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 September 30, 1997
or
[ ] Transition Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Transition Period from ------------to------------
- --------------------------------------------------------------------------------
Commission File Number 33-87570
I.R.S. Employer Identification Number 41-1793975
American Church Mortgage Company
Incorporated Under the Laws of the State of Minnesota
10237 Yellow Circle Drive
Minnetonka, MN 55343
Telephone: (612) 945-9455
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 requirements
for the past 90 days. Yes X No
The number of shares outstanding of the Registrant's stock as of October
31, 1997 was:
487,775 Shares of Common Stock Outstanding
1
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
INDEX Page
No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets September 30, 1997 and 1996..............................3
Statements of Operations
Nine Month Periods Ending September 30, 1997 and 1996.................4
Interim Three Month Periods Ending
September 30, 1997 and 1996.........................................4
Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1996.........................5
Statement of Stockholders Equity........................................6
Notes to Financial Statements ..........................................7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...........13
Item 6. Exhibits and Reports on Form 8-K .............................13
Signatures'..........................................13
2
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED BALANCE SHEETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, September 30,
1997 1996
<S> <C> <C>
Assets:
Current Assets
Cash and Cash Equivalents.............................. $ 99,536 $ 592,045
Prepaid Expense........................................ - 0 - 695
Current Maturities of Loans Receivable................ 61,543 33,722
---------- -----------
Total current Assets: 161,079 626,462
Loans Receivable, net of current maturities............ 3,184,573 2,022,698
Bonds Receivable....................................... 124,668 72,805
Deferred Offering Costs................................ 30,558 - 0 -
Deferred Tax Asset..................................... 15,000 - 0 -
Organizational Expenses, (net of accumulated
amortization September 30, 1997, $1,011; September
30, 1996, $708)...................................... 540 844
---------- ----------
Total Assets: $ 3,516,418 $ 2,722,809
========== ==========
Liabilities and Shareholder's Equity:
Current Liabilities:
Accounts Payable....................................... $ 36,129 $ 1,022
Deferred Income........................................ 11,066 - 0 -
Dividends Payable...................................... 87,103 62,344
---------- ----------
Total current Liabilities:......................... 134,298 63,366
Deferred Income, net of current deferred Income........ 36,717 38,415
Shareholder's Equity
Common stock, par value $.01 per share; authorized
30,000,000 shares; issued and outstanding 368,066
as of September 30, 1997, 292,606 shares as of
September 30, 1996................................ 3,681 2,926
Additional Paid in Capital............................. 3,389,106 2,663,104
Accumulated Deficit.................................... (47,384) (45,002)
--------- ----------
Total Shareholders Equity: 3,345,403 2,621,028
--------- ----------
$ 3,516,418 $ 2,722,809
========= ==========
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
3
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1997 1996 1997 1996
-------- --------- ------- -------
<S> <C> <C> <C> <C>
Revenues
Interest Income Loans........................... $ 230,245 $ 125,073 $ 88,414 $ 57,756
Interest Income Other........................... 17,437 - 0 - 3,460 - 0 -
Capital Gains Realized.......................... 3,157 - 0 - 1,097 - 0 -
Origination Income.............................. 8,347 4,640 2,824 1,613
------- ------- ------ ------
Total Revenues: 259,186 129,713 95,795 59,369
Expenses
Professional Fees............................... 7,862 11,753 1,062 2,261
Director Fees................................... 1,600 - 0 - - 0 - 800
Amortization.................................... 228 228 76 76
Escrow Interest Expense......................... - 0 - 37,274 - 0 - - 0 -
Advisory Fees................................... 4,700 - 0 - 4,700 - 0 -
Other........................................... 5,246 10,603 1,108 7,169
------- ------- ------ ------
Total Expenses: 19,636 59,858 6,946 10,306
Net Operating Income (loss).......................... $ 239,550 $ 69,855 $ 88,849 $ 49,063
------- ------- ------ -------
Provision for (Benefit from )
Income Taxes....................................... 5,000 - 0 - - 0 - - 0 -
