As filed with the Securities and Exchange Commission on March 23, 2000 CIK: 0001035270
Registration No. 333-93475
=============================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
POST-EFFECTIVE AMENDMENT No. 1 to
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
PIF/Cornerstone Ministries Investments, Inc.
(Name of small business issuer in its charter)
Georgia 6531 58-2232313
(State or jurisdiction of incorporation or (Primary Standard Industrial (I.R.S. Employer Identification No.)
organization) Classification Code Number)
6030 Bethelview Road, Suite 101
Cumming, Georgia 30040
404.323.3311
(Address and telephone number of principal executive offices and principal place of business)
Cecil A. Brooks, Chairman, President, Chief Executive Officer
PIF/Cornerstone Ministries Investments, Inc.
6030 Bethelview Road, Suite 101
Cumming, Georgia 30040
404.323.3311
(Name, address and telephone of agent for service)
---------------------------
Copies to:
Drew Field
534 Pacific Avenue
San Francisco, CA 94133
415.296.9795
---------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
---------------------------
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Title of each Dollar Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate offering Amount of
to be registered registered per share/certificate price registration fee
- -------------------------------------------------------------------------------------------------------------------
Common Stock, without par value $ 2,275,000 $ 6.50 $ 2,275,000 $ -
Series B Certificates of Indebtedness $17,000,000 $500.00 $17,000,000 $ -
Total $ -
The registrant hereby amends this registration statement on such date or dates as may be necessary to
delay its effective date until the registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of
1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
If any of the securities on this Form are to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, check the following: X
---
EXPLANATORY NOTE
The registration statement, and this post-effective amendment, contain two forms
of prospectus, one to be used in connection with an offering of common stock and
one to be used in a concurrent offering of certificates of indebtedness. The
common stock prospectus and the certificate of indebtedness prospectus are
identical in all respects except for the front cover page. The front cover page
for the certificate of indebtedness prospectus included in this registration
statement is labeled "Alternate Certificate of Indebtedness Page." The form of
common stock prospectus is included in this post-effective amendment no. 1 to
the registration statement and the form of the front cover page of the
certificate of indebtedness prospectus follow the common stock prospectus.
350,000 SHARES
Cornerstone Ministries Investments, Inc.
COMMON STOCK
-------------------------
Cornerstone Ministries Investments, Inc. is offering these 350,000
shares of common stock directly to investors and also through selected
securities broker-dealers, on a best efforts basis.
The shares have been approved for listing on the Chicago Stock Exchange
after completion of the offering.
This offering will end when all the shares have been purchased or
earlier, if we decide to close the offering.
-------------------------
This offering involves a high degree of risk. See "Risk Factors"
beginning on page 4.
-------------------------
Neither the Securities and Exchange Commission nor any state securities
regulator has approved or disapproved the shares or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
================================================================================
Public Broker-dealer
Offering Discounts and Proceeds to
Price Commissions CMI
- --------------------------------------------------------------------------------
Per Share $6.50 $0.455 $6.045
- --------------------------------------------------------------------------------
Total $2,275,000 $159,250 $2,115,750
================================================================================
-------------------------
The date of this Prospectus is___________, 2001
Supplement to the prospectus dated May 1, 2000
(This Supplement is available only to persons who have received the prospectus
dated May 1, 2000 . You may request a copy of that prospectus, by calling
800.637.8304, by fax to 678.455.1114, by email to info@cmiatlanta.com or by mail
to 6030 Bethelview Road, Suite 101, Cumming, GA 30040.)
Management's Discussion and Analysis of
Results of Operations
Merger with Presbyterian Investors Fund, Inc.
On December 29, 2000 Presbyterian Investors Fund, Inc., a not for profit
corporation, merged into Cornerstone Ministries Investments, Inc. The name of
the merged entity became PIF/Cornerstone Ministries Investments, Inc.
