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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 Commission File Number 000-49971 Ocean West Holding Corporation  Delaware
    
    71-0876952(State of Incorporation)
    
    (IRS EmployerIdentification Number)
   15991 Redhill Avenue, Suite 110
Tustin, California 92780
(Address of Principal Executive Offices) (714) 247-4200
(Issuers Telephone Number, Including Area Code) State the number of shares outstanding of each of the issuers classes of common stock as of
the latest practicable date. 5,586,104 shares of Common Stock, 210,096 shares of Class B Common Stock and 0 shares of Class D Common
Stock outstanding as of May 16, 2005 Transitional Small Business Disclosure Format:
    
    Yes o No þ




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PART 1  FINANCIAL INFORMATION Item 1. Consolidated Financial StatementsConsolidated Balance Sheet  As of March 31, 2005 (unaudited)
    
    
    3Consolidated Statements of Operations  For the Three Months and Six Months Ended March 31, 2005 and 2004 (unaudited)
    
    
    4Consolidated Statements of Cash Flows  For the Six Months Ended March 31, 2005 and 2004 (unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Management Discussions and Analysis and Plan of Operation
    
    
    7Item 3. Controls and Procedures
    
    
    11PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    12Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    12Item 3. Defaults Upon Senior Securities
    
    
    12Item 4. Submission of Matters to a vote of Security Holders
    
    
    12Item 5. Other Information
    
    
    12Item 6. Exhibits and Reports on Form - 8K
    
    
    12Signatures
    
    
    13EX-31.1EX-31.2EX-32.1
  2




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OCEAN WEST HOLDING CORPORATION AND SUBSIDIARY 
 
 March 31,2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    154,445Receivable from loans sold
    
    
    3,040,143Mortgage loans held for sale
    
    
    85,694Prepaid and other current assets
    
    
    551,363Total current assets
    
    
    3,831,645Property and equipment, net
    
    
    196,428Other assets:Originated mortgage servicing rights
    
    
    34,371Loans held for investment
    
    
    327,700Deposits
    
    
    35,163Total other assets
    
    
    397,234Total assets
    
    $
    4,425,307Liabilities and Stockholders EquityCurrent liabilities:Accounts payable and accrued expenses
    
    $
    1,323,348Due to stockholder
    
    
    25,247Current maturities of long-term debt
    
    
    740,126Current maturity of capital lease obligation
    
    
    34,718Warehouse lines of credit
    
    
    3,415,672Total current liabilities
    
    
    5,539,111Long-term liabilities:Long-term debt, less current maturities
    
    
    531,648Amount due to related party
    
    
    15,000Total long-term liabilities
    
    
    546,648Total liabilities
    
    
    6,085,759Stockholders equity:Preferred stock, $.01 par value, 10,000,000 shares authorized:Series C, 1,000 shares issued and outstanding
    
    
    100,000Series E, 680 shares issued and outstanding
    
    
    170,000Series F, 1,050 issued and outstanding
    
    
    105,000Series G, 2,000 shares issued and outstanding
    
    
    200,000Series I, 125 shares issued and outstanding
    
    
    12,500Series L, 1,000 shares issued and outstanding
    
    
    1,000,000Series M, 5,000 shares authorized, 0 shares issued and outstanding
    
    
    Series N 10,000 shares authorized, 2,250 issued and outstanding
    
    
    2,250,000Class B common stock, $.01 par value, 5,000,000 shares authorized, 210,096
shares issued and outstanding
    
    
    2,101Class D common stock, $.01 par value, 600,000 shares authorized, none issued
and outstanding
    
    
    Common stock, $.01 par value 30,000,000 shares authorized, 5,586,104
issued and outstanding
    
    
    55,861Additional paid-in capital
    
    
    1,543,194Accumulated deficit
    
    
    (7,099,107
    )Total stockholders equity
    
    
    (1,660,452
    )Total liabilities and stockholders equity
    
    $
    4,425,307
 The accompanying notes are an integral part of these financial statements. 3




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OCEAN WEST HOLDING CORPORATION AND SUBSIDIARY 
 
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues:Revenues from origination and sale
of mortgage loans, net
    
