U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1997
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
For the transition period from _______________ to _______________
Commission File No. 0-12240
NOTE BANKERS OF AMERICA, INC.
(Name of Small Business Issuer in its Charter)
TEXAS 84-0882076
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
770 S. Post Oak Lane Suite 690
Houston, Texas 77056
(Address of Principal Executive Offices)
Issuer's Telephone Number: (713) 840-0230
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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 / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
May 31,1997
Common Voting Stock - 22,530,000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements.
<TABLE>
<CAPTION>
NOTE BANKERS OF AMERICA, INC.
Consolidated Balance Sheets
March 31,1997
ASSETS
<S> <C>
CASH $ 12,775
LOANS HELD FOR RESALE 750,895
FURNITURE, FIXTURES AND EQUIPMENT, at cost, less
accumulated depreciation of $12,019 8,757
REAL ESTATE OWNED 167,194
ACCRUED INCOME AND OTHER ASSETS 23,192
GOODWILL 63,771
-----------
$1,026,584
LIABILITIES AND STOCKHOLDERS' DEFICIT
BANK LINE OF CREDIT $ 80,516
ESCROW DEPOSITS 36,897
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 203,238
NOTES PAYABLE 1,153,186
STOCKHOLDERS' DEFICIT
Preferred Stock, No Par Value; 150,000,000
shares authorized; none issued
Common Stock, $.001 par value; 500,000,000
shares authorized, 22,430,000 shares
issued and outstanding 22,430
Paid In Capital 73,231
Accumulated Deficit (542,914)
Total Stockholders' Deficit (447,253)
$1,026,584
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE BANKERS OF AMERICA, INC.
Consolidated Statements of Operations
3 Months 9 Months
Ended Ended
3/31/97 3/31/97
<S> <C> <C>
REVENUE:
Brokerage Income $ 50,776 $ 293,131
Gain on Loan Sales 6,979 29,674
Interest on Loans 33,210 109,118
Loan Servicing Fees 1,777 5,593
Total Revenue 92,742 437,516
OPERATING EXPENSES
Brokerage Commissions 10,905 104,747
Interest Expense 39,804 121,512
Salaries and Benefits 86,901 288,582
Occupancy 6,845 20,540
Legal and Accounting Expense 7,658 70,028
Amortization and Depreciation 831 2,583
Other 30,815 88,941
Total Operating Expenses 183,760 696,934
LOSS FROM OPERATIONS (91,018) (259,418)
OTHER INCOME
Gain on Sale of Real Estate 0 12,895
Other Income 9,603 20,821
Total Other Income 9,603 33,716
NET LOSS (81,415) (225,702)
Net Losses of Subsidiaries Prior to Acquisition 20,031
CONSOLIDATED NET LOSS $ (81,415) $ (205,671)
LOSS PER SHARE AMOUNTS $ (0.00363) $ (0.01269)
WEIGHTED AVERAGE SHARES OUTSTANDING 22,430,000 16,213,667
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE BANKERS OF AMERICA, INC.
Consolidated Statement of Change in Stockholders' Equity
For the Three Months Ended 9-30-96, 12-31-96 and 3-31-97
Common Stock Paid In Retained Stockholders'
Shares Amount Capital Earnings Equity
<S> <C> <C> <C> <C> <C>
Balances June 30, 1996 227,000 227 4,472,279 (4,495,506) (23,000)
Net Loss - 3 months ended 9/30/96 (90,317) (90,317)
Issue Common Stock 22,203,000 22,203 27,797 50,000
Pooling of Interest :
Combination
(a reverse acquisition) (4,500,076) 4,495,506 (4,570)
Private Mortgage Bankers, Inc.
