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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended: March 31, 2004

OR

For the transition period from              to             

Commission file number: 1-13563

LASER MORTGAGE MANAGEMENT, INC.

(Exact name of registrant as specified in its charter)

c\o Mariner Investment Group, Inc.

780 Third Avenue, 16th Floor

New York, NY 10017

(Address of principal executive offices)

(Zip Code)

(212) 758-2024

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all documents and 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 by check mark whether the registrant is an accelerated filer (as defined in Exchange Act

Rule 12b-2).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of stock, as of the last practicable date: 14,038,983 shares of common stock, $0.001 par value, outstanding as of May 4, 2003.

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LASER MORTGAGE MANAGEMENT, INC.

FORM 10-Q

INDEX

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LASER Mortgage Management, Inc.

Statements of Net Assets in Liquidation

(Liquidation Basis)

See notes to financial statements.

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LASER Mortgage Management, Inc.

Statements of Changes in Net Assets in Liquidation

(Liquidation Basis) (Unaudited)

See notes to financial statements.

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LASER Mortgage Management, Inc.

Statements of Cash Flows

(Liquidation Basis) (Unaudited)

See notes to financial statements

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LASER Mortgage Management, Inc.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2004 (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

LASER Mortgage Management, Inc. (the “Company”) was incorporated in Delaware on May 1, 2001, as a wholly-owned subsidiary of LASER Mortgage Management, Inc., a Maryland corporation (“LASER Maryland”), and is the successor by merger to LASER Maryland. LASER Maryland was incorporated in Maryland on September 3, 1997 and commenced its operations on November 26, 1997. On May 30, 2001, the Company’s Board of Directors and sole stockholder, LASER Maryland, approved the liquidation and dissolution of the Company under the terms and conditions of the Plan of Liquidation and Dissolution, subject to the approval of the Plan of Liquidation and Dissolution by the stockholders of LASER Maryland. On July 27, 2001, the stockholders of LASER Maryland, at the annual meeting, approved the reincorporation of LASER Maryland in Delaware (the “Reincorporation”), through the merger of LASER Maryland with and into the Company, and the subsequent liquidation and dissolution of the Company under the terms and conditions of the Plan of Liquidation and Dissolution. On July 31, 2001, LASER Maryland completed the Reincorporation by merging with and into the Company. As of the effective date of the Reincorporation, LASER Maryland ceased to exist. On August 3, 2001, the Company filed a certificate of dissolution with the Secretary of State of the State of Delaware, and the dissolution of the Company was effective upon such filing. The Company has ceased to conduct normal business operations and now operates solely for the purpose of providing for the satisfaction of its obligations, adjusting and winding-up its business and affairs and distributing its remaining net assets. References herein to “LASER” or the “Company” include LASER Maryland prior to the date of the Reincorporation, as applicable.

In accordance with the Plan of Liquidation and Dissolution, receiving the approval of the Delaware Court of Chancery, the Company made distributions of $0.50 and $3.00 per outstanding share of common stock on April 8, 2003 and December 28, 2001, respectively, to stockholders of record as of March 31, 2003 and December 17, 2001, respectively. As of March 31, 2004, the estimated net realizable value of the Company’s net assets in liquidation was $0.85 per share. After providing for expenses and subject to court approval, the Company expects to distribute the remaining net assets in liquidation before the end of the 2004 fiscal year, in accordance with the timing set forth in the Plan of Liquidation and Dissolution. The total amount of distributions to stockholders is subject to change based on numerous factors, including operating expenses, the Delaware Court of Chancery modifying the distribution amounts and timing currently envisioned by the Board of Directors under the Plan of Liquidation and Dissolution, unanticipated claims or expenses, as well as other factors beyond the control of the Company.

The Company was organized to create and manage an investment portfolio of primarily mortgage-backed securities and mortgage loans that, in combination with financing and hedging activities, would generate income for distribution to its stockholders while preserving the Company’s capital base. At its inception, the Company elected to be taxed as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its short taxable year ended December 31, 1997. The Company qualified as a REIT for the taxable years ended December 31, 1997 through 2001. The Company did not qualify as a REIT for the years beginning January 1, 2002.