    $
    787,881
    
    
    $
    3,055,379
    
    
    $
    2,246,976
    
    
    $
    4,749,821Operating expenses:Salaries and wages
    
    
    248,502
    
    
    
    1,306,253
    
    
    
    1,008,473
    
    
    
    1,970,005Payroll taxes
    
    
    88,255
    
    
    
    262,805
    
    
    
    185,965
    
    
    
    323,381Other general and administrative expenses
    
    
    674,570
    
    
    
    1,447,580
    
    
    
    1,857,145
    
    
    
    3,248,922Depreciation & amortization
    
    
    35,058
    
    
    
    15,646
    
    
    
    70,090
    
    
    
    96,838Total operating expenses
    
    
    1,046,385
    
    
    
    3,032,284
    
    
    
    3,271,673
    
    
    
    5,639,146(Loss) income from operations
    
    
    (258,504
    )
    
    
    23,095
    
    
    
    (874,696
    )
    
    
    367,182Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net (loss) income
    
    
    (258,504
    )
    
    
    23,095
    
    
    
    (874,696
    )
    
    
    367,182Dividends on preferred shares
    
    
    36,318
    
    
    
    50,010
    
    
    
    74,558
    
    
    
    110,454Net (loss) income applicable to common
shareholders
    
    $
    (294,822
    )
    
    $
    (26,915
    )
    
    $
    (949,254
    )
    
    $
    256,728Net income (loss) applicable to common
shareholders per common share
basic and diluted
    
    $
    (0.05
    )
    
    $
    0.00
    
    
    $
    (0.16
    )
    
    $
    0.04Weighted average number of common shares
outstanding basic and diluted
    
    
    5,796,200
    
    
    
    5,795,200
    
    
    
    5,796,200
    
    
    
    5,795,200
 The accompanying notes are an integral part of these financial statements. 4




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OCEAN WEST HOLDING CORPORATION AND SUBSIDIARY 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2005
    
    
    March 31, 2004Cash flows (used for) provided by operating activities:Net (loss) income
    
    $
    (874,696
    )
    
    $
    (893,825
    )Adjustments to reconcile net income
to net cash provided by operating activities:Depreciation and amortization
    
    
    70,090
    
    
    
    96,838Changes in operating assets and liabilities:(Increase) decrease in assets:Restricted cash
    
    
    
    
    
    
    3,010Receivable from loans sold
    
    
    3,096,877
    
    
    
    2,568,728Mortgage loans held for sale
    
    
    271,311
    
    
    
    (1,321,346
    )Prepaid and other current assets
    
    
    (282,615
    )
    
    
    698,820Increase in liabilities:Accounts payable and accrued expenses
    
    
    83,613
    
    
    
    (182,381
    )Client trust payable
    
    
    
    
    
    
    3,010Net cash provided by operating activities
    
    
    2,395,847
    
    
    
    966,384Cash flows provided by (used for) investing activities:Purchases of property and equipment
    
    
    (11,606
    )
    
    
    (10,733
    )Net change in notes receivable
    
    
    1,022,425
    
    
    
    Net cash provided by (used for) investing activities
    
    
    1,010,819
    
    
    
    (10,733
    )Cash flows provided by (used for) financing activities:Net borrowings (payments) under warehouse lines of credit
    
    
    (3,110,873
    )
    
    
    (1,053,753
    )Principal (repayments) borrowings on long-term debt
    
    
    (162,476
    )
    
    
    134,753Payments on capital lease obligations
    
    
    (28,394
    )
    
    
    (41,017
    )Borrowings on notes payable, stockholders
    
    
    
    
    
    
    59,100Advances from stockholder
    
    
    
    
    
    
    Preferred stock dividends
    
    
    (74,558
    )
    
    
    (80,371
    )Net cash provided by (used for) financing activities
    
    
    3,376,302
    
    
    
    (981,288
    )Net decrease in cash and cash equivalents
    
    
    30,364
    
    
    
    (25,187
    )Cash and cash equivalents,beginning of period
    
    
    124,080
    
    
    
