-----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, JndYbOT3SmPtgAL+aaYiZuHe76EqEAqEE2FyfhbSoIfBMVQ1r/GOTXlUM6zIDuXt CPy8lJik6BbOT9wG5LHrBg== 0001050502-02-000061.txt : 20020414 0001050502-02-000061.hdr.sgml : 20020413 ACCESSION NUMBER: 0001050502-02-000061 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011119 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020123 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: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-14462 FILM NUMBER: 02515089 BUSINESS ADDRESS: STREET 1: 1800 GLENARM PLACE STREET 2: SUITE 500 CITY: DENVER, STATE: CO ZIP: 80202 BUSINESS PHONE: 3032971800 MAIL ADDRESS: STREET 1: 7100 GRANDVIEW AVE STREET 2: SUITE 1 CITY: ARVADA STATE: CO ZIP: 80002 8-K/A 1 amerivest8ka-1.txt 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A-1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 19, 2001 AmeriVest Properties Inc. ---------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-14462 84-1240264 --------------------------- --------------- ----------------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 1780 South Bellaire Street, Suite 515, Denver, Colorado 80222 ------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 297-1800 Item 7. Financial Statements And Exhibits. (a) Financial Statements of Real Estate Property Acquired: Report of Independent Public Accountants F-1 Statements of Revenue and Certain Expenses - for the nine months ended September 30, 2001 (Unaudited) and for the year ended December 31, 2000 F-2 Notes to Statements of Revenue and Certain Expenses F-3 (b) Unaudited Pro Forma Financial Information: Pro Forma Financial Information (Unaudited) F-5 Pro Forma Consolidated Balance Sheet as of September 30, 2001 (Unaudited) F-6 Pro Forma Consolidated Statements of Operations (Unaudited): For the nine months ended September 30, 2001 F-7 For the year ended December 31, 2000 F-8 Notes to Pro Forma Consolidated Financial Statements (Unaudited) F-9 (c) Statement of Estimated Taxable Operating Results and Cash to be Made Available by Operations for the Year ended December 31, 2000 (Unaudited) F-11 Note to Statement of Estimated Taxable Operating Results and Cash to be Made Available by Operations F-12 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Management of AmeriVest Properties Inc.: We have audited the accompanying statement of revenue and certain expenses of Arrowhead Fountains Office Building (see Note 1) for the year ended December 31, 2000. This financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion. This statement of revenue and certain expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the Property's revenue and expenses and/or financial position. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain expenses of Arrowhead Fountains Office Building for the year ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. /s/ Arthur Andersen LLP ---------------------------------- Arthur Andersen LLP Denver, Colorado October 25, 2001 F-1 ARROWHEAD FOUNTAINS OFFICE BUILDING STATEMENTS OF REVENUE AND CERTAIN EXPENSES For the Nine For the Year Months Ended Ended September 30, December 31, 2001 2000 ---------- ---------- (Unaudited) REVENUE: Rental revenue $1,527,968 $1,526,604 Other revenue 66,837 34,868 ---------- ---------- Total revenue 1,594,805 1,561,472 ---------- ---------- CERTAIN EXPENSES: Repairs and maintenance 45,350 55,663 Utilities 132,230 167,508 Property taxes 114,669 153,674 Property management fees 43,231 38,757 Operating services 115,549 154,869 ---------- ---------- Total expenses 451,029 570,471 ---------- ---------- EXCESS REVENUE OVER CERTAIN EXPENSES $1,143,776 $ 991,001 ========== ========== The accompanying notes are an integral part of these financial statements. F-2 ARROWHEAD FOUNTAINS OFFICE BUILDING NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES DECEMBER 31, 2000 NOTE 1 - BASIS OF PRESENTATION The accompanying statement of revenue and certain expenses reflect the operations of Arrowhead Fountains Office Building ("Arrowhead Fountains" or the "Property"). The Property consists of one office building located in suburban Phoenix, Arizona. The Property contains approximately 96,000 net rentable square feet and is located on approximately 5 acres of land. As of December 31, 2000, the Property had an occupancy percentage of approximately 90%. The Property was acquired by AmeriVest Properties Inc. and subsidiaries ("AmeriVest") from an unrelated party on November 19, 2001 for $12,750,000, which was paid by the assumption of the existing loan in the amount of $9,300,000 and the balance from a portion of the proceeds of our late July 2001 public offering. In addition, AmeriVest incurred approximately $219,000 in related acquisition fees and costs, of which, approximately $175,000 represents the advisory fee due to Sheridan Realty Advisors, LLC in connection with the acquisition per the Property Management and Advisory Agreement. The accounting records of the Property are maintained on the accrual basis. The accompanying statements of revenue and certain expenses are prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and exclude certain expenses such as interest, depreciation and amortization, professional fees and other costs not directly related to future operations of the Property. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumption that affect the reported amounts of revenue and expenses during the reporting period. The ultimate results could differ from those estimates. Interim Information (Unaudited) - ------------------------------- In the opinion of management, the unaudited information as of September 30, 2001 included herein contains all the adjustments necessary, which are of a normal recurring nature, to present fairly the revenue and certain expenses for the nine months ended September 30, 2001. Results of interim periods are not necessarily indicative of results to be expected for the year. Management is not aware of any material factors that would cause the information included herein to not be indicative of future operating results. F-3 ARROWHEAD FOUNTAINS OFFICE BUILDING NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES DECEMBER 31, 2000 NOTE 2 - OPERATING LEASES The Property's revenue is obtained from tenant rental payments as provided for under non-cancelable operating leases, many of which are renewable. Future minimum rentals on these leases, excluding tenant reimbursements of operating expenses, as of December 31, 2000, are as follows: Year Ending December 31: 2001 $ 1,865,048 2002 1,844,715 2003 1,760,082 2004 1,492,072 2005 1,258,276 Thereafter 2,329,642 ----------- $10,549,835 =========== The following table exhibits those tenants who accounted for greater than 10% of the revenues for the year ended December 31, 2000, and the corresponding percentage of the future minimum rentals above: Percentage of Percentage of Future Tenant 2000 Revenues Minimum Rentals ------ ------------- --------------- A 24.4% 18.4% B 11.5% 13.9% C 12.5% 5.6% D 17.0% 33.3% Tenant A is a real estate brokerage firm, tenants B and C are financial services firms and tenant D is an insurance company. F-4 AMERIVEST PROPERTIES INC. AND SUBSIDIARIES PRO FORMA FINANCIAL INFORMATION (Unaudited) The accompanying unaudited pro forma consolidated balance sheet presents the historical financial information of AmeriVest as of September 30, 2001 as adjusted for the acquisition of Arrowhead Fountains, as if the transaction had occurred on September 30, 2001. The accompanying unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2001 and the year ended December 31, 2000 combine the historical operations of AmeriVest with the historical operations of Arrowhead Fountains as if the transaction had occurred on January 1, 2000. The unaudited pro forma consolidated financial statements have been prepared by AmeriVest management based upon the historical financial statements of AmeriVest and Arrowhead Fountains. These pro forma statements may not be indicative of the results that actually would have occurred if the combination had been in effect on the dates indicated or which may be obtained in the future. The pro forma financial statements should be read in conjunction with the historical financial statements included in AmeriVest's previous filings with the SEC. F-5
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 2001 (Unaudited) Acquisition of AmeriVest Arrowhead Pro Forma (Historical) Fountains Combined ------------ ------------ ------------ ASSETS Investment in Real Estate Land $ 9,960,376 $ 2,605,671 (b) $ 12,566,047 Building and improvements 50,417,352 10,422,683 (b) 60,840,035 Furniture, fixtures and equipment 155,808 -- 155,808 Tenant improvements 1,431,132 -- 1,431,132 Tenant leasing commissions 271,632 -- 271,632 Less: accumulated depreciation and amortization (2,717,634) -- (2,717,634) ------------ ------------ ------------ Net Investment in Real Estate 59,518,666 13,028,354 72,547,020 Cash and cash equivalents 9,216,887 (3,494,202)(a) 5,722,685 Accounts receivable 156,853 -- 156,853 Deferred rent receivable 324,330 -- 324,330 Deferred financing costs, net 463,351 93,000 (c) 556,351 Prepaid expenses, escrows and other assets 1,346,069 -- 1,346,069 ------------ ------------ ------------ Total Assets $ 71,026,156 $ 9,627,152 $ 80,653,308 ============ ============ ============ LIABILITIES Mortgage loans and notes payable $ 41,875,236 $ 9,300,000 (c) $ 51,175,236 Accounts payable and accrued expenses 1,662,097 201,996 (d) 1,864,093 Accrued real estate taxes 810,955 38,223 (b) 849,178 Prepaid rents and security deposits 990,573 33,579 (b) 1,024,152 Dividends payable 826,605 -- 826,605 ------------ ------------ ------------ Total Liabilities 46,165,466 9,573,798 55,739,264 ------------ ------------ ------------ OWNERS' EQUITY Common stock 6,613 -- 6,613 Capital in excess of par value 30,709,501 53,354 (e) 30,762,855 Distributions in excess of accumulated earnings (5,855,424) -- (5,855,424) ------------ ------------ ------------ Total Owners' Equity 24,860,690 53,354 24,914,044 ------------ ------------ ------------ Total Liabilities and Owners' Equity $ 71,026,156 $ 9,627,152 $ 80,653,308 ============ ============ ============ See notes to the pro forma consolidated financial statements. F-6
