10QSB 1 fusa10qsbsep30.txt 10-QSB SEPTEMBER 30, 2005 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2005 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File No. 000-50274 FUSA Capital Corporation ----------------------------------------------------- (Exact name of Registrant as specified in its charter) Nevada 51-0520296 ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1420 Fifth Avenue, 22nd Floor, Seattle, WA 98101 ------------------------------------------ ------------------ (Address of principal executive offices) (Zip/Postal Code) (206) 274-5107 (Telephone Number) ------------------- Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] YES [] NO State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date. There were 58,277,564 common stock shares, par value $0.0001, as of September 30, 2005. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION......................................... 3 Item 1. Financial Statements: Condensed Consolidated Balance Sheet September 30, 2005 (unaudited).....................................................4 Unaudited Condensed Consolidated Statements of Operations for the three months ended September 30, 2005 and cumulative from inception on February 9, 2005 through September 30, 2005..........5 Unaudited Condensed Consolidated Statement of Cashflows for the three months ended September 30, 2005 and cumulative from inception on February 9, 2005 through September 30, 2005.....6 Consolidated Statement of Stockholders' equity from inception on February 9, 2005 through September 30, 2005 ...................7 Notes to Financial Statements (unaudited) ........................8 Item 2. Plan of operation .............................................. 10 Item 3 Controls and Procedures......................................... 12 PART II OTHER INFORMATION............................................... 13 Item 1 Legal Proceedings............................................... 13 Item 2 Changes in Securities and Small Business Issuer Purchases of Equity Security................................... 13 Item 3 Defaults Upon Senior Securities................................ 13 Item 4 Submission of Matters to a Vote of Security Holders............ 13 Item 5 Other Information.............................................. 13 Item 6 Exhibits and Reports on Form 8-K............................... 13 Signature................................................................ 14 1 FORWARD-LOOKING STATEMENTS In addition to historical information, this Report contains forward-looking statements. Such forward-looking statements are generally accompanied by words such as "intends," "projects," "strategies," "believes," "anticipates," "plans," and similar terms that convey the uncertainty of future events or outcomes. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in ITEM 2 of this Report, the section entitled "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof and are in all cases subject to the Company's ability to cure its current liquidity problems. There is no assurance that the Company will be able to generate sufficient revenues from its current business activities to meet day-to-day operation liabilities or to pursue the business objectives discussed herein. The forward-looking statements contained in this Report also may be impacted by future economic conditions. Any adverse effect on general economic conditions and consumer confidence may adversely affect the business of the Company. FUSA Capital Corporation undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission. 2 Part I - Financial Information FUSA CAPITAL CORPORATION (A DEVELOPMENT STAGE COMPANY) TABLE OF CONTENTS Part I Financial Information Page Item 1. Financial Statements: Consolidated Condensed Balance Sheet September 30, 2005 (unaudited) ................................. 4 Unaudited Consolidated Condensed Statement of Operations for the three months ended September 30, 2005 and from inception on February 9, 2005 through September 30, 2005 ...................... 5 Unaudited Consolidated Condensed Statement of Cash Flows for the period from inception on February 9, 2005 through September 30, 2005 ........................................ 6 Statements of Stockholders' equity for the period from from inception on February 9, 2005 through September 30, 2005 ..... 7 Notes to Consolidated Financial Statements (unaudited) ............ 8 Item 2. Plan of operation .................................................11 3 FUSA CAPITAL CORPORATION (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED CONDENSED BALANCE SHEET Friday, September 30, 2005 (unaudited)
ASSETS CURRENT ASSETS Cash $ 270,650 Accounts receivable 6,451 Prepaid Insurance 813 Prepaid Rent 1,762 ---------------- Total Current Assets 279,676 ---------------- Furniture and fixtures at cost, net 16,376 ---------------- OTHER ASSETS Lease Deposit 3,525 ---------------- Total Other Assets 3,525 ---------------- Total Assets $ 299,577 ================ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 68,073 Accrued Liabilities 2,000 Notes payable 405,131 ---------------- Total Current Liabilities 475,204 ---------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, $.0001 par value, 5,000,000 shares authorized, none issued - Common stock, par value $.0001, 500,000,000 shares authorized, 56,577,564 issued and outstanding 5,828 Paid in capital 3,203,466 (Deficit) accumulated during the development stage (3,384,920) ---------------- Total Stockholders' Equity (175,626) ---------------- $ 299,577 ================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 4 FUSA CAPITAL CORPORATION (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited)
