UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
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(Mark one)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2007
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ______________ to _____________
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Commission File Number: 000-28453
Ameri-First Financial Group, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 75-2610236
(State of incorporation) (IRS Employer ID Number)
211 West Wall Street, Midland, TX 79701-4556
(Address of principal executive offices)
(432) 682-1761
(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: October 18, 2007: 3,622 shares
outstanding
Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]
AMERI-FIRST FINANCIAL GROUP, INC.
Form 10-QSB for the Quarter ended September 30, 2007
Table of Contents
Page
----
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 7
Item 3 Controls and Procedures 10
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 10
Item 2 Recent Sales of Unregistered Securities and Use of Proceeds 10
Item 3 Defaults Upon Senior Securities 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Item 5 Other Information 10
Item 6 Exhibits 10
SIGNATURES 11
2
PART I
ITEM 1 - FINANCIAL STATEMENTS
Ameri-First Financial Group, Inc.
Balance Sheet
September 30, 2007
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 12,440
------------
TOTAL CURRENT ASSETS 12,440
------------
TOTAL ASSETS $ 12,440
============
LIABILITIES AND SHAREHOLDERS' DEFICIT
LIABILITIES
CURRENT LIABILITIES
Accrued interest payable $ 38,844
Notes payable to shareholder 740,000
Shareholder advances 65,000
------------
TOTAL CURRENT LIABILITIES 843,844
------------
TOTAL LIABILITIES 843,844
------------
SHAREHOLDERS' DEFICIT
Common stock - $0.00001 par value,
25,000,000 shares authorized,
3,622 shares issued and outstanding --
Additional paid-in capital 31,690,338
Accumulated deficit (32,521,742)
------------
TOTAL SHAREHOLDERS' DEFICIT (831,404)
------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 12,440
============
The accompanying notes are an integral part of these financial statements.
3
Ameri-First Financial Group, Inc.
Statements of Operations and Comprehensive Loss
Nine and three months ended September 30, 2007 and 2006
(Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
2007 2006 2007 2006
-------- -------- -------- --------
REVENUES $ -- $ -- $ -- $ --
-------- -------- -------- --------
EXPENSES
General and administrative expenses 5,227 2,896 690 380
Professional fees 30,544 13,913 2,556 --
-------- -------- -------- --------
Total expenses 35,771 16,809 3,246 380
-------- -------- -------- --------
LOSS BEFORE OTHER INCOME AND
PROVISION FOR INCOME TAXES (35,771) (16,809) (3,246) (380)
OTHER INCOME (EXPENSE)
Interest income 405 908 153 277
Interest expense (57,831) (40,484) (19,422) (16,784)
-------- -------- -------- --------
TOTAL OTHER EXPENSE (57,426) (39,576) (19,269) (16,507)
LOSS BEFORE PROVISION FOR INCOME TAXES (93,197) (56,385) (22,515) (16,887)
PROVISION FOR INCOME TAXES -- -- -- --
-------- -------- -------- --------
NET LOSS (93,197) (56,385) (22,515) (16,887)
OTHER COMPREHENSIVE INCOME -- -- -- --
-------- -------- -------- --------
COMPREHENSIVE LOSS $(93,197) $(56,385) $(22,515) $(16,887)
======== ======== ======== ========
Loss per share of common stock outstanding
computed on net loss - basic and fully diluted $ (48.87) $ (95.24) $ (6.22) $ (28.53)
======== ======== ======== ========
Weighted-average number of shares
outstanding - basic and fully diluted 1,907 592 3,622 592
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
4
Ameri-First Financial Group, Inc.
Statements of Cash Flows
Nine months ended September 30, 2007 and 2006
(Unaudited)
2007 2006
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $(93,197) $(56,385)
Adjustments to reconcile net loss
to net cash used in operating activities
Increase in accrued interest payable 57,831 40,484
-------- --------
NET CASH USED IN OPERATING ACTIVITIES (35,366) (15,901)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES -- --
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from shareholder loan 15,000 --
Proceeds from private placement 12,000 --
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 27,000 --
-------- --------
DECREASE IN CASH (8,366) (15,901)
-------- --------
Cash at beginning of period 20,806 41,217
-------- --------
CASH AT END OF PERIOD $ 12,440 $ 25,316
======== ========
SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID
Interest paid for the year $ -- $ --
======== ========
Income taxes paid for the year $ -- $ --
======== ========
NON-CASH
Issuance of stock to settle debt $232,806 $ --
======== ========
The accompanying notes are an integral part of these financial statements.
5
Ameri-First Financial Group, Inc.
Notes to Financial Statements
September 30, 2007
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The Company follows the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.