    457,969Cash and cash equivalents,end of period
    
    $
    154,445
    
    
    $
    432,782Supplemental disclosure of cash flow information -Interest paid
    
    $
    67,930
    
    
    $
    72,271Income taxes paid
    
    $
    
    
    
    $
    
 The accompanying notes are an integral part of these financial statements. 5




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OCEAN WEST HOLDING CORPORATION AND SUBSIDIARY 
 
 (1) Basis of Presentation: The accompanying unaudited interim consolidated financial statements of Ocean West Holding
Corporation, and its subsidiary Ocean West Enterprises, Inc. dba Ocean West Funding (collectively
the Company), reflect all adjustments which, in the opinion of management, are necessary for a
fair presentation of the results of the interim periods presented. All such adjustments are of a
normal recurring nature. Since inception through March 31, 2005, the Company has suffered recurring losses from operations;
we have incurred aggregate net losses of $ 7,099,107. This circumstance raise substantial doubt
about our ability to continue as a going concern, as described in the explanatory paragraph on our
independent auditors report on the September 30, 2004 consolidated financial statements, included
in the Companys Annual Report on Form 10-KSB. Management believes that cash flows from operations will be sufficient to meet the Companys
current liquidity and capital needs at least for the next fiscal quarter ended June 30, 2005.
Future offerings are possible, although the Company does not currently have any specific offering
plans. (2) Nature of Business: Ocean West Holding Corporation (Ocean West) was organized in the State of Delaware on August 15,
2000 as a holding company with negligible assets and liabilities. During March 2002, Ocean West
acquired all of the issued and outstanding shares of preferred and common stock of Ocean West
Enterprises, Inc. dba Ocean West Funding (Ocean West Enterprises) in an exchange of shares.
Since the shareholders of Ocean West Enterprises are the controlling shareholders of Ocean West
after the exchange, Ocean West Enterprises treated the transaction as recapitalization, and the
historical financial statements reflect the operations of Ocean West Enterprises. On July 15, 2004, Marshall L. Stewart, Daryl S. Meddings, Enfo Loan Corporation, Kingsley and Nancy
Cannon and Dale and Suzanne Delmege agreed to sell 4,921,930 of their shares of common stock of the
Company to Consumer Direct of America, a Nevada corporation (CDA) in exchange for 622,388 shares
of CDA (the Transfer). Since the transfer of shares resulted in CDA owning 84.9% of Ocean West,
this constituted a change in control of the Company. Ocean West Enterprises, a California corporation, was incorporated in November 1988 for the purpose
of engaging in mortgage banking activities. It is involved in the process of originating,
packaging and funding of HUD and other government-insured loans and non-government-insured loans in
the United States. (3) Principles of Consolidation: The consolidated financial statements include the accounts of Ocean West and its wholly owned
subsidiary, Ocean West Enterprises. All significant inter-company accounts and transactions have
been eliminated. (4) Interim Period: These financial statements have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted. Operating results
for the six months ended March 31, 2005 are not necessarily indicative of the results that may be
expected for the full year ending September 30, 2005. The unaudited interim consolidated financial statements should be read in conjunction with the
Companys audited financial statements and notes thereto for the past fiscal year ended September
30, 2004, included in the Companys Annual Report on Form 10-KSB. Earnings per share have been calculated based upon the weighted average number of common shares
outstanding during both reporting periods. 6




