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UJarfielcl Sz Companu CPH' s
Fl Professional Corporation www_wOyfiG[dCpOS_COm
14555 N. Scottsdale Road, Suite #540 • Scottsdale, HZ 85254 (480) 948-1 711 Fox (480) 951 -3887
Lawrence J. LUorfie|d, CPH***A@
Hurt J. Heinzel, CPFl*@
I\/lan; R. Mashotu, CPB*
Sherri B. Fieber, CPB*
Pamela J. Holmaos, (PH"`
Licensed in;
Hrizona*
Fllosl
â€Â£â€˜iL§’§‘i""’ Lawrence J. Warfield, Receiver
,,,,,,,,,,,,,,,,,,,, Receivership Estate of International Funding Association, et al
2?$;;?;;2?;L‘$$$£é§?$* Scwsdele. AZ
Nlaruland Society of CPHs°
Texas Society of CPFi$"
We have compiled the accompanying statement of sources and uses of
cash — modified cash basis of the Receivership Estate of international
Funding Association, et al for the six months ended June 30, 2007 in
accordance with Statements on Standards for Accounting and Review
Services issued by the American institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the Receiver. We have not
audited or reviewed the accompanying financial statement and,
accordingly, do not express an opinion or any other form of assurance on
it.
The accompanying statement was prepared to present sources and uses
of cash —— modified cash basis as described in Note 2, and is not intended
to be a complete presentation of gross income and expenses.
This report was intended solely for the information and use of the
Receiver of the United States District Court for the District of Arizona.
This restriction is not intended to limit the distribution of this report, which
is a matter of public record.
We are not independent with respect to the Receivership Estate of
International Funding Association, et al.
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{ CPHP
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Warfield and Company, CPAs
August 28, 2007
Exhibit "A"
Case 2:03-cv—01825—PGR Document 364-2 Filed 10/26/2007 Page 1 of 4
RECEIVERSHIP ESTATE OF INTERNATIONAL FUNDING ASSOCIATION, etal
Statement of Sources and Uses of Cash - Modified Cash Basis
January 1, 2007 - June 30, 2007
January 1 · June 30, 2007
SOURCES OF CASH:
Funds Recovered from Defenclents 5 20,000.00
Interest on T—Bills 10,596.32
Interest Income 2,082.44
Dividend Income 46.74
TOTAL SOURCES OF CASH $ 32,725.50
USES OF CASH:
ADMINISTRATIVE EXPENSES
Storage Expense- Reverse Prior Period Overpay (147.06)
TOTAL ADMINISTRATIVE EXPENSES $ (147.06)
TOTAL USES OF CASH (147.06)
NET INCREASE (DECREASE) IN CASH FOR PERIOD $ 32,872.56
CASH AT THE BEGINNING OF PERIOD - JANUARY 1, 2007 619,449.66
CASH AT THE END OF PERIOD - JUNE 30, 2007 5 652,322.22
Case 2:03-cv—01825—PGR Document 364-2 Filed 10/26/2007 Page 2 of 4
(See Accountants' Compilation Report and Notes to Financial Statements)
Receivership Estate of International Funding Association, et al
Notes to Financial Statements
January 1, 2007 through June 30, 2007
NOTE 1 — NATURE OF OPERATIONS
International Funding Association, et al, a Receivership was created as a result of
actions brought by the United States Securities and Exchange Commission,
entitled SEC v. Ronald Stephen Holt and International Funding Association, et al,
cause number CV 03-1825-Pl-lX—PGR ("SEC Action") and by the Commodity
Futures Trading Commission v. International Funding Association, et al, cause
number CV03—1826-Pl~IX—PGR ("CFTC Action"). A Receiver was appointed by the
United States District Court for the District of Arizona (Receivership Court) and
selves at the Receivership Court’s direction. Pursuant to the orders of the
Receivership Court, the Receiver has been charged with the responsibility of
taking possession of and managing all of the assets of the defendants and relief
defendants in the SEC Action and the CFTC Action.
The Receiver serves as an equity receiver on behalf of the Receivership Court.
