Ameritrust Restates Financials Amid 7 Trillion Share Fraud Scandal

TL;DR

**Ameritrust is a zombie company, avoid at all costs; 7 trillion shares are worthless paper.**

AI Summary

Ameritrust Corporation (ATCC) filed a 10-Q/A to restate its financial statements for the quarter ended December 31, 2020, following an SEC microcap fraud case against its former CEO, Mr. Seong Yeol Lee. The restatement derecognizes approximately 7 trillion shares of common stock and related project development assets, which were deemed unsupported by valid consideration and non-compliant with U.S. GAAP. As a result, the company's financial statements now reflect a dormant state subsequent to September 30, 2020, with no revenues and a net loss of $750,217 for the twelve months ended September 30, 2020. Despite the accounting restatement, the transfer agent records still show 7 trillion shares outstanding, creating a significant discrepancy. The company reported total assets of $4,225,653 and total liabilities of $75,469 as of December 31, 2020, with cash and cash equivalents at $2,551,600. Current management is evaluating corporate and legal actions to reconcile the share count and address the going concern issue, as the company has no current operations.

Why It Matters

This restatement reveals a massive microcap fraud, impacting investors who may hold shares now deemed invalid. The discrepancy between the 7 trillion shares on transfer agent records and the restated financial position, which recognizes only 26,767,818 shares, creates extreme uncertainty and potential for significant dilution or loss for existing shareholders. For employees and customers, the company's dormant status and lack of operations signal a non-viable business. Competitively, Ameritrust is effectively out of the market, highlighting the risks of investing in thinly traded, unregulated microcap stocks where fraud can go undetected for extended periods.

Risk Assessment

Risk Level: high — The risk level is high due to the derecognition of approximately 7 trillion shares of common stock and related assets, which were tied to a microcap fraud case involving the former CEO, Mr. Seong Yeol Lee. The company explicitly states it has not generated revenues since fiscal year 2020 and does not currently have operations, raising substantial doubt about its ability to continue as a going concern.

Analyst Insight

Investors should immediately divest any holdings in Ameritrust Corp (ATCC) given the company's dormant status, the invalidation of 7 trillion shares, and the ongoing legal and corporate uncertainties. New investors should absolutely avoid this stock, as its future is highly speculative and fraught with legal and financial challenges.

Financial Highlights

debt To Equity

0.02

revenue

$0

operating Margin

N/A

total Assets

$4,225,653

total Debt

$75,469

net Income

-$750,217

eps

N/A

gross Margin

N/A

cash Position

$2,551,600

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• 7 trillion — Shares issued by former CEO (Derecognized due to fraud, but still on transfer agent records)
• 26,767,818 — Shares recognized as outstanding (Reflects the restated, legitimate share count)
• $750,217 — Net Loss (For the twelve months ended September 30, 2020, reflecting dormant operations)
• $2,551,600 — Cash and Cash Equivalents (As of December 31, 2020, indicating limited liquidity for a dormant company)
• $4,225,653 — Total Assets (As of December 31, 2020, after derecognition of fraudulent assets)
• $75,469 — Total Liabilities (As of December 31, 2020, indicating minimal operational liabilities)
• 0 — Revenues (For the three months ended December 31, 2020, and twelve months ended September 30, 2020, confirming dormant status)
• 2020 — Last fiscal year with operations (Company has been dormant since then)
• 2024-09-30 — SEC final judgment date (Date SEC announced final judgments against former CEO and company)
• 2023-03-07 — Former CEO's passing date (Date Mr. Seong Yeol Lee ceased serving as CEO)

