10-K 1 file001.txt FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended June 30, 2002 -------------- Commission File No. 0-1437 -------------------------- THE FIRST REPUBLIC CORPORATION OF AMERICA ----------------------------------------- (Exact name of Registrant as specified in its charter) DELAWARE 13-1938454 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 302 Fifth Avenue New York, New York 10001 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 279-6100 -------------- Securities registered pursuant to Section 12(b) of the Act: None ---- Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $1 per share ------------------------------------ (Title of Class) Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of September 12, 2002, 667,534 common shares were outstanding, and the aggregate market value of common shares held by nonaffiliates of Registrant was approximately $1,915,000 (based upon the price paid by Registrant for shares). Documents Incorporated by Reference ----------------------------------- See Item 14(c) The First Republic Corporation of America 10-K Contents

PART I ITEM 1. BUSINESS a. General Development of Business The First Republic Corporation of America (the "Company") was incorporated in the State of Delaware in February 1961, and is presently engaged, either directly or through its subsidiaries, in the real estate, hotel, seafood, and textile businesses. See Item 1(c) for a description of the businesses in which the Company and its subsidiaries are engaged. The Company discontinued its yarn spinning operations in Lake City, South Carolina in September 2001, and sold the spinning plant and the land on which it was located for $615,000 in January 2002. The Company recognized a loss of approximately $69,000. The Company received $150,000 in cash and a $465,000 mortgage note bearing interest at 7-3/4%. The note calls for 59 equal monthly payments of approximately $4,400, and a $369,000 balloon payment on February 10, 2007. On October 31, 2001, the Company sold the vacant land that it owned in Melbourne, Florida for $1,775,000. There was no existing mortgage debt on this property. After expenses and adjustments, the Company received net proceeds of approximately $1,621,000 and recognized a gain of approximately $178,000. In July 2002, the Company's 80.2% owned subsidiary, Bluepoints Company, Inc. ("Bluepoints") discontinued the harvesting of clams at its Long Island, New York property. Bluepoints has entered into a contract to sell the two buildings at the site as well as approximately five acres of land for $1,600,000. Bluepoints' basis in the property is approximately $275,000. The contract is contingent upon the ability of the purchaser to obtain certain regulatory approvals by January 30, 2003. Bluepoints has received a $60,000 refundable deposit. The purchaser can obtain an additional extension until July 31, 2003, but if this option is exercised, the deposit would be forfeited. The purchaser is also responsible to pay the real estate taxes on the property as long as the contract is in force. b. Financial Information about Industry Segments The sales and operating profit from operations and the identifiable assets attributable to each industry segment for the three years ended June 30, 2002 are set forth in Note 2 (Industry Segments and Foreign Operations) of the Notes to Consolidated Financial Statements, which are incorporated herein by reference to Item 8. hereof. c. Narrative Description of Business Real Estate The Company owns various loft buildings, office buildings, industrial buildings, shopping centers, and residential and other properties, situated along the East Coast of the United States in Massachusetts, Rhode Island, New York, New Jersey, Pennsylvania, Virginia, North Carolina and Florida. A general description of these properties is provided in Item 2. below. 1 Real estate revenues accounted for approximately 24%, 23% and 26% of consolidated revenues from operations for the fiscal years ended June 30, 2002, 2001 and 2000, respectively. Hotel The Company owns and operates a 288-room hotel and convention center located in Liverpool, New York, which it operates under a Holiday Inn franchise agreement. There are approximately 20 facilities in the Liverpool/Syracuse area with which the hotel competes. Currently, the Company believes it is the third largest hotel in terms of revenues in the area. Hotel revenues accounted for approximately 10%, 9% and 10% of consolidated revenues from operations for the fiscal years ended June 30, 2002, 2001 and 2000, respectively. Seafood Bluepoints holds title to approximately 13,000 acres of land under the water of the Great South Bay between Fire Island and Long Island's South Shore in New York State. Until operations were discontinued in July 2002 Bluepoints harvested hard-shell clams on this property. At one time Bluepoints was a substantial factor in the market for hard shell clams. However, a significant decrease in clam production at Bluepoints, combined with substantial new production by competitors harvesting clams in other areas along the Eastern Seaboard, resulted in a diminished role for Bluepoints and continuing losses in its hard-shell clam operation. These factors ultimately led to Bluepoints' decision to discontinue its hard shell clam operations in July 2002. In September 1998, Bluepoints began selling imported products, principally lobster tails from Honduras and Oman. Sales of the foregoing products were approximately $13,152,000 and $13,848,000 and losses were approximately $1,000 and $16,000 for the fiscal years ended June 30, 2002 and 2001, respectively. In fiscal 2001, Bluepoints has an arrangement with a company that sells its seafood products at the Fulton Fish Market in New York City. This venture had sales of approximately $8,637,000 and $7,986,000 and operating profits of approximately $34,000 and $67,000 for the fiscal years ended June 30, 2002 and 2001, respectively. Bluepoints, through foreign subsidiaries, operates a shrimp farm and is a 62.5% owner of a shrimp hatchery, both of which are located in Ecuador. Sales of shrimp from the foregoing operations approximated $550,000 and $366,000 for the fiscal years ended June 30, 2002 and 2001, respectively. Bluepoints, through a foreign subsidiary, also 2 owns a 38% interest in another Ecuadorian shrimp farming operation. See Items 12. and 13. below for information relating to shares of stock of Bluepoints and these foreign subsidiaries owned by certain affiliates of the Company. The Company also owns a seafood operation in Cape Canaveral, Florida that harvests scallops and sells other imported and domestic seafood products. In the current fiscal year, sales from this operation were approximately $4,952,000 and there was a loss of $1,510,000. This compares to sales of approximately $8,896,000 and a loss of $2,583,000 from operations during the prior year. Seafood revenues accounted for approximately 48%, 49% and 45% of consolidated revenues from operations for the fiscal years ended June 30, 2002, 2001 and 2000, respectively. Textile The Hanora Spinning division of the Company ("Hanora"), operates a yarn spinning plant in Woonsocket, Rhode Island. Hanora, which is not a significant factor in the market it serves, competes with a number of other yarn spinning plants on the basis of quality of product and price. During the fiscal year ended June 30, 2002, Hanora purchased approximately $358,000 of additional equipment. The backlog of yarn orders on August 31, 2002 was $7,054,000 as compared to $7,998,000 on August 31, 2001. Approximately 80% of the current backlog is expected to be shipped in the fiscal year ending June 30, 2003. Two customers accounted for approximately 28% of Hanora's total sales during the 2002 fiscal year. The loss of either of these customers would not have a material adverse effect on the Company and its subsidiaries taken as a whole. Through September 30, 2001, the Hanora South division of the Company ("Hanora South") operated a yarn spinning plant in Lake City, South Carolina, which produced craft, sweater, hosiery, upholstery and industrial yarns as a commission spinner for Hanora. As of September 30, 2001, Hanora South ceased operations and Hanora is now doing all the spinning of yarn at its Rhode Island plant. The land and building of Hanora South were sold in January 2002. See item 1a. J&M Dyers, ("J&M"), another division of the Company, which operates a yarn dyeing plant in Sumter, South Carolina, is a commission dyer for rawstock, package, ombre and skein dyeing. J&M is not a significant factor in the market it serves and competes with a number of other firms that are substantially larger. At the present time, J&M does not have a significant backlog of orders. Textile revenues accounted for approximately 17%, 18% and 17% of consolidated revenues from operations for the fiscal years ended June 30, 2002, 2001 and 2000, respectively. 3 ITEM 2. PROPERTIES

(1)--Reference is made to Schedule III for information with respect to mortgages encumbering certain properties listed in the table. (2)--Except as otherwise noted, the properties listed in the Seafood Segment are owned by Bluepoints Company, Inc., an 80.2% owned subsidiary of the Company. (3) --Hard shell clamming operations were discontinued in July 2002 and the five acres of land and the two buildings are presently subject to a sales contract. See item 1a. 6 ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. 7 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS a. The Company's common stock is traded in the over-the-counter market. There have not been any quotations for the Company's common stock in the National Daily Quotation Service for the past several years. During the two most recent fiscal years, the Company has purchased shares at prices ranging from a low of $42 per share in August 2000 to a high of $50 in January 2002. Due to the absence of quotations it may be deemed that there is no established public trading market for the Company's common stock. b. As of September 12, 2002, there were 696 holders of record of the Company's common stock. c. No dividends have been paid during the two years ended June 30, 2002. The Company has no intention of paying dividends in the foreseeable future. d. The Company did not sell any securities during the past year. 8 ITEM 6. SELECTED FINANCIAL DATA