Retained Earnings (Deficit)
June 30, 1996 (274,813) (274,813)
Par value of stock issued
in excess of book value
of the combined company (62,430) (62,430)
Balances September 30, 1996 22,430,000 22,430 0 (427,560) (405,130)
Net Loss - 3 months ended 12/31/96 (43,939) (43,939)
Debt cancelled in exchange
for common stock 58,231 58,231
Sale of Common Stock 15,000 15,000
Balances December 31, 1996 22,430,000 22,430 73,231 (471,499) (375,838)
Net Loss - 3 months ended 3/31/97 (81,415) (81,415)
Correct expenses reported for
quarter ended 12/31/96 - 10,000 10,000
Balances March 31, 1997 22,430,000 22,430 73,231 (542,914) (447,253)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE BANKERS OF AMERICA, INC.
Consolidated Statements of Cash Flow
3 Months 9 Months
Ended Ended
3/31/97 3/31/97
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (81,415) $(235,704)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and Amortization 831 2,584
Expenses paid by a shareholder on behalf of the company
and accounted for as contributed capital 4,801
Amortization of unearned
discounts and fees (3,762) (13,901)
Changes in operating assets and liabilities:
Decrease (increase) in accrued
income and other assets (1,606) (575)
(Decrease) increase in accounts payable and accrued expenses 34,410 46,042
Less accrued expenses paid by a shareholder on behalf of
the company and accounted for as contributed capital 15,199
Gain on sale of loans (6,979) (29,674)
Gain on sale of real estate (13,355)
Net cash used in operating
activities (58,521) (224,583)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Loans (82,674) (216,895)
Proceeds from sale of loans 231,130 475,191
Payments received on loans 64,775 119,991
Purchase of real estate and improvements (18,473) (43,092)
Proceeds from sale of real estate - 65,405
Net cash provided by (used in)
investing activities 194,758 400,600
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in escrow
deposits (21,989) 995
Payments on bank line of credit (146,917) (165,417)
Proceeds from notes payable 205,674 341,313
Payments on notes payable (193,140) (407,934)
Proceeds from sale of stock 45,000
Net cash provided by (used in)
financing activities (156,372) (186,043)
(DECREASE) INCREASE IN CASH (20,135) (10,026)
CASH - beginning of period 32,910 22,801
CASH - end of period $ 12,775 $ 12,775
SUPPLEMENTAL CASH FLOWS
INFORMATION:
Escrow deposits transferred to
Mortgage Payments $ $ 10,442
Notes given for purchase of
Private Mortgage Bankers Inc. Stock $ $ 60,000
Note given for purchase of
Life Today Financial Services, Inc. Stock $ $ 25,000
Note given for purchase of
Life Today, Inc. Stock $ $ 25,000
Notes payable exchanged for
Note Bankers of America stock $ $ 50,000
Accounts payable exchanged for
Note Bankers of America stock $ $ 8,231
</TABLE>
<PAGE>
NOTE BANKERS OF AMERICA, INC.
Notes to Consolidated Financial Statements
Organization:
-------------
(1)General Genetics Corporation was formed in 1982, but business activity
had been substantially discontinued since 1986. In July of 1996 Life Today
Inc., purchased Life Today Financial Services, Inc., and later that month
Private Mortgage Bankers, Inc., purchased Life Today, Inc.
On August 30, 1996, 100% of the outstanding shares of Private Mortgage
Bankers Inc., were acquired by General Genetics Corporation in exchange for
20,313,000 shares of common stock of General Genetics Corporation in a
transaction accounted for as a reverse acquisition. Upon completion of the
acquisition, the stockholders of the Company became the controlling
stockholders of General Genetics Corporation.
September 25, 1996, General Genetics Corporation was merged into NOTE
BANKERS OF AMERICA, INC.
(2) Business Activities:
--------------------
The Company purchases privately-held, owner financed mortgages from
individuals who have personally financed the sale of real property. The
Company either holds the loans for investment purposes or sells them to
individual investors, banks or other institutions. The Company is also in the
business of brokering owner-financed mortgages.
Another principal business activity of the Company is to broker life
insurance policies of terminally ill individuals to other investors or
institutions. The life insurance policyholder receives a percentage of the
face amount of the policy, determined by certain factors, including the
insured's life expectancy. The Company receives a commission to provide this
brokerage service.
