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): August 18, 1998
AmeriVest Properties Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-14462 84-1240264
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
2801 Youngfield Street, Suite 300, Golden, Colorado 80401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 205-7870
7100 Grandview Avenue, Suite 1, Arvada, Colorado 80002
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(Former address if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements of Real Estate Properties Acquired
Independent Auditor's Report F-1
Combined Statements of Real Estate Operating Revenues
and Expenses - year ended December 31, 1997
and six months ended June 30, 1998 (unaudited) F-2
Notes to Financial Statements F-3-4
Unaudited Pro Forma Financial Information
Pro Forma Financial Information F-5
Unaudited Pro Forma Consolidated Balance Sheet
as of June 30, 1998 F-6
Unaudited Pro Forma Consolidated Statement of
Operations - six months ended June 30, 1998 F-7
Unaudited Pro Forma Consolidated Statement of
Operations - year ended December 31, 1997 F-8
Notes to Unaudited Pro Forma Consolidated
Financial Statements F-9
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors and Stockholders
AMERIVEST PROPERTIES INC.
We have audited the accompanying combined statement of real estate operating
revenues and expenses for four Texas real estate properties acquired by
AmeriVest Buildings Texas Inc., a wholly owned subsidiary of AmeriVest
Properties Inc., for the year ended December 31, 1997. This financial statement
is the responsibility of the Company's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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.
The accompanying financial statement was 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 real estate operating revenues
and expenses of the Texas real estate properties acquired by AmeriVest Buildings
Texas Inc.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the real estate operating revenues and expenses of the
Texas real estate properties acquired by AmeriVest Buildings Texas Inc., for the
year ended December 31, 1997 in conformity with generally accepted accounting
principles.
Wheeler Wasoff, P.C.
Denver, Colorado
October 22, 1998
F-1
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AMERIVEST PROPERTIES INC.
TEXAS REAL ESTATE PROPERTIES ACQUIRED
COMBINED STATEMENTS OF REAL ESTATE OPERATING REVENUES AND EXPENSES
YEAR ENDED DECEMBER 31, 1997 AND SIX MONTHS ENDED JUNE 30, 1998 (Unaudited)
Year Ended Six Months Ended
December 31,1997 June 30, 1998
(Unaudited)
REAL ESTATE OPERATING REVENUES $845,288 $427,727
-------- --------
REAL ESTATE OPERATING EXPENSES
Property operating expenses
Operating expenses 315,616 157,782
Real estate taxes 77,356 38,678
Management fees 36,000 18,000
General and administrative 1,779 546
-------- --------
430,751 215,006
-------- --------
NET INCOME FROM REAL ESTATE OPERATIONS $414,537 $212,721
======== ========
The accompanying notes are an integral part of the financial statement.
F-2
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AMERIVEST PROPERTIES INC.
TEXAS REAL ESTATE PROPERTIES ACQUIRED
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 and JUNE 30, 1998 (Unaudited)
NOTE 1 - BASIS OF PRESENTATION
On August 18, 1998, pursuant to a purchase and sale agreement entered into
in June 1998, AmeriVest Properties Inc. (AmeriVest), through its wholly
owned subsidiary AmeriVest Buildings Texas Inc. (AmeriVest Buildings)
completed the acquisition of 4 office buildings (the Acquired Buildings) in
the State of Texas. The aggregate purchase price for the Acquired Buildings
of $3.625 million consisted of approximately $1.953 million in cash and the
assumption of $1.672 million of existing debt.
The real estate operating revenues and expenses presented in the
accompanying financial statements relate only to the operations of the
Acquired Buildings and do not represent all of the operating costs and
expenses of the sellers. Operating expenses include the actual costs of
operating and maintaining the Acquired Buildings, but do not include
charges for interest, depreciation, federal or state income taxes or
general and administrative expenses not directly related to the Acquired
Buildings. The amounts of these omitted expenses are not known or
reasonably available. The real estate operating expenses for the periods
presented may not be indicative of future operation of the Acquired
Buildings.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Rental revenue from real estate operations is recognized as earned, on a
monthly basis.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
F-3
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AMERIVEST PROPERTIES INC.
TEXAS REAL ESTATE PROPERTIES ACQUIRED
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 and JUNE 30, 1998 (Unaudited)
NOTE 3 - LEASE AGREEMENTS
The following table summarizes future minimum base rent to be received from
noncancelable tenant leases for the Acquired Buildings that expire each
year as of December 31:
1998 $ 915,502
1999 786,910
2000 752,462
2001 710,532
2002 710,532
Thereafter 6,778,555
-----------
$10,654,493
===========
NOTE 4 - CONCENTRATIONS
The Acquired Buildings are leased primarily (63% in the aggregate) to
NationsBank, Texas, N.A., under long-term lease agreements.
NOTE 5 - