UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
December 31, 2004, 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 No.: 33-73748
--------
FUND AMERICA INVESTORS CORPORATION II
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1218906
------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
6400 S. Fiddler's Green Circle, Suite 1200B
Englewood, Colorado 80111
-------------------------------------------
(Address of principal executive offices)
Registrant's telephone number including area code: (303) 290-6025
--------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained, to the
best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an
accelerated filer. [ ] Yes [X] No
State the aggregate market value of the voting stock held by
non-affiliates of the registrant: As of December 31, 2004:
$0.00.
The number of shares outstanding of the Registrant's $0.01
par value common stock, as of March 30, 2004 was 349,000 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
ITEM 1. BUSINESS
- ------- --------
Fund America Investors Corporation II (the "Company") was
incorporated in the State of Delaware on December 14, 1992 as a
limited purpose finance corporation. The Company was established
to engage in the issuance and administration of Collateralized
Mortgage Obligations (the "Bonds") and Asset-Backed Certificates
(the "Certificates", and together with the Bonds, the
"Securities"). The Securities are issued in one or more series,
from time to time, by the Company as described in the prospectus
and series-related prospectus supplement of the Company's latest
effective registration statement.
The Securities of each series can be issued by the Company,
but typically the Company forms a separate trust to act as the
issuer solely for the purpose of issuing a series. A series of
Securities that include Bonds will be issued pursuant to an
indenture and will represent indebtedness of the trust or issuer.
A series of Securities that include Certificates will represent
beneficial ownership in the related trust or issuer. The sole
source of payments to Bondholders or Certificateholders within
each series of Securities is produced from the related trust
property. The trust property is generally comprised of mortgage
loans and/or mortgage-related assets as described in each of the
series' related prospectus supplements.
The Company may not, either directly or indirectly through a
beneficially owned trust, engage in any business or investment
activity other than to; (1) issue and sell Securities; (2)
purchase, own, hold, pledge or sell collateral or other mortgage-
related assets; (3) invest and maintain cash balances on an
interim basis in high quality short-term investments; and (4)
engage in other activities which are necessary or convenient to
accomplish the foregoing and are incidental thereto.
On January 1, 2004, the Company had a total of $561 million
registered and unissued Securities on its Registration Statement
No. 333-33823. No Securities were issued, during the year ended
December 31, 2004. From inception to date, the Company has
issued nineteen series of Securities, which aggregate $2.4
billion in original issued principal. The Company does not have
any further obligations in connection with the issuance of these
Securities. Under accounting principles generally accepted in
the United States of America, these issuances are considered to
be a direct sale of the collateral.
The Company's fifth Registration Statement on Form S-3 was
filed on September 30, 1998 with the Securities and Exchange
Commission. The purpose of this filing was to register an
additional amount of Securities and to merge the Company's
Effective Registration Statement No. 333-33823, thereby
increasing the total amount of Securities that can be issued by
the Company. As of December 31, 2004, this Registration
Statement was not effective and was subject to completion or
amendment. The Company intends to file one or more further
amendments to complete this Registration Statement and to bring
it effective.
Pursuant to Rule 3-11 of Regulation S-X, if a registrant is
an inactive entity as defined in this rule, the financial
statements required by this regulation for purposes of reports
pursuant to the Securities Exchange Act of 1934 may be unaudited.
The Company meets all the conditions as defined for an inactive
entity under this rule and accordingly has elected to file
unaudited financial statements contained herein for the current
year-end, December 31, 2004.
ITEM 2. PROPERTIES
- ------- ----------
The Company has no material physical properties.
ITEM 3. LEGAL PROCEEDINGS None.
- ------- -----------------
-2-
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ------------------------------------------------------
No matters were submitted to the security holders during the
fourth quarter of the fiscal year ended December 31, 2004.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- ------- STOCKHOLDER MATTERS
-----------------------------------------------------
There is no established public trading market for the
Company's common stock and no dividends have been declared
or paid. All of the Company's common stock is owned by a
sole shareholder.
