U.S. Securities and Exchange Commission
Washington D.C. 20549
FORM 10-QSB/A
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____to
Commission file number 000-33371
AMERICA FIRST ASSOCIATES CORPORATION
(Exact name of small business issuer as specified in its charter)
| Delaware | 11-324688 | |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
94 Covert Avenue, Stewart Manor, NY 11530
(Address of principal executive offices)
(516) 437-0866
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the latest practicable date: 8,568,200
AMERICA FIRST ASSOCIATES CORP. INDEX TO FORM 10-QSB
| Contents | Page | |
| Part I. Financial Information | ||
| Item 1: | Financial Statements: | |
| Statement of Financial Condition as of June 30, 2004 and December 31,2003 | ||
| Statement of Operations for the six months ended June 30 2004, and 2003 | ||
| Statement of Operations for the three months ended June 30, 2004 and 2003 | ||
| Statement of Changes in Shareholders Equity for the period January 1, 2003 to June 30, 2004 | ||
| Statement of Cash Flows for the six months ended June 30, 2004 and 2003 | ||
| Notes to Financial Statements | ||
| Item 2: | Management's Discussion and Analysis of Financial Conditions and Results of Operations | |
| Part II. Other Information | ||
| Item 1: Legal Proceedings | ||
| Item 2: Changes in Securities | ||
| Item 3: Defaults Upon Senior Securities | ||
| Item 4: Submission of Matters to Vote of Security Holders | ||
| Item 5: Exhibits and Reports on Form 8-K | ||
PART I. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
AMERICA FIRST ASSOCIATES CORP.
STATEMENT OF FINANCIAL CONDITION
JUNE 30, 2004 AND DECEMBER 31, 2003
| June 30, 2004 Unaudited | December 31, 2003 Audited | |
| Assets | ||
| Cash and cash equivalents | $ 112,487 | $ 302,472 |
| Securities owned marked at market | 881,613 | 683,667 |
| Deposit with clearing organization - Securities | 100,159 | 100,599 |
| Receivables from clearing organization | 37,788 | 80,981 |
| Prepaid expenses | 5,622 | 21,448 |
| Other assets | 170 | 170 |
| Total Assets | $ 1,137,839 | $ 1,189,337 |
| Liabilities and shareholder's equity | ||
| Liabilities: | ||
| Accounts payable and accrued expenses | $ 31,121 | $ 35,951 |
| Total Liabilities | $ 31,121 | $ 35,951 |
| Commitments | ||
| Shareholders' equity: | ||
| Common stock, $.001 par value, 20,000,000 shares authorized, 8,568,200 shares issued and outstanding as of June 30, 2004 and December 31, 2003 | $ 8,568 | $8,568 |
| Additional paid-in capital | 1,996,680 | 1,996,680 |
| Retained earnings (Deficit) | ( 898,530) | ( 851,862) |
| Total shareholders' equity | 1,106,718 | 1,153,386 |
| Total liabilities and shareholders' equity | $ 1,137,839 | $ 1,189,337 |
The notes are an integral part of the Financial Statements
AMERICA FIRST ASSOCIATES CORP.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
| Revenues: | 2004 Unaudited | 2003 Unaudited | |
| Commissions | $ 303,852 | $ 254,562 | |
| Principal transactions | 23,374 | 60,779 | |
| Interest and other income | 14,804 | 6,705 | |
| Total revenues | $ 342,030 | $ 322,046 | |
| Expenses: | |||
| Consulting and Professional Fees | 11,321 | 19,347 | |
| Employee compensation and benefits | 153,671 | 189,500 | |
| Selling general & administrative | 223,706 | 163,253 | |
| Total expenses | $ 388,698 | $ 372,100 | |
| Income (loss) before income taxes | ( 46,668) | ( 50,054) | |
| Provision for income taxes | -- | ( 1,762) | |
| Tax benefit of loss carryforward | -- | -- | |
| Net income (loss) | $ (46,668) | $ (51,816) | |
| Earnings Per Share | |||
| Basic and Dilutive | (.01) | (.01) | |
| Weighted Average Common Shares Outstanding | 8,568,200 | 9,018,000 | |
The notes are an integral part of the Financial Statements