9 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Working capital at June 30, 2002 decreased by approximately $3,146,000 to $16,134,000. Net cash provided by operating activities was approximately $1,682,000 during the 2002 fiscal year. Net cash used in financing activities was approximately $1,145,000. Net cash of approximately $2,305,000 was used in investing activities. The Company has a $9,000,000 term loan with its principal lender bearing interest at 7.5% and a $3,000,000 revolving line of credit with an interest rate equal to either (a) LIBOR plus 2% or (b) the Alternate Base Rate (as defined) plus 0.50%. These loans are collateralized by a mortgage on the East Newark Industrial Center. The term loan requires amortization payments of approximately $359,000 per annum. Both loans mature on October 21, 2002. The Company is presently negotiating with its lender for a five-year renewal. At June 30, 2002, the term loan balance was $7,355,500 and nothing was outstanding on the revolving line of credit. On October 31, 2001, the Company sold its vacant land in Melbourne, Florida for approximately $1,775,000 and recognized a gain of approximately $178,000. The net proceeds to the Company after expenses were approximately $1,621,000. In September 2001, the Company discontinued operations at its Hanora South spinning plant. The operations performed at Hanora South are now being performed at Hanora. In January 2002, the Company sold Hanora South's land and building for $615,000. The Company received $150,000 in cash and a $465,000 mortgage note. The Company recognized a loss of approximately $69,000 on the sale. During the three years ended June 30, 2002, the Company incurred capital expenditures of approximately $7,423,000. In addition, approximately $1,861,000 was expended for tenant improvements during this three year period. At June 30, 2002 the Company had no significant commitments for capital expenditures and believes that its current cash position and borrowing capacity are adequate to meet cash needs for the next twelve months. The Company's equity share of losses from Ecuadorian shrimp operations was approximately $927,000 in fiscal 2002 as compared to $717,000 in fiscal 2001. The Company's shrimp farms have begun to introduce "Polyculture" which is a method of farming a species of fish, Tilapia, and shrimp together. This farming method has been proven to be successful in combating White Spot Virus in Ecuador. Efforts are also continuing to increase shrimp production through the use of the Company's patented Mariculture System, the development of a product, Tolerine, designed to mitigate White Spot Virus that is decimating Ecuador's shrimp production, the micro-screening of the water supply to the ponds and other improved farming techniques. Although there can be no assurance that the shrimp production will improve, the Company believes that operations may improve in the future as a result of cost reductions, the efforts to increase production as discussed above, and the marketing of its Mariculture System to other shrimp farmers. 10 RESULTS OF OPERATIONS Real Estate In fiscal 2002, the Company's real estate operating profits increased $637,000 on a decrease in revenues of $783,000. The decrease in revenues was primarily due to the sale of the Company's office building on West 39th Street in New York City on October 4, 2000. The decrease in revenues was offset by decreased fuel and utility costs of $479,000 and snow removal costs of $153,000 as a result of the mild winter this year. There was also a reduction in repairs and maintenance at the Nyanza property of $515,000 and at the East Newark building of $378,000. In fiscal 2001, operating profits decreased $263,000 and revenues decreased $1,225,000. The decrease in revenues was due to the sale of the Company's office building on West 39th Street in New York City on October 4, 2000 and its Miami Beach property on May 1, 2000, offset by revenue increases at substantially all the Company's other properties. The decrease in operating profits was due to the reduced revenue offset by reduced repairs and maintenance of $726,000 at the Waltham and Nyanza properties and reduced mortgage interest of $213,000. In fiscal 2000, operating profits decreased $1,582,000 and revenues increased $876,000. The decrease in operating profits was due to $1,251,000 of costs incurred at the Nyanza Building to clean up an oil spill caused by a small break in an oil return line that had been leaking oil over an extended period of time; increased energy costs of $265,000 due to a substantial increase in fuel costs; increased repairs and maintenance of $555,000 at the East Newark and Waltham properties; increased mortgage interest of $85,000 and a $169,000 insurance recovery in fiscal 1999 at the Richmond Virginia Shopping Center. The decrease in operating profits mentioned above were offset by increased revenues and operating profits at substantially all the other properties. The revenue increases came principally from the Newburyport property that was renovated in the prior year ($553,000) and the Shipps Corner Shopping Center which the Company purchased in November 1998 ($231,000). Hotel In fiscal 2002, revenues decreased $100,000 but profits increased $206,000 as a result of decreased fuel and utility costs of $102,000, lower repairs and maintenance of $25,000, reduced real estate taxes of $97,000 and slightly lower operating costs. In fiscal 2001, revenues decreased $95,000 and profits decreased $466,000 as a result of the lower revenues, increased fuel and utility costs of $140,000, higher repairs and maintenance of $53,000, increased depreciation expense of $67,000 and higher operating costs. In fiscal 2000, revenues increased $1,256,000 and profits increased $529,000 as a result of the completion, in January 1999, of a $4,000,000 renovation project which allowed the hotel to operate as a Holiday Inn franchise. Depreciation expense increased $307,000 as a result of the renovation. 11 Seafood In fiscal 2002, overall revenues for the seafood division decreased $5,052,000 as compared to the prior year. Losses from operations (including equity share of losses in affiliated entity and excluding minority interests share of loss of subsidiaries) in fiscal 2002 were $4,714,000 as compared to losses of $4,653,000 in fiscal 2001. Revenues increased at the Ecuadorian shrimp operations by $196,000 but losses from operations were $2,737,000 due to continued poor shrimp yields caused by the devastating outbreak three years ago of White Spot Virus that continues to decimate the Ecuadorian shrimp industry. The Company is continuing its efforts to combat the virus. The Company believes that the introduction of the Polyculture technology combined with the procedures introduced last year and the continued use of its patented Mariculture system may result in an improvement in the shrimp operations. However, there can be no assurance that these treatments will be successful. The Company's Florida operations incurred a loss of $1,510,000 in fiscal 2002 as compared to a loss of $2,583,000 in fiscal 2001 on a $3,634,000 decrease in revenues. Bluepoints Long Island operations had a loss of $546,000 as compared to a loss of $65,000 in the prior year and revenues decreased $1,654,000. Due to continuing losses in its clamming operations, the Company closed its clam operations in July 2002 and has entered into a contract of sale for its West Sayville Long Island facility. The domestic seafood industry is continuing to experience a drop in profitability that started in September of 2000 due to the slowing economy. In fiscal 2001, revenues for the seafood division increased $5,198,000 as compared to the prior year. Losses from operations (including equity share of losses in affiliated entity and excluding minority interests' share of loss of subsidiaries) in fiscal 2001 were $4,653,000 as compared to losses of $2,501,000 in fiscal 2000. Losses from the Ecuadorian shrimp operations were $2,005,000 and revenues decreased $710,000 due to continued poor shrimp yields caused by the devastating outbreak two years ago of White Spot Virus that is decimating the Ecuadorian shrimp industry. The Company continued its efforts started in the prior year to combat the virus by importing larvae from Panama and micro-screening the water going into its ponds. The Company's Florida operations incurred a loss of $2,583,000 in fiscal 2001 as compared to a loss of $798,000 in fiscal 2000 on a $4,563,000 increase in revenues. Bluepoints Long Island operations had a loss of $65,000 as compared to a profit of $497,000 in the prior year and revenues increased $1,345,000. The domestic seafood industry experienced a severe drop in profitability starting in September of 2000 due to the slowing economy and reduced consumer confidence. Seafood operations were adversely affected by losses incurred on imported scallops caused by a precipitous drop in domestic scallop prices and lower than anticipated margins on many of our seafood products. In fiscal 2000, revenues for the seafood division increased $12,287,000 as compared to the prior year. Losses from operations (including equity share of losses in affiliated entity and excluding minority interests' share of loss of subsidiaries) in fiscal 2000 were $2,501,000 as compared to a loss of $2,428,000 in fiscal 1999. Losses from the Ecuadorian shrimp operations were $2,199,000 and revenues decreased $1,389,000 due to continued poor shrimp yields caused by the White Spot Virus. The Company attempted to combat the virus by constructing grow-out ponds so that juvenile shrimp could mature to a larger size before 12 they were placed into the shrimp ponds thereby making them less susceptible to the virus. The Company was also developing a new product, Tolerine, to help the shrimp fight off the White Spot Virus. The Company's scallop operation incurred a loss of $798,000 in fiscal 2000 as compared to a loss of $547,000 in fiscal 1999 on a $343,000 decrease in revenues. Bluepoints Long Island operations had a profit of $497,000 as compared to a profit of $66,000 in the prior year. Revenues increased $14,019,000 principally due to the sale of lobster tails, a new product introduced last year, and other seafood products. Textile In fiscal 2002, revenues for the textile division decreased $2,222,000 over the prior year and operating loss increased $63,000. Hanora Spinning's operating profit increased $251,000, to $671,000 and revenues decreased $2,131,000. Hanora South and J&M Dyers ("J&M") incurred a combined loss of $650,000, as compared to the prior years' loss of $319,000 and revenues decreased $160,000. Losses increased principally due to costs incurred in closing down our yarn spinning plant in Lake City South Carolina in September 2001. Whitlock Combing Co. Inc. ("Whitlock"), which owned a wool combing plant in South Carolina and which discontinued operations in 1992, incurred a loss of $126,000 relating to its property in South Carolina that is being offered for sale compared to a loss of $143,000 last year. During the three years ended June 30, 2002, the Company purchased approximately $1,214,000 of machinery and equipment for the textile operations. In fiscal 2001, revenues for the textile division increased $1,735,000 and operating loss decreased $251,000. Hanora Spinning's operating profit increased $114,000, to $420,000 and revenues increased $1,924,000. Hanora South and J&M Dyers incurred a combined loss of $319,000, as compared to the prior years' loss of $416,000 and revenues decreased $189,000. Losses decreased principally due to the higher revenues and lower depreciation at Hanora South and J&M of $136,000. Whitlock incurred a loss of $143,000 compared to a loss of $183,000 last year. In fiscal 2000, revenues for the textile division decreased $1,111,000 and operating loss decreased $383,000. Hanora Spinning's operating profit decreased $77,000, to $306,000 and revenues decreased $661,000. Hanora South and J&M Dyers incurred a combined loss of $416,000, as compared to the prior years' loss of $593,000 and revenues decreased $450,000. The decrease in revenues was due to the continuing downturn in the textile industry caused by increased competition from foreign companies. Earnings increased principally due to lower depreciation at Hanora South and J&M of $167,000 and the write off in fiscal 1999 of $300,000 relating to Whitlock. Whitlock incurred a loss of $183,000 compared to a loss of $466,000 (including a write-down of its building by $300,000) in fiscal 1999. 