ITEM 6. SELECTED FINANCIAL DATA
- ------- -----------------------
Year Ended December 31,
------------------------------------------------------------------------
Unaudited Unaudited Unaudited
2004 2003 2002 2001 2000
------------ ------------ ------------ ------------ ------------
Income Statement Data:
Revenue $ 1,500 $ 25,073 $ 44,192 $ 30,008 $ 4,956
Net (loss)income $ (10,742) $ 14,069 $ 7,731 $ (8,072) $ 51,682
Net (loss)income per share
of common stock (1) (1) (1) (1) (1)
Balance Sheet Data:
Total assets $ 246,932 $ 257,046 $ 285,367 $ 261,636 $ 257,353
Shareholder's equity $ 245,394 $ 255,936 $ 258,367 $ 261,636 $ 257,208
(1) Not presented, as all shares of common stock are held by a
sole shareholder.
-3-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1. General
-------
As of December 31, 2004, the Company has issued nineteen
series of registered Pass-Through Securities aggregating
$2,439,812,829 in initial amount for all the issuances. Five
series of Bonds remain outstanding on December 31, 2004. The
following list consists of the outstanding series shown with the
initial issuance amounts.
Series Amount Collateral
- --------- ---------------- --------------------------------
1993-A $262,435,000 Trust consisting primarily of
adjustable rate one- to four-
family, first lien mortgage
loans
1993-C $319,000,000 Trust consisting primarily of
Federal National Mortgage
Association and Federal Home
Loan Mortgage Corporation
Securities; private mortgage
backed securities including
certain residual interest
securities; principal component
of bonds issued by the
Resolution Funding Corporation
1994-A $ 44,599,100 Trust consisting primarily of
adjustable rate one- to four-
family, first lien mortgage
loans
1998-B $ 50,703,106 Trust consisting primarily of
three Pooled Fannie Mae
Certificates, one Pooled Ginnie
Mae Certificate, two Pooled
Freddie Mac Certificates and one
Pooled Non-Agency Certificate
2000-1 $ 3,216,000 Trust consisting primarily of
Federal National Mortgage
Association and Federal Home
Loan Mortgage Corporation
Securities
2. Liquidity and Capital Resources
-------------------------------
The Company expects to fund ongoing operations from its cash
balances, revenues derived from the issuance of Securities, and
if necessary, from loans or capital contributions from its sole
shareholder. The current cash position will not adequately fund
overhead costs over the next twelve months without additional
revenues generated during this period. Capital funding will
continue to be provided by the sole shareholder to cover
operating costs on a monthly basis or until the Company generates
sufficient revenue. The funding source for any additional
capital costs relating to the registration of securities will be
determined when the funding is required and will depend on the
cash position at that time.
3. Results of Operations
---------------------
The Company does not have any significant assets other than
cash held for operations and capitalized deferred offering costs.
Major operating activity is initiated from the issuance of
Securities or the preparation in registering Securities to be
issued. Costs incurred with registering Securities are
capitalized until such time as the Securities are issued in an
offering.
Net income may fluctuate from period to period based on the
use of the Company's registered and unissued Securities and calls
on outstanding issuances. The Company generally charges a flat
fee on the issuance of a series of securities and a proportionate
share of deferred costs associated with its registration
statement.
-4-
The Company reported a net loss of $10,742 and net income of
$14,069 for the twelve-months ended December 31, 2004 and
December 31, 2003 respectively, and the Company reported net
income of $7,731 for the twelve-months ended December 31, 2002.