The $ 23,280,643 in assets from PIF are primarily performing church loans and
cash held in money market accounts awaiting distribution according to
outstanding loan commitments. The $ 23,280,643 in liabilities assumed are
primarily Certificates of Participation in three loan funds. These are fixed
term, fixed rate securities that are either unsecured or collateralized by
specific loan assets.
PIF/CMI had assets on December 31, 2000 of $31,124,693; liabilities of
$28,542,096; and a total equity of $2,582,597.
Overview of operations
Since their inception, both CMI and PIF have been focused on serving only
faith-based organizations, principally churches. We also offer specialized
programs for churches and non-profit sponsors of senior housing and affordable
housing programs. While our earnings have historically come from financing
churches, that began to change during the last quarter of 2000 as CMI began to
realize revenues from investment in senior and affordable housing projects.
PIF/CMI generates revenue from origination and renewal fees on loans, interest
on these loans, gains on the sale of property and interest on money market
accounts. We also receive limited lease income, but we are no longer pursuing a
lease/purchase strategy. We currently charge a 10% fee on new loans and renewal
fees of as much as 5% of the outstanding balance of the renewing loan. Our
interest rate on all new loans is currently from 10% to 12%. Some loans are
participating loans, enabling PIF/CMI to receive income from the gains on the
sale of property for which it has provided financing. The participation
percentage varies between 25% and 33% of the gains on the sale of real estate.
Comparison of Periods Ending December 31, 1999 and December 31, 2000
Income
General. Assets increased from $4,502,381 at the end of 1999 to
$31,124,693 at the end of 2000, as a result of the merger with PIF and the sale
of CMI's stock and certificates. The December 29, 2000 merger was too late to
materially affect income for the year. Gross income was $534,336 for 1999 and
$912,396 for 2000. Net income for these periods, before dividends but after
taxes, was $116,138 and $214,228. The increase in gross and net income is the
result of increased investable assets resulting from the sale of shares and
certificates.
Total loans outstanding on December 31, 1999 were $3,412,979 and $26,469,809 on
December 31, 2000. Our other assets at the end of 2000 included $273,500 in
investments in church bonds and $869,066 in interest receivable. We also had
investments in liquid securities of $2,181,280, as required by PIF's financing
terms.
Interest Income. Interest income on loans increased during the year
2000, from 148,758 to 432,590, largely as a result of additional loans made
during this period. The total increase in loans outstanding, prior to the merger
with PIF was $1,981,212, from $3,412,979 at December 1999 to $5,394,191 at
December 29, 2000. The loan balance as of December 31, 2000, reflecting the
effects of the merger was $26,469,809. Pro forma loan interest income for the
full year 2000 for the combined companies would have been $2,244,862.
2
Investment interest income prior to the merger decreased from $34,453 to
$19,410, reflecting a more rapid deployment of available funds into loans. PIF,
prior to the merger, earned $193,166 in investment interest income in 2000, plus
$27,631 in bond interest income.
Fee Income. Fee income for the twelve months ending December 31, 2000
was $478,806 versus $263,162 for the same period in 1999. The increase is the
result of additional loans being made during the course of the year out of
increased funds arising from the sale of stock and certificates, as well as some
limited refinancing of existing loans by third parties, providing some
additional loanable assets. Total pro forma fee income for the combined entities
for the twelve months ending December 31, 2000 was $1,308,140.
Income from the sale of property. CMI did not realize any income from
the sale of property during the year 2000. By the end of 1999, CMI had disposed
of most of the property to which it held title. None of its participating loans
had sold property during the course of the year. PIF/CMI currently holds title
to one property, in Soddy Daisy, TN, which it expects to sell during the year
2001.
