-----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, AmF3RQPFpj8wHu3C70bDUrtjjuOkivwrijK/eZx+DaQVWCzm6q8X2y3k2wZVyHkL sMXYv6hhC0EpMsXYUs6YYw== 0001000096-97-000571.txt : 19970815 0001000096-97-000571.hdr.sgml : 19970815 ACCESSION NUMBER: 0001000096-97-000571 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE 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 SEC ACT: 1934 Act SEC FILE NUMBER: 001-14462 FILM NUMBER: 97662888 BUSINESS ADDRESS: STREET 1: 7100 GRANDVIEW AVE STREET 2: SUITE 1 CITY: ARVADA STATE: CO ZIP: 80002 BUSINESS PHONE: 3034213040 MAIL ADDRESS: STREET 1: 7100 GRANDVIEW AVE STREET 2: SUITE 1 CITY: ARVADA STATE: CO ZIP: 80002 10QSB 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 1997. 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.) Delaware 84-1240264 ------------------------------ ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7100 Grandview Avenue, Suite 1 Arvada, Colorado 80002 - ------------------------------- ------- (Zip Code) (303) 421-1224 ---------------------------------------------- (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 August 11, 1997 the Registrant had outstanding 1,382,870 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 JUNE 30, 1997 Table of Contents ----------------- Page No. Part I Item 1. Financial Statements Balance Sheets as of December 31, 1996 and June 30, 1997 3 Statements of Operations for the Three Months and Six Months Ended June 30, 1996 and 1997 4 Statements of Cash Flows for the Six Months Ended June 30, 1996 and 1997 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 2
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS December 31, June 30, 1996 1997 ------------ ------------ (Unaudited) ASSETS Investment in real estate Land $ 2,374,808 $ 2,374,808 Buildings and improvements 11,975,946 11,988,162 Furniture, fixtures and equipment 225,099 231,254 Tenant improvements 512,725 517,951 Less accumulated depreciation and amortization (4,573,871) (4,846,193) ------------ ------------ Net Investment in Real Estate 10,514,707 10,265,982 Cash and cash equivalents 1,230,640 1,091,541 Tenant accounts receivable 30,014 26,060 Deferred financing costs, net 111,139 98,615 Prepaid expenses and other assets 49,580 46,677 ------------ ------------ $ 11,936,080 $ 11,528,875 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Mortgage loans $ 7,397,995 $ 7,332,112 Accounts payable and accrued expenses 52,765 21,516 Accrued interest 57,273 56,759 Accrued real estate taxes 240,411 152,613 Prepaid rents and security deposits 99,133 90,548 Dividends payable -- 155,573 ------------ ------------ Total Liabilities 7,847,577 7,809,121 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, $.001 par value Authorized - 10,000,000 shares Issued and outstanding - 1,382,870 1,383 1,383 Capital in excess of par value 4,256,101 4,256,101 Distribution in excess of accumulated earnings (168,981) (537,730) ------------ ------------ Total Stockholders' Equity 4,088,503 3,719,754 ------------ ------------ $ 11,936,080 $ 11,528,875 ============ ============ See accompanying notes to financial statements. 3
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended Six Months Ended June 30, 1997 June 30, 1997 ------------------------------- ------------------------------ 1996 1997 1996 1997 ---- ---- ---- ---- (unaudited) (unaudited) REAL ESTATE OPERATING REVENUE Rental revenue Commercial properties $ 58,337 $ 241,255 $ 117,425 $ 531,924 Storage properties -- 327,386 -- 640,480 ----------- ----------- ----------- ----------- 58,337 568,641 117,425 1,172,404 ----------- ----------- ----------- ----------- REAL ESTATE OPERATING EXPENSES Property operating expenses Operating expenses 1,232 128,929 2,147 249,926 Real estate taxes 8,290 60,122 16,581 120,304 Management fees - related 4,417 30,036 8,871 61,875 General and administrative 39,729 110,065 80,303 197,697 Interest 28,566 170,540 57,540 341,887 Depreciation and amortization 10,143 142,643 20,285 285,138 ----------- ----------- ----------- ----------- 92,377 642,335 185,727 1,256,827 ----------- ----------- ----------- ----------- OTHER INCOME Interest income 20 13,872 20 26,819 ----------- ----------- ----------- ----------- NET (LOSS) $ (34,020) $ (59,822) $ (68,282) $ (57,604) =========== =========== =========== =========== NET (LOSS) PER COMMON SHARE $ (.12) $ (.04) $ (.24) $ (.04) =========== =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 284,000 1,382,870 284,000 1,382,870 =========== =========== =========== =========== See accompanying notes to financial statements. 4