Management further acknowledges that it is solely responsible for adopting sound
accounting practices, establishing and maintaining a system of internal
accounting control and preventing and detecting fraud. The Company's system of
internal accounting control is designed to assure, among other items, that 1)
recorded transactions are valid; 2) valid transactions are recorded; and 3)
transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods being
presented
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements filed with the U. S. Securities and
Exchange Commission on its Annual Report on Form 10-KSB for the year ended
December 31, 2006. The information presented within these interim financial
statements may not include all disclosures required by generally accepted
accounting principles and the users of financial information provided for
interim periods should refer to the annual financial information and footnotes
when reviewing the interim financial results presented herein
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the U. S. Securities and Exchange Commission's
instructions for Form 10-QSB, are unaudited and contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations and cash flows of
the Company for the respective interim periods presented. The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending December 31, 2007.
NOTE 2 - COMMON STOCK
On April 12, 2007, the Company settled $232,806 worth of accrued interest owned
to Glenn A. Little, the sole director, with the issuance of stock. The
transaction authorized the issuance of 15,000,000 pre-split shares of restricted
common stock in payment of accrued interest in the amount of $232,806. These
shares were subject to the subsequent 1:500,000 reverse split resulting in 30
shares post-split.
Effective May 30, 2007, the issued and outstanding shares of the Company reverse
split on a one share for each 500,000 shares basis with fractional shares
rounded up to the nearest whole share. All common stock amounts in this report
have been restated to account for the stock split and retroactive effect has
been given to the financial statements.
On June 4, 2007, the Company issued 3,000 post-split shares of restricted common
stock in a private placement ($4.00 per share) for a cash payment of $12,000. Of
the shares issued 2,850 were issued to Glenn A. Little, the sole director.
As a result of these two issuances and the reverse split, Glenn A Little owns
2,905 or 80% of the outstanding shares of the common stock.
6
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(1) CAUTION REGARDING FORWARD-LOOKING INFORMATION
Certain statements contained in this quarterly filing, including, without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of similar import, constitute forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following: international, national and
local general economic and market conditions: demographic changes; the ability
of the Company to sustain, manage or forecast its growth; the ability of the
Company to successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-QSB and investors are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
(2) RESULTS OF OPERATIONS
The Company had no revenue for either of the nine or three month periods ended
September 30, 2007 and 2006, respectively.
General and administrative expenses for the nine and three month periods ended
September 30, 2007 and 2006 were nominal, consisting of professional fees
related to the Company's attempts to cure various deficiencies in filing
periodic reports under the Securities Exchange Act or 1934, as amended, and
accrued interest expense on notes/advances payable to officer/shareholders. The
Company has been delinquent in providing periodic filings pursuant to the
Securities Exchange Act of 1934. It is anticipated that future expenditure
levels will increase as the Company intends to fully comply with it's periodic
reporting requirements. Loss per share for the respective nine month periods
ended September, 2007 and 2006 were $48.87 and $95.24 respectively, based on the
weighted-average shares issued and outstanding at the end of each respective
period.
The Company does not expect to generate any meaningful revenue or incur
operating expenses for purposes other than fulfilling the obligations of a
reporting company under the Securities Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.
At September 30, 2007 and 2006, respectively, the Company had negative working
capital of approximately $831,404 and $958,884, respectively.
The Company and it's significant creditor, Glenn A. Little, have acknowledged
that outside funds are necessary to support the corporate entity and comply with
the periodic reporting requirements of the Securities Exchange Act of 1934, as
amended. To this end, Mr. Little has verbally agreed to advance the Company up
to $70,000 with a maturity period not to exceed two (3) years from the initial
funding date at an interest rate of 6.0% per annum. As of September 30, 2007,
Mr. Little has advanced approximately $65,000 under this agreement, with a
maturity date in November 2007.
7
It is the belief of management and significant stockholders that they will
provide sufficient working capital necessary to support and preserve the
integrity of the corporate entity will be present. However, there is no legal
obligation for either management or significant stockholders to provide
additional future funding. Should this pledge fail to provide financing, the
Company has not identified any alternative sources. Consequently, there is
substantial doubt about the Company's ability to continue as a going concern.
The Company's need for working capital may change dramatically as a result of
any business acquisition or combination transaction. There can be no assurance
that the Company will identify any such business, product, technology or company
suitable for acquisition in the future. Further, there can be no assurance that
the Company would be successful in consummating any acquisition on favorable
terms or that it will be able to profitably manage the business, product,
technology or company it acquires.
PLAN OF BUSINESS
GENERAL
The Company intends to locate and combine with an existing, privately-held
company which is profitable or, in management's view, has growth potential,
irrespective of the industry in which it is engaged. However, the Company does
not intend to combine with a private company which may be deemed to be an
investment company subject to the Investment Company Act of 1940. A combination
may be structured as a merger, consolidation, exchange of the Company's common
stock for stock or assets or any other form which will result in the combined
enterprise's becoming a publicly-held corporation.