Expenses
Interest Expenses. As a result of its growth in assets, and as a result
of drawing $750,000 from its line of credit, CMI experienced an increase in
interest expense from $209,541 to $314,871. This increase in interest expense,
in addition to the interest expense on the LOC of $53,360, is a result of a net
increase in outstanding certificate principal of $1,692,864, from $3,063,334 to
$4,756,198. The company began sales of its Series B Certificates of
Participation in May 2000 and the increase is the net of sales less $55,000 in
principal balance of certificates that matured. From the proceeds of the current
offering of stock and certificates, the company fully repaid its LOC prior to
the merger with PIF. The combined pro-forma interest expense for 2000,
reflecting the merger, was $2,354,546.
Marketing and Selling Expenses. To date, CMI has not committed
substantial resources for marketing its lending capabilities because of the
continuing backlog of projects with which it has been approached. Total
promotional expenses in 2000 were $21,435, an increase of $14,000 over expenses
in 1999.
Operating and Administrative Expenses. Operating and administrative
expenses totaled $152,092 in 1999 and $196,072 in 2000. This increase can be
attributed to having a larger asset base on which administrative services are
calculated. Prior to the merger, CMI paid PIF an administrative services fee of
1.5% of assets. This component of operating and administrative fees increased
from $47,400 to $76,125. Other areas of expense increase were: accounting, from
$7,595 to $12, 373; legal expense, from $3,265 to $10,925; as well as other
smaller increases. CMI also experienced some reduction in expenses between 1999
and 2000: from $43, 257 to $3,964 in consulting fees and from $15,256 to $9,363
in trust service fees.
Selling commissions are paid in cash but capitalized over three, five, and seven
years depending on whether a three-year certificate, five-year certificate or
common stock is sold. Commissions increased from $18,046 in 1999 to $36,716 in
2000 as certificates and common stock have been sold in the current offering,
which commenced in May 2000. Commission expense, and the accompanying
capitalized assets will increase as securities continue to be sold.
Amortized legal expenses increased as a result of the new offering in the year
2000. Legal expenses associated with both the 1998 offering and the 2000
offering are capitalized and amortized. We capitalized and are amortizing the
costs associated with the transfer of registrar, paying agent, and trustee
services.
Taxes. CMI paid taxes of $56,567 in 1999 on pre-tax income of $172,705.
We estimate taxes for the year 2000 will be approximately $130,166 on pre-tax
income of $344,394. Total expenses, including taxes, for 1999 were $418,200 and
$717,578 for 2000.
Dividends
We paid quarterly dividends totaling $1.00 per share during 1999, for
an annual rate based on the initial stock offering price of 10%. In January of
2000 the Board of Directors voted to split the existing shares, reducing their
price from $10.00 per share to $6.50 per share and increasing the number of
shares outstanding. The Board
3
also elected to change the payment of dividends from quarterly to semi-annual
periods. During 2000 the Board declared semi-annual dividends of $0.78 each per
share, for an annualized return of 12%.
Liquidity and Capital Resources
Cash from Operations. Net cash provided from operating activities in
1999 was $19,215 and for 2000 was $1,540,958.
Cash from Financings. CMI began operations in 1996 with an initial
investment of $510,000 from individuals and PIF. CMI's first offering of stock
and certificates in 1998 raised a total of $3,747,306.
Current Offering. CMI is currently seeking new capital of up to
$19,275,000, consisting of $2,275,000 in common stock (shares priced at $6.50
per share) and $17,000,000 in unsecured debt. This offering began in May 2000.
Through December 31, 2000, 214,035 shares had been sold, raising $1,391,228, and
an additional $1,754,922 in certificates had been sold. The total realized from
this ongoing offering is $3,146,150. A portion of these new investments came
from maturing investments in PIF.
We believe that additional sales of new investments from the current and planned
offerings, as well as cash on hand, expected refinancings and sales of existing
loans, will be sufficient to meet our capital needs for the next quarter. The
amount and timing of our future capital requirements will depend on factors such
as the origination and funding of new investments, the costs of additional
underwriting and marketing efforts, and general expenses of operations.
