may achieve a higher level of market penetration and operational results then would otherwise be likely.

Industries’ DLFA unit contemplates a professional football league for male gender participants who are at minimum eighteen (18) years of age and have obtained, at minimum, their high school diploma or a general equivalency designation and who in return for their on field services, receive financial compensation.

The primary amateur football market for Industries’ DLFA unit male gender participants who are at least eighteen (18) years of age and have obtained their high school diploma for which Industries’ DLFA unit competes is the National Collegiate Athletics Association (NCAA). Currently, the NCAA is both the leading and dominant industry competitor in the football market place for the services of male gender participants who are at least eighteen (18) years of age and have obtained their high school diploma.  In exchange for the opportunity to pursue and obtain a college or university level degree, open recruiting for the services of male gender participants who are at least eighteen (18) years of age and have obtained their high school diploma is the principal method of competing and obtaining the services of said male gender participants by the NCAA football market segment.  Industries’ DLFA unit believes that its competitive position is strengthened in this industry segment by providing its male gender participants with professional level, financial compensation for the performance of their on field services in exchange for an opportunity to also work towards and obtain a college or university level degree.

The primary professional football markets for Industries’ DLFA unit for male gender participants who receive financial compensation for their services for which Industries’ DLFA unit competes is the National Football League (NFL); Canadian Football League (CFL) and the United Football League (UFL) respectively. Currently, the NFL and CFL respectively are the leading industry competitors in the football market place for male gender participants who receive financial compensation in exchange for their services. The agreement to and the exchange of, a mutually acceptable financial consideration is the principal method of competing for and obtaining the services of male gender participants in the professional football market for which Industries’ DLFA unit competes.  Industries’ DLFA unit believes that its competitive position is strengthened in this industry segment by: 1) establishing teams in twenty (20) new consumer markets; 2) being the most active employer in each of the twenty (20) consumer markets for which it contemplates team operations, sports not withstanding; 3) providing male gender participants 18 years or older and who have at a minimum obtained their high school diploma or G.E.D. equivalence with an viable alternative to amateur level, college athletics which provides them with professional level, financial compensation while also providing with an opportunity to work towards and obtain a college or university level degree; and  4) providing its male gender participants with additional opportunities to obtain employment in the professional football industry.

 
12

 

The Company’s SCOR unit contemplates operating in the athletic footwear and apparel industry. The athletic footwear and apparel industry is keenly competitive in the United States and on a worldwide basis in the areas of new product development, price, product identity, marketing, distribution, and customer service support. SCOR anticipates that it will compete with an increasing number of specialized athletic shoe and apparel companies. The intense competition and the rapid changes in technology, as well as, consumer preferences for existing athletic footwear and apparel brands constitute significant risk factors for SCOR.  Yet, SCOR has demonstrated the viability of the SCOR Brand by moving the brand from its proto type; to development stage to actual product production, delivery and consumer market sales. During previous periods, said sales where generated primarily through its scorbrands.com owned E-Commerce, online store.

Nike, Reebok, Adidas, Converse, Sketcher and Under Armour are amongst the leading market brands in the footwear and apparel industry. Given the proprietary nature of existing production, marketing and distribution processes, SCOR may face tremendous competitive risk in its attempts to gain market share from its more established competitors. However, SCOR believes that through the utilization of various alternative methods of product production, marketing and distribution, it may achieve a higher initial level of market results then would otherwise be attainable.

            Sources and Availability of Raw Materials

The intended operations of the Company's and/or subsidiaries may be dependent upon sources and/or the availability of raw materials for the initiation and completion of its contemplated business ventures.

The Company intended business is not dependent upon sources and/or the availability of raw materials for the initiation and completion of its contemplated business operations.

Landrush's purposed multi-family residential and commercial development ventures are highly dependent upon sources and the availability of raw materials. Landrush may source and use such raw materials as: steel beams, wood, bricks, cement, and plastic. Landrush general building contractors may make direct use of said raw materials during the course of any proposed, contracted building assignment. All material sources of raw materials which may be needed by Landrush to carry out its contemplated residential and commercial development ventures are generally available in sufficient supply.

Media Force intended business is not dependent upon sources and/or the availability of raw materials for the initiation and completion of its any of its contemplated business operations.

 
13

 

SCOR's branded athletic shoes shall be dependent upon a ready source of natural and synthetic rubber, vinyl and plastic compounds, foam cushioning materials, nylon, canvas, and leather. SCOR's proposed apparel products are dependent upon the use of natural and synthetic fabrics, treads and specialized performance fabrics designed to repel rain, retain heat, or efficiently transport body moisture. SCOR's contemplated athletic shoes and apparel lines shall be produced by third party, contract manufacturers located in China. Said contract manufacturers typically buy raw materials in bulk, as needed for production. Raw materials necessary to produce SCOR’s branded footwear is generally available in or are delivered to the countries where the manufacturing process takes place. The contract manufacturers who have been engaged to produce SCOR's branded line of shoes and apparel have not experienced any material level of difficulties in satisfying the raw material requirements used for the production of the SCOR brand line of athletic shoes and apparel.

Industries’ intended DLFA professional football league team uniforms and team merchandise shall be dependent upon a ready source of natural and synthetic rubber, mesh, nylon, cotton and leather materials.  Industries’ contemplated team uniforms and team merchandise shall be produced by third party, contract manufacturers located in China. Said contract manufacturers typically buy raw materials in bulk, as needed for production. Raw materials necessary to produce Industries’ team uniforms and team merchandise are generally available in, or are delivered to the countries where the manufacturing process takes place. The contract manufacturers who have been engaged to produce Industries’ team uniforms and team merchandise have not experienced any material level of difficulties in satisfying raw material requirements used for the production of Industries’ team uniforms and team merchandise.

Dependence of Segment on a Single Customer

For the Company’s fiscal year ended December 31, 2011, neither the Company nor its Landrush, Media Force, Industries or SCOR units, nor any of their segments, were dependent upon a single customer or a few customers for the generation of aggregate product sales which are equal to 10% or more of its consolidated revenue.

Patents, Trademarks, Licenses, Franchises and Concessions

The Company utilizes trade and/or service marks on a substantial number of the products and/or services proposed for Re-marketing by its Landrush; Media Force; SCOR and DLFA subsidiaries.  The Company believes having distinctive marks that are unique and readily identifiable is a very important factor in creating and maintaining a market for its products and services, in identifying the Company and its subsidiaries, establishing exclusive product branding, marketing and distribution rights and in distinguishing its products and services from the other products and services offered in the market place.  The Company and its subsidiaries consider its trade and service brand marks to be amongst its most valuable assets.

The Texas Home Equity ReFund®; The Cash-Out Mortgage ReFinancer®; The Home Equity Cashier®; and SCOR® brand marks are registered trademarks of the Company and/or its subsidiaries. The Company and its subsidiaries have the exclusive right to use and market said trademarks in the market place.

The Black Financial~Newsâ brand mark is a registered trademark of the Company and/or its subsidiaries. As such, the Company and its subsidiaries have the exclusive right to use and market said trademarks in the market place as it pertains to its branded broadcast network.

The SCORâ brand mark is a registered trademark of the Company and/or its subsidiaries.  As such, the Company and its subsidiaries have the exclusive right to use and market said trademarks in the market place as it pertains to the exclusive marketing and distribution rights of its branded footwear and apparel products. Industries, through each of its DLFA league seal and twenty (20) DLFA teams, maintains the exclusive television & radio broadcast, marketing, merchandising and distribution rights for the league, as well as, each of its twenty (20) uniquely branded team logos. Each named DLFA team as they pertain to their current cities, respectively, is listed below:

 
14

 

Stampede (Austin, TX); Rustlers (Dallas, TX); Drillers (Houston, TX); Warriors (Oklahoma City, OK); River Wranglers (San Antonio, TX); Blackjacks (Las Vegas, NV); Stars (Los Angeles, CA); Mountaineers (Salt Lake City, UT); Soldiers (Sacramento, CA); Silicons (San Jose, CA); Gamblers (Newark, NJ); Gotham Gladiators (New York, NY); Liberty (Philadelphia, PA); Rhinos (Toronto, CN); Vultures (Richmond, VA); Bulldogs (Chicago, IL); Condors (Columbus, OH); Corndoggs (Des Moines, IA); Stallions (Louisville, KY); Cheezheads (Milwaukee, WI); Pioneers (Portland); Roaddoggs (Michigan).

               Government Approval of Principal Products and Services

For the Company’s fiscal year ended December 31, 2011, none of the products and/or services of the Company nor its Landrush, Media Force, Industries, or SCOR units require any governmental approval.

Effect on Business of Probable Compliance with Federal, State, and Local Provisions

For the Company's fiscal year ended December 31, 2011 there were no material nor immaterial items or issues of federal, state or local compliance as related to the developmental operations of the Company or of any of its subsidiaries.

Cost and Effects of Compliance with Environmental laws

For the Company's fiscal year ended December 31, 2011 there were no material or immaterial items or issues of federal, state or local compliance as related to the developmental operations of the Company or of any of its subsidiaries. Subsequent to the end of the Company’s December 31, 2011, the Company does not anticipate making any material capital expenditures on any items or on any issues necessary for federal, state or local compliance as related to the developmental operations related to the Company or of any of its subsidiaries.

Change in Numbers of Employees

During the Company’s fiscal year ended December 31, 2011, neither the Company nor any of its subsidiary units added any new employees. During the Company’s 2012 fiscal year, both the Company and its subsidiaries anticipates that it may experience a material change in the number of employees that are required to implement, execute, manage and support the planning, administrative, finance, accounting, marketing, sales and the day to day operational aspects of: 1) its current operations; or 2) any operating entity and/or assets which may be acquired by the Company or its subsidiaries.

Reports to Security Holders

The Company is a reporting company. The Company files quarterly reports on Form 10-Q; annual reports on Form 10-K and current information reports on Form 8-K. The Company may also file various other reports from time to time as prescribed and required by the Securities and Exchange Commission.

The public may read and copy any reports and/or other materials that the Company files with the SEC at the SEC’s pubic reference room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of: 10 a.m. to 3 p.m. Further, the public may obtain information on the operation of the public reference room by calling the SEC at: 1-800-SEC-0330.  Moreover, the SEC maintains an internet site at: http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

 
15

 

In the event that the Company is no longer required to file reports with the SEC or for any reason does not file reports with the SEC, the Company shall voluntarily make an annual report of the Company’s operations, to include, directly with a publicly recognized information repository such as the OTC Markets Pink Sheet Information service.

Item. 1A.     Risk Factors

The following factors, among others, should be considered carefully in evaluating an investment in the Company’s securities. Please read the section in the Company’s Re-marketing Memorandum; titled “Risk Factors”, each sub-caption there under, as well as, the Company’s un-audited financial statements for the periods ended December 31, 2010 and December 31, 2011 respectively in conjunction with the notes to the financial statements thereof carefully before making a decision concerning the purchase of any of the Company’s securities.

Development Stage Status

The Company is a development stage holding Company operating through four subsidiaries; Landrush, Media Force, Industries and SCOR. Operations since the Company’s inception in 1991 through the Company’s fiscal period ended December 31, 2011, have primarily included expenditures related to the development and execution of the Company’s business plan; contemplated business ventures, products and services.  Since its inception, neither the Company nor any of its subsidiaries have been profitable.

Product Quality and Development

The products, services and business ventures developed by the Company’s and its Landrush, Media Force, Industries and SCOR units are newly developed. There are no assurances that a market will develop or can be maintained according to the Company’s business plan; or the contemplated business ventures of any of its subsidiary units.

The Texas Home Equity ReFund® and Cash-Out Mortgage ReFinancer® products contemplated to be offered by the Company’s Landrush unit are new with no history as licensed products.  As such, there are no assurances that the Texas Home Equity ReFund® and Cash-Out Mortgage ReFinancer® products will be received in the market place or obtain a significant level of distribution.

The Black Financial~Newsâ TV Network proposed to be launched by the Company’s Media Force unit is a new broadband video channel with no history of broadcast distribution. There are no assurances that the Black Financial~Newsâ TV Network will be received in the market place or establish a significant level of distribution.

The Company’s SCOR unit has successfully developed, designed and produced its SCOR Brand line of footwear and apparel and introduced said products into the market place. However, in order for the Company’s SCOR unit to be perceived as a viable replacement for better known name brand athletic footwear and apparel, the proposed SCOR products must be visually attractive and solidly constructed. In order to solidify its SCOR Brand products in the market place, SCOR must establish effective channels of distribution and maintain an active product development program. There is no assurance that a market will develop for the SCOR brand line of athletic shoes and apparel.

 
16

 

The Company’s Industries’ DLFA unit is a new professional football league contemplated by Industries.  Industries’ DLFA unit shall be in primary competition with the National Collegiate Athletic Association (NCAA), the National Football League (NFL), the United Football League (UFL) and the Canadian Football League (CFL) for personnel. The NCAA and NFL currently hold leading positions in the market place as it pertains to advertisers and television market share. There are no assurances that Industries’ DLFA segment shall be able to obtain sufficient personnel levels to staff each of its twenty (20) contemplated teams nor that Industries’ DLFA segment shall be able to obtain broadcast distribution for its games on its Dream League TV Network or on any third party television networks.