Three months February 9, 2005 Ended (Inception) September 30, to 2005 September 30, 2005 -------------------------- --------------------- REVENUES $ - $ - -------------------------- --------------------- EXPENSES Selling, general and administrative 195,766 357,161 Stock based compensation 1,925,750 2,992,250 Interest expense 1,025 2,199 Depreciation Expense 1,434 2,744 Website development 12,466 30,564 -------------------------- --------------------- Total expenses 2,136,442 3,384,920 -------------------------- --------------------- NET (LOSS) $ (2,136,442) $ (3,384,920) ========================== ===================== NET (LOSS) PER SHARE $ (0.04) $ (0.06) ========================== ===================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 57,785,897 52,909,744 ========================== =====================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 5 FUSA CAPITAL CORPORATION ( a Development Stage Company) Consolidated Condensed Statement of Cashflows
February 9, 2005 (Inception) to September 30, 2005 ------------------------ OPERATING ACTIVITIES Net (loss) from operations $ (3,384,920) ------------------------ Adjustments to reconcile net (loss) to net Cash (used) by operating activities: Common Stock issued for compensation 2,992,250 Common Stock issued for services 9,000 Depreciation of fixed assets 2,744 Changes in operating assets and liabilities: (Increase) in accounts receivable (6,451) Decrease (jncrease) in prepaid insurance (813) (Increase) in prepaid rent (1,762) Increase in accounts payable 56,133 Increase in accrued liabilities 2,000 (Decrease) in accrued interest (1,736) ------------------------ Total adjustments 3,051,365 ------------------------ Net cash (used by) operating activities (333,555) ------------------------ INVESTING ACTIVITIES (Increase) in fixed assets (19,121) (Increase) in Lease deposits (3,525) Cash received in recapitalization of the company 184 ------------------------ Net cash (used by) investing activities (22,462) ------------------------ FINANCING ACTIVITIES Proceeds from issuance of common stock 310,000 Increase in note payable 316,667 ------------------------ Net cash provided by financing activities 626,667 ------------------------ Net increase in cash 270,650 ------------------------ Cash, Beginning of period - ------------------------ Cash, End of period $ 270,650 ======================== SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES Non-monetary net liabilities assumed in a recapitalization of the Company on March 7, 2005 $ 102,140 184 ------------------------ $ 101,956 ======================== OTHER DISCLOSURES: Interest paid on note payable $ 1,201 ========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 6 FUSA CAPITAL CORPORATION ( a Development Stage Company) STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited)
(Deficit) Accumulated Common Stock During Total ------------------------------- Paid-in Development Stockholders' Shares Amount Capital Stage Equity -------------- -------------- ----------------- ---------------- ---------------- Inception, Feb 9, 2005, 27,000,000 $ 2,700 $ 6,300 $ - $ 9,000 Stock issued for services @ $.0001 per share Net (Loss), for the period ended March 6, 2005 (11,605) (11,605) -------------- -------------- ----------------- ---------------- ---------------- Balance, March 6, 2005 27,000,000 2,700 6,300 (11,605) (2,605) Recapitalization, March 7 2005 (restated) 27,447,564 2,745 (104,701) (101,956) March 9, 2005 Stock issued for cash @ $.34 per share 300,000 30 99,970 100,000 March 31, 2005 Stock issued for cash @ $.34 per share 390,000 39 129,961 130,000 April 5, 2005 Stock issued for cash @ $.34 per share 60,000 6 19,994 20,000 April 15, 2005 Stock issued for cash @ $.34 per share 120,000 12 39,988 40,000 April 21, 2005 Stock issued for cash @ $.34 per share 60,000 6 19,994 20,000 May 26 - June 9, 2005, Stock issued for compensation @ $.89 per share 1,200,000 120 1,066,380 1,066,500 Net (loss) for period (1,236,872) (1,236,872) -------------- -------------- ----------------- ---------------- ---------------- Balance, $ 5,658 $ 1,277,886 $ (1,248,477) $ 35,067 June 30, 2005 (unaudited) 56,577,564 July 29 - Septemeber 22, 2005 Stock issued for compensation @ average of $1.13 per share 1,700,000 170 1,925,580 1,925,750 - Net (loss) for period (2,136,442) (2,136,442) -------------- -------------- ----------------- ---------------- ---------------- Balance September 30, 2005 (unaudited) 58,277,564 5,828 3,203,466 (3,384,920) (175,626) ============== ============== ================= ================ =================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 7 FUSA CAPITAL CORPORATION Notes to Consolidated Financial Statements (Unaudited) September 30, 2005 Note 1 - Basis of presentation ------------------------------ In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required 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 of the Company's financial position as of September 30, 2005 and the results of its operations and cash flows for the three months ended September 30, 2005 and from February 9, 2005 (inception) to September 30, 2005 have been made. Operating results for the period from inception, February 9, 2005 to September 30, 2005 are not necessarily indicative of the results that may be expected for the year ended December 31, 2005. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Form 10-QSB for the quarter ended June 30, 2005. On March 7, 2005 the Company acquired all of the issued and outstanding shares of common stock of FUSA Technology Investments, Inc, (FTIC) a development stage Nevada Corporation, formed on February 9, 2005, in exchange for 27 million restricted shares of common stock of the Company valued at par $2,700. This stock exchange transaction resulted in a change of control wherein the financial statements to be filed in the future will be those of the acquired company, FTIC, consolidated with its legal parent, FUSA Capital Corporation (FCC), as required for proper financial presentation. At the date of the stock exchange all of the net assets of FCC were acquired by FTIC at fair value which equaled FCC's book value. The historical transactions of the acquired company will be carried forward, similar to the accounting treatment given in a recapitalization. In effect, the acquired company is considered the acquirer for accounting purposes only, not since its shareholders received less shares of the Company's common stock than were outstanding prior to the exchange, but for the reason that the Company's Board of Directors resigned and were replaced by the FTIC Board. FTIC's year-end will be December 31. Note 2 - Accounting policies and procedures ------------------------------------------- Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered cash equivalents. Cash equivalents include funds held in a money market account. For the period September 30, 2005, the Company held $28,750 in cash equivalents. Use of 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 8 Stock-Based Compensation As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the Company has elected to follow Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock-based compensation to employees. Under APB No. 25, when the exercise price of the Company's employee stock options is equal to or greater than the fair value of the underlying stock on the date of grant, no compensation expense is recognized. In December 2004, the FASB issued SFAS 123R. SFAS 123R is applicable to transactions in which an entity exchanges its equity instruments for goods and services. It focuses primarily on transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123R supersedes the intrinsic value method prescribed by APB No. 25, requiring that the fair value of such equity instruments be recorded as an expense as services are performed. Prior to SFAS 123R, only certain pro forma disclosures of accounting for these transactions at fair value were required. SFAS 123R will be effective for the first quarter 2006 financial statements, and permits varying transition methods including retroactive adjustment of prior periods or prospective application beginning in 2006. The Company expects to adopt SFAS 123R using the prospective method effective January 1, 2006. Under this transition method the Company will begin recording stock option expense prospectively, starting in first quarter 2006. For stock based compensation to non-employees, the Company is required to follow SFAS No. 123, which requires that stock awards granted to directors, consultants and other non-employees be recorded at the fair value of the award granted. During the period, all of the Company's stock awards have been granted as compensation for services received, with no exercise price which was below the fair value of the Company's common stock. For these vested stock awards, the Company has recorded stock compensation expense for the difference between the fair value and their exercise prices. Note 3 - Going concern ---------------------- The Company's condensed consolidated financial statements are prepared using the accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not commenced its planned principal operations and has generated minimal revenues. The Company is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful. Without sufficient financing it would be unlikely for the Company to continue as a going concern. Management's plan is to develop the video and audio search engine technology business. Note 4 - Notes Payable ---------------------- Notes payable consists of the following at September 30, 2005: -------------------------------------------------------------------------------- Demand note payable to unrelated party, interest at 6% per annum, $ 25,130 no fixed terms of repayment, unsecured -------------------------------------------------------------------------------- Demand notes payable to unrelated parties, non-interest bearing, 380,001 no fixed termsof repayment, unsecured -------------------------------------------------------------------------------- Total Notes Payable $405,131 -------------------------------------------------------------------------------- 9 Note 5 - Capital Stock ---------------------- Stock-based compensation On April 26, 2005, the Company entered into two consulting agreements, and one employment agreement with the President /Chief Executive Officer of the Company with an indefinite term, unless terminated by either party. One consulting agreement provides for compensation which, at the Company's discretion, may take the form of up to a total of 2,100,000 stock options with no exercise price or up to a total of $70,000 in cash payments. The compensation of either stock options or cash is payable by the Company in varying amounts upon the successful completion of six acceptable performance and project milestones through October 12, 2005. Under the agreement, the Company has no obligation to the consultant until it has accepted and approved the achievement of a milestone. During the period ended June 30, 2005 the Company approved the achievement of milestone 1, 2 and 3, entitling the consultant to receive 1.2 million stock options of Company stock with no exercise price. During the period ended September 30, 2005 the Company approved the achievement of milestones 4, 5 and 6, entitling the consultant to receive the final 900,000 stock options of Company stock with no exercise price. These share issuances were accounted for in accordance