-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GA1XDlpHcEt7IH9ET4O9TAfQm8+AqZ+u9Iu37y20RaOTrE9neFtObdZib2evxbgG /EHBOaAL+sSkucC+9bwpsw== 0001068800-99-000328.txt : 19990727 0001068800-99-000328.hdr.sgml : 19990727 ACCESSION NUMBER: 0001068800-99-000328 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNERSTONE MORTGAGE INVESTMENT GROUP INC CENTRAL INDEX KEY: 0000790524 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 431393535 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-04001 FILM NUMBER: 99669981 BUSINESS ADDRESS: STREET 1: 201 PROGRESS PKWY CITY: MARYLAND HEIGHTS STATE: MO ZIP: 63043 BUSINESS PHONE: 3148512000 10-Q 1 CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1999 ------------- Commission file number 33-4001 ------- CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. - ------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 43-1393535 - ------------------------------------------------------------------------ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 201 Progress Parkway Maryland Heights, Missouri 63043 - ------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (314) 515-2000 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date, August 7, 1998: COMMON STOCK, $.01 Par Value - 1,000 Shares CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. INDEX Page Number Part I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheet 3 Statement of Operations 4 Statement of Changes in Stockholder's Equity 5 Statement of Cash Flows 6 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Part II. OTHER INFORMATION 9 SIGNATURES 10 2 Part I. FINANCIAL INFORMATION Item 1. Financial Statements CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. BALANCE SHEET (UNAUDITED)
June 30, December 31, 1999 1998 - ----------------------------------------------------------------------------------------------- ASSETS ------ CASH $ 52,386 $ 52,386 RECEIVABLE FROM TRUSTEE 7,988 0 --------- --------- TOTAL ASSETS $ 60,374 $ 52,386 ========= ========= LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ LIABILITIES: PAYABLE TO EDWARD D. JONES & CO., L.P. $ 391,651 $ 423,577 ACCRUED EXPENSES 3,206 3,206 --------- --------- TOTAL LIABILITIES 394,857 426,783 --------- --------- STOCKHOLDER'S EQUITY: COMMON STOCK - $.01 par value, 1,000 shares authorized, issued and outstanding 10 10 PAID-IN-CAPITAL 300,490 300,490 RETAINED DEFICIT (634,983) (674,897) --------- --------- TOTAL STOCKHOLDER'S EQUITY (334,483) (374,397) --------- --------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 60,374 $ 52,386 ========= ========= - ----------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
3 Part I. FINANCIAL INFORMATION Item 1. Financial Statements CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. STATEMENT OF OPERATIONS (UNAUDITED)
Six Months Ended June 30, June 30, 1999 1998 - ---------------------------------------------------------------------------------------------- REVENUES: Residual income $41,386 $19,857 ------- ------- EXPENSES: Registration, filing and other fees 1,472 3,036 ------- ------- INCOME BEFORE INCOME TAXES 39,914 16,821 PROVISION FOR (BENEFIT FROM) INCOME TAXES - - ------- ------- NET INCOME $39,914 $16,821 ======= ======= - ---------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
4 Part I. FINANCIAL INFORMATION Item 1. Financial Statements CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (UNAUDITED)
Six Months Ended June 30, 1999 and 1998 Common Paid-In- Retained Stock Capital Deficit Total - --------------------------------------------------------------------------------------------- BALANCE, DECEMBER 31, 1997 $ 10 $300,490 $(730,484) $(429,984) NET INCOME - - 16,821 16,821 ------- -------- --------- --------- BALANCE, JUNE 30, 1998 $ 10 $300,490 $(713,663) $(413,163) ======= ======== ========= ========= BALANCE, DECEMBER 31, 1998 $ 10 $300,490 $(674,897) $(374,397) NET INCOME - - 39,914 39,914 ------- -------- --------- --------- BALANCE, JUNE 30, 1999 $ 10 $300,490 $(634,983) $(334,483) ======= ======== ========= ========= - --------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
5 Part I. FINANCIAL INFORMATION Item 1. Financial Statements CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. STATEMENT OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, 1999 1998 - ---------------------------------------------------------------------------------------------- CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: Net income $ 39,914 $ 16,821 Adjustments to reconcile net income to net cash provided by operating activities: (Decrease) increase in payable to Edward D. Jones & Co., L.P. (31,926) 579 Increase in receivable from trustee (7,988) (13,740) -------- -------- Net cash provided by operating activities 0 3,660 -------- -------- Net increase in cash 0 3,660 CASH, beginning of period 52,386 48,726 -------- -------- CASH, end of period $ 52,386 $ 52,386 ======== ======== - ---------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
