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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-QSB/A




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|x          |  | Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
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|           |  | For the quarterly period ended May 31, 2002                                            
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|o          |  | Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934     
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|           |  | For the transition period from ____________ to ____________                            

Commission file number 0-18808

1st Realty Investments, Inc.

(Name of small business issuer as specified in its charter)


|                                  |  |  |                                   | 
|--------------------------------- |  |  | --------------------------------- | 
|Nevada                            |  |  | 13-3530765                       
|(State or other jurisdiction      |  |  | (IRS Employer Identification No.)
|of incorporation or organization) |  |  |                                   | 

|                                                              |  |                                    |  | 
|------------------------------------------------------------- |  | ---------------------------------- |  | 
|                                                              |  | 5115 N. Scottsdale Road, Suite 101 |  | 
|                                                              |  | Scottsdale, AZ 85250               |  | 
|                                                              |  | (480) 949-6007                     |  | 
|(Address and telephone number of principal executive offices)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.

Yes   o   No   x




The number of shares of the registrants Common Stock outstanding at September
30, 2002 was 17,518,525.








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1ST REALTY INVESTMENTS, INC.

CONTENTS




|           |                                                             |  |      |    | 
|---------- | ----------------------------------------------------------- |  | ---- | -- | 
|           |                                                             |  | PAGE
|           |                                                             |  |     
|Part I     |                                                             |  |      |   
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|           | Financial Information                                       |  |      |    | 
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|           | Item 1. Financial Statements                                |  |      | 3  | 
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|           | Item 2. Managements Discussion and Analysis                |  |      | 9  | 
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|Part II    |                                                             |  |      |   
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|           | Other Information                                           |  |      |    | 
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|           | Item 1. Legal Proceedings                                   |  |      | 12 | 
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|           | Item 2. Changes in Securities and Use of Proceeds           |  |      | 12 | 
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|           | Item 3. Defaults Upon Senior Securities                     |  |      | 12 | 
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|           | Item 4. Submission of Matters to a Vote of Security Holders |  |      | 12 | 
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|           | Item 5. Other Information                                   |  |      | 12 | 
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|           | Item 6. Exhibits and Reports on Form 8-K                    |  |      | 12 | 
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|Signatures |                                                             |  | 13   |   




2



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PART I FINANCIAL INFORMATION

Item 1.Financial Statements

1ST REALTY INVESTMENTS, INC.

CONSOLIDATED BALANCE SHEETS





|                                               |                                      |                                                                                                                            |         |                   |           |             |           |                |           |   |           | 
|---------------------------------------------- | ------------------------------------ | -------------------------------------------------------------------------------------------------------------------------- | ------- | ----------------- | --------- | ----------- | --------- | -------------- | --------- | - | --------- | 
|                                               |                                      |                                                                                                                            |         |                   |           | May 31,2002 |           | August 31,2001
|                                               |                                      |                                                                                                                            |         |                   |           |             |           |               
|                                               |                                      |                                                                                                                            |         |                   |           | (unaudited) |           |                |           |  
|ASSETS                                         |                                      |                                                                                                                            |         |                   |           |             |           |               
|                                              
|                                              
|                                              
|                                              
|                                               | Cash and cash equivalents            |                                                                                                                            | $       | 4,661             |           |             | $         | 5,799          |          
|                                              
|                                              
|                                              
|                                              
|                                               | Notes receivable, net                |                                                                                                                            |         | 66,861            |           |             |           | 68,322         |          
|                                              
|                                              
|                                              
|                                              
|                                               | Property and equipment, net          |                                                                                                                            |         | 69                |           |             |           | 698            |          
|                                              
|                                              
|                                              
|                                              
|                                               | Investment in unconsolidated company |                                                                                                                            |         | 658,896           |           |             |           | 760,987        |          
|                                              
|                                              
|                                              
|                                              
|                                               | Other assets                         |                                                                                                                            |         | 14,583            |           |             |           | 14,436         |          
|                                               |                                      |                                                                                                                            |         |                   |           |             |           |                |          
|                                               |                                      | $                                                                                                                          | 745,070 |                   |           | $           | 850,242   |               
|                                               |                                      |                                                                                                                            |         |                   |           |             |           |                |          
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |                                      |                                                                                                                            |         |                   |           |             |           |               
|                                              
|                                              
|                                              
|                                              
|                                               | Liabilities                          |                                                                                                                            |         |                   |           |             |           |                |          
|                                              
|                                              
|                                              
|                                              
|                                               |                                      | Payable to related entities                                                                                                |         | $                 | 1,110,056 |             |           | $              | 1,065,534 |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                      | Accounts payable and other
accrued liabilities                                                                             |         |                   | 20,979    |             |           |                | 15,628    |  
|                                               |                                      |                                                                                                                            |         |                   |           |             |           |                |          
|                                               |                                      |                                                                                                                            |         | Total liabilities |           |             | 1,131,035 |                |           |   | 1,081,162 | 
|                                              
|                                              
|                                              
|                                              
|                                               | Stockholders equity (deficit)       |                                                                                                                            |         |                   |           |             |           |                |          
|                                              
|                                              
|                                              
|                                              
|                                               |                                      | Common stock, $0.001 par value;
25,000,000 shares
authorized; 17,518,525 shares issued at May 31, 2002 and
August 31, 2001 |         |                   | 17,519    |             |           |                | 17,519    |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                      | Additional paid-in capital                                                                                                 |         |                   | 45,401    |             |           |                | 45,401    |  
|                                              
|                                              
|                                              
|                                              
|                                               |                                      | Accumulated deficit                                                                                                        |         |                   | (448,885  | )           |           |                | (293,840  | )
|                                              
|                                              
|                                              
|                                              
|                                               |                                      | Treasury stock, at cost, 651,972
shares at May 31, 2002 and August 31, 2001                                                |         |                   |          |             |           |                |          |  
|                                               |                                      |                                                                                                                            |         |                   |           |             |           |                |          
|                                               |                                      | Total stockholders equity
(deficit)                                                                                       |         |                   | (385,965  | )           |           |                | (230,920  | )
|                                               |                                      |                                                                                                                            |         |                   |           |             |           |                |          
|                                               |                                      | $                                                                                                                          | 745,070 |                   |           | $           | 850,242   |               
|                                               |                                      |                                                                                                                            |         |                   |           |             |           |                |          