Dependence on Advertising and Promotion

The success of the products and services contemplated to be offered by the Company’s subsidiary units are dependent on advertising and promotions each of the products and services.

Media Force’s Black Financial~Newsâ TV Network (BFNN) contemplated by the Company’s Media Force unit is dependent upon the advertisement and promotion of its broadband channel, as well as, commercial advertising and sponsorship support as a primary source of revenue generation for the unit. Absent the receipt of advertiser, sponsorship and promotional support, Media Force’s BFNN unit may be adversely affected and there is no assurance that BFNN shall be successful in meeting its operational objectives. Absent the receipt of advertiser and promotional support, Media Force’s BFNN unit may be adversely affected and there is no assurance that BFNN shall be successful in meeting its operational objectives.

The athletic shoe and apparel market is heavily dependant upon marketing. The Company’s SCOR unit shall be highly dependent upon the advertisement and promotion of its branded products in order to generate a sufficient level of sales activity. Absent the receipt of advertiser and promotional support, the Company’s SCOR unit may be adversely affected and there is no assurance that SCOR shall be successful in meeting its operational objectives.

The Company’s Industries’ DLFA unit and each of its contemplated twenty (20) teams is heavily dependant upon advertising, sponsorship and promotional support as a primary source of its revenues.  Absent the receipt of adequate levels of advertiser and promotional support, there are no assurances that Industries’ DLFA segment will be successful in meeting its operational, revenue and profitability objectives.

No Assurance of Profitability

The Company is a development stage Company which has not generated a material level of consolidated revenue to date nor has the Company generated a profit. For the Company’s fiscal years ended December 31, 2010 and December 31, 2011 respectively, the Company generated net losses of <$5,504> and <$13,130> respectively. The Company’s prospects must be considered in light of the risks, expenses and difficulties frequently encountered by development stage companies. To address these risks, the Company must, among other things, establish its products and services in their respective markets, respond to competitive developments, continue to attract, retain and motivate qualified personnel, and continue to upgrade its technologies and commercialize its products and services incorporating such technologies. There can be no assurance that the Company can be successful in addressing these risks or that the Company can be operated profitably, which depends on many factors, including the success of the Company’s marketing program, the control of expense levels and the success of the Company’s business activities.

 
17

 

Possible Under Capitalization and Need For Future Financing

The Company and its subsidiary units anticipates that a significant portion of its short-term working capital and long term acquisition financing resources shall be provided from the proceeds generated by the re-payment and liquidation of its $18,863,700 Note Receivable2 held as payment for a $18,863,700 loan made to its affiliated Citizens Capital Corp. 1998 ESOP Trust (ESOP Trust) in exchange for the purchase a $30,000,000; issue of the Company’s Series 2010A; 7% percent; $1,000 par value; convertible; callable; 144A; First Mortgage Bonds Due 2020. The Promissory Note originating from said Note Receivable2 has a “demand call’ provision that allows the Company to “demand” the liquidation of up to 30,000 Series 2010A; $1,000 par value bonds, held by the ESOP Trust, to certain Qualified Institution Buyers (QIBs) and/or Accredited Investors in the secondary market, at anytime. If the Company is unable to obtain anticipated financing utilizing the “demand call” provisions of its Note Receivable2 held, there can be no assurance that the Company will be able to successfully implement its acquisition oriented business objectives or meet working capital requirements.

Further, the Company and its subsidiary units anticipates that a significant portion of its short-term working capital and long term acquisition financing resources may be provided from the proceeds generated from the secondary market re-sale of the Company’s common equity, held by affiliates and non affiliates of the Company.

While the Company intends to explore a number of options in order to secure alternative financing in the event that currently anticipated financing is not obtained or is insufficient, there can be no assurance that additional financing will be available when needed or obtained on terms favorable to the Company.

Dependence on Management

As of the Company’s fiscal year end December 31, 2011, shareholders and bondholders of the Company are fully dependent upon the Company’s Chief Executive Officer, Billy D. Hawkins, to conduct the Company’s business and to implement the operating objectives of each of its subsidiary units.  Success of the business depends on the skills and efforts of both current and future management and, to a large extent, on the active participation of the Company’s board of directors, executive officers and key employees. The Company may provide stock options in order to retain and motivate qualified management personnel or other key employees. However, the inability to attract and retain qualified management and other key employees could adversely affect the Company’s ability in meeting its business objectives.

Competition

As discussed above, the markets for which the Company’s and each of its subsidiary units propose to operate are intensely competitive, rapidly evolving and subject to rapid fundamental and technological change. Except for that of capital, information, knowledge and technology, there are no substantial barriers to initial entry, and the Company expects competition to persist, intensify and increase in the future. There can be no assurance that market competitors in each of the Company subsidiary units will not develop fundamental methods and technologies or products that render the Company’s products obsolete or less marketable, that the Company will be able to compete successfully, that the Company will be able to successfully enhance its products, or develop new products or lower costs when and as needed.

Proposed Expansion and Ability to Manage Growth

The Company and each of its subsidiary units intend to expand its current level of operations.  Expansion of the Company’s operations will be dependent upon, among other things, its ability to: (I) achieve significant market acceptance for the Company’s products and services; (II) hire and retain qualified management, marketing, technical and other personnel; (III) successfully manage growth, if any (including monitoring operations, controlling costs, and maintaining effective quality controls); and, (IV) obtain adequate levels of both working capital and acquisition financing when needed.  The Company’s prospects for future growth will be largely dependent upon its ability to introduce and achieve significant penetration of its products and technologies in targeted markets, to successfully market its concepts, to develop and commercialize applications of its design and production technologies for the market and to enter into strategic alliances with third-parties in connection with the exploitation of its technologies. The Company may also seek to expand its operations through corporate merger and/or acquisition.

 
18

 

Item 1B.  Unresolved Staff Comments

On May 23, 2011, the SEC issued an Order Instituting Proceeding (“OIP”) against the Company pursuant to Section 12(j) of the Exchange Act.  For further information on this matter, please reference Item 3; “Legal Proceedings” of this Form 10-K Annual Report.

Item 2.  Description of Property

The Company maintains temporary; sublet administrative offices located at: 3409 Webb Garden; Dallas, Texas 75229. In preparation of its anticipated growth and the corresponding need for expanded office accommodations, the Company is actively seeking suitable network studio, management and administrative offices.

As growth and expansion require, the Company and each of its subsidiaries anticipates relocating to administrative offices during the Company's 2012 fiscal year.