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Item 2. Managements Discussion and Analysis or Plan of Operation. General Ocean West is a holding company, which holds all of the issued and outstanding stock of Ocean
West Enterprises. Ocean West Enterprises is a wholesale and retail mortgage banking company
primarily engaged in the business of originating and selling loans secured by real property with
one to four units. We offer a wide range of products and historically, we primarily have targeted
high quality, low risk borrowers. However, we recently expanded into the higher risk sub-prime
market to assist in efforts to diversify our lending practices. Our income is generated from loan
origination fees and from gains from sales of mortgage loans on the secondary mortgage market and
to private investors. We also generate revenues through fees, such as brokerage fees, underwriting
fees, processing fees and document drawing fees, in connection with the funding or brokering of a
loan. During six months ended March 31, 2005, we have funded approximately 28% of our loans
through our warehouse credit facilities. Typically, the amount drawn from our warehouse lines of
credit for a particular loan is repaid when the loan is sold in the secondary mortgage market or to
an investor. We face strong competition in originating, purchasing and selling mortgage loans and related
mortgage servicing rights. Our competition is principally from savings and loans associations,
other mortgage companies, commercial banks and, to a lesser degree, credit unions and insurance
companies, depending upon the type of mortgage loan product offered. In addition to offering a
wide range of competitive products, we believe we compete with these entities through our efforts
to provide helpful and timely service to mortgage brokers and borrowers alike. Many of these
institutions have greater financial resources than we do and maintain a significant number of
branch offices in the areas in which we conduct operations. Increased competition for mortgage
loans from other lenders may result in a decrease in the volume of mortgage loans that we are able
to originate and purchase. If we are unable to compete effectively, our operations and financial
condition could be materially and adversely affected. Ocean West changed its fiscal year-end subsequent to March 31, 2002 from March 31 to September
30 effective in 2002. The reasons for the change were a reduction in auditing costs as fewer
companies use a September 30 year-end and to aid in HUD reporting. Critical Accounting Policies As set forth in greater detail in Footnote (1) to Ocean Wests September 30, 2004 financial
statements Summary of Significant Accounting Policies, the Company recognizes revenue upon sale
of a loan when the documents are shipped to the independent investors, and all rights have passed
and the Company has become obligated to convey the loan, thereby isolating the transferred assets
from the Company and fulfilling all criteria of SFAS No. 140. If these criteria were not met, then
revenue recognition would be delayed until the proceeds were subsequently received from the
investors, typically within the following month. Pursuant to SFAS No. 91, the Company capitalizes its loan origination costs, including an amount of
its payroll and related costs which are directly attributable to the credit origination process.
The measurement of such capitalizable costs requires the use of some judgments by management, as to
the portion of such costs associated with credit origination and with other activities. Disclosure, pursuant to SFAS No. 107, is required of the fair value of financial instruments.
However, since most of the Companys financial instruments turn over within a very short time
period, management discloses that the net book value approximates fair value at the balance sheet
date. Results of Operations We believe that interest rate trends potentially have the single largest effect on our results
of operations. Trends in interest rates are not only important to our refinance business, but are
also very important in the purchase market. As interest rates rise, more individuals are
eliminated as potential borrowers. The reason for this is simple, as interest rate get higher, so
do the mortgage payments. Higher payments mean fewer people have the ability to qualify for loans.
Historically, mortgage bankers like us are more negatively affected by a rising interest rate
market than banks. Banks tend to have an advantage in an adjustable rate market, because banks
have the ability to hold loans and, therefore, can be 7