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Six Months Ended June 30 ------------------------------------- 1996 1997 ----------- ----------- (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) $ (68,282) $ (57,604) Adjustments to reconcile net (loss) to net cash provided by operating activities Depreciation and amortization 20,285 285,138 Changes in assets and liabilities Decrease in receivables 386 3,955 Decrease in prepaids 24,024 2,610 (Decrease) in accounts payable (16,857) (34,162) (Decrease) in accruals (9,827) (93,983) (Increase) in deferred offering costs (76,117) -- ----------- ----------- Net cash (used) provided by operating activities (126,388) 105,954 CASH FLOWS FROM INVESTING ACTIVITIES Additions to investments in real estate -- (23,597) ----------- ----------- Net cash (used) by investing activities -- (23,597) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sale of common stock warrants 150,000 -- Cost of warrants offering (8,008) -- Payments on mortgage loans (8,821) (65,883) Dividends paid -- (155,573) ----------- ----------- Net cash provided (used) by financing activities 133,171 (221,456) ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,783 (139,099) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,177 1,230,640 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13,960 $ 1,091,541 =========== =========== See accompanying notes to financial statements. 5
AMERIVEST PROPERTIES INC. NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 1997 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 31,1996. 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 six months ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. Subsequent Events - ----------------- In August 1997, the Company entered into contracts to acquire three office buildings in Texas for approximately $1,150,000 and up to 56,200 shares of the Company's Common Stock, subject to future upward adjustment based on the trading price of the Company's Common Stock. Two of the buildings are in El Paso and the other one is in Lubbock. Although there is no assurance, the three buildings are expected to close before the end of September. The Company has also entered into a commitment letter for a Revolving Line of Credit with Norwest Bank Colorado, N.A. for $400,000. The closing on the commitment is expected to be completed by the end of August. With respect to the Company's previously announced letter of intent to acquire an office building in Amarillo, Texas, negotiations have been suspended indefinitely. The Company intends to pursue the possibility of recommencing negotiations in the near future, although there is no assurance that this will occur. 6 AMERIVEST PROPERTIES INC. 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 consummation of the Company's initial public offering on October 29, 1996 (the "IPO") and its acquisition of five properties on October 30, 1996, effective as of July 1, 1996. Results Of Operations --------------------- Three Months Ended June 30, 1997, Compared With Three Months Ended June 30, 1996. - -------------------------------------------------------------------------------- The Company's results of operations for the three months ended June 30, 1997 include six operating properties, whereas the three months ended June 30, 1996 results of operations include only one operating property. Revenues for second quarter 1997 increased approximately $510,000, and operating expenses, management fees, interest, and depreciation and amortization increased approximately $128,000, $26,000, $142,000 and $133,000 respectively, as compared with second quarter 1996. All increases resulted primarily from including the operations of five new properties as of July 1, 1996. The general and administrative expenses increased approximately $70,000 due primarily from the addition of the five new properties and costs associated with public relations, appraisal fees and travel. The Company also had interest income of $14,000 for the 1997 quarter, primarily as a result of investment funds being held for real estate acquisitions. The net loss for the three months ended June 30, 1997 was $59,822, or $.04 per share, as compared to a net loss of $34,020, or $.12 per share, for the three months ended June 30, 1996. Six Months Ended June 30, 1997, Compared With Six Months Ended June 30, 1996. - ----------------------------------------------------------------------------- The Company's results of operations for the six months ended June 30, 1997 include six operating properties, whereas the June 30, 1996 results of operations include only one operating property. Revenues for 1997 increased approximately $1,055,000, and operating expenses, management fees, interest, and depreciation and amortization increased approximately $247,000, $53,000, $284,000 and $265,000 respectively, as compared with 1996. All increases resulted primarily from including the operations of five new properties as of July 1, 1996. All real estate taxes for each property remained flat when 7 compared to prior year's taxes, except for the Appleton, Wisconsin office property for which Real Estate taxes decreased on an annualized basis by $15,000. The general and administrative expenses increased approximately $117,000 due primarily from the addition of the