Effects of Inflation
Inflation, which has been limited during the course of our operating history,
has had little effect on operations and we do not believe it will have a
significant effect on our cost of capital or on the rates that we charge on our
loans. Inflation resulting in increased prices for real estate could potentially
increase the gains realized from the sale of property, while at the same time
decrease the ability of some potential clients to purchase, finance, or lease a
property.
Index to financial statements
Audited financial statements, December 31, 2000 and December 31, 1999:
Independent Auditors' Report F-1
Balance Sheets F-2
Statement of Income and Retained Earnings F-3
Statements of Changes in Stockholders' equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
4
T. JACKSON McDANIEL III
Certified Public Accountant
1439 McLendon Drive
Suite C
Decatur, GA 30033
(770) 491-0609
To the Board of Directors
Cornerstone Ministries Investments, Inc.
I have audited the accompanying balance sheet of Cornerstone Ministries
Investments, Inc. as of December 31, 2000, 1999 and 1998 and the related
statements of income, retained earnings, and cash flows for the for the years
then ended. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Cornerstone Ministries Investments,
Inc. as of December 31, 2000, 1999 and 1998 and results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.
S/T. Jackson McDaniel III
March 12, 2000
F-1
CORNERSTONE MINISTRIES INVESTMENTS, INC.
BALANCE SHEET
December 31, 2000, December 31, 1999 and December 31, 1998
ASSETS
12/31/00 12/31/99 12/31/98
-------------- ------------- -------------
CURRENT ASSETS
CASH $ 2,181,280 $ 706,035 $ 677,576
ACCOUNTS RECEIVABLE 67,085 - -
ACCRUED INTEREST RECEIVABLE 869,066 46,167 1,948
-------------- ------------- -------------
TOTAL CURRENT ASSETS 3,117,431 752,202 679,524
REAL ESTATE LOANS RECEIVABLE 26,469,809 3,412,979 625,179
FIXED ASSETS-NET OF ACCUMULATED
DEPRECIATION 6,689
INTANGIBLE ASSETS-NET OF ACCUMULATED
AMORTIZATION 455,226 332,200 199,510
INVESTMENTS
REAL ESTATE HELD 295,499
OTHER ASSETS
PREMIUM PAID FOR ASSET ACQUISITION 500,000
BOND HOLDINGS 273,500
PREPAID INSURANCE 5,507
DEPOSIT 1,031 5,000 -
-------------- ------------- -------------
TOTAL ASSETS $ 31,124,693 $ 4,502,381 $ 1,504,213
============== ============= =============
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 26,337 $ 87,537 $ 147,534
INTEREST PAYABLE 2,213,690 83,750 2,697
INCOME TAXES PAYABLE 112,264 30,810 -
PAYROLL TAX LIABILITIES 34,871
DIVIDENDS PAYABLE 151,974 29,776 -
DUE TO CHURCH GROWTH FOUNDATION 22,240
RENT DEPOSITS HELD 700 700 5,780
-------------- ------------- -------------
TOTAL CURRENT LIABILITIES 2,562,076 232,573 156,011
LONG TERM LIABILITIES-INVESTOR CERTIFICIATES
INVESTOR CERTIFICATES 25,483,051 3,056,276 608,500
BOND FUND CERTIFICATES 474,145
------------ ---------- -------------
TOTAL LONG TERM LIABILITIES 25,957,196 3,056,276 608,500