The accompanying notes are an integral part of these consolidated financial statements.

3



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1ST REALTY INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS


(unaudited)





|                                                                                   |                                            |   |                       |         |                           |   |            |         |      |   |            |          |   |   |            |         |  
|---------------------------------------------------------------------------------- | ------------------------------------------ | - | --------------------- | ------- | ------------------------- | - | ---------- | ------- | ---- | - | ---------- | -------- | - | - | ---------- | ------- | -
|                                                                                   |                                            |   | Quarter ended May 31, |         | Nine months ended May 31,
|                                                                                   |                                            |   |                       |         |                          
|                                                                                   |                                            |   | 2002                  |         | 2001                      |   | 2002       |         | 2001
|                                                                                   |                                            |   |                       |         |                           |   |            |         |     
|Interest income                                                                    |                                            | $ | 1,403                 |         |                           | $ | 2,479      |         |      | $ | 4,528      |          |   | $ | 16,298     |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|General and administrative expense                                                 |                                            |   | 43,517                |         |                           |   | 4,320      |         |      |   | 53,110     |          |   |   | 120,661    |        
|                                                                                   |                                            |   |                       |         |                           |   |            |         |      |   |            |          |   |   |            |        
|Operating loss                                                                     |                                            |   | (42,114               | )       |                           |   | (1,841     | )       |      |   | (48,582    | )        |   |   | (104,363   | )      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Other
income (expense)                                                            
|                                                                                   | Interest expense                           |   | (18,118               | )       |                           |   | (19,650    | )       |      |   | (55,718    | )        |   |   | (32,251    | )      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Equity in losses of
unconsolidated
company |   |                       | (38,062 | )                         |   |            | (31,590 | )    |   |            | (102,091 | ) |   |            | (49,664 | )
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Other income                               |   |                       | 51,346  |                           |   |            |        |      |   |            | 51,346   |   |   |            |        |  
|                                                                                   |                                            |   |                       |         |                           |   |            |         |      |   |            |          |   |   |            |        
|                                                                                   |                                            |   | (4,834                | )       |                           |   | (51,240    | )       |      |   | (106,463   | )        |   |   | (81,915    | )      
|                                                                                   |                                            |   |                       |         |                           |   |            |         |      |   |            |          |   |   |            |        
|Net loss                                                                           |                                            | $ | (46,948               | )       |                           | $ | (53,081    | )       |      | $ | (155,045   | )        |   | $ | (186,278   | )      
|                                                                                   |                                            |   |                       |         |                           |   |            |         |      |   |            |          |   |   |            |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Net loss per common and common
equivalent share Basic and diluted                  |                                            | $ |                      |         |                           | $ |           |         |      | $ | (0.01      | )        |   | $ | (0.01      | )      
|                                                                                   |                                            |   |                       |         |                           |   |            |         |      |   |            |          |   |   |            |        
|Weighted average common and common
equivalent shares outstanding
Basic and diluted |                                            |   | 17,518,525            |         |                           |   | 17,518,525 |         |      |   | 17,518,525 |          |   |   | 17,031,346 |        




The accompanying notes are an integral part of these consolidated financial statements.

4



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1ST REALTY INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


(unaudited)


|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                           |         |          |         |        |         |  
|---------------------------------------------------- | --------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ----------------------------------------- | ---------------------------------------------- | ------- | ------------------------- | ------- | -------- | ------- | ------ | ------- | -
|                                                     |                                                                                                     |                                                                |                                           |                                                |         | Nine months ended May 31,
|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                          
|                                                     |                                                                                                     |                                                                |                                           |                                                |         | 2002                      |         | 2001    
|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|Cash flows from operating activities                 |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|                                                     | Net loss                                                                                            |                                                                | $                                         | (155,045                                       | )       |                           | $       | (186,278 | )      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net loss to net cash
used in operating activities                          |                                                                |                                           |                                                |         |                           |         |          |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                                     | Bad debt expense                                               |                                           |                                                |        |                           |         |          | 110,301 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                                     | Depreciation and amortization                                  |                                           |                                                | 1,827   |                           |         |          | 1,015   |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                                     | Undistributed losses of
unconsolidated company                 |                                           |                                                | 102,091 |                           |         |          | 49,664  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                                     | Accretion of interest income                                   |                                           |                                                |        |                           |         |          | (11,081 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                                     | Change in assets and liabilities
(net of businesses acquired): |                                           |                                                |         |                           |         |          |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                                     |                                                                |                                           | Other assets                                   |         |                           | (1,345  | )        |         |        | (1,018  | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                                     |                                                                |                                           | Accounts payable
and other accrued
liabilities |         |                           | 5,351   |          |         |        | (17,434 | )
|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|                                                     |                                                                                                     |                                                                |                                           | Net cash used in
operating
activities          |         |                           | (47,121 | )        |         |        | (54,831 | )
|                                                    
|                                                    
|                                                    
|                                                    
|Cash flows from investing activities                 |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Collection of notes receivable                                                                      |                                                                |                                           | 1,461                                          |         |                           |         | 45,199   |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Cash acquired through purchase of investments in
businesses                                         |                                                                |                                           |                                               |         |                           |         | 18,632   |        
|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|                                                     |                                                                                                     |                                                                | Net cash provided
by investing
activities |                                                |         | 1,461                     |         |          |         | 63,831 |        
|                                                    
|                                                    
|                                                    
|                                                    
|Cash flows from financing activities                 |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Increase (decrease) in advances from related
parties                                                |                                                                |                                           | 44,522                                         |         |                           |         | (3,256   | )      
|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|Net increase (decrease) in cash and cash equivalents |                                                                                                     |                                                                | (1,138                                    | )                                              |         |                           | 5,744   |         
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and cash equivalents at beginning of period     |                                                                                                     |                                                                | 5,799                                     |                                                |         |                           |        |         
|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|Cash and cash equivalents at end of period           |                                                                                                     | $                                                              | 4,661                                     |                                                |         | $                         | 5,744   |         
|                                                     |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|Supplemental disclosure of cash flow information:    |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|                                                    
|                                                    
|                                                    
|                                                    
|Noncash investing and financing activities           |                                                                                                     |                                                                |                                           |                                                |         |                           |         |         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of common stock to acquire a note
receivable                                               |                                                                | $                                         |                                               |         |                           | $       | 20,000   |        
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of common stock and a note payable to a
related party to acquire investments in
businesses |                                                                | $                                         |                                               |         |                           | $       | 961,629  |        

The accompanying notes are an integral part of these consolidated financial statements.

5



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1ST REALTY INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(unaudited)





NOTE A  BACKGROUND AND BASIS OF PRESENTATION

The accompanying consolidated financial statements as of and for the three
month and nine month periods ended May 31, 2002 and 2001 include the accounts
of 1st Realty Investments, Inc. (formerly First National Realty Associates,
Inc.) and its wholly- and majority-owned subsidiaries (collectively, the
Company). Investments in companies that represent 20% to 50% of the ownership
interest are accounted for on the equity method. Investments in companies that
represent less than a 20% ownership interest are accounted for on the cost
basis. All material intercompany accounts and transactions have been
eliminated.

The accompanying unaudited financial information reflects all adjustments,
consisting only of normal recurring adjustments, that are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods presented.

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is responsible
for making estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities at the
date of the financial statements, and reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.

The Company is an Arizona-based company that was formed in Georgia in October
1988, and became a publicly-held Nevada company through a merger into Emphatic
Mergers, Inc. a publicly-held corporation on April 11, 1990. The name of the
corporation was changed from First National Realty Associates, Inc. to 1st
Realty Investments, Inc. on July 13, 2000.

The Company was founded with the intended purpose of becoming primarily a
national residential real estate brokerage company, focusing on relatively
affluent markets in geographically diverse market areas. Between 1988 and 1991,
the Company grew primarily through the acquisition of other real estate
brokerage companies in multiple states. However, principally due to the
downturn in the real estate industry in the early 1990s, the Company was
unable to generate profitable operations. On April 6, 1992, the Company filed a
voluntary petition in the United States Bankruptcy Court for the District of
Georgia to reorganize under Chapter 11 of the United States Bankruptcy Code
(the Bankruptcy Code). On January 21, 1993, the Companys Chapter 11 case was
voluntarily converted to a case under Chapter 7 of the Bankruptcy Code. All of
the Companys assets were subsequently liquidated and the proceeds distributed,
and the bankruptcy was dismissed on September 27, 1994. From that date through
the end of fiscal 2000, the Company had no operations. It did, however, incur
approximately $51,000 in administrative and legal expenses during that time.
The Company paid for these costs either by issuing common stock or through
advances it received from Great Western Land and Recreation, Inc. (Great
Western), formerly Amortibanc Management, L.C.