The nature and scope of the Receiver’s powers and duties are established in the
written opinions of the courts of the United States and in the orders of the
Receivership Court entered in the SEC Action and the CFTC Action. The
Receiver is also engaged in tracing the flow of investor funds through the accounts
of the defendants and others to locate other Receivership Assets that the Receiver
has been directed to take possession of. This process involves interviewing
witnesses, analyzing receivership records and subpoenaing and analyzing bank
records. The Receiver is also required to deal with various claimants who claim to
be owed money by the defendants and relief defendants.
NOTE 2 — BASIS OF ACCOUNTING
The financial statement has been prepared on the modified cash basis of
accounting, which is an other comprehensive basis of accounting. Under this
basis, revenues are generally recognized when received rather than when earned,
and expenses are recognized when cash is disbursed rather than when the
obligation is incurred.
ln the accompanying statement of sources and uses of cash — modified cash
basis, interest earned on U.S. Treasury Bills is recognized when earned rather
than when received.
Cash — International Funding Association, et al has included U.S. Treasury Bills
with a maturity of less than four months in the caption cash on the statement of
sources and uses of cash —— modified cash basis.
Estimates —— The preparation of the statement of sources and uses of cash —
modified cash basis and notes thereto require International Funding Association,
et al to make estimates and assumptions that affect certain disclosures.
Accordingly, actual amounts may differ.
w¤*fI¤Id 5* C¤@a@el2:03—cv-01825-PGR Document 364-2 Filed 10/26/2007 gaggjgugfcictcuntem
Receivership Estate of International Funding Association, etal
Notes to Financial Statements
January 1, 2007 through June 30, 2007
NOTE 3 — RELATED PARTY TRANSACTIONS
The Receiver under the direction of the Receivership Court has engaged a public
accounting firm, owned by the Receiver, to assist the Receiver in performing
various administrative and accounting functions related to the Receivership
Assets. During this period, $5,985.00 of fees have been incurred by Warfield &
Company, CPAs. No fees were paid to Warfield & Company, CPAs for the period
ending June 30, 2007. A total of $81,176.21 in fees and expenses remain unpaid
to Warfield & Company, CPAs. Of this amount, $25,472.67 is from 2004,
$35,008.79 is from 2005, $14,709.75 is from 2006, and the remaining $5,985.00 is
from 2007. The unpaid amounts are not included in the statement of sources and
uses of cash -— modified cash basis, as they have not been paid as of June 30,
2007.
NOTE 4 — UNPAID EXPENSES
ln addition to the accounting fees incurred in Note 3, International Funding
Association, et al has incurred $108,208.58 of unpaid expenses, comprised of fees
and expenses incurred by the Receiver of $19,345.14 and other professional
sen/ices engaged by the Receiver of $88,863.44. Of these amounts, $18,653.81
is from 2004, $29,986.55 is from 2005, $41,130.22 is from 2006, and the
remaining $18,438.00 is from 2007. These amounts are not included in the
statement of sources and uses of cash —- modified cash basis, as they have not
been paid as of June 30, 2007.
NOTE 5 —- CONTINGENCIES
The Receiver is in the process of determining if International Funding Association,
etal has any income tax or other tax liabilities as of June 30, 2007.
NOTE 6 — SUBSEOUENT EVENTS
As ofthe date of this report there were additional professional fees and expenses
incurred by the Receivership in the amount of $3,039.41.
lU¤rfi¤ld 5 €¤i(i¤22se 2:03—cv—01825—PGR Document 364-2 Filed 10/26/2007 (lgagg gabof fqzwumms
Case 2:03-cv-01825-PGR
Exhibit "A" Document 364-2
Filed 10/26/2007
Page 1 of 4
Case 2:03-cv-01825-PGR
Document 364-2
Filed 10/26/2007
Page 2 of 4
Case 2:03-cv-01825-PGR
Document 364-2
Filed 10/26/2007
Page 3 of 4
Case 2:03-cv-01825-PGR
Document 364-2
Filed 10/26/2007
Page 4 of 4
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