Differences between the three years consist primarily of four
main components of income and expense. First, the Company
reported other bond income in 2003 and 2002 that consisted of
call option fees earned. Call option income can fluctuate due to
the relative composition of the series from which the call right
value or income was determined. The call option income reported
was $25,000 and $44,166 for the years ended 2003 and 2002,
respectively. There was no call option income in 2004. The second
main difference between periods is the reduction in accounting
fees reported under general and administrative expenses. As
discussed below, the Company no longer has its financial
statements audited as a result, expenses decreased by $9,250 from
2002 to 2003 due the reduction in accounting fees. The third main
difference between the reporting years is a reduction in
management fee expense of $7500 for the 2004 year from the 2003
year and a reduction of $16,500 for the 2003 year from the 2002
year due to a restructure of management fees, discussed below.
The fourth main difference is the $9500 loss on impairment of
offering costs recorded in 2004. Deferred offering cost related
to a certain type of loan included in the shelf offering but no
longer in existence due to a change in government regulations,
were written off.
Audited financial statements - Pursuant to Rule 3-11 of
Regulation S-X, if a registrant is an inactive entity as defined
in this rule, the financial statements required by this
regulation for purposes of reports pursuant to the Securities
Exchange Act of 1934 may be unaudited. The Company meets all the
conditions as defined for an inactive entity under this rule and
accordingly had elected to file unaudited financial statements
for the years ended December 31, 2004, December 31, 2003 and
December 31, 2002. The Company paid audit fees of $0, $0, and
$9,250 for the twelve months ended December 31, 2004, 2003 and
2002, respectively.
Management fees - For the years ended 1993 to 2002, the
Company paid facilities management fees to The Chotin Group
Corporation (the "Facilities Manager"), a related party, under a
Management Agreement dated January 1, 1993. Under this
agreement, a fixed monthly fee was paid to the Facilities
Manager. The Company has adopted a new income-based fee
structure that more appropriately matches the composition of its
income as well as the structure of its business operations.
Payment of fees under the January 1, 1993 Management Agreement
ceased on December 31, 2002. The Company paid management fees of
$0, $7,500 and $24,000 for the twelve months ended December 31,
2004, 2003 and 2002, respectively.
4. Forward Looking Statements
--------------------------
The statements contained in this Item 7 and Item 7A that are
not historical facts, including, but not limited to, statements
that can be identified by the use of forward-looking terminology
such as "may," "will," "expect," "anticipate," "estimate" or
"continue" or the negative thereof or other variations thereon or
comparable terminology, are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
and involve a number of risks and uncertainties. The actual
results of the future events described in such forward-looking
statements could differ materially from those stated in such
forward-looking statements. Among the factors that could cause
actual results to differ materially are: the market for mortgage-
backed securities, competition, government regulation and
possible future litigation.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------- ----------------------------------------------------------
Securities issued by the Company are either debt securities
or securities which evidence beneficial ownership interest in
designated trusts established to facilitate the transfer of trust
asset payments to the Bondholders who hold such debt securities
or to the Certificateholders who hold such beneficial ownership
interests. Assets securing payments to Bondholders or
Certificateholders are pledged or sold to designated trusts and
are not assets of the Company. Additionally, Bonds and
Certificates that are issued either by the Company or a trust
formed by the Company do not represent an ownership interest in
or an obligation of the Company.
-5-
Disclosures required in this Item 7A are intended to clarify
a registrant's exposures to market risk associated with
activities in derivative financial instruments, other financial
instruments, and derivative commodity instruments. The purpose of
this section is to disclose the material effects on earnings,
fair values, and cash flows that are inherent to potential market
risk exposure. Potential market risk associated with Securities
issued under the Company's registration statement will not have a
material effect on the Company's earnings or cash flow since the
Securities do not represent an interest in or an obligation of
the Company. In addition, the Company has no public common
equity; all common stock of the Company is held by one
shareholder. Therefore, material effects of potential market
risk exposure on Securities issued from the Company will not have
any significant impact on the Company.
