**U.S. Securities and Exchange Commission**

 

**Washington, D.C.  20549**

 

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**FORM 10QSB**

 

**ý**** QUARTERLY REPORTUNDER SECTION 13OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934**

 

**For the quarterly period ended June 30,2004**

 

**OR**

 

**o**** TRANSITION REPORTUNDER SECTION 13OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934**

 

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**Commission File No. 333-111153**

 

**FIRST METROPLEX CAPITAL, INC.**

 
| State of Organization               |   | IRS Employer Identification No. |
|-------------------------------------|--------|---------------------------------|
| **Texas**                           |   | **71-0919962**                  |
|                                |   |                            |
| **15950 Dallas Parkway, Suite 525** |
| **Dallas, Texas  75248**       |

 

Registrant’s telephone number:  **972-720-9000**

 

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Check whether the issuer (1) has filed all reports required to be filedby Section 13 or 15(d) of the Exchange Act during the past 12 months (orfor 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.      (1) Yes ý   No o    (2) Yes  ý   No o

 

As of June 30, 2004, no shares of the Registrant’s common stockwere outstanding.

 

 

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**FIRST METROPLEX CAPITAL, INC.**

**DALLAS, TEXAS**

**(A DEVELOPMENT STAGE ENTERPRISE)**

 

**BALANCE SHEET**

**(UNAUDITED)**

 
| ** **                                                                                | ** ** | **June 30,  2004** | ** ** | **December 31,  2003** | ** ** |
|-------------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Assets                                                                                    |       |                    |       |                        |       |
| Cash                                                                                      |       | $                       | 168,523    |                        | $          | 342,711 |   |
| Prepaid expenses                                                                          |       | 20,608                  |       | 60,430                      |       |
| Prepaid rent                                                                              |       | 15,307                  |       | —                      |       |
| Property and equipment, net of accumulated  depreciation of $7,956 and $890, respectively |       | 173,890                 |       | 28,521                      |       |
| Construction-in-progress                                                                  |       | 495,203                 |       | —                      |       |
| Other assets                                                                              |       | 36,743                  |       | 24,717                      |       |
| Deferred tax asset                                                                        |       | 194,664                 |       | —                      |       |
|                                                                                      |       |                    |       |                        |       |
| **Total assets**                                                                          |       | $                       | 1,104,938  |                        | $          | 456,379 |   |
|                                                                                      |       |                    |       |                        |       |
| Liabilities                                                                               |       |                    |       |                        |       |
| Accrued expenses                                                                          |       | —                  |       | $                           | 14,445     |   |
| Advances from organizers                                                                  |       | $                       | 2,215,000  |                        | $          | 1,062,500 |   |
|                                                                                      |       |                    |       |                        |       |
| **Total liabilities**                                                                     |       | $                       | 2,215,000  |                        | $          | 1,076,945 |   |
|                                                                                      |       |                    |       |                        |       |
| Stockholders’ deficit                                                                |       |                    |       |                        |       |
| Capital stock, par value $.01, 10,000,000  shares authorized, none issued and outstanding |       | —                  |       | —                      |       |
| Deficit accumulated in the development  stage                                             |       | $                       | (1,110,062 | )                           | (620,566   | ) |
|                                                                                      |       |                    |       |                        |       |
| **Total liabilities and stockholders’ deficit**                                      |       | $                       | 1,104,938  |                        | $          | 456,379 |   |

 

2

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**FIRST METROPLEX CAPITAL, INC.**

**DALLAS, TEXAS**

** (ADEVELOPMENT STAGE ENTERPRISE)**

** **

**STATEMENT OF OPERATIONS**

**(UNAUDITED)**

 
| ** **                                  | ** ** | **For the three  months ended  June 30, 2004** | ** ** | **For the three  months ended  June 30, 2003** | ** ** |
|---------------------------------------------|------------|-----------------------------------------------------|------------|-----------------------------------------------------|------------|
|                                        |       |                                                |       |                                                |       |
| Expenses                                    |       |                                                |       |                                                |       |
| Professional fees                           |       | $                                                   | 21,546     |                                                | —     |   |
| Consulting fees                             |       | 91,260                                              |       | —                                              |       |
| Management fees                             |       | 25,500                                              |       | —                                              |       |
| Contract labor/Payroll expense              |       | 124,807                                             |       | —                                              |       |
| Depreciation                                |       | 4,953                                               |       | —                                              |       |
| Advertising expense                         |       | 13,250                                              |       | —                                              |       |
| Investor relations                          |       | 10,179                                              |       | —                                              |       |
| Promotions                                  |       | 18,314                                              |       | —                                              |       |
| Taxes – Payroll                        |       | 13,515                                              |       | —                                              |       |
| Rent                                        |       | 29,220                                              |       | —                                              |       |
| Miscellaneous                               |       | 41,195                                              |       | —                                              |       |
|                                        |       |                                                |       |                                                |       |
| **Loss before  provision for income taxes** |       | $                                                   | (393,739   | )                                                   | —     |   |
|                                        |       |                                                |       |                                                |       |
| **Income tax benefit  (expense)**           |       | $                                                   | 152,145    |                                                |       |   |
|                                        |       |                                                |       |                                                |       |
| **Net income (loss)**                       |       | $                                                   | (241,594   | )                                                   | —     |   |