------- ------- ------- -------
Net Income (loss).................................... $ 234,550 $ 69,855 $ 88,849 $ 49,063
======= ======= ======= =======
Income (Loss) Per Common Share....................... $ .64 $ .27 $ .24 $ .18
Weighted Average Common Shares
Outstanding.................................... 364,540 257,074 365,212 270,881
Dividends Declared................................... $ 252,040 $ 109,012 $ 87,103 $ 62,334
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
4
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Nine For the Nine
Months Ended Months Ended
September 30, September 30,
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ 234,550 $ 69,855
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Deferred income taxes 5,000
Amortization 228 228
Earnings on Bonds (3,157)
Change in assets and liabilities:
Increase (Decrease) in prepaid expenses - 0 - (695)
Increase (Decrease) in accounts payable (2,911) (48,472)
Increase (Decrease) in deferred income 1,853 38,415
-------- ---------
Net cash used in operating activities 235,563 59,331
Cash Flows From Investing Activities
Investment in mortgage loans (626,712) (2,070,288)
Collections of mortgage loans 41,420 13,868
Investment in bonds (871) (72,805)
-------- ---------
Net cash used for investing activities (586,163) (2,129,225)
Cash Flows From Financing Activities
Proceeds from stock offering - 0 - 2,526,657
Dividends Paid (162,608) - 0 -
-------- ---------
Net cash from (used for) financing activities (162,608) 2,526,657
-------- ---------
Net increase (Decrease) in Cash (513,208) 456,763
Cash
Beginning of period 612,744 135,282
---------- ----------
End of period $ 99,536 $ 592,045
========== ==========
Supplemental Schedule of Noncash
Financing Activities
Dividends declared but not paid $ 87,103 $ 62,344
Deferred offering costs financed through
accounts payable $ 30,558
Dividends reinvested $ 87,750
Supplemental Cash Flow Information
Cash paid during the period for
Interest - 0 - - 0 -
Income Taxes - 0 - - 0 -
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
5
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
UNAUDITED STATEMENT OF STOCKHOLDER'S EQUITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance, December 31, 1996 359,791 $ 3,598 $ 3,306,437 $ (29,894)
Issuance of 8,275 shares of
common stock, through
Dividend Reinvestment Program 8,275 83 82,670
Net Income 234,550
Dividends declared (252,040)
------- ----- --------- -------
Balance, September 30, 1997 368,066 $ 3,681 $ 3,389,107 $ (47,384)
(unaudited)
</TABLE>
Notes to Financial Statements are an integral part of this Statement.
6
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
NOTES TO UNAUDITED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with the instructions for interim statements and, therefore, do not include all
information and disclosures necessary for a fair presentation of results of
operations, financial position, and changes in cash flow in conformity with
generally accepted accounting principles. However, in the opinion of management,
such statements reflect all adjustments (which include only normal recurring
adjustments) necessary for a fair presentation of the financial position,
results of operations, and cash flows for the period presented.
The unaudited consolidated financial statements of the Company should be read in
conjunction with its December 31, 1996, audited financial statements included in
the Company's Annual Report on Form 10-KSB, as filed with the Securities and
Exchange Commission for the year ended December 31, 1996.
Nature of Business
American Church Mortgage Company, a Minnesota corporation, was incorporated on
May 27, 1994. The Company was organized to engage in the business of making
mortgage loans to churches an other nonprofit religious organizations throughout
the United States, on terms that it establishes for individual organizations.
Accounting Estimates
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principals. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could differ from those estimates.
Cash
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. The Company maintains
some cash in bank deposit accounts which, at times, may exceed federally insured
limits. The Company has not experienced any losses in such accounts.
Marketable Securities
The Company accounts for its debt securities under Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The Company classifies its marketable debt securities as
"held-to-maturity" because it has the intent and ability to hold the securities
to maturity. Securities classified as held-to-maturity are carried at amortized
cost.
Allowance for Loans Receivable
The Company follows a policy of providing an allowance for loans receivable.
However, at September 30, 1997, management believes the loans receivable to be
collectible in all material respects.
Deferred Income
Deferred income represents loan origination fees which are recognized over the
life of the loan as an adjustment to the yield on the loan.
7
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences in recognition of income from loan origination
fees for financial and income tax reporting. Deferred taxes are recognized for
operating losses that are available to offset future taxable income.
For fiscal 1996 and 1997, the Company will elect to be taxed as a Real Estate
Investment Trust (REIT). Accordingly, the Company will not be subject to Federal
income tax to the extent of distributions to its Shareholders if the Company
meets all the requirements under the REIT provisions of the Internal Revenue
Code.
Income (Loss) Per Common Share
Income (loss) per common share is computed based upon the weighted average
number of common and dilutive common equivalent shares outstanding during the
period. Fully diluted and primary income (loss) per common share are the same
for the periods presented.
Newly Issued Accounting Standards
In February 1997, Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" was approved for issuance. The Company will adopt this Statement in
fiscal 1997. The effect of this Statement has not been determined, however, the
impact on the Company's financial position and results of operations is not
expected to be material.
2. MORTGAGE AND BONDS RECEIVABLE
At September 30, 1997, the Company had funded eight first mortgage loans and one
second mortgage loan to churches for an aggregate amount of $3,312,000. The
first mortgage loans made by the Company range in interest rates charged to the
borrowers from 9.75% for annually adjustable 20 year amortized loans to 11.25%
for 15 year fixed interest rate loans. The second mortgage loan made by the
Company bears interest at the rate of 15% (adjusting to 12% upon occurrence of a
continency). The maturity schedule for those loans as of September 30, 1997 is
as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $ 18,343
1998 73,362
1999 181,845
2000 91,310
2001 101,872
Thereafter 2,779,384
---------
Total $3,246,116
</TABLE>
The Company also has three bonds receivable, which are carried at cost plus
amortized interest income. The bonds pay quarterly interest ranging from 7.75%
to 9.55%. The combined principal of $152,000 is due at various maturity dates
between May 15, 2001 and January 1, 2012.
3. STOCK OPTION PLAN
The Company has adopted a Stock Option Plan granting each member of the Board of
Directors and the president of the Advisor (Note 5) an option to purchase 3,000
shares of common stock annually upon their re-election. The purchase price of
the stock will be the fair market value at the grant date. On November 15, 1994,
the Company granted options to purchase an aggregate of 21,000 shares of common
stock at $10 per share. These options became exercisable November 15, 1995 and
expire November 15, 1999. No options have been exercised as of September 30,
1997.
The Company has chosen to account for stock based compensation in accordance
with APB Opinion 25. Management believes that the disclosure requirements of
Statement of Financial Accounting Standards No. 123 are not material to its
financial statements.
8
<PAGE>
4. TRANSACTIONS WITH AFFILIATES
The Company has an Advisory Agreement with Church Loan Advisors, Inc. (Advisor).
The Advisor is responsible for the day-to-day operations of the Company and
provides administrative services and personnel.
Upon non-renewal or termination of the Advisory Agreement, the Company maybe
required to pay the Advisor a termination fee equal to two percent of the value
of the average invested assets of the Company as of the date of termination,
subject to limitations set forth in the Advisory Agreement.
The Company pays the Advisor an annual base management fee of 1.25 percent of
average invested assets (generally defined as the average of the aggregate book
value of the assets invested in securities and equity interests in and loans
secured by real estate), which is payable on a monthly basis. The Advisor will
also receive one-half of the origination fees paid by a mortgage loan borrower,
in connection with a mortgage loan made or renewed by the Company. The Company
paid $4,700 in advisory fees and $10,200 in origination fees from January 1
through September 30, 1997.
The Advisor and the Company are related through common ownership and common
management.