-6-
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------- -------------------------------------------
FUND AMERICA INVESTORS CORPORATION II
Balance Sheets
December 31,
---------------------------
Unaudited Unaudited
2004 2003
------------ ------------
Assets
Cash and cash equivalents $ 71 $ 466
Deferred offering costs, net 246,861 256,361
Prepaid expenses - 219
------------ ------------
Total assets $ 246,932 $ 257,046
============ ============
Liabilities - accounts payable $ 1,538 $ 1,110
Commitments and Contingencies
Shareholder's equity
Common stock, par value $.01 per share;
1,000,000 shares authorized; 349,000
shares issued and outstanding 3,490 3,490
Additional paid-in capital 505,210 504,010
Shareholder distributions (1,919,298) (1,918,298)
Retained earnings 1,655,992 1,666,734
------------ ------------
Total shareholder's equity 245,394 255,936
------------ ------------
Total liabilities and shareholder's equity $ 246,932 $ 257,046
============ ============
See notes to financial statements
-7-
FUND AMERICA INVESTORS CORPORATION II
Statements of Operations
Year Ended December 31,
------------------------------------------
Unaudited Unaudited Unaudited
2004 2003 2002
------------ ------------ ------------
Revenue
Other bond income $ - $ 25,000 $ 44,166
Issuance fees - - -
Interest - 73 26
Miscellaneous 1,500 - -
------------ ------------ ------------
Total revenue 1,500 25,073 44,192
------------ ------------ ------------
Expenses
General and administrative 2,742 3,504 12,461
Impairment Expense 9,500 - -
Management fees - 7,500 24,000
------------ ------------ ------------
Total expenses 12,242 11,004 36,461
------------ ------------ ------------
Net income(loss) $ (10,742) $ 14,069 $ 7,731
============ ============ ============
See notes to financial statements
-8-
FUND AMERICA INVESTORS CORPORATION II
Statements of Shareholder's Equity
Years Ended December 31, 2004, 2003 and 2002
Common Stock
---------------------- Additional
Number of Par Paid-in Shareholder Retained
Shares Value Capital Distributions Earnings Totals
---------- ------- ----------- --------------- ----------- ---------
Balances at
January 1, 2002 349,000 3,490 488,010 (1,874,798) 1,644,934 $261,636
Shareholder distributions - - - - - -
Capital contribution - - 16,000 - - 16,000
Net loss - - - - 7,731 7,731
---------- ------- ---------- -------------- ----------- ---------
Unaudited Balances at
December 31, 2002 349,000 3,490 504,010 (1,874,798) 1,652,665 285,367
Shareholder distributions - - - (43,500) - (43,500)
Capital contribution - - - - - -
Net income - - - 14,069 14,069 -
---------- ------- ---------- -------------- ----------- ---------
Unaudited Balances at
December 31, 2003 349,000 $ 3,490 $ 504,010 $ (1,918,298) $ 1,666,734 $ 255,936
Shareholder distributions - - - (1,000) - (1,000)
Capital contribution - - 1,200 - - 1,200
Net income - - - - (10,742) (10,742)
---------- ------- ---------- -------------- ----------- ---------
Unaudited Balances at
December 31, 2004 349,000 3,490 505,210 (1,919,298) 1,655,992 245,394
See notes to financial statements
-9-
FUND AMERICA INVESTORS CORPORATION II
Statements of Cash Flows
Year Ended December 31,
------------------------------------------
Unaudited Unaudited Unaudited
2004 2003 2002
------------ ------------ ------------
Operating activities:
Net income(loss) $ (10,742) $ $4,069 $ 7,731
Adjustments to reconcile net income(loss) to
net cash provided by(used in) operating activities:
Amortization of deferred offering costs - - -
Write-down of deferred offering costs
for impairment 9,500 - -
Changes in operating assets and liabilities:
Accounts payable 428 1,110 -
Prepaid expenses 219 (9) (6)
------------ ------------ ------------
Net cash provided by(used in) operating activities: (595) 15,170 7,725
Investing activities:
Additions to deferred offering costs - - -
Financing activities:
Capital contributions 1,200 - 16,000
Shareholder distributions (1,000) (43,500) -
------------ ------------ ------------
Net cash provided by(used in) financing activities: 200 (43,500) 16,000
------------ ------------ ------------
Net increase(decrease) in cash and
cash equivalents (395) (28,330) 23,725
Cash and cash equivalents at beginning of year 466 28,796 5,071
------------ ------------ ------------
Cash and cash equivalents at end of year $ 71 $ 466 $ 28,796
============ ============ ============
See notes to financial statements
-10-
FUND AMERICA INVESTORS CORPORATION II
Notes to Financial Statements
For the Years Ended December 31, 2004
unaudited, 2003 unaudited, 2002 unaudited
Note 1. The Company
Fund America Investors Corporation II (the "Company") was
incorporated in the State of Delaware on December 14, 1992 as a
limited purpose finance corporation. The Company was established
to engage in the issuance and administration of Collateralized
Mortgage Obligations (the "Bonds") and Asset-Backed Certificates
(the "Certificates", and together with the Bonds, the
"Securities"). The Securities are issued in one or more series,
from time to time, by the Company in accordance with the
provisions in the prospectus and series-related prospectus
supplement of the Company's latest effective registration
statement.