(3) Consolidation Accounting Policies:
------------------------------------
The financial statements reflect the acquisitions of Life Today
Financial Services, Inc., by Life Today, Inc., and the acquisition of Life
Today by Private Mortgage Bankers, Inc., as purchases resulting in Goodwill
(excess of purchase price over net worth) of $63,771. The acquisition of
Private Mortgage Bankers, Inc., by the Registrant represents and has been
accounted for as a pooling of interest and a reverse acquisition whereby
Private Mortgage Bankers, Inc., was the acquiror and for financial statement
purposes, the historical financial statements, of the Registrant will be those
of Private Mortgage Bankers, Inc. Therefore, the registrants Paid in Capital
of $4,472,279 has been offset against the registrants deficit of $4,495,506 as
of June 30, 1996, and the acquiror's net deficit has been charged $67,000 for
the par value of stock issued to accomplish the acquisition in excess of the
book value of the combiner company. All intercompany transactions are
eliminated in consolidation.
(4) Furniture, Fixtures and Equipment:
-------------------------------------
Furniture, fixtures and equipment is stated at cost less accumulated
depreciation. Depreciation of furniture, fixtures and equipment is computed
using the straight-line method over estimated useful lives of the assets of
five years.
(5) Loans Held for Resale:
------------------------
Loans to be held for an indefinite period of time are classified as
available for sale and are carried at the lower of cost or market. Cost is
computed as the principal amount outstanding, net of unearned discounts and
deferred loan fees and expenses. Unearned discounts on loans are recognized as
income over the term of the loans on a level-yield method. These loans are
sold in response to changes in market interest rates, liquidity needs or other
similar factors.
The allowance of credit losses is established through a provision for
credit losses charged to operating expense. The allowance represents an amount
which, in management's judgement will be adequate to absorb possible losses on
existing credits which may become uncollectible. Management's judgement in
determining the adequacy of the allowance is based on evaluations of the
collectibility of loans. These evaluations take into consideration such
factors as changes in the nature and volume of the loan portfolio, current
economic conditions, overall portfolio quality and review of specific credits.
The Company began accounting for impaired loans in 1995 as prescribed in
Statement of Financial Accounting Standards No.118, "Accounting by Creditors
for Impairment of a Loan" (SFAS No.118). Impaired loans are measured on the
present value of expected future cash flows discounted at the loan's effective
interest rate or, as a practical expedient, at the loan's observable market
price or the fair value of the collateral if the loan is collateral dependent.
The adoption of SFAS No.118 had no material impact upon the financial
statement of the Company.
(6) Loan Origination Costs:
------------------------
Loan origination costs are deferred and amortized over the lives of the
related loans as an adjustment of yield.
(7) Real Estate Owned:
--------------------
Real estate owned represents property purchased for investment or
acquired through foreclosure. Real estate owned is carried at the lower of
cost or fair value. Reductions in the balance of real estate owned at the time
of foreclosure are charged to the allowance for credit losses. Any subsequent
writedowns to reflect current fair value are charged to operating expense.
(8) Income Taxes:
--------------
The Company recognizes income taxes in accordance with Statement of
Financial Accounting Standards No.109, "Accounting for Income Taxes" (SFAS
No.109). Under this method, deferred income taxes are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis.
Under SFAS No.109, deferred tax assets are recognized for deductible
temporary differences and operating loss and tax credit carryforwards, and
then a valuation allowance is established to reduce that deferred tax asset if
it is "more likely than not" that the related tax benefits will not be
realized.
(9) Brokerage Income:
------------------
Revenue is recognized when a life insurance policy is sold to another
investor life insurance company and both parties are funded. Under insurance
regulations, the insured has 15 calendar days, after receipt of the proceeds,
to rescind the sale of the life insurance policy. If the sale is rescinded,
the sales proceeds and the commission is returned to the purchasing insurance
company. The Company accounts for any rescissions during the month the life
insurance policy was originally sold. Since inception, the Company has not
had a policy sale rescinded.
