-----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, SMaYYMY8Tw9Cx+m1zl46gTBzL8kFv5CFHVAsFMnqYRfBofKSU1jRkag4Hfc28vGG yy1l2+o/oM+intl75zi8Wg== 0001000096-99-000264.txt : 19990518 0001000096-99-000264.hdr.sgml : 19990518 ACCESSION NUMBER: 0001000096-99-000264 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 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: 99625046 BUSINESS ADDRESS: STREET 1: 2801 YOUNGFIELD STREET STREET 2: SUITE 300 CITY: GOLDEN STATE: CO ZIP: 80401 BUSINESS PHONE: 3032057870 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, 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.) Delaware 84-1240264 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3333 S. Wadsworth Blvd., # D-216 Lakewood, Colorado 80227 - --------------------------------- -------- (Zip Code) (303) 980-1880 ---------------------------------------------- (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 14, 1999 the Registrant had outstanding 1,658,770 shares of common stock, par value $.001. Transitional Small Business Disclosure Format (check one): Yes No X ----- ----- 1 AMERIVEST PROPERTIES INC. AND SUBSIDIARIES FORM 10-QSB MARCH 31, 1999 Table of Contents ----------------- Page No. Part I Item 1. Financial Statements Balance Sheets as of December 31, 1998 and March 31, 1999 3 Statements of Operations for the Three Months Ended March 31, 1998 and 1999 4 Statements of Cash Flows for the Three Months Ended March 31, 1998 and 1999 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 - 8 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, 1998 1999 ----------- ---------- (Unaudited) ASSETS Investment in real estate Land $ 4,745,754 $ 4,745,754 Buildings and improvements 22,363,656 22,381,607 Furniture, fixtures and equipment 284,993 291,651 Tenant improvements 541,058 553,982 Less accumulated depreciation and amortization (5,837,264) (6,068,732) ------------ ------------ Net Investment in Real Estate 22,098,197 21,904,262 Cash and cash equivalents 441,316 241,256 Tenant accounts receivable 48,615 66,047 Deferred financing costs, net 624,917 612,330 Prepaid expenses and other assets 501,889 423,778 ------------ ------------ $ 23,714,934 $ 23,247,673 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Mortgage loans and notes payable $ 18,861,599 $ 18,791,093 Accounts payable and accrued expenses 121,327 141,301 Accrued interest 108,810 29,252 Accrued real estate taxes 558,745 273,719 Prepaid rents and security deposits 214,912 290,325 Dividends payable 199,052 199,107 ------------ ------------ Total Liabilities 20,064,445 19,724,797 ------------ ------------ STOCKHOLDERS' EQUITY Common stock, $.001 par value Authorized - 10,000,000 shares Issued and outstanding - 1,658,770 shares 1,659 1,659 Capital in excess of par value 5,607,725 5,607,725 Distribution in excess of accumulated earnings (1,958,895) (2,086,508) ------------ ------------ Total Stockholders' Equity 3,650,489 3,522,876 ------------ ------------ $ 23,714,934 $ 23,247,673 ============ ============ 3
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, 1998 1999 ---------- ---------- REAL ESTATE OPERATING REVENUE Rental revenue Commercial properties $ 336,409 $1,001,102 Storage properties 361,896 327,702 ---------- ---------- 698,305 1,328,804 ---------- ---------- REAL ESTATE OPERATING EXPENSES Property operating expenses Operating expenses 154,119 280,751 Real estate taxes 74,543 139,645 Management fees 38,679 22,098 General and administrative 104,798 207,208 Interest 176,726 363,564 Depreciation and amortization 147,702 243,781 ---------- ---------- 696,567 1,257,047 ---------- ---------- NET INCOME $ 1,738 $ 71,757 ========== ========== NET INCOME PER COMMON SHARE $ .001 $ .043 ========== ========== NET INCOME PER COMMON SHARE ASSUMING DILUTION $ .001 $ .043 ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 1,438,070 1,658,770 ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ASSUMING DILUTION 1,443,070 1,662,520 ========== ========== 4
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 1998 1999 --------- ---------- (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,738 $ 71,757 Adjustments to reconcile net income to net cash provided (used) by operating activities Depreciation and amortization 147,702 244,428 Changes in assets and liabilities (Increase) in receivables (19,762) (17,432) (Increase) decrease in prepaids (276,600) 77,740 Increase (decrease) in accounts payable 844 (7,741) Increase (decrease) in accruals 12,534 (261,721) --------- --------- Net cash (used) provided by operating activities (133,544) 107,031 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to investments in real estate (21,787) (37,533) --------- --------- Net cash (used) by investing activities (21,787) (37,533) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short term borrowings 375,000 -- Payments on mortgage loans (35,746) (70,506) Dividends paid (160,800) (199,052) --------- --------- Net cash provided (used) by financing activities 178,454 (269,558) --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 23,123 (200,060) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 99,334 441,316 --------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 122,457 $ 241,256 ========= ========= 5
