UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 33-55254-18
COMPANY'S NAME
AFFORDABLE HOMES OF AMERICA, INC.
(Exact name of registrant as specified in charter)
NEVADA 87-0434297
(STATE OF OTHER JURISDICTION (I.R.S. Employer
INCORPORATION OR ORGANIZATION) Identification number)
4505 W. Hacienda Ave.
Unit I-1
Las Vegas, Nevada 89118
(Address of Principal Executive Office) (Zip Code)
702-579-4800
(Registrant's Telephone Number, Including Area Code)
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Page Two
Item No 1 Changes in Control of Registrant
No events to report
Item No 2 Acquisition or Disposition of Assets
Affordable Homes of America, Inc.("Affordable") has acquired
Kampen and Associates, Inc ("Kampen"). The acquisition of Kampen was
accomplished by the issuance of convertible preferred shares with a strike
price of $3.50 per share. The total purchase price for Kampen was
$7,000,000 paid by the issuance of convertible preferred stock and
assumption of debt slightly in excess of $5,000,000. Kampen is a real
estate development company located in the Seattle area. At the present
time, the Seattle area is experiencing rapid growth in the construction
and sale of single family homes. Kampen owns a project which consists of
575 lots on one of the prime building sites in the Seattle area. The
Kampen site has an MAI appraisal of $7,000,000 "as is". Affordable will
immediately file for Preliminary Plot Plan Approval which it estimates will
take approximately 4 months to obtain. After such approval construction
will begin. The estimates are that this project will bring approximately
$77,000,000 in gross revenues over a 5 year period needed to complete this
project.
Item No. 3 Bankruptcy or Receivership
No events to report
Item No. 4 Changes in Registrant's Certifying Accountants
The new Certified Public Accountants for Affordable Homes of
America, Inc. are
Bianculli & Pascale
9 Endo Blvd.
Garden City, New York, 11530
Item No. 5 Other Events
No events to report
Item No. 6 Resignation of Registrant's Directors
No events to report
Item No. 7 Financial Statements, Proforma Financial Information and
Exhibits
1) Affordable Homes of America, Inc. December 31, 1998 Audit
financials attached
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SIGNATURES
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 hereunto duly authorized.
AFFORDABLE HOMES OF AMERICA, INC.
By: /s/ Merle Ferguson Dated: 14 April, 1999
--------------------------------
Merle Ferguson, President
By: /s/ Susan Donohue Dated: 14 April, 1999
-------------------------------
Susan Donohue, Secretary
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AFFORDABLE HOMES OF AMERICA, INC
FINANCIAL STATEMENTS
and
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
DECEMBER 31, 1998
<PAGE>
AFFORDABLE HOMES OF AMERICA, INC.
INDEX TO FINANCIAL STATEMENT
DECEMBER 31, 1998
PAGE
Report of Independent Certified Public Accountants
Affordable Homes of America, Inc. 1
Balance Sheet of Affordable Homes of America, Inc.
as of December 31, 1998 2
Statement of Operations and Accumulated Deficit
of Affordable Homes of America, Inc. for the
year ended December 31, 19 98 3
Statement of Cash Plows of Affordable Homes of
America, Inc. for the year ended December 31,
1998 4
Notes to the Financial Statements 5-8
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders
Affordable Homes of America, Inc.
We have audited the accompanying balance sheet of Affordable Homes of
America, Inc. as of December 31, 1998 and the related statement of
operations and accumulated deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above, presents fairly in all
material respects, the financial position of Affordable Homes of America,
Inc. as of December 31, 1998 and the results of its operations and it s
cash f lows for the year then ended in conformity with generally accepted
accounting principles.
Garden City, New York
February 16,
A Professional Accountancy Corporation
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<TABLE>
AFFORDABLE HOMES OF AMERICA, INC.
