10-Q/A: First America Resources Corporation Files Amended Quarterly Report Due to Shell Company Status Error

First America Resources Corporation files an amended 10-Q/A report to correct a shell company status misidentification and remove references to a property acquisition that did not occur.

Summary

• First America Resources Corporation filed an amended quarterly report on Form 10-Q/A for the period ended March 31, 2024.
• The amendment corrects an error on the cover page, where the company incorrectly indicated it was not a shell company.
• The company also updated the CEO certifications and removed references to a property in Cedartown, Georgia, that was not acquired.
• The original report was filed on May 16, 2024.
• The company had no revenues for the three months ended March 31, 2024, and March 31, 2023.
• The net loss for the three months ended March 31, 2024, was $7,400, compared to a net loss of $2,822 for the same period in 2023.
• As of March 31, 2024, the company had cash and cash equivalents of $43,006 and a working capital deficiency of $164,339.
• The company's accumulated deficit as of March 31, 2024, was $463,663.
• The company is considering acquiring FAMCe (formerly known as First America Metal Corporation) or another operating company.
• The company's ability to continue as a going concern is dependent on raising capital or generating revenues.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the company's ongoing losses, working capital deficiency, and going concern uncertainty. While there are some positive developments, such as the cash infusion and potential acquisition, the overall financial situation is precarious.

Positives

• The company received a cash infusion of $100,500 from its President, Mr. Jian Li, on March 20, 2023, to develop its business model.
• The company is negotiating with a battery supplier for sales and distribution in the US markets.
• Management has significant real estate experience.

Negatives

• The company reported no revenue for the three months ended March 31, 2024.
• The company incurred a net loss of $7,400 for the quarter ended March 31, 2024.
• The company has a working capital deficiency of $164,339 as of March 31, 2024.
• The company has an accumulated deficit of $463,663 as of March 31, 2024.
• The company's auditors have raised substantial doubt about its ability to continue as a going concern.

Risks

• The company's ability to continue as a going concern is dependent on raising capital or generating revenues.
• The company's lack of operating history and financial resources raise substantial doubt about its ability to continue as a going concern.
• The company is subject to risks and uncertainties including economic and market conditions, ability to manage growth, and government regulations.
• The company is supported by employees of FAMCe, and the health and safety of those employees is a priority during the COVID-19 pandemic.

Future Outlook

The company anticipates acquiring FAMCe or another operating company and is exploring real estate investments and battery sales to generate revenue. The company's ability to continue as a going concern is dependent on raising capital or generating revenues.

Management Comments

• Management anticipates that after acquisition we will be competitive in pricing of some or all of the following, depending upon market conditions which can change, even rapidly, from time-to-time: Copper, Brass, Stainless, Aluminum, High Temp Alloys, Zinc, Tin, Cobalt, Tungsten Alloys, and electronic material.
• Our president, Jian Li, has significant real estate experience, primarily involving construction and management of various kinds of properties, specifically industrial properties of various type in multiple states.

Industry Context

The company's shift towards real estate and battery technology aligns with growing interest in renewable energy and alternative investments. However, the company faces competition from established players in both sectors and must demonstrate its ability to execute its business plan effectively.

Comparison to Industry Standards

• It is difficult to compare First America Resources Corporation to industry standards due to its current state as a shell company and its plans to acquire a new business.
• If the company acquires FAMCe, it would then be comparable to other scrap metal recycling companies, such as Sims Metal Management or Schnitzer Steel Industries, but further analysis would be required to determine its competitive positioning.
• If the company pursues real estate investments, it would be compared to other small real estate investment trusts (REITs) or private real estate companies, with metrics such as occupancy rates, rental income, and property values being key indicators.
• If the company pursues battery sales and distribution, it would be compared to other battery distributors and manufacturers, with metrics such as sales volume, market share, and gross margin being key indicators.

Related Party Transactions

• Jian Li, the CEO and President, provided a cash infusion of $100,500 to the company on March 20, 2023.
• Jian Li has loaned the company an aggregate of $228,933, which is due upon demand and bears no interest.
• The company is considering acquiring FAMCe, a business owned primarily by Jian Li.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial condition and going concern uncertainty.
• Employees of FAMCe may be impacted by the potential acquisition.
• The company's ability to meet its obligations to creditors is uncertain.

Next Steps

• Complete the acquisition of FAMCe or another operating company.
• Secure additional debt or equity funding.
• Generate operating revenues through real estate investments and battery sales.
• Comply with SEC reporting obligations.

Key Dates

Keywords

Financial statements, Going concern, Shell company, Quarterly report, Net loss, Working capital, Accumulated deficit, First America Resources Corporation, FAMCe, Acquisition, Battery technology, Real estate