In fiscal 2001, the Company began efforts to become an operating company once
again. On September 22, 2000, the Company purchased a $20,000 note receivable
issued by an unrelated company in connection with a sale of real estate,
bearing interest at 9%. This note receivable was purchased from Great Western
in exchange for 500,000 shares of common stock. On December 29, 2000, the
Company purchased ownership interests in nine entities from Great Western in
exchange for a $951,629 note payable and 1,000,000 shares of common stock. The
most significant of these interests were a 25.52% ownership in Laguna at
Arrowhead Apartments L.L.C. (Laguna), which owns an apartment complex in
Phoenix, Arizona, and a 51% interest in Firebird Financial L.L.C. (Firebird
Financial), an entity that was formed to provide second mortgage financing in
the Houston, Texas area. Firebird Financial has not funded any new loans since
1998, and does not have any current plans to fund additional loans in the
future. The other seven entities had no operations and minimal net asset
values.







The acquisitions of the ownership interests in the nine entities from Great
Western are accounted for by the purchase method of accounting. The purchase
price was allocated as follows: $876,332 to Laguna, $74,579 to Firebird
Financial and $10,718 to the remaining seven entities. The purchase price was
based on the estimated fair value of the entities acquired based on an
independent appraisal of Laguna and managements estimates of the values of the
other entities. The 25.52% interest in Laguna is being accounted for on the
equity method since acquisition and the accounts of Firebird Financial are
consolidated in these financial statements. Firebird Financial has a deficit
equity balance, therefore no minority interest is reflected in these financial
statements. The excess cost over the Companys interest in the net equity of
Laguna is included in the investments in unconsolidated company on the
balance sheet and is being amortized over the life of the Laguna apartment
complex. A partnership controlled by the Chairman of the Companys board of
directors owns 1.82% of Laguna. Ownership of the remaining 72.66% of Laguna is
by 28 other unaffiliated investors.




6



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##### 






Great Western is a related company. Jay Torok, the Chairman of the board of
directors, is also the Chairman, President and Chief Executive Officer of Great
Western. William Szilagyi, the President and a member of the board of directors
is also the Senior Vice President of Great Western. Prior to September 2000,
Great Western owned 6.2% of the Companys common stock. As a result of the
issuance of common stock to Great Western in September 2000 and December 2000
discussed above, Great Western owns 14.3% of the Companys common stock as of
September 30, 2002.




The Company filed its annual report on Form 10-K for the year ended August 31,
1991, and its quarterly report on Form 10-Q for the quarter ended November 30,
1991, on or about December 13, 1991 and January 21, 1992, respectively. It has
not filed annual reports for the years ended August 31, 1992 through 2000, or
quarterly reports for the quarters ended February 28, 1992 through May 31,
2000. Quarterly reports for the quarters ended November 30, 2000 through
February 28, 2002 and an annual report on Form 10-KSB for the fiscal year ended
August 31, 2001 were filed on June 25, 2002. Due to changes in personnel and
the lack of availability of records kept by such personnel prior to 2000, the
Company has determined that certain of its records for the fiscal years 1992
through 2000 are not available and therefore not able to be audited and the
cost of recreating and auditing such records, if such recreation were possible,
would not be justified in light of the age of the information and its relevancy
to the Companys current operations. Therefore, the Company does not intend to
prepare or file annual or quarterly reports for the periods set forth above
through the year ended August 31, 2000.

NOTE B  LOSS PER COMMON SHARE

Basic loss per share is computed by dividing net loss by the weighted average
number of common shares outstanding during the period. Diluted loss per share
incorporates the incremental shares issuable upon the assumed exercise of stock
options. The number of incremental shares from the assumed exercise of stock
options is calculated by applying the treasury stock method. For the three and
nine month periods ended May 31, 2002 and 2001, the 750,000 shares issuable
upon the exercise of the stock options were not included in the calculation
because they were antidilutive.

NOTE C  NOTES RECEIVABLE

Notes receivable consist primarily of second mortgage loans made to
individuals, which are reported net of unamortized discount of $42,311 and an
allowance for doubtful accounts of $110,301 at May 31, 2002. The notes have
original maturities of 3 to 5 years and bear interest at effective rates of
19.0% to 33.6%. Principal and interest are payable monthly based on 15-year
amortization schedules with the remaining balances due at maturity.

Notes receivable also includes a $20,000 note issued by an unrelated company in
connection with a sale of real estate, bearing interest at 9%, principal and
interest payable as lots are sold and released, with any outstanding balance
due in September 2003. This note receivable was purchased from Great Western in
September 2000 in exchange for 500,000 shares of the Companys common stock.