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
<S> <C>
CURRENT ASSETS
Cash in banks (Note 1) 99,500
----------
Total current assets 99,500
TOTAL ASSETS 99,500
==========
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
CURRENT LIABILITIES
Accrued expenses 18,000
----------
Total current liabilities 18,000
TOTAL LIABILITIES 18,000
STOCKHOLDERS' EQUITY
Common Stock ( .001 par value - 20,000,000 shares
authorized, 5,000 issued and outstanding) (Note 1) 1
Preferred Stock ( .001 par value-5,000,000 shares
authorized, none issued and outstanding)
Additional paid in capital 99,999
Accumulated deficit (18,500)
-----------
Total Stockholders' Equity 81,500
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $99,500
===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
<PAGE>
<TABLE>
AFFORDABLE HOMES OF AMERICA, INC.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1998
<S> <C>
Administrative expenses:
Professional fees $18,000
Miscellaneous Expense 500
--------
Net loss before taxes (18,500)
Income tax provision (Note 2) 0
Net loss (18,500)
=========
Accumulated deficit - Beginning of year 0
Accumulated deficit - December 31, 1998 $(18,500)
=========
Net loss per share $(3.70)
=========
Weighted average number of shares outstanding 5,000
=========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL DART OF THESE STATEMENTS
<PAGE>
<TABLE>
AFFORDABLE HOMES OF AMERICA, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(18,500)
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH USED IN OPERATING ACTIVITIES
Increase - Liabilities
Accrued expenses 18,000
------------
Total Adjustments 18,000
Net Cash (used in) Operations (500)
------------
CASH FLOWS FROM INVESTING ACTIVITIES
Initial capitalization 100,000
-----------
Net Cash from investing activities 100,000
Sub Total 99,500
-----------
NET INCREASE IN CASH 99,500
CASH AT BEGINNING OF YEAR 0
----------
CASH AT DECEMBER 31, 1998 $99,500
============
Supplemental Disclosure of cash flow information:
Cash Paid during the year
Interest expense $0
============
Income Taxes $0
============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
<PAGE>
AFFORDABLE HOMES OF AMERICA, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - General and Summary of Significant Accounting Policies
(A) Nature of Business
Affordable Homes of America, Inc., (Affordable), a Nevada corporation, is
in the business of constructing homes for the first time homebuyer on a low
cost basis. The company was incorporated on February 10, 1997, but remained
inactive until November 1998. Initial capitalization took place on November
2, 1998.
(B) Net Loss per Share
Net loss per share is computed on the basis of the weighted average number
of common shares outstanding during the period. Only the weighted average
number of shares of common stock outstanding is used to compute loss per
share for the period from inception to December 31, 1998 as there were no
stock options, warrants, or other common stock equivalents during thin
period.
(C) Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a
maturity of 90 days or less to be cash equivalents for financial statement
purposes.
(D) Income Taxes
Normally, taxes are provided on all revenue and expense items included in
the statements of Operations, regardless of the period in which such items
are recognized for income tax purposes, except for items representing a
permanent difference between pretax accounting income and taxable income.
(E) Use of Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
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.
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(F) Basis of Presentation
The accompanying balance sheet and related statements of operations and
retained deficit ant cash flows includes only the accounts of Affordable
Homes of America, Inc. as of December 31, 1998.
NOTE 2 Income Taxes
The Company accounts for income taxes on the liability method, an provided
by Statement of Financial Accounting Standards 109, Accounting for Income
Taxes (SPAS 109).
The Company incurred a net operating loss of 518,500 available to offset
future income for financial reporting purposes expiring in 2014.
NOTE 3 Related Party Transaction
On May 15, 199S, the Company entered into an agreement with a third party
under which it has received consulting services. The agreement was funded
in the amount of $15, 000 by Composite Industries of America, Inc., an
entity under common control. The expense was recorded for the period ended
December 31, 1998 and the amount is reflected in accrued expenses.
Management believes the transaction was an arms length transaction,
NOTE 4 Concentration of Credit Risk - Cash
The Company maintains its cash balances in a financial institution located
in Las Vegas, Nevada. At times, the balance may exceed federally insured
limits of $100,000. The Company has not experienced any losses in such
accounts and believes it is not exposed to any significant credit risk on
cash on deposit. The fair market value of this financial instrument
approximates cost.
The fair market value of these balances approximate book value.
NOT: 5 Subsequent Event
Effective February 16, 1999, Affordable entered into an "Entire Output
Agreement" with Composite Industries of America, Inc. (composite)' a
company under common control. Composite owns patent rights in the U.S
relating to a building material "product" which is stronger, flexible, and
more weather resistant than most current building materials. Affordable is
in the business of manufacturing, making, using, distributing and selling
building supplies, and in the business of building houses. Affordable
entered in to the entire output agreement with Composite for the purposes
of distributing, reselling, marketing and using the "product" on an
exclusive basis, for the home building industries only Affordable has
further agreed to buy the entire output of Composite manufactured for the
home building industry in the territories of the United States and Canada.
Under the teems of the agreement, Composite agrees to sell exclusively to
Affordable and Affordable agrees to buy exclusively from Composite,
Composite's entire output of patented "product".
<PAGE>
NOTE 5 Subsequent-Event (continued)
The price that Affordable will pay for the first product shall be
Composite's cost of production including an allowance for overhead.
Effective at the end of each six month period, Composite may increase the
price of the "product" after- giving Affordable Is days prior Fritters
notice. Increases shall apply to any products shipped after the expiration
of the quarter unless upon written notice, Affordable is unwilling to
accept such increase, in which case Affordable may terminate the agreement.
Affordable agrees to deposit 50% of each order upon placement of the order
with Composite. The balance of 50% is payable upon confirmation of
shipment.
The agreement begins 90 days from the date Composite is prepared to make
the first shipment of products and will continue for a period of 10 years.