Basis of Presentation – As described above, stockholders approved the Plan of Liquidation and Dissolution of the Company on July 27, 2001. As a result, the Company adopted liquidation basis accounting effective July 28, 2001. Accordingly, the Company’s assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts, including an accrual for estimated expenses associated with the liquidation of the Company. Before the adoption of liquidation basis accounting, the Company operated as a continuing business and followed going concern basis accounting. Because substantially all of the existing assets and liabilities of the Company were carried at approximate fair value in accordance with generally accepted accounting principles (“GAAP”), the adoption of liquidation basis accounting did not have a material impact on the Company’s financial statements other than requiring the Company to charge stockholders’ equity for the reduction in the carrying value of securities to reflect their estimated net realizable value, the write-off of the remaining balance of prepaid expenses, and the reserve for estimated expenses associated with the liquidation of the Company. However, the valuation of assets and liabilities at their estimated net realizable values and estimated settlement amounts, respectively, necessarily requires estimates and assumptions. Changes in market conditions, actual costs associated with the liquidation, and other factors may affect the amounts ultimately realized or settled, and those amounts may differ, perhaps materially, from the carrying values on the Company’s financial statements.

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LASER Mortgage Management, Inc.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2004 (UNAUDITED) (Continued)

The accompanying unaudited financial statements have been prepared on liquidation basis accounting in conformity with GAAP and the instructions to Form 10-Q and Article 10, Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these unaudited financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation, have been included in these financial statements. These unaudited interim financial statements, as of and for the period ended March 31, 2004, should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. Operating results for any interim period are not necessarily indicative of results that may be expected for a full year.

A summary of the Company’s significant accounting policies follows:

Cash Equivalents – Cash equivalents had consisted of an overnight reverse repurchase agreement. The amount reported on the statements of net assets in liquidation represents the amount advanced under the agreement. At March 31, 2004, the Company did not hold any overnight reverse repurchase agreements.

Investments – The Company invested primarily in mortgage-backed securities and mortgage loans. The mortgage-backed securities included privately issued or U.S. government or agencies issued mortgage pass-through certificates, collateralized mortgage obligations and other securities representing interests in, or obligations backed by, pools of mortgage loans (collectively, “Mortgage Securities”). The mortgage loans were secured by first or second liens on single-family residential, multi-family residential, commercial or other real property (“Mortgage Loans,” and together with Mortgage Securities, “Mortgage Assets”). The Company also invested in other debt and equity securities (together with Mortgage Securities, “Securities,” and together with Mortgage Assets, “Investments”).

Before the adoption of liquidation basis accounting and in accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, the Company classified its Securities as available-for-sale. The available-for-sale classification required that those Securities be carried at estimated fair value, with unrealized gains and losses reported on the balance sheet as a separate component of stockholders’ equity within accumulated other comprehensive income (loss). This classification was appropriate since the Company may have needed to sell, from time to time, any of its Securities as part of its overall management of its balance sheet even though the Company generally intended to hold most of its Securities until maturity.

After the adoption of liquidation basis accounting, the Company’s Investments were carried at estimated net realizable value on the statements of net assets in liquidation, with unrealized gains and losses reported on the statements of changes in net assets in liquidation.

The Company’s Mortgage Loans were carried at estimated net realizable value on the statements of net assets in liquidation, with unrealized gains and losses reported on the statements of changes in net assets in liquidation. Before the adoption of liquidation basis accounting, the Company’s Mortgage Loans were carried on the balance sheet at their unpaid principal balance, net of unamortized discount or premium.

Interest income has been accrued based on the outstanding principal or notional amount of the Investments and cash equivalents and their contractual terms. Premiums and discounts associated with the purchase of the Investments have been amortized into interest income over the lives of the Investments using the effective yield method.

Realized gains and losses on Investment transactions have been determined on the specific identification basis and were recorded on the statements of changes in net assets in liquidation.

