<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 SEPTEMBER 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 November 14, 1997 -- 1,000 shares
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FUND AMERICA INVESTORS CORPORATION
FORM 10-Q FOR THE
NINE MONTHS ENDED SEPTEMBER 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 Operation 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults upon Senior Securities 8
Item 4. Submission of Matters to a Vote
of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports 8
SIGNATURES 9
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUND AMERICA INVESTORS CORPORATION
BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1997 1996
_____________ ____________
<S> <C> <C>
Assets
Cash $123,234 $147,076
Deferred offering costs 111,672 111,672
________ ________
Total assets $234,906 $258,748
======== ========
Shareholder's equity
Common stock, par value $.01 per
shares; 10,000 shares authorized;
1,000 shares issued and
outstanding 10 10
Additional paid-in capital 369,990 369,990
Accumulated deficit (135,094) (111,252)
________ ________
Total shareholders equity 234,906 258,748
________ ________
Total liabilities and
shareholder's equity $234,906 $258,748
======== ========
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<TABLE>
FUND AMERICA INVESTORS CORPORATION
Statements of Operations
(Unaudited)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
__________________ _________________
1997 1996 1997 1996
______ ______ ______ ______
<S> <C> <C> <C> <C>
Revenue
Interest income $1,100 $1,355 $3,497 $4,756
Miscellaneous income - - - 3,600
______ ______ ______ ______
Total revenue 1,100 1,355 3,497 8,356
______ ______ ______ ______
Expenses
General and
administrative 582 497 7,662 8,174
Legal fees 995 - 1,677 368
Management fees 6,000 6,000 18,000 18,000
_______ _______ ________ ________
Total expenses 7,577 6,497 27,339 26,542
_______ _______ ________ ________
Net loss $(6,477) $(5,142) $(23,842) $(18,186)
======= ======= ======== ========
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<TABLE>
FUND AMERICA INVESTORS CORPORATION
Statements of Cash Flows
(Unaudited)
<CAPTION>
Nine months ended
September 30,
____________________
1997 1996
_______ _______
<S> <C> <C>
Net cash flow from
operating activities:
Net loss $(23,842) $(18,186)
Adjustments to reconcile
net loss to net cash flow
from operating activities:
Changes in operating assets
and liabilities:
Accounts payable - (44,926)
Deferred offering costs - 5,000
________ ________
Net cash flow used in
operating activities (23,842) (52,112)
________ ________
Net decrease in cash (23,842) (58,112)
Cash at beginning of period 147,076 212,361
_______ _______
Cash at end of period $123,234 $154,249
======== ========
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FUND AMERICA INVESTORS CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Nine months ended September 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 its 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 September 30, 1997, and the results
of its operations and cash flows for the periods ended September 30,
1997 and 1996.
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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 September 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 third quarter operations resulted in a net loss of $6,477 and $5,142,
respectively, for the three months ended September 30, 1997 and 1996.
Comparably, the Company reported a net loss for both nine month periods
ended September 30, 1997 and 1996 of $23,842 and $18,186.
Both interim periods reflected the same operating activities, generating
no issuance income while funding normal ongoing expenses. The primary
reason for the increase in the net loss from 1996 to 1997 resulted
from reduced interest earnings on cash balances.
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: November 14, 1997 By: /s/ Helen M. Dickens
Helen M. Dickens
Vice President, Secretary/Treasurer
PAGE 9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 123,233
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 123,233
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 234,906
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 234,906
<TOTAL-LIABILITY-AND-EQUITY> 234,906
<SALES> 0
<TOTAL-REVENUES> 3,497
<CGS> 0
<TOTAL-COSTS> 27,340
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (23,842)
<INCOME-TAX> 0
<INCOME-CONTINUING> (23,842)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,842)
<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>