5. INCOME TAXES
The income tax expense (benefit) consists of the following components:
<TABLE>
<CAPTION>
September 30,
1997 1996
<S> <C> <C>
Current $ - $ -
Deferred 5,000 -
------ -----
Total tax expense (benefit) $ 5,000 $ -
====== =====
</TABLE>
The following reconciles the income tax benefit with the expected provision
obtained by applying statutory rates to pretax income:
<TABLE>
<CAPTION>
September 30,
1997 1996
<S> <C> <C>
Expected tax expense (benefit) $ 51,000 $ (300)
(Increase) decrease in valuation allowance 300
Benefit of REIT distributions (46,000)
------- ----
Totals $ 5,000 $ -
======== ====
The components of deferred income taxes are as follows:
</TABLE>
<TABLE>
<CAPTION>
September 30,
1997 1996
<S> <C> <C>
Deferred tax assets:
Temporary differences (loan origination fees) $ 14,000
Net operating loss carry-forward 1,000 $ 1,600
Valuation allowance - (1,600)
-------- ------
Net deferred tax asset $ 15,000 $ -
======== ======
</TABLE>
9
<PAGE>
6. PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK
The Company filed a Registration Statement with the Securities and Exchange
Commission for a secondary public offering of its common stock in 1997. The
Company offered to sell 1,500,000 shares of its common stock at a price of $10
per share. The offering is being underwritten by an affiliate of the Advisor on
a "best efforts" basis. The Company's initial public offering of its shares was
completed in November 1996.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments, none of which
are held for trading purposes, are as follows at September 30, 1997 and 1996:
<TABLE>
<CAPTION>
September 30,
1997 1996
------------------------ --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and equivalents $ 99,536 $ 99,536 $ 592,045 $ 592,045
Loans receivable 3,246,116 3,246,116 2,056,420 2,056,420
Bonds receivable 124,668 124,668 72,805 72,805
</TABLE>
The carrying value of cash and equivalents approximates fair value. The fair
value of the loans receivable and the bonds receivable are estimated by
discounting future cash flows using current discount rates that reflect the
risks associated with similar types of loans.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
The Company was founded in May 1994, began a "best efforts" offering of
its common stock on July 11, 1995, and commenced active business operations on
April 15, 1996 after completion of the "Minimum Amount" in its public offering
(described below). Consequently, for the years ended December 31, 1994 and 1995,
the Company had no operating revenues, and expenses were limited to
organizational and offering-related costs.
On July 11, 1995, the Securities and Exchange Commission declared
effective the Company's offering of 2,000,000 common shares at a price of $10.00
per share. The Company achieved the Minimum Offering of at least 200,000 shares
($2,000,000) sold to not less than 100 individuals (the "Minimum Offering") on
April 15, 1996. Until the Minimum Offering was achieved, the Company could not
commence its active business of making mortgage loans to churches. Consequently,
business operations from Inception (May 27, 1994) to completion of the Minimum
Offering (April 15, 1996) were limited to daily business organizational efforts,
activities relating to the offering, reviewing potential candidates for church
mortgage loans to be made by the Company once the Minimum Offering was achieved,
and conducting informational meetings with brokers and broker-dealers identified
to the Company by the Managing Underwriter.
Between the date upon which the Company began active business
operations (April 15, 1996) and July 1, 1997, the Company made loans to nine
churches in the aggregate amount of $3,312,000, with the average size being
$368,000. The Company has also purchased in the secondary market three church
mortgage bonds at a discount, including two First Mortgage Church Bonds in the
face amount of $50,000 and one Second Mortgage Church Bond in the face amount of
$100,000. Funding of additional mortgage loans is expected to continue on an
on-going basis as funds become available to the Company through (i) the sale of
additional common stock; (ii) prepayment and repayment at maturity of existing
loans; (iii) borrowed funds; and (iv) dividends reinvested under the Company's
Dividend Reinvestment Plan. The Company's initial public offering ended November
8, 1996 with 355,508 of its shares having been sold to 275 investors.