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LASER Mortgage Management, Inc.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2004 (UNAUDITED) (Continued)

Reserve for Estimated Liquidation Costs – Under liquidation basis accounting, the Company is required to estimate and accrue the costs directly associated with the liquidation. The amount recorded in the statements of net assets in liquidation represents estimated professional fees and other expenses expected to be incurred in connection with liquidation activities and paid out over the course of the liquidation. The ongoing general and administrative expenses related to operating the Company until its liquidation is completed have not been included in this reserve. The ultimate amount paid might vary significantly due to, among other things, the timing of the liquidation.

Fair Value of Financial Instruments – The fair value of the Company’s Investment was based on prices provided by a dealer who makes markets in these financial instruments. The fair value reported reflects an estimate and was not necessarily indicative of the amount the Company could have realized in a current market exchange. The carrying values of cash equivalents and other financial assets and liabilities approximated their estimated fair value because of the short-term nature of these financial instruments. Estimated net realizable value approximates estimated fair value as presented in these financial statements.

Income Taxes – At its inception, the Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with its short taxable year ended December 31, 1997. As such, the Company generally had been entitled to a deduction for all dividends it paid to its stockholders for a taxable year. As a result, the Company had not been subject to federal income taxation with respect to its distributed income. Qualification as a REIT requires that the Company satisfy a number of asset, income and distribution tests. The Company qualified as a REIT for the taxable years ended December 31, 1997 through 2001. The Company did not qualify as a REIT for the years beginning January 1, 2002.

The Company follows the provisions of SFAS No. 109, “Accounting for Income Taxes”, which provides for the recognition of deferred tax assets and liabilities relating to the future tax consequences of net operating loss carryforwards and the differences between the financial reporting amounts and the tax bases of assets and liabilities, measured using the enacted tax rates and laws that are expected to be in effect when the taxes are actually paid or recovered. When the Company determines that it is more likely than not that the measured amount of the deferred tax assets will not be realized, the Company will reduce the deferred tax assets through a valuation allowance.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires the Company 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 amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

2. INVESTMENTS

At March 31, 2004 and December 31, 2003, the Company owned a $2,900,000 principal amount U.S. Treasury Note with an estimated net realizable value of $2,918,125 and $2,922,649, respectively. The Security matures October 31, 2004 and carries an annual coupon interest rate of 2.125%.

3. RESERVE FOR ESTIMATED LIQUIDATION COSTS

At the time of the adoption of liquidation basis accounting, the Company recorded $700,000 for estimated professional fees and other expenses directly related to the liquidation that are anticipated to be incurred over the course of the liquidation. The ongoing general and administrative expenses related to operating the Company until its liquidation is completed have not been included in this reserve. At March 31, 2004 and December 31, 2003, the reserve for estimated liquidation costs amounted to $375,727 and $395,004, respectively. During the three months ended March 31, 2004, the Company paid $19,277 of liquidation costs.

4. MANAGEMENT ARRANGEMENTS

Upon the termination of the management agreement with Mariner Mortgage Management, L.L.C. (“Mariner”) on November 1, 2001, the Company became self managed and entered into employment agreements with William J. Michaelcheck, the President and Chief Executive Officer of the Company, and Charles R. Howe, II, the Vice President,

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LASER Mortgage Management, Inc.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2004 (UNAUDITED) (Continued)

Treasurer and Secretary of the Company, each at a salary of $10,000 per month. Effective October 1, 2002, the employment agreement with Mr. Howe was amended to reduce his salary to $5,000 per month. Messrs. Michaelcheck and Howe previously were responsible for managing the Company’s portfolio at Mariner and continue to have significant responsibilities at Mariner.

On November 1, 2001, the Company also entered into a support services agreement with Mariner Investment Group, Inc. (“Mariner Investment Group”), an affiliate of Mariner, under which Mariner Investment Group will provide the Company with office space and services, bookkeeping and accounting services and such other services as may be agreed upon from time to time by the Company and Mariner Investment Group for a fee of $30,000 per month. Effective July 1, 2002, the fee under the support services agreement was reduced to $20,000 per month.