with SFAS No. 123, which requires compensation expense to be measured at fair value. As such, the value of the underlying shares was determined based on the fair value of Company stock on the date that each of milestone 4, 5 and 6 was achieved and approved. The resulting value of the stock compensation award of $918,000 was recorded as stock compensation expense The second consulting agreement provides for compensation which, at the Company's discretion, may take the form of up to a total of 1,500,000 shares of Company stock or up to a total of $50,000 in cash payments. The compensation of either shares or cash is payable by the Company in varying amounts upon the successful completion of six acceptable performance and project milestones through October 12, 2005. Under the agreement, the Company has no obligation to the consultant until it has accepted and approved the achievement of a milestone. During the current period there were no milestones achieved under the terms of the agreement. During the period ended September 30, 2005 the Company issued 725,000 shares of the Company's stock as stock compensation to officers of the company. In addition, the Company issued 75,000 shares to investor relations firms for services granted. The resulting value of $1,007,750 was recorded as stock compensation and included in share capital and additional paid in capital. Item 2. Plan of Operation The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements. Plan of Operation The following discussion regarding our plan of operations for the next 12 months contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors and subsequent events. Overview FUSA Capital Corporation , www.fusamedia.com, is a provider of proprietary Internet-based video and audio search engine solutions for consumers and digital content providers. FUSA operates Searchforvideo.com (Beta), a free web-based search engine and video portal that allows consumers to easily look for, find and play video clips available on the public web. FUSA also owns and operates the Searchforvideo.com Desktop (Beta), which offers consumers the ability to subscribe to online video clip channels including news, sports, entertainment, business and health. As soon as new video clips are discovered, they are automatically delivered to consumers with Searchforvideo Desktop (Beta) installed on their computers. Users can click to watch a video right away or keep an ordered playlist for viewing videos at a later time. As of the time of this posting, Searchforvideo.com utilizes over 2000 sources and provides links to over 1,000,000 video clips. FUSA's proprietary technology has five patents pending. 10 FUSA's projected revenue streams will come from advertising revenue from www.searchforvideo.com and from technology and consulting licensing agreements to the enterprise market. The original business of the Company, as Galaxy, was a development stage company that had a primary business to develop, produce, and market live entertainment in the forum of professional wrestling. Galaxy never developed a significant business in this field and ceased efforts toward establishing operations in the professional wrestling field on March 31, 2004. On March 31, 2004, the controlling shareholders of Galaxy sold 5,750,000 shares of common stock of the Company to Camila Maz in a private transaction, thus effecting a change of control in the Company. On May 7, 2004, President and Director Jerome Jolly resigned as an Officer and Director, Secretary and Treasurer Grady Johnson also resigned as an Officer and Director. Concurrently, Ms. Maz was appointed as the Sole Director and Officer of the Company. On May 24, 2004, the Company dismissed its auditors and engaged the accounting firm of Braverman International P.C. as the Company's auditors. During the period from March 31, 2004 until December 31, 2004, the Company engaged in no significant business activities and had no revenues. From March 31, 2004 until March 7, 2005 the Company was engaged in the search for a business combination. On March 7, 2005, FUSA entered into a merger agreement with FUSA Technology Investments Corp., a Nevada corporation ("FTIC"). The purpose of the merger was to provide value to existing FUSA shareholders by providing the Company with the opportunity to enter the emerging growth field of video and audio search engine technology. Specifically, as a result of the merger, FUSA has the opportunity to own, develop and market the incomplete video and audio search engine technology conceived by FTIC. This incomplete solution consisted primarily of the design requirements, specifications and know-how of Chief Executive Jenifer Osterwalder, together with an evaluation copy of a partially completed prototype of the search engine. This solution was soft launched in a beta format in September, 2005. As a result of the merger, FUSA is now a technology company focused on the development and marketing of audio and video search engine technology. When completed, this technology will provide a complete video and audio search engine solution, consisting of multiple modules. The search engine solution modules will work together providing a comprehensive video and audio search engine system to discover, scrape, index and generate metadata in RSS (Really Simple Syndication) format for syndication to any Internet enabled device. The search engine solution can be deployed as a stand-alone server for corporate use or in a cluster of servers in a high volume public search engine environment. We intend to market our search solution to companies who operate Internet websites with news, video clip, music and sports content. We also intend to license our technology to original equipment manufacturer ("OEM") customers for use in various electronic devices such as wireless phones, television set top boxes, PDA's, wireless MP3 players, personal video recorders, digital appliances, cars and kiosks. We also intend to offer consumers search engine capabilities through the development of various internet sites based on the following URLs which we already own: www.searchforvideo.com; www.searchforaudio.com; www.searchfortv.com; www.searchforipod.com; www.searchfortivo.com; www.searchformedia.com; www.searchforpodcasts.com. Our search solution is not yet fully functional; we currently have no paying customers for our technology nor do we have any relationships in place with any OEMs. Some of the largest, best known and most technologically sophisticated companies in the world compete in the search engine space. Google, Yahoo, Microsoft and Lycos are well-financed, established competitors in this space. In addition, a number of start-ups have entered the audio and video search subspecialty within the search engine space. Many of these start-ups are better financed than we are and may have established customer relationships. Although our position is one of vulnerable, new entrant, we believe that the possibility of commercial success for us exists in this field because: 1. No established or emerging company in this space has developed a market dominant audio/video search engine product. 11 2. Because of the size and diversity of the audio/video search engine market, we believe that the market will support a number of different solutions based on the preferences of individual corporate and OEM licensors. 3. We believe our technology is competitive with any publicly available audio/video search engine technology. 4. Our "agnostic" independent, non-affiliated status in this field is attractive to customers who may not wish to align themselves with search engine vendors who have competitive products to their own or whose corporate parents are direct or indirect competitors. 5. As has been established by the success of google.com, search engine technology is sufficiently powerful and disruptive that it can create enormous value in a short period of time, displacing large, well-financed and established market leaders. We believe that our competitive position versus other new entrants to the space is strong because of the flexibility, simplicity and ease of deployment of our technology as well as our relatively low overhead, anticipated responsiveness to customer demands and our expertise in the area of Real Simple Syndication (an HTML programming language which is optimal for the deployment of this kind of search engine technology. FUSA does not currently have any customers or revenues. Moreover, we have limited capital resources. In the period from February 9, 2005 (Date of Inception) to September 30, 2005, the Company generated no revenues and posted a net loss of $3,384,920 resulting from costs of general and administrative expenses, website development stock compensation and interest expenses. The Company is considered a development stage company. The Company's executive offices are located at 1420 Fifth Avenue, 22nd Floor, Seattle, Washington, 98101. The Company's telephone number is 206-274-5107. The Company's fiscal year end is December 31. ITEM 3. Controls and Procedures (a) Evaluation of disclosure controls and procedures. Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation included certain internal control areas in which we have made and are continuing to make changes to improve and enhance controls. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. (b) Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 12 Part II OTHER INFORMATION Item 1. Legal Proceedings Not Applicable Item 2. Changes in Securities and Small Business Issuer Purchases of Equity Securities Recent Sales of Unregistered Securities Beginning on January 2, 2005, we began to solicit subscriptions for our contemplated private placement of securities. As of March 31, 2005, we had sold $230,000 worth of securities in this private placement. The terms of this private placement provide for the sale of up to 60 units of our securities, each unit costing $20,000 and consisting of 20,000 shares of our common stock and warrants to purchase an additional 20,000 shares of our common stock at an exercise price of $2.00 and an expiration date of December 31, 2006. As of March 31, 2005, there were 48.5 units remaining in our private placement. The private placement is on-going. Item 3. Defaults Upon Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders Not Applicable Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K None. (a) LIST OF EXHIBITS List of Exhibits 3.1 Articles of Incorporation of the Company filed September 13, 2000 and Amendments thereto, incorporated by reference to the Registration Statement on Form 10-SB, as amended, previously filed with the SEC. 3.2 By-Laws of the Company adopted September 13, 2000 , incorporated by reference to the Registration Statement on Form 10-SB, as amended, previously filed with the SEC. 4.1 Form of Subscription Agreement between the Registrant and subscribers to its offering of 60 units sold at $20,000 each and containing 20,000 shares of common stock and warrants to purchase 20,000 shares of common stock per unit. 31.1 Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 32.1 Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (b) REPORTS ON FORM 8-K None. 13 SIGNATURE In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FUSA Captial Corporation /s/ Jenifer Osterwalder ----------------------------- Jenifer Osterwalder Chief Executive Officer (Duly Authorized Officer and Principal Financial and Accounting Officer) Dated: November 14, 2005 14