NOTE D  PAYABLES TO RELATED ENTITIES

Related entity payables are as follows at May 31, 2002:

|                         |  |   |           | 
|------------------------ |  | - | --------- | 
|Great Western (1)        |  | $ | 1,096,210 | 
|                        
|                        
|                        
|                        
|JPMH Ltd Partnership (2) |  |   | 13,846    | 
|                         |  |   |           | 
|                         |  | $ | 1,110,056 | 
|                         |  |   |           | 



|(1) |  | The payable to Great Western is primarily to finance the purchase of the
Companys ownership interests in Laguna and Firebird Financial from Great
Western on December 29, 2000. The amounts owed to Great Western are
payable on demand, and $892,570 of the payable bears interest at 8% per
annum.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|(2) |  | JPMH Ltd. Partnership holds a 49% ownership interest in Firebird
Financial.                                                                                                                                                                                                                          
|   

7



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##### 



NOTE E  COMMITMENTS AND CONTINGENCIES

From time to time the Company is involved in litigation arising in the normal
course of business. The Company is not a party to any outstanding litigation as
of May 31, 2002 or as of the filing date of this report, other than as
discussed below.

Great Western entered into a merger agreement with quepasa.com as of August 6,
2001. In October 2001, in order to induce Great Western to amend and extend the
original merger agreement, quepasa.com loaned Great Western $500,000 (the
loan). This loan was secured by 1st Realtys investment in Laguna. In February
2002, the merger agreement was terminated. The merger agreement provided for a
termination fee of $500,000 as liquidated damages under certain circumstances.
Great Western believes that it is entitled to this termination fee, which would
result in the loan being deemed paid in full, and has filed a declaratory
judgment action against quepasa.com on that issue. quepasa.com has filed a
counterclaim, alleging that it is entitled to the termination fee and seeking
to foreclose on the loan. quepasa.com has named 1st Realty as a third-party
defendant to its counterclaim because 1st Realtys investment in Laguna was
pledged as collateral for the loan. Management does not believe that the
ultimate resolution of this matter will have a material adverse effect on 1st
Realtys financial condition, results of operations or cash flow.

NOTE F  RELATED PARTY TRANSACTIONS




On September 22, 2000, the Company purchased a $20,000 note receivable, issued
by an unrelated company in connection with a sale of real estate, bearing
interest at 9%. This note receivable was purchased from Great Western in
exchange for 500,000 shares of the Companys common stock. On December 29,
2000, the Company purchased ownership interests in nine entities from Great
Western in exchange for a $951,629 note payable and 1,000,000 shares of the
Companys common stock. These interests included a 25.52% ownership in Laguna,
which owns an apartment complex in Phoenix, Arizona, and a 51% interest in
Firebird Financial, an entity that was formed to provide second mortgage
financing in the Houston, Texas area. Firebird Financial has not funded any new
loans since 1998, and does not have any current plans to fund additional loans
in the future. The other seven entities had no operations and minimal net asset
values. In addition, Great Western charges the Company $900 per month for
management services provided to Firebird Financial. At May 31, 2002, advances
from Great Western totaled $1,096,210, primarily to finance the purchase of the
Companys ownership interests in Laguna and Firebird Financial from Great
Western. The Company has pledged its interest in Laguna as collateral for a
$500,000 loan Great Western received from a third party (see Note E).







Jay Torok, the Chairman of the board of directors, is also the Chairman,
President and Chief Executive Officer of Great Western. William Szilagyi, the
President and a member of the board of directors is also the Senior Vice
President of Great Western.




The Company utilizes office space at the office of Great Western. The Company
is using this space free of charge.

NOTE G  OTHER INCOME




Other income for the three months ended May 31, 2002 consisted of a gain on the
sale of land in Houston, Texas for cash. The land was sold to the owner of the
adjacent property. The land was owned by F Troops, LLC, a wholly owned
subsidiary of the Company that was one of the entities the Company purchased
from Great Western in December 2000. The land had been carried at zero value
due to its location in a flood way, which severely limited its ability to be
developed. However, recent changes in circumstances have increased the
development potential of the land when combined with the adjacent property.




NOTE H  RECENT ACCOUNTING PRONOUNCEMENTS

In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144 Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS 144). SFAS 144 requires that all
long-lived assets (including discontinued operations) that are to be disposed
of by sale be measured at the lower of book value or fair value less cost to
sell. Additionally, SFAS 144 expands the scope of discontinued operations to
include all components of an entity with operations that can be distinguished
from the rest of the entity and will be eliminated from the ongoing operations
of the entity in a disposal transaction. SFAS 144 became effective for the
Company as of January 1, 2002. The Companys implementation of SFAS 144 had no
effect on its financial condition or results of operations.

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Item 2.Managements Discussion and Analysis

The following discussion includes forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from the
results contemplated by these forward-looking statements due to certain
factors, including those discussed below, elsewhere in this Form 10-QSB and in
the Companys other filings with the SEC.

