UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q/A
(Mark One)
(X) Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934 For
the quarterly period ended March 31, 1998
Commission File Number: 333-11625
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CAPITAL ALLIANCE INCOME TRUST LTD.,
A REAL ESTATE INVESTMENT TRUST
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(Exact name of registrant as specified in its charter)
Delaware 94-3240473
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(State or other Jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
50 California Street
Suite 2020
San Francisco, California 94111
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(Address of principal executive office) (zip code)
(415) 288-9575
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (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 _X_ No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of April 30, 1998, the aggregate market value of the registrant's shares of
Common Stock, $.01 par value, held by non affiliates of the registrant was
approximtely $7,949,393. At that date 993,674 shares of common stock were
outstanding outstanding. The shares are approved for listing on the American
Stock Exchange upon notice of issuance, but will not trade publicly until the
conclusion of the Registrant's current "best efforts" public offering.
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CAPITAL ALLIANCE INCOME TRUST LTD.,
A REAL ESTATE INVESTMENT TRUST
Notes to Financial Statements
For the three months ended March 31, 1998 and 1997
(Unaudited)
If the Trust fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, the Trust will be subject to tax on
its taxable income at regular corporate rates. Distributions to
stockholders in any year in which the Trust fails to qualify will not be
deductible by the Trust nor will they be required to be made. Unless
entitled to relief under specific statutory provisions, the Trust will also
be disqualified from taxation as a REIT for the four taxable years
following the year during which qualification was lost.
Based on the Trust's belief that it has operated in a manner so as to allow
it to elect to be taxed as a REIT since inception, no provision for federal
income taxes has been made in the financial statements.
* For the three-month period ended March 31, 1997, the distributions per
* preferred share are allocated 90% as ordinary income and 10% as a return of
* capital for tax purposes. For the 3-month period ended March 31, 1998, the
* distributions per preferred share are allocated 100% ordinary income and
* the common share distribution is allocated 88 % ordinary income and a 12%
* return of capital for tax purposes.
Fair value of financial instruments. For cash and cash equivalents, the
carrying amount is a reasonable estimate of fair value. For mortgage note
receivables, fair value is estimated by discounting the future cash flows
using the current interest rates at which similar loans would be made to
borrowers with similar credit ratings and for the same remaining
maturities. It was determined that the difference between the carrying
amount and the fair value of the mortgage notes receivable is immaterial.
Organizational costs. Organization costs are capitalized and amortized on a
straight-line basis over five years.
Deferred offering costs. Deferred offering costs relate to an initial
public offering of common stock. While the offering is underway, these
costs will be offset pro-rata against the proceeds from the issuance of
common stock and as a reduction of stockholder's equity.
Real estate owned. Real estate owned results from foreclosure of loans and
at time of foreclosure is recorded at the lower of carrying amount or fair
value of the property minus estimated costs to sell. At this time senior
debt to which the asset is subject is reported as mortgage payable.
Subsequent to foreclosure, the foreclosed asset value is periodically
reviewed and is adjusted to fair value. No depreciation is taken on the
real estate held for sale. Income and expenses related to real estate owned
are recorded as interest income, interest expense and general and
administrative expenses on the Statements of Operations.
Earnings per share. The Preferred Shares receive an annual preferred
allocation of income and distributions. Prior to the December 4, 1997
issuance of Common Shares, the Preferred Shares received 100% of the
Trust's net income. After completion of the current offering of common
shares and after meeting such preference, at least 95% of any additional
income earned will be distributed to the Common Shares, until the
distribution on the Common Shares matches that of the Preferred Shares (see
Note 9).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAPITAL ALLIANCE INCOME TRUST LTD.,
A Real Estate Investment Trust
Dated: May 14, 1998 By: /s/ Richard J. Wrensen
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Richard J. Wrensen, Chief Financial Officer
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