(10) Commitments and Contingencies:
-------------------------------
The company executed a "Loan Acquisition, Servicing and Repurchase
Agreement" with a bank in 1991 under the terms of which the company brokered
certain mortgage loans to the bank and provides servicing of the loans for the
bank. The agreement includes a default agreement under which the company is to
"buy back" mortgage loans that become delinquent. As of March 31,1997 there
were 23 loans being serviced by the company with a amortized cost basis to the
bank of approximately $522,103. All of the loans are secured by single family,
owner occupied residences in the greater Houston area and none were 60 days
past due at March 31, 1997. Performance under the agreement is guaranteed by a
major stockholder of the Company and a former stockholder of a subsidiary
corporation. No significant loss to the company under this agreement is
anticipated by management.
(11) Estimates:
---------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount 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.
(12) Fair Value of Financial Instruments
---------------------------------------
The Company's only financial instruments are accounts payable and
accrued expenses. Management believes the carrying amount of these financial
instruments approximate their fair values.
(13) Loss Per Common Share:
------------------------
The loss per share data was computed based on the weighted average number
of common shares outstanding. The Company authorized a 1 share of new for 20
old share reverse stock split on August 30, 1996. All share and per share
amounts have been adjusted to give effect to the stock split.
(14) Marketable Equity Securities:
------------------------------
The Company has certain marketable equity securities, at March 31, 1997
deemed by management to have no fair value.
(15) Notes Receivable - Other:
----------------------------
The Company had certain notes receivable, dated in 1984, for
approximately $150,000 of which management had deemed uncollectible and had
fully reserved for all years presented in the accompanying financial
statements.
(16) Revolving Line of Credit:
---------------------------
The Company had a revolving line of credit with a bank in the maximum
amount of $250,000 which matured January 23, 1997. The line of credit was
used by the Company solely to finance the purchase of single family
residential loans and the holding of such loans until they are sold. The
balance of $80,516.00 as of March 31, 1997 is being liquidated as the Company
sells the underlying mortgages. Funds from sources other than the underlying
mortgages will be required to fully liquidate the balance.
(17) Notes Payable:
--------------
At March 31, 1997, the Company had a note payable to a bank for $47,339
which matured January 23, 1997, including all interest accrued thereon at the
bank's prime rate plus 2%. The note is collateralized by a single family
residential property and guaranteed by a major stockholder of the Company and
a former stockholder of a subsidiary corporation. The note will be liquidated
with the sale of the real estate.
On March 31, 1997, the Company had financial arrangements with various
individuals through their individual retirement (IRA) accounts, which were
originated to finance the purchase of mortgage loans and real estate. Notes
collateralized by mortgage loans mature at various dates from 1997 to 2021.
The notes become due and payable immediately upon demand of individuals.
Principal and interest are payable monthly, at rates ranging from 11% to 12 %.
In the event of foreclosure, the notes payable are collateralized by the
underlying real estate; principal payments are discontinued and interest only
is payable monthly. Upon the Company's sale of the real estate and creation
of a new mortgage loan, principal payments and interest are due monthly, based
on the term and maturity date of the new mortgage loan. Upon the Company's
sale of real estate for cash, the note payable becomes unsecured. The Company
is obligated to make a best effort to collateralize the note with a new
mortgage loan purchase or real estate purchase. Unsecured notes and notes
secured by real estate have no stated maturity date. Interest is payable
monthly at rates ranging from 11% to 12%. At March 31, 1997 the notes payable
to individuals pursuant to this arrangement totaled $684,438.
The Company has various notes to two individuals, having no written
terms, including the maturity dates and interest rates. Some of the notes are
due upon the maturity of the underlying mortgage loan collateral; and the
other notes have no stated maturity date and are unsecured. Interest rates
vary between 12% to 13% and for some notes, interest is payable monthly; for
others, interest is due at maturity of the underlying mortgage loan
collateral. Should an individual desire to liquidate his account, upon
written notice, the Company will employ its best efforts and has up to six
months to sell the underlying collateral for cash proceeds to be remitted to
the individual. In such liquidation, funds from sources other than the
underlying mortgage loans would be required. The collateralized notes total
$90,323 and the unsecured notes total $154,132 at March 31, 1997.