DEFERRED INCOME TAXES 22,823 12,372 3,948
-------------- ------------- -------------
TOTAL LIABILITIES 28,542,096 3,301,221 768,459
COMMON STOCK, .01 PAR VALUE,
10,000,000 SHARES AUTHORIZED,
397,227 ISSUED AND OUTSTANDING 3,972 1,191 730
PAID IN CAPITAL 2,578,286 1,189,839 729,140
RETAINED EARNINGS (DEFICIT) 339 10,130 5,884
-------------- ------------- -------------
TOTAL SHAREHOLDER'S EQUITY 2,582,597 1,201,160 735,754
-------------- ------------- -------------
TOTAL LIABILITIES AND MEMBER'S EQUITY $ 31,124,693 $ 4,502,381 $ 1,504,213
============== ============= =============
F-2p
<FN>
See accompanying accountant's report and notes to financial statement
</FN>
CORNERSTONE MINISTRIES INVESTMENTS, INC
STATEMENT OF INCOME
AND RETAINED EARNINGS
For the years ended December 31, 2000, December 31, 1999
and December 31, 1998
12/31/00 12/31/99 12/31/98
----------------- ------------------ -------------
REVENUES
Interest Income-Loans $ 432,590 $ 148,758 $ 47,958
Fees Earned 478,806 263,162 -
Rental Income 1,452 -
Other income 1,000
Gain on Sale of Real Estate 86,513 37,280
----------------- ------------------ -------------
TOTAL REVENUES 912,396 499,885 85,238
OPERATING EXPENSES
Interest Expense-Investor Certificates 314,871 209,541 6,297
Interest on Line of Credit 53,360
Management Fees 76,125 47,400 -
Marketing Expenses 92,239 33,876 12,716
Operating Expenses 50,817 70,816 20,313
----------------- ------------------ -------------
TOTAL OPERATING EXPENSES 587,412 361,633 39,325
NET INCOME FROM OPERATIONS 324,984 138,252 45,913
OTHER INCOME (EXPENSE)
Interest Income-Banks 19,410 34,453 3,190
Income Tax Expense (130,166) (56,567) (10,038)
----------------- ------------------ -------------
TOTAL OTHER INCOME (EXPENSE) (110,756) (22,114) (6,848)
NET INCOME $ 214,228 $ 116,138 $ 39,065
RETAINED EARNINGS (DEFICIT)-BEGINNING OF YEAR 10,130 5,884 5,069
DIVIDENDS (224,019) (111,892) (38,250)
----------------- ------------------ -------------
RETAINED EARNINGS (DEFICIT)-END OF YEAR $ 339 $ 10,130 $ 5,884
================= ================== =============
F-3
<FN>
See accompanying accountant's report and notes to financial statement
</FN>
CORNERSTONE MINISTRIES INVESTMENTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the year ended December 31, 2000
Retained Total
Common Paid-In Earnings Owner's
Stock Capital (Deficit) Equity
--------- -------------- ----------- -------------
Balance at December 31, 1999 $ 1,191 $ 1,189,839 $ 10,130 $ 1,201,160
Net Income (Loss) for the year -
ended December 31, 2000 214,228 214,228
Dividends declared (224,019) (224,019)
Capital contribution 2,781 1,388,447 1,391,228
--------- -------------- ----------- -------------
Balance at December 31, 2000 $ 3,972 $ 2,578,286 $ 339 $ 2,582,597
========= ============== =========== =============
F-4
<FN>
See accompanying accountant's report and notes to financial statement
</FN>
CORNERSTONE MINISTRIES INVESTMENTS, INC.