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) Historical -------------------------- Arrowhead Pro Forma Pro Forma AmeriVest Fountains Adjustments Combined ----------- ----------- ----------- ----------- REAL ESTATE OPERATING REVENUE Rental revenue $ 7,496,114 $ 1,594,805 $ -- $ 9,090,919 ----------- ----------- ----------- ----------- REAL ESTATE OPERATING EXPENSES Property Operating Expenses Operating expenses 1,955,488 290,749 -- 2,246,237 Real estate taxes 594,282 114,669 -- 708,951 Management fees 380,653 43,231 33,833(f) 457,717 General and administrative 521,266 2,380 -- 523,646 Impairment of deferred rents receivable 326,113 -- -- 326,113 Interest 2,336,038 -- 451,521(g) 2,787,559 Depreciation and amortization 1,667,362 -- 195,425(h) 1,862,787 ----------- ----------- ----------- ----------- 7,781,202 451,029 680,779 8,913,010 ----------- ----------- ----------- ----------- OTHER INCOME Interest income 92,366 -- -- 92,366 Equity in loss of unconsolidated affiliate (10,843) -- -- (10,843) ----------- ----------- ----------- ----------- 81,523 -- -- 81,523 ----------- ----------- ----------- ----------- INCOME (LOSS) BEFORE GAIN ON SALE OF REAL ESTATE (203,565) 1,143,776 (680,779) 259,432 GAIN ON SALE OF REAL ESTATE 1,143,698 -- -- 1,143,698 =========== =========== =========== =========== NET INCOME (LOSS) $ 940,133 $ 1,143,776 $ (680,779) $ 1,403,130 =========== =========== =========== =========== NET INCOME PER COMMON SHARE Basic $ 0.23 $ 0.35 =========== =========== Diluted $ 0.23 $ 0.34 =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 4,020,898 4,020,898 =========== =========== Diluted 4,143,767 4,143,767 =========== =========== See notes to the pro forma consolidated financial statements. F-7
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2000 (Unaudited) Historical -------------------------- Arrowhead Pro Forma Pro Forma AmeriVest Fountains Adjustments Combined ----------- ----------- ----------- ----------- REAL ESTATE OPERATING REVENUE Rental revenue $ 7,222,437 $ 1,561,472 $ -- $ 8,783,909 ----------- ----------- ----------- ----------- REAL ESTATE OPERATING EXPENSES Property Operating Expenses Operating expenses 1,946,633 375,660 -- 2,322,293 Real estate taxes 668,224 153,674 -- 821,898 Management fees 344,636 38,757 36,215(f) 419,608 General and administrative 517,019 2,380 -- 519,399 Severance expense 255,442 -- -- 255,442 Interest 2,167,869 -- 812,341(g) 2,980,210 Depreciation and amortization 1,205,795 -- 260,567(h) 1,466,362 ----------- ----------- ----------- ----------- 7,105,618 570,471 1,109,123 8,785,212 ----------- ----------- ----------- ----------- OTHER INCOME Interest income 55,874 -- -- 55,874 Equity in loss of unconsolidated affiliate (52,808) -- -- (52,808) ----------- ----------- ----------- ----------- 3,066 -- -- 3,066 ----------- ----------- ----------- ----------- INCOME (LOSS) BEFORE GAIN ON SALE OF REAL ESTATE 119,885 991,001 (1,109,123) 1,763 GAIN ON SALE OF REAL ESTATE 2,556,839 -- -- 2,556,839 ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 2,676,724 $ 991,001 $(1,109,123) $ 2,558,602 =========== =========== =========== =========== NET INCOME PER COMMON SHARE Basic and diluted $ 1.07 $ 1.03 =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 2,492,584 2,492,584 =========== =========== Diluted 2,495,919 2,495,919 =========== =========== See notes to the pro forma consolidated financial statements. F-8
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited pro forma consolidated financial statements are presented to reflect the acquisition of Arrowhead Fountains by AmeriVest. The accompanying unaudited pro forma consolidated balance sheet presents the historical financial information of AmeriVest as of September 30, 2001 as adjusted for the acquisition of Arrowhead Fountains, as if the transaction had occurred on September 30, 2001. The accompanying unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2001 and the year ended December 31, 2000 combine the historical operations of AmeriVest with the historical operations of Arrowhead Fountains as if the transaction had occurred on January 1, 2000. NOTE 2 - PRO FORMA ADJUSTMENTS The unaudited pro forma