SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: September 30, 2000
Commission file number: 333-67287
AEI INCOME & GROWTH FUND 23 LLC
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Delaware 41-1922579
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
Transitional Small Business Disclosure Format:
Yes No [X]
AEI INCOME & GROWTH FUND 23 LLC
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of September 30, 2000 and December 31, 1999
Statements for the Periods ended September 30, 2000 and 1999:
Operations
Cash Flows
Changes in Members' Equity
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI INCOME & GROWTH FUND 23 LLC
BALANCE SHEET
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
CURRENT ASSETS:
Cash and Cash Equivalents $ 941,062 $ 2,583,998
Receivables 132,247 0
----------- -----------
Total Current Assets 1,073,309 2,583,998
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 3,156,241 0
Buildings and Equipment 666,089 0
Construction in Progress 1,888,504 0
Accumulated Depreciation (4,082) 0
----------- -----------
Net Investments in Real Estate 5,706,752 0
----------- -----------
Total Assets $ 6,780,061 $ 2,583,998
=========== ===========
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 157,782 $ 72,484
Distributions Payable 120,065 40,462
----------- -----------
Total Current Liabilities 277,847 112,946
----------- -----------
MEMBERS' EQUITY (DEFICIT):
Managing Members' Equity (5,144) (633)
Limited Members' Equity, $1,000 Unit Value;
24,000 Units authorized; 7,913 and 2,994
Units issued and outstanding in 2000 and
1999, respectively 6,507,358 2,471,685
----------- -----------
Total Members' Equity 6,502,214 2,471,052
----------- -----------
Total Liabilities and Members' Equity $ 6,780,061 $ 2,583,998
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND 23 LLC
STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Three Months Ended Nine Months Ended
9/30/00 9/30/99 9/30/00 9/30/99
INCOME:
Rent $ 79,213 $ 0 $ 128,306 $ 0
Investment Income 47,473 230 126,567 262
-------- --------- --------- ---------
Total Income 126,686 230 254,873 262
-------- --------- --------- ---------
EXPENSES:
LLC Administration -
Affiliates 40,327 15,742 112,084 29,749
LLC Administration and
Property Management -
Unrelated Parties 1,707 0 7,982 900
Depreciation 4,082 0 4,082 0
-------- --------- --------- ---------
Total Expenses 46,116 15,742 124,148 30,649
-------- --------- --------- ---------
NET INCOME (LOSS) $ 80,570 $ (15,512) $ 130,725 $ (30,387)
======== ========= ========= =========
NET INCOME (LOSS) ALLOCATED:
Managing Members $ 2,417 $ (155) $ 3,922 $ (304)
Limited Members 78,153 (15,357) 126,803 (30,083)
-------- --------- --------- ---------
$ 80,570 $ (15,512) $ 130,725 $ (30,387)
======== ========= ========= =========
NET INCOME (LOSS) PER
LLC UNIT
6,735, 1,869, 5,198 and 1,869 weighted average
Units outstanding for the periods,
respectively) $ 11.60 $ (8.22) $ 24.39 $ (16.10)
======== ========= ========= =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND 23 LLC
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 130,725 $ (30,387)
Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided by Operating Activities:
Depreciation 4,082 0
Increase in Receivables (132,247) 0
Increase in Payable to
AEI Fund Management, Inc. 85,298 31,080
----------- -----------
Total Adjustments (42,867) 31,080
----------- -----------
Net Cash Provided By
Operating Activities 87,858 693
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (5,710,834) 0
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital Contributions from Limited Members 4,919,429 1,868,616
Organization and Syndication Costs (737,901) (280,042)
Increase in Distributions Payable 79,603 0
Distributions to Members (281,091) 0
----------- -----------
Net Cash Provided By
Financing Activities 3,980,040 1,588,574
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (1,642,936) 1,589,267
CASH AND CASH EQUIVALENTS, beginning of period 2,583,998 1,000
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 941,062 $ 1,590,267
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND 23 LLC
STATEMENT OF CHANGES IN MEMBERS' EQUITY
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Limited
Member
Managing Limited Units
Members Members Total Outstanding
BALANCE, December 31, 1998 $ 1,000 $ 0 $ 1,000 0
Capital Contributions 0 1,868,616 1,868,616
Organization and
Syndication Costs (60) (279,982) (280,042)
Net Loss (304) (30,083) (30,387)
--------- ----------- ----------- ---------
BALANCE, September 30, 1999 $ 636 $ 1,558,551 $ 1,559,187 0
========= =========== =========== =========
BALANCE, December 31, 1999 $ (633) $ 2,471,685 $ 2,471,052 2,993.82
Capital Contributions 0 4,919,429 4,919,429 4,919.43
Organization &
Syndication Costs 0 (737,901) (737,901)
Distributions (8,433) (272,658) (281,091)
Net Income 3,922 126,803 130,725
---------- ----------- ----------- ---------
BALANCE, September 30, 2000 $ (5,144) $ 6,507,358 $ 6,502,214 7,913.25
========= =========== =========== =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND 23 LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
(1) The condensed statements included herein have been prepared
by the LLC, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the LLC believes that
the disclosures are adequate to make the information
presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with
the financial statements and the summary of significant
accounting policies and notes thereto included in the LLC's
latest annual report on Form 10-KSB.