Results of Operations
The Company commenced active business operations on or about April 15,
1996, therefore, results of operations through December 31, 1996 are reflective
of approximately 255 days of operations. As of November 1, 1997, the Company had
funded ten first mortgage loans and two second mortgage loans to churches for an
aggregate amount of $3,972,000 and purchased $52,000 principal amount of First
Mortgage Church Bonds for a purchase price of $47,283 (which includes $407 in
accrued interest), and for $100,000 face amount Second Mortgage Church Bonds for
$72,805. The first mortgage loans made by the Company range in interest rate
charged to the borrowers from 9.75% for annually adjustable 20 year amortized
loans to 11.25% for 15 year fixed interest rate loans. One of the second
mortgage loans made by the Company bears interest at the rate of 15% (adjusting
to 12% upon occurrence of a contingency) and the other is at 11.50% for a five
year period. As of November 1, 1997, the average, principal-adjusted interest
rate on the Company's portfolio of loans was 11.09% and the average current
yield on the Company's portfolio of bonds was 11.20% .
Net income for the nine months ended September 30, 1997 was $234,550
($.64 per share) on total revenues of $259,186. Revenues included segments of
income from interest paid by borrowers, capital gains and origination income,
all of which constitute the Company's "core" income segments under its business
plan. Operations expenses likewise are believed to be reasonably reflective of
the Company's expected on-going expenses which, for the most part, consist
mostly of the Advisory Fee. The Advisory Fee absorbs all operating expenses of
the Company with the exception of professional fees, shareholder services fees,
director fees and costs related to capital-raising activities. The Advisor
waived $23,619 in fees otherwise payable to it during the nine month period
ended September 30, 1997. Comparison of the nine month period ended September
30, 1997 with the same period in 1996 is not believed to be illustrative because
the Company had only 165 calendar days of business operations for the period
ended September 30, 1996 compared with 270 calendar days of operations for the
nine month period ending September 30, 1997.
The Company's Board of Directors declared dividends to Shareholders of
$.23875 for each share held of record on September 30, 1997 compared to $.1927
for each share held of record September 30, 1996. Total revenues for the
Company's third fiscal quarter ended September 30, 1997 was $95,795 up form
$59,369 for the third quarter of 1996. Net income for the third fiscal quarter
ended September 30, 1997 was $88,849 up from $49,063 for the same period ending
September 30, 1996. The dividend declared for September 30, 1997 and 1996
represents an annualized rate of return to Shareholders of 9.50% and 9.25%
respectively.
11
<PAGE>
The Company's total assets increased from $2,722,809 as of September
30, 1996 to $3,516,418 as of September 30, 1997, primarily as a result of the
sale and issuance of the Company's common stock pursuant to its initial public
offering, the proceeds of which were deployed into mortgage loans, church bonds
purchased in the secondary market, and cash and cash equivalent money market
obligations. Shareholders' Equity rose from $2,621,028 to $3,345,403 for the
same reason. The Company's liabilities at the end of the nine month period ended
September 30, 1997 are primarily comprised of a "Deferred Income" item,
reflecting the practice of the Company of recognizing its origination income --
fees charged to borrowers at the commencement of its loans -- over the life of
each loan, and dividends declared as of September 30, 1997 but not yet paid.
Total assets of the Company as of September 30, 1997 were $3,516,418.
Liquidity and Capital Resources
On March 31, 1996 the Company had no assets other than the $200,000 of
paid in capital invested by its promoter, DRM Holdings, for 20,000 shares of the
Company's common stock for which it paid $10 per share, and had incurred no
material obligations, other than accumulated and unpaid expenses pertaining to
its initial public offering. The initial $200,000 capital contribution by DRM
Holdings, Inc. was partially used to pay legal and accounting costs relating to
the organization of the Company, Independent Director's fees and certain
professional and other fees and costs associated with the Company's initial
public offering. On or about April 15, 1996, the Company recorded additional
paid-in capital of $2,019,205 in connection with the sale of the Company's
common stock in its initial public offering and began active business
operations. As of September 30, 1997, the Company had recorded a total of
$3,389,106 in paid in capital, which includes the initial $200,000 investment by
DRM Holdings, Inc.