Item 3. Legal Proceedings

On May 23, 2011, the Securities and Exchange Commission; Division of Enforcement issued an Order Instituting Proceeding (“OIP”) against the Company pursuant to Section 12(j) of the Exchange Act to suspend or revoke the registration of our common stock because of our failure to file an annual report on Form 10-K or Form 10-KSB since December 31, 2001or quarterly reports on either Form 10-Q or Form 10-QSB since September 31, 2001.  An Administrative Law Judge will consider the evidence in the Section 12(j) proceeding and has been directed in the OIP to issue an initial decision within 120 days of service of the OIP. We are currently evaluating the Section 12(j) OIP, including available procedural remedies and intend to defend against the possible suspension or revocation of the registration of the Company’s common stock.

On June 6, 2011 in reply, the Company filed an initial answer to the OIP.  On June 14, 2011, the Company filed a second answer to the OIP.

On July 15, 2011, the Company and representatives of the SEC Enforcement Division (“Division”) participated in a prehearing conference in which the Division was granted leave to file a summary disposition pursuant to 17 C.F.R. 201.250.  On August 12, 2011, the Division filed its Motion for Summary Disposition and Brief in Support.

On September 7, 2011, the Company filed its Response, in Opposition to the Division’s Motion. On September 12, 2011, the Division filed a brief in Reply on its Motion.  On September 12, 2011, the Company filed a multi-year; comprehensive Form 10-K annual report with the SEC for the period end December 31, 2010, inclusive of financial statements for the fiscal years ended December 31, 2001 thru December 31, 2009.  The Company’s filed Form 10-K annual report thereby provided current information, on the Company, to public investors. On September 15, 2011, the Company filed Form 10-Q for the quarterly periods ended March 31, 2011 and June 30, 2011, respectively. The Company’s filed Form 10-Q quarterly reports thereby provided current information, on the Company, to public investors.

 
19

 

On September 23, 2011, with current information on the Company available to the public, the Administrative Law Judge rendered his Initial Decision in favor of Summary Disposition and the revocation of the registration of the Company’s common stock pursuant to Section 12(j) of the Exchange Act of 1934, as amended.

On October 3, 2011, the Company filed a Motion to Correct Manifest Errors of Fact related to the Initial Decision. The Initial Decision shall become effective in accordance with and subject to the provisions of Rule 360 of the Commission’s Rules of Practice. Pursuant to that Rule, a party may file a petition for review of an Initial Decision within twenty-one days after service of the decision. A party may also file a motion to correct a manifest error of fact within ten days of the Initial Decision pursuant to Rule 111 of the Commission’s Rules of Practice. If a motion to correct a manifest error of fact is filed by a party, then that party shall have twenty-one days to file a petition of review from the date of the order resolving the motion to correct a manifest error of fact. As such, the Petition for Review of Initial Decision and Notice of Appeal of Administrative Proceedings Pursuant to Section 12(j) of the Exchange Act of 1934 was timely filed, pursuant to the Initial Decision by the Commission dated September 23, 2011.

The Initial Decision will not become final until the Commission enters an order of finality. The Commission will enter an order of finality unless a party files a petition for review or a motion to correct a manifest error of fact, or unless the Commission determines on its own initiative to review the Initial Decision. If any of these events occurs, the Initial Decision shall not become final.

On November 2, 2011, the Company filed a Petition for Review of Initial Decision and Notice of Appeal of Administrative Proceedings Pursuant to Section 12(j) of the Exchange Act of 1934.

Said request for review not withstanding, due to the egregious nature of the underlying errors in the Findings of Fact in the Initial Decision which were material in several of the underlying premises which contributed to the Administrative Law Judge’s Initial Decision (See E-Smart Technologies, Inc., Order Remanding Proceedings; Securities Exchange Act of 1934 Release No. 50514; October 12, 2004); and the prejudice and inequity exhibited against the Company in the Initial Decision as related to the “non-exclusive” application of revocation sanctions for the same Violations under Section 13(a); Rules 13a-1 and 13a-13 of the Exchange Act of 1934 as exhibited In the Matter of Comverse Technology, Inc.; Securities Exchange Act of 1934 Release No. 65301; Administrative Proceeding File No. 3-13828; the Company intends to move with vigor in seeking judicial review of any final order entered pursuant to such decision.

On November 16, 2011, pursuant to Commission Rule of Practice 411,1/ the petition of Citizens Capital Corp., for review of the administrative law judge’s initial decision was granted.  Pursuant to Rule of Practice 411 (d), 3/ the Commission, on its own initiative, has determined to review what sanctions, if any, are appropriate in this matter.

On January 17, 2012, the SEC; Division of Enforcement filed a brief with the Commission, in opposition, to Citizens Capital Corp.’s petition for Review of the Initial Decision of the Administrative Law Judge, after said petition for review was granted by the Commission, on its own initiative, on November 16, 2011.

Again, on January 17, 2012, the SEC; Division of Enforcement curiously filed a motion with the Commission, for leave to adduce additional evidence while concurrently opposing Citizens Capital Corp.’s petition for Review of the Initial Decision of the Administrative Law Judge.

 
20

 

On January 27, 2012, the Company filed its Opposition to the Division of Enforcement’s motion for leave to adduce additional evidence.

On February 6, 2012, the Company filed Opposition Number 2; to the Division of Enforcement’s motion for leave to adduce additional evidence.

As of March 1, 2012, there has not been any further determination or ruling in this matter. The Company intends to continue to move with vigor in seeking initial judicial and subsequently, appeal level court review, if necessary, of any final order entered pursuant to such decision.

Item 4. (This item has been removed and reserved)

PART II

Item 5.  Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of        Equity Securities

The Company’s common stock originally traded on the NASD Over-the-Counter Bulletin Board under the symbol CAAP in the first quarter of the Company’s fiscal year ended December 31, 2000. The Over-the-Counter Bulletin Board is an inter-dealer quotation system whose price quotes does not reflect any retail mark-up, mark-down or commission and may not represent actual transactions. The high and low price quotes for the Company’s common stock during each quarter of fiscal year 2000 was as follows:

   
Stock
   
High
Low
2000
     
 
First Quarter
.03
.02
 
Second Quarter
1.71
.1875
 
Third Quarter
2.25
.14
 
Fourth Quarter
.34
.04

Beginning in the Company’s fiscal year ended December 31, 2002 thru its fiscal year ended December 31, 2011, the Company’s common stock did not have any market makers actively making a market in its common stock. As such, the Company’s common stock has not been actively traded during the referenced period. The high and low price quotes for the Company’s common stock during each quarter of fiscal year 2011 was as follows:

   
Stock
   
High
Low
2011
     
 
First Quarter
.00
.00
 
Second Quarter
.00
.00
 
Third Quarter
.00
.00
 
Fourth Quarter
.00
.00

As of December 31, 2011, there were approximately 51 record holders of the Company’s common stock.