AMERICA FIRST ASSOCIATES CORP.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003
| Revenues: | 2004 Unaudited | 2003 Unaudited | |
| Commissions | $ 108,309 | $ 144,421 | |
| Principal transactions | ( 113,254) | 86,893 | |
| Interest and other income | 10,605 | 1,131 | |
| Total revenues | $ 5,660 | $ 232,445 | |
| Expenses: | |||
| Consulting and Professional Fees | 6,060 | 14,347 | |
| Employee compensation and benefits | 58,011 | 146,387 | |
| Selling general & administrative | 111,510 | 68,911 | |
| Total expenses | $ 175,581 | $ 229,645 | |
| Income (loss) before income taxes | ( 169,921) | ( 2,800) | |
| Provision for income taxes | -- | (--) | |
| Tax benefit of loss carryforward | -- | -- | |
| Net income (loss) | $ (169,921) | $ ( 2,800) | |
| Earnings Per Share | |||
| Basic and Dilutive | (.01) | (.001) | |
| Weighted Average Common Shares Outstanding | 8,568,200 | 9,018,000 | |
The notes are an integral part of the Financial Statements
AMERICA FIRST ASSOCIATES CORP.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2004
| Common Stock | Common Stock | Paid-in Capital | Retained Earnings | Shareholder's Equity | ||
| Balance January 1, 2003 | 9,018,000 | $ 9,018 | $ 2,121,230 | $ (1,048,732) | $ 1,081,516 | |
| Common Stock | ||||||
| Purchase and retired | ( 449,800) | ( 450) | ( 124,550) | -- | ( 125,000) | |
| Net Income | -- | -- | -- | 196,870 | 196,870 | |
| Balance, December 31, 2003 | 8,568,200 | $ 8,568 | $ 1,996,680 | $ (851,862) | $ 1,153,386 | |
| Net income (loss) | ( 46,668) | ( 46,668) | ||||
| Balance, June 30,2004 | 8,568,200 | $ 8,568 | $ 1,996,680 | $ (898,530) | $ 1,106,718 | |
The notes are an integral part of the Financial Statements
AMERICA FIRST ASSOCIATES CORP.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
| June 30, 2004 Unaudited | June 30, 2003 Unaudited | ||
| Cash Flows from Operating Activities | |||
| Net income (loss) | $ ( 46,668) | $ ( 51,816) | |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
| Depreciation and amortization | -- | 1,080 | |
| Adjustment to Retained Earnings | -- | 19,173 | |
| Changes in assets and liabilities: | |||
| (Increase) Decrease in operating assets: | |||
| Marketable Securities | ( 197,946) | ( 150,855) | |
| Prepaid expenses | 15,826 | 16,055 | |
| Other assets | -- | 5,005 | |
| Due to/from clearing organization-net | 43,192 | 30,177 | |
| Deposit with clearing organization | 440 | -- | |
| Increase (decrease) in operating liabilities: | |||
| Accounts payable and accrued expenses | ( 4,829) | ( 34,941) | |
| Net cash provided by (Applied to) operating activities | ( 189,985) | (166,122) | |
| Net increase in cash | ( 189,985) | (166,122) | |
| Cash and cash equivalents Beginning | 302,472 | 668,339 | |
| Cash and cash equivalents Ending | $ 112,487 | $ 502,217 | |
The notes are an integral part of the Financial Statements
AMERICA FIRST ASSOCIATES CORP.
NOTES TO FINANCIAL STATEMENTS
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 1. ORGANIZATION AND NATURE OF BUSINESS
America First Associates Corp. (the Company) is a Delaware Corporation that was formed in 1995 with one office currently located at 94 Covert Ave., Stewart Manor, NY 11530. There is no public trading market for the Company's common stock and it is not listed on any exchange. The Company plans to apply for listing on the OTC Bulletin Board and anticipates trading by fiscal year ending 2004.
The Company is engaged in a single line of business as a securities broker-dealer, which comprises several classes of services, including principal transactions, agency transactions, investment banking and investment advisory. The Company principally engages in executing general securities transactions on behalf of its clients.