AMERIVEST PROPERTIES INC. NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1999 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 three months ended March 31, 1999 are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. 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. Results Of Operations --------------------- Three Months Ended March 31, 1999 Compared With Three Months Ended March 31, 1998. - -------------------------------------------------------------------------------- The Company's results of operations for the three months ended March 31, 1999 include 24 operating properties, whereas the March 31, 1998 results of operations include nine operating properties. Revenues for first quarter 1999 increased approximately $630,500, and operating expenses, real estate taxes, general and administrative, interest, and depreciation and amortization increased approximately $126,600, $65,100, $102,400, $186,800 and $96,100, respectively. All increases resulted primarily from inclusion of the operations of the 15 new properties since last year, except for general and administrative expenses which also include additional costs of administrative personnel, of approximately $20,000. The management fees decreased approximately $16,600 for the quarter due to the change in 1999 of directly managing six of the properties as opposed to contracting a third party management company to oversee the day to day operations The net income for the three months ended March 31, 1999 was $71,757, or $.04 per share, as compared to $1,738, or $.00 per share, for the three months ended March 31, 1998. Financial Condition, Liquidity And Capital Resources ---------------------------------------------------- From December 31, 1998 to March 31, 1999, net investment in real estate decreased by approximately $194,000, primarily due to depreciation for the three month period of $230,000, which was partially offset by approximately $37,000 of additional capital improvements. 6 At March 31, 1999, the Company had approximately $241,000 of cash available for working capital. Tenant accounts receivables increased by approximately $17,400 in March as a result of additional billings to tenants for prior year's operating costs. Prepaid expenses and other assets decreased by approximately $78,000 primarily as a result of real estate property tax payments being made from the escrow accounts held by the mortgage lenders. Mortgage loans and accrued real estate taxes decreased by $70,500 and $285,000, respectively. Accounts payable and accrued expenses increased by $20,000; these changes were reflective of normal business occurrences. Accrued interest decreased by $79,600 due to the April payment on mortgage loans being paid in March. In May 1999, the Company entered into a purchase and sale agreement for the acquisition of three office buildings located in Indianapolis, Indiana. The aggregate purchase price for the three office buildings is approximately $7,944,000. The purchase will be made with approximately 561,000 shares of common stock valued at $4.75 per share or approximately $2,665,000 of additional equity, and the assumption of the existing mortgage on the properties of approximately $5,279,000. The acquisition is subject to stockholder approval and is expected to close in the third quarter of 1999. The Company desires to acquire additional properties and, in order to do so, it may need to raise additional debt or equity capital. 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. The Company intends to meet its near-term working capital liquidity requirements through cash flows provided from operations. The Company has a short-term revolving credit line from Norwest Bank Colorado in the amount of $300,000. At March 31, 1999 the Company had no outstanding balance on the line of credit. 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, air conditioning units, and external security systems installed in the Company's buildings. The Company currently is working with its service contractors to review the operation of elevators, air conditioners, and other equipment installed in the Company's buildings to confirm that this equipment is Year 2000 compliant. Although the service contractors have responded with respect to most of these systems indicating that they are Year 2000 compliant, the review of all the systems is not yet complete. The Company believes that this review will be completed prior to June 30, 1999 and that the cost of this review will be included in the cost of the Company's service contracts for this equipment. 7 The Company also intends to contact its major tenants to determine their Year 2000 compliance. Failure of tenants to be Year 2000 compliant may lead to delays in payment of rent to the Company and delayed revenue to the Company. The Company intends to complete its review of tenant compliance in the second quarter of 1999. The Company has purchased new accounting and tenant service software that is Year 2000 compliant. The Company would have purchased new software to meet its needs regardless of potential Year 2000 issues with its prior system. The Company installed and received training concerning this new software and the approximate cost was less than $25,000. Management believes that inflation should not have a material adverse effect on the Company. Many of 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 pressures 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 Securities 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. 8 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 March 31, 1999, 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 17, 1999 By: /s/ James F. Etter ----------------------------------------- James F. Etter, Chief Executive Officer and Principal Financial Officer 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1999 MAR-31-1999 241,256 0 66,047 0 0 0 27,972,994 (6,058,732) 23,247,673 0 18,791,093 0 0 1,659 3,521,217 23,247,673 1,328,804 1,328,804 0 0 893,483 0 303,564 71,757 71,757 71,757 0 0 0 71,757 .04 .04
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