five new properties and costs associated with public relations, appraisal fees and travel. The Company also had interest income of $27,000 for 1997, primarily as a result of investment funds being held for real estate acquisitions. The net loss for the six months ended June 30, 1997 was $57,604, or $.04 per share, as compared to a net loss of $68,282, or $.24 per share, for the six months ended June 30, 1996. Financial Condition, Liquidity And Capital Resources ---------------------------------------------------- The consolidated financial condition of the Company evidenced the following changes from December 31, 1996 to June 30, 1997. Net investment in Real Estate decreased approximately $249,000, primarily due to depreciation for the six month period. The completion of the Company's IPO in October 1996 included approximately $1,000,000 of cash which was set aside primarily for future acquisitions. Deferred financing costs, net, decreased approximately $12,000 due to amortization for the six months ended June 30, 1997. Mortgage loans decreased by approximately $66,000 due to normal payments over the period. Accounts payable and accrued expenses, accrued real estate taxes, and prepaid rents decreased approximately $31,000, $88,000 and $9,000 respectively, all of which result from timing differences in the course of normal operations during the first six months of 1997. Dividends payable increased by $156,000 over the same period in 1996, since no dividends were declared until December 1996. At June 30, 1997, the Company had approximately $1,090,000 of cash and cash equivalents. The Company held approximately $156,000 of cash in reserve for a stockholder dividend distribution which was paid on July 9, 1997 and the balance of $934,000 was available for acquisitions and working capital. The Company desires to acquire additional properties and, in order to do so, it may need to raise additional debt or equity 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. As indicated in Item 5 and elsewhere herein, the Company has entered into three separate contracts to acquire three office buildings in Lubbock (one) and El Paso (two), Texas for approximately $1,150,000 and up to 56,200 shares of the Company's Common Stock, subject to future upward adjustment based on the trading price of the Company's Common Stock, and negotiations have been suspended indefinitely concerning the possible acquisition of an office building in Amarillo, Texas. 8 Management believes that the cash flow from the 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 additional capital resources to upgrade the facilities in the near future are not anticipated. 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 not contractual restraints against increasing rents to attempt to respond to inflationary pressures, if any inflationary pressure should materialize. 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 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 and operating costs, that could cause actual results to differ materially from the Company's expectations. 9 Part II. Other Information Item 5. Other Information ----------------- In August 1997, the Company entered into three separate contracts to acquire three office buildings in Lubbock (two) and El Paso (one), Texas for approximately $1,150,000 and up to 56,200 shares of the Company's Common Stock, subject to future upward adjustment based on the trading price of the Company's Common Stock. Although there is no assurance, the three acquisitions are expected to close before the end of September. In addition, negotiations have been suspended concerning the Company's possible acquisition of a 10-story office building in Amarillo, Texas. Although there is no assurance that it will be able to do so, the Company intends to pursue the possibility of recommencing negotiations in the near future. The Company also has entered into a commitment letter for a Revolving Line of Credit with Norwest Bank Colorado, N.A. for $400,000. The closing for the commitment is expected to be completed by the end of August. 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 June 30,1997, the Registrant did not file any reports on Form 8-K. 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. August 14, 1997 By: /S/ JAMES F. ETTER --------------------------------- James F. Etter, President and Principal Financial Officer 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS 6-MOS DEC-31-1997 DEC-31-1997 JUN-30-1997 JUN-30-1997 1,091,541 1,091,541 0 0 26,060 26,060 0 0 0 0 1,117,601 1,117,601 15,112,175 15,112,175 4,846,193 4,846,193 11,528,875 11,528,875 477,009 477,009 0 0 0 0 0 0 1,383 1,383 3,718,371 3,718,371 11,528,875 11,528,875 568,641 1,172,404 568,641 1,172,404 0 0 471,795 914,940 0 0 0 0 170,540 341,887 (59,822) (57,604) 0 0 (59,822) (57,604) 0 0 0 0 0 0 (59,822) (57,604) (.04) (.04) (.04) (.04)
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