First Capital International (FCPN) 10-Q2022 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended September 30, 2022.

☐ Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee required)

For the transition period from                            to                           .

Commission file number: 000-26271

First Capital International, Inc

(Name of Registrant in Its Charter)

5829 W Sam Houston Pkwy N

Suite 405

Houston, Texas 77041

(Address of Principal Executive Offices)

(713) 629-4866

(Issuer’s Telephone Number, Including Area Code)

Securities registered under Section 12(g) of the Exchange Act:

Common Stock ($0.001 Par Value)

(Title of Each Class)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

At November 7, 2022, there were 34,401,924 shares of the registrant’s common stock outstanding (the only class of voting common stock).

FORM 10-Q

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including information included or incorporated by reference, include “forward-looking statements.” Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements in this Quarterly Report on Form 10-Q and the documents incorporated by reference herein and therein are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records, and other data available from third parties. While we believe such third-party information is reliable, we have not independently verified any third-party information and our internal data has not been verified by any independent source. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections, which speak only as of the date on which they are made. As a result, you are cautioned not to place undue reliance on these forward-looking statements.

Factors that could cause or contribute to actual results differing materially from those discussed in the forward-looking statements include in this report, include but are not limited to, those discussed in this report and in our Annual Report on Form 10-K for the year ended December 31, 2021, and in particular, the risks discussed in our Form 10-K under the caption “Risk Factors” in Item 1A therein, and those discussed in other documents we file with the Securities and Exchange Commission (“SEC”). Important factors that in our view could cause material adverse effects on our financial condition and results of operations include, but are not limited to:

These factors and the other risk factors described in this Quarterly Report on Form 10-Q and the documents incorporated by reference herein and therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, actual results or developments anticipated by us may not be realized or, even if substantially realized, that they may not have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.

Unless otherwise indicated, or unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “First Capital,” the “Company,” “we,” “us,” and “our” mean First Capital International, Inc.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FIRST CAPITAL INTERNATIONAL, INC.

BALANCE SHEETS

September 30, 2022 and 2021

(unaudited)

See accompanying notes to these unaudited financial statements.

FIRST CAPITAL INTERNATIONAL, INC.

UNAUDITED STATEMENTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2022 and 2021

(unaudited)

See accompanying notes to these unaudited financial statements.

FIRST CAPITAL INTERNATIONAL, INC.

STATEMENTS OF STOCKHOLDERS’ DEFICIT

For the Three Months Ended September 30, 2022 and 2021

(unaudited)

See accompanying notes to these unaudited financial statements.

FIRST CAPITAL INTERNATIONAL, INC.

STATEMENTS OF STOCKHOLDERS’ DEFICIT

For the Nine Months Ended September 30, 2022 and 2021

(unaudited)

See accompanying notes to these unaudited financial statements.

FIRST CAPITAL INTERNATIONAL, INC.

UNAUDITED STATEMENTS OF CASH FLOWS

For the Three Months Ended September 30, 2022 and 2021

(unaudited)

FIRST CAPITAL INTERNATIONAL, INC.

UNAUDITED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2022 and 2021

(unaudited)

See accompanying notes to these unaudited financial statements.

FIRST CAPITAL INTERNATIONAL, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 – ORGANIZATION

First Capital International, Inc. (the “Company”) was incorporated as a Delaware corporation on April 21, 1994 and assumed its current name in August 1998 when new management took over the Company. The Company is currently a holding company with no existing operations.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited financial statements included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

In the opinion of management, the unaudited condensed financial information included herein reflect all adjustments, consisting only of normal, recurring adjustments, which are necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the interim periods presented. The results of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for a full year or any other interim period.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company currently is a holding company with no existing operations. As shown in the accompanying unaudited financial statements, the Company incurred losses of $43,573 for the nine months ended September 30, 2022 and has an accumulated deficit of $10,943,607 and working capital deficit of $407,388 at September 30, 2022. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Use Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions.

Related Party Transactions

Related party transactions historically have been with companies either owned or controlled by Mr. Alex Genin, the Company CEO, Chairman of the Board of Directors and President of the Company.

During the nine months ended September 30, 2022, the Company received a cash advance from Alex Genin in the amount of $32,000 to fund the Company’s bank account. First National Energy Corp., a company where Alex Genin is the majority shareholder, also paid invoices amounting to $3,000. Outstanding balance due to these related parties amounted to $76,711 as of September 30, 2022.

Net Income/(Loss) per Common Share

Basic and diluted net income per share are computed by dividing the net income/ (loss) by the weighted average number of shares of common stock and common stock equivalents outstanding during the years. Common stock equivalents consist of common stock issuable under the Company’s stock compensation plan for its employees and consultants. Common stock equivalents related to 4.5 million common shares issuable upon conversion of the Series A Convertible Preferred Stock are not included in the diluted loss per share calculations as their effect would be anti-dilutive due to the Company’s net loss.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

NOTE 3 – STOCKHOLDERS’ EQUITY

During the nine months ended September 30, 2022, the Company did not issue any common stock shares, preferred stock shares, warrants or options.

Accrued dividends on preferred shares for the nine months ended September 30, 2022 is $38,625.