Overview

1st Realty Investments, Inc. is incorporated in the state of Nevada. We
are an Arizona-based company that was formed in Georgia in October 1988, and
became a publicly-held Nevada company through a merger into Emphatic Mergers,
Inc. a publicly-held corporation on April 11, 1990. We changed our name from
First National Realty Associates, Inc. to 1st Realty Investments, Inc. on July
13, 2000.

We were founded with the intended purpose of becoming primarily a national
residential real estate brokerage company, focusing on relatively affluent
markets in geographically diverse market areas. Between 1988 and 1991, we grew
primarily through the acquisition of other real estate brokerage companies in
multiple states. However, principally due to the downturn in the real estate
industry in the early 1990s, we were unable to generate profitable operations.
On April 6, 1992, we filed a voluntary petition in the United States Bankruptcy
Court for the District of Georgia to reorganize under Chapter 11 of the United
States Bankruptcy Code (the Bankruptcy Code). On January 21, 1993, we
voluntarily converted our petition to a case under Chapter 7 of the Bankruptcy
Code. All of our assets were subsequently liquidated and the proceeds
distributed, and the bankruptcy was dismissed on September 27, 1994. From that
date through the end of fiscal 2000, we had no operations. We did, however,
incur approximately $51,000 in administrative and legal expenses during that
time. We paid for these costs either by issuing common stock or through
advances we received from Great Western Land and Recreation, Inc. (Great
Western), formerly Amortibanc Management L.C.




In fiscal 2001, we began efforts to become an operating company once
again. On September 22, 2000, we purchased a $20,000 note receivable issued by
an unrelated company in connection with a sale of real estate, bearing interest
at 9%. This note receivable was purchased from Great Western in exchange for
500,000 shares of common stock. On December 29, 2000, we purchased ownership
interests in nine entities from Great Western in exchange for a $951,629 note
payable and 1,000,000 shares of common stock. The most significant of these
interest were a 25.52% ownership in Laguna at Arrowhead Apartments L.L.C.
(Laguna), which owns an apartment complex in Phoenix, Arizona, and a 51%
interest in Firebird Financial L.L.C. (Firebird Financial), an entity that
was formed to provide second mortgage financing in the Houston, Texas area.
Firebird Financial has not funded any new loans since 1998, and does not have
any current plans to fund additional loans in the future. The other seven
entities had no operations and minimal net asset values.







Great Western is a related company. Jay Torok, the Chairman of our board
of directors, is also the Chairman, President and Chief Executive Officer of
Great Western. William Szilagyi, our President and a member of our board of
directors is also the Senior Vice President of Great Western. Prior to
September 2000, Great Western owned 6.2% of our common stock. As a result of
the issuance of common stock to Great Western in September 2000 and December
2000 discussed above, Great Western owns 14.3% of our common stock as of
September 30, 2002.




We filed our annual report on Form 10-K for the year ended August 31,
1991, and our quarterly report on Form 10-Q for the quarter ended November 30,
1991, on or about December 13, 1991 and January 21, 1992, respectively. We have
not filed annual reports for the years ended August 31, 1992 through 2000, or
quarterly reports for the quarters ended February 28, 1992 through May 31,
2000. Quarterly reports for the quarters ended November 30, 2000 through
February 28, 2002 and an annual report on Form 10-KSB for the fiscal year ended
August 31, 2001 were filed on June 25, 2002. Due to changes in personnel and
the lack of availability of records kept by such personnel prior to 2000, we
have determined that certain of our records for the fiscal years 1992 through
2000 are not available and therefore not able to be audited and the cost of
recreating and auditing such records, if such recreation were possible, would
not be justified in light of the age of the information and its relevancy to
our current operations. Therefore, we do not intend to prepare or file annual
or quarterly reports for the periods set forth above through the year ended
August 31, 2000.




Our business plan is to use our limited resources to search for,
investigate and acquire or participate in a business opportunity.




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Results of Operations

Three months ended May 31, 2002 (third quarter of fiscal 2002) compared to the
quarter ended May 31, 2001 (third quarter of fiscal 2001)

Interest income.Interest income was $1,403 in the third quarter of fiscal
2002 compared to $2,479 in the third quarter of fiscal 2001. Interest income is
related to the second mortgage notes receivable carried by Firebird Financial
and to the $20,000 note receivable we purchased from Great Western.

General and administrative expense.General and administrative expense
increased $39,197 to $43,517 in the third quarter of fiscal 2002 from $4,320 in
the third quarter of fiscal 2001. General and administrative expense consisted
of management, legal and accounting fees. The increase is primarily due to
legal and accounting fees of $35,395 incurred in connection with the
preparation and filing, on June 25, 2002, of quarterly reports for the quarters
ended November 30, 2000 through February 28, 2002 and an annual report on Form
10-KSB for the fiscal year ended August 31, 2001.

