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

First America Resources Corporation files an amendment to its quarterly report to correct its shell company status and smaller reporting company status.

Summary

• First America Resources Corporation filed an amended quarterly report on Form 10-Q/A to correct an error on the cover page of the original report.
• The company erroneously indicated it was not a shell company, but the amendment clarifies that it is a shell company.
• The company also corrected the small reporting company status.
• 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.
• The original report was for the quarter ended March 31, 2023.
• The company had 7,964,090 shares issued and outstanding as of March 31, 2023.
• The company is focusing on real estate and battery technology ventures, supported by a $100,500 cash infusion from its President, Mr. Jian Li.
• The company is negotiating with a battery supplier for sales and distribution in the US markets.
• The company is considering acquiring commercial properties, including one in Cedartown, GA, valued at $250,000.
• The company had cash and cash equivalents of $102,378 at March 31, 2023, and a working capital deficiency of $126,754.
• The company incurred net losses of $2,822 and $1,700 for the quarters ended March 31, 2023 and 2022, respectively.
• The company owes Mr. Li an aggregate of $228,933 on loans, which are oral and bear no interest, due upon demand.

Sentiment

Score: 3

Explanation: The sentiment is low due to the company's status as a shell company, its working capital deficiency, ongoing losses, and reliance on related-party loans. The potential for new ventures in real estate and battery technology offers a glimmer of hope, but significant challenges remain.

Positives

• The company received a $100,500 cash infusion from its President, Jian Li.
• The company is exploring new business ventures in real estate and battery technology.
• The company is negotiating with a battery supplier for US market sales and distribution.

Negatives

• The company is a shell company.
• The company has a working capital deficiency of $126,754 as of March 31, 2023.
• The company incurred net losses of $2,822 and $1,700 for the quarters ended March 31, 2023 and 2022, respectively.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern.

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 ability to execute its business plan depends on securing additional equity financing and, if necessary, mortgage financing.
• The company's forward-looking statements are subject to risks and uncertainties, and actual results may differ materially.
• The company is exposed to risks related to the COVID-19 pandemic and geopolitical events.

Future Outlook

The company plans to develop its business model of offering real estate and trading options to nascent battery technologies, acquire income-producing properties, and potentially acquire FAMCe (formerly known as First America Metal Corporation) or another operating company. The company anticipates needing additional equity financing and potentially mortgage financing.

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 aligns with growing interest in renewable energy and real estate investment. However, the company faces competition from established players in both sectors and must overcome its financial challenges to succeed.

Comparison to Industry Standards

• As a shell company, First America Resources' financial performance is not directly comparable to operating companies in the real estate or battery technology sectors.
• Companies in the real estate sector, such as REITs (Real Estate Investment Trusts) like Simon Property Group or Prologis, typically have significant revenue from rental income and focus on managing and developing properties.
• Battery technology companies, such as Tesla or QuantumScape, invest heavily in research and development and aim to commercialize advanced battery solutions.
• First America Resources' current financial state and business model are significantly different from these industry leaders.

Related Party Transactions

• Loans to officer/shareholder Jian Li totaled $228,933 as of March 31, 2023.
• A total of 6,388,010 shares were issued to officer and director Jian Li.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial condition and status as a shell company.
• Employees of FAMCe (formerly known as First America Metal Corporation), which supports the company, are subject to health and safety measures related to COVID-19.
• The company's ability to execute its business plan will impact its stakeholders, including potential customers and suppliers in the real estate and battery technology sectors.

Next Steps

• The company intends to fully develop its business model of offering real estate and trading options to nascent battery technologies.
• The company intends to initially purchase already income producing properties or properties that will produce rent income in a short period of time.
• The company plans to do additional equity financing to finance future real estate investments.
• The company plans to sell some of the properties that it will have acquired at a higher price that it paid in order to buy them using the proceeds in order to buy new properties again at opportunistic prices.
• The company is in negotiations with a battery supplier specializing in golf cart and forklift batteries for the sale and distribution in the US Markets which will result in sales revenues.
• The company has instructed counsel to prepare an acquisition contract for a commercial property.

Key Dates

Keywords

shell company, amended quarterly report, real estate, battery technology, going concern, financial statements, First America Resources, financing, losses, cash infusion