The Company has not paid any cash or common stock based dividends on its common stock since its inception. Periodically, the Company will consider the payment of dividends in light of the Company’s earnings, capital requirements, financial condition and other factors, but there is no assurance that the Company will elect to pay dividends in the future.

 
21

 

The Company is not currently subject to any restrictions which would limit its ability to pay either cash or stock dividends on its common equity, providing that sufficient earnings and/or surplus are available to pay a cash dividend.

For the Company’s fiscal period ended December 31, 2011; December 31, 2010 and December 31, 2009 respectively, the Company did not purchase any of its own equity securities.

Item 6.  Select Financial Data

The Company qualifies as a smaller reporting company as defined by 229.10(f)(1). As such, the Company is not required to provide the information required by this item.

Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Explanatory Note” at the beginning of this report, reading the section entitled; “Business” under Item 1 of this report, as well as, reading the consolidated financial statements and the related notes thereto which appear elsewhere in this report under both Item 8 and Item 15(a) of this report. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and all of which could be affected by uncertainties and risks. Our actual results may differ materially from the results contemplated in these forward-looking statements as a result of many factors including, but not limited to, those described under “Risk Factors” under Item 1A.

Selected Annual Results of Operations

The following discussion of the financial condition and results of operations of the Company for its fiscal year ended December 31, 2011 should be read in conjunction with the Financial Statements and the related Notes thereto included under Item 8, “Financial Statements” located in this Form 10-K. Operations since inception have primarily included expenditures related to operations and the internal development of the Company’s assets and proposed business ventures, research; and the development of its prototype branded products and services. The Company’s operations since January 1, 2011, include redeployment of its Media Force unit’s Black Financial News Network website and completion of the launch of its Black Financial News TV Network, as well as, redeployment of its DLFA Industries unit’s Dream League Football website and completion of the launch of its Dream League Football Association, professional football league and its Dream League TV game programming Network.

Further, the Company’s operations since January 1, 2011 included completion of the internal development of its 100+ channels; subscriber based; pay television, sports and entertainment, programming and distribution platform.

The Company’s Landrush unit is currently evaluating, for acquisition, various commercial, hotel and multi-family residential real estate purchase opportunities.

The Company has previously completed the development of its SCOR brand line of footwear and apparel and is currently pursuing the resumption of production, marketing and distribution of its SCOR Brand line of products.

 
22

 

The Company anticipates its SCOR brand footwear being designated the official shoe of its DLFA Industries unit’s Dream League Football Association, professional football league.

The following table shows selected results of operations for the fiscal years ended December 31, 2001 thru December 31, 2011. As of December 31, 2011, the Company has completed the internal development of its portfolio of products and services.  With the exception of the initial introduction of its SCOR Brand line of athletic, casual footwear and apparel target market consumers, the Company, as of December 31, 2011, had not introduced its products and services into the consumer market.  As such, the figures in the table below may not be reflective of future operations.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
Year Ended December 31,
 
 
 
 
 
 
2011
 
 
 
 
2010
 
 
 
 
2009
 
 
 
 
2008
 
 
 
 
2007
 
 
 
 
2006
 
 
 
 
2005
 
 
 
 
2004
 
 
 
 
2003
 
 
 
 
2002
 
 
 
 
2001
From Period of Inception  (March 12, 1991)
to December 31, 2011
Sales
$  0
$    13
$    37
$  103
$ 198
$       0
$   369
$      0
$  7,054
$ 36,106
$ 71,531
$ 177,937
                         
Cost of Sales
0
0
3
0
0
0
0
0
3,487
7,197
12,843
37,401
                         
Other Income
0
0
(4,750)
0
0
0
0
0
(10,758)
0
6,801
(8,707)
                         
Gross Margin
0
13
(4,716)
103
198
0
369
0
3,567
28,909
65,489
131,829
                         
G & A Expensive
13,130
5,517
9,938
9,568
7,787
10,215
24,435
3,359
3,530
29,781
128,840
492,473
                         
Net Income (Loss)
(13,130)
(5,504)
(14,654)
(9,465)
(7,589)
(10,215)
24,066
(3,359)
(10,721)
(872)
(63,351)
(360,644)
                         
Net Loss (Per Share)
*
*
*
*
*
*
*
*
*
*
*
*
                         
*Less than $0.01 Per Share
 

Liquidity and Capital Resources

Since its inception, the Company has financed its operations primarily from contributions from its principle stockholder, the sale of its common stock, and re-marketing with related parties. For the periods ending December 31, 2010 and 2011 respectively, contributions from its principal stockholder totaled $4,190 and $2,580 respectively. The Company had ($62,602) in cash as of December 31, 2010.

The Company’s operating activities generated a net loss of ($63,351); ($872); ($10,721); ($3,359); ($24,066); ($10,215); ($7,589); ($9,465); ($14,654); ($5,504) and ($13,130), respectively for the fiscal years ended December 31, 2001; December 31, 2002; December 31, 2003; December 31, 2004; December 31, 2005; December 31, 2006; December 31, 2007; December 31, 2008; December 31, 2009;  December 31, 2010 and December 31, 2011 respectively. Losses generated during each of these periods were due to general administrative and operating expenses exceeding both developmental and operational revenue for the reported periods.

 
23

 

As a development stage Company, the Company’s products and services have not been fully introduced, marketed and distributed into the consumer market place and thus have not generated a significant level of revenues streams necessary to offset administrative and operating expenses through the Company’s fiscal year ended December 31, 2011. During fiscal year 2012, the Company’s plans to introduce and publicly market its 1) subscriber based Black Financial News TV Network; 2) Dream League Football Association, professional football league; 3) Dream League TV Network; 4) 100+ channels; IPTV subscriber based; pay television, sports and entertainment, programming and distribution platform.

For the fiscal year ended December 31, 2010 and 2011 respectively, the Company used ($0) and $0 net cash, respectively for investing activities. As a development stage Company, the Company has not generated sufficient cash from operations to initiate a material level of investing activities; however, investment in subsidiary common stock during fiscal year 2009 was financed by an exchange of intangible assets for subsidiary stock.

At December 31, 2011, the Company’s level of cash reserves and liquid working capital may not be sufficient to allow the Company to introduce and publicly market its developed products and services into the consumer market place. During fiscal year 2011, the Company, as related to receipt of the sales proceeds thereof, may pursue the secondary re-marketing of both equity and debt held by its ESOP Trust or other non-affiliates, as selling security holders. The Company continues to pursue lines of credit from third party lenders; pursue both short term and/or long term borrowings from institutional investors necessary to fund its working capital requirements and the introduction of its branded products and services into the consumer market place.