NOTE 4 – SUBSEQUENT EVENTS

The Company evaluated events occurring after September 30, 2022, and through the date the financial statements were issued, November 10, 2022 and did not identify any events or transactions that would require disclosure in these financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Plan of Operation

Overview

The Company’s current business objective is to seek a business combination with an operating company. We intend to use the Company’s limited personnel and financial resources in connection with such activities. The Company will utilize its capital stock, debt or a combination of capital stock and debt, in effecting a business combination. It may be expected that entering into a business combination will involve the issuance of restricted shares of capital stock. The issuance of additional shares of our capital stock:

Similarly, if we issued debt securities, it could result in:

Results of Operations during the three months ended September 30, 2022 as compared to the three months ended September 30, 2021

We have not generated any revenues during the three months ended September 30, 2022 and 2021. We had total operating expenses of $6,933 related to general and administrative expenses during the three months ended September 30, 2022, compared to total operating expenses of $9,107 during the three months ended September 30, 2021. The decrease in general and administrative expenses in 2022 is attributable to a decrease in professional fees in connection with the preparation of our regulatory financial reports. We incurred interest expense of $1,101 and $0 during the three months ended September 30, 2022 and 2021, respectively. During the three months ended September 30, 2022 and 2021, we had net losses of $8,034 and $9,107, respectively, mainly due to our general and administrative expenses.

Results of Operations during the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021

We have not generated any revenues during the nine months ended September 30, 2022 and 2021. We had total operating expenses of $40,052 related to general and administrative expenses during the nine months ended September 30, 2022, compared to total operating expenses of $24,455 during the nine months ended September 30, 2021. The increase in general and administrative expenses in 2022 is attributable to an increase in professional fees in connection with the preparation of the regulatory financial reports. We incurred interest expense of $3,521 and $0 during the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, we had net losses of $43,573 and $24,455, respectively, mainly due to our general and administrative expenses.

Liquidity and Capital Resources

At present, the Company has no business operations and no cash resources other than that provided by management. We are dependent upon interim funding provided by management to pay professional fees and expenses. Our President and CEO, Alex Genin, has informally agreed to provide funding as may be required to pay for accounting fees and other administrative expenses of the Company until the Company enters into a business combination. Such funding from Mr. Genin is not guaranteed and he reserves the right to cease providing such funding at any time. The Company would be unable to continue as a going concern without interim financing provided by management.

If we require additional financing, we cannot predict whether equity or debt financing will become available at terms acceptable to us, if at all. The Company will depend upon services provided by management to fulfill its filing obligations under the Exchange Act. At present, the Company has no financial resources to pay for such services.

The Company does not currently engage in any business activities that provide cash flow. It is anticipated that the costs of investigating and analyzing business combinations, maintaining the filing of Exchange Act reports, the investigation, analyzing, and consummation of an acquisition will be paid from additional money contributed by our President and CEO, Alex Genin, or an affiliated party.

During the next 12 months we anticipate incurring costs related to:

We estimate that these costs will be in the range of $60,000 to $80,000 per year, and that we will be able to meet these costs as necessary through advances or loans to us by management and/or an affiliated party.

At September 30, 2022 we had current assets of $1,319, consisting entirely of cash and cash equivalents, and on December 31, 2021, we had current assets of $7,682, also consisting entirely of cash and cash equivalents.

The Company currently plans to satisfy its cash requirements for the next 12 months through borrowings from our President and CEO Alex Genin and believes it can satisfy its cash requirements. The Company expects that money borrowed will be used during the next 12 months to satisfy the Company’s operating costs, professional fees and for general corporate purposes. There is no written funding agreement between the Company and our President and CEO Alex Genin. The Company has only limited capital. Additional financing is necessary for the Company to continue as a going concern. Our independent auditors have an unqualified audit opinion for the years ended December 31, 2021 and 2020 with an explanatory paragraph on going concern.

Off-Balance Sheet Arrangements

As of September 30, 2022 and 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

Contractual Obligations and Commitments

As of September 30, 2022 and 2021, we did not have any contractual obligations.

Critical Accounting Policies

Our significant accounting policies are described in the notes to our unaudited financial statements for the three months ended September 30, 2022 and 2021, and are included elsewhere in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Alex Genin, our President and Chief Executive Officer, is our principal executive officer and our principal financial officer.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this report, an evaluation was carried out by our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Securities and Exchange Commission’s (“SEC”) Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) as of September 30, 2022. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.

Based on management’s evaluation, it concluded that our disclosure controls and procedures were not effective as of September 30, 2022. This determination is based on the previously reported material weakness management previously identified in our internal control over financial reporting, as described below. We are in the process of remediating the material weakness in our internal control, as described below. We believe the completion of these processes should remedy our disclosure controls and procedures. We will continue to monitor these issues.

Previously Reported Material Weakness in Internal Control Over Financial Reporting

In our Annual Report for the year ended December 31, 2021, filed with the SEC on April 15, 2022, management concluded that our internal control over financial reporting was not effective as of December 31, 2021. In the evaluation, management identified a material weakness in internal control related to (a) inadequate segregation of duties within account processes due to limited personnel; (b) lack of written policies and procedures for accounting, IT and financial reporting and record keeping (no control procedures in place); and (c) lack of multiple levels of review over the financial reporting process.

Remediation Efforts to Address Material Weakness

In response to the material weaknesses described above, we anticipate hiring additional accounting personnel in the future, which we believe will help remediate all three of the material weaknesses. Although we hope to hire additional accounting personnel as soon as possible, currently we do not have sufficient capital to hire such additional personnel. It is possible that we will not have adequate financial resources to hire additional accounting personnel until such time as a business combination transaction is consummated.

Changes in Internal Control Over Financial Reporting

Except for the changes discussed above, there have been no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the three months ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, one should carefully consider the discussion of various risks and uncertainties contained in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021. We believe the risk factors presented in this filing and those presented on our 2021 Form 10-K are the most relevant to our business and could cause our results to differ materially from any forward-looking statements made by us.

ITEM 6. EXHIBITS

* Incorporated by reference from our previous filings with the SEC

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.