consolidated financial statements reflect the following pro forma adjustments: (a) The net cash paid for Arrowhead Fountains consists of the following: Purchase price $ 12,750,000 Estimated acquisition costs 50,000 Advisory fee per Sheridan Realty Advisors, LLC agreement 175,000 Loan origination fee 93,000 Less: loan balance assumed (9,300,000) Less: accrued advisory fee (175,000) Less: credit for accrued real estate taxes (38,223) Less: credit for security deposits (33,579) Less: credit for accrued interest (26,996) ------------ Cash paid $ 3,494,202 (b) The purchase price of Arrowhead Fountains was allocated to the assets and liabilities based on estimated fair values. (c) The loan in the amount of $9.3 million, which was assumed from the previous owner, bears interest at 1-month LIBOR plus 190 basis points and matures on December 5, 2003. AmeriVest paid a 1% loan origination fee, which has been capitalized and is being amortized over the remaining life of the loan. F-9 (d) Consists of the advisory fee of $175,000 due to Sheridan Realty Advisors, LLC in connection with the acquisition of Arrowhead Fountains per the Property Management and Advisory Agreement and $26,996 in accrued interest on the assumed loan. (e) Fair value of 73,500 incentive warrants granted to Sheridan Realty Advisors, LLC in connection with the acquisition of Arrowhead Fountains per the Property Management and Advisory Agreement. (f) Adjustment to management fees pursuant to the Property Management and Advisory Agreement: Nine Months Ended Year Ended September 30, December 31, 2001 2000 -------------- -------------- Elimination of historical management fees $ (43,231) $ (38,757) Management fees per Sheridan Realty Advisors, LLC agreement 77,064 74,972 -------------- -------------- Pro forma adjustment $ 33,833 $ 36,215 ============== ============== (g) Interest expense to be recognized related to the mortgage loan assumed upon the acquisition of Arrowhead Fountains. Includes loan interest calculated at 1-month LIBOR (used 4.32% and 6.58% for the nine months ended September 30, 2001 and the year ended December 31, 2000, respectively, based on an average of 1-month LIBOR during the respective periods) plus 190 basis points and the amortization of the loan origination fee. (h) Depreciation expense calculated assuming a 40-year useful life. NOTE 3 - INCOME PER SHARE Pro forma income per common share for the nine months ended September 30, 2001 and the year ended December 31, 2000 is computed based on the weighted average number of common shares outstanding during the periods presented. F-10 AMERIVEST PROPERTIES INC. AND SUBSIDIARIES STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS AND CASH TO BE MADE AVAILABLE BY OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 (Unaudited) The following represents an estimate of the taxable operating results and cash to be made available by operations expected to be generated by AmeriVest (including the operations of Arrowhead Fountains) based upon the pro forma consolidated statement of operations for the year ended December 31, 2000. These estimated results do not purport to represent results of operations for these properties in the future and were prepared on the basis described in the accompanying notes, which should be read in conjunction herewith. Revenue $8,777,744 ---------- Expenses: Operating expenses 2,322,293 Real estate taxes 821,898 Management fees 419,608 General and administrative 519,399 Severance expense 255,442 Interest 2,980,210 Depreciation and amortization 1,003,864 ---------- Total expenses 8,322,714 ---------- Estimated Taxable Operating Income 455,030 Add back depreciation and amortization 1,003,864 ---------- Estimated Cash to be Made Available by Operations $1,458,894 ========== F-11 AMERIVEST PROPERTIES INC. AND SUBSIDIARIES NOTE TO STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS AND CASH TO BE MADE AVAILABLE BY OPERATIONS (Unaudited) NOTE 1 - BASIS OF PRESENTATION Depreciation has been estimated based upon an allocation of the purchase price of Arrowhead Fountains to land (20%) and building (80%) and assuming (for tax purposes) a 39-year useful life applied on a straight-line method. No income taxes have been provided because the Company is organized and operates in such a manner so as to qualify as a Real Estate Investment Trust ("REIT") under the provisions of the Internal Revenue Code (the "Code"). Accordingly, the Company generally will not pay Federal income taxes provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. F-12 SIGNATURES Pursuant to the requirements 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. AMERIVEST PROPERTIES INC. January 23, 2002 By: /s/ D. Scott Ikenberry -------------------------------- D. Scott Ikenberry Chief Financial Officer F-13 -----END PRIVACY-ENHANCED MESSAGE-----