-----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, H6v+QQwthfpMvzXYa7xxrCihagenq11EpBsPIsub+koDYm/Jm/B321we/d2YV7O1 XeszPIbml4HlUMi0mn30gw== 0001000096-98-000347.txt : 19980518 0001000096-98-000347.hdr.sgml : 19980518 ACCESSION NUMBER: 0001000096-98-000347 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 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: SEC FILE NUMBER: 001-14462 FILM NUMBER: 98624252 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 March 31, 1998. 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 May 11, 1998 the Registrant had outstanding 1,438,070 shares of common stock, per value $.001. Transitional Small Business Disclosure Format (check one): Yes No X ----- ----- AMERIVEST PROPERTIES INC. AND SUBSIDIARIES FORM 10-QSB March 31, 1998 Table of Contents ----------------- Page No. -------- Part I Item 1. Financial Statements Balance Sheets as of December 31, 1997 and March 31, 1998 3 Statements of Operations for the Three Months Ended March 31, 1997 and 1998 4 Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1998 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 9 Item 6. Exhibits and Reports on Form 8-K 9 -2-
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, March 31, 1997 1998 ------------ ------------ (Unaudited) ASSETS Investment in real estate Land $ 2,668,758 $ 2,680,098 Buildings and improvements 13,064,287 13,109,690 Furniture, fixtures and equipment 248,667 249,650 Tenant improvements 519,945 524,506 Less accumulated depreciation and amortization (5,118,271) (5,258,862) ------------ ------------ Net Investment in Real Estate 11,383,386 11,305,082 Cash and cash equivalents 99,334 122,457 Tenant accounts receivable 34,625 54,387 Deferred financing costs, net 85,956 79,661 Prepaid expenses and other assets 38,767 315,074 ------------ ------------ $ 11,642,068 $ 11,876,661 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Mortgage loans and notes payable $ 7,413,077 $ 7,752,331 Accounts payable and accrued expenses 48,543 49,388 Accrued interest 56,219 57,590 Accrued real estate taxes 298,074 304,347 Prepaid rents and security deposits 120,799 126,211 Dividends payable 160,801 160,771 ------------ ------------ Total Liabilities 8,097,513 8,450,638 ------------ ------------ STOCKHOLDERS' EQUITY Common stock, $.001 par value Authorized - 10,000,000 shares Issued and outstanding - 1,429,070 shares (1997) and 1,438,070 shares (1998) 1,429 1,438 Capital in excess of par value 4,463,955 4,504,446 Distribution in excess of accumulated earnings (920,829) (1,079,861) ------------ ------------ Total Stockholders' Equity 3,544,555 3,426,023 ------------ ------------ $ 11,642,068 $ 11,876,661 ============ ============ -3-
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended March 31 -------------------------- 1997 1998 -------------------------- (unaudited) REAL ESTATE OPERATING REVENUE Rental revenue Commercial properties $ 290,669 $ 336,409 Storage properties 313,094 361,896 ---------- ---------- 603,763 698,305 ---------- ---------- REAL ESTATE OPERATING EXPENSES Property operating expenses Operating expenses 120,997 154,119 Real estate taxes 60,182 74,543 Management fees 31,839 38,679 General and administrative 87,632 104,798 Interest 171,347 176,726 Depreciation and amortization 142,495 147,702 ---------- ---------- 614,492 696,567 ---------- ---------- OTHER INCOME Interest income 12,947 NET INCOME $ 2,218 $ 1,738 ========== ========== INCOME PER COMMON SHARE $ .002 $ .001 ========== ========== INCOME PER COMMON SHARE ASSUMING DILUTION $ .002 $ .001 ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 1,382,870 1,438,070 ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - ASSUMING DILUTION 1,382,870 1,443,070 ========== ========== -4-
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended March ------------------------------------- 1997 1998 ----------- ----------- (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,218 $ 1,738 Adjustments to reconcile net income to net cash provided (used) by operating activities Depreciation and amortization 142,495 147,702 Changes in assets and liabilities (Increase) in receivables (22,707) (19,762) (Increase) in prepaids (13,366) (276,600) (Decrease) increase in accounts payable (10,325) 844 Increase in accruals 11,698 12,534 ----------- ----------- Net cash provided (used) by operating activities 110,013 (133,544) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to investments in real estate (3,008) (21,787) ----------- ----------- Net cash (used) by investing activities (3,008) (21,787) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short term borrowings -- 375,000 Payments on mortgage loans (32,557) (35,746) Dividends paid -- (160,800) ----------- ----------- Net cash (used) provided by financing activities (32,557) 178,454 ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 74,448 23,123 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,230,640 99,334 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,305,088 $ 122,457 =========== =========== -5-