For the three months ended March 31, 2004 and 2003, the Company incurred $45,000 and $45,000, respectively, of expenses under the employment agreements and $60,000 and $60,000, respectively, of expenses under the support services agreement.

All of the management arrangements discussed above have been ratified and approved by the Compensation Committee of the Board of Directors.

5. INCOME TAXES

At its inception, the Company elected to be taxed as a REIT under the Internal Revenue of 1986, as amended, commencing with its short taxable year ended December 31, 1997. As such, the Company generally had been entitled to a deduction for all dividends it paid to its stockholders for a taxable year. As a result, the Company had not been subject to federal income taxation with respect to its distributed income. Qualification as a REIT requires that the Company satisfy a number of asset, income and distribution tests. The Company qualified as a REIT for the taxable years ended December 31, 1997 through 2001. Because less than 75% of the Company’s gross income for the 2002 taxable year did not derive from certain required REIT investments, the Company did not qualify as a REIT for the years beginning January 2002. As a consequence, the Company is no longer entitled to deduct dividends paid to stockholders from its taxable income. The Company is subject to federal income tax at corporate rates (including any applicable alternative minimum tax) with respect to gains from liquidating sales of assets and income from operations for the year ended December 31, 2002 and for subsequent taxable years. The federal income taxes would reduce the amounts otherwise distributable to its stockholders.

Through the tax year ended December 31, 2003, the Company experienced approximately $120.3 million of cumulative net operating losses as calculated for tax purposes (“NOLs”). NOLs generally may be carried forward for 20 years. The Company believes that during 1999 it experienced an “ownership change” within the meaning of Section 382 of the Code. Consequently, the Company’s use of NOLs generated before the ownership change to reduce taxable income after the ownership change will be subject to limitations under Code Section 382. Generally, Code Section 382 limits the use of NOLs in any year to the value of the Company’s common stock on the date of the ownership change multiplied by the long-term tax-exempt rate (published by the IRS) with respect to that date. The Company believes that the annual limitation with respect to the use of its NOLs is approximately $3.0 million and that, as of the beginning of the tax year 2004, approximately $90.7 million of the estimated cumulative NOL of $120.3 million is subject to the annual limitation.

For the three months ended March 31, 2004, the Company estimates that it incurred approximately $0.4 million of loss for tax purposes. As a result, the Company increased its aggregate gross deferred tax assets by approximately $54,000 and recognized a corresponding increase of $54,000 in the valuation allowance for the change in the gross deferred tax asset.

* * * * *

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company’s financial statements as of and for the three months ended March 31, 2004 and notes thereto and with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. References herein to “LASER” or the “Company” include LASER Mortgage Management, Inc., a Maryland corporation, prior to the date of the Reincorporation described in Note 1 to the Notes to Financial Statements included as part of Item 1.

Forward-Looking Statements

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: Statements in this discussion regarding the Company and its business, which are not historical facts, are “forward-looking statements” that involve risks and uncertainties. Risks and uncertainties, which could cause results to differ from those discussed in the forward-looking statements herein, are listed in the Company’s Annual Report filed on Form 10-K.

General

On July 27, 2001, the stockholders of LASER Maryland, at the annual meeting, approved the Reincorporation of LASER Maryland in Delaware, through the merger of LASER Maryland with and into the Company, and the subsequent liquidation and dissolution of the Company under the terms and conditions of the Plan of Liquidation and Dissolution. On July 31, 2001, LASER Maryland completed the Reincorporation by merging with and into the Company. As of the effective date of the Reincorporation, LASER Maryland ceased to exist. On August 3, 2001, the Company filed a certificate of dissolution with the Secretary of State of the State of Delaware, and the dissolution of the Company was effective upon such filing. The Company has ceased to conduct normal business operations and now operates solely for the purpose of providing for the satisfaction of its obligations, adjusting and winding-up its business and affairs and distributing its remaining net assets.