The Company operates principally under a clearance agreement with another broker-dealer organization. Under the agreement, the contracted broker-dealer assumes and maintains the Company's customer accounts and performs custodial functions regarding customer securities. The Company is responsible for payment of certain customer accounts (unsecured debits) as defined in the agreement. The Company also provides on-line brokerage services for its customers.
The Company transacts its business with customers located throughout the United States.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.
AMERICA FIRST ASSOCIATES CORPORATION
NOTES TO THE FINANCIAL STATEMENT
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and cash equivalents
For purposes of the Statement of Cash Flow, the Company has defined cash equivalents as highly liquid investments, with original maturities of less than ninety days that are not held for sale in the ordinary course of business. The Company maintains cash balances at a financial institution. Accounts at the institution are insured by the Federal Deposit Insurance Corporation up to $100,000.
Financial Instruments
As of December 31, 2003, the carrying value of the Company' s financial instruments including cash, cash equivalents and cash deposits with a clearing organization, receivables, accounts payable and accrued expenses approximate their fair values, based on the short-term maturities of these instruments.
Off-Balance-Sheet Risk and Concentration of Credit Risk
The Company, as an introducing broker, clears all transactions with and for customers on a fully disclosed basis with a clearing broker and promptly transmits all customer funds and securities to the clearing broker who carries all of the accounts of such customers. These activities may expose the Company to off-balance-sheet risk in the event that the customer and/or clearing broker is unable to fulfill its obligations. The Company does not maintain margin accounts for its customers; and, therefore there were no excess margin securities. The Company seeks to control off-balance-sheet risk by monitoring the market value of securities held in compliance with regulatory and internal guidelines. The Company, as a part of its trading activities, assumes short positions in its inventory. The establishment of short positions exposes the Company to off-balance-sheet risk in the event prices increase, as the Company may be obligated to acquire the securities at prevailing market prices.
Securities Transactions Revenues
Securities transactions and the related revenue and expenses are recorded on a settlement date basis. The recording of securities transactions on a trade date basis was considered, and the difference was deemed immaterial.
AMERICA FIRST ASSOCIATES CORPORATION
NOTES TO THE FINANCIAL STATEMENT
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Securities Transactions Revenues (Continued)
Customers' securities and commodities transactions are reported on a settlement date basis with related commission income and expenses reported on a trade date basis. Accounts receivable and payable for securities transactions that have not reached their contractual settlement date are recorded net on the statement of financial condition. All accounts receivable as of December 31, 2003 and June 30, 2004 are receivables from the clearinghouse organization.
Marketable securities are valued at market value, and securities not readily marketable are valued at fair value as determined by management.
Revenue Recognition
Investment Banking
Investment banking revenues include gains, losses, and fees, net of syndicate expenses, arising from securities offerings in which we act as an underwriter or agent. Revenues also include fees earned from providing merger-and-acquisition and financial restructuring advisory services. Investment banking management fees are recorded on offering date, sales concessions on settlement date, and underwriting fees at the time the underwriting is completed and the income is reasonably determinable. During the periods covered by this report we had no investment banking revenues.
Commissions Income and Expenses
Commissions and related clearing expenses are recorded on a trade-date basis as securities transactions occur.
Investment Advisory Income
Investment advisory fees when earned are generally received quarterly but are recognized as earned on a pro rata basis over the term of the contract and are shown as part of the commissions earned.
Interest Income
Interest income is recorded on the accrual basis and dividend income is recognized on the next dividend date.
AMERICA FIRST ASSOCIATES CORPORATION
NOTES TO THE FINANCIAL STATEMENT
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue Recognition (continued)
Principal Transactions
Principal transactions consist of trading gains and losses on a net basis.
Income Taxes
We account for income taxes under SFAS No. 109, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense in the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Deferred tax expenses or benefits are recognized in the financial statements for the changes in deferred tax liabilities or assets between the years.