AMERIVEST PROPERTIES INC. NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1998 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 31,1997. 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 three months ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. -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 subsequent to the consummation of the Company's initial public offering on October 29, 1997 (the "IPO") and its acquisition of five properties on October 30, 1997, effective as of July 1, 1997, and of three properties, effective August 1, 1997. Results Of Operations --------------------- Three Months Ended March 31, 1998, Compared With Three Months Ended March 31, 1997. - -------------------------------------------------------------------------------- The Company's results of operations for the three months ended March 31, 1998 include nine operating properties, whereas the March 31, 1997 results of operations include six operating properties. Revenues for first quarter 1998 increased approximately $95,000 or 15%, and operating expenses, management fees, interest, and depreciation and amortization increased approximately $33,000, $7,000, $5,000 and $5,000 respectively, as compared with March 31, 1997. All increases resulted primarily from including the operations of three new properties as of August 1, 1997. Real estate taxes increased $14,000 ($57,000 on an annualized basis) when compared with prior year's taxes. The general and administrative expenses increased approximately $17,000 due primarily to costs associated with public relations and travel. The net income for the three months ended March 31, 1998 was $1,738, or $.001 per share, as compared to a net income of $2,218, or $.002 per share, for the three months ended March 31, 1997. Financial Condition, Liquidity And Capital Resources ---------------------------------------------------- The consolidated financial condition of the Company evidenced the following changes from December 31, 1997 to March 31, 1998. Net Investment in Real Estate decreased approximately $78,000, due primarily to depreciation of $140,000 for the three month period. Deferred financing costs, net, decreased approximately $6,000 due to amortization for the three months ended March 31, 1998. Mortgage loans and notes payable increased by approximately $339,000. This increase was primarily due to an additional $375,000 of borrowing against lines of credit, of this amount $55,000 was paid as earnest money deposits on the eleven Texas properties that the Company has contracted to purchase and $190,000 was paid as -7- a deposit for certain advance costs related to the proposed refinancing and new acquisition financing described below. On April 1, 1998 the Company's bank line of credit was increased from $400,000 to $650,000. Accounts payable and accrued expenses, prepaid rents and accrued real estate taxes all remained relatively constant for the period. At March 31, 1998, the Company had approximately $122,000 of cash available for working capital. Prepaid expenses and other assets increased by approximately $276,000 primarily as a result of deposits on proposed property acquisitions of $242,000. Tenant receivables increased by approximately $20,000 in March as a result of additional billings to tenants for prior year's operating costs. Approximately $161,000 was distributed as dividends on April 9, 1998. In November 1997, the Company entered into purchase and sale agreements for the acquisition of eleven commercial real estate properties located in Texas. The aggregate purchase price for the eleven properties is approximately $7,316,000, comprised of $6,103,000 cash, 204,300 shares of the Company's common stock and a promissory note in the amount of $192,000. The financing arrangements for these acquisitions are in process and are expected to be finalized during the second quarter of 1998. In addition, the Company is in the process of refinancing its current real estate portfolio at terms the Company believes favorable to its long term operating and growth strategies. The Giltedge Office Building is expected to complete its refinancing during May 1998. The terms of the loan commitment are for a loan of $3,200,000 at an interest rate of 7.75%, amortized over a term of 30 years, with a balloon payment for the balance due May 2008. The proceeds from the loan will be used to repay the current mortgage of $2,002,500, pay off the Company's current lines of credit of $525,000 and the remaining balance will be used for working capital. Terms of the other refinancing arrangements for the self-storage and industrial properties have not been finalized. 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. 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. -8- 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. Part II. Other Information Item 5. Other Information ----------------- None 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 March 31,1998, 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. May 15, 1998 By: /s/ James F. Etter ------------------------------------- James F. Etter, President and Principal Financial Officer -9- EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1998 MAR-31-1998 122,457 0 54,387 0 0 571,579 16,563,944 (5,258,862) 11,305,082 2,473,231 0 0 0 1,438 3,424,585 11,305,082 698,305 698,305 0 0 519,841 0 176,726 1,738 1,738 1,738 0 0 0 1,738 .001 .001
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