Key Players & Entities

• Ameritrust Corporation (company) — Registrant filing the 10-Q/A
• Seong Yeol Lee (person) — Former Chief Executive Officer of Ameritrust Corp, responsible for microcap fraud
• Securities and Exchange Commission (regulator) — Obtained final judgments in SEC v. Seong Yeol Lee and Ameritrust Corporation
• Gryphon (company) — Entity that merged with Ameritrust on August 28, 2020
• $750,217 (dollar_amount) — Net loss for the twelve months ended September 30, 2020
• $2,551,600 (dollar_amount) — Cash and cash equivalents as of December 31, 2020
• $4,225,653 (dollar_amount) — Total Assets as of December 31, 2020
• $75,469 (dollar_amount) — Total Liabilities as of December 31, 2020
• 7 trillion (dollar_amount) — Approximate number of shares issued by former CEO and subsequently derecognized
• 26,767,818 (dollar_amount) — Number of shares issued and outstanding as of December 31, 2020, after restatement

FAQ

Risk Factors

• SEC Fraud Case and Restatement [high — legal]: The company restated its financial statements due to an SEC microcap fraud case against its former CEO, Mr. Seong Yeol Lee. This resulted in the derecognition of approximately 7 trillion shares and related assets, impacting the company's financial integrity and historical reporting.
• Dormant Operations and Lack of Revenue [high — operational]: Ameritrust Corp has no current operations and reported zero revenues for the three months ended December 31, 2020, and the twelve months ended September 30, 2020. The company's financial statements reflect a dormant state subsequent to September 30, 2020.
• Discrepancy in Share Count [high — legal]: Despite the restatement derecognizing 7 trillion shares, the transfer agent records still show this inflated number outstanding. This significant discrepancy poses legal and reconciliation challenges for the company.
• Going Concern Uncertainty [high — financial]: With no current operations and a net loss of $750,217 for the twelve months ended September 30, 2020, the company faces a going concern issue. Management is evaluating corporate and legal actions to address this.
• Unregistered Sales of Equity Securities [medium — legal]: The company has engaged in unregistered sales of equity securities, as noted in Item 2 of the filing. This practice can lead to regulatory scrutiny and potential penalties.
• Defaults Upon Senior Securities [medium — legal]: Item 3 of the filing mentions defaults upon senior securities. While details are not elaborated, this indicates potential financial distress and legal obligations.

Industry Context

Ameritrust Corporation operates in the financial services sector, which is highly regulated and sensitive to market confidence. The company's current situation, marked by a fraud case and dormant operations, places it outside the typical competitive landscape of active financial institutions. The focus is on regulatory compliance and corporate restructuring rather than market share or industry growth.

Regulatory Implications

The SEC microcap fraud case and subsequent restatement highlight significant regulatory risks. The company must address the discrepancy in share counts and demonstrate compliance with U.S. GAAP to regain any semblance of regulatory standing. Failure to do so could result in further sanctions or delisting.

What Investors Should Do

1. Exercise extreme caution due to the company's dormant status and the severe impact of the fraud case and restatement.
2. Monitor management's progress in reconciling the share count and addressing the going concern issue, as these are critical for any potential future viability.
3. Acknowledge that the company's historical financial data is unreliable due to the restatement and the former CEO's fraudulent activities.

Key Dates

• 2023-03-07: Former CEO Mr. Seong Yeol Lee passed away. — Marks the cessation of the former CEO's role, potentially impacting ongoing legal proceedings and company direction.
• 2020-12-31: Quarter ended December 31, 2020. — Date of the unaudited financial statements filed in the 10-Q/A, reflecting the company's dormant state post-restatement.
• 2020-09-30: Twelve months and fiscal year ended September 30, 2020. — Last fiscal year with reported operations and the period for which the net loss of $750,217 is reported.

Glossary

10-Q/A

An amended quarterly report filed with the SEC, used to correct or supplement information previously filed in a 10-Q. (This filing is an amendment to Ameritrust Corp's quarterly report, indicating significant corrections to its financial statements.)

Restatement

The process of correcting previously issued financial statements due to errors or non-compliance with accounting standards. (Ameritrust Corp's financial statements were restated due to a fraud case, fundamentally altering its reported financial position.)