(2) Organization -
AEI Income & Growth Fund 23 LLC (the LLC), a Limited
Liability Company, was formed on October 14, 1998 to acquire
and lease commercial properties to operating tenants. The
LLC's operations are managed by AEI Fund Management XXI,
Inc. (AFM), the Managing Member. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the Special
Managing Member and an affiliate of AFM, AEI Fund
Management, Inc., performs the administrative and operating
functions for the LLC.
The terms of the offering call for a subscription price of
$1,000 per LLC Unit, payable on acceptance of the offer.
Under the terms of the Operating Agreement, 24,000 LLC Units
are available for subscription which, if fully subscribed,
will result in contributed Limited Members' capital of
$24,000,000. The LLC commenced operations on September 30,
1999 when minimum subscriptions of 1,500 Limited Membership
Units ($1,500,000) were accepted. At September 30, 2000,
7,913.25 Units ($7,913,247) were subscribed and accepted by
the LLC. The Managing Members have contributed capital of
$1,000. The LLC shall continue until December 31, 2048,
unless dissolved, terminated and liquidated prior to that
date.
During operations, any Net Cash Flow, as defined, which the
Managing Members determine to distribute will be distributed
97% to the Limited Members and 3% to the Managing Members.
Distributions to Limited Members will be made pro rata by
Units.
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the Managing Members determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Members and 1% to the Managing Members until the
Limited Members receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to 7%
of their Adjusted Capital Contribution per annum, cumulative
but not compounded, to the extent not previously distributed
from Net Cash Flow; (ii) any remaining balance will be
distributed 90% to the Limited Members and 10% to the
Managing Members. Distributions to the Limited Members will
be made pro rata by Units.
AEI INCOME & GROWTH FUND 23 LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(2) Organization - (Continued)
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Members for such
year. Any additional profits will be allocated in the same
ratio as the last dollar of Net Cash Flow is distributed.
Net losses from operations will be allocated 99% to the
Limited Members and 1% to the Managing Members.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Operating Agreement as follows: (i)
first, to those Members with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Members
and 1% to the Managing Members until the aggregate balance
in the Limited Members' capital accounts equals the sum of
the Limited Members' Adjusted Capital Contributions plus an
amount equal to 7% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, the balance of any
remaining gain will then be allocated 90% to the Limited
Members and 10% to the Managing Members. Losses will be
allocated 98% to the Limited Members and 2% to the Managing
Members.
The Managing Members are not required to currently fund a
deficit capital balance. Upon liquidation of the LLC or
withdrawal by a Managing Member, the Managing Members will
contribute to the LLC an amount equal to the lesser of the
deficit balances in their capital accounts or 1.01% of the
total capital contributions of the Limited Members over the
amount previously contributed by the Managing Members.
(3) Investments in Real Estate -
On February 25, 2000, the LLC purchased a parcel of land in
Kettering, Ohio for $459,500. The land is leased to
Tumbleweed, Inc. (TWI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$39,058. Effective June 23, 2000, the annual rent was
increased to $45,376. Simultaneously with the purchase of
the land, the LLC entered into a Development Financing
Agreement under which the LLC advanced funds to TWI for the
construction of a Tumbleweed restaurant on the site.
Initially, the LLC charged interest on the advances at a
rate of 8.5%. Effective June 23, 2000, the interest rate
was increased to 9.875%. On August 23, 2000, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $120,821. Total
acquisition costs, including the cost of the land, were
$1,235,159.