 

3

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**FIRST METROPLEX CAPITAL, INC.**

**DALLAS, TEXAS**

** (ADEVELOPMENT STAGE ENTERPRISE)**

** **

**STATEMENT OF OPERATIONS**

**(UNAUDITED)**

 
| ** **                                  | ** ** | **For the six  months ended  June 30, 2004** | ** ** | **Inception  (February 20, 2003)  to June 30, 2004** | ** ** |
|---------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------------------------|------------|
|                                        |       |                                              |       |                                                           |       |
| Expenses                                    |       |                                              |       |                                                           |       |
| Professional fees                           |       | $                                                 | 80,254     |                                                           | $          | 171,593 |   |
| Consulting fees                             |       | 213,761                                           |       | 497,827                                                        |       |
| Regulatory application and filing fees      |       | —                                            |       | 45,037                                                         |       |
| Management fees                             |       | 51,000                                            |       | 136,000                                                        |       |
| Contract labor/Payroll expense              |       | 172,742                                           |       | 259,205                                                        |       |
| Depreciation                                |       | 7,066                                             |       | 7,956                                                          |       |
| Advertising expense                         |       | 13,633                                            |       | 13,633                                                         |       |
| Investor relations                          |       | 12,517                                            |       | 12,517                                                         |       |
| Promotions                                  |       | 18,314                                            |       | 18,314                                                         |       |
| Taxes – Payroll                        |       | 13,515                                            |       | 13,515                                                         |       |
| Rent                                        |       | 50,271                                            |       | 50,271                                                         |       |
| Miscellaneous                               |       | 51,087                                            |       | 78,858                                                         |       |
|                                        |       |                                              |       |                                                           |       |
| **Loss before  provision for income taxes** |       | $                                                 | (684,160   | )                                                              | $          | (1,304,726 | ) |
|                                        |       |                                              |       |                                                           |       |
| **Income tax benefit  (expense)**           |       | $                                                 | 194,664    |                                                           | $          | 194,664 |   |
|                                        |       |                                              |       |                                                           |       |
| **Net income (loss)**                       |       | $                                                 | (489,496   | )                                                              | $          | (1,110,062 | ) |
|                                             |            |                                                   |            |                                                                |            |  |  |  |  |

 

4

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**FIRST METROPLEX CAPITAL, INC.**

**DALLAS, TEXAS**

** (ADEVELOPMENT STAGE ENTERPRISE)**

** **

**STATEMENT OF CASH FLOWS**

**(UNAUDITED)**

 
| ** **                                                                 | ** ** | **For the six months  ended June 30** | ** ** | **Inception  (February 20, 2003)  to June 30, 2004** | ** ** |
|----------------------------------------------------------------------------|------------|--------------------------------------------|------------|----------------------------------------------------------------|------------|
| **2004**                                                                   | ** ** | **2003**                                   |
| Cash flows from operating activities                                       |       |                                       |       |                                                           |       |   |   |
| Net loss                                                                   |       | $                                          | (489,496   | )                                                              | —     |   | $ | (1,110,523 | ) |
| Adjustments to reconcile net loss to net  cash used in operating activites |       |                                       |       |                                                           |       |   |   |
| Changes in operating assets and liabilities                                |       |                                       |       |                                                           |       |   |   |
| Decrease (increase) in prepaid expenses                                    |       | 24,515                                     |       | —                                                         |       | (35,915 | ) |
| (Increase) in other assets                                                 |       | (12,026                                    | )          | —                                                         |       | (36,743 | ) |
| (Increase) in deferred tax asset                                           |       | (194,664                                   | )          | —                                                         |       | (194,664 | ) |
| (Decrease) in accrued expenses                                             |       | (14,445                                    | )          | —                                                         |       | — |   |
|                                                                       |       |                                       |       |                                                           |       |   |   |
| **Net cash used in  operating activities**                                 |       | (686,116                                   | )          | —                                                         |       | (1,377,384 | ) |
|                                                                       |       |                                       |       |                                                           |       |   |   |
| Cash flows from investing activities:                                      |       |                                       |       |                                                           |       |   |   |
| Purchases of premises and equipment                                        |       | (640,572                                   | )          | —                                                         |       | (669,093 | ) |
|                                                                       |       |                                       |       |                                                           |       |   |   |
| Cash flows from financing activities                                       |       |                                       |       |                                                           |       |   |   |
| Advances from organizers                                                   |       | 1,152,500                                  |       | —                                                         |       | 2,215,000 |   |
|                                                                       |       |                                       |       |                                                           |       |   |   |
| **Net increase  (decrease) in cash and cash equivalents**                  |       | (174,188                                   | )          | —                                                         |       | 168,523 |   |
|                                                                       |       |                                       |       |                                                           |       |   |   |
| **Cash, beginning of  period**                                             |       | 342,711                                    |       | —                                                         |       | — |   |
|                                                                       |       |                                       |       |                                                           |       |   |   |
| **Cash, end of period**                                                    |       | 168,523                                    |       | —                                                         |       | 168,523 |   |
|                                                                            |            |                                            |            |                                                                |            |  |  |  |  |