Derecognize

To remove an asset or liability from the balance sheet. (Approximately 7 trillion shares and related assets were derecognized, significantly reducing the company's reported assets and equity.)

U.S. GAAP

Generally Accepted Accounting Principles in the United States, the standard framework for financial accounting and reporting. (The restatement was necessitated by non-compliance with U.S. GAAP regarding the unsupported shares and assets.)

Going Concern

An accounting assumption that a company will continue to operate for the foreseeable future. (The company faces a going concern issue due to its dormant operations and lack of revenue, raising doubts about its ability to continue as an ongoing business.)

Transfer Agent

A financial institution responsible for maintaining records of stock and bond owners, canceling and issuing certificates, and distributing dividends. (The discrepancy between the restated share count and the transfer agent's records highlights a critical reconciliation issue.)

Year-Over-Year Comparison

This 10-Q/A filing represents a significant departure from any prior operational filings due to the accounting restatement. Previous filings would have reflected the unsupported 7 trillion shares and related assets, which have now been derecognized. The current filing shows zero revenue and a net loss of $750,217 for the twelve months ended September 30, 2020, confirming the company's dormant state since that period, a stark contrast to any prior operational periods.

Filing Documents

• form10qa.htm (10-Q/A) — 336KB
• ex31-1.htm (EX-31.1) — 16KB
• ex32-1.htm (EX-32.1) — 10KB
• 0001493152-25-013763.txt ( ) — 2007KB
• atcc-20201231.xsd (EX-101.SCH) — 17KB
• atcc-20201231_cal.xml (EX-101.CAL) — 32KB
• atcc-20201231_def.xml (EX-101.DEF) — 35KB
• atcc-20201231_lab.xml (EX-101.LAB) — 144KB
• atcc-20201231_pre.xml (EX-101.PRE) — 115KB
• form10qa_htm.xml (XML) — 158KB

Financial Statements

Financial Statements 4 Balance Sheets as of December 31, 2020 (Unaudited) and Setember 30, 2020 (Audited) 5 6 7 8 Notes to the Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 16 Item 4.

Controls and Procedures

Controls and Procedures 16 PART II OTHER INFORMATION: 16 Item 1.

Legal Proceedings

Legal Proceedings 16 Item 1A.

Risk Factors

Risk Factors 16 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16 Item 3. Defaults Upon Senior Securities 16 Item 4. Submission of Matters to a Vote of Securities Holders 16 Item 5. Other Information 16 Item 6. Exhibits 17

Signatures

Signatures 18 3 Table of Contents PART I – FINANCIAL INFORMATION Item 1. Financial Statements The accompanying interim financial statements of Ameritrust Corporation ("the Company", "we", "us" or "our"), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The interim financial statements should be read in conjunction with the Company's latest annual financial statements. In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented. 4 Table of Contents AMERITRUST CORPORATION BALANCE SHEETS (UNAUDITED) December 31, 2020 September 30, 2020 (Unaudited) (Audited) ASSETS Current Assets Cash and cash equivalents $ 2,551,600 $ 2,551,600 Net receivables and notes 5,992 5,992 Real estate under development and completed 766,210 766,210 Right to use assets 50,715 50,715 Other current assets 65,000 65,000 Total Current Assets 3,439,517 3,439,517 Non-Current Assets Goodwill and intangible assets, net 786,136 786,136 Property, plant and equipment, net - - Total Non-Current Assets 786,136 786,136 Total Assets $ 4,225,653 $ 4,225,653 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Current Liabilities Accounts payable $ 24,754 $ 24,754 Liability of right to use 50,715 50,715 Total Current Liabilities 75,469 75,469 Long term debt - - Total Long-Term Liabilities - - Total Liabilities 75,469 75,469 Commitments and contingencies (Note 6) - Stockholders' Equity Commo

View Full Filing

View this 10-Q/A filing on SEC EDGAR