AEI INCOME & GROWTH FUND 23 LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(3) Investments in Real Estate - (Continued)
On April 18, 2000, the LLC purchased a parcel of land in
Victoria, Texas for $409,500. The land is leased to Kona
Restaurant Group, Inc. (KRG) under a Lease Agreement with a
primary term of 17 years and annual rental payments of
$42,998. Simultaneously with the purchase of the land, the
LLC entered into a Development Financing Agreement under
which the LLC will advance funds to KRG for the construction
of a Johnny Carino's restaurant on the site. Through
September 30, 2000, the LLC had advanced $910,285 for the
construction of the property and is charging interest on the
advances at a rate of 10.5%. The total purchase price,
including the cost of the land, will be approximately
$1,800,000. After the construction is complete, the Lease
Agreement will be amended to require annual rental payments
of approximately $189,000.
On April 19, 2000, the LLC purchased a parcel of land in San
Antonio, Texas for $1,558,000. The land is leased to
Razzoo's, Inc. (RI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $132,430.
Simultaneously with the purchase of the land, the LLC
entered into a Development Financing Agreement under which
the LLC will advance funds to RI for the construction of a
Razzoo's restaurant on the site. Through September 30,
2000, the LLC had advanced $942,174 for the construction of
the property and is charging interest on the advances at a
rate of 8.5%. Effective September 15, 2000, the interest
rate was increased to 9.75%. The total purchase price,
including the cost of the land, will be approximately
$3,510,000. After the construction is complete, the Lease
Agreement will be amended to require annual rental payments
of approximately $342,000.
On June 30, 2000, the LLC purchased a 44% interest in a
parcel of land in Alpharetta, Georgia for $707,520. The
land is leased to Razzoo's, Inc. (RI) under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $60,139. Simultaneously with the purchase of
the land, the LLC entered into a Development Financing
Agreement under which the LLC will advance funds to RI for
the construction of a Razzoo's restaurant on the site.
Through September 30, 2000, the LLC had advanced $36,045 for
the construction of the property and was charging interest
on the advances at a rate of 8.5%. The LLC's share of the
total purchase price, including the cost of the land, will
be approximately $1,685,200. After the construction is
complete, the Lease Agreement will be amended to require
annual rental payments of approximately $164,000. The
remaining interests in the property are owned by AEI Net
Lease Income & Growth Fund XIX Limited Partnership, AEI Real
Estate Fund XVIII Limited Partnership and AEI Private Net
Lease Millennium Fund Limited Partnership, affiliates of the
LLC.
(4) Receivables -
At September 30, 2000, the LLC had receivables of
construction interest and rent in the amount of $37,118 and
$95,129, respectively. These amounts are accrued on the
transactions discussed in Note 3 and are collected upon
completion of the properties.
AEI INCOME & GROWTH FUND 23 LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(5) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the LLC. The payable to AEI Fund
Management represents the balance due for those services.
This balance is non-interest bearing and unsecured and is to
be paid in the normal course of business.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the nine months ended September 30, 2000, the LLC
recognized rental income of $128,306. During the same period,
the LLC earned $126,567 in investment income from subscription
proceeds which were invested in a short-term money market account
and from development advances. This investment income
constituted 50% of total income for the period. The percentage
of total income represented by investment income declines as
subscription proceeds are invested in properties.
During the nine months ended September 30, 2000 and 1999,
the LLC paid administration expenses to affiliated parties of
$112,084 and $29,749 respectively. These administration expenses
include initial start-up costs and administrative expenses
associated with processing distributions, reporting requirements
and correspondence to the Limited Members. During the same
periods, the LLC incurred administration expenses from unrelated
parties of $7,982 and $900, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, and other property costs.
The LLC distributes all of its net income during the
offering and acquisition phases, and if net income, after
adjustment for depreciation, is not sufficient to fund the
distributions, the LLC may distribute other available cash that
constitutes capital.
As of September 30, 2000, the LLC's cash distribution rate
was 7.0% on an annualized basis. Pursuant to the Operating
Agreement, distributions of Net Cash Flow were allocated 97% to
the Limited Members and 3% to the Managing Members.
Since the LLC has only recently purchased its real estate,
inflation has had a minimal effect on income from operations.