6 Part I. FINANCIAL INFORMATION Item 1. Financial Statements CORNERSTONE MORGAGE INVESTMENT GROUP, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) BASIS OF PRESENTATION The financial information included herein is unaudited. However, in the opinion of management, such information includes all adjustments, consisting solely of normal recurring adjustments, which are necessary for a fair presentation of the results of interim operations. These interim results should be read in connection with the annual Form 10-K. The results of operations for the three months ended June 30, 1999, are not necessarily indicative of the results to be expected for the full year. FUTURE OPERATIONS Cornerstone Mortgage Investment Group, Inc. (the "Company" or "Cornerstone") was incorporated in the state of Delaware on January 9, 1986, as a wholly-owned, limited purpose subsidiary of Edward D. Jones & Co., L.P. ("EDJ"), a Missouri limited partnership. EDJ organized the Company and currently owns all the issued and outstanding capital stock of the Company. Cornerstone was organized for the limited purpose of issuing and selling secured mortgage bonds (the "Bonds"), which are collateralized by Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA) Certificates. Due to revisions of the Internal Revenue Code enacted, effective January 1, 1987, Cornerstone no longer issues bonds. Cornerstone will continue operations until such time as the Bonds previously issued are retired or mature. 7 Part I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. MANAGEMENT'S FINANCIAL DISCUSSION Residual interest income from Cornerstone certificates of $9,108 and $19,857 was recognized during the six months ended June 30, 1999 and June 30, 1998, respectively. No series were issued or repurchased during these periods. Expenses for the six months ended June 30, 1999 and June 30, 1998, were $1,472 and $3,036, respectively. The outstanding principal balance and remaining collateral value relating to series 1 and 3 issued by Cornerstone are $2,024,000 and $2,042,652 as of June 30, 1999. Series 2 was retired in the first quarter of 1999. In 1997, the Partnership began the process of identifying the software applications expected to be impacted by the Year 2000 system issue. The Partnership does not believe the costs of addressing these issues will have a material impact on the partnership's financial position or on its results of operations. 8 Part II. OTHER INFORMATION CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. Item 1: Legal Proceedings: There are no pending legal proceedings. Item 2. Changes in Securities: No change. Item 3. Default upon Senior Securities: No default. Item 4. Submission of Matters to a Vote of Security Holders: Nothing to report. Item 5. Other Information: Nothing to report. Item 6: Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. Description of Exhibit ----------- ---------------------- 4.1 Indenture dated as of June 15, 1986, between the Company and The Bank of New York, as successor Trustee, relating to Secured Mortgage Bonds (incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-1, as amended, File No. 33-4001). 4.2 First Supplemental Indenture dated August 28, 1986 (incorporated by reference to Exhibit 1 to the Current Report on Form 8-K filed on September 19, 1986). 4.3 Second Supplemental Indenture dated September 26, 1986 (incorporated by reference to Exhibit 1 to the Current Report on Form 8-K filed on October 6, 1986). 4.4 Third Supplemental Indenture dated October 31, 1986 (incorporated by reference to Exhibit 1 to the Current Report on Form 8-K filed on November 12, 1986). (b) Reports on Form 8-K No reports were filed on Form 8-K for the quarter ended June 30, 1999. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CORNERSTONE MORTGAGE INVESTMENT GROUP, INC. (Registrant) /s/ John C. Heisler Chairman of the Board, -------------------------- Chief Financial Officer, John C. Heisler Chief Accounting Officer and Director July 21, 1999 /s/ Philip R. Schwab President, Chief Executive -------------------------- Officer and Director July 21, 1999 Philip R. Schwab
10 EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the financial statements of Cornerstone Mortgage Investment Group, Inc. for the quarter ended June 30, 1999 and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 52,386 0 7,988 0 0 60,374 0 0 60,374 394,857 0 10 0 0 (334,493) 60,374 41,386 41,386 0 0 1,472 0 0 39,914 0 39,914 0 0 0 39,914 0 0
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