As of its fiscal year ended December 31, 2011, the Company did not have a material level of commitments for capital expenditures. However, during its 2012 fiscal year, the Company’s anticipates making capital expenditures of approximately $520,000 for the purchase of certain studio and broadcast equipment related to 1) its Black Financial News TV Network; 2) its Dream League TV Network; and 3) its 100+ channels; IPTV subscriber based; pay television, sports and entertainment, programming and distribution platform. The Company anticipates that the capital necessary for its acquisition initiatives and the further introduction of its products and/or services into the consumer marketplace shall be derived from the anticipated proceeds received from the secondary, re-marketing, to both institutional and accredited investors, of its common equity and Series 2010A Bonds, held by it ESOP Trust, as selling security holder.

Result of Operations

The Company is a development stage company whose internally developed assets, branded products and services have not been significantly advertised, promoted or introduced into the consumer marketplace as of its fiscal year ended December 31, 2011

As such, revenue generated as a result of the Company’s internally developed assets, branded products and services did not generate a material level of operating revenue during this period.

For the fiscal periods ended December 31, 2009; December 31, 2010 and December 31, 2011 respectively, the Company had revenue of; $37; $13; and $0, respectively.

For the fiscal period ended December 31, 2011, the Company’s DLFA Industries unit contributed $0 to the Company’s operating revenue for the period.

For the fiscal period ended December 31, 2011, the Company’s Media Force unit contributed $0 to the Company’s operating revenue for the period.

 
24

 

For the fiscal period ended December 31, 2011, the Company’s Landrush unit contributed $0 to the Company’s operating revenue for the period.

For the fiscal period ended December 31, 2011, the Company’s SCOR unit contributed $0 to the Company’s operating revenue for the period.

During its 2012 fiscal year, the Company anticipates making capital expenditures of approximately $520,000 related to the purchase of studio and broadcast equipment related to 1) its Media Force unit’s Black Financial News TV Network; 2) its Industries’ Dream League TV Network; and 3) its 100+ channels; IPTV subscriber based; pay television, sports and entertainment, programming and distribution platform.

It is the Company’s opinion that at the event in which its internally developed assets, products and services are fully introduced, advertised, and distributed into the market place, there shall be a corresponding increase in the Company’s revenue and profitability. Further, it is the Company’s objective to initiate and pursue a program of growth and acquisition which will allow the Company to add, to its current holdings, various operating companies and/or operating assets thereby allowing the Company to “acquire” revenue.

Developments since our Last Periodic Report

There has been no material company developments since September 30, 2011, the date of the Company’s last filed, third quarter periodic report.

As of the Company’s fiscal period ended December 31, 2011, the Company’s plans contemplate an ongoing pursuit of both synergistic and unrelated assets and/or corporate merger and acquisition opportunities while operating in the following four market segments: 1) commercial and multi-family residential real estate investment and development; 2) (a) specialty news broadcast; (b) broadband sports, information and entertainment television programming; and (c) broadcasting distribution; 3) the design, marketing and distribution of branded athletic shoes and apparel and 4) professional sports entertainment and broadcasting, through its four wholly owned subsidiaries: Landrush Realty Corporation (“Landrush” - 97%); Media Force Sports & Entertainment, Inc. (“Media Force”- 97%); SCOR Brands, Inc. (“SCOR” - 97% ) and DLFA Industries, Inc. (“Industries”- 100%). Operations since inception have primarily included expenses related to development of the Company’s proposed business ventures.

Item 7A.  Quantitative and Qualitative Disclosure about Market Risk

Market risk represents the risk of loss that may impact the Company’s financial condition due to adverse changes in financial market prices and rates.  The Company is exposed to market risk related to changes in overall market interest rates as it relates to the Company’s Series 2010A; 7% percent; 144A bonds, if and when said bonds are remarketed in the institutional debt market by the Company’s affiliate and selling bondholder. .

Interest Rate Risk on our Debt

Because the interest rates applicable to our Series 2010A; 7% percent; 144A bonds are fixed, the Company may be exposed to market risk from rises in market interest rates.  In the event that market interest rates rise, the Company’s Series 2010A; 7% percent; 144A bonds may have to be significantly discounted in order to remarket said bonds according to competitive, current market rates.  The Company does not utilize any hedging instruments or derivative techniques in relations to its Series 2010A; 7% percent; 144A bonds. For a description of the Company’s Series 2010A; 7% percent; 144A bonds, please see Note No. 13 and Note No. 14 respectively of the Notes to the Company’s 2011 Financial statements.

 
25

 


Item 8.  Financial Statements and Supplementary Data

The Company is a smaller reporting company as defined by 229.10(f)(1). As such, the Company is not required to provide the Supplementary Data information segment required by this item.  However, the Company is required to provide Financial Statements related to this item 8.

For the period December 31, 2001 thru December 31, 2011, the Company was an inactive entity pursuant to Rule 17 CFR 210.3-11 (Please See Index Section Entitled – “Explanatory Note”). If a registrant is an inactive entity as defined below, the financial statements required by this regulation for purposes of reports pursuant to the Securities Exchange Act of 1934 may be un-audited. An inactive entity is one meeting all of the following conditions: (a) Gross receipts from all sources for the fiscal year are not in excess of $100,000;  (b) the registrant has not purchased or sold any of its own stock, granted options therefore, or levied assessments upon outstanding stock, (c) Expenditures for all purposes for the fiscal year are not in excess of $100,000; (d) No material change in the business has occurred during the fiscal year, including any bankruptcy, reorganization, readjustment or succession or any material acquisition or disposition of plants, mines, mining equipment, mine rights or leases; and (e) No exchange upon which the shares are listed, or governmental authority having jurisdiction, requires the furnishing to it or the publication of audited financial statements.

The Company is hereby providing its financial statements (un-audited) under this Item 8 for the period ended December 31, 2011.

Index to Consolidated Financial Statements:
 
   
 
Page No.
   
 Management's Accounting Report
30
   
     Financial Statements (Un-Audited)
 
   
             Consolidated Balance Sheet
31
 
 
             Consolidated Statements of Operations
33
   
             Consolidated Statement of Stockholder’s Equity (Deficit)
34
   
             Consolidated Statements of Cash Flows
37
   
             Notes to Consolidated Financial Statements
39

 
26

 

MANAGEMENT’S ACCOUNTING REPORT


Board of Directors
Citizens Capital Corp.
Dallas, Texas

The Company's management utilizes accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenues and expenses. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements and notes are representations of the Company's management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting controls and preventing and detecting fraud. The Company's system of internal accounting controls is designed to assure, among other items, that; 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period and in a timely manner to produce financial statements which fairly present the financial condition of Citizens Capital Corp. (a development stage company).