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Item 2. Managements Discussion and Analysis or Plan of Operation (continued). more creative in designing adjustable rate loans to fit the borrowers needs. Mortgage bankers
like us are limited to loan products that can be sold in the secondary market or securitized.
These programs have become more competitive in recent years, but we believe banks still retain a
competitive advantage. Historically inflation has an impact on us because inflation typically impacts interest rates.
As the threat of inflation becomes more of a concern, interest rates tend to rise. This result is
based upon the perception that the Federal Reserve will revise short-term interest rates to keep
inflation in check. This concern ultimately affects mortgage rates. Our revenues are currently derived approximately two-thirds from sale of loans and one-third
from fees generated in connection with such sales. Revenues generated from the sale of a loan vary
based on loan type and size. Premiums paid can range from 1/8% to 5% of the loan amount.
Conventional conforming loans have lowest profit margins while alternative A and sub-prime loans
have higher premiums. Sub-prime loans typically have the largest margins. Fees received also vary
depending on loan type and origination source and generally range from $495 to $995 per loan. Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004 During the quarter ended March 31, 2005, we funded 287 loans with an aggregate dollar value of
approximately $52 million compared to 770 loans with an aggregate dollar value of approximately
$134 million in the quarter ended March 31, 2004. This decrease was due to a reduction of 47
branch locations and less favorable market conditions. The average loan size for the quarter
ended March 31, 2005 was approximately $181,000, which was an increase from an average loan size of
$175,000 for the quarter ended March 31, 2004. Net revenues from origination and/or sale of loans decreased 51.7% or $843,000, to $788,000
for the quarter ended March 31, 2005 from $1.6 million for the quarter ended March 31, 2004. The
decrease in revenues can be attributed the reduction of 47 branches as well as overall market
conditions. Total operating expenses decreased $944,000 or 47.4% to $1.0 million for the quarter ended
March 31, 2005 from $2.0 million for the quarter ended March 31, 2004. Salaries, wages and payroll
taxes were $337,000 for the quarter ended March 31, 2005 compared to $690,000 for the March 31,
2004. The decrease in salaries, wages and payroll taxes was primarily due to the reduction of 47
branch offices. Other general and administrative expenses consist primarily of rent, advertising
services, and fees for professional services, insurance and office expenses. These expenses
decreased $578,000 to $675,000 for the quarter ended March 31, 2005 from $1.3 million for the same
period in 2004. Rent, insurance and related office expenses decreased as branch officers were
reduced to meet loan demand. We had a net loss of $258,504 for the quarter ended March 31, 2005 compared to net loss of
$364,258 for the same quarter of 2004. The decrease in income for the March 31, 2005 quarter was
due to the decrease in loan volume due to the reduction of 47 branches. Six Months Ended March 31, 2005 Compared to Six Months Ended March 31, 2004 During the six months ended March 31, 2005, we funded 708 loans with an aggregate dollar value
of approximately $127 million compared to 1,192 loans with an aggregate dollar value of
approximately $340 million in the six months ended March 31, 2004. This decrease was due to less
favorable market conditions and a reduction in branch locations by 46. The average loan size for
the six months ended March 31, 2005 was approximately $179,379, which was a decrease from an
average loan size of $177,000 for the six months ended March 31, 2004. Net revenues from origination and/or sale of loans decreased 52.7% or $2.5 million, to $2.2
million for the six months ended March 31, 2005 from $4.7 million for the six months ended March
31, 2004. The decrease in revenues can be attributed the reduction of the number of branches as
well as overall market conditions. Total operating expenses decreased $2.5 million or 44.6% to $3.1 million for the six months
ended March 31, 2005 from $5.6 million for the six months ended March 31, 2004. Salaries, wages
and payroll taxes were $1.2 million for the six months ended March 31, 2005 compared to $2.3
million for the March 31, 2004. The decrease in salaries,
wages and payroll taxes was primarily due the reduction of 47 branch offices. Other general
and administrative expenses
consist primarily of rent, advertising services, and fees for professional services, insurance
and office expenses. These expenses decreased 42.8% or $1.4 million, to $1.9 million for the six
months ended March 31, 2005 from $3.2 million 8




