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, 1997.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 1-14462
AmeriVest Properties, Inc.
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(Exact name of small business issuer as specified in its charter.)
Delaware 84-1240264
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7100 Grandview Avenue, Suite 1
Arvada, Colorado 80002
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(Zip Code)
(303) 421-1224
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(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
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As of May 9, 1997 the Registrant had outstanding 1,382,870 shares of common
stock, per value $.001.
Transitional Small Business Disclosure Format (check one):
Yes No X
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AMERIVEST PROPERTIES INC. AND SUBSIDIARY
FORM 10-QSB
March 31, 1997
Table of Contents
Page No.
Part I
Item 1. Financial Statements
Balance Sheets as of December 31, 1996 and
March 31, 1997 3
Statements of Operations for the Three Months
Ended March 31, 1996 and 1997 4
Statements of Cash Flows for the Three Months Ended
March 31, 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 9
Item 6. Exhibits and Reports on Form 8-K 9
2
<PAGE>
<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, March 31,
1996 1997
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Investment in real estate
Land $ 2,374,808 $ 2,374,808
Buildings and improvements 11,975,946 11,975,946
Furniture, fixtures and equipment 225,099 225,099
Tenant improvements 512,725 515,733
Less accumulated depreciation and amortization (4,573,871) (4,709,954)
------------ ------------
Net Investment in Real Estate 10,514,707 10,381,632
Cash and cash equivalents 1,230,640 1,305,088
Tenant accounts receivable 30,014 52,721
Deferred financing costs, net 111,139 104,877
Prepaid expenses and other assets 49,580 62,794
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$ 11,936,080 $ 11,907,112
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Mortgage loans payable $ 7,397,995 $ 7,365,438
Accounts payable and accrued expenses 52,765 45,354
Accrued interest 57,273 57,020
Accrued real estate taxes 240,411 266,985
Prepaid rents and security deposits 99,133 81,594
Dividends payable -- 155,573
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Total Liabilities 7,847,577 7,971,964
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
Authorized - 10,000,000 shares
Issued and outstanding - 1,382,870 1,383 1,383
Capital in excess of par value 4,256,101 4,256,101
Distribution in excess of accumulated earnings (168,981) (322,336)
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Total Stockholders' Equity 4,088,503 3,935,148
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$ 11,936,080 $ 11,907,112
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3
</TABLE>
<PAGE>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended
March 31
----------------------------
1996 1997
----------------------------
(unaudited)
REAL ESTATE OPERATING REVENUE
Rental revenue
Commercial properties $ 59,088 $ 290,669
Storage properties -- 313,094
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59,088 603,763
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REAL ESTATE OPERATING EXPENSES
Property operating expenses
Operating expenses 915 120,997
Real estate taxes 8,291 60,182
Management fees - related 4,454 31,839
General and administrative 40,574 87,632
Interest 28,974 171,347
Depreciation and amortization 10,142 142,495
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93,350 614,492
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OTHER INCOME
Interest income -- 12,947
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NET INCOME (LOSS) $ (34,262) $ 2,218
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NET INCOME (LOSS) PER COMMON SHARE $ (.12) $ .002
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 284,000 1,382,870
========== ==========
4
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<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended
March 31
------------------------------------
1996 1997
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(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (34,262) $ 2,218
Adjustments to reconcile net (loss) income to net cash
provided by operating activities
Depreciation and amortization 10,142 142,495
Changes in assets and liabilities
(Increase) in receivables (312) (22,707)
Decrease (increase) in prepaids 23,512 (13,366)
Increase (decrease) in accounts payable 46,115 (10,325)
Increase in accruals 11,845 11,698
Increase in deferred offering costs (30,239) --
----------- -----------
Net cash (used) provided by operating activities 26,801 110,013
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CASH FLOWS FROM INVESTING ACTIVITIES
Additions to investments in real estate -- (3,008)
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Net cash (used) by investing activities -- (3,008)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock warrants 7,500
Cost of warrants offering (8,008)
Payments on mortgage loans payable (4,363) (32,557)
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Net cash (used) provided by financing activities (4,871) (32,557)
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NET INCREASE IN CASH AND
CASH EQUIVALENTS 21,930 74,448
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 7,177 1,230,640
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CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 29,107 $ 1,305,088
=========== ===========
5
</TABLE>
<PAGE>
AMERIVEST PROPERTIES INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997
General
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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 three months ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997.