The Securities of each series can be issued by the Company,
but typically the Company forms a separate trust to act as the
issuer solely for the purpose of issuing a series. A series of
Securities that include Bonds will be issued pursuant to an
indenture and will represent indebtedness of the trust or issuer.
A series of Securities that include Certificates will represent
beneficial ownership in the related trust or issuer. The sole
source of payments to Bondholders or Certificateholders within
each series of Securities is produced from the related trust
property. The property or assets within each trust are comprised
of mortgage-related assets as defined in each of the series'
related prospectus supplements.
The Company will not, either directly or indirectly through
a beneficially owned trust engage in any business or investment
activity other than to; (1) issue and sell Securities; (2) invest
cash balances on an interim basis in high quality short-term
investments; (3) purchase, own, hold, pledge or sell collateral
or other mortgage-related assets; (4) engage in other activities
which are necessary or convenient to accomplish the foregoing and
are incidental thereto.
The Company expects to fund ongoing operations from its cash
balances, revenues derived from the issuance of Securities, and
if necessary, from loans or capital contributions from its sole
shareholder. The current cash position will not adequately fund
overhead costs over the next twelve months without additional
revenues generated during this period. Capital funding will
continue to be provided by the sole shareholder to cover
operating costs on a monthly basis or until the Company generates
sufficient revenue. The funding source for any additional
capital costs relating to the registration of securities will be
determined when the funding is required and will depend on the
cash position at that time.
Pursuant to Rule 3-11 of Regulation S-X, if a registrant is
an inactive entity as defined in this rule, the financial
statements required by this regulation for purposes of reports
pursuant to the Securities Exchange Act of 1934 may be unaudited.
The Company meets all the conditions as defined for an inactive
entity under this rule and accordingly has elected to file
unaudited financial statements contained herein for the current
year-end, December 31, 2004.
Note 2. Summary of Significant Accounting Policies
In connection with the issuance of Securities, the Company
generally will enter into a purchase agreement with the seller of
the mortgage assets or the collateral. Simultaneously, the
collateral is conveyed, by the Company, to the trust who issues
the Securities, pursuant to a pooling and servicing agreement.
Correspondingly, the purchase price for the Collateral payable to
the seller is netted out from the proceeds realized from the sale
of the Securities. Therefore, the Company's financial statements
reflect the net result of the issuance and not the gross amounts
attributable to the purchase price of the collateral and the
sales proceeds from the issuance of the Securities.
-11-
Note 2. Summary of Significant Accounting Policies (continued)
Costs of registering securities are deferred. As the
Securities are issued from the registered securities, costs are
charged to operations. The charge is based on the ratio of bonds
issued to securities registered but previously unissued.
Fees from the Security issuance transactions are recognized
as revenue when the transactions close. All expenses of the
transaction, including a portion of deferred offering costs, are
charged to operations.
Other bond income represents fees received upon the sale of
call options on CMO issuances. Such income is recognized at
closing when call option rights are transferred.
For purposes of reporting cash flows, cash and cash
equivalents include demand deposit accounts.
Net income per share is not presented, as all shares of
common stock are held by a sole shareholder.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amount of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
Statement of Financial Accounting Standards ("SFAS") No. 107
"Disclosure about Fair Value of Financial Instruments," requires
disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet. The Company's
financial instruments include: cash and cash equivalents, and
accounts payable. The carrying amount of these assets and
liabilities approximates their fair value.
The Company evaluates long-lived assets for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If a long-
lived asset is identified as impaired, the value of the asset
must be reduced to its fair value. The Company's deferred
offering costs are considered long-lived assets. In 2004,
management determined that there was an impairment of deferred
offering costs totaling $9500 related to a loan program included
in the shelf registration statement related to a certain type of
loan included in the shelf offering but no longer in existence
due to a change in government regulations. There was no
impairment expense in 2003 or 2002.
SFAS No. 131, "Disclosure about Segments of an Enterprise
and Related Information," requires the disclosure of operating
segments and the geographic location of the Company. Management
considers the Company's business to presently comprise of a
single operating segment, and all of the Company's operations
were concentrated in Englewood, Colorado.
Note 3. Income Taxes
Under S Corporation guidelines of the Internal Revenue Code,
the Company has elected to be treated substantially as a
partnership for income tax purposes. As a result, the sole
shareholder reports any taxable income or loss of the Company on
his individual tax return. Accordingly, no provision for federal
income taxes has been recorded in the financial statements.
-12-
Note 4. Related Party Transactions
The Company has engaged in related party transactions as
discussed below. Accordingly, the accompanying financial
statements are not necessarily indicative of the financial
position that would exist or the results of operations that would
have occurred if the transactions had been with unaffiliated
entities.
The sole shareholder of the Company is also the sole
shareholder, Chief Executive Officer and Director of The Chotin
Group Corporation. On January 1, 1993, the Company entered into
a Management Agreement with The Chotin Group Corporation (the
"Facilities Manager"). This agreement was terminated on December
31, 2002 and was replaced by a subsequent Management Agreement
that changed the terms of fee provisions. Under the terms of
both agreements, the Facilities Manager is required to provide
facilities use and other services necessary for the Company to
manage its business affairs. The management fees paid were $0,
$7,500 and $24,000 for the twelve months ended December 31, 2004,
2003 and 2002, respectively.
Note 5. CMO Information
At December 31, 2004 and 2003, the outstanding principal
balance of the issued Securities and the amount of publicly and
privately issued securities were as follows:
2004
- ------------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
- --------- -------------- -------------- -----------
1993-A $ 16,945,584 $ 14,215,515 $ 2,730,069
1993-C 102,000,000 102,000,000 -
1994-A 637,993 554,443 83,550
1998-A - - -
1998-B 2,588,580 2,588,580 -
1998-NMC1 - - -
2000-1 2,848,382 2,698,782 149,600
-------------- -------------- -----------
Total $ 125,020,539 $ 122,057,320 $ 2,963,219
============== ============== ===========
2003
- ------------------------------------------------------------------
Total Publicly Privately
Series Certificates Issued Issued
- --------- -------------- -------------- -----------
1993-A $ 22,150,769 $ 19,420,700 $ 2,730,069
1993-C 102,000,000 102,000,000 -
1994-A 1,374,220 1,197,924 176,296
1998-A 365,525 365,525 -
1998-B 3,862,457 3,862,457 -
1998-NMC1 2,744,184 2,744,184 -
2000-1 2,856,666 2,707,066 149,600
-------------- -------------- -----------
Total $ 135,353,821 $ 132,297,856 $ 3,055,965
============== ============== ===========
-13-
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ------- ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------------------------
None
ITEM 9A. CONTROLS AND PROCEDURES
- -------- -----------------------
Pursuant to the Securities and Exchange Commission in
regards to the Sarbanes-Oxley Act Section 404, the Company is
considered a "non-accelerated filer" and does not have to comply
with the management report on internal controls until its first
fiscal year ending on or after July 15, 2006.