The Leases may contain cost of living increases which will result
in an increase in rental income over the term of the Leases.
Inflation also may cause the LLC's real estate to appreciate in
value. However, inflation and changing prices may also have an
adverse impact on the operating margins of the properties'
tenants which could impair their ability to pay rent and
subsequently reduce the LLC's Net Cash Flow available for
distributions.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Liquidity and Capital Resources
The LLC's primary sources of cash will be proceeds from
the sale of Units, investment income, rental income and proceeds
from the sale of property. Its primary uses of cash will be
investment in real properties, payment of expenses involved in
the sale of Units, the organization of the LLC, the management of
properties, the administration of the LLC, and the payment of
distributions.
The Operating Agreement requires that no more than 15% of
the proceeds from the sale of Units be applied to expenses
involved in the sale of Units (including Commissions) and that
such expenses, together with acquisition expenses, not exceed 20%
of the proceeds from the sale of Units. As set forth under the
caption "Estimated Use of Proceeds" of the Prospectus, the
Managing Members anticipate that 15% of such proceeds will be
applied to cover organization and offering expenses if only the
minimum proceeds are obtained and that 14% of such proceeds will
be applied to such expenses if the maximum proceeds are obtained.
To the extent organization and offering expenses actually
incurred exceed 15% of proceeds, they are borne by the Managing
Members.
Before the acquisition of all such properties, cash flow
from operating activities is not significant. Net income, after
adjustment for depreciation, is lower during the first few years
of operations as administrative expenses remain high and a large
amount of the LLC's assets remain invested on a short-term basis
in lower-yielding cash equivalents. Net income will become the
largest component of cash flow from operating activities and the
largest component of cash flow after the completion of the
acquisition phase.
The Operating Agreement requires that all proceeds from
the sale of Units be invested or committed to investment in
properties by the later of two years after the date of the
Prospectus or six months after termination of the offer and sale
of Units. While the LLC is purchasing properties, cash flow from
investing activities (investment in real property) will remain
negative and will constitute the principal use of the LLC's
available cash flow. Until capital is invested in properties,
the LLC will remain extremely liquid.
On February 25, 2000, the LLC purchased a parcel of land
in Kettering, Ohio for $459,500. The land is leased to
Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $39,058.
Effective June 23, 2000, the annual rent was increased to
$45,376. Simultaneously with the purchase of the land, the LLC
entered into a Development Financing Agreement under which the
LLC advanced funds to TWI for the construction of a Tumbleweed
restaurant on the site. Initially, the LLC charged interest on
the advances at a rate of 8.5%. Effective June 23, 2000, the
interest rate was increased to 9.875%. On August 23, 2000, after
the development was completed, the Lease Agreement was amended to
require annual rental payments of $120,821. Total acquisition
costs, including the cost of the land, were $1,235,159.
On April 18, 2000, the LLC purchased a parcel of land in
Victoria, Texas for $409,500. The land is leased to Kona
Restaurant Group, Inc. (KRG) under a Lease Agreement with a
primary term of 17 years and annual rental payments of $42,998.
Simultaneously with the purchase of the land, the LLC entered
into a Development Financing Agreement under which the LLC will
advance funds to KRG for the construction of a Johnny Carino's
restaurant on the site. Through September 30, 2000, the LLC had
advanced $910,285 for the construction of the property and is
charging interest on the advances at a rate of 10.5%. The total
purchase price, including the cost of the land, will be
approximately $1,800,000. After the construction is complete,
the Lease Agreement will be amended to require annual rental
payments of approximately $189,000.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On April 19, 2000, the LLC purchased a parcel of land in
San Antonio, Texas for $1,558,000. The land is leased to
Razzoo's, Inc. (RI) under a Lease Agreement with a primary term
of 15 years and annual rental payments of $132,430.
Simultaneously with the purchase of the land, the LLC entered
into a Development Financing Agreement under which the LLC will
advance funds to RI for the construction of a Razzoo's restaurant
on the site. Through September 30, 2000, the LLC had advanced
$942,174 for the construction of the property and is charging
interest on the advances at a rate of 8.5%. Effective September
15, 2000, the interest rate was increased to 9.75%. The total
purchase price, including the cost of the land, will be
approximately $3,510,000. After the construction is complete,
the Lease Agreement will be amended to require annual rental
payments of approximately $342,000.
