United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the First Quarterly Period ended May 31, 2002
Commission File Number: 000-31759
FIRST AUTO, INC.
Nevada 88-0423037
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
3131 Southwest Freeway, Number 36, Houston TX 77098
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 713-522-7550
As of May 31, 2002, the number of shares outstanding of the Registrant's
Common Stock was 8,281,500.
Transitional Small Business Disclosure Format (check one): yes [ ] no [X]
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial statements, for the three months ended May 31, 2002, included
herein have been prepared by the Company, without audit pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnotes disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information not misleading.
The Remainder of this Page is Intentionally left Blank
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FIRSTAUTO, INC.
(a Development Stage Company)
BALANCE SHEETS
May 31, February 28,
2002 2002
ASSETS
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 607 $ 607
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . 607 607
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . $ 607 $ 607
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable - related party . . . . . . . . . . . $ 99,610 $ 93,350
Note payable - related party . . . . . . . . . . . . . 1,700 1,700
Total Liabilities. . . . . . . . . . . . . . . . . . . . $ 101,310 $ 95,050
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding, 8,281,500 shares. . 8,282 $ 8,282
Additional Paid-In Capital . . . . . . . . . . . . . . 145,035 145,035
Accumulated Equity (Deficit) . . . . . . . . . . . . . (254,020) (247,760)
Total Stockholders' Equity . . . . . . . . . . . . . . . (100,703) (94,443)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . $ 607 $ 607
========== ===========
The accompanying notes are an integral part
of these financial statements.
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FIRSTAUTO, INC.
(a Development Stage Company)
STATEMENTS OF OPERATIONS (UNAUDITED)
From
Inception on
From March March 24,
1, 2002 to 1999 through
May 31, May 31,
2002 2001 2002
Revenues. . . . . . . . . $ -0- $ -0- $ -0-
Net Loss from Operations. 6,260 -0- 254,020
Net Income (Loss) . . . . $ (6,260) $ -0- $ (254,020)
=========== ========== ===========
Loss per Share. . . . . . $ (0.00) $ -0- $ (0.03)
=========== ========== ===========
Weighted Average
Shares Outstanding. . 8,281,500 7,981,500 7,882,500
=========== ========== ===========
The accompanying notes are an integral part
of these financial statements.
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FIRSTAUTO, INC.
(a Development Stage Company)
STATEMENTS OF CASH FLOW (UNAUDITED)
From
Inception on
From March March 24,
1, 2002 to 1999 through
May 31, May 31,
2002 2001 2002
Operating activities
Net Income (Loss). . . . . . . . . $ (6,260) $ 0 $(254,020)
Items not effecting cash
Stock issued for services. . . . 36,817
Increase in accounts receivable. (4,400)
Increase in accounts payable . . 6,260 1,700 99,610
--------- --------- ----------
Net Cash from Operations . . . . . . 0 (2,700) (117,593)
--------- --------- ----------
Cash from financing activities
Proceeds from note payable . . . . 0 1,700
Cash from sale of common stock . . 116,500
---------
Net Cash from financing activities . 0 118,200
--------- ---------
Increase (Decrease) in Cash. . . . . 0 (2,700) 607
Beginning Cash . . . . . . . . . . . 607 3,329 0
--------- --------- ----------
Ending Cash. . . . . . . . . . . . . $ 607 $ 629 $ 607
========= ========= ==========
Cash Paid For:
Interest . . . . . . . . . . . . . $ 0 $ 0 $ 0
Taxes. . . . . . . . . . . . . . . $ 0 $ 0 $ 0
Non-Cash Financing Activities
The Company issued 6,816,500 shares of common stock for organization costs.
These costs were valued at $6,817 and expensed in 1999.
The Company issued 300,000 shares of common stock for services. These
costs were valued at $30,000 and expensed in September 2001.
The accompanying notes are an integral part
of these financial statements.
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FIRSTAUTO, INC.
(A Development Stage Company)
Notes to the Financial Statements
May 31, 2002
NOTES TO FINANCIAL STATEMENTS
FirstAuto, Inc. ("the Company") has elected to omit substantially all footnotes
to the financial statements for the period ended May 31, 2002, since there have
been no material changes (other than indicated in other footnotes) to the
information previously reported by the Company in their Annual Report filed on
Form 10-KSB for the Fiscal year ended February 28, 2002.
