-----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, LaltXFBNbyv7+7aDMxKXpbfVnkvvkueV8ACzJKbc7DTAqS63ogVpgCofRdIttSwh klm6Bp+0szaVC/kcIrHuxw== 0001000096-00-000192.txt : 20000302 0001000096-00-000192.hdr.sgml : 20000302 ACCESSION NUMBER: 0001000096-00-000192 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 20000229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIVEST PROPERTIES INC CENTRAL INDEX KEY: 0000927102 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 841240264 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 001-14462 FILM NUMBER: 557617 BUSINESS ADDRESS: STREET 1: 1800 GLENARM PLACE STREET 2: SUITE 500 CITY: DENVER, STATE: CO ZIP: 80202 BUSINESS PHONE: 303-297-18 MAIL ADDRESS: STREET 1: 7100 GRANDVIEW AVE STREET 2: SUITE 1 CITY: ARVADA STATE: CO ZIP: 80002 10QSB/A 1 FORM 10-QSB/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A1 [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 1999. OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from __________ to __________ Commission file number 1-14462 AmeriVest Properties Inc. ------------------------- (Exact name of small business issuer as specified in its charter.) Maryland 84-1240264 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1800 Glenarm Place Suite 500 Denver, Colorado 80202 - ----------------------------- -------- (Zip Code) (303) 297-1800 -------------- (Issuer's telephone number, including area code) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ----- ----- As of November 12, 1999 the Registrant had outstanding 2,228,850 shares of common stock, par value $.001. Transitional Small Business Disclosure Format (check one): Yes No X ----- ----- AMERIVEST PROPERTIES INC. AND SUBSIDIARIES FORM 10-QSB SEPTEMBER 30, 1999 Table of Contents ----------------- Page No. Part I Item 1. Financial Statements Balance Sheets as of December 31, 1998 and September 30, 1999 3 Statements of Operations for the Three Month and Nine Months Ended September 30, 1998 and 1999 4 Statements of Cash Flows for the Nine Months Ended September 30, 1998 and 1999 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II Item 6. Exhibits and Reports on Form 8-K 9 2
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, September 30, 1998 1999 ------------ ------------ ASSETS (Unaudited) ASSETS Investment in real estate Land $ 4,745,754 $ 6,325,104 Buildings and improvements 22,363,656 28,721,814 Furniture, fixtures and equipment 284,993 318,770 Tenant improvements 541,058 612,103 Less accumulated depreciation and amoritization (5,837,264) (6,583,790) ------------ ------------ Net Investment in Real Estate 22,098,197 29,394,001 Cash and cash equivalents 441,316 511,977 Tenant accounts receivable 48,615 66,682 Deferred financing costs, net 624,917 588,107 Prepaid expenses and other assets 501,889 545,262 ------------ ------------ $ 23,714,934 $ 31,106,029 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Mortgage loans payable $ 18,861,599 $ 23,913,756 Accounts payable and accrued expenses 121,327 194,722 Accrued interest 108,810 149,969 Accrued real estate taxes 558,745 546,473 Prepaid rents and security deposits 214,912 342,817 Dividends payable 199,052 267,462 ------------ ------------ Total Liabilities 20,064,445 25,415,199 ------------ ------------ STOCKHOLDERS' EQUITY Preferred stock, $.001 par value Authorized - 5,000,000 shares Issued and outstanding - none -- -- Common stock, $.001 par value Authorized - 15,000,000 shares Issued and outstanding - 1,658,770 shares (1998) 1,659 2,229 and 2,228,850 shares (1999) Capital in excess of par value 5,607,725 8,179,723 Distribution in excess of accumulated earnings (1,958,895) (2,491,122) ------------ ------------ Total Stockholders' Equity 3,650,489 5,690,830 ------------ ------------ $ 23,714,934 $ 31,106,029 ============ ============ 3
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES Consolidated Statement of Operations Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------ 1998 1999 1998 1999 ---- ---- ---- ---- (Unaudited) (Unaudited) REAL ESTATE OPERATING REVENUE Rental revenue Commercial Properties $ 800,756 $ 1,294,684 $ 1,461,757 $ 3,254,198 Storage Properties 368,732 377,343 1,089,870 1,057,981 ----------- ----------- ----------- ----------- 1,169,488 1,672,027 2,551,627 4,312,179 ----------- ----------- ----------- ----------- REAL ESTATE OPERATING EXPENSES Property operating expenses Operating expenses 303,286 493,477 605,377 1,202,773 Real estate taxes 120,343 163,429 269,946 430,488 Management fees 60,465 39,464 135,957 83,688 General and administrative 113,511 192,497 310,820 503,773 Interest 309,603 464,571 666,130 1,185,215 Expenses associated with debt refinancing 337,000 -- 337,000 -- Depreciation