Interest expense. Interest expense was $18,118 in the third quarter of
fiscal 2002 compared to $19,650 in the third quarter of fiscal 2001. The
interest expense is related to the payable to Great Western, $892,570 of which
bears interest at 8% per annum.




Equity in losses of unconsolidated company.Equity in losses of
unconsolidated company (Laguna) was $38,062 in the third quarter of fiscal 2002
compared to $31,590 in the third quarter of fiscal 2001. During 2001, Laguna
was negatively impacted by the opening of three new apartment complexes nearby,
causing a decrease in the occupancy levels and an increase in the level of
concessions offered to new tenants. The losses increased during 2002 due to
further increases in competition combined with the impact of the economic
downturn in the Phoenix area.







Other income.Other income was $51,346 in the third quarter of fiscal 2002
compared to zero in the third quarter of fiscal 2001. Other income consisted of
a gain on the sale of land in Houston, Texas for cash. The land was sold to the
owner of the adjacent property. The land was owned by F Troops, LLC, a wholly
owned subsidiary of the Company that was one of the entities the Company
purchased from Great Western in December 2000. The land had been carried at
zero value due to its location in a flood way, which severely limited its
ability to be developed. However, recent changes in circumstances have
increased the development potential of the land when combined with the adjacent
property.




Nine months ended May 31, 2002 (first nine months of fiscal 2002) compared to
the nine months ended May 31, 2001 (first nine months of fiscal 2001)

Interest income.Interest income was $4,528 in the first nine months of
fiscal 2002 compared to $16,298 in the first nine months of fiscal 2001.
Interest income is related to the second mortgage notes receivable carried by
Firebird Financial and to the $20,000 note receivable we purchased from Great
Western. Firebird Financial was acquired in December 2000 and the note
receivable was purchased in September 2000. Interest income in the first nine
months of 2001 was unusually high because of two loans that were paid off
during the period. The remaining unamortized discount on these two loans, which
totaled $10,413, was included in interest income during the quarter.




General and administrative expense.General and administrative expense
decreased $67,551 to $53,110 in the first nine months of fiscal 2002 from
$120,661 in the first nine months of fiscal 2001. General and administrative
expense in the first nine months of fiscal 2002 consisted of management, legal
and accounting fees, including legal and accounting fees of $35,395 incurred in
connection with the preparation and filing, on June 25, 2002, of quarterly
reports for the quarters ended November 30, 2000 through February 28, 2002 and
an annual report on Form 10-KSB for the fiscal year ended August 31, 2001.
General and administrative expense in the first nine months of fiscal 2001
consisted of $110,301 in charge-offs of uncollectible notes receivable carried
by Firebird Financial and $10,360 of management, legal and accounting fees,
primarily related to Firebird Financial. The charge-offs of uncollectible
notes receivable were determined based on the payment history, the value of the
collateral and the status of the borrower.




Interest expense. Interest expense was $55,718 in the first nine months of
fiscal 2002 compared to $32,251 in the first nine months of fiscal 2001. The
interest expense is related to the payable Great Western. Beginning in January
2001, interest at 8% per annum began to accrue on $892,570 of this payable.




Equity in losses of unconsolidated company.Equity in losses of
unconsolidated company (Laguna) was $102,091 in the first nine months of fiscal
2002 compared to $49,664 in the first nine months of fiscal 2001. Laguna was
purchased in December 2000. During




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2001, Laguna was negatively impacted by the opening of three new apartment
complexes nearby, causing a decrease in the occupancy levels and an increase in
the level of concessions offered to new tenants. The losses increased during
2002 due to further increases in competition combined with the impact of the
economic downturn in the Phoenix area.







Other income.Other income was $51,346 in the first nine months of fiscal
2002 compared to zero in the first nine months of fiscal 2001. Other income
consisted of a gain on the sale of land in Houston, Texas for cash. The land
was sold to the owner of the adjacent property. The land was owned by F
Troops, LLC, a wholly owned subsidiary of the Company that was one of the
entities the Company purchased from Great Western in December 2000. The land
had been carried at zero value due to its location in a flood way, which
severely limited its ability to be developed. However, recent changes in
circumstances have increased the development potential of the land when
combined with the adjacent property.




Liquidity and Capital Resources

Cash used in operating activities was $47,121 in the first nine months of
fiscal 2002 compared to $54,831 in the first nine months of fiscal 2001. Cash
used in operations in the first nine months of fiscal 2002 consisted of our net
loss of $155,045 and an increase in other assets of $1,345 offset by an
increase in accounts payable and other accrued liabilities of $5,351 and net
non-cash expenses of $103,918. Net non-cash expenses consisted of $102,091 in
undistributed losses related to our equity investment in Laguna and $1,827 in
depreciation and amortization expense.