In accordance with the Plan of Liquidation and Dissolution, receiving the approval of the Delaware Court of Chancery, the Company made distributions of $0.50 and $3.00 per outstanding share of common stock on April 8, 2003 and December 28, 2001, respectively, to stockholders of record as of March 31, 2003 and December 17, 2001, respectively. As of March 31, 2004, the estimated net realizable value of the Company’s net assets in liquidation was $0.85 per share. After providing for expenses and subject to court approval, the Company expects to distribute the remaining net assets in liquidation before the end of the 2004 fiscal year, in accordance with the timing set forth in the Plan of Liquidation and Dissolution. The total amount of distributions to stockholders is subject to change based on numerous factors, including operating expenses, the Delaware Court of Chancery modifying the distribution amounts and timing currently envisioned by the Board of Directors under the Plan of Liquidation and Dissolution, unanticipated claims or expenses, as well as other factors beyond the control of the Company.

As a result of the stockholders approving the Plan of Liquidation and Dissolution, the Company adopted liquidation basis accounting effective July 28, 2001. Accordingly, the Company’s assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts, including an accrual for estimated expenses associated with the liquidation of the Company. Before the adoption of liquidation basis accounting, the Company operated as a continuing business and followed going concern basis accounting. Because substantially all of the existing assets and liabilities of the Company were carried at approximate fair value in accordance with generally accepted accounting principles (“GAAP”), the adoption of liquidation basis accounting did not have a material impact on the Company’s financial statements other than requiring the Company to charge stockholders’ equity for: the reduction in the carrying value of securities to reflect their estimated net realizable value, the write-off of the remaining balance of prepaid expenses, and the reserve for estimated expenses associated with the liquidation of the Company. However, the valuation of assets and liabilities at their estimated net realizable values and estimated settlement amounts, respectively, necessarily requires estimates and assumptions. Changes in market conditions, actual costs associated with the liquidation, and other factors may affect the amounts ultimately realized or settled, and those amounts may differ, perhaps materially, from the carrying values on the Company’s financial statements.

At its inception, the Company elected to be taxed as a REIT under the Code, commencing with its short taxable year ended December 31, 1997. The Company qualified as a REIT for the taxable years ended December 31, 1997 through 2001. The Company did not qualify as a REIT for the years beginning January 1, 2002.

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Changes in Net Assets in Liquidation

For the Three Months Ended March 31, 2004

Under liquidation basis accounting, the Company reported a decrease in net assets in liquidation from operating activities of $(0.1) million for the three months ended March 31, 2004. The Company’s cash equivalents and security earned interest income of less than $0.1 million for the three months ended March 31, 2004. General and administrative expenses during the three months ended March 31, 2004 amounted to less than $(0.2) million and consisted primarily of support services fees, professional fees and payroll expenses. At March 31, 2004, the Company’s net assets in liquidation amounted to $11.9 million and the balance of cash and cash equivalents amounted to $9.5 million.

For the Three Months Ended March 31, 2003

Under liquidation basis accounting, net assets in liquidation from operating activities increased by $1.1 million for the three months ended March 31, 2003. The Company’s cash equivalents earned $0.1 million of interest income. In addition, the Company recorded an increase of $2.0 million from securities comprised primarily of the proceeds from the sale of securities previously determined to be other-than-temporarily impaired and estimated to have no net realizable value. General and administrative expenses during that period amounted to $(1.0) million and consisted of $(0.8) million paid for directors and officers insurance, $(0.1) million of fees paid pursuant to the support services agreement and $(0.1) million of professional fees, payroll and other expenses.

The cash liquidation distribution of $0.50 per outstanding share of common stock that was declared during the three months ended March 31, 2003 offset the Company’s increase in net assets in liquidation from operating activities by $(7.0) million. At March 31, 2003, the Company’s net assets in liquidation amounted to $12.4 million.

During the three months ended March 31, 2003, a net $(1.0) million of cash was used in the Company’s operating activities, primarily for the extension of the insurance coverage for the directors and officers. Cash generated by the proceeds from the previously mentioned sale of securities amounted to $2.0 million. At March 31, 2003, the balance of cash and cash equivalents amounted to $20.0 million. The balance of cash and cash equivalents after the payment of the $(7.0) million cash liquidation distribution on April 8, 2003 amounted to $13.0 million.

