<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,
1997,
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Nos.: 33-60662
FUND AMERICA INVESTORS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 84-1070310
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
6400 S. Fiddler's Green Circle, Suite 1200A, Englewood, Colorado 80111
(Address of principal executive offices)
Registrant's telephone number including area code: (303) 290-6024
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 August 14, 1997 -- 1,000 shares
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FUND AMERICA INVESTORS CORPORATION
FORM 10-Q FOR THE
SIX MONTHS ENDED JUNE 30, 1997
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements 3
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 7
Item 2. Changes in Securities 7
Item 3. Defaults upon Senior Securities 7
Item 4. Submission of Matters to a Vote
of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports 7
SIGNATURES 8
PAGE 2
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUND AMERICA INVESTORS CORPORATION
BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1997 1996
________ ___________
<S> <C> <C>
Assets
Cash $131,720 $147,076
Deferred offering costs 111,672 111,672
________ __________
Total assets $243,392 $258,748
======== ==========
Liabilities - accounts payable $ 2,010 $ -
________ __________
Shareholder's equity
Common stock, par value
$.01 per share;
10,000 shares authorized;
1,000 shares issued and
outstanding 10 10
Additional paid-in capital 369,990 369,990
Accumulated deficit (128,618) (111,252)
________ _________
Total shareholder's equity 241,382 258,748
________ _________
Total liabilities and
shareholder's equity $243,392 $258,748
======== =========
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<TABLE>
FUND AMERICA INVESTORS CORPORATION
Statements of Operations
(Unaudited)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
_________________ ________________
1997 1996 1997 1996
______ _______ ______ _______
<S> <C> <C> <C> <C>
Revenue
Interest income $1,171 $1,485 $2,397 $3,401
Miscellaneous income 0 3,600 0 3,600
______ ______ ______ ______
Total revenue 1,171 5,085 2,397 7,001
______ ______ ______ ______
Expenses
General and administrative 460 1,016 7,081 7,677
Legal fees 550 192 682 368
Management fees 6,000 6,000 12,000 12,000
______ ______ ______ ______
Total expenses 7,010 7,208 19,763 20,045
______ ______ ______ ______
Net loss $(5,839) $(2,123) $(17,366) $(13,044)
======= ======= ======== ========
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<TABLE>
FUND AMERICA INVESTORS CORPORATION
Statements of Cash Flows
(Unaudited)
<CAPTION>
Six months ended
June 30,
________________________
1997 1996
_________ _________
<S> <C> <C>
Net cash flow used in
operating activities:
Net loss $(17,366) $(13,044)
Adjustments to reconcile net
loss to net cash flow
from operating activities:
Changes in operating
assets and liabilities:
Deferred offering costs - 5,000
Accounts payable 2,010 (45,085)
_________ ________
Net cash flow used in
operating activities (15,356) (53,129)
_________ ________
Net decrease in cash (15,356) (53,129)
Cash at beginning of period 147,076 212,361
________ ________
Cash at end of period $131,720 $159,232
======== ========
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FUND AMERICA INVESTORS CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Six months ended June 30, 1997 and 1996
1. Basis of Presentation
Organization
Fund America Investors Corporation (the "Company") was incorporated
in the State of Delaware on October 19, 1987 as a limited purpose finance
corporation. The company was established to engage in the issuance and
administration of Collateralized Mortgage Obligations ("CMOs") which
are secured by mortgage loans or by mortgage loan pass-through
certificates backed by mortgage loans (collectively referred to as the
"Collateral"). The Collateral may be issued and/or guaranteed by
agencies, including the Government National Mortgage Association, the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation, or other entities. To issue such CMOs, the Company may
acquire, hold, sell or pledge the Collateral, but typically these
activities are transacted through trusts beneficially owned and created
by the Company.
The Company may not, either directly or indirectly, through a
beneficially owned trust, engage in any business or investment activity
other than (i) issuing and selling CMOs (ii) investing cash balance on an
interim basis in high quality short-term securities; (iii) purchasing,
owning, holding, pledging or selling the Collateral or other
mortgage-related assets; and (iv)engaging in other activities which are
necessary or convenient to accomplish the foregoing and are incidental
thereto.
Under its fourth Registration Statement, declared effective on July
23, 1993, the Company currently has registered but unissued $141,000,000
in CMOs. The Company will continue to seek opportunities to utilize the
remaining $141 million of registered and unissued CMOs.
2. Unaudited Financial Statements
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the
financial position of the Company at June 30, 1997, and the results of
its operations and cash flows for the periods ended June 30, 1997 and
1996.
Page 6
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Company expects to fund its ongoing operations from its cash
balances, revenue derived from CMO offerings and, if necessary, with
borrowings from its sole shareholder. As of June 30, 1997, $500,000 was
available to be borrowed from the Company's sole shareholder. Any
borrowings will be subordinate and junior to any issued mortgage
securities.
The Company will use substantially all of the net proceeds from the
issuance of each series of CMOs to acquire the mortgage loans or mortgage
certificates pledged as collateral for such series of CMOs, and to pay
issuance expenses incurred in connection with the transaction.
Results of Operations
The Company reported a net loss for the six months ended June 30,
1997 of $17,366 as compared to a net loss for the six months ended June
30, 1996 of $13,044. A decrease of interest earned on cash balances is
the primary difference in the results of operations between the two
reporting periods.
Page 7
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit 27. Financial Data Schedule
B. Form 8-K - None
Page 8
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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.
FUND AMERICA INVESTORS CORPORATION
(Registrant)
Date: August 14, 1997 By: /s/ Helen M. Dickens
Helen M. Dickens
Vice President, Secretary/Treasurer
(Duly authorized and Principal
Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 131720
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 131720
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 243392
<CURRENT-LIABILITIES> 2010
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 241383
<TOTAL-LIABILITY-AND-EQUITY> 243392
<SALES> 0
<TOTAL-REVENUES> 2397
<CGS> 0
<TOTAL-COSTS> 19763
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (17366)
<INCOME-TAX> 0
<INCOME-CONTINUING> (17366)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17366)
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>Not presented, as all shares of common stock are held by a sole
shareholder.
</FN>
</TABLE>