Depreciation
Depreciation is provided on a straight-line basis using estimated useful lives of five to ten years. Leasehold improvements are amortized over the lesser of the economic useful life of the improvement or the term of the lease.
| June 30, 2004 | December 31, 2003 | |
| Office Equipment | $ 8,390 | $ 8,390 |
| Accumulated Depreciation | (8,390) | ( 8,390) |
| $ -- | $ -- |
The Company wrote off fully depreciated assets in the amount of $19,183 in 2003 as a result of its moving offices. Depreciation expenses were $1,080 for the quarter ending June 30, 2003 and $0 for the quarter ending June 30, 2004.
AMERICA FIRST ASSOCIATES CORPORATION
NOTES TO THE FINANCIAL STATEMENT
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 3. CONCENTRATIONS OF CREDIT RISK
We are engaged in various trading and brokerage activities with counter parties, primarily broker-dealers, banks, and other financial institutions. In the event counter parties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counter party or issue of the instrument. It is our policy to review, as necessary, the credit standing of each counter party.
NOTE 4. LEASE OBLIGATIONS TO PRINCIPAL SHAREHOLDER
On April 2, 2003 the principal shareholder and sole officer of the Company purchased the office building currently occupied by us, located at 94 Covert Avenue, Stewart Manor, NY. The shareholder used personal funds and a bonus of $230,000 received from us in partial payment for the acquisition cost. The bonus was later rescinded and returned, to provide us with additional working capital.
We have leased office space from the shareholder for a term of five years, with an option to extend the lease for additional five years. The lease began on April 2, 2003 and covers approximately 3,700 square feet. Aggregate annual future rentals for office space at June 30, 2004, are approximately as listed below:
| 2004 | $ 30,000 |
| 2005 | 60,000 |
| 2006 | 60,000 |
| 2007 | 60,000 |
| 2008 | 15,000 |
| $ 225,000 |
Rent expense for the six months ending June 30, 2004 and 2003 were $30,000 and $25,600, respectively.
AMERICA FIRST ASSOCIATES CORPORATION
NOTES TO THE FINANCIAL STATEMENT
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 5. COMMITMENTS AND CONTINGENCIES
On April 2, 1997, we entered into an agreement with U.S. Clearing Corp. (USCC), a registered broker-dealer and a member of New York Stock Exchange to provide a facility for its customers to buy and sell securities. Our customer and proprietary accounts whether cash, margin or delivery are placed with and cleared by the USCC.
We are is solely responsible for all compliance, supervisory, and internal audit functions as they relate to our officers, employees, and associates. We are responsible for supervisory review of any accounts over which its officers, employees, or agents have discretionary authority. The NYSE, NASD, and SEC require us to be adequately knowledgeable regarding our customers and their investment objectives.
The USCC is responsible for complying with the NASD's Rules of Fair Practice, the Rules of Option Trading, and rules of other examining authorities.
The USCC has the custody of all securities in the accounts and registers them under the contract. For the securities that are traded over the counter, the USCC assumes the risk for the dealer with whom it executes transactions.
Under the agreement, we have financial liability under the following conditions:
| 1. | In the case of purchases or sales of securities in an account, until the client has satisfactorily made settlement with the necessary cleared funds or securities. | |
| 2. | Loss incurred in transactions with firms with which it deals on a principal basis. | |
| 3. | Customer transactions and maintenance margin calls, until actual and complete payment is made to the USCC. | |
| 4. | Losses incurred in connection with any check-writing privilege or debit or credit card services extended by a provider to customers introduced to the USCC. |
In order to participate and takedown shares in an underwriting, we are as a correspondent required to have $250,000 in net capital and Good Faith Deposit must be no less than 30% of its commitments.
NOTE 6. REPURCHASE OF SHARES
On August 21, 2003, we purchased from three of our shareholders 449,800 shares for $125,000, or $.28 per share. The three shareholders had originally paid $449,800 for the shares or $1 per share. The shares have been retired.
AMERICA FIRST ASSOCIATES CORPORATION
NOTES TO THE FINANCIAL STATEMENT
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 7. NET CAPITAL REQUIREMENTS
The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1).
We are also subject to the Commodity Futures Trading Commission's (CFTC's) minimum financial requirements (Regulation 1.17), which require that we maintain net capital, as defined, equal to 4 percent of customer funds required to be segregated pursuant to the Commodity Exchange Act, less the market value of certain commodity options, all as defined.