Subsequent Event
- ----------------
On May 8, 1997 the Company entered into a Letter of Intent to acquire a
10-story, 87,000 square feet of usable space, office building in Amarillo,
Texas. The definitive purchase and financing agreements are not yet finalized.
Although there is no assurance, the acquisition is expected to be completed
within the next three months.
6
<PAGE>
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 March 31, 1997, Compared With Three Months Ended March 31,
1996.
- --------------------------------------------------------------------------------
The Company's results of operations for the three months ended March 31,
1997 include six operating properties, whereas the March 31, 1996 results of
operations include only one operating property. Revenues for first quarter 1997
increased approximately $545,000, and operating expenses, management fees,
interest, and depreciation and amortization increased approximately $120,000,
$47,000, $142,000 and $132,000 respectively, as compared with March 31, 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 compared to prior year's taxes, except for the Appleton, Wisconsin
property for which Real Estate taxes decreased on an annualized basis by
$15,000. The general and administrative expenses increased approximately $47,000
due primarily to costs associated with public relations and travel. The Company
also had interest income of $13,000 for the 1997 quarter, primarily as a result
of investment funds being held for real estate acquisitions.
The net income for the three months ended March 31, 1997 was $2,218, or
$.002 per share, as compared to a net loss of $34,262, or $.12 per share, for
the three months ended March 31, 1996.
Financial Condition, Liquidity And Capital Resources
----------------------------------------------------
The consolidated financial condition of the Company evidenced the following
changes from December 31, 1996 to March 31, 1997. Net investment in Real Estate
decreased approximately $133,000, primarily due to depreciation for the three
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.
7
<PAGE>
Deferred financing costs, net, decreased approximately $6,000 due to
amortization for the three months ended March 31, 1997. Mortgage loans payable
decreased by approximately $32,000 due to normal payments over the period.
Accounts payable and accrued expenses and prepaid rents decreased approximately
$7,000 and $17,000 respectively, with accrued real estate taxes increasing
approximately $26,000, all of which result from timing differences in the course
of normal operations during the first quarter of 1997.
At March 31, 1997, the Company had approximately $1,150,000 of cash and
cash equivalents available for acquisitions and working capital needs. The
Company also had approximately $156,000 of cash held in reserve for a
stockholder dividend distribution which was paid on April 9, 1997. Tenant
receivables increased by approximately $22,000 in March as a result of
additional billings to tenants for operating costs during the quarter.
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 a
Letter of Intent to acquire a 10-story, 87,000 square feet of usable space,
office building in Amarillo, Texas.
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.
8
<PAGE>
Part II. Other Information
Item 5. Other Information
------------------
On May 8, 1997 the Company entered into a Letter of Intent to acquire a
10-story, 87,000 square feet of usable space, office building in Amarillo,
Texas, for an undisclosed amount. The acquisition is subject to obtaining
adequate financing and the finalization of definitive purchase and financing
agreements. Although there is no assurance, the acquisition is expected to close
within the next three months.
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 31,1997, 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.
May 15, 1997
By: /s/ JAMES F. ETTER
-------------------------------
James F. Etter, President and
Principal Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,305,088
<SECURITIES> 0
<RECEIVABLES> 52,721
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,420,603
<PP&E> 15,091,586
<DEPRECIATION> (4,709,954)
<TOTAL-ASSETS> 11,907,112
<CURRENT-LIABILITIES> 606,526
<BONDS> 0
0
0
<COMMON> 1,383
<OTHER-SE> 3,933,765
<TOTAL-LIABILITY-AND-EQUITY> 11,907,112
<SALES> 603,763
<TOTAL-REVENUES> 603,763
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 443,145
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 171,347
<INCOME-PRETAX> 2,218
<INCOME-TAX> 2,218
<INCOME-CONTINUING> 2,218
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,218
<EPS-PRIMARY> .002
<EPS-DILUTED> .002
</TABLE>
