VIKING CAPITAL GROUP INC (VGCP)
Annual Report (SEC form 10KSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company's operations for the four years ended December 31, 1994 have consisted of efforts to develop its existing plan to become a provider of specialized administration and data processing services for the insurance and financial services industries as described elsewhere herein and efforts to attract capital in order to implement the Company's plan of operations. In addition, during this period the Company has become a fully reporting SEC company and publicly traded with market makers offering the Company's common stock across the USA. The Company became a fully reporting SEC Company in 1994 and its common stock began trading on the over the counter electronic bulletin board January 20, 1995. The Company has received no significant revenues through 1995, revenues of $273,925 in 1996, and revenues of $124,527 in 1997 and no revenue in 1998 and has generated substantial losses in all years.
The Company's plan of operation is described in full in Item 1. Business, above. The Company's plan of operations has been implemented in multiple phases with the implementation of each phase being subject to the receipt of various levels of funding. It is management's belief that such phases have been accomplished as it pertains to preparing the Company for the acquisition of its first insurance company. Complete implementation of the Company's plan of operations is anticipated to require funding in three phases. In phase I, the Company secured, on December 23, 1998, a purchase agreement for the private purchase of up to $2,500,000 (12,500,000 common restricted shares) for working capital. In Phase II, the Company is currently being solicited by various state and local government authorities with economic incentive packages in the range of $20 million to $30 million dollars in grants or other incentives to place the Company's administrative business in their state or local area. The Company expects that this administrative business will employ between 1,200 and 1,450 people. Phase III is in the form of an equity sale of the Company's preferred stock for the purpose of acquiring four to six life insurance companies to reach the Company's immediate goal of $1.5 billion in managed insurance assets. There can be no assurance that such funding will be obtained or that the proposed plan of operation will be completed.
The Company will continue to negotiate for funding of up to $250,000,000 for the purchase of four to six insurance companies, purchase of a life software system, purchase of computer equipment, completion of additional functionality to its technical architecture middleware, and provide working capital and continue to pursue grants and other incentives from state and local authorities for an economic incentive package of between $20 - $30 million. While the Company has secured, on December 23, 1998, a private purchase agreement for up to $2.5 million (12,500,000 common restricted shares) over a period of months, the Company has not received any commitments from any private or institutional lender or investor or from any other source to provide funding to the Company for the purchase of insurance companies as of 12/31/98. Accordingly, while the Company believes that it can successfully conduct a private placement of debt and/or equity, continue to capitalize its subsidiaries, establish broker/dealer alliances and/or conduct a public offering before the end of 1999, with implementation of the remaining phase of the Company's plan of operations to follow shortly thereafter, there is no assurance that the Company can successfully complete a private placement of debt and/or equity or a public offering or that it can successfully implement any of its plan of operations. Failure to successfully complete a private placement and/or public offering of debt and/or equity, or securing funding from other sources, would materially adversely affect the timing and ability of implementation of the Company's plan of operations. If the Company is successful in implementing its plan of operations, the Company will be required to lease, acquire or construct significant additional facilities and equipment and hire substantial additional employees to carry out such operations.
At December 31, 1998, the Company had cash on hand of $47,506, total current assets of $106,394 including cash, and liabilities totaling $851,175 excluding accrued officer's salary of $634,963. Subsequent to 12/31/98 the Company had received additional cash via private sale of common stock of $678,069. Also subsequent to 12/31/98, $68,716 of $304,140 promissory notes outstanding as of 12/31/98 converted to common stock. The Company anticipates that the funds on hand will not sustain current operations beyond the first six months and are not sufficient to implement any of the Company's plan of operations. Accordingly, in order to sustain operations past such period and to implement the company's plan of operations, the Company must secure funds from other sources.
ITEM 7. FINANCIAL STATEMENTS
The "F series" pages follow page 18 and begin with "F-1"
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Independent Auditor's Report..................................................................................................F-3 Consolidated Balance Sheets as of December 31, 1998, and 1997...........................................F-4 Consolidated Statements of Operations for the years ended December 31, 1998, 1997 and for the period from inception (November 12, 1986) to December 31, 1998.................................F-6 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1998, and 1997 and for the period from inception (November 12, 1986) to December 31, 1998....................F-7 Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1997, and for the period from inception (November 12, 1986) to December 31, 1998.............................F-11 Notes to Consolidated Financial Statements .............................................................F-14
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company's financial statements are audited by King Griffin & Adamson P.C., Dallas, Texas. King Griffin & Adamson P.C. also audited the Company's financial statements for the prior year. |