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Item 2. Managements Discussion and Analysis or Plan of Operation
(continued). for the same period in 2004. Rent, insurance and
related office expenses decreased as branch officers were reduced to meet loan demand. We had a net loss of $874,696 for the six months ended March 31, 2005 compared to net loss of
$893,824 for the period of 2004. The reduction of the loss was due to a decrease in operating
expenses, offset by a decrease loan volume. Liquidity and Capital Resources Liquidity is the ability of a company to generate funds to support asset growth, satisfy
disbursement needs, maintain reserve requirements and otherwise operate on an ongoing basis. If
our loan volume were to increase too rapidly, we believe the increase could have a severe impact on
our liquidity. Our warehouse credit facilities limit the amount that may be advanced on each loan
funded. Therefore, cash must be used to fund the additional dollars needed to close escrow. Thus,
it is crucial that we closely monitor our loan volume. Historically we have funded loans primarily through our warehouse credit facilities or using
cash on hand. During the six months ended March 31, 2005, we have funded approximately 28% of our
loans through our warehouse credit facilities. Loans that are closed using our credit facilities
are funded through short term borrowing on our warehouse lines of credit. We pay interest on funds
advanced under the warehouse lines of credit at a pre-negotiated rate. The interest rate at which
we borrow is variable in nature and typically averages between 4.5% and 6.9% per annum. The
average time between funding a mortgage and the receipt of the proceeds from the sale of the
mortgage was approximately fifteen days during fiscal 2004 and continued as such during the six
months ended March 31, 2005. Our ability to finance and purchase mortgage loans depends on our ability to secure warehouse
lines of credit with acceptable terms. Previously, we have funded the majority of our loans
through First Collateral Services. First Collateral ceased providing us funds under the line
effective April 30, 2003. The outstanding balance on the First Collateral Services line of credit
is being paid off as the loans securing the lines are sold. As of March 31, 2005 the outstanding
balance with First Collateral Services was $445,758. Until January 2003, we had frequently drawn
amounts in excess of the limit on the line. It bears interest at 8% and the rate on September 30,
2004 was 4.311%. Currently we fund loans through warehouse lines of credit with Provident Consumer Financial
Services , Warehouse One Acceptance Company IV, LLC and a Private Line. As of December 31, 2004,
these facilities were in the name of the Companys parent, Consumer Direct of America (CDA). As
of March 31, 2005 the outstanding balance with Provident Consumer Financial Services , Warehouse
One and the private line was $1,168,206, $335,803 and $1,465,905, respectively. The lending limit
on the line of credit through Provident Consumer Financial Services is currently $8,000,000,
Warehouse One lending limit is $5,000,000 and the private line is $5,000,000. The Warehouse One
and Provident lines are also $50 to $100 more per transaction than those charged by First
Collateral. In addition, the lending limits on the First Collateral line of credit had been larger
than those granted by the current providers. The loan agreement governing the terms of the
Warehouse One line of credit contains a restrictive covenant requiring CDA to maintain a minimum
corporate net worth of $3,000,000 and a minmum combined corporate/guarantor tangible net worth of
$7,000,000. The Company is currently not in compliance with its lender. As of March 31, 2005 the
stockholders equity of CDA was $ (2,811,370) per the terms of the contract this has created an
event of default. Since the Company does not comply with the restrictive covenants, there is the
possibility that we may lose the credit facility at any time, which would cause a negative impact
on the way we do business and a material adverse effect on our results of operations and financial
condition. At March 31, 2005, the interest rate charged on our warehousing lines of credit with Provident
Consumer Financial Services, Warehouse One and the Private Line were approximately 6.93%, 5.25% and
4.5%, respectively. The fees associated with Provident Consumer Financial Services and Warehouse
One is also $50 to $100 more per transaction than those charged by First Collateral. In addition
the lending limits on the First Collateral line of credit has been larger than those granted by the
current providers. The loss of First Collateral as our primary warehouse lender has increased our
cost of funds and has limited our ability to fund a higher volume of loans and may have a material
adverse effect on our results of operations and financial condition. To the extent we are not
successful in securing alternate warehousing sources; we may have to curtail our mortgage loan
origination activities, which would also have a material adverse effect on our results of
operations and financial condition. At the present time, our liquidity resources are minimal. We are currently not in compliance
and have not consistently met the HUD net worth requirements. We were unable to maintain a
minimum net worth of $1,000,000 to retain our mortgagee status. Due to the facts that the Company
was unable to maintain its required net worth and the 9