The Company has two notes payable for the purchase of stock in Private
Mortgage Bankers, Inc. of $30,000 each due August 15, 1999 with interest
payable monthly at the rate of eight percent.
(18) Concentrations of Credit Risk
--------------------------------
The Company's financial instruments which are exposed to concentrations
of credit risk consist primarily of loans receivable secured by single family
residential mortgages in Houston and surrounding area. The Company assesses
its credit risk and provides an allowance for credit loss for any
loans which it deems doubtful of collection.
(19) Loans Receivable:
-----------------
Major classifications of loans at March 31, 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Residential real estate:
Single Family residential $900,581
Multi-Family residential 23,489
Commercial 15,018
Land 8,087
--------
$947,175
Less:
Loan fees and unearned discounts 186,280
Allowance for credit losses 10,000
--------
$750,895
========
</TABLE>
<PAGE>
Item 2.
Management's Discussion and Analysis or Plan of Operation.
This report on Form 10-QSB contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The Company intends that such
forward-looking statements be subject to its safe harbors created thereby.
The following is a discussion and analysis of the consolidated financial
condition of the Company as of March 31, 1997 and of the results of operations
for the Company for the three and nine months ended March 31, 1997, and of
certain factors that may affect the Company's prospective financial condition
and results of operations. The following should be read in conjunction with
the unaudited consolidated financial statements and related notes appearing
elsewhere herein.
Prior to September 30, 1996, the Company, formerly known as General
Genetics Corporation, was essentially dormant with no business activities.
General Genetics Corporation was formed in 1982, but business activity has
been substantially discontinued since 1986. In July of 1996 Life Today Inc.,
purchased Life Today Financial Services, Inc., and later that month Private
Mortgage Bankers, Inc., purchased Life Today, Inc. On August 30, 1996, 100%
of the outstanding shares of Private Mortgage Bankers Inc., were acquired by
General Genetics Corporation in exchange for shares of common stock of General
Genetics Corporation in a transaction accounted for as a reverse acquisition.
Upon completion of the acquisition, the stockholders of the Company became the
controlling stockholders of General Genetics Corporation. On September 25,
1996, General Genetics Corporation was merged into Note Bankers of America,
Inc. These events make period to period and trend analysis of the Company's
statements difficult. Comparative discussions herein are based upon current
and prior period proforma financial statements prepared by management for each
of its primary operating subsidiary units (P.B. and Life Today Companies),
which proforma financial statements are included as footnotes to this
discussion to facilitate meaningful comparison. In the opinion of management,
all adjustments considered necessary for a fair presentation have been
included.
OVERVIEW
The Company is a speciality financial services holding company that
primarily conducts business in two distinct areas:
(1) providing viatical settlements for terminally ill individuals by
purchasing life insurance policies ("Viatical Receivables") from terminally
ill individuals, both acting as a broker and acting for its own principal
investment account; and
(2) purchasing, brokering, acquiring, repackaging, holding for
investment and acting as a dealer in portfolios of "owner financed"
residential and "light" commercial real property first mortgage loans,
primarily originated as owner financed ("Mortgage Receivables").
The Company's financial statements consolidate the assets, liabilities
and operations of Private Mortgage Bankers, Inc. ("P.B."), the Company's
wholly-owned special purpose subsidiary through which the Company conducts it
mortgage purchase operations, and Life Today, Inc. ("Life today"), the
Company's wholly-owned special purpose subsidiary through which the Company
conducts its viatical settlement business operations.
RECENT DEVELOPMENTS
Through December 31, 1996, P.B. and Life Today have primarily acted as
brokers in the purchase of Mortgage Receivables and Viatical Receivables by
originating and packaging the Receivables for presentation for purchase by
prospective third party investors. P.B. and Life Today have developed a
continuing relationship with several individual investors who provided
financing for the purchase of their current portfolio of Receivables. Current
investors in these Receivables include primarily high net worth individuals
and individual pension and retirement accounts. However, dependence upon
individual third party investor-purchasers has necessarily limited the ability
of P.B. and Life Today to significantly expand the volume of their purchases
and thereby has limited their ability to generate profits. Management
believes that future profitability is dependent upon increasing the volume of
Receivables purchased and purchasing Receivables as principal for its own
account, thereby increasing the return realized on each Receivable. If the
Company is to significantly increase the volume of Receivables purchased,
management believes that it must provide for the marketing of funds through
its own investment program and utilize those funds for the purchase of
Receivables as principal for its own account.
Management is currently implementing plans to undertake on behalf of P.B.
and Life Today private debt offerings to raise a minimum of $10,000,000 to be
used to acquire Receivables for its own account and then to "warehouse" the
Receivables it has purchased into pools. The Company intends to then offer
these pools of Receivables to institutional investors.
RESULTS OF OPERATIONS
PRIVATE MORTGAGE BANKERS, INC.(1)
BROKERAGE INCOME - The company closed 7 transactions totaling $16,967 (an
average of $2,424 each) for the three months ended
March 31, 1996. For the quarter ended March 31, 1997, none were closed.
GAIN ON LOAN SALES - The company sold 3 loans for a total gain of $6,366
for the quarter ended March 31, 1996, and 4 loans for a total gain of $18,037
for the quarter ended March 31, 1997.
GAIN ON SALE OF HOUSES - The company sold 2 houses for a total gain of
$18,831 for the quarter ended March 31, 1996, no houses were sold for the
quarter ended March 31, 1997.
OTHER OPERATING EXPENSE - Other operating expense decreased from
$15,110 in the quarter ended March 31, 1996 to $9,264 for the respective
quarter in 1997. The decrease is due to managements efforts to hold costs to a
minimum while seeking investment capital.
LIFE TODAY COMPANIES (2)
BROKERAGE REVENUE - For the quarter ended March 31, 1997 the company
closed 8 transactions for a total of $50,776 compared to 14 transactions for a
total of $93,292 in the same quarter of 1996.
DIRECT COST - Direct costs as a percentage of revenue were as follows:
1997 1996
---- ----
3 mos. ended 3/31 22% 16%
The increase in direct cost as a percentage of revenue is partially due
to arrangements with a certain broker.
SALARIES AND BENEFITS - In 1996 salaries were paid based upon income and
cash available. In 1997 salaries are stated amounts and for the quarters ended
March 31, 1997, and include accruals for salaries earned but not yet paid.
GENERAL GENETICS CORPORATION (3)
Note Bankers of American, Inc. (fka General Genetics Corporation)
incurred expenses of $38,292 for the quarter ended March 31, 1997. General
Genetics Corporation was not active for the related periods in 1996. The
expenses incurred in 1997 are primarily allocated shares of Private Mortgage
Bankers, Inc. and Life Today, Inc. salaries and office expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of cash during the quarter ending March 31,
1997, were funds generated by sales of loans and viatical brokerage fees. The
Company's cash requirements have been and will continue to be significant.
Financial difficulties have not been uncommon in the history of the Company
and there can be no assurance that it will be able to raise the capital it now
needs. The future success of the Company, and its growth, depends on its
ability to raise additional funds. If the Company is successful in obtaining
short-term funds, they will be disbursed for general operations.
Once short term capital to meet the requirements has been obtained,
management of the Company will be able to next address an updated and revised
business plan for the next twelve months of operations. It should be noted
that, even with a revised business plan, there is no assurance that the
Company will be successful in bringing sufficient long term capital to achieve
profitability.
As of March 31, 1997, the current liabilities exceeded current assets by
$512,575, a ratio of 1.6 to 1. The available cash of $12,775 represented
1.62% of total current assets. Cash flow required by operating activities
decreased by 30% ($25,219) from the quarter ended December 31, 1996 to the
quarter ended March 31, 1997.
<PAGE>
<TABLE>
<CAPTION>
PRIVATE MORTGAGE BANKERS, INC.