These financial statements are the responsibility of the Company’s management. In the opinion of management, the financial statements referred to herein present fairly, in all respects and without any material misrepresentations, the financial position of Citizens Capital Corp. (a development stage company) for the years ended December 31, 2011 and December 31, 2010, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for the years ended December 31, 2011 and December 31, 2010 and from the period of inception (March 12, 1991) to December 31, 2011.

/s/ Billy D. Hawkins
Citizens Capital Corp.
Chief Executive Officer


Dallas, Texas
March 1, 2011

 
27

 
CITIZENS CAPITAL CORP.
(a development stage company)



CONSOLIDATED BALANCE SHEET

For The Year Ended December 31, 2011 and December 31, 2010


   
2011
   
2010
 
CURRENT ASSETS:
           
Cash
  $ (62,602 )   $ (71,758 )
Accounts receivable
    -       13  
Total current assets
    (62,602 )     (71,745 )
                 
OTHER ASSETS:
               
   Investments –  (Note 10)
    25,010       25,010  
   Note Receivable2 from ESOP Trust - (Note 11)
    18,863,700       18,863,700  
                        Total other assets
    18,888,710       18,888,710  
                 
                 
PROPERTY AND EQUIPMENT, net of accumulated depreciation
    -       -  
                 
INTANGIBLE ASSETS, net of accumulated amortization of: $11,118 (2011); $7,936   (2010)  - (Note 12)
               
   Brands; Rights; Services and Contracts
    24,786       27,540  
   Goodwill
    3,856       4,284  
                        Total intangible assets
    28,642       31,824  
                 
Total assets
  $ 18,854,750     $ 18,848,789  
                 
LIABILITIES AND STOCKHOLDERS DEFICIT
         
                 
CURRENT LIABILITIES:
               
Accounts payable
  $ 11,877     $ 1,327  
Advances from stockholder
    8,270       8,270  
Total current liabilities
    20,147       9,597  
                 
LONG TERM LIABILITIES:
               
Credit card cash advances – (Note 4)
    38,418       38,418  
Interest Payable – Credit card advances  (Note 4)
    57,233       52,678  
   Loans from stockholders – (Note 6)
    26,714       26,714  
   Interest Payable - Stockholders’ Loans -  (Note 6)
    9,846       8,440  
   Series 2010A; 7% percent; $1,000 par value; convertible; callable; 144A; First Mortgage Bonds due 2020 - (Note 13)
     30,000,000        30,000,000  
Discount on Series 2010A; 144A Bond Issuance - (Note 14)
    (11,136,300 )     (11,136,300 )
                        Total long term liabilities
    18,995,911       18,989,950  
                 
                        Total liabilities
  $ 19,016,058     $ 18,999,547  
                 
COMMITMENT - (Note 9)
               
                 
STOCKHOLDERS’ DEFICIT:
               
Preferred stock, 7 ¼ percent; $1.00 stated value, 5,000,000 shares authorized; 1,000,000 shares issued and outstanding - (Note 8)
    1,000,000       1,000,000  
Common stock, no par value, 100,000,000 shares authorized; 48,022,500 shares issued and outstanding ($.01 stated value)
    480,225       480,225  
Additional paid-in capital
    48,818,823       48,816,243  
Note receivable1 from ESOP – (Note 7)
    (50,099,712 )     (50,099,712 )
Deficit accumulated during the development stage
    (360,644 )     (347,514 )
Total stockholders’ deficit
    (161,308 )     (150,758 )
                 
Total liabilities and stockholders’ deficit
  $ (18,854,750 )   $ (18,848,789 )

See accompanying notes to consolidated financial statements.

 
28

 
CITIZENS CAPITAL CORP.
(a development stage company)




CONSOLIDATED STATEMENTS OF OPERATIONS

   
Year Ended December 31,
   
Period from
Inception
(March 12, 1991)
to
 
   
2011
   
2010
   
December 31, 2011
 
                   
SALES
  $ 0     $ 13     $ 177,937  
                         
COST OF SALES
    0       0       37,401  
                         
OTHER INCOME/(LOSS)
    -       -       (8,707 )
                         
GROSS MARGIN
    0       13       131,829  
                         
GENERAL AND ADMINISTRATIVE EXPENSES
    13,130       5,517       492,473  
                         
NET LOSS
  $ (13,130 )   $ (5,504 )   $ (360,644 )
                         
NET LOSS PER SHARE (basic and diluted)
  $   *   $   *        
                         
* Less than $.01 per share
 
See accompanying notes to consolidated financial statements.
 
29

 
CITIZENS CAPITAL CORP.
(a development stage company)



 
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

   
Preferred Stock
   
Common Stock
   
Additional
Paid-In
   
Note
Receivable
   
Accumulated
       
   
Shares
 
Amount
   
Shares
   
Amount
   
Capital
   
from ESOP
   
Deficit
   
Totals
Common stock issued founder upon incorporation
   -   $ -       300     $ 3     $ (3 )   $ -     $ -     $ -  
                                                             
Common stock issued founder December 24, 1993
   -      -       22,499,700       224,997       (224,997 )      -        -        -  
                                                             
Preferred stock issued November 1, 1994
  1,000,000     1,000,000        -        -       (988,000 )      -        -       12,000  
                                                             
Contributions by stockholder at various dates prior to 1997
   -      -        -        -       56,096        -        -       56,096  
                                                             
Cumulative net loss through December 31, 1996
   -      -        -        -        -        -       (65,271 )     (65,271 )
                                                             
BALANCES, December 31, 1996
  1,000,000     1,000,000       22,500,000       225,000       (1,156,904 )     -       (65,271 )     2,825  
                                                             
Common stock issued for brand and service marks November 14, 1997
   -      -       3,000,000       30,000       (30,000 )      -        -        -  
                                                             
Contributions by stockholder during 1997
   -      -        -        -       9,307        -        -       9,307  
                                                             
Net loss for the year
  -     -       -       -       -       -       (9,657 )     (9,657 )
                                                             
BALANCES, December 31, 1997
  1,000,000     1,000,000       25,500,000       255,000       (1,177,597 )     -       (74,928 )     2,475  
                                                             
Common stock issued to ESOP May 8, 1998
   -      -       15,000,000       150,000       49,950,000       (50,100,000 )      -        -  
                                                             
Contributions by stockholder during 1998
   -      -        -        -       15,563        -        -       15,563  
                                                             
Net loss for the year
  -     -       -       -       -       -       (17,353 )     (17,353 )
                                                             
BALANCES, December 31, 1998
  1,000,000     1,000,000       40,500,000       405,000       48,787,966       (50,100,000 )     (92,281 )     685  
                                                             
Contributions by stockholder during 1999
   -      -        -        -       17,319        -        -       17,319  
                                                             