NOTE 8. INCOME TAXES
At December 31, 2003, we had net operating loss carryforwards of approximately $897,100, which expire in 2022. These net operating loss carryforwards may be used to offset future taxable income.
At December 31, 2003, we have recorded a deferred tax asset of $356,000 resulting primarily from net operating loss carryforwards. The valuation allowance of $356,000 has been recorded against the deferred tax asset since it is more likely than not that it will not be realized. The valuation allowance of $433,000, for 2002, was reduced by $79,000 to recognize the tax benefit of loss carryforward in 2003.
A reconciliation of income tax at the federal statutory income tax rate to total income taxes is as follows:
| 2004 | 2003 | |
| Computed at the federal Statutory rate of 34% | $ -- | $ 66,000 |
| State and local tax (benefit) | 1,756 | 13,000 |
| Benefit of Carryover | ( --) | ( 79,000) |
| $ 1,756 | $ -- |
AMERICA FIRST ASSOCIATES CORPORATION
NOTES TO THE FINANCIAL STATEMENT
PART I. FINANCIAL INFORMATION (CONTINUED)
NOTE 9. BASIC AND DILUTED EARNINGS PER SHARE
Basic earnings per share of common stock were computed by dividing income available to common stockholders (net income, less the preferred stock dividend requirement), by the weighted average number of common shares outstanding for the year. Diluted earnings per share are not presented because we have issued no dilutive potential common shares. Diluted earnings per share is the same as the basic earnings per share because we have issued no dilutive potential securities.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
The following discussion of the financial condition and results of financial condition and the results of our operations should be read in conjunction with the dated Financial Statements and the related notes and other financial information included in the Company's Form 10-SB filed in April 2004. This discussion contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.
Overview
America First Associates Corporation has conducted its operations as a fully disclosed brokerage firm registered with the Securities and Exchange Commission, the National Association of Securities Dealers and 50 state securities divisions including the District of Columbia and Puerto Rico. We are a provider of cost-effective, full-service online financial service targeting the rapid growth momentum of individual investors who utilize the Internet for their personal investment objectives. We provide customers the ability to buy and sell securities, mutual funds, bonds and other investment financial instruments as well as providing clients with 24 hour account access and real-time electronic information on stocks, market indices, analysts' research and news. We plan to continue to provide quality service to our current customers while increasing brand awareness and customer loyalty. Management's strategy is to expand our business and operations by strategically using the internet and other advertising outlets to efficiently market and distribute our services to potential customers and build brand awareness on a national level to increase our customer base.
AMERICA FIRST ASSOCIATES CORPORATION
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS (continued)
Results of Operations
Six months ended June 30, 2004, compared to the same period of 2003.
Total revenue for the six months ended June 30, 2004, were $342,030, an increase of $19,984 or 6% as compared to revenues of $322,046 for the six months ended June 30, 2003. The increase in total revenue is attributed to an increase in online trading and gains on investments. Revenues from commissions increased by $49,290 or 19%, to $303,852 for the six months ended June 30, 2004 from $254,562 for the six months ended June 30, 2003 due primarily to an increase in overall trading activity by online traders. Revenues from principal transactions decreased to $23,374 for the six months ended June 30, 2004 from a $60,779 for the six months ended June 30, 2003 a decrease of 62%. Interest and other income increased to $14,804 for the six months ended June 30, 2004 from $6,705 for the six months ended June 30, 2003 due to a increase in higher interest paid on U.S. Obligations purchased by the firm.
Total expenses increased by $16,598, or 4% to $388,698 for the six months ended June 30, 2004 from $372,100 for the six months ended June 30, 2003. Employee compensation and benefits decreased by 19%, to $153,671 for the six months ended June 30, 2004 from $189,500 for the six months ended June 30, 2003. As we continue to grow we will need additional employees to service our growing customer base; therefore we anticipate a proportionate increase in employee compensation and benefit expenses. Clearing charges represent payments to our clearing firm who facilitate our clients' transactions. Such expenses decreased by 1%, to $82,114 for the six months ended June 30, 2004 from $82,948 for the six months ended June 30, 2003.