and amortization 236,790 293,908 531,544 782,102 ----------- ----------- ----------- ----------- 1,480,998 1,645,222 2,856,774 4,187,999 ----------- ----------- ----------- ----------- OTHER INCOME Interest income 898 3,784 2,640 9,160 ----------- ----------- ----------- ----------- NET (LOSS) INCOME $ (310,612) $ 30,589 $ (305,147) $ 133,340 =========== =========== =========== =========== NET (LOSS) INCOME PER COMMON SHARE $ (0.19) $ 0.02 $ (0.20) $ 0.08 =========== =========== =========== =========== NET (LOSS) INCOME PER COMMON SHARE ASSUMING DILUTION $ (0.19) $ 0.02 $ (0.20) $ 0.08 =========== =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 1,618,703 1,988,202 1,498,281 1,768,581 =========== =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING ASSUMING DILUTION 1,618,703 1,992,702 1,498,281 1,773,081 =========== =========== =========== =========== 4
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended September 30, -------------------- 1998 1999 ---- ---- (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net (Loss) Income $ (302,507) $ 133,340 Adjustments to reconcile net (loss) income to net cash provided by operating activities Depreciation and amortization 531,544 782,102 Write off of loan fees 33,348 Other 16,203 Changes in assets and liabilities (Increase) in receivables (113,317) (18,067) (Increase) in prepaids (404,458) (44,488) Increase in accounts payable 161,132 1,158 Increase in accruals 146,338 297,439 ------------ ------------ Net cash provided by operating activities 52,080 1,167,687 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Additions to investments in real estate (8,297,923) (283,612) Proceeds from sale of vacant land -- 54,997 ------------ ------------ Net cash (used) by investing activities (8,297,923) (228,615) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short term borrowings 980,000 Repayments of short term borrowings (1,130,000) Proceeds from mortgage loans 15,700,000 Payments on mortgage loans (6,137,216) (202,844) (Increase) in loan costs (551,537) Dividends paid (483,354) (665,567) ------------ ------------ Net cash provided (used) by financing activities 8,377,893 (868,411) ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 132,050 70,661 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 99,334 441,316 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 231,384 $ 511,977 ============ ============ 5
AMERIVEST PROPERTIES INC. NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 1999 General - ------- The unaudited financial statements included herein were prepared from the records of the Company in accordance with Generally Accepted Accounting Principles and reflect all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results of operations and financial position for the interim periods. Such financial statements generally conform to the presentation reflected in the Company's Form 10-KSB filed with the Securities and Exchange Commission for the year ended December 31,1998. The current interim period reported herein should be read in conjunction with the Company's Form 10-KSB subject to independent audit at the end of the year. The results of operations for the nine months ended September 30, 1999 are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. Subsequent Events - ----------------- On November 1, 1999, the Company entered into a contract to sell its industrial warehouse building in Denver, Colorado for $2,070,000. This sale is expected to close on December 15, 1999 and the preliminary expected gain on this sale is approximately $750,000. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. ------------------------------------------------------------------------ The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Form 10-KSB and elsewhere. These financial statements present the operations of the Company prior, and subsequent to, the Company's acquisitions in June 1998, July 1998, August 1998 and July 1999. Results Of Operations --------------------- Three Months Ended September 30, 1999, Compared With Three Months Ended September 30, 1998. - -------------------------------------------------------------------------------- The Company's results of operations for the three months ended September 30, 1999 include 25 operating properties, whereas the September 30, 1998 results of operations include 24 operating properties. Revenues for third quarter 1999 increased approximately $500,000, and operating expenses, real estate taxes, general and administrative, interest, and depreciation and amortization increased approximately $190,200, $43,000, $79,000, $155,000 and $57,000 respectively, for a total increase of $522,000 as compared with September 30, 1998. These