 

5

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**FIRST METROPLEX CAPITAL, INC.**

**DALLAS, TEXAS**

**(A DEVELOPMENT STAGE ENTERPRISE)**

 

**STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE SIX MONTH PERIODSENDED JUNE 30, 2004 AND 2003 AND FROM INCEPTION TO JUNE 30, 2004**

**(UNAUDITED)**

 
| ** **                                           | ** ** | **Common  Stock** | ** ** | **Paid In  Capital** | ** ** | **(Deficit) Accumulated  During Development Stage** | ** ** | **Total**  | ** ** |
|------------------------------------------------------|------------|-------------------|------------|----------------------|------------|-----------------------------------------------------|------------|------------|------------|
| Balance, December 31, 2002                      |       | —            |       | —               |       | —                                              |       | —     |       |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Comprehensive Income:                                |       |              |       |                 |       |                                                |       |       |       |
| Net loss, six month period ended  June 30, 2003 |       | —            |       | —               |       | —                                              |       | —     |       |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Total comprehensive income                           |       | —            |       | —               |       | —                                              |       | —     |       |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Balance, June 30, 2003                          |       | —            |       | —               |       | —                                              |       | —     |       |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Balance, December 31, 2003                      |       | —            |       | —               |       | (620,566                                            | )          | (620,566   | )          |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Comprehensive Income                                 |       |              |       |                 |       |                                                |       |       |       |
| Net loss, six month period ended  June 30, 2004 |       | —            |       | —               |       | (489,496                                            | )          | (489,496   | )          |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Total comprehensive income                           |       | —            |       | —               |       | (489,496                                            | )          | (489,496   | )          |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Balance, June 30, 2004                          |       | —            |       | —               |       | (1,110,692                                          | )          | (1,110,692 | )          |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| At inception (February 20, 2003)                |       | —            |       | —               |       | —                                              |       | —     |       |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Comprehensive Income:                                |       |              |       |                 |       |                                                |       |       |       |
| Net loss, from inception to June 30,  2004      |       | —            |       | —               |       | (1,110,692                                          | )          | (1,110,692 | )          |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Total comprehensive income                           |       | —            |       | —               |       | (1,110,692                                          | )          | (1,110,692 | )          |
|                                                 |       |              |       |                 |       |                                                |       |       |       |
| Balance, June 30, 2004                          |       | —            |       | —               |       | (1,110,692                                          | )          | (1,110,692 | )          |

 

6

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**FIRSTMETROPLEX CAPITAL, INC.**

**DALLAS, TEXAS**

**(A DEVELOPMENT STAGE ENTERPRISE)**

**NOTES TO FINANCIAL STATEMENTS**

**JUNE 30, 2004**

** **

**NOTE 1 - BASIS OF PRESENTATION**

** **

The accompanying financial statements have been prepared in accordancewith generally accepted accounting principles for interim financial informationand with the instructions to Form 10-QSB. Accordingly, they do not include all the information and footnotesrequired by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments(consisting of normal recurring accruals) considered  necessary for a fair presentation have beenincluded.  Operating results for thethree and six month period ended June 30, 2004 are not necessarilyindicative of the results that may be expected for the year endingDecember 31, 2004.  These statementsshould be read in conjunction with the financial statements and footnotesthereto included in the prospectus dated April 30, 2004.