Distributions

For the three months ended March 31, 2004, the Company did not make any capital distributions or declare any dividends. On March 20, 2003, the Company announced that it would make a partial liquidation distribution to its stockholders of $0.50 per outstanding share of common stock. On April 8, 2003, the Company made that distribution to stockholders of record as of March 31, 2003.

Financial Condition

Investments

At March 31, 2004, the Company holds a $2.9 million principal amount U.S. Treasury Note with a net realizable value of $2.9 million carrying an annual coupon interest rate of 2.125% that matures on October 31, 2004. On March 21, 2003, the Company sold substantially all of the mortgage securities previously determined to be other-than-temporarily impaired, which were estimated to have no net realizable value, for $2,000,000. The remaining mortgage securities owned and previously determined to be other-than-temporarily impaired are estimated to have no net realizable value as of March 31, 2004.

Liquidity and Capital Resources

Liquidity measures the Company’s ability to turn non-cash assets into cash during the liquidation period to satisfy its commitments to pay ongoing general and administrative expenses and estimated costs of liquidation, and to make distributions to stockholders. As of March 31, 2004, the Company holds a highly liquid, readily marketable U.S. Treasury Note and combined with its balance of cash and cash equivalents of $9.5 million, liquidity amounts to

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$12.4 million. The Company believes that this amount and its resultant earnings will be adequate to support the Company and pay its obligations during the liquidation period. The Delaware Court of Chancery granted permission on March 18, 2003 to make a distribution of $0.50 per outstanding share of common stock and the Company made that distribution on April 8, 2003 to stockholders of record as of March 31, 2003.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. The primary market risk exposure that the Company had been subject to was the movement in interest rates with respect to its portfolio of mortgage assets, which were highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond the control of the Company.

The Company is exposed to interest rate risk as an investor in a U.S. Treasury Note. Due to the short-term maturity, the interest rate risk to the Company is not significant.

Additionally, the Company is a party to certain other financial instruments, including interest receivable, accounts payable and other accrued expenses that are not interest rate sensitive.

Item 4. Controls and Procedures

The Company maintains a system of internal controls and procedures designed to provide reasonable assurance that information required to be disclosed in its filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The Company’s principal executive and financial officers have evaluated the disclosure controls and procedures prior to the filing of this quarterly report on Form 10-Q and have determined that such disclosure controls and procedures were effective as of March 31, 2004.

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PART II. OTHER INFORMATION

Item 1 Legal Proceedings

On October 23, 2000, the Company filed suit in federal court in the Southern District of New York against Asset Securitization Corporation, Nomura Asset Capital Corporation and Nomura Securities International, Inc. alleging that the defendants defrauded the Company into purchasing over $19.0 million worth of mortgage pass-through certificates by failing to disclose among other things, that one of largest loans in the mortgage pool was seriously troubled. On December 8, 2000, the defendants filed a motion to dismiss the action. On September 5, 2001, defendants’ motion to dismiss the action was granted with respect to the claims brought under Sections 12(a)(2) and 15 of the Securities Act of 1933 and denied with respect to the common law fraud claims and claims brought under Sections 10(b) and 20(a) of Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On February 4, 2003, the Company withdrew the lawsuit and all claims were dismissed with prejudice and without costs.

In accordance with the Plan of Liquidation and Dissolution, on November 8, 2001, the Board of Directors filed a petition with the Delaware Court of Chancery for permission to make an initial distribution to stockholders of $3.00 per outstanding common share. On November 28, 2001, the Delaware Court of Chancery approved this initial distribution to stockholders. On December 28, 2001, a distribution of $3.00 per outstanding share of common stock was made to stockholders of record as of December 17, 2001. The Delaware Court of Chancery granted permission on March 18, 2003 to make a distribution of $0.50 per outstanding share of common stock and the Company made that distribution on April 8, 2003 to stockholders of record as of March 31, 2003.

Item 6 Exhibits and Reports on Form 8-K

(a) Exhibits

See Exhibit Index.

(b) Reports

None.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 14, 2004

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EXHIBIT INDEX

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