On June 30, 2000, the LLC purchased a 44% interest in a
parcel of land in Alpharetta, Georgia for $707,520. The land is
leased to Razzoo's, Inc. (RI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of $60,139.
Simultaneously with the purchase of the land, the LLC entered
into a Development Financing Agreement under which the LLC will
advance funds to RI for the construction of a Razzoo's restaurant
on the site. Through September 30, 2000, the LLC had advanced
$36,045 for the construction of the property and was charging
interest on the advances at a rate of 8.5%. The LLC's share of
the total purchase price, including the cost of the land, will be
approximately $1,685,200. After the construction is complete,
the Lease Agreement will be amended to require annual rental
payments of approximately $164,000. The remaining interests in
the property are owned by AEI Net Lease Income & Growth Fund XIX
Limited Partnership, AEI Real Estate Fund XVIII Limited
Partnership and AEI Private Net Lease Millennium Fund Limited
Partnership, affiliates of the LLC.
As of September 30, 2000, the LLC's commitments to acquire
properties exceeded funds available from current subscription
proceeds. The LLC anticipates future subscription proceeds will
be adequate to fund the final acquisition of these commitments.
During the offering of Units, the LLC's primary source of
cash flow will be from the sale of LLC Units. The LLC commenced
its offering of LLC Units to the public through a registration
statement which became effective March 23, 1999. From March 23,
1999 to September 30, 1999, the minimum number of LLC Units
(1,500) needed to form the LLC were sold. On September 30, 1999,
a total of 1,868.616 Units ($1,868,616) were transferred into the
LLC. Through September 30, 2000, the LLC raised a total of
$7,913,247 from the sale of 7,913.25 Units. The Managing General
Partner has extended the offering of Units to the earlier of
completion of sale of all Units or March 22, 2001. From
subscription proceeds, the LLC paid organization and syndication
costs (which constitute a reduction of capital) of $1,186,719.
After completion of the acquisition phase, the LLC's
primary use of cash flow is distribution and redemption payments
to Members. The LLC declares its regular quarterly distributions
before the end of each quarter and pays the distribution in the
first week after the end of each quarter. The LLC attempts to
maintain a stable distribution rate from quarter to quarter.
Beginning in 2002, the LLC may acquire Units from Limited
Members who have tendered their Units to the LLC. Such Units may
be acquired at a discount. The LLC is not obligated to purchase
in any year more than 2% of the number of Units outstanding at
the beginning of the year. In no event shall the LLC be
obligated to purchase Units if, in the sole discretion of the
Managing Member, such purchase would impair the capital or
operation of the LLC.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Until capital is invested in properties, the LLC will
remain extremely liquid. After completion of property
acquisitions, the LLC will attempt to maintain a cash reserve of
only approximately 1% of subscription proceeds. Because
properties are purchased for cash and leased under triple-net
leases, this is considered adequate to satisfy most
contingencies.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the LLC, must be evaluated in the
context of a number of factors that may affect the LLC's
financial condition and results of operations, including the
following:
Market and economic conditions which affect the value
of the properties the LLC owns and the cash from rental
income such properties generate;
the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
affects of these consequences for investors;
resolution by the Managing Members of conflicts with
which they may be confronted;
the success of the Managing Member of locating
properties with favorable risk return characteristics;
the effect of tenant defaults; and
the condition of the industries in which the tenants of
properties owned by the LLC operate.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the LLC is a party or of which the LLC's property is subject.
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II - OTHER INFORMATION
(Continued)
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 First Amendment to Net Lease
Agreement dated August 23, 2000 between
the LLC and Tumbleweed, Inc. relating to
the property at 2030 E. Dorothy Lane,
Kettering, Ohio.
10.2 Second Amendment to Net Lease
Agreement dated August 23, 2000 between
the LLC and Tumbleweed, Inc. relating to
the property at 2030 E. Dorothy Lane,
Kettering, Ohio.
27 Financial Data Schedule for period
ended September 30, 2000.
b. Reports filed on Form 8-K -
During the quarter ended September
30, 2000, the LLC filed a Form 8-K,
dated August 28, 2000, reporting
the acquisition of a Tumbleweed
restaurant in Kettering, Ohio.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: November 7, 2000 AEI Income & Growth Fund 23 LLC
By: AEI Fund Management XXI, Inc.
Its: Managing Member
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