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Item 2. Managements Discussion and Analysis or Plan of Operation (continued). amount of FHA business has decreased
significantly over the past few years, we elected to change our status to Correspondent with HUD in
July of 2003. The percentage of FHA loans funded for the three and six months ended March 31, 2005
was 0% and 0.43%, respectively based on dollar volume. Historically we have funded operations through a combination of borrowings and issuance of
stock. We currently intend to retain our earnings for the foreseeable future to help increase our
liquidity. In August and September of 2004, Consumer Direct of America, a Nevada corporation,
purchased in aggregate 2,250,000 of senior preferred stock of Ocean West Enterprises., a for an
aggregate purchase price of $2,250,000 in cash. Management continues to explore investment
alternatives to aid in its liquidity, but there can be no reliance made on such. Management believes that cash flows from operations will be sufficient to meet the Companys
current liquidity and capital needs at least for the next fiscal quarter ended June 30, 2005.
Future offerings are possible, although the Company does not currently have any specific offering
plans. Cash Flows During the first six months of fiscal 2005 and 2004 we had net cash provided by operating
activities of $2.4 million and $966,834, respectively. The primary sources of net cash provided by
was a decrease in receivables from loan sold, mortgage loans held for sale, increase in other
current assets and accounts payable, over the six month period ending March 31, 2005. The primary
sources of net cash provided by was a decrease in the amount of mortgage loans held for sale and
the increase in receivables from loans sold over the six month period ending March 31, 2004 offset
by the net loss for the period. As investors purchase loans, the amounts advanced for such loans
through the warehouse lines of credit are paid. At that time, the receivables are cleared and the
cash deposited in our operating account. These accounts vary significantly depending upon where
the bulk of the loans are in the process of funding and selling. Net cash used for investing activities during the first six months of fiscal 2005 was $1.0
million and $12,000, which was attributable to the collection of notes receivable and the purchase
of property and equipment. Net cash used for investing activities during the first six months of
fiscal 2004 was $11,000 which was attributable to the purchase of property and equipment Net cash used for financing activities for the six months ended March 31, 2005 was $3.4
million. This consisted primarily of net payments under the warehouse lines of credit of $3.1
million, payments of $28,000 on capital lease obligations, as well as dividends paid of $74,558.
Net cash used for financing activities for the six months ended March 31, 2004 was $981,000.
This consisted primarily of payments under the warehouse lines of credit of $1.1 million,
payments of $41,000 on capital lease obligations, as well as dividends paid of $80,371 offset by
borrowings of $134,000 on long-term debt and $59,100 on notes payable from stockholder. At 2004, the Company has net operating loss carryforwards (NOLs) of approximately
$3,983,443, for Federal income tax reporting purposes and approximately $2,787,507 for state
reporting purposes, expiring in various years through 2025. On September 11, 2002, the Governor of California signed into law new tax legislation that
suspends the use of NOL carryforwards into tax years beginning on or after January 1, 2002 and
2003. Should the Company have taxable income it may not look to California net operating losses
generated in prior years to offset taxable income. This suspension will not apply to tax years
beginning in 2004 and beyond. Regulatory Trends The regulatory environments in which we operate have an impact on the activities in which we
may engage, how the activities may be carried out and the profitability of those activities.
Therefore, changes to laws, regulations or regulatory policies can affect whether and to what
extent we are able to operate profitably. For example, proposed state and federal legislation
targeted at predatory lending could have the unintended consequence of raising the cost or
otherwise reducing the availability of mortgage credit for those potential borrowers with less than
prime-quality credit histories, thereby resulting in a reduction of otherwise legitimate sub-prime
lending opportunities. 10




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Forward-Looking Statements Statements contained in this Form 10-QSB that are not historical facts are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. In addition, words such as believes, anticipates, expects and similar
expressions are intended to identify forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements or events, or timing of events, to differ materially from any
future results, performance or achievements or events, or timing of events, expressed or implied by
such forward-looking statements. We cannot assure that we will be able to anticipate or respond
timely to the changes that could adversely affect our operating results in one or more fiscal
quarters. Results of operations in any past period should not be considered indicative of results
to be expected in future periods. Fluctuations in operating results may result in fluctuations in
the price of our securities. In the event we need to raise additional financing, there can be no assurance that any such
financing will be available on acceptable terms. If such financing is not available on
satisfactory terms, we may be unable to expand or continue our business as desired and operating
results may be adversely affected. Debt financing will increase expenses and must be repaid
regardless of operating results. Equity financing could result in dilution to existing
stockholders. Some of the more prominent known risks and uncertainties of our business are set forth below.
However, this section does not discuss all possible risks and uncertainties to which we are is
subject, nor can it be assumed that there are not other risks and uncertainties which may be more
significant.  
    Our losses from period to period;
    Our failure to continuously meet HUD minimum net worth requirements;
    Our failure to continue to be an approved FHA mortgagee;
    Our dependence on the warehouse lines of credit which has been reduced ;
    Our need for additional funding sources so that our ability to originate and fund
loans is not impaired and
    Our ability to compete with banks and other mortgage lenders that are significantly larger. 
 Item 3. Controls and Procedures. Within 90 days prior to the date of this report, the Company carried out an evaluation,
under the supervision and with the participation of the Companys management, including the
Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design
and operation of the Companys disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon that evaluation, the Companys Chief Executive Officer and Chief Financial
Officer concluded that the Companys disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company that is required to be included in
the Companys periodic filings with the Securities and Exchange Commission. There have been no
significant changes in the Companys internal controls or, to the Companys knowledge, in other
factors that could significantly affect those internal controls subsequent to the date the
Company carried out its evaluation, and there have been no corrective actions with respect to
significant deficiencies and material weaknesses. The Companys management, including the Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls or our internal controls will prevent all error and
all fraud. A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can be faulty, and
that breakdowns can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential 11