13 Corporate/Other Corporate interest and expenses for the last three years was $4,324,000, $4,492,000 and $4,175,000, respectively. Corporate and other revenues for the last three years was $236,000, $387,000 and $864,000, respectively. Corporate expenses includes the operations of the Merrimac division other than those related to the ownership of currently leased real estate which are included in the real estate operations. Corporate interest and expenses in fiscal 2002 decreased due to a decrease in salaries of $148,000 and a reduction in interest expense of $66,000. Corporate interest and expenses in fiscal 2001 increased due to an increase in salaries of $118,000, and increased professional fees of $171,000, offset by a reduction in interest expense of $98,000. Corporate expenses in fiscal 2000 decreased due to a reduction of $280,000 in professional fees, offset by an increase in salaries of $53,000. CRITICAL ACCOUNTING POLICIES Management's discussion and analysis of financial condition and results of operations is based upon the Company's consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies affect its significant judgments and estimates used in the preparation of its consolidated financial statements. Valuation of Property Held for Use and Sale On a quarterly basis, the Company reviews the carrying value of both properties held for use and for sale. The Company records impairment losses and reduces the carrying value of properties when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. In cases where the Company does not expect to recover its carrying costs on properties held for use, the Company reduces its carrying cost to fair value, and for properties held for sale, the Company reduces its carrying value to the fair value less costs to sell. Management does not believe that the value of the properties held for sale or properties in use are impaired as of June 30, 2002. Valuation of Investments in and Advances to Affiliated Entities On a quarterly basis, the Company reviews the carrying value of the investments in and 14 advances to affiliated entities. Although the seafood operations of the Company (particularly the Ecuadorian seafood operations) continue to generate operating losses management believes that the investments that it is currently making will return the operations to profitability. If the Company is unsuccessful in its efforts, an impairment write-down, which may be material, will be required. Management does not believe that the carrying amount of the investments in and advances to affiliated entities are impaired as of June 30, 2002. Recent Accounting Pronouncements In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards ("Statement") No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets. Statement No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Use of the pooling-of-interests method is no longer permitted. Statement No. 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination that is completed after July 1, 2001. Statement No. 142 no longer permits the amortization of goodwill and indefinite-lived intangible assets. Instead, these assets must be reviewed annually (or more frequently under certain conditions) for impairment in accordance with this statement. This impairment test uses a fair value approach rather than the undiscounted cash flows approach previously required by Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The amortization of goodwill included in other expenses will also no longer be recorded upon adoption of the new rules. Intangible assets that do not have indefinite lives will continue to be amortized over their useful lives and reviewed for impairment in accordance with Statement No. 121. Management does not believe that the adoption of Statement No. 141 or 142 will have a significant effect on results of operations or the financial position of the Company. In August 2001, the FASB issued Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Statement No. 144 provides accounting guidance for financial accounting and reporting for the impairment or disposal of long-lived assets. Statement No. 144 supersedes Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of. It also supersedes the accounting and reporting of APB Opinion No. 30, Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Evens and Transactions related to the disposal of a segment of a business. Statement No. 144 is effective for fiscal years beginning after December 15, 2001. Management does not anticipate that its adoption will have a material effect on the financial position or results of operations of the Company. 15 Forward-Looking Statements Certain statements made in this report may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21B of the Securities Act of 1934, as amended. Such forward-looking statements include statements regarding the intent, belief or current expectations of the Company and its management and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the following: the ability of the Company to increase production at its Ecuadorian shrimp farms, and to address the virus problem that is affecting shrimp production in Ecuador, the availability of scallops in the area covered by the Company's Cape Canaveral, Florida operations, the success of the Company's Polyculture process, Mariculture System, Tolerine product and micro-screening efforts, demand for the Company's textile services, general economic and business conditions, which will, among other things, affect the demand for space and rooms at the Company's real estate and hotel properties, the availability and creditworthiness of prospective tenants, lease rents and the terms and availability of financing, and adverse changes in the real estate markets, including, among other things, competition with other companies, risks of real estate development and acquisition, governmental actions and initiatives and environmental safety requirements. 16 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS The Company currently has no variable rate debt. 17 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 18 Report of Independent Auditors Board of Directors and Stockholders The First Republic Corporation of America We have audited the accompanying consolidated balance sheets of The First Republic Corporation of America (the "Company") and subsidiaries as of June 30, 2002 and 2001, and the related consolidated statements of operations and comprehensive (loss) income, retained earnings, and cash flows for each of three years in the period ended June 30, 2002. Our audits also included the financial statement schedules listed in the accompanying index to financial statements (Item 14.a.2). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We did not audit the financial statements of (a) Marchelot S.A. and its subsidiaries, Bluepoints International Fisheries, Inc. and subsidiaries and the hotel division, which statements reflect total assets constituting 22% in 2002, 24% in 2001 and 23% in 2000, and total revenues constituting 20% in 2002, 23% in 2001, and 20% in 2000, of the related consolidated totals, and (b) Langomorro, Langostinera El Morro Cia. Ltda. and Affiliated Companies (the "Mondragon Companies", a corporation in which the Company has a 38% interest), accounted for on the equity method. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such entities, is based solely on the reports of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 audits and the reports of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of The First Republic Corporation of America and subsidiaries at June 30, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended June 30, 2002, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. /s/ ERNST & YOUNG LLP New York, New York September 17, 2002 19 Independent Auditor's Report ---------------------------- To the Board of Directors Marchelot S.A. and Subsidiaries New York, U.S.A. 1. We have audited the accompanying consolidated balance sheets of Marchelot S. A. (a wholly-owned subsidiary of Bluepoints Co. Inc. of Bermuda), and its subsidiaries as of June 30, 2002 and 2001, and the related consolidated statements of operations, stockholders' equity and cash flows for the three years ended June 30, 2002. 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 audits. 2. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 statements' presentation. We believe that our audits provide a reasonable basis for our opinion. 3. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Marchelot S.A. and Subsidiaries as of June 30, 2002 and 2001, and the results of their operations and their cash flows for the three years ended June 30, 2002, in conformity with accounting principles generally accepted in the United States of America. /s/ BDO STERN August 2, 2002 Guayaquil, Ecuador 20 INDEPENDENT AUDITOR'S REPORT Board of Directors Bluepoints International Fisheries, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheet of Bluepoints International Fisheries, Inc. (a Florida corporation) and Subsidiaries as of June 30, 2002, and the related consolidated statements of operations and accumulated deficit and cash flows for the year then ended. These consolidated 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 auditing standards generally accepted in the United States of America. 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. The Company's financial statements do not disclose deferred taxes. In our opinion, disclosure of that information is required to conform with accounting principles generally accepted in the United States of America. In our opinion, except for the omission of the information discussed in the preceding paragraph, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bluepoints International Fisheries, Inc. and Subsidiaries as of June 30, 2002 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Hoyman, Dobson & Company, P.A. Hoyman, Dobson & Company, P.A. August 23, 2002 21 [DB&B LOGO] DERMODY, BURKE & BROWN Certified Public Accountants, P.C. INDEPENDENT AUDITORS' REPORT ==================================================== BOARD OF DIRECTORS FIRST REPUBLIC CORPORATION http://www.dbandb.com OF AMERICA, HOLIDAY INN 120 Corporate Drive Auburn, NY 13201-1634 We have audited the accompanying balance sheets of (315) 253-6273 FIRST REPUBLIC CORPORATION OF AMERICA, HOLIDAY INN Fax (315) 253-0890 as of June 30, 2002 and 2001, and the related statements of income and division control and cash flows for the years then ended. These financial 100 Grange Place, statements are the responsibility of the Company's Suite A management. Our responsibility is to express an Cortland, NY 13045-1330 opinion on these financial statements based on our (607) 753-3300 audits. Fax (607) 753-1348 We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance 555 French Road about whether the financial statements are free of New Hartford, NY 13413-1044 material misstatement. An audit includes examining, (315) 732-2991 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 audits provide a reasonable basis for our opinion. The Holiday Inn is owned and operated by First Republic Corporation of America and its affiliated company, First Republic Building Corporation. The accounting records maintained in Syracuse relate only to the transactions incurred in the daily operation of the Hotel. Transactions involving debt financing, tax escrow payments, corporate income a member of taxes and property accounts are not reflected on the Hotel's books but are the accounting responsibility [POLARIS INTERNATIONAL of First Republic and its affiliate. These financial LOGO] statements are issued for inclusion in the financial WORLDWIDE SOLUTIONS statements of FirstRepublic Corporation of America FOR YOUR BUSINESS. and should not be considered 22 separately in determining the financial position and results of operations of the Holiday Inn. ================================================================================ In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the operations of First Republic Corporation of America, Holiday Inn at June 30, 2002 and 2001 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The information on pages 12 to 23 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /S/ DERMODY, BURKE AND BROWN DERMODY, BURKE AND BROWN CERTIFIED PUBLIC ACCOUNTANTS, P. C. Syracuse, NY August 16, 2002 23 The First Republic Corporation of America and Subsidiaries Consolidated Balance Sheets