STATEMENT OF CASH FLOWS
For the years ended December 31, 2000, December 31, 1999
and December 31, 1998
12/31/00 12/31/98 12/31/98
---------------- --------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash from Operations:
Net income (loss) $ 214,228 $ 116,138 $ 39,065
Items that do not use
Cash:
Amortization 31,945 14,332 3,879
(Increase) Decrease in
Accounts Receivable (67,085) - -
(Increase) Decrease in
Accrued Interest Receivable (822,899) (44,219) 377
(Increase) Decrease in
Intangible Assets (154,971) (147,022) (188,636)
(Increase) Decrease in
Other Assets (1,538) (5,000) -
Increase (Decrease) in
Accounts Payable (61,200) (59,997) 147,534
Increase (Decrease) in
Interest Payable 2,129,940 81,053 2,697
Increase (Decrease) in
Dividends Payable 122,198 29,776 -
Increase (Decrease) in
Rent Deposit Payable (5,080) 4,599
Increase (Decrease) in
Income taxes payable 81,454 30,810 -
Increase (Decrease) in
Payroll Tax Liabilities 34,871
Increase (Decrease) in
Other Liabilities 23,564
Increase (Decrease) in
Deferred tax liability 10,451 8,424 3,948
---------------- --------------- ------------
Net Cash Provided (Used) by
Operating Activities 1,540,958 19,215 13,463
Cash Flows From Investing Activities:
Real Estate Purchased (295,499)
Effect of PIF Asset Acquisition (308,966)
Loans purchased (21,720,888) - -
Loans made (3,387,451) (3,552,450) (364,585)
Loan principal repayments received 2,051,509 764,874 162,703
---------------- --------------- ------------
Net Cash Provided (Used) by
Investing Activities (23,661,295) (2,787,576) (201,882)
Cash Flows From Financing Activties:
Stock subscriptions sold 1,391,228 461,160 219,870
Certificates of Indebtedness Issued 1,699,922
Certificates of Indebtedness Acquired 20,726,853 2,417,776 608,500
Dividends Paid (222,421) (82,116) (38,250)
---------------- --------------- ------------
Net Cash Provided by Financing Activities 23,595,582 2,796,820 790,120
Net Increase (Decrease)
in Cash: 1,475,245 28,459 601,701
Cash-Beginning of Year 706,035 677,576 75,875
---------------- --------------- ------------
Cash-End of Year $ 2,181,280 $ 706,035 $ 677,576
================ =============== ============
During the year ended December 31, 2000 the Company F-5
paid cash interest of $317,360
<FN>
See accompanying accountant's report and notes to financial statement
</FN>
CORNERSTONE MINISTRIES INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1 - Summary of Significant Accounting Policies
(A) Conformity with Generally Accepted Accounting Principles and Accounting
Method
The accounting policies of the Company conform to generally accepted accounting
principles consistent to its industry. The Company uses the accrual method of
accounting.
(B) Description of Company's Operations
The Company is in the business of originating and purchasing Mortgage loans on
Church and Church related properties. Costs associated with loan applications
received directly from borrowers are expensed as period costs.
The Company is also in the business of investing in Church and Church related
real estate for the purpose of 1)selling at a profit, 2)leasing to Churches and
Church related activities.
(C) Organizational Information
The Company is a corporation organized under the laws of the State of Georgia.
(D) Organizational Expenses
The expenses associated with organizing the corporation and beginning business
are have been capitalized and are being amortized over 60 months.
(E) Provision for Loan Losses
Management is of the opinion that losses arising from the default of Church or
Church related loans are not probable or reasonably estimated. Management has an
aggressive policy of working out any potential problem loans before they reach
the default stage. As of the balance sheet date no loan is in arrears in a
material amount. Therefore, no allowance for loan losses is reflected in the
accompanying statements.
(F) Comparative Data
The Balance Sheet information for the years ended December 31, 1999 and December
31, 1998 are presented for comparative purposes and are not intended to be
complete financial statement presentations.
F-6
CORNERSTONE MINISTRIES INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
(G) Accrued Interest Income
Interest income is accrued monthly on the outstanding balance of loans
receivable.
(H) Accrued Interest Expense
Interest on Certificates of Indebtedness is accrued semiannually from the date
of issuance, and may be paid semiannually. Investors holding five year
certificates in multiples of $10,000 may receive interest monthly.
(G) Cash and Cash Equivalents
Cash and cash equivalents include checking accounts and short term certificates
with original maturities of 90 days of less.
NOTE 2 - LEASE COMMITMENTS
The Company currently has no lease commitments. For the year ended December 31,
2000 the Company shared office space at no cost with its largest shareholder.
Subsequent to December 31, 2000 the Company continued this arrangement on a
month to month basis until it occupied new office space on February 28, 2001.
