UNITED STATES
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 Quarter ended September 30, 1995 Commission file number 33-5154
RESIDENTIAL RESOURCES, INC.
ARIZONA 86-0544838
- ----------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2058 North Mills Avenue, Suite 344, Claremont, California 91711
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(Address of principal executive offices)
909-629-6187
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (I) 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), an (ii) has been subject to such
filing requirements for the past (90) days.
Yes X No
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The number of shares outstanding of the registrant's common stock as of
September 30, 1995 was 7,018.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
RESIDENTIAL RESOURCES, INC.
BALANCE SHEETS
SEPTEMBER 30, 1995 AND MARCH 31, 1995
1995 1995
September 30, March 31,
(Unaudited) (Audited)
ASSETS
Cash $2,416 $11,788
Contracts Receivable $201,109 $200,000
Deferred Registration Costs $229,565 $229,565
Property and Equipment, at cost
Less Accumulated Depreciation $47,958 $52,318
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TOTAL ASSETS $481,048 $493,671
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Accounts Payable $58,098 $79,940
Notes and Advances Due to
Related Parties $384,195 $402,235
Note Payable $52,500 $52,500
Accrued Interest $9,623 $7,698
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TOTAL LIABILITIES $504,416 $542,373
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STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $ 0.10 par value - $1,000 $1,000
authorized, 100,000 shares; issued,
10,000 shares; outstanding, 7,018
shares
Additional Paid In Capital $109,298 $109,298
Accumulated Deficit ($133,368) ($158,702)
Less: treasury stock, at cost ($298) ($298)
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TOTAL STOCKHOLDER'S EQUITY (DEFICIT) ($23,368) ($48,702)
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $481,048 $493,671
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SEE NOTES TO FINANCIAL STATEMENTS
2
RESIDENTIAL RESOURCES, INC.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 1994 AND 1995
Three Months Ended Six Months Ended
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September 30, September 30, September 30, September 30,
------------- ------------- ------------- -------------
1995 1994 1995 1994
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
REVENUES
Interest and Other Income $ 304
Contract Fees $ 0 $94,630 $440,000 $286,729
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TOTAL REVENUE $ 0 $94,630 $440,304 $286,729
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COSTS AND EXPENSES
Operating Expenses $2,267 $121,857 $414,970 $288,393
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TOTAL EXPENSES $2,267 $121,857 $414,970 $288,393
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INCOME (LOSS) BEFORE INCOME TAXES $2,267 ($27,227) $ 25,334 ($ 1,664)
------- -------- -------- --------
PROVISION FOR INCOME TAXES
NET INCOME (LOSS) $2,267 ($27,227) $ 25,334 ($ 1,664)
------- -------- -------- --------
EARNINGS (LOSS) PER SHARE ($0.32) ($3.88) $3.61 ($ 0.17)
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SEE NOTES TO FINANCIAL STATEMENTS
3
RESIDENTIAL RESOURCES, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDING SEPTEMBER 30, 1995 AND 1994
SEPTEMBER SEPTEMBER
--------- ---------
30, 1995 30, 1994
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(Unaudited) (Unaudited)
----------- -----------
Cash Flows From/(Used For)
Operating Activities:
Net Income $25,334 ($1,664)
Adjustments to Reconcile Net Income
Depreciation $ 4,360 $0
(Loss) to Net Cash Provided By/Used
In Operating Activities:
Increase (Decrease) Resulting
From Changes In:
Contract Receivable $ 1,109 $ 0
Accounts Payable ($21,842) $ 1,192
Due to Related Parties ($18,040) $ 0
Accrued Interest $ 1,925 $ 0
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Net Cash Provided by Operating Activities $ 9,372 ($ 472)
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Net Cash Flows Provided by Financing Activities $ 0 $ 0
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Net Increase (Decrease) In Cash $ 9,372 ($ 472)
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Cash, Beginning Of Period $11,788 $ 350
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Cash, End Of Period $ 2,416 ($ 122)
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SEE NOTES TO FINANCIAL STATEMENTS
4
RESIDENTIAL RESOURCES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at September 30, 1995, and for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principals
have been condensed or omitted. It is suggested that these unaudited, condensed,
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's March 31, 1995, audited
financial statements. The results of operations for the six months ended
September 30, 1995 and 1994 are not necessarily indicative of the operating
results for the full year.
NOTE 2. RELATED PARTY TRANSACTIONS
Notes and amounts due to related parties are as follows:
September 30, 1995 March 31, 1995
------------------ --------------
(Unaudited) (Audited)
Settlement agreement to former
stockholder, paid in May 1995 $ - $ 90,000
Settlement agreement to former
stockholder due on demand,
currently paid in $2,500 per
month installments,
non-interest bearing 135,110 145,000
Advances from related party
due on demand 196,585 114,385
Note payable to related
party, due on demand, bearing
interest of 12% 52,500 52,500
Other 0 350
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$384,195 $402,235
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Because of the limited purpose and operations of the Company, it does not have
and is not expected to have any significant assets, other than assets which may
be acquired and immediately pledged to secure a specific series of bonds issued
by the Company, if any, intangible capitalized costs and deferred registration
costs.
The Company has little need for liquidity with no plans to increase its
liquidity. The Company has no commitments for capital expenditures and no
material resources.
The Company is dependent on its parent, Residential Resources Financial
Services, Inc., to continue as a going concern. Residential Resources Financial
Services, Inc., has committed to support the Company for at least another year.
While revenues for the three month period ending September 30, 1995 was zero,
revenues for the six month periods ending September 30, 1995 and 1994 consisted
primarily of contracts to assist financial institutions in the rating,
securitization and placement of mortgage-backed securities.
Costs and expenses consisted primarily of contract costs (commissions and legal
costs) and General and Administrative costs and management fees.
The Company has an open shelf registration statement on file with the Securities
and Exchange Commission under which the Company or trusts created by the Company
may issue asset-colateralized bonds in an aggregate principal amount of up to
$1.1 billion on an expedited basis.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
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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.
RESIDENTIAL RESOURCES, INC.
Date: November 13, 1995
/s/ William P. Schlick
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William P. Schlick,
Chief Executive Officer
Chief Financial Officer
7