See notes to consolidated financial statements. 24 The First Republic Corporation of America and Subsidiaries Consolidated Balance Sheets (continued)

See notes to consolidated financial statements. 25 The First Republic Corporation of America and Subsidiaries Consolidated Statements of Operations and Comprehensive (Loss) Income

See notes to consolidated financial statements. 26 The First Republic Corporation of America and Subsidiaries Consolidated Statements of Retained Earnings

See notes to consolidated financial statements. 27 The First Republic Corporation of America and Subsidiaries Consolidated Statements of Cash Flows

28 The First Republic Corporation of America and Subsidiaries Consolidated Statements of Cash Flows (continued)

See notes to consolidated financial statements. 29 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements June 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of The First Republic Corporation of America and all majority owned or controlled subsidiaries (the "Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company records its investment in partnerships and corporations in which it owns or owned interests ranging from 38% to 50% in accordance with the equity method. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. INVENTORIES Inventories are valued at the lower of cost or market with cost being determined by specific identification. Inventories are summarized as follows:

30 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DEPRECIATION AND AMORTIZATION Depreciation and amortization are provided by the straight-line method over the following estimated useful lives:

Tenant improvements and leasing commissions are amortized over the term of the respective tenants' leases. Financing costs are amortized over the term of the related debt. REVENUES Sales of textiles and seafood are recognized when shipments are made to customers. Returns of textiles and seafood are not significant, therefore no provision has been recorded. Rental revenue is recognized on an accrual basis in accordance with the terms of the lease except that leases with scheduled rent increases are required to be recognized on a straight-line basis over the life of the lease. Hotel revenues are recognized when the related services are rendered. Gain from sales of properties is recognized when the buyer has demonstrated a commitment to pay through adequate payments and no significant contingencies remain. 31 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ACCOUNTING FOR INCOME TAXES The liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF In August 2001, the Financial Accounting Standards Board ("FASB") issued Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Statement No. 144 provides accounting guidance for financial accounting and reporting for the impairment or disposal of long-lived assets. Statement No. 144 supersedes Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. It also supersedes the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations--Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions related to the disposal of a segment of a business. Statement No. 144 is effective for fiscal years beginning after December 15, 2001. Management does not anticipate that its adoption will have a material effect on the financial position or results of operations of the Company. EARNINGS PER SHARE Basic and diluted per share amounts are based on 668,092 (2002), 669,195 (2001) and 669,922 (2000) weighted average shares of common stock outstanding. FOREIGN OPERATIONS A subsidiary, together with certain entities in which the subsidiary owns a 38% interest, is engaged in shrimp farming operations in Ecuador. Financial statements of such foreign entities were translated using the U.S. dollar as the functional currency since Ecuador had a hyperinflationary currency until February 2000. Since March 2000, these subsidiaries maintain their accounting records in U.S. dollars as a result of Ecuador dollarizing its currency. Operations include exchange gains (included in selling, general and administrative expenses) of $0 (2002), $0 (2001) and $612,965 (2000) resulting from foreign currency transactions and from translation of the foreign entities' financial statements. 32 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) BUSINESS COMBINATIONS In June 2001, the FASB issued Statement No. 141, Business Combinations. Statement No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. Use of the pooling-of-interests method is no longer permitted. Statement No. 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination that is completed after July 1, 2001. For the year ended June 30, 2002, the adoption of this statement had no effect on results of operations or the financial position of the Company. GOODWILL AND OTHER INTANGIBLE ASSETS In June 2001, the FASB issued Statement No. 142, Goodwill and Other Intangible Assets. Statement No. 142 no longer permits the amortization of goodwill and indefinite-lived intangible assets. Instead, these assets must be reviewed annually (or more frequently under certain conditions) for impairment in accordance with this statement. This impairment test uses a fair value approach rather than the undiscounted cash flows approach previously required by Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (as amended by Statement No. 144). Amortization of goodwill will also no longer be recorded upon adoption of the new rules. Intangible assets that do no have indefinite lives will continue to be amortized over their useful lives and reviewed for impairment in accordance with Statement No. 121 (as amended by Statement No. 144). The Company is required to adopt Statement No. 142 on July 1, 2002. Management does not anticipate that the adoption of this statement will have a significant effect on results of operations or the financial position of the Company. CASH EQUIVALENTS The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. 33 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 2. INDUSTRY SEGMENTS AND FOREIGN OPERATIONS The Company's operations in the industry segments detailed below consist of: Real Estate: Ownership of loft, office and industrial buildings, shopping centers and residential property located principally in the states of New York, New Jersey, Florida, North Carolina, Massachusetts, Rhode Island, Virginia and Pennsylvania. Hotel: Ownership and operation of a hotel and convention center in Liverpool, New York. Seafood: Harvesting and sale of hard-shell clams on property owned by the Company located underwater off Long Island's South Shore in New York State, (discontinued July 2002) harvesting and sale of scallops on property leased by the Company in Cape Canaveral, Florida, sales of shrimp from Ecuador (grown in Company leased ponds or purchased from a 38% owned entity and other third-parties) and sales of lobster tails, shrimp and other products purchased locally or imported from various other countries. Textile: Operation of a yarn spinning plant and a dye house located in Rhode Island and South Carolina. The Company operates in four segments, as noted above. These segments are managed and reported separately because of the differences in products they produce and markets they serve. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on operating income, i.e. results of operations before certain corporate items and income taxes. There are no intersegment sales. 34 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 2. INDUSTRY SEGMENTS AND FOREIGN OPERATIONS (CONTINUED) Following is information about the Company's industry segments for each of the three years ended June 30:

35 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 2. INDUSTRY SEGMENTS AND FOREIGN OPERATIONS (CONTINUED)

(a) Includes mortgage interest expense of $1,175,844 (2002), $1,268,079 (2001), and $1,481,190 (2000). (b) Includes losses from Whitlock (see Note 10). (c) See Note 3. (d) Consists principally of investments in and advances to affiliated entities. (e) Includes interest income of $41,000 (2002), $237,000 (2001) and $117,000 (2000). (f) Includes interest income of $1,046,000 (2002), $1,035,000 (2001) and $927,000 (2000). 36 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 3. AFFILIATED ENTITIES The following table summarizes information with respect to the Company's affiliated entities:

(1)--Advances to Mondragon from the Company were approximately $15,700,000 and $14,382,000 at June 30, 2002 and 2001, respectively (see Note 9). REAL ESTATE Sunscape Associates ("Sunscape") owns a 167 unit garden apartment complex located in Orlando, Florida. The other 50% interest in Sunscape is owned by corporate entities which in turn are owned by officers and directors of the Company. SEAFOOD Bluepoints Company Inc. ("Bluepoints"): Bluepoints, an 80.2% owned subsidiary of the Company, owns Marchelot S.A. which in turn owns a 38% interest in two Ecuadorian corporations, Isca C.A. and Langomorro CIA. Ltda. (collectively, the "Mondragon Companies"), engaged in shrimp farming operations in Ecuador. The remaining 19.8% of Bluepoints is owned by certain stockholders of the Company. The Estate of A.A. Rosen owns 50% of the Mondragon Companies. 37 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 3. AFFILIATED ENTITIES (CONTINUED) Condensed combined financial information of the Mondragon Companies is as follows:

38 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 4. LONG-TERM DEBT AND CREDIT FACILITIES Long-term debt consists of the following:

(1)--The net book value of real estate assets pledged as collateral is approximately $18,400,000 and $18,800,000 at June 30, 2002 and 2001, respectively. (2)--In fiscal 1998, the Company refinanced a mortgage, collateralized by the Brookhaven Shopping Center in Brookhaven Pennsylvania, which had an outstanding balance of approximately $1,500,000 for $2,500,000. The new loan bears interest at 7.8% per annum and provides for monthly payments of $20,601 including principal and interest commencing February 1, 1998 through December 31, 2007 when the remaining unpaid balance of $1,722,000 will become due. The balance was $2,239,473 and $2,306,596 at June 30, 2002 and 2001, respectively. (3)--The Company has a $9,000,000 term loan with interest at 7.5% and a $3,000,000 revolving line of credit with an interest rate equal to either (a) LIBOR plus 2.0% or, (b) the Alternate Base Rate (as defined) plus 0.50%.The term loan requires amortization payments of $358,800 per annum. Both loans mature on October 21, 2002. The Company is presently negotiating with its lender to renew the loans for an additional five years. At June 30, 2002 and 2001, the term loan balance was $7,355,500 and $7,714,300, respectively, with a fixed rate of interest of 7.5% and for both years, nothing was outstanding under the revolving line of credit. 39 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 4. LONG-TERM DEBT AND CREDIT FACILITIES (CONTINUED) (4)--On August 31, 1998, the Company obtained a $3,355,000 construction loan from a bank for its property at 260 Merrimac Street in Newburyport, Massachusetts. The loan was obtained for the purpose of converting the vacant property, formerly occupied by Towle Manufacturing Company, into commercial space suitable for rental. The construction loan, which matured on August 31, 2000 was extended and in October 2001 was converted to a term loan expiring August 31, 2005. The loan is collateralized by a mortgage on the Merrimac property, bears interest at 5.5% and calls for monthly payments through August 2005. A balloon payment of $3,141,405 is then due. The balance was $3,324,252 and $3,355,000 at June 30, 2002 and 2001, respectively. (5)--On September 3, 1998, the Company refinanced a mortgage on its London Bridge Shopping Center in Virginia Beach, Virginia with a new lender and paid off the old mortgage of approximately $2,520,000. The new $3,000,000 mortgage calls for monthly payments of $23,711 including principal and interest, bears interest at 7.25% and matures on September 1, 2018. The balance was $2,719,400 and $2,803,442 at June 30, 2002 and 2001, respectively. (6)--On December 18, 1998, the Company closed a loan with the Overseas Private Investment Corporation for $5,050,000. The loan is collateralized by a mortgage on the Waltham Engineering Center, bears interest at 7.3% per annum, provides for 15 semi-annual payments of principal and interest and matures on June 15, 2006. The balance was $2,693,334 and $3,366,667 at June 30, 2002 and 2001, respectively. (7)--On May 20, 1999, the Company obtained a $2,500,000 loan, from a bank, secured by a mortgage on the Shipps Corner Shopping Center, in Virginia Beach, Virginia, which the Company acquired in November 1998. The self liquidating loan calls for monthly payments of $19,000, including principal and interest, bears interest at 7% per annum, and matures in June 2019. The balance was $2,308,370 and $2,376,753 at June 30, 2002 and 2001, respectively. 40 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 4. LONG-TERM DEBT AND CREDIT FACILITIES (CONTINUED) (8)--On July 26, 1996, the Company obtained a $4,000,000 loan, from a bank, secured by Greensboro North Shopping Center located in Greensboro, North Carolina. The loan calls for monthly payments of $35,850, including principal and interest, bears interest at 8.35% per annum, and matures on August 1, 2006 when the remaining unpaid balance of $2,521,772 plus interest will become due. The balance was $3,280,124 and $3,429,591 on June 30, 2002 and 2001, respectively. (9)--On February 4, 1994, the Company obtained a $3,000,000 loan, from a bank, secured by Greensboro South Shopping Center located in Greensboro, North Carolina. The loan calls for monthly payments of $29,543, including principal and interest, bears interest at 8.5% per annum, and matures on March 1, 2009. The balance was $1,816,001 and $2,007,238 on June 30, 2002 and 2001, respectively. (10)--On July 7, 2000, the Company obtained a $10,500 loan from a credit corporation, to purchase a forklift. The loan called for monthly payments of $274, bore interest at 11.5%, and was to mature on June 7, 2004. The loan was repaid during the year ended June 30, 2002. Aggregate principal payments on debt outstanding as of June 30, 2002 are as follows:

5. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS Statement No. 107, Disclosures about Fair Value of Financial Instruments, requires disclosures about fair value for all financial instruments for which it is practicable to estimate that value. 41 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 5. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) The following methods and assumptions were used by the Company in estimating fair values for financial instruments at June 30, 2002: Cash and Cash Equivalents, Accounts and Rents Receivable, Other Receivables, Restricted Cash, Cash and Securities in Trust for Tenants Security Deposits, Mortgage Escrow Funds and Security Deposits, Due from Related Parties, Accounts Payable, Accrued Expenses and Taxes Payable, Due to Related Parties and Other Liabilities: The carrying amounts of these assets and liabilities approximate fair value due to their short term nature. Notes Payable and Long-Term Debt:. For fixed rate notes payable, fair value is estimated using discounted cash flow analysis based on the Company's current incremental borrowing rate for similar types of borrowing arrangements. The fair value of the Company's notes payable and long-term debt is approximately $27,327,000. 6. INCOME TAXES At June 30, 2001, the Company had a net operating loss carryforward of approximately $32,500,000 for income tax purposes that expired in 2002. This carryforward, resulted from the merger of Merrimac Corporation into the Company on June 30, 1993. Deferred tax assets and liabilities reflected the net tax effects of the net operating loss carryforward and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 42 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 6. INCOME TAXES (CONTINUED) For financial reporting purposes, a valuation allowance had been recognized to offset the portion of the deferred tax assets related to the carryforwards. Significant components of the Company's deferred tax liabilities and assets are as follows:

The components of (loss) income before income taxes are as follow:

Significant components of the income tax expense (benefit) are as follows:

43 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 6. INCOME TAXES (CONTINUED) The reconciliation of income tax expense computed at the U.S. Federal statutory tax rates to income tax expense follows:

7. BENEFIT PLANS The Company and certain subsidiaries have profit-sharing plans covering substantially all nonunion employees. Contributions to one of the plans is discretionary. Total plan costs were approximately $215,000 and are included in selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive income (loss) for each of the years ended June 30, 2002, 2001 and 2000. A former subsidiary, which has been merged into the Company, had noncontributory pension plans covering certain employees. All covered employees participated in the basic pension plan with benefits based upon years of service. In addition, this subsidiary maintained a supplementary plan for salaried employees covered by the basic pension plan. This supplementary plan provided benefits based upon salary and years of credited service, with deductions for employees' primary social security benefits and benefits received under the basic plan. The funding policy is to contribute at least the minimum amounts required by the Employee Retirement Income Security Act of 1974 or additional amounts to assure that plan assets will be adequate to provide retirement benefits. 44 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 7. BENEFIT PLANS (CONTINUED) Since a significant part of this subsidiary's operations have been discontinued, substantially all employees included in the plan have been terminated and no additional service benefits will accrue to such employees.

Net periodic pension cost included the following components:

45 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 7. BENEFIT PLANS (CONTINUED) The discount rate used in determining the actuarial present value of the projected benefit obligation was 7.25% at June 30, 2002 and 7.5% at June 30, 2001. The expected long-term rate of return on plan assets was 8.0% in all three years. 8. LEASES The Company is the lessee under a noncancellable operating ground lease which expires in 2065. The lease provides for rentals of $11,404 per year and requires future minimum rental payments aggregating $707,000 at June 30, 2002. Rent expense includes real estate taxes, and in certain instances utilities and maintenance costs, and rent for the corporate home office under a month-to-month lease from a related party (see Note 9). Total rent expense for all operating leases amounted to approximately $124,000, $121,000 and $119,000 and are included in selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive income (loss) for the years ended June 30, 2002, 2001 and 2000, respectively. The Company owns various office buildings, industrial buildings and shopping centers from which it earns rental income under leases with various tenants. Generally leases provide for tenants to pay additional amounts based on real estate taxes and operating expenses incurred to maintain and operate these properties in excess of base year amounts. Lease terms for these properties range from one to 20 years. Future minimum rentals (excluding operating expenses and other items billable to tenants which aggregated approximately $2,200,000, $2,400,000 and $2,200,000 and are included in rents and other revenues--real estate and hotel operations on the accompanying consolidated statements of operations and comprehensive (loss) income in the years ended June 30, 2002, 2001 and 2000, respectively) to be received under the above-mentioned leases, all of which are classified and accounted for as operating leases, are as follows:

46 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 9. RELATED PARTY TRANSACTIONS Certain stockholders, directors, officers or their relatives ("related parties") own interests in certain investments of the Company as follows:

(1)-- At June 30, 2002 and 2001, the minority share of stockholders' deficiency of Bluepoints amounted to $8,464,256 and $7,094,090, respectively. Such deficiency results from losses which were funded by loans from the Company on behalf of the minority shareholders. Repayment of the minority interest deficiency has been jointly guaranteed by a major stockholder and the Estate of A.A. Rosen. Accordingly, the minority interest share in the deficiency of the subsidiary is shown as a receivable due from related parties in the consolidated balance sheets. (2)-- Included in the investment balance of $15,700,000 and $14,382,000 are advances the Company has made to the Mondragon Companies amounting to $15,700,000 and $14,382,000 at June 30, 2002 and 2001, respectively (see Note 3). Repayment of 56.8% of any advances to the Mondragon Companies has been guaranteed by the Estate of A.A. Rosen which owns 50% of the Mondragon Companies. 47 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 9. RELATED PARTY TRANSACTIONS (CONTINUED) Certain transactions were entered into with the above-mentioned related parties and companies in which they have an ownership interest as follows:

See Note 4 for other related party information. During fiscal 2000 the Company had borrowed funds from a group of entities (the "Tranel Group"), either owned or controlled by a major stockholder, to finance Bluepoints expanded importation and sale of lobster tails. The loans bore interest at 8% per annum and had no fixed repayment terms or maturity dates. The loans were repaid in October 2000. 10. OTHER MATTERS The Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened against the Company or its properties, other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurred by the Company related to any of this litigation will not materially affect the financial position, operating results or liquidity of the Company. 48 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) 10. OTHER MATTERS (CONTINUED) In June 1992, Whitlock, which was in the wool-combing business, sold substantially all of its assets and substantially terminated all its remaining operations. The remaining assets (included in the textile segment) of Whitlock, consisting of land and building are being held for sale and recorded at their estimated net realizable value of $500,000 at June 30, 2002. Losses incurred to maintain the property such as real estate taxes and insurance amounted to approximately $126,000, $143,000 and $183,000 in 2002, 2001 and 2000, respectively. Financial instruments which potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts and rents receivable. The Company maintains operating cash accounts at financial institutions in many states along the Eastern seaboard and, for its foreign subsidiaries, in Ecuador. Such accounts are subject to risk to the extent that the balances exceed the institutions' insurable limits. The Company's policy is designed to limit exposure to any one institution. Concentrations of credit risk with regard to accounts and rents receivable are limited due to the large number of entities comprising the Company's customer base and such base being dispersed over the industries in which the Company operates. Based on an analysis of the financial instruments which potentially subject the Company to significant concentrations of credit risk, the Company's management believes that there are no significant concentrations of credit risk at June 30, 2002. During the years ended June 30, 2002, 2001 and 2000, there were 931, 935 and 480 shares of stock purchased for treasury at a cost of $44,679, $46,285 and $20,160, respectively. 11. MORTGAGE RECEIVABLE A summary of mortgage receivable is as follows:

11. MORTGAGE RECEIVABLE (CONTINUED) 49 The First Republic Corporation of America and Subsidiaries Notes to Consolidated Financial Statements (continued) (1)--Payment terms of mortgage with purchaser of Hanora South's Lake City, South Carolina facility require 59 equal monthly installments commencing March 10, 2002 of approximately $4,400 and a final installment of $369,000 on February 10, 2007. 12. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized consolidated quarterly financial information for the years ended June 30, 2002 and 2001 is as follows:

50 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None 51 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT a. and b. Identification of directors and executive officers:

The term of office for all directors and executive officers will expire at the next annual meeting of stockholders, which is anticipated to be held in December 2002, upon the election and qualification of their successors. c. Not applicable. 52 d. Family Relationships Jonathan P. Rosen is the son of Miriam N. Rosen. Robert Nimkoff is a cousin of Jonathan P. Rosen. Jane G. Weiman is the sister-in-law of William M. Silverman and a cousin of Jonathan P. Rosen. e. Business Experience Irving S. Bobrow is a member of the New York Bar. For more than the past five years, Mr. Bobrow has been a member of the law firm of Bobrow & Rosen in New York City and has engaged in real estate investments for his own account. Miriam N. Rosen is a member of the New York Bar. For more than the past five years, Mrs. Rosen has been counsel to the law firm of Bobrow & Rosen in New York City and has engaged in real estate investments for her own account. William M. Silverman is a member of the New York Bar. For more than the past five years, Mr. Silverman has been a member of the law firm of Otterbourg, Steindler, Houston and Rosen P.C. in New York City. Jane G. Weiman has been a private investor for more than the past five years. For the past several years, Mrs. Weiman has also been a member of the Board of the Washington, D.C. Urban League. All directors and executive officers have served as such for more than the past five years. f. Not applicable. g. Not applicable. Section 16(a) Beneficial Ownership Reporting Compliance Except as set forth in the next sentence, the Company believes, based on written representations received by it, that for the year ended June 30, 2002, all filing requirements under Section 16(a) of the Securities Exchange Act of 1934 applicable to beneficial owners of the Company's securities and the Company's officers and directors were complied with. Jonathan P. Rosen, on one occasion, did not timely file a Form 4 to report the purchase of the Company's securities in one transaction. A report was subsequently filed by Mr. Rosen to report that transaction. 53 ITEM 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The Chairman of the Company's Board of Directors has annually reviewed and set the compensation of the Chief Executive Officer of the Company who, in turn, has reviewed and set the compensation of the other officers of the Company. All such compensation is reviewed on or about April 1 of each year taking into consideration (i) the Company's financial performance during the preceding year, (ii) the performance of the employee during that year, and (iii) the need to retain competent executive officers dedicated to the enhancement of the Company's performance in future years by paying salaries comparable to those being paid to such executive officers by other companies involved in similar lines of business. The following table sets forth all compensation paid or accrued by the Company during the last three fiscal years for services in all capacities to the Chief Executive Officer and each executive officer of the Company whose cash compensation exceeds $100,000.

54 (1)--The Company maintains two profit-sharing plans which cover a significant number of their employees. Vesting begins at 20% after two years of service with 100% vesting being reached after six years of service. Company contributions to one such plan are at the discretion of the Board of Directors. The Company is required to make minimum contributions to the second plan and, at the discretion of the Board of Directors, may make additional contributions. The executive officers listed above are covered under the second plan and the amount contributed by the Company to such plan on behalf of each executive officer is set forth under the heading "Other Compensation" in the Executive Compensation Summary. (2)--As of July 1, 2001, Norman Halper resigned as President and became a Vice President and Harry Bergman became President COMPENSATION OF DIRECTORS Each director who is not an officer of the Company is paid $3,000 per quarter. The following performance graph is a line graph comparing the yearly change in the cumulative stockholder return on the Company's Common Stock against the cumulative return of the Dow Jones U.S. Total Market Index and the S&P SmallCap 600 Index for the five fiscal years ended June 30, 2002. The stockholder return on the Company's Common Stock has been determined solely based on the price of the Common Stock since there have been no dividends declared on the Common Stock. Since there has been only limited or sporadic quotations for the Common Stock during the five year period, the price of the Common Stock at the relevant dates has been determined by utilizing the price at which the Company purchased shares of Common Stock on the dates closest to each measuring date. COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN Among The First Republic Corporation of America, Inc., Dow Jones US Total Market Index and Standard & Poor's Small Cap 600 Index FISCAL YEAR ENDING JUNE 30 [GRAPHIC OMITTED] -------------------------------------------------- --------- -------- --------- -------- -------- ---------- 1997 1998 1999 2000 2001 2002 -------------------------------------------------- --------- -------- --------- -------- -------- ---------- The First Republic Corporation of America, Inc. 100.00 117.31 124.62 153.85 120.00 143.23 -------------------------------------------------- --------- -------- --------- -------- -------- ---------- Dow Jones US Total Market Index 100.00 128.97 155.62 170.36 144.62 118.46 -------------------------------------------------- --------- -------- --------- -------- -------- ---------- S&P Small Cap 600 Index 100.00 119.46 121.47 138.94 154.39 174.93 -------------------------------------------------- --------- -------- --------- -------- -------- ----------

55 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT a. Security Ownership of Certain Beneficial Owners The following table sets forth certain information with respect to all persons who are known to the Company to be the beneficial owner of more than 5% of its common stock as of September 12, 2002:

(1)--Except as noted below in Notes (2) and (3), all shares are owned directly by the parties listed in the table. (2)--Includes 5,756 shares representing her proportionate interest in 19,188 shares owned by Tranel, Inc. Tranel, Inc. is a corporation of which 30%, 15.2%, 34.8%, 10% and 10% of the shares of which are owned by Mary Nimkoff, Jonathan P. Rosen, Miriam N. Rosen, Louis H. Nimkoff and Robert Nimkoff, respectively. (3)--Includes 2,917 shares representing his proportionate interest in 19,188 shares owned by Tranel, Inc. 56 b. Security Ownership of Management The following table sets forth, as of August 30, 2002, certain information with respect to security holdings in the Company and Bluepoints, an 80.2% owned subsidiary of the Company, by directors of the Company and all officers and directors as a group:

(1)--Messrs. Bobrow, Silverman and Mrs. Weiman own their shares directly. Jonathan P. Rosen owns 230,917 shares directly. See Notes (2) and (3) of the preceding table. (2)--Includes 1,919 shares representing his proportionate interest in 19,188 shares owned by Tranel, Inc. (3)--Owned directly. (4)--Does not include 113,350 shares of common stock and 500 shares of Bluepoints owned by his wife (Lynn M. Silverman) directly. Mr. Silverman disclaims beneficial ownership of such shares. c. Changes in Control The Company knows of no contractual arrangements which may at a subsequent date result in a change in control of the Company. 57 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS a. Transactions with Management and Others Lynn M. Silverman, a principal stockholder of the Company, Jane G. Weiman, a director and principal stockholder of the Company, Jonathan P. Rosen, a director, chairman of the board and principal stockholder of the Company, and Miriam N. Rosen, a director of the Company, own in the aggregate 19.8% of the outstanding shares of Bluepoints. The remainder of the shares of Bluepoints is owned by the Company. Lynn M. Silverman is the wife of William M. Silverman, a director of the Company. The Company's corporate office is located in a building owned by 302 Fifth Ave. Associates, a partnership owned 100% by The Estate of A.A. Rosen, Miriam Rosen and Jonathan Rosen. The Company is a month-to-month tenant, paying rent of $9,400 per month as of June 30, 2002, which the Company believes is comparable to other rentals in the areas. Jonathan P. Rosen is the executor of the Estate of A.A. Rosen and Miriam Rosen is the primary beneficiary of the Estate of A.A. Rosen. The Estate of A.A. Rosen owns 50% of Isca C.A. and Langomorro CIA, Ltda. (collectively referred to as "Mondragon"), two Ecuadorian corporations engaged in shrimp farming operations. The Estate of A.A. Rosen also holds a $640,000 note payable by Bluepoints which note was originally issued in May 1991 in connection with the acquisition by Bluepoints of a 38% interest in Mondragon and an additional 12-1/2% interest in Larfico Larvas Del Pacifico S.A., an Ecuadorian corporation which owns and operates a shrimp hatchery and Comercorp S.A. which owns certain real property in Ecuador. The note is a demand note and bears interest at 1% above the prime rate in effect at the Bank of New York. b. Certain Business Relationships The Company and its subsidiaries purchase substantially all of their property, casualty and liability insurance through participation with a group of other entities controlled by The Estate of A.A. Rosen and Jonathan P. Rosen (the "Rosen Group Properties"). This procedure enables the group to obtain negotiated insurance rates. During the fiscal year ended June 30, 2002, total premiums incurred by the Company and its subsidiaries under this arrangement amounted to approximately $732,000. The Company received fees of $100,000 in fiscal 2002 representing charges to the group for administrative services performed by Company personnel in connection with the foregoing. At June 30, 2002, approximately $732,000 was payable to Rosen Group Properties. Tranel Inc. and Statecourt Enterprises, Inc. each owns a 25% interest in a 167-unit garden complex located in Orlando, Florida in which the Company owns the remaining 50%. Tranel Inc. is owned by Mary Nimkoff, Jonathan P. Rosen, Miriam N. Rosen, Robert Nimkoff and Louis H. Nimkoff (see Item 12) and Statecourt Enterprises, Inc. is owned 48% by The Estate of A.A. Rosen, 20% by Jonathan P. Rosen and 32% by a trust for Miriam N. Rosen. 58 c. Indebtedness of Management The Estate of A.A. Rosen owns 25% of the outstanding stock of Larfico, an Ecuadorian corporation that owns a hatchery that produces post-larval shrimp and 50% of the outstanding stock of Mondragon, an Ecuadorian company engaged in shrimp farming operations. Bluepoints beneficially owns 62.5% of the outstanding stock of Larfico and all of the outstanding stock of Emporsa, an Ecuadorian corporation engaged in shrimp farming operations. As of August 31, 2002, Larfico was indebted to Bluepoints for $196,667 of loans made by Bluepoints to Larfico at various dates between November 8, 1985 and August 5, 1989 (the "Larfico Indebtedness.") Such loans bear interest at 1% over the prime rate in effect at The Bank of New York and are due August 2003. Since July 1, 2001, the largest aggregate amount of outstanding indebtedness from Larfico to Bluepoints was $196,667. In addition, as of June 30, 2002, Mondragon was indebted to the Company for $15,700,000 of loans made by the Company to Mondragon on various dates between August 28, 1991 and June 25, 2002 (the "Mondragon Indebtedness"). Such loans bear interest at 1% over the prime rate in effect at the Bank of New York and have no fixed maturity. Since July 1, 2001, the largest aggregate amount of outstanding indebtedness from Mondragon to the Company was $15,700,000. The Estate of A.A. Rosen has guaranteed the repayment of 25% of the Larfico Indebtedness and 56.8% of the Mondragon Indebtedness. Since July 1, 2001, the largest amount of outstanding indebtedness from Emporsa and Larfico to Mondragon was $332,000 which was the balance at June 30, 2002. Such loans bear no interest and have no fixed maturity. Since July 1, 2001, the largest amount of outstanding indebtedness from Mondragon to Larfico and Emporsa was $5,490,000, which was the balance at June 30, 2002. Said indebtedness has no fixed maturity and bears interest at 7.3%. As of August 31, 2002, Bluepoints was indebted to the Company for $50,795,000 of loans made by the Company to Bluepoints at various dates between November 8, 1985 and August 31, 2002. Such loans bear interest at the rate of 1% over the prime rate in effect at the Bank of New York and are due on demand. Since July 1, 2001, the largest aggregate amount of outstanding indebtedness from Bluepoints to the Company was $50,795,000. A substantial portion of the foregoing loans was used by Bluepoints to acquire and fund the Ecuadorian shrimp operations. The Estate of A.A. Rosen and Jonathan P. Rosen have jointly provided a limited guarantee with respect to the repayment of loans made by the Company to Bluepoints. Such guarantee is limited to 19.8% of the deficiency in the shareholders equity of Bluepoints. As of June 30, 2002, the amount of the guarantee was $8,464,256. d. Not applicable. 59 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K

60 The First Republic Corporation of America and Subsidiaries Schedule II--Valuation and Qualifying Accounts

(a) Amounts charged off and credits issued, net of recoveries on accounts previously written off. 61 The First Republic Corporation of America and Subsidiaries Schedule III--Real Estate and Accumulated Depreciation Year ended June 30, 2002

62 The First Republic Corporation of America and Subsidiaries Schedule III--Real Estate and Accumulated Depreciation (continued)

(a) Cost for Federal income tax purposes approximates amounts reflected in Column E. (b) A mortgage is held by the bank who provides a line of credit to the Company. (See Note 5 to the consolidated financial statements.) 63 The First Republic Corporation of America and Subsidiaries Schedule III--Real Estate and Accumulated Depreciation (continued)

Note: Includes assets used in the real estate and hotel operations. 64 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES ------------------------------------------ AUDIT REPORT ON THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS For the years ended June 30, 2002 and 2001 65 [BDO STERN CIA LTDA. LETTERHEAD] Independent Auditor's Report ---------------------------- To the Board of Directors Langomorro, Langostinera El Morro Cia. Ltda. and Affiliated Companies New York, U.S.A. 1. We have audited the accompanying consolidated and combined balance sheets of Langomorro, Langostinera El Morro Cia. Ltda. and its affiliated companies as of June 30, 2002 and 2001, and the related consolidated and combined statements of operations, stockholders' equity and cash flows for the three years ended June 30, 2002. 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 audits. 2. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 statements' presentation. We believe that our audits provide a reasonable basis for our opinion. 3. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Langomorro, Langostinera El Morro Cia. Ltda. and its affiliated companies as of June 30, 2002 and 2001, and the results of their operations and their cash flows for the three years ended June 30, 2002, in conformity with accounting principles generally accepted in the United States of America. /s/ BDO STERN August 1, 2002 Guayaquil, Ecuador 66 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES CONSOLIDATED AND COMBINED BALANCE SHEETS (EXPRESSED IN US DOLLARS)

SEE SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES AND NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS. 67 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES CONSOLIDATED AND COMBINED STATEMENTS OF LOSSES (EXPRESSED IN US DOLLARS)

SEE SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES AND NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS. 68 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES CONSOLIDATED AND COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY (EXPRESSED IN US DOLLARS)

SEE SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES AND NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS. 69 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES STATEMENTS OF CASH FLOWS - DIRECT METHOD (EXPRESSED IN US DOLLARS)

SEE SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES AND NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS. 70 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES (EXPRESSED IN US DOLLARS)

SEE SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES AND NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS. 71 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES ===============================================================================

72 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES ===============================================================================

73 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES ===============================================================================

74 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (EXPRESSED IN US DOLLARS)

75 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

76 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (EXPRESSED IN US DOLLARS)

77 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

78 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (EXPRESSED IN US DOLLARS)

79 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (EXPRESSED IN US DOLLARS)

80 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (EXPRESSED IN US DOLLARS)

81 LANGOMORRO, LANGOSTINERA EL MORRO CIA. LTDA. AND AFFILIATED COMPANIES NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

82 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE FIRST REPUBLIC CORPORATION OF AMERICA By /s/ Jonathan P. Rosen ---------------------------------------- Jonathan P. Rosen, Chief Executive and Chief Operating Officer By /s/ Harry Bergman ---------------------------------------- Harry Bergman, Chief Financial and Chief Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Harry Bergman Date October 8, 2002 -------------------------------------------------- -------------------- Harry Bergman, Director /s/ Irving S. Bobrow Date October 8, 2002 -------------------------------------------------- -------------------- Irving S. Bobrow, Director /s/ Norman A. Halper Date October 8, 2002 -------------------------------------------------- -------------------- Norman A. Halper, Director /s/ Robert Nimkoff Date October 8, 2002 -------------------------------------------------- -------------------- Robert Nimkoff, Director /s/ Miriam N. Rosen Date October 8, 2002 -------------------------------------------------- -------------------- Miriam N. Rosen, Director /s/ Jonathan P. Rosen Date October 8, 2002 -------------------------------------------------- -------------------- Jonathan P. Rosen, Director 83 I, Jonathan P. Rosen, certify that: 1. I have reviewed this annual report on Form 10-K of The First Republic Corporation of America; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report. Date: October 8, 2002 /s/ Jonathan P. Rosen -------------------------------------------- Jonathan P. Rosen Chief Executive and Chief Operating Officer 84 I, Harry Bergman, certify that: 1. I have reviewed this annual report on Form 10-K of The First Republic Corporation of America; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report. Date: October 8, 2002 /s/ Harry Bergman -------------------------------------------- Harry Bergman Chief Financial and Chief Accounting Officer 85

FIRST REPUBLIC CORP OF AMERICA 10-K