(See NOTE
NOTE 3 - REAL ESTATE LOANS RECEIVABLE
At December 31, 2000, 1999, and 1998 the Company had Real Estate Loans
Receivable from Churches totaling $26,469,809, $3,412,979, and $625,179
respectively. These loans mature over a period beginning in 2001 and ending in
2012. Of the total loans receivable at December 31, 2000 $21,720,888) were
acquired as a result of the PIF Acquisition (See NOTE
NOTE 4 - INTANGIBLE ASSETS
Intangible assets consist of costs incurred to 1) organize the Company, 2) costs
of registering the Company's equity and debt securities, 3) developing the
Prospectus for registering of the Company's securities, and 4) commissions paid
and/or accrued on the sale of debt securities and equity securities. These
intangibles are amortized on a straight line basis periods of 5 to 40 years.
F-7
CORNERSTONE MINISTRIES INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 5 - INCOME TAXES
Income taxes payable and the corresponding expense on The Company's net income
for the years ended December 31, 2000, December 31, and 1998, December 31, 1997
has been computed as follows:
12/31/1999 12/31/1999 12/31/1998
--------------- --------------- -------------
Current: Federal $ 101,519 $ 36,044 $ 4,128
State 18,195 8,151 1,962
Deferred Federal 9,058 10,747 2,820
State 1,394 1,625 1,128
--------------- --------------- -------------
$ 130,166 $ 56,567 $ 10,038
=============== =============== =============
Deferred income taxes arise because of timing differences between financial
accounting and tax accounting rules for the deductibility of intangible
amortization expense.
NOTE 6 - CASH CONCENTRATION
A cash concentration risk arises when the Company has more cash in one financial
institution then is covered by insurance. At December 31, 2000, December 31,
1999 and December 31, 1998 the Company had cash in one institution that was over
the amount insured by the FDIC of $2,081,280 $606,035, and $577,576.
NOTE 7 - SIGNIFICANT BUSINESS CONCENTRATION
At December 31, 2000 the Company has loans receivable derived from lending
activities of $26,469,809. Of this amount $5,155,426 or approximately 19.5% of
the total loan portfolio of the Company is from one entity. This entity borrowed
the funds to finance an Phase I of an Assisted Living Facility in Ft. Pierce,
Fl. At December 31, 2000 this facility had not yet opened. However, subsequent
to year end, the financed facility opened Phase I.
NOTE 8-NAME CHANGE
Prior to the year ended December 31, 1998, the Company was named "Cornerstone
Ministries Fund, Inc.". During the year ended December 31, 1998, the Company
changed its name to "Cornerstone Ministries Investments, Inc." to allow it to
register its securities in all 50 states and to more correctly identify it with
its mission.
F-8
CORNERSTONE MINISTRIES INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 10-SECURITIES OFFERING
In December 1999 The Company filed a FORM SB-2 Registration Statement under The
Securities Act of 1933. Under this Registration Statement it is The Company's
intent to raise approximately $19,275,000 in additional capital. This is to be
accomplished through the issuance of $2,275,000 in additional Common Stock and
$17,000,000 in new Certificates of Indebtedness.
As of the date of the accompanying accountant's report the company has an
additional 2,781 shares of stock as a result of this offering..
NOTE 11-STOCK SPLIT
In December of 1999 the board of directors authorized a split its stock in a
ratio of approximately 1.53 to 1. This split was effected for shareholders of
record on January 2, 2000, and effected as of January 15, 2000. The split has no
effect on the earnings or cash position of the company at December 31, 2000.
NOTE 12-ACQUISITION OF ASSETS OF PRESBYTERIAN INVESTORS FUND, INC.
On October 11, 2000 the Board of Directors agreed to acquire certain assets of
the Presbyterian Investors Fund, Inc. (PIF). PIF was in the business of
originating and purchasing loans made to churches that are members of The
Presbyterian Church in America (PCA). The acquisition price was determined by an
evaluation of the loan portfolio the PIF and was to be paid by the assumption of
certain liabilities of PIF plus a premium to be paid for the assets that was not
to be less than $500,000. This acquisition was closed on December 29, 2000
effective as of that date. The financial statements to which these footnotes are
a part include the results of that acquisition.
