FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to __________________
Commission File Number 000-33247
PREFERRED FINANCIAL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Colorado 84-1493157
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5442 Dungaree Street, Las Vegas, NV 89118
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(Address of principal executive office) (Zip Code)
(Registrant's telephone number, including area code) (702) 221 8703
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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 No x
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The number of shares outstanding of each of Issuer's classes of common equity
as of July 31, 2003.
Common Stock, par value $.0001 2,530,000
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Title of Class Number of Shares
Transitional Small Business Disclosure Format Yes No X
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PREFERRED FINANCIAL RESOURCES, INC.
Index
Page
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Part I: Financial Information
Item 1 Financial Statements
Consolidated Condensed Balance Sheet as of July 31, 2003 (unaudited) 3
Consolidated Condense Statements of Operations for the Three Months
Ended July 31, 2003 and 2002 (unaudited) 4
Consolidated Condense Statement of Changes in Shareholders' Deficit
for the Three months Ended July 31, 2003 (unaudited) 5
Consolidated Condense Statements of Cash Flows for the Three Months
Ended July 31, 2003 and 2002 (unaudited) 6
Notes to Consolidated Condensed Financial Statements (unaudited) 7
Item 2 Plan of Operation 8
Part II: Other Information 9
Signatures 10
Exhibits 11
PREFERRED FINANCIAL RESOURCES, INC.
Consolidated Condensed Balance Sheet
July 31, 2003
(unaudited)
Assets
Cash 972
Prepaid expenses 5,815
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$ 6,787
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Liabilities and Shareholders' Deficit
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Liabilities:
Accounts payable and accrued liabilities $ 750
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Total liabilities 750
Shareholders' deficit:
Preferred stock -
Common stock 2,673
Additional paid-in capital 39,295
Deficit accumulated during the development stage (35,931)
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Total shareholder's deficit 6,037
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$ 6,787
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See accompanying notes to consolidated condensed financial statements
PREFERRED FINANCIAL RESOURCES, INC.
Consolidated Condensed Balance Sheet
(unaudited)
Three Months Ended
July 31,
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2003 2002
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Contributed rent 300 300
General and administrative 11,833 3,557
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12,133 3,857
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Loss before income taxes (12,133) (3,857)
Income tax provision --- ---
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Net loss $(12,133) $(3,857)
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Basic and diluted loss per share $ 0 0
Weighted average common shares outstanding 2,530,000 1,446,667
============ =========
See accompanying notes to consolidated condensed financial statements
PREFERRED FINANCIAL RESOURCES, INC.
Consolidated Condensed Statement of Changes in Shareholder's Deficit
(unaudited)
Deficit
Additional Accumulated
Common Stock Additional During the
------------ paid-in Development
Shares Amount capital Stage Total
------ ------ ------- ----- -----
Balance at
April 30, 2003 2,530,000 2,673 22,791 (23,978) 1,666
Contributed rent (Note 2) --- --- 300 --- 300
Contributed services (Note 2) --- -- 1,204 --- 1,204
Capital contributed (Note 2) --- -- 2,500 --- 2,500
Related party payment of costs on
behalf of Company (Note 2) --- -- 12,500 --- 12,500
Net income/loss --- --- --- (12,133) (12,133)
--------- ----- ----- -------- -------
Balance at
July 31, 2001 2,530,000 2,673 39,295 (35,931) 6,037
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See accompanying notes to consolidated condensed financial statements
PREFERRED FINANCIAL RESOURCES, INC.
Consolidated Condensed Statements of Cash Flows
(unaudited)
Three Months Ended
July 31,
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2003 2002
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Net cash used in operating activities $(16,628) $(2,073)
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Cash flows from financing activities:
Payment of expenses on behalf of company
by an affiliate 12,500 ---
Contributed capital by an affiliate 2,500 2,073
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Net cash provided by financing activities 2,073 ---
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Net change in cash (1,628) ---
Cash:
Cash, beginning of period 2,600 ---
Cash, end of period 972 ---
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Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes --- ---
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Interest --- ---
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See accompanying notes to consolidated condensed financial statements
PREFERRED FINANCIAL RESOURCES, INC.
Notes to Consolidated Condensed Financial Statements
(unaudited)
Note 1: Basis of Presentation
The consolidated condensed financial statements presented herein have been
prepared by the Company in accordance with the accounting policies in its
audited financial statements for the year ended April 30, 2003 filed in its
Form 10-KSB and should be read in conjunction with the notes thereto. The
Company's plans to evaluate, structure and complete a merger with (or
acquisition of) a privately owned corporation.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the three month period ended July 31, 2003 are not
necessarily indicative of the results to be expected for the year.