 

**NOTE 2 - SUMMARY OF ORGANIZATION**

** **

The Company is a proposed one-bank holding company with respect to a denovo bank, T Bank, N.A. (In Organization), Dallas, Texas (the “Bank”).  The Company filed applications with theOffice of the Comptroller of the Currency (the “OCC”) to charter the Bank andwith the Federal Deposit Insurance Corporation (the “FDIC”) for federal depositinsurance.  Preliminary approvals of eachof these applications have been received. The Company has filed an application with the Federal Reserve Bank ofDallas for prior approval to form a bank holding company and has no reason tobelieve that approval of its application will not be forthcoming.

 

The Company is a development stage enterprise as defined by theFinancial Accounting Standards Board Statement No. 7, “Accounting and Reportingby Development Stage Enterprises,” as it devotes substantially all its effortsto establishing a new business, its planned principal operations have notcommenced and there has been no significant revenue from the planned principaloperations.

 

**ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATION.**

** **

The following discussion and analysis provides information which theCompany believes is relevant to an assessment and understanding of theCompany’s results of operations and financial condition.  This discussion should be read in conjunctionwith the financial statements and accompanying notes appearing in this report.

 

**OVERVIEW**

** **

First Metroplex Capital, Inc. (the “Company”) was incorporated onDecember 23, 2002 to serve as a holding company for a proposed de novobank, T Bank, N.A. (In Organization), Dallas, Texas (the “Bank”).  The Company is still in a development stageand will remain in that stage until the Bank opens for business.  Since its inception, the Company’s main focushas been centered on activities relating to the organization of the Company andthe Bank, conducting the Company’s initial public offering, applying to theOffice of the Comptroller of the Currency (the “OCC”) for a bank charter,applying to the Federal Deposit Insurance Corporation (the “FDIC”) for depositinsurance, conducting the sale of the Company’s common stock,

 

7

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interviewing and hiring personnel, and preparing the locations fromwhich the Company and its subsidiary Bank will operate.

 

The Company has filed a Registration Statement on Form SB-2 with theSecurities and Exchange Commission (the “SEC”) which Registration Statementbecame effective April 30, 2004. Pursuant to the Registration Statement, a minimum of 1,100,000 shares ofthe Company’s common stock, $.01 par value per share (the “Common Stock”), anda maximum of 1,400,000 shares of Common Stock were registered for sale at anoffering price of $10.00 per share.  Asof the date of this report, subscriptions funds in the amount of approximately$10.0 million have been received into escrow for the purchase of shares.

 

**FINANCIAL RESULTS**

** **

For the six-month period ended June 30, 2004, net loss amounted to$498,496.  For the six-month period endedJune 30, 2004, the primary expenses were consulting fees ($213,761),contract labor/payroll expense ($172,742), professional fees ($80,254) and rent($50,271).  Because the Company is in theorganizational stage, it has no operations from which to generaterevenues.  Because First MetroplexCapital, Inc. (“Company”) had engaged in no material operations during the sixmonths ended June 30, 2003, comparative financial information for suchperiod is unavailable.  The Company hasincluded comparative financial information from the date of inception throughJune 30, 2004.

 

Initially, the Bank anticipates deriving its revenues principally frominterest charged on loans and, to a lesser extent, from interest earned oninvestments, fees received in connection with the origination of loans andother miscellaneous fees and service charges. Its principal expenses are anticipated to be interest expense ondeposits and operating expenses.  Thefunds for these activities are anticipated to be provided principally byoperating revenues, deposit growth, purchases of federal funds from otherbanks, sale of loans and investment securities, and partial or full repaymentof loans by borrowers.

 

The Bank’s operations will depend substantially on its net interestincome, which is the difference between the interest income earned on its loansand other assets and the interest expense paid on its deposits and otherborrowings.  This difference is largelyaffected by changes in market interest rates, credit policies of monetaryauthorities, and other local, national or international economic factors whichare beyond the Bank’s ability to predict or control.  Large moves in interest rates may decrease oreliminate the Bank’s profitability.

 

**FUNDING OF OPERATIONS AND LIQUIDITY**

** **

The Company’s operations from inception through June 30, 2004 havebeen funded from advances made by its organizers.  To date, the organizers have advanced$2,215,000 to the Company.  The Companybelieves that the proceeds to be raised during the initial public offering willprovide sufficient capital to support the growth of both the Company and theBank for their initial years of operations. The Company does not anticipate that it will need to raise additionalfunds to meet expenditures required to operate its business or that of the Bankover the initial twelve months after a successful offering; all anticipatedmaterial expenditures during that period are expected to be provided for out ofthe proceeds of the Company’s initial public offering.