Pending negotiation and consummation of a combination, the Company anticipates
that it will have, aside from carrying on its search for a combination partner,
no business activities, and, thus, will have no source of revenue. Should the
Company incur any significant liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.
If the Company's management pursues one or more combination opportunities beyond
the preliminary negotiations stage and those negotiations are subsequently
terminated, it is foreseeable that such efforts will exhaust the Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated. In that event, the Company's common stock will
become worthless and holders of the Company's common stock will receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.
COMBINATION SUITABILITY STANDARDS
In its pursuit for a combination partner, the Company's management intends to
consider only combination candidates which are profitable or, in management's
view, have growth potential. The Company's management does not intend to pursue
any combination proposal beyond the preliminary negotiation stage with any
combination candidate which does not furnish the Company with audited financial
statements for at least its most recent fiscal year and unaudited financial
statements for interim periods subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner. The Company will, if necessary funds are available, engage attorneys
and/or accountants in its efforts to investigate a combination candidate and to
consummate a business combination. The Company may require payment of fees by
such combination candidate to fund the investigation of such candidate. In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain reports from independent organizations of recognized
standing covering the technology being developed and/or used by the candidate.
The Company's limited financial resources may make the acquisition of such
reports difficult or even impossible to obtain and, thus, there can be no
assurance that the Company will have sufficient funds to obtain such reports
when considering combination proposals or candidates. To the extent the Company
is unable to obtain the advice or reports from experts, the risks of any
combined enterprise's being unsuccessful will be enhanced. Furthermore, to the
knowledge of the Company's officers and directors, neither the candidate nor any
of its directors, executive officers, principal shareholders or general
partners:
8
(1) will not have been convicted of securities fraud, mail fraud, tax
fraud, embezzlement, bribery, or a similar criminal offense involving
misappropriation or theft of funds, or be the subject of a pending
investigation or indictment involving any of those offenses;
(2) will not have been subject to a temporary or permanent injunction or
restraining order arising from unlawful transactions in securities,
whether as issuer, underwriter, broker, dealer, or investment advisor,
may be the subject of any pending investigation or a defendant in a
pending lawsuit arising from or based upon allegations of unlawful
transactions in securities; or
(3) will not have been a defendant in a civil action which resulted in a
final judgment against it or him awarding damages or rescission based
upon unlawful practices or sales of securities.
The Company's officers and directors will make these determinations by asking
pertinent questions of the management of prospective combination candidates.
Such persons will also ask pertinent questions of others who may be involved in
the combination proceedings. However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable. Unless something comes to their attention
which puts them on notice of a possible disqualification which is being
concealed from them, such persons will rely on information received from the
management of the prospective combination candidate and from others who may be
involved in the combination proceedings.
LIQUIDITY AND CAPITAL RESOURCES
It is the belief of management and significant stockholders that they will
provide sufficient working capital necessary to support and preserve the
integrity of the corporate entity will be present. However, there is no legal
obligation for either management or significant stockholders to provide
additional future funding. Should this pledge fail to provide financing, the
Company has not identified any alternative sources. Consequently, there is
substantial doubt about the Company's ability to continue as a going concern.
The Company has no current plans, proposals, arrangements or understandings with
respect to the sale or issuance of additional securities prior to the location
of a merger or acquisition candidate. Accordingly, there can be no assurance
that sufficient funds will be available to the Company to allow it to cover the
expenses related to such activities.
The Company does not currently contemplate making a Regulation S offering.
Regardless of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.
9
ITEM 3 - CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Exchange Act, prior to the filing date of
this report, the Company carried out an evaluation of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. This
evaluation was carried out under the supervision and with the participation of
the Company's management, including the Company's President, Chief Executive and
Chief Financial Officer. Based upon that evaluation, the Company's President,
Chief Executive and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective. There have been no significant
changes in the Company's internal controls or in other factors, which could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Company's Chief
Executive and Chief Financial Officer as appropriate, to allow timely decisions
regarding required disclosure.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS
On April 12, 2007, the Company settled the accrued interest owned to Glenn A.
Little, the sole director with the issuance of stock. The transaction authorized
the issuance of 15,000,000 pre-split shares of restricted common stock in
payment of accrued interest in the amount of $232,806. These shares were subject
to the subsequent 1:500,000 reverse split resulting in 30 shares.
On June 4, 2007, the Company issued 3,000 shares of restricted common stock for
a cash payment of $12,000. Of the shares issued 2,850 were issued to Glenn A.
Little, the sole director.
As a result of these two issuances and the reverse split, Glenn A Little owns
2,905 or 80% of the outstanding shares of the common stock.
ITEM 3 - DEFAULTS ON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS
31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002
10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERI-FIRST FINANCIAL GROUP, INC.
Dated: October 18, 2007 /s/ Glenn A. Little
----------------- ---------------------------------
Glenn A. Little
Chief Executive Officer,
Chief Financial Officer,
and Director
11