Net loss for the year
  -     -       -       -       -       -       (18,203 )     (18,203 )
                                                             
BALANCES, December 31, 1999
  1,000,000     1,000,000       40,500,000       405,000       48,805,285       (50,100,000 )     (110,484 )     (199 )
                                                             
Common stock issued and options for services
  -     -       10,000       100       30,000       -       -       30,100  
                                                             
Contribution by stockholder during 2000
   -      -        -        -       1,623        -        -       1,623  
                                                             
Net loss for  year
  -     -       -       -       -       -       (87,234 )     (87,234 )
                                                             
BALANCES, December 31, 2000
  1,000,000     1,000,000       40,510,000       405,100       48,836,908       (50,100,000 )     (197,718 )     (55,710 )
                                                             
Common stock issued to Joint Venture  Partner January 5, 2001
 
-
 
-
      1,500,000       15,000       (15,000 )    
-
     
-
     
-
                                                             
Common stock issued for services January 25, 2001
 
-
 
-
      1,012,500       10,125      
-
     
-
     
-
      10,125  
                                                             
Common stock issued to SCOR Brands subsidiary August 1, 2001
 
-
 
-
      5,000,000       50,000       (50,000 )    
-
     
-
     
-
                                                             
Principal Repayment by ESOP of  Note Receivable during 2001
 
-
 
-
     
-
     
-
     
-
      170      
-
      170  
                                                             
Net loss for  year
  -     -       -       -       -       -       (63,351 )     (63,351 )
BALANCES, December 31, 2001
  1,000,000     1,000,000       48,022,500       480,225       48,771,908       (50,099,830 )     (261,069 )     (108,766 )
                                                             
Net loss for  year
  -     -       -       -       -       -       (872 )     (872 )
BALANCES, December 31, 2002
  1,000,000     1,000,000       48,022,500       480,225       48,771,908       (50,099,830 )     (261,941 )     (109,638 )
                                                             
Net loss for  year
  -     -       -       -       -       -       (10,721 )     (10,721 )
BALANCES, December 31, 2003
  1,000,000     1,000,000       48,022,500       480,225       48,771,908       (50,099,830 )     (272,662 )     (120,359 )
                                                             
Contribution by stockholder during 2004
                                2,159                       2,159  
                                                             
Principal Repayment by ESOP of  Note Receivable during 2004
 
-
   
-
     
-
     
-
     
-
      118      
-
      118  
                                                             
Net loss for  year
  -     -       -       -       -       -       (3,359 )     (3,359 )
BALANCES, December 31, 2004
  1,000,000     1,000,000       48,022,500       480,225       48,774,067       (50,099,712 )     (276,021 )     (121,441 )
                                                             
Contribution by stockholder during 2005
                                18,929                       18,929  
                                                             
Net loss for  year
  -     -       -       -       -       -       (24,066 )     (24,066 )
BALANCES, December 31, 2005
  1,000,000     1,000,000       48,022,500       480,225       48,792,996       (50,099,712 )     (300,087 )     (126,578 )
                                                             
Contribution by stockholder during 2006
                                7,170                       7,170  
                                                             
Net loss for  year
  -     -       -       -       -       -       (10,215 )     (10,215 )
BALANCES, December 31, 2006
  1,000,000     1,000,000       48,022,500       480,225       48,800,166       (50,099,712 )     (310,302 )     (129,623 )
                                                             
Contribution by stockholder during 2007
                                2,897                       2,897  
                                                             
Net loss for  year
  -     -       -       -       -       -       (7,589 )     (7,589 )
BALANCES, December 31, 2007
  1,000,000     1,000,000       48,022,500       480,225       48,803,063       (50,099,712 )     (317,891 )     (134,315 )
                                                             
Contribution by stockholder during 2008
                                4,056                       4,056  
                                                             
Net loss for  year
  -     -       -       -       -       -       (9,465 )     (9,465 )
BALANCES, December 31, 2008
  1,000,000     1,000,000       48,022,500       480,225       48,807,119       (50,099,712 )     (327,356 )     (139,724 )
                                                             
Contribution by stockholder during 2009
                                4,934                       4,934  
                                                             
Net loss for  year
  -     -       -       -       -       -       (14,654 )     (14,654 )
BALANCES, December 31, 2009
  1,000,000     1,000,000       48,022,500       480,225       48,812,053       (50,099,712 )     (342,010 )     (149,444 )
                                                             
Contribution by stockholder during 2010
                                4,190                       4,190  
                                                             
Net loss for  year
  -     -       -       -       -       -       (5,504 )     (5,504 )
BALANCES, December 31, 2010
  1,000,000   $ 1,000,000       48,022,500     $ 480,225     $ 48,816,243     $ (50,099,712 )   $ (347,514 )   $ (150,758 )
 
Contribution by stockholder during 2011
                                 2,580                        2,580  
                                                             
Net loss for  year
                                                (13,130 )     (13,130 )
BALANCES, December 31, 2011
  1,000,000   $ 1,000,000       48,022,500     $ 480,225     $ 48,818,823     $ (50,099,712 )   $ (360,644 )   $ (161,308 )
 
See accompanying notes to consolidated financial statements.

 
30

 
CITIZENS CAPITAL CORP.
(a development stage company)



CONSOLIDATED STATEMENTS OF CASH FLOWS

   
 
Year Ended December 31,
   
Period from
Inception
(March 12, 1991)
to
 
   
2011
   
2010
   
December 31, 2011
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net Income/(loss)
  $ (13,130 )   $ (5,504 )   $ (360,644 )
Adjustments to reconcile net loss to cash used by operating activities:
                       
Expenses paid by stockholder
    2,580       4,190       141,998  
Services paid for with stock and options
    -       -       40,225  
Depreciation and amortization
    3,182       3,536       30,590  
Amortization of Series 2010A; 144A bond discount
    -       -       -  
Loss on sale/disposal of equipment
    -       -       20,242  
Loss on sale/disposal of intangible assets - brands, rights, services, contracts
     -        -        20,250  
Changes in assets/liabilities
                       
(Increase) decrease in accounts receivable
    13       (13 )     0  
(Increase) decrease in prepaid expenses
    -       -       -  
(Increase) decrease in intangible assets – brands, rights, services, contracts
     -        -        (60,400 )
(Increase) decrease in intangible assets – Goodwill
    -       -       (4,760 )
(Increase) decrease in other assets - Note Receivable2 from ESOP
     -        -       (18,863,700 )
Increase (decrease) in accounts payable
    10,550       1,327       11,877  
Increase in credit card cash advances
    -       -       38,418  
Increase (decrease) in interest payable Credit card cash advance
     4,555        4,338        57,233  
Increase (decrease) in interest payable –  Stockholders’ Loans
     1,406        1,352