UNAUDITED INFORMATION
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments which
are, in the opinion of management, necessary to properly reflect the results of
the period presented. The information presented is not necessarily indicative
of the results from operations expected for the full fiscal year.
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ITEM 2. DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(A) PLAN OF OPERATION. The plan of operation for the next twelve months begins
with capital formation. As a practical matter this involves perfecting our
on-going submission of our common stock for quotation on the OTCBB
(Over-The-Counter Bulletin Board). Upon raising sufficient capital we will
launch operations. We are not presently accepted for quotation on OTCBB or NQB
Pink Sheets. Our submission is pending.
The first stage of operations will be to develop the details and structure
of our projected web site and how the services will be provided to the target
audience and the dealers, vendors and advertisers. The second stage will be to
establish e-commerce partners for links for automotive service providers such as
insurance, warranties, and financing and to create a database of vehicle
information, contact information for dealers, and links to auto manufacturer
sites for further vehicle descriptions. The third stage is to obtain initial web
advertising on various search engines and other high traffic Internet sites.
Within six to eight months after receipt of capital from the registered
offering, we will be able to roll-out the web site and advertising campaign and
begin full operation.
(1) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS. We
expect to require substantial capital formation during the next twelve months
of our operations. We cannot state at this time when our operations would launch
for the following reasons. We cannot interest knowledgeable investors until our
common stock can be quoted on the OTCBB. We cannot achieve quotation of our
common stock until and unless this 1934 Registration of our common stock is
effective and clear of comments by the staff of the Securities and Exchange
Commission. We would expect our principal shareholder to provide interim funding
until such time as we can attract investors. Realistically, we would require
$1,000,000 to launch. We would expect to require an additional $1,000,000 to
sustain us in operations for the first twelve months. Accordingly, we expect to
require an additional $1,000,000 for the first twelve months of operation. We
would need to interest knowledgeable investors to fund our initial launch, and
would expect to raise that first $2,000,000 by the sale of common stock. It is
possible that with a successful first funding and launch of operations, we would
be able to secure interim loan financing to enable us to expand our business
sufficiently to make further capital formation more attractive to investors.
There is no assurance that our funding plans will be realized or that our
requirements will be met. If we are not able to achieve this requirement, we may
not be able to become or continue as a going concern. In this connection we
refer to Note 2 of our audited financial statements: "The accompanying financial
statements have been prepared assuming that the Company will continue as a going
concern. The Company is dependent upon raising capital to continue operations.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty. It is management's plan to raise capital in
order to define their operations, thus creating operating revenues." We further
refer to Note 3: "The Company is a development stage company as defined in
Financial Accounting Standards Board Statement 7. It is concentrating
substantially all its efforts in raising capital and developing its business
operations in order to generate significant revenues.
We do not anticipate any contingency upon which we would voluntarily cease
filing reports with the SEC, even though we may cease to be required to do so.
It is in our compelling interest to report our affairs quarterly, annually and
currently, as the case may be, generally to provide accessible public
information to interested parties, and also specifically to maintain its
qualification for the OTCBB, if and when the Issuer's intended application for
submission be effective.
(2) SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT. None.
(3) EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT. None.
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(4) EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES. None for the
present. Following launch of operations, we would expect to require a staff of
employees. The number required would grow as our operations might grow.
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We have enjoyed no revenues since inception. We had no expenses during this
reporting quarter.
(C) FUTURE PROSPECTS. We have disclosed an ambitious business plan. There can
be no assurance that our plan will succeed in whole or in part. We may not be
able to achieve our funding requirements. Even if substantial funding proves
available, there is no assurance that our business will prove competitive or
profitable. Our business may fail for any number of possible unforeseen
contingencies. Start-up ventures such as ours are inherently speculative and
fraught with risks of business failure. While management believes that its plan
contains the strategy for success, the road to failure is filled with good
intentions and missed opportunities. Caution must be expressed at this early
stage of our development, that we may be disappointed in our expectations.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None
ITEM 2. CHANGE IN SECURITIES. None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS. None
ITEM 5. OTHER INFORMATION. None
ITEM 6. REPORTS ON FORM 8-K. None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Q Report for the second Quarter ended May 31, 2002, has been signed
below by the following person on behalf of the Registrant and in the capacity
and on the date indicated.
Dated: July 10, 2002
FIRST AUTO, INC.
by
/s/J. Dan Sifford
J. Dan Sifford
President/Director
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