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future conditions; over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost- effective control system, misstatements due to error or fraud may occur
and not be detected. Changes in Internal Controls During the period covered by this report, there have been no changes in the Companys internal
control over financial reporting that have materially affected or are reasonably likely to
materially affect the Companys internal control over financial reporting. 
 PART II  OTHER INFORMATION 
 Item 1. Legal Proceedings. We are party to claims from time to time, not required to be disclosed in accordance with Item
103 of Regulation S-B. While management currently believes that the ultimate outcome of these
proceedings, individually and in the aggregate, will not have a material adverse effect on our
financial position or results of operations, litigation is subject to inherent uncertainties. Were
an unfavorable ruling to occur, there exists the possibility of a material adverse impact on our
results of operations of the period in which the ruling occurs. The estimate of the potential
impact on our financial position or overall results of operations for the above legal proceedings
could change in the future. 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None. 
 Item 3. Defaults Under Senior Securities The loan agreement governing the terms of the Warehouse One line of credit contains a
restrictive covenant requiring CDA, the Companys parent, to maintain a minimum corporate net worth
of $3,000,000 and a minmum combined corporate/guarantor tangible net worth of $7,000,000. The
Company is currently not in compliance with its lender. As of March 31, 2005 the stockholders
equity of CDA was $(2,811,370) per the terms of the contract this has created an event of default.
Since the Company does not comply with the restrictive covenants, there is the possibility that we
may lose the credit facility at any time, which would cause a negative impact on the way we do
business and a material adverse effect on our results of operations and financial condition. 
 Item 4. Submission of Matters to a Vote of Security Holders. On April 25, 2005, the Company filed a Preliminary Schedule 14C Information Statement Form 14C
to; change the name of the Company increase the authorized common stock to 100,000,000 common
shares, delete from the certificate of incorporation the provisions allowing cumulative voting, as
well as the change in control of the subsidiary Ocean West Enterprises. 
 Item 5. Other Information None. 
 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits See Index of Exhibits on page 14. (b) Reports on Form 8-K On February 4, 2005 the Company filed a Form 8-K reporting a change in accountants. On April 25, 2005 the Company filed a Form 8K, to report the entry into a material
definitive agreement, a Securities Exchange Agreement and Plan of Reorganization with
InfobyPhone Inc., a Delaware 12




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corporation. The exchange agreement provides for the issuance of existing shareholders of
InfoByPhone of 6,000,000 shares of the registrants common stock and bringing the total
outstanding shares to 11,586,104 on a fully diluted basis. 
 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized. OCEAN WEST HOLDING CORPORATIONDate: May 23, 2005By:
    
    /s/ Marshall L. StewartMarshall L. StewartPresident and Chief Executive OfficerDate: May 23, 2005
    
    By:
    
    /s/ Wayne K. BaileyWayne K. BaileyChief Financial Officer (Principal Accounting Officer)
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OCEAN WEST HOLDING CORPORATION
Quarterly Report on Form 10-QSB
For the Quarter Ended March 31, 2005 
 INDEX OF EXHIBITS ExhibitDescription of Exhibit
    
    Table Number*
    
    Number302 Certifications
    
    
    31(i)
    
    Certificate of Chief Executive
Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    
    
    
    
    
    31.1(ii)
    
    Certificate of Chief Financial
Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    
    
    
    
    
    31.2906 Certifications
    
    
    32(i)
    
    Certificate of Chief Executive
Officer and Chief Financial Officer
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.**
    
    
    
    
    
    
    32.1
 14