EX-2 3 0003.txt FINANCIAL STATEMENTS ENDED MARCH 31, 2000 & 1999 EXHIBIT 2 Unaudited balance sheet of AMRES as of March 31, 2000 and the statements of operations, stockholder's equity and cash flows for the nine months ended March 31, 2000 and 1999 AMERICAN RESIDENTIAL FUNDING, INC. BALANCE SHEET AS OF MARCH 31, 2000 (UNAUDITED) ASSETS Current assets: Cash $ 50,374 Receivables 191,281 Marketable securities 600,000 Other current assets 59,349 Notes receivable from related party 54,000 ------------- Total current assets 955,004 Property and equipment, net 105,385 Other assets 40,117 ------------- $ 1,100,506 ============= LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 65,224 Accrued liabilities 134,346 Notes payable 374,956 ------------- Total liabilities 574,526 Shareholders' deficit: Preferred stock 600,000 Common stock 105,000 Accumulated deficit (179,020) ------------- Total shareholders' deficit 525,980 ------------- $ 1,100,506 ============= See accompanying notes to financial statements AMERICAN RESIDENTIAL FUNDING, INC. STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED) 2000 1999 ------------- ------------- Revenues $ 4,045,935 $ 2,349,920 Cost of revenues 2,945,611 1,508,685 ------------- ------------- Gross profit 1,100,324 841,235 General and administrative expenses 1,272,613 818,614 ------------- ------------- (Income) loss before income taxes (172,289) 22,621 Provision for income taxes 2,506 800 ------------- ------------- Net income (loss) $ (174,795) $ 21,821 ============= ============= See accompanying notes to financial statements
AMERICAN RESIDENTIAL FUNDING, INC. STATEMENTS OF CASHFLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED) 2000 1999 ---- ---- Cash flows from operating activities: Net income (loss) $ (174,795) $ 21,821 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 5,236 3,923 Changes in operating assets and liabilities: Receivables (62,956) (139,580) Other current assets (50,824) (18,557) Accounts payable (69,773) 92,950 Accrued liabilities 87,555 12,606 --------- --------- Net cash used in operating activities (265,557) (26,837) --------- --------- Cash flows from investing activities: Purchases of property and equipment (60,797) (46,053) Other assets 455 (40,087) --------- --------- Net cash used in investing activities (60,342) (86,140) --------- --------- Cash flows from financing activities: Repayment of capital contribution -- (27,285) Proceeds from notes payable 224,956 145,000 Proceeds from (repayments of) related party borrowings 46,000 (80,000) --------- --------- Net cash provided by financing activities 270,956 37,715 --------- --------- Net decrease in cash (54,943) (75,262) Cash at beginning of period 105,317 130,000 --------- --------- Cash at end of period $ 50,374 $ 54,738 ========= ========= See accompanying notes to financial statements
NOTE 1 - BASIS OF PRESENTATION UNAUDITED INTERIM FINANCIAL STATEMENTS The accompanying financial statements are unaudited and are prepared in accordance with rules and regulations of the Securities and Exchange Commission for interim quarterly reporting. Accordingly, these financial statements do not include all disclosures required under generally accepted accounting principles. In the opinion of management, the accompanying financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position of American Residential Funding, Inc. as of March 31, 2000, and the results of their operations and their cash flows for the nine months ended March 31, 2000. Results for the nine months ended March 31, 2000, are not necessarily indicative of the operations which may occur during the year ending June 30, 2000. NOTE 2 - SUBSEQUENT EVENT Subsequent to March 31, 2000, AMRES' former parent sold a subsidiary to an unrelated party. AMRES had outstanding debt due to this unrelated party. In connection with the agreement to sell the subsidiary, all outstanding debt of AMRES due to the unrelated party was forgiven. As a result of this forgiveness of debt, AMRES recorded an extraordinary gain of $346,856.