Run Away.... NOW!

The DIWire had an article yesterday about First Capital Investment Corporation's (FCIC) replacement of its auditor and its appointment of a new auditor, chief financial officer, and compliance officer.  The following passage from FCIC's 8-K disclosing the accounting change had this passage, with my emphasis added:

During the fiscal years ended December 31, 2015 and 2016 and the subsequent interim period through August 24, 2017, there were no disagreements between the Company and RSM on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of RSM, would have caused RSM to make reference to the subject matter of the disagreement in its report on the Company’s financial statements and there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K, except there existed a difference of opinion between the Company and RSM that had not been resolved to the satisfaction of RSM relating to the Company’s investments in First Capital Retail, LLC (“ FCR ”), as further discussed in Item 8.01 of this Form 8-K. Specifically, the Company’s investments in FCR may be deemed to have been transactions with an affiliate under Section 57 of the Investment Company Act of 1940 and/or a transaction with a related party as defined under U.S. generally accepted accounting principles. If either determination were made, further investigation may conclude that such determination, if not reflected in the Company’s financial statements to be filed for the quarters ended March 31, 2017 and June 30, 2017, could materially impact the reliability of the Company’s financial statements for such periods.

The disclosure reads as though the auditor fired FCIC, as it had an issue with FCIC's two loans to affiliates, which are FSIC's only investments.  It is now August and FCIC has not filed a financial report for 2017.  This is a pattern of First Captial.  When it acquired United Realty Trust in September 2015 and renamed it First Capital Real Estate Trust it shortly thereafter fired the REIT's auditor and has not filed a financial statement since.  The lack of financial filings and disclosure is repeating at FCIC.

I am not going to waste anymore time discussing First Capital and its investments other than to state that firing auditors and not filing financial statements are not positive developments.  FCIC, as far as I am aware, is still trying to raise capital from retail investors, and I have heard that one reputation oblivious third party due diligence firm is still writing reports on First Capital's investments.  Do your homework.