10-Q/A: First America Resources Corrects Shell Company Status in Amended Quarterly Report

First America Resources Corporation files an amended quarterly report to correct an error regarding its shell company status and small reporting company status.

Summary

• First America Resources Corporation is filing an amended quarterly report on Form 10-Q/A to correct an error in its original report.
• The company erroneously indicated it was not a shell company, which has been corrected in this amendment.
• The company has also checked the small reporting company box since it is.
• The amendment does not modify or update any other disclosures in the original report, nor does it reflect events occurring after the original filing date.
• As of September 30, 2023, there were 7,964,090 shares issued and outstanding of the registrant's common stock.
• The company had revenues of $3,920 for the quarter ended September 30, 2023, compared to $0 for the same period in 2022.
• The company incurred a net loss of $13,666 for the quarter ended September 30, 2023, compared to a net loss of $7,773 for the same period in 2022.
• The company is focusing on real estate and battery technology ventures.
• The company received $160,992 of battery inventory on consignment, sold $3,920 of it, and returned the rest.
• The company's president, Jian Li, has provided loans to the company, totaling $228,933 as of September 30, 2023.
• The company has a net operating loss carried forward of $444,797 available to offset taxable income in future years which commence expiring in fiscal 2032.

Sentiment

Score: 3

Explanation: The sentiment is low due to the company's shell status, net losses, working capital deficiency, and going concern uncertainty. The correction of the shell company status is a minor positive, but the overall financial situation remains precarious.

Positives

• The company generated $3,920 in revenue for the quarter ended September 30, 2023, compared to $0 in the same period last year.
• The company received a cash infusion of $100,500 from its President, Mr. Jian Li, to develop its business model.
• The company is exploring new business ventures in real estate and battery technology.
• The company has a net operating loss carried forward of $444,797 available to offset taxable income in future years which commence expiring in fiscal 2032.

Negatives

• The company incurred a net loss of $13,666 for the quarter ended September 30, 2023.
• The company has a working capital deficiency of $145,473 as of September 30, 2023.
• The company has an accumulated deficit of $444,797 as of September 30, 2023.
• The company's disclosure controls and procedures are not effective.
• The company is considered a shell company.

Risks

• The company's lack of operating history and financial resources raise substantial doubt about its ability to continue as a going concern.
• The company's future depends on securing additional equity financing and mortgage financing.
• The company's potential acquisition of FAMCe or another operating company is subject to completion of audit and preparation of required filings.
• The company's business is subject to risks and uncertainties including economic and market conditions, government regulations, competition, and business disruptions.
• The company's ability to generate revenue or secure financing is uncertain.

Future Outlook

The company anticipates acquiring FAMCe (formerly known as First America Metal Corporation) or another operating company, depending upon completion of audit and preparation of required filings on Form 8-K, which they hope to complete in the next 12 months but may take longer.

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.

Industry Context

The company's shift towards real estate and battery technology reflects a diversification strategy, potentially driven by the evolving market demands and opportunities in these sectors.

Comparison to Industry Standards

• It is difficult to compare First America Resources to industry standards due to its status as a shell company and its evolving business model.
• The company's financial performance is significantly below industry averages for both real estate and battery technology companies.
• The company's reliance on loans from its president is not a sustainable long-term financing strategy.

Related Party Transactions

• Loans from officer/shareholder Jian Li totaled $228,933 as of September 30, 2023.
• 6,388,010 shares were issued to Jian Li, CEO & President, representing 80.21% of common shares.

Stakeholder Impact

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

Next Steps

• Complete the audit and prepare the required filings on Form 8-K for the potential acquisition of FAMCe or another operating company.
• Secure additional equity financing and mortgage financing for real estate investments.
• Negotiate and finalize the licensing agreement for the sale and distribution of batteries in the US market.
• Acquire income-producing properties to generate rental income.

Key Dates

Keywords

shell company, amended report, quarterly report, financial statements, real estate, battery technology, going concern, First America Resources, FAMCe