Statements of Operations
For the Three Months Ended
Mar. 31 Mar. 31
1997 1996
<S> <C> <C>
REVENUE:
Brokerage Income $ 0 $ 7,620
Gain on Loan Sales 6,979 11,868
Interest on Loans 33,210 44,701
Loan Servicing Fees 1,777 971
Total Revenue 41,966 65,160
OPERATING EXPENSES
Brokerage Commissions 0 4,989
Interest Expense 39,804 42,518
Salaries and Benefits 23,532 39,042
Occupancy 4,445 6,299
Legal and Accounting Expense 1,742 2,899
Amortization and Depreciation 0 0
Other 9,264 15110
Total Operating Expenses 78,787 110,857
LOSS FROM OPERATIONS (36,821) (45,697)
OTHER INCOME
Gain on Sale of Real Estate 0 0
Other Income 9,510 8,368
Total Other Income 9,510 8,368
NET LOSS $(27,311) $(37,329)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMBINED LIFE TODAY, INC AND LIFE TODAY FINANCIAL SERVICES, INC.
Statements of Operations For the Three Months Ended
Mar. 31 Mar. 31
1997 1996
<S> <C> <C>
BROKERAGE REVENUE $ 50,776 $ 93,292
DIRECT COSTS 11,392 14,863
Gross Profit 39,384 78,429
OPERATING EXPENSES
Advertising 5,075 1,446
Interest Expense 299 205
Salaries and Benefits 40,410 19,235
Depreciation and amortization 831 877
Other 8,675 24205
Total Operating Expenses 55,290 45,968
LOSS FROM OPERATIONS (15,906) 32,461
OTHER INCOME
Loss on Sale of Assets
Other Income 93
Total Other Income 93 0
NET INCOME (LOSS) $(15,813) $ 32,461
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE BANKERS OF AMERICA, INC.
fka General Genetics Inc.
Statements of Operations
For the Three Months Ended
Mar. 31 Mar. 31
1997 1996
<S> <C> <C>
REVENUE: $ 0 $ 0
OPERATING EXPENSES
Advertising 5,000
Interest Expense
Salaries and Benefits 22,959
Occupancy
Legal and Accounting Expense 5,436
Amortization and Depreciation
Other 4,897 900
Total Operating Expenses 38,292 900
LOSS FROM OPERATIONS 38,292 900
OTHER INCOME 0 0
NET LOSS $ 38,292 $ 900
</TABLE>
<PAGE>
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings.
None; not applicable.
Item 2.Changes in Securities.
None; not applicable.
Item 3.Defaults Upon Senior Securities.
None; not applicable.
Item 4.Submission of Matters to a Vote of Security Holders.
Item 5.Other Information.
None; not applicable
Item 6.Exhibits and Reports on Form 8-K.
(a)Exhibits.
27 Financial Data Sheet
(b)Reports on Form 8-K.
None
<PAGE>
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.
NOTE BANKERS OF AMERICA, INC.
/S/ E. Donald DeYoung
Date: May 9, 1997 By ________________________________________
E. Donald DeYoung, Director/President
/S/ Allen E. Myers
Date: May 9, 1997 By _______________________________
Allen E. Myers, Director/CEO
/S/ Louis J. Blendeman
Date: May 9, 1997 By ________________________________
Louis J. Blenderman, Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements contained in the form 10-Q for the quarter
ended March 31, 1997, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,775
<SECURITIES> 0
<RECEIVABLES> 23,192
<ALLOWANCES> (10,000)
<INVENTORY> 760,895
<CURRENT-ASSETS> 786,862
<PP&E> 20,776
<DEPRECIATION> (12,019)
<TOTAL-ASSETS> 1,026,584
<CURRENT-LIABILITIES> 1,299,437
<BONDS> 0
<COMMON> 22,430
0
0
<OTHER-SE> 73,231
<TOTAL-LIABILITY-AND-EQUITY> 1,026,584
<SALES> 231,130
<TOTAL-REVENUES> 326,496
<CGS> 224,151
<TOTAL-COSTS> 235,056
<OTHER-EXPENSES> 133,051
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,804
<INCOME-PRETAX> (81,415)
<INCOME-TAX> 0
<INCOME-CONTINUING> (81,415)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (81,415)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