 

**CAPITAL EXPENDITURES**

** **

The Company has made significant capital expenditures for the purposeof purchasing property and equipment to be utilized by the Bank in the ordinarycourse of its banking business following receipt of all final regulatoryapprovals and for the purpose of making leasehold improvements to theproperties from which the Company and the Bank will conduct their respectiveoperations.  As of June 30, 2004,the

 

8

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Company had purchased property and equipment having an aggregate costof approximately $173,890 and had expended approximately $495,000 forconstruction in progress in respect of the leasehold improvements.

 

**ADVISORY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

** **

Certain of the statements contained in this report on Form 10-QSB thatare not historical facts are forward looking statements relating to, withoutlimitation, future economic performance, plans and objectives of management forfuture operations, and projections of revenues and other financial items thatare based on the beliefs of the Company’s management, as well as assumptionsmade by and information currently available to the Company’s management.

 

The Company cautions readers of this report that such forward-lookingstatements involve known and unknown risks, uncertainties and other factorswhich may cause the actual results, performance or achievements of the Companyto be materially different from those expressed or implied by suchforward-looking statements.  Although theCompany’s management believes that their expectations of future performance arebased on reasonable assumptions within the bounds of their knowledge of theirbusiness and operations, there can be no assurance that actual results will notdiffer materially from their expectations.

 

The Company’s operating performance each quarter is subject to variousrisks and uncertainties that are discussed in detail in the Company’s filingswith the Securities and Exchange Commission, including the “Risk Factors”section of the Company’s Registration Statement (Registration No.333-111153) as filed with the Securities and Exchange Commission and declaredeffective on April 30, 2004.

 

**ITEM 3. CONTROLS AND PROCEDURES**

** **

The Company’s Chief Financial Officer has evaluated the Company’s disclosurecontrols and procedures as of a date within 90 days prior to the date of thisfiling, and concluded that these controls and procedures are effective.  There have been no significant changes ininternal controls or in other factors that could significantly affect thesecontrols subsequent to the date of this evaluation.

 

Disclosure controls and procedures are the Company’s controls and otherprocedures that are designed to ensure that information it is required todisclose in the reports it files under the Exchange Act is recorded, processed,summarized and reported, within the time periods specified in the Securitiesand Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controlsand procedures designed to ensure that information the Company is required todisclose in the reports that it files under the Exchange Act is accumulated andcommunicated to management, including the principal executive and financialofficers, as appropriate, to allow timely decisions regarding requireddisclosure.

 

**PART II. OTHER INFORMATION**

** **

**ITEM 1.  LEGALPROCEEDINGS.**

** **

The Company is not a party to any pending litigation.

 

**ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.**

** **

During the six months ended June 30, 2004, the Company did notissue any securities without registration under the Securities Act of 1933.

 

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES.**

** **

This item is not applicable.

 

9

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**ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**

** **

No matters were submitted to a vote of the shareholders of the Companyduring the six months ended June 30, 2004.

 

**ITEM 5.  OTHERINFORMATION.**

** **

This item is not applicable.

 

**ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.**

** **

(a)                                  The certificationpursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act isfiled as Exhibit 31 hereto.

 

(b)                                 Thecertification pursuant to Rules 13a-14(b) or Rule 15d-14(b) of the SecuritiesExchange Act  and 18 U.S.C. §1350 isfiled as Exhibit 32 hereto.

 

(c)                                  Reports on Form8-K.  Registrant filed no reports on Form8-K during the three month period ended June 30, 2004.

 

**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 theundersigned thereunto duly authorized.

 

 
|                             | FIRST  METROPLEX CAPITAL, INC. |
|----------------------------------|--------------------------------|
|                             |                           |   |
|                             |                           |   |
| Date:  August 16, 2004 | By:                            | /s/ Patrick G. Adams |   |
|                             |                           | Patrick G. Adams |
|                             |                           | Chief Executive Officer |
|                             |                           | (Executive, Financial and Accounting Officer) |

 

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**EXHIBITINDEX**

** **

** **
| **Exhibit  Number** | ** ** | **Description of Exhibit**                                                                                                      |
|---------------------|------------|---------------------------------------------------------------------------------------------------------------------------------|
| **31**              | ** ** | **Certification  pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act**                                     |
| **32**              | ** ** | **Certification  pursuant to Rules 13a-14(b) or Rule 15d-14(b) of the Securities Exchange  Act  and 18 U.S.C. §1350** |

 

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