SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended August 31, 1998
-----------------
Commission File No. 33-2749
FIRST MORTGAGE CORPORATION
--------------------------
(Exact name of registrant as specified in its charter)
Incorporated under the laws of the State of
Utah 87-03202209
- ------------------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
257 East 200 South, Suite 950, Salt Lake City, Utah 84111
(Address of Principal Executive Offices)
Registrant's telephone number, including area code
(801) 363-7663
N/A
-----
Former name, former address and former fiscal year,
if changed since last report
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.
(1) Yes X No
---- ----
(2) Yes X No
---- ----
Indicate the number of shares outstanding of each class of common stock as
of August 1, 1999.
---------------
51,101,680 Common Stock (Par Value $.001)
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First Mortgage Corporation
Form 10-Q
Three Months Ended August 31, 1998
INDEX
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Page
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PART I Financial Information
ITEM 1 Financial Statements
Balance Sheets . .4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . 8
Management's Discussion and Analysis of
the Statement of Income. . . . . . . . . . . . . . . . . . . . . . . . . 9
PART II Other Information
ITEM 1 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . .10
ITEM 2 Changes in Securities . . . . . . . . . . . . . . . . . . . . . . .10
ITEM 3 Defaults upon Senior Securities. . . . . . . . . . . . . . . .10
ITEM 4 Submission of Matters to a Vote of Security Holders . . . . . . . .10
ITEM 5 Other Information. . . . . . . . . . . . . . . . . . . . . . .10
ITEM 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . .10
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
First Mortgage Corporation
Financial Statements
August 31, 1998
&
February 28, 1998
First Mortgage Corporation
Balance Sheets
August 31, 1998 and February 28, 1998
<TABLE>
<CAPTION>
(Unaudited)
August February
31, 1998 28, 1998
------------ ------------
<S> <C> <C>
ASSETS
Current Assets
- --------------
Cash in Bank $ 4,158 $ 198,335
Cash in Savings 100,000 100,000
Other Receivables -0- 9,509
Contracts Receivable 15,000 15,000
Notes Receivable 621,500 339,000
------------ ------------
Total Current Assets 740,658 661,844
Fixed Assets
- ------------
Office Equipment 2,060 2,261
Leasehold Improvements 400 470
------------ ------------
Total Fixed Assets 2,460 2,731
Other Assets
- ------------
Certificate of Deposit 200,000 200,000
Land 47,968 47,968
------------ ------------
Total Other Assets 247,968 247,968
------------ ------------
Total Assets $ 991,086 $ 912,543
============ ============
</TABLE>
See Accompanying Notes
4
First Mortgage Corporation
Balance Sheets -Continued-
August 31, 1998 & February 28, 1998
<TABLE>
<CAPTION>
(Unaudited)
August February
31, 1998 28, 1998
------------ ------------
<S> <C> <C>
Liabilities And Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable $ -0- $ 883
Taxes Payable 71,130 124,673
------------ ------------
Total Current Liabilities 71,130 125,556
Stockholders' Equity
- --------------------
Common Stock, 100,000,000
Shares Authorized at $0.001 Par Value;
51,101,680 Shares Issued & Outstanding 51,102 51,102
Capital in Excess of Par Value 242,697 242,697
Retained Earnings 626,157 493,188
------------ ------------
Total Stockholders' Equity 919,956 786,987
------------ ------------
Total Liabilities &
Stockholders' Equity $ 991,086 $ 912,543
============ ============
</TABLE>
See Accompanying Notes
5
First Mortgage Corporation
Statements of Operations -Unaudited-
For the Six Months Periods Ended August 31, 1998 & 1997
and the Three Months Period Ended August 31, 1998 & 1997
<TABLE>
<CAPTION>
For the Six Months For the Three Months
Periods Ended Periods Ended
August August August August
31, 1998 31, 1997 31, 1998 31, 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues
- --------
Mortgage Recovery $ 313,000 $ 100,070 $ 219,000 $ 81,927
Interest 43,111 11,946 22,093 7,002
Bad Debt Recovery 1,468 796 1,045 416
---------- ---------- ---------- ----------
Total Revenues 357,579 112,812 242,138 89,345
Expenses
- --------
Commission Expense 134,200 18,800 86,200 11,800
Office Expense 5,108 3,336 3,016 1,878
Rent 4,350 4,350 2,175 2,175
Professional Fees 5,241 4,080 5,182 4,080
Telephone 1,581 1,026 513 519
Depreciation 270 372 135 203
Land Expense -0- 249 -0- -0-
Travel 302 7,201 -0- 6,044
Taxes 15,830 -0- 9,330 -0-
---------- ---------- ---------- ----------
Total Expenses 166,882 39,414 106,551 26,699
---------- ---------- ---------- ----------
Net Profit Before Taxes 190,697 73,398 135,587 62,646
Income Taxes 57,728 16,102 48,950 13,795
---------- ---------- ---------- ----------
Net Profit After Taxes $ 132,969 $ 57,296 $ 86,637 $ 48,851
========== ========== ========== ==========
Earnings Per Share $ .02 $ .001 $ .02 $ .001
Weighted Average
Shares Outstanding 51,101,680 51,101,680 51,101,680 51,101,680
</TABLE>
See Accompanying Notes
6
First Mortgage Corporation
Statements of Cash Flows
For the Six Months Periods Ended August 31, 1998 & 1997
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
1998 1997
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities
- ------------------------------------
Net Income $ 132,969 $ 57,296
Adjustments to Reconcile Net Income
to Operating Activities:
Rounding 1 -0-
Depreciation 270 372
Changes in Operating Assets & Liabilities:
Decrease in Other Receivables 9,509 -0-
Decrease in Prepaid Taxes -0- 4,742
(Decrease) in Accounts Payable ( 883) -0-
Increase (Decrease) in Taxes ( 53,543) 16,102
------------ ------------
Net Cash Provided by
Operating Activities 88,323 78,512
Cash Flows from Investing Activities
- ------------------------------------
Increase in Contracts ( 282,500) -0-
Purchase of Equipment -0- ( 2,658)
Purchase of Land -0- ( 4,328)
Collected On Contracts -0- 34,430
------------ ------------
Net Cash Provided by
Investing Activities ( 282,500) 27,444
Cash Flows from Financing Activities
- ------------------------------------
Net Cash Provided by
Financing Activities -0- -0-
------------ ------------
Increase (Decrease) in Cash ( 194,177) 105,956
Cash at Beginning of Year 298,335 470,153
------------ ------------
Cash at End of Year $ 104,158 $ 576,109
============ ============
Expense Disclosures
- -------------------
Interest $ -0- $ -0-
Taxes 57,728 16,102
</TABLE>
See Accompanying Notes
7
First Mortgage Corporation
Notes to Financial Statements
NOTE #1 - Statement Preparation
- -------------------------------
The Company has prepared the accompanying financial statements with interim
financial reporting requirement promulgated by the Securities and Exchange
Commission. The information furnished reflects all adjustments which are,
in the opinion of management, necessary for a fair presentation of
financial position and results of operations.
The consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's February 28, 1998 10-K report.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and Capital Resources
- -------------------------------
Management believes that proceeds from current revenues from interest and
cash reserves will provide sufficient capital to meet the Company's needs
for the next twelve months.
Management believes that its prime source of funds will be interest earned
from the trust deed notes receivable.
Results of Operations
- ---------------------
During the six months period ending August 31, 1998, the Company collected
$313,000 from mortgage recovery activities and $43,111 from interest
income. Comparable figures for the six months of 1997 are $100,700 from
mortgage recovery income and $11,946 from interest income.
For the three months period ending August 31, 1998, mortgage recovery
revenues were $219,000 and interest earnings were $22,093. Comparable
figures for the three month period of 1997, are $81,927 from mortgage
revenues and $7,002 from interest income. The increase in revenues from
the previous comparable period are the result of specific loan packages
obtained from the FDIC. The Company expects this trend to continue into
the next six months but not into the next fiscal year.
The Company had $357,579 in revenues in the six months period ending August
31, 1998. For the comparable six months period ending August 31 1997,
total revenues were $112,812.
Commissions expense for the six months period ending August 31, 1998, were
$134,200 and $18,000 for the six months period of 1997.
Administrative expenses for the six months period ending August 31, 1998,
were $32,682 and for the comparable period of 1997 were $20,614.
Net profit after provisions for income taxes were $132,969 for August 31,
1998, and $57,296 for August 31, 1997.
The Company's management anticipates that revenues for the next fiscal year
will be limited to interest earned on mortgage contracts. The collection
of loan packages from FDIC and RTC is largely completed at February 28,
1999.
9
PART II - OTHER INFORMATION
----------------------------
Item 1 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . None
Item 2 Changes in the Rights of
the Company's Security Holders. . . . . . . . . . . . . . . . . None
Item 3 Defaults by the Company on its
Senior Securities . . . . . . . . . . . . . . . . . . . . . . . .None
Item 4 Results of Votes of Security Holders. . . . . . . . . . . . . . .None
Item 5 Other Information . . . . . . . . . . . . . . . . . . . . . . . .None
Item 6 Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . .None
10
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
August 1, 1999 /S/ William S. Greaves
Date:---------------- By: -------------------------
August 1, 1999 William S. Greaves, President
(Principal Executive Officer)
(Principal Financial & Accounting Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000036548
<NAME> FIRST MORTGAGE CORP.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-31-1998
<CASH> 104,158
<SECURITIES> 0
<RECEIVABLES> 636,500
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 740,658
<PP&E> 6,783
<DEPRECIATION> 4,277
<TOTAL-ASSETS> 991,086
<CURRENT-LIABILITIES> 71,130
<BONDS> 0
0
0
<COMMON> 51,102
<OTHER-SE> 868,854
<TOTAL-LIABILITY-AND-EQUITY> 991,086
<SALES> 0
<TOTAL-REVENUES> 357,579
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 166,882
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 190,697
<INCOME-TAX> 57,728
<INCOME-CONTINUING> 132,969
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,969
<EPS-BASIC> .02
<EPS-DILUTED> 0
</TABLE>