On September 30, 1997 the Company had liquid assets consisting mainly
of cash and cash equivalents of approximately $99,536, of which $12,433 was
available to be loaned by the Company. The remaining cash and cash equivalents
of $87,103 was income received by the Company and not yet distributed to
Shareholders. Other assets included Loans Receivable (including current portion)
in the amount of $3,246,116, and church bonds in the amount of $124,668. The
Company believes that it is unnecessary for the Company to maintain large amount
of cash or cash equivalents for reserve or other purposes, since most
operational costs are included within the Advisory Fee paid to the Advisor.
Therefore, the intent of the Company is to deploy materially all of the
Company's assets into loans in order to maximize returns to the Company and
yields to its Shareholders.
The Company's revenue is derived principally from interest income, and
secondarily, origination fees and renewal fees generated by mortgage loans which
it makes to churches. The Company also earns income through interest on funds
that are invested pending their use in funding mortgage loans or distributions
of dividends to its Shareholders, and on income generated on church bonds it may
purchase and own. The Company generates revenue through (i) Permitted Temporary
Investments of the net proceeds from the sale of Shares, and (ii) implementation
of its business plan of making mortgage loans to churches and other non-profit
religious organizations. The principal expenses of the Company are Advisory
Fees, legal and accounting fees, communications costs with its Shareholders, and
the expenses of its stock transfer agent, registrar and dividend reinvestment
agent.
The Company's future capital needs are expected to be met by (i)
additional sale of its shares to the public (ii) prepayment, repayment at
maturity and renewal of mortgage loans made by the Company, and (iii) borrowed
funds. The Company believes that the "rolling" effect of mortgage loans
maturing, together with dividends reinvested under the Company's Dividend
Reinvestment Plan, will provide a supplemental source of capital to fund
business operations. Although the Company may borrow funds in an amount not to
exceed 50% of its Average Invested Assets in order to increase its lending
capacity, it has not secured a source for such borrowing.
On September 26, 1997 the Company received approval from the Securities
and Exchange Commission to conduct a second public offering of an additional
1,500,00 shares of common stock at $10 per share. The shares offered will be
sold by securities broker-dealers, on a "best efforts" basis, who are members of
the National Association of Securities Dealers, Inc. ("NASD"). American
Investors Group, Inc., an affiliate of the Advisor, serves as Managing
Underwriter of the Offering and LaSalle St. Securities, Inc., Chicago, Illinois
serves as Co-Underwriter of the Offering. This Offering will terminate no later
than 365 days from September 26, 1997, subject to extension by mutual agreement
of the Company and Managing Underwriter for an additional 120 days, or until
completion of the sale of the Shares, whichever first occurs. The Company
reserves the right to terminate the Offering at any time. The Company intends to
continue to deploy net proceeds form the sale of Shares in the Offering as they
are sold and on a regular basis pursuant to its investment and operating
strategy.
12
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
quarter ended September 30, 1997.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits filed with Form 10-QSB
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: November 12, 1997
AMERICAN CHURCH MORTGAGE COMPANY
By: /s/ V. James Davis
V. James Davis
Chief Executive Officer, Treasurer
(and Chief Financial Officer)
By: /s/ David G. Reinhart
David G. Reinhart
Vice President and Secretary
file:f:\acmc\10qs&ks\10q697.wpd
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 99,536
<SECURITIES> 124,668
<RECEIVABLES> 3,246,116
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 161,079
<PP&E> 0
<DEPRECIATION> 540
<TOTAL-ASSETS> 3,516,418
<CURRENT-LIABILITIES> 134,298
<BONDS> 0
0
0
<COMMON> 3,681
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,516,418
<SALES> 0
<TOTAL-REVENUES> 259,186
<CGS> 0
<TOTAL-COSTS> 19,636
<OTHER-EXPENSES> 5,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 239,550
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 234,550
<EPS-PRIMARY> .64
<EPS-DILUTED> 0
</TABLE>