increases resulted primarily from inclusion of the operations of the four bank office buildings acquired in August 1998, for the full period, and the Keystone Property which was acquired effective July 1, 1999. Management fees decreased by approximately $21,000 due primarily to bringing the property management and accounting functions in house on January 1, 1999. The $337,000 6 one-time charge in 1998 for a debt prepayment penalty, as part of the Company s debt restructuring, did not recur in 1999. The Company also had interest income of $3,784 for the 1999 period, as compared with $898 for the 1998 period, primarily as a result of investment funds being held for working capital. The net income for the three months ended September 30, 1999 was $30,589, or $.02 per share, as compared to a net loss of $(310,612), or $(.19) per share, for the three months ended September 30, 1998. Nine Months Ended September 30, 1999, Compared With Nine Months Ended September 30, 1998. - -------------------------------------------------------------------------------- The Company's results of operations for the nine months ended September 30, 1999 include 25 operating properties for the last three months of this period, whereas the September 30, 1998 results of operations include 24 operating properties. Revenues for 1999 increased approximately $1,760,500, and operating expenses, real estate taxes, general and administrative, interest, and depreciation and amortization increased approximately $597,400, $160,500, $192,900, $519,000 and $251,000 respectively, for a total increase of $1,720,500 as compared with September 30, 1998. These increases resulted primarily from inclusion of the operations of the four bank office buildings acquired in August 1998, for the full period, and the Keystone Property which was acquired effective July 1, 1999. Management fees decreased by approximately $52,000 due primarily to bringing the property management and accounting functions in house on January 1, 1999. The $337,000 one-time charge in 1998 for a debt prepayment penalty, as part of the Company's debt restructuring, did not recur in 1999. The Company also had interest income of $9,160 for the 1999 period, as compared with $2,640 for the 1998 period, primarily as a result of investment funds being held for working capital. The net income for the nine months ended September 30, 1999 was $133,340 or $0.08 per share, as compared with a net loss of $(302,507), or $(0.20) per share, for the nine months ended September 30, 1998. Financial Condition, Liquidity And Capital Resources ---------------------------------------------------- On August 12, 1999 the Company completed the acquisition of three office buildings, Keystone Office Park (Keystone Property), a commercial office property consisting of three office buildings in Indianapolis, Indiana. The effective date of this transfer was July 1, 1999. The Keystone Property contains an aggregate of approximately 95,836 square feet. The purchase price for Keystone Property was $7,944,000, which was paid by assuming approximately $5,255,000 of existing debt and $116,400 of related escrow balances on the properties and issuing approximately 541,600 shares of the Company's common stock at the rate of $4.75 per share. In conjunction with the assumption of the Debt, the Company also assumed the obligations and liabilities of the original guarantors of the Debt with an indemnification back for any obligations and liabilities accruing prior to the acquisition. The Company sold two vacant lots adjacent to its bank buildings in Texas with aggregate cash proceeds of approximately $55,000. From December 31, 1998 to September 30, 1999, net investment in real estate increased approximately $7,296,000. This increase was due to the acquisition of the Keystone Property less the sale of the two lots described above and normal depreciation. Tenants accounts receivable increased approximately $18,000 due to normal fluctuation in the collections cycle. Deferred financing costs decreased by approximately $37,000 as a result of normal amortization. Prepaid expenses and other assets increased by approximately $43,400 due primarily to normal fluctuations in tax, maintenance and insurance escrow reserves, and the acquisition of Keystone Property. 