-14-
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
Name Position Age
- --------------------- ----------------------------------- -----
Steven B. Chotin Director, Chairman and Chief 57
Executive Officer
M. Garrett Smith Director 43
Helen M. Dickens Director and President 51
John G. Grant Senior Vice President 44
Zachary H. Pashel Senior Vice President 32
M. Sean Rowland Vice President (terminated on 39
February 7,2005)
Jennifer M. Land Secretary 33
Steven B. Chotin, 57, has been a Director and the Chairman
and Chief Executive Officer of the Company since its inception.
Mr. Chotin has been Chief Executive Officer and sole shareholder
of The Chotin Group Corporation, a financial service firm, since
July 1984. Mr. Chotin was a director of American Southwest
Financial Corporation and of American Southwest Finance Co., Inc.
from 1982 to 1994.
H. Garrett Smith, age 43, has served as a director since
November 17, 2004. Mr. Smith is currently a private investor.
From December of 2000 through February of 2005, he was a
Principal with BP Capital, LLC, a Dallas, Texas-based investment
firm specializing in the oil and gas industry, and as a General
Partner and Portfolio Manager of BP Capital Energy Equity Fund,
an energy hedge fund. From 1989 to 2000, Mr. Smith held a number
of financial management positions, including Executive Vice
President and Chief Financial Officer, of Pioneer National
Resources Company, an exploration and production
Helen M. Dickens, 51, has been a Director of the Company
since 1995, President of the Company since 2002 and was
previously Vice President and Secretary of the Company from 1989
to 2002. Ms. Dickens is also President of The Chotin Group
Corporation. Previously, Ms. Dickens held the position of Vice
President along with Chief Operations Officer at The Chotin Group
Corporation. Prior to joining The Chotin Group Corporation In
1989, Ms. Dickens served as Assistant Corporate Secretary and
Assistant to the Chairman of the Board and President of Uniwest
Financial Corp., a non-diversified savings and loan holding
company. Ms. Dickens received a Bachelor of Science degree from
Metropolitan State College with a Major in Accounting.
John M. Grant, 43, was appointed Senior Vice President of
the Company as of January 1, 2005. Mr. Grant is also a Senior
Vice President of The Chotin Group. Mr. Grant joined The Chotin
Group in 2004 after a decade at ING Investment Management, where
he served as Senior Vice President and Senior Portfolio Manager.
From 1988 to 1993, Mr. Grant was a Senior Investment Officer at
Allmerica Asset Management, and prior to that time he served as
an Analyst at United Investment Research. Mr. Grant holds a
Bachelor of Arts degree in Sociology from Boston University and
an MBA from Northeastern University. In addition, he has earned
the right to use the Chartered Financial Analyst designation.
Zachary H. Pashel, 32, was appointed Senior Vice President
as of January 1, 2004. Mr. Pashel is also Vice President of The
Chotin Group. Prior to joining The Chotin Group in 2004, Mr.
Pashel's employment included Deson Ventures and Greyrock Capital
Partners, both groups specializing in middle market private
equity and M&A advisory services. Mr. Pashel also owned and
operated numerous companies in the real estate and aviation
industries. Mr. Pashel concentrated on English Literature
at Brandeis University.
-15-
M. Sean Rowland, 39, joined the Company as Vice President in
January 2002. Mr. Rowland is also Vice President of Structured
Finance for The Chotin Group Corporation, a position taken in
January 2002. Prior to joining The Chotin Group, Mr. Rowland was
with Stifel Nicholas & Co. and has worked in the fixed income
trading market for over ten years, primarily focusing on mortgage-
backed securities. He holds a Bachelor of Science degree in
Economics from San Jose University. Mr. Rowland's position with
the Company terminated on February 7, 2005.
