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 Bonds; (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 securities; and (4) engage in other activities which are necessary or convenient to accomplish the foregoing and are incidental thereto.
On January 1, 2000, the Company had a total of $564 million registered and unissued Securities on its Registration Statement No. 333-33823. During the first quarter ended March 31, 2000, the Company issued one series of Securities for $3.2 million. This series, Fund America Investors Corporation II, Issuer Trust 2000-1, was issued pursuant to a separate prospectus supplement filed on January 21, 2000. No Securities were issued during the second, third and fourth quarters of 2000. After the first quarter issuance, the balance of unissued Securities remaining on Registration Statement No. 333-33823 was $561 million as of December 31, 2000. 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, 2000, 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.
ITEM 2.
ITEM 2. PROPERTIES The Company has no material physical properties.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS None.
ITEM 4.
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, 2000.
PART II
ITEM 5.
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 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. General
As of December 31, 2000, the Company has issued nineteen series of registered Pass-Through Securities aggregating $2,439,812,829 in initial amount for all the issuances. Twelve series of Bonds remain outstanding on December 31, 2000. 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-B $ 77,409,000 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
1993-E $190,145,165 Trust consisting primarily of adjustable rate one- to four-family, first lien mortgage loans
1993-H $ 45,634,831 Trust consisting primarily of adjustable rate one- to four-family, first lien mortgage loans
1993-J $150,069,158 Trust consisting primarily of adjustable rate one- to four-family, first lien mortgage loans
1994-A $ 44,599,100 Trust consisting primarily of adjustable rate one- to four-family, first lien mortgage loans
1997-NMC1 $121,765,000 Trust assets consisting primarily of adjustable rate mortgage loans that are secured by first lien mortgages on one- to four-family residen- tial property
1998-A $ 60,373,853 Trust consisting primarily of one Pooled Fannie Mae Certificate, two Pooled Freddie Mac Certifi- cates and one Pooled Non-Agency Certificate
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
1998-NMC1 $236,526,000 Trust assets consisting primarily of adjustable rate mortgage loans that are secured by first lien mortgages on one- to four-family residen- tial properties
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 be provided by the sole shareholder to cover anticipated costs on a monthly basis or until the Company generates sufficient revenue. The funding source for 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. The Company generally charges the issuer of a series of Securities a flat fee and a proportionate share of deferred costs associated with its registration statement.
An evaluation of long-lived assets at December 31, 1998 resulted in impairment of the Company's deferred offering costs. It was determined that costs in excess of the currently accepted market pass-through costs should be charged to net income. The net impairment charged to operations in 1998 was $1,127. Based on pass-through fees charged in 2000, deferred offering costs of $256,361 as of December 31, 2000, are expected to be recovered in future issuances.
The Company reported net income for the year ended December 31, 2000 of $51,682 compared to net income of $160,561 for the year ended December 31, 1999 and net income of $196,084 for the year ended December 31, 1998. The income reported for December 31, 2000 was the result of net issuance fees earned of $69,895 and call option income of $18,000 received when the call rights on Fund America Investors Corporation II, Series 1993-H were sold. In 1999, the Company earned income of $195,006 from call option fees received when Fund America Investors Corporation II, Series 1993-F certificates were called by the servicer. Call option income is not a usual event, and the Company does not anticipate the receipt of call option fees in future periods. The Company earned fees of $360,418 from the issuance of three series of Securities in 1998. Variables affecting comparable results of operations are typically the number of securitizations completed and/or impairments of assets.
Results of Operations - Other Matters: Recently Issued Accounting Pronouncements
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities," is effective for all fiscal years beginning after June 15, 2000. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. Under SFAS No. 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. The Company adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did not have a significant impact on the financial position, results of operations, or cash flows of the Company.
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB No. 101), issued in December 1999 by the Securities and Exchange Commission, clarifies existing accounting principles related to revenue recognition in financial statements. The Company adopted SAB No. 101 during the fourth quarter of 2000 and the adoption did not affect the Company's financial statements for the year ended December 31, 2000
4. Forward Looking Statements
The statements contained in this Item 7 and Item 7A
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.
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.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholder Fund America Investors Corporation II Englewood, Colorado
We have audited the accompanying balance sheets of Fund America Investors Corporation II as of December 31, 2000 and 1999, and the related statements of operations, shareholder's equity, and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we 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. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the financial position of Fund America Investors Corporation II as of December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado March 21, 2001
FUND AMERICA INVESTORS CORPORATION II Notes to Financial Statements
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 Bonds; (2) invest cash balances on an interim basis in high quality short-term securities; (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.
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.
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.
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.
Note 2. Summary of Significant Accounting Policies (continued)
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 under this pronouncement. An evaluation of long-lived assets resulted in impairment of the Company's deferred offering costs at December 31, 1998. It was determined that costs in excess of the currently accepted market pass-through costs should be charged to net income. During 2000 and 1999, management determined that there was no impairment of the Company's long-lived assets. The net impairment charged to operations was $1,127 in 1998.
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.
Recently Issued Accounting Standards
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," is effective for all fiscal years beginning after June 15, 2000. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. Under SFAS No. 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. The Company adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did not have a significant impact on the financial position, results of operations, or cash flows of the Company.
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB No. 101) issued in December 1999 by the Securities and Exchange Commission, clarifies existing accounting principles related to revenue recognition in financial statements. The Company adopted SAB No. 101 during the fourth quarter of 2000 and the adoption did not affect the Company's financial statements for the year ended December 31, 2000.
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.