7 Mortgage Property loans payable increased by approximately $5,052,000 due primarily to the acquisition of the Keystone Property. Accounts payable and accrued expenses increased by approximately $73,400 during the period, all of which resulted from timing differences in the course of normal operations and the addition of the Keystone Property. Accrued real estate taxes decreased approximately $12,000 as a result of the normal tax payment cycle. Accrued interest, prepaid rents and security deposits increased in total by approximately $169,000. This increase was primarily the result of the addition of the Keystone Property. At September 30, 1999, the Company had approximately $512,000 of cash and cash equivalents, including approximately $267,500 of cash to be utilized for a stockholder dividend distribution which was paid on October 15, 1999. The Company desires to acquire additional properties and, in order to do so, it will need to raise additional equity capital, and perhaps also additional debt capital. The Company also intends to obtain credit facilities for short and long-term borrowing with commercial banks or other financial institutions. The issuance of such securities or increase in debt for additional properties, of which there is no assurance, could adversely affect the amount of dividends paid to stockholders. Management believes that the cash flow from its properties will be sufficient to meet the Company's working capital needs for the next year. All properties have been maintained on an ongoing basis so that capital resources in excess of the Company's operating cash flow are not anticipated in order to upgrade the facilities in the near future. Management believes that inflation should not have a material adverse effect on the Company. The Company's leases of office and showroom space require the tenants to pay increases in operating expenses, and the self-storage leases are short-term so that there are no contractual restraints against increasing rents to attempt to respond to inflationary pressures, if any inflationary pressures should materialize. Year 2000 Compliance. - --------------------- Year 2000 compliance is the ability of computer hardware and software to respond to the problems posed by the fact that computer programs traditionally have used two digits rather than four digits to define an applicable year. As a consequence, any of the Company's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing interruption of operations, including temporary inability to send invoices or engage in normal business activities or to operate equipment such as elevators and air conditioning units installed in the Company's buildings. The Company has received assurances from its service contractors that the operation of elevators, air conditioners, and other equipment installed in the Company's buildings are Year 2000 compliant. The Company installed new computer hardware and software that is year 2000 compliant at the beginning of 1999 at a cost of approximately $25,000. The Company does not expect to incur additional material expenses for year 2000 compliance. This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Exchange Act of 1934. Although the Company believes that the expectations reflected in the 8 forward-looking statements and the assumptions upon which the forward-looking statements are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct. See the Company's Annual Report on Form 10-KSB for additional statements concerning important factors, including occupancy and rental rates, operating costs, interest rates, maintenance and construction costs, that could cause actual results to differ materially from the Company's expectations. Part II. Other Information Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (A) The following Exhibit is filed as part of this Quarterly Report on Form 10-QSB: 27. Financial Data Schedule (B) During the quarter ended September 30, 1999, the registrant filed a Current Report on Form 8-K reporting an event occurring on August 12, 1999, which was filed on August 12, 1999. These Current Reports on Form 8-K concerned the Registrant's acquisition of the Keystone Property during the quarter ended September 30, 1999. SIGNATURES ---------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERIVEST PROPERTIES INC. Date: February 28, 2000 By: /s/ James F. Etter ---------------------- ------------------------ James F. Etter, President Date: February 28, 2000 By: /s/ D. Scott Ikenberry ---------------------- ---------------------------- D. Scott Ikenberry Chief Financial Officer (Principal Financial Officer) 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS 9-MOS DEC-31-1999 DEC-31-1999 JUL-01-1999 JAN-01-1999 SEP-30-1999 SEP-30-1999 511,977 511,977 0 0 66,682 66,682 0 0 0 0 0 0 35,977,791 35,977,791 6,583,790 6,583,790 31,106,029 31,106,029 0 0 0 0 0 0 0 0 2,229 2,229 5,688,601 5,688,601 31,106,029 31,106,029 1,672,027 4,312,179 1,672,027 4,312,179 0 0 1,180,651 3,002,784 0 0 0 0 464,571 1,185,215 30,589 133,340 0 0 30,589 133,340 0 0 0 0 0 0 30,589 133,340 .02 .08 .02 .08
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