Interim financial data presented herein are unaudited.
Note 2: Related Party Transactions
During the three months ended July 31, 2003 and 2002, an affiliate paid
certain expenses on behalf of the Company totaling $12,500 and $-0-,
respectively. These payments were treated as a prepaid expense ($5,000) an
expense ($7,500), in 2003, with a corresponding charge to additional paid-in
capital in the accompanying financial statements.
During the three months ended July 31, 2003 and 2002, respectively, an
affiliate contributed $2,500 and $2,073 to the Company for working capital
purposes. The transactions were accounted for as contributed capital in the
accompanying financial statements.
During the three months ended July 31, 2003 and 2002, management provided free
office space to the Company, on an as needed basis. The Company's Board of
Directors valued this free service at approximately $100 per month, based on
prevailing local market rates. The accompanying consolidated condensed
financial statements include a charge to rent expense and a credit to paid-in
capital of $300 and $300, for the three months ended July 31, 2003 and 2002,
respectively.
During the three months ended July 31, 2003 and 2002, management provided
their time and effort to the Company, on an as needed basis, at no charge to
the Company. The Company's Board of Directors valued this free service at
approximately $25-$50 per hour, depending on the services performed, based on
prevailing local market rates. The accompanying consolidated condensed
financial statements include a charge to general and administrative expense
and a credit to paid-in capital of $1204 and $475, for the three months ended
July 31, 2003 and 2002, respectively.
Note 3: Income Taxes
The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". The Company
incurred net operating losses during the periods shown on the accompanying
unaudited condensed financial statements resulting in a deferred tax asset,
which was fully allowed for; therefore, the net benefit and expense result in
$-0- income taxes.
Item 2. Plan of Operations.
General
The Company has no full-time employees, incurs nominal rent and administrative
expenses and has no other recurring operating expenses, except for those
professional fees and expenses necessary to maintain its reporting status
under the Securities and Exchange Act of 1934, as amended. The Company
anticipates raising no capital over the next twelve months. The Company has no
plans to acquire any assets or make any investments prior to completing a
merger.
The Company has entered into an Agreement and Plan of Merger with Investors
Preferred Opportunities, Inc. ("IPO"). The merger is contingent upon IPO
obtaining the business of Princeton Homes, Corporation, a modular home
manufacturer located in Virginia.
Selection of an appropriate merger candidate is complex and risky due to the
lack of Company financial resources, the speculative nature of such a
transaction, management's limited time commitment to the Company, management's
potential conflicts of interest, the burdens of being a reporting company, and
competition in the marketplace. There is no assurance that the Company will be
successful in consummating the merger with IPO or that such a merger will
result in profitable operations.
Special note regarding forward-looking statements
This report contains forward-looking statements within the meaning of federal
securities laws. These statements plan for or anticipate the future.
Forward-looking statements include statements about our future business plans
and strategies, statements about our need for working capital, future
revenues, results of operations and most other statements that are not
historical in nature. In this Report, forward-looking statements are generally
identified by the words "intend", "plan", "believe", "expect", "estimate", and
the like. Investors are cautioned not to put undue reliance on forward-looking
statements. Except as otherwise required by applicable securities statues or
regulations, the Company disclaims any intent or obligation to update publicly
these forward-looking statements, whether as a result of new information,
future events or otherwise. Because forward-looking statements involve future
risks and uncertainties, these are factors that could cause actual results to
differ materially from those expressed or implied.
Results of Operations
Three Months Ended July 31, 2003 and 2002.
The net loss for the three months ended July 31, 2003 was $12,133 compared
with a net loss of $3,857 for the three months ended July 31, 2002.
The Company did not generate any revenues for the three months ended July 31,
2003, compared to revenues of $0 for the three months ended July 31, 2002.
Part II: Other Information
Item 1: Legal Proceedings
No report required.
Item 2: Changes in Securities
No report required.
Item 3: Defaults upon Senior Securities
No report required.
Item 4: Submission of Matters to a Vote of Security Holders
No report required.
Item 5: Other information
No report required.
Item 6: Exhibits and Reports on Form 8-K
(a). Exhibits:
1. 99.1: Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - CEO
2. 99.2: Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - CFO
(b). No Form 8-K was filed during the period covered by this
report.
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SIGNATURES
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The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair
presentation of the results of operations for the three months ended July 31,
2003 have been included.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PREFERRED FINANCIAL RESOURCES, INC
Date: March 18, 2004
By: Roger Sherman
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Roger W. Sherman, President