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, President 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 remains in force until written termination of the agreement is presented by either party. As of December 31, 2000, no such notice of termination has been given or received by the Company. Under the terms of the agreement, the
Note 4. Related Party Transactions (continued)
Facilities Manager is required to provide facilities use and other services necessary for the Company to manage its business affairs. The management fees paid during each of the three years ended December 31, 2000 were $24,000.
Note 5. CMO Information
At December 31, 2000 and 1999, the outstanding principal balance of the issued Securities and the amount of publicly and privately issued securities were as follows:
---------------------------------------------------------------------- Total Publicly Privately Series Certificates Issued Issued -------- -------------- -------------- --------------- 1993-A $ 57,486,997 $ 54,457,257 $ 3,029,740 1993-B 10,009,582 6,600,244 3,409,338 1993-C 139,299,724 139,299,724 - 1993-E 17,393,581 14,491,962 2,901,619 1993-H 4,144,862 4,144,862 - 1993-J 12,120,924 11,522,661 598,263 1994-A 3,290,964 2,874,174 416,790 1997-NMC1 13,327,473 13,327,473 - 1998-A 10,331,855 10,331,855 - 1998-B 37,578,296 37,578,296 - 1998-NMC1 44,459,845 44,459,845 - 2000-1 2,882,890 2,733,290 149,600 ------------ ------------ -----------
Total $352,326,993 $341,821,643 $10,505,350 ============ ============ ===========
---------------------------------------------------------------------- Total Publicly Privately Series Certificates Issued Issued -------- -------------- -------------- --------------- 1993-A $ 71,694,755 $ 68,444,059 $ 3,250,696 1993-B 12,692,393 9,173,079 3,519,314 1993-C 152,419,021 152,419,021 - 1993-E 24,858,455 20,711,537 4,146,918 1993-H 5,771,393 5,771,393 - 1993-J 15,776,894 14,975,146 801,748 1994-A 4,104,297 3,528,849 575,448 1996-A 41,747,842 41,747,842 - 1997-NMC1 29,819,797 29,819,797 - 1998-A 11,956,177 11,956,177 - 1998-B 38,532,238 38,532,238 - 1998-NMC1 122,158,583 122,158,583 - ------------ ------------ -----------
Total $531,531,845 $519,237,721 $12,294,124 ============ ============ ===========
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Position Age - ------------------ ---------------------------------- -----
Steven B. Chotin Director, Chairman, Chief Executive Officer and President 53 M. Garrett Smith Director 39 Helen M. Dickens Director, Vice President and Secretary 47 Matthew T. Kennedy Assistant Secretary 25 Annel Henderson Principal Accounting Officer and Controller 39
Steven B. Chotin, 53, has been a Director and the Chairman, Chief Executive Officer and President of the Company since its inception. Mr. Chotin has been President 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. Mr. Chotin may be deemed to be a "promoter" within the meaning of Rule 405 under the Securities Act of 1933, as amended (the "Act").
M. Garrett Smith, 39, joined Pitkin Fuel Corporation out of Dallas, Texas in January 2001 as it's Chief Financial Officer. Previously, Mr. Smith was Chief Financial Officer at Stonebridge Technologies. Prior to Stonebridge, Mr. Smith was Executive Vice President and Chief Financial Officer of Pioneer Natural Resources Company. He also served as a Senior Vice President of Corporate Acquisitions at Pioneer. Prior to joining Pioneer, Mr. Smith was a partner with BTC Partners, a financial consultant to MESA, Inc.
Helen M. Dickens, 47, has been a Director of the Company since 1995, Vice President and Secretary of the Company since 1989. Ms. Dickens is also Vice President and Chief Operations Officer of The Chotin Group Corporation, positions she has held since 1989. Prior to joining The Chotin Group Corporation, 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.
Matthew T. Kennedy, 25, has been the Assistant Secretary of the Company since 1999. Mr. Kennedy joined The Chotin Group Corporation in 1999 as a financial analyst. In 1998, Mr. Kennedy received a Bachelor of Science degree from Miami University with a Major in Economics and a Minor in Information Systems.
Annel Henderson, 39, has been the Controller of the Company since 1992 and the Principal Accounting Officer since 1995. Mrs. Henderson has been the Controller of The Chotin Group Corporation since 1992. Prior to 1992, she was Accounting Manager of Community Holdings Corporation.
Directors and Executive Officers are elected annually for a one-year term.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 2000, 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 pays its outside director a monthly fee of $150.00. No other officers or directors receive any compensation for their services.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Amount and Nature Of Title Beneficial Percent of Class Name and Address of Beneficial Owner Ownership (1) of 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.
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."
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements - Independent Auditors' Report - Balance Sheets at December 31, 2000 and 1999 - Statements of Operations for the Years Ended December 31, 2000, 1999 and 1998 - Statements of Shareholder's Equity for the Years Ended December 31, 2000, 1999 and 1998 - Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 - Notes to Financial Statements for the Years Ended December 31, 2000, 1999 and 1998
(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 None
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: March 30, 2001 By: /s/ Helen M. Dickens --------------------- ---------------------------------- Helen M. Dickens Vice 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 March 30, 2001 - --------------------- Executive Officer and President Steven B. Chotin (Principal Executive Officer)
/s/ Helen M. Dickens Director, Vice President and March 30, 2001 - --------------------- Treasurer (Principal Financial Helen M. Dickens Officer)
/s/ Garrett Smith Director March 30, 2001 - --------------------- Garrett Smith
/s/ Matthew T. Kennedy Assistant Secretary March 30, 2001 - ---------------------- Matthew T. Kennedy
/s/ Annel Henderson Principal Accounting Officer March 30, 2001 - ---------------------- Annel Henderson
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.