Consulting and professional fees decreased to $11,321 for the six months ended June 30, 2004 from $19,347 for the six months ended June 30, 2003.
Selling, general and administrative expenses increased by $60,453 or 37% from $163,253 to $223,706 for the quarters ended June 30, 2003 to June 30, 2004, respectively. The largest areas of increased costs were for travel, communications and data processing.
As a result of the foregoing, our net loss amounted to $46,668 for the six months ended June 30, 2004 as compared to a net loss of $51,816 for the six months ended June 30, 2003, a decrease in loss of $5,148 or 10%.
Our effective federal income tax rate is 35%. The net operating loss carryover is now approximately $900,000.
AMERICA FIRST ASSOCIATES CORPORATION
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS (continued)
Financial Condition
As of June 30, 2004, cash totaled $112,487 as compared to $302,472 at December 31, 2003. Cash applied to operating activities was $189,985 in the first six months of 2004 compared to $166,122 in 2003. Net working capital was $1,106,717 and $1,153,386 on June 30, 2004 and December 31, 2003, respectively.
There was no cash used or provided by investing or financing activities in the first six months of 2004 or 2003.
We believe we have the financial resources needed to meet business requirements in the foreseeable future.
Outlook
The statements contained in this Outlook are based on current expectations. These statements are forward-looking and actual results may differ materially. The Company's success is directly related to its marketing iniatives and stock market activity.
Liquidity and Future Plans
Our focus is to expand our customer base through an aggressive marketing program. Our future results of operations and the other forward-looking statements contained herein, particularly the statements regarding growth in the security products industry, marketing and general and administrative expenses, involves a number of risks and uncertainties. In addition to the factors discussed above, there are other factors that could cause actual results to differ materially, such as business conditions and the general economies; competitive factors including rival discount broker dealers.
Management believes that we have the product mix, facilities, personnel, and competitive and financial resources for business success, but future revenues, costs, margins, product mix and profits are all subject to the influence of a number of factors, as discussed above.
ITEM 3. DISCLOSURE CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures
For purposes of rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934 ("Exchange Act"), the term "disclosure controls and procedures" refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. Within 90 days prior to the date of this report ("Evaluation Date"), the Company carried out an evaluation under the supervision and with the participation of the Company's Chief Executive Officer and its Chief Financial Officer of the effectiveness of the design and operation of its disclosure controls and procedures. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, such controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in our periodic reports filed under and pursuant to the Exchange Act.
(b) Changes in internal controls
There were no significant changes to our internal controls or in other factors that could significantly affect our internal controls subsequent to the Evaluation Date.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Form 10-SB for the year ended December 31, 2003 filed in March 2004.
ITEM 2. CHANGES IN SECURITIES
There have been no changes in the instruments defining the rights or rights evidenced by any class of registered securities.
There have been no dividends declared.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
There has been no submission of a matter to vote by security holders in 2003 or 2004.
ITEM 5. OTHER INFORMATION
Exhibits
(31.1) Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
(31.2) Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
Report on Form 8-K
None
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this Form 10-QSB to its Registration Statement to be signed by the undersigned, thereunto duly authorized.
| AMERICA FIRST ASSOCIATES CORP. | ||
| Date: November 9, 2004 | By: /s/ Joseph Ricupero | |
| Joseph Ricupero, Chief Executive Officer, Financial Operations Officer |
Exhibit 31.1
CERTIFICATION
I, Joseph Ricupero, the Registrant's Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of America First Associates Corp;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's certifying officer is responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's certifying officer disclosed, based on our most recent evaluation, to the registrant's auditor: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's certifying officer has indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Dated: July 19, 2004
Joseph Ricupero
By: /s/ Joseph Ricupero Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Joseph Ricupero, the Registrant's Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of America First Associates Corp;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's certifying officer is responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's certifying officer disclosed, based on our most recent evaluation, to the registrant's auditor: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's certifying officer has indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Dated: July 19, 2004
Joseph Ricupero
By: /s/ Joseph Ricupero Chief Financial Officer
