UNITED STATES 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 QUARTERLY PERIOD ENDED JUNE 30, 1998,
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, 1998 -- 1,000 shares
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FUND AMERICA INVESTORS CORPORATION
FORM 10-Q FOR THE
SIX MONTHS ENDED JUNE 30, 1998
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
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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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FUND AMERICA INVESTORS CORPORATION
BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1998 1997
____________ ___________
<S> <C> <C>
Assets
Cash $ 99,557 $117,269
Deferred offering costs 38,903 38,903
_________ ________
Total assets $138,460 $156,172
========= ========
Liabilities -
Accounts payable $ 108 $ 106
--------- --------
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 (231,648) (213,934)
-------- --------
Total shareholder's equity 138,352 156,066
-------- --------
Total liabilities and
shareholder's equity $138,460 $156,172
======== ========
See notes to financial statements
Page 3
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<TABLE>
FUND AMERICA INVESTORS CORPORATION
Statements of Operations
(Unaudited)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
1998 1997 1998 1997
------- ------- -------- -------
<S> <C> <C> <C> <C>
Revenue
Interest income $1,261 $1,171 $2,565 $2,397
------ ------ ------ ------
Total revenue 1,261 1,171 2,565 2,397
------ ------ ------ ------
Expenses
General and
administrative 471 460 8,171 7,081
Legal fees 108 550 108 682
Management fees 6,000 6,000 12,000 12,000
------ ------ ------ ------
Total expenses 6,579 7,010 20,279 19,763
------ ------ ------ ------
Net loss $(5,318) $(5,839) $(17,714) $(17,366)
====== ====== ====== ======
See notes to financial statements
Page 4
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<TABLE>
FUND AMERICA INVESTORS CORPORATION
Statements of Cash Flows
(Unaudited)
<CAPTION>
Six months ended
June 30,
----------------------
1998 1997
---------- ---------
<S> <C> <C>
Net cash flow used in
operating activities:
Net loss $(17,714) $(17,366)
Adjustments to reconcile
net loss to net cash flow
from operating activities:
Changes in operating
assets and liabilities:
Accounts payable 2 2,010
-------- --------
Net cash flow used in
operating activities (17,712) (15,356)
-------- --------
Net decrease in cash (17,712) (15,356)
Cash at beginning of period 117,269 147,076
-------- --------
Cash at end of period $ 99,557 $131,720
======== ========
See notes to financial statements
Page 5
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FUND AMERICA INVESTORS CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Six months ended June 30, 1998 and 1997
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 (1)
issuing and selling bonds; (2) investing cash balances on an interim
basis in high quality short-term securities; (3) purchasing, owning,
holding, pledging or selling the collateral or other mortgage-related
assets; and (4) engaging in other activities which are necessary or
convenient to accomplish the foregoing and are incidental thereto.
During the first quarter ended June 30, 1998, there was no activity on
the Company's fourth Registration Statement No. 33-60662. The Company
is, however, planning to update the Registration Statement through
amendments in order to utilize the $141 million of remaining and unissued
CMOs. After all updates are completed, the Company expects that an
affiliated mortgage company will utilize the remaining balance by
securitizing mortgage loans generated from their operations.
2. Unaudited Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
reporting periods and in accordance with the instructions to Form 10-Q.
In complying to the guidelines, the accompanying financial statements do
not include all of the information and footnotes that are required for a
complete annual reporting period.
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, 1998, and the results
of its operations and cash flows for the periods ended June 30, 1998 and
1997.
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, 1998, $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, 1998 of
$17,714 as compared to a net loss for the six months ended June 30, 1997
of $17,366. An increase in general and administration expenses is the
primary difference in the results of operations between the two reporting
periods.
Page 7
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
SIGNATURES
Page 8
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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, 1998 By: /s/ Helen M. Dickens
-------------------------- ------------------------------
Helen M. Dickens
Vice President,
Secretary/Treasurer
(Duly authorized and
Principal Financial Officer<PAGE>
Page 9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 99557
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 99557
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 138460
<CURRENT-LIABILITIES> 108
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 138342
<TOTAL-LIABILITY-AND-EQUITY> 138460
<SALES> 0
<TOTAL-REVENUES> 2565
<CGS> 0
<TOTAL-COSTS> 20279
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (17714)
<INCOME-TAX> 0
<INCOME-CONTINUING> (17714)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17714)
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>
Not presented since all shares of common stock are held by a sole
shareholder.
</FN>
</TABLE>
