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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 15, 1997
MATZEL & MUMFORD MORTGAGE FUNDING, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 33-98178 22-3382016
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Village Court, Hazlet, New Jersey 07730
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(Address of principal executive offices) (Zip Code)
(908) 888-1055
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(Registrant's telephone number, including area code)
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Item 7(a). Financial Statements.
Item 7(c). Exhibits.
27 Financial Data Schedule.
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MATZEL & MUMFORD AT
APPLE RIDGE II, L.L.C.
FINANCIAL STATEMENTS
PERIOD JULY 14, 1997 TO JULY 15, 1997
<PAGE>
MATZEL & MUMFORD AT
APPLE RIDGE, II, L.L.C.
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FINANCIAL STATEMENTS
PERIOD JULY 14, 1997 TO JULY 15, 1997
1
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MATZEL & MUMFORD AT APPLE RIDGE, II, L.L.C.
CONTENTS
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INDEPENDENT AUDITORS' REPORT ..................................... 3
FINANCIAL STATEMENTS:
Balance sheet .................................................. 4
Statements of cash flows ....................................... 5
Notes to financial statements .................................. 6-8
2
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INDEPENDENT AUDITORS' REPORT
To the Members
Matzel & Mumford at Apple Ridge II, L.L.C.
Hazlet, New Jersey
We have audited the accompanying balance sheet of Matzel & Mumford at Apple
Ridge II, L.L.C. as of July 15, 1997 and the related statements of cash flows
for the period July 14, 1997 (date of inception) to July 15, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Matzel & Mumford at Apple Ridge
II, L.L.C. as of July 15, 1997 and its cash flows for the period July 14, 1997
(date of inception) to July 15, 1997 in conformity with generally accepted
accounting principles.
July 21, 1997
3
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MATZEL & MUMFORD AT APPLE RIDGE II, L.L.C.
BALANCE SHEET
June 15, 1997
ASSETS
Deposit .................................................... $ 6,496
Inventory (Note 2) ......................................... 1,175,892
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TOTAL ASSETS ......................................... $1,182,388
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LIABILITIES AND MEMBERS' EQUITY
Loan payable to bank (Note 3) .............................. $ 40,000
Due to affiliates (Note 4) ................................. 491,698
Mortgage payable -- M&M Mortgage Funding (Note 3) .......... 650,690
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TOTAL LIABILITIES .................................... 1,182,388
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MEMBERS' EQUITY .............................................. 1,000
RECEIVABLE FROM MEMBERS ...................................... (1,000)
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TOTAL MEMBERS' EQUITY ................................ --
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TOTAL LIABILITIES AND MEMBERS' EQUITY ................ $1,182,388
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See accompanying notes to financial statements.
4
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MATZEL & MUMFORD AT APPLE RIDGE II, L.L.C.
STATEMENTS OF CASH FLOWS
For the periods
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July 14, 1997
(date of
inception)
JULY 15, 1997
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .................................................. $ --
Adjustments to reconcile net loss to net cash
used in operating activities:
Increase in inventories .................................. (1,175,892)
Increase in deposit ...................................... (6,496)
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NET CASH USED IN OPERATING ACTIVITIES ................. (1,182,388)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgages payable ............................. 690,690
Advances from affiliates .................................... 491,698
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NET CASH PROVIDED BY FINANCING ACTIVITIES ............. 1,182,388
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INCREASE IN CASH .............................................. --
CASH, BEGINNING OF PERIOD ..................................... --
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CASH, END OF PERIOD ........................................... $ --
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See accompanying notes to financial statements.
5
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MATZEL & MUMFORD AT APPLE RIDGE II, L.L.C.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF ACCOUNTING POLICIES
Nature of Business and Organization
Matzel & Mumford at Apple Ridge II, L.L.C.("M&M at Apple Ridge II") is a
New Jersey limited liability company formed on July 14, 1996 for the
purpose of purchasing land in Wall, New Jersey and developing and
constructing 17 single-family homes on the land. One additional lot with a
farm house closed October 31, 1996 by an affiliate and transferred to the
Company on July 14, 1997. On July 15, 1997, M&M at Apple Ridge II closed
title to the other 17 lots.
Revenue Recognition
Revenues arising from home sales will be recognized under the accrual
method. Under this method, income will be recognized when all terms
relating to the sale of a unit are complete, consideration is exchanged and
title is conveyed to the buyer.
Inventories
Inventories are stated at the lower of cost or estimated net realizable
value, which is determined by reducing the anticipated net sales proceeds
by the estimated costs necessary to complete or improve the property to the
condition used in arriving at the anticipated selling price.
Inventory costs are currently comprised of land and project overhead.
Inventory costs will be comprised of direct unit and allocated costs.
Development costs will be capitalized until the property is complete and
title has been conveyed to the buyer. Development costs generally include
land and improvements, house construction, project overhead, interest and a
portion of construction management fees. Interest capitalized is based upon
the interest rate on specifically related debt. A portion of the management
fees to a related party are paid and capitalized by the Company.
Members' Capital
The two managing members have pledged a total of $1,000 in capital
contributions.
6
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MATZEL & MUMFORD AT APPLE RIDGE II, L.L.C.
NOTES TO FINANCIAL STATEMENTS (Continued)
Income Taxes
The Company is organized and operates as a limited liability corporation
which is not subject to Federal or state income taxes. Accordingly, no
provision for income taxes has been made. The earnings or losses of the
Company are included on each member's tax return, according to the terms of
the operating agreement.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
2. INVENTORIES
Inventories relating to the development of single-family homes consist of
the following at July 15, 1997:
Land ................................ $ 888,311
Project overhead .................... 181,360
Financing costs ..................... 106,221
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$1,175,892
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All expenses incurred for the development of the project will be
capitalized. Selling expenses which do not benefit future periods, and
general and administrative expenses, will be treated as period costs and
will be expensed as incurred.
3. MORTGAGE PAYABLE
The Company has a mortgage payable to Matzel & Mumford Mortgage Funding, an
entity controlled by the members of M&M at Apple Ridge II, which is payable
interest only at 16%. Interest payments are payable quarterly until July
15, 1998 when the outstanding principal balance is due. The note is
collateralized by a mortgage on the property.
7
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MATZEL & MUMFORD AT APPLE RIDGE II, L.L.C.
NOTES TO FINANCIAL STATEMENTS (Continued)
The Company also has a loan payable to a bank bearing interest at prime,
plus 1 1/2%. Interest payments are payable monthly until October 30, 1997
when the outstanding principal balance is due. The loan is collateralized
by a mortgage on the property.
4. RELATED PARTY TRANSACTIONS
Included in due to/from affiliates are net cash advances from affiliated
companies of the managing member of the Company. The advances are short
term in nature and bear no interest. The amounts are to be repaid as cash
flow allows.
8
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
MATZEL & MUMFORD MORTGAGE
FUNDING, INC.
Dated: September 23, 1997 By: /s/ ROGER MUMFORD
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Roger Mumford
President
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<ARTICLE> 5
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUL-15-1997
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<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1,175,892
<CURRENT-ASSETS> 1,182,388
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,182,388
<CURRENT-LIABILITIES> 1,182,388
<BONDS> 0
0
0
<COMMON> 0
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