Jennifer M. Land, 33, was appointed to Corporate Secretary
of the Company in January 2003. Mrs. Land has also been employed
with The Chotin Group Corporation since 1993 where she has been
the Executive Administrative Assistant to the CEO. She was given
the additional position of Director of Human Resources in
December of 2000, Corporate Secretary of The Chotin Group in
January 2003, and Corporate Treasurer in March 2005.
Directors and Executive Officers are elected annually for a
one-year term.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
As of December 31, 2004, no executive officer had received
any compensation exceeding $100,000.
The Company has not paid any compensation pursuant to plans
or any other compensation arrangement. The Company paid its
outside director $1,800 annually for the year ended December 31,
2002. The Company had revised the outside director's fees to
$1,000 annually starting January 1, 2003. No other officers or
directors receive any compensation for their services.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- -------- MANAGEMENT
------------------------------------------------------------
Amount and
Nature Of
Title Name and Address Beneficial Percent of
of Class of Beneficial Owner Ownership (1) Class
- -------- ------------------------------ ------------ ----------
Common Steven B. Chotin 349,000 100%
6400 S. Fiddler's Green Circle
Suite 1200
Englewood, CO 80111
(1) Amount of such shares with respect to which persons
indicated have the right to acquire beneficial ownership as
specified in Rule 13d-3(d)(1) under the Securities Exchange Act
of 1934: Zero.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
The information relating to this Item is incorporated herein
by reference to Item 8, "Financial Statements and Supplementary
Data" under Note 4 "Related Party Transactions."
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
- -------- --------------------------------------
Qualifying under the definition of an Asset-Backed Issuer,
Fund America Investors Corporation II is not required to disclose
this information required under item 14.
-16-
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
( a )(1) Financial Statements
- Balance Sheets at December 31, 2004 and 2003, both
unaudited
- Statements of Operations for the Years Ended
December 31, 2004 (unaudited), 2003 (unaudited) and
2002 (unaudited)
- Statements of Shareholder's Equity for the Years
Ended December 31, 2004
(unaudited), 2003 (unaudited) and 2002 (unaudited)
- Statements of Cash Flows for the Years Ended
December 31, 2004 (unaudited), 2003 (unaudited) and
2002 (unaudited)
- Notes to Financial Statements for the Years Ended
December 31, 2004 (unaudited), 2003 (unaudited) and
2002 (unaudited)
( a )(2) Financial Statement Schedules
The financial statement schedules have been omitted
because they are inapplicable.
( b ) Reports on Form 8-K
None
( c ) Exhibits
Exhibit 31.1 - Certification by the Chief Executive
Officer pursuant to Rules 13a-14(a)
and 15d-14(a) under the Exchange Act
Exhibit 31.2 - Certification by the Chief Financial
Officer pursuant to Rules 13a-14(a)
and 15d-14(a) under the Exchange Act
-17-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 II
(Registrant)
Date April 11, 2005 By: /s/ Helen M. Dickens
-------------- -------------------------------
Helen M. Dickens
President
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
/s/ Steven B. Chotin Director, Chairman, Chief April 11, 2005
- -------------------- Executive Officer (Principal
Steven B. Chotin Executive Officer)
/s/ Helen M. Dickens Director, President (Principal April 11, 2005
- -------------------- Financial Officer)
Helen M. Dickens
/s/ Garrett Smith Director April 11, 2005
- --------------------
Garrett Smith
/s/ John Grant Senior Vice President April 11, 2005
- --------------------
John Grant
/s/ Zachary H Pashel Senior Vice President April 11, 2005
- --------------------
Zachary H. Pashel
/s/ Jennifer M. Land Secretary, Treasurer April 11, 2005
- --------------------
Jennifer M. Land
-18-
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE
NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
Since the Company has a sole shareholder, the Company has
not sent and will not send an annual report or proxy material to
its shareholder.