NOTE 13-SUBSEQUENT EVENT-REAL ESTATE ACQUISITION
On February 1, 2001 the company acquired two office condos to be used as office
space. The purchase price was $250,000. The company occupied this new office
space on February 28, 2001. Until the new space was occupied the company
operated under a month to month lease at $1,031 a month.
F-9
[Alternate Certificate of Indebtedness Page]
$17,000,000
Cornerstone
Ministries
Investments, Inc.
SERIES B CERTIFICATES OF INDEBTEDNESS
-------------------------
Cornerstone Ministries Investments, Inc. is offering these Series B
Certificates of Indebtedness directly to investors and also through selected
securities broker-dealers, on a best efforts basis.
The amount you pay for certificates will be repaid upon their maturity
date, unless you choose to replace them with any certificates we may be offering
at that time. We do not expect that there will be any trading market for the
certificates.
This offering will end when all the certificates have been purchased or
earlier, if we decide to close the offering. There is no requirement that a
minimum number of certificates must be sold.
-------------------------
This offering involves a high degree of risk. See "Risk Factors"
beginning on page 4.
-------------------------
Neither the Securities and Exchange Commission nor any state securities
regulator has approved or disapproved the shares or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
===================================================================================================================
Certificate Annual Principal Public Offering Broker-dealer
Maturity Interest Amount Price per Discounts and Proceeds to
Date Rate Offered Certificate Commissions CMI
- -------------------------------------------------------------------------------------------------------------------
March 15, 2003 7.00% $ 3,000,000 $2,500 $ 75 $2,425
March 15, 2005 9.00% 14,000,000 $2,500 $125 $2,375
- -------------------------------------------------------------------------------------------------------------------
Total $17,000,000 $790,000 $16,210,000
===================================================================================================================
The date of this Prospectus is___________, 2001
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
Item 27. Exhibits
Exhibits listed below are filed as part of this Post-effective Amendment to
Registration Statement pursuant to Item 601 of Regulation S-B.
Exhibit
Number Description
------ -----------
23.1 Consent of T. Jackson McDaniel III, Certified Public Accountant
27 Financial Data Schedule
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorizes this Post-effective
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, in Cumming, Georgia, on March 20, 2001.
PIF/CORNERSTONE MINISTRIES INVESTMENTS, INC. (Issuer)
By S/CECIL A. BROOKS
------------------------------------------
Cecil A. Brooks, Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
post-effective amendment No. 1 to registration statement was signed by the
following persons in the capacities and on the dates stated.
Signature Title Date
S/CECIL A. BROOKS Chief Executive Officer, President and March 20, 2001
- -------------------------------------------- Chairman of the Board of Directors
Cecil A. Brooks
S/JOHN T. OTTINGER Vice President, Chief Financial Officer March 20, 2001
- -------------------------------------------- Secretary, Treasurer and Director
John T. Ottinger (Principal financial and accounting officer)
S/THEODORE R. FOX Director March 20, 2001
- --------------------------------------------
Theodore R. Fox
S/RICHARD E. MCLAUGHLIN Director March 20, 2001
- --------------------------------------------
Richard E. McLaughlin
S/JAYME SICKERT Director March 20, 2001
- --------------------------------------------
Jayme Sickert
S/IRVING B. WICKER Director March 20, 2001
- --------------------------------------------
Irving B. Wicker
S/TAYLOR MCGOWN Director March 20, 2001
- --------------------------------------------
Taylor McGown
S/HENRY R. DARDEN Director March 20, 2001
- --------------------------------------------
Henry Darden
* S/CECIL A. BROOKS
-----------------
Cecil A. Brooks
p Attorney-in-fact