Cash provided by investing activities was $1,461 in the first nine months
of fiscal 2002 compared to $63,831 in the first nine months of fiscal 2001.
Cash provided by investing activities in the first nine months of fiscal 2002
consisted collections of notes receivable. Cash provided by investing
activities in the first nine months of fiscal 2001 consisted of cash acquired
through purchase of investments in businesses of $18,632 and collections of
notes receivable of $45,199. The investments in businesses were financed by a
$951,629 advance from Great Western and by the issuance to Great Western of
1,000,000 shares of our common stock.

Cash provided by financing activities was $44,522 in the first nine months
of fiscal 2002 compared to cash used of $3,256 in the first nine months of
fiscal 2001. Cash used by financing activities in the first nine months of
fiscal 2002 consisted of a net increase in the payable to related parties
(primarily Great Western).




At May 31, 2002, notes receivable, net of unamortized discount, total
$177,162. Many of these notes are seriously delinquent, with the status ranging
from current to 47 months delinquent. We evaluate the collectibility of these
notes based on the payment history, the value of the collateral and the status
of the borrower. If we believe the collectibility of a note to be in doubt, we
establish a specific reserve for that note. In addition, we have provided an
allowance for estimated losses in the remaining portfolio of performing loans
based on the same criteria. At May 31, 2002, our allowance for doubtful
accounts totals $110,301.




Our cash balance at May 31, 2002 was $4,661. Our limited cash requirements
have been funded primarily by advances from Great Western. We cannot presently
foresee the cash requirements of any business opportunities that we may
ultimately acquire. However, since it is likely that any business we acquire
will be involved in active business operations, we anticipate that an
acquisition will result in increased cash requirements as well as increases in
the number of employees.

Recent Accounting Pronouncements

In October 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 144 Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS 144). SFAS 144 requires that all
long-lived assets (including discontinued operations) that are to be disposed
of by sale be measured at the lower of book value or fair value less cost to
sell. Additionally, SFAS 144 expands the scope of discontinued operations to
include all components of an entity with operations that can be distinguished
from the rest of the entity and will be eliminated from the ongoing operations
of the entity in a disposal transaction. SFAS 144 became effective for us as of
January 1, 2002. The implementation of SFAS 144 had no effect on our financial
condition or results of operations.

Business Risks and Forward-Looking Statements




This Quarterly Report on Form 10-QSB includes forward-looking
statements. Forward-looking statements are often characterized by the use of
words such as may, believes, plans, will, anticipates, estimates,
expects, or intends or by discussions of strategy, plans or intentions. All
forward-looking statements in this Form 10-QSB are made based on our current
expectations and estimates, which involve risks, uncertainties and other
factors that could cause results to differ materially from those




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expressed in forward-looking statements. You are cautioned not to place
undue reliance on any such forward-looking statements. We have no obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect anticipated or unanticipated events or
circumstances occurring after the date of such statements. Forward-looking
statements involve a number of risks and uncertainties including, but not
limited to, general economic conditions, our ability to find a suitable company
to effect a business opportunity, and competitive factors.

PART II: OTHER INFORMATION

Item 1.Legal Proceedings

We are not a party to any pending legal proceedings and, to the best of
our knowledge, no litigation by or against us has been threatened other than as
discussed below.

Great Western entered into a merger agreement with quepasa.com as of
August 6, 2001. In October 2001, in order to induce Great Western to amend and
extend the original merger agreement, quepasa.com loaned Great Western
$500,000. This loan was secured by 1st Realtys investment in Laguna. In
February 2002, the merger agreement was terminated. The merger agreement
provided for a termination fee of $500,000 as liquidated damages under certain
circumstances. Great Western believes that it is entitled to this termination
fee, which would result in the loan being deemed paid in full, and has filed a
declaratory judgment action against quepasa.com on that issue. quepasa.com has
filed a counterclaim, alleging that it is entitled to the termination fee and
seeking to foreclose on the loan. quepasa.com has named 1st Realty as a
third-party defendant to its counterclaim because 1st Realtys investment in
Laguna was pledged as collateral for the loan. Management does not believe that
the ultimate resolution of this matter will have a material adverse effect on
1st Realtys financial condition, results of operations or cash flows.

Item 2.Changes in Securities and Use of Proceeds

Not Applicable.

Item 3.Defaults Upon Senior Securities

Not Applicable.

Item 4.Submission of Matters to a Vote of Security Holders

Not Applicable

Item 5.Other Information

Not Applicable

Item 6.Exhibits and Reports on Form 8-K



|(a) |  | Exhibits
|--- |  | --------

None



|(b) |  | Reports on Form 8-K
|--- |  | -------------------




None




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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|                       |  |                                           
|---------------------- |  | ------------------------------------------
|                       |  | 1ST REALTY INVESTMENTS, INC               
|                       |  | (Registrant)                              
|                       |  |                                           
|                      
|Date: October  6, 2002 |  | By /s/ William Szilagyi                   
|                       |  |                                           
|                       |  | William SzilagyiPresident (Duly Authorized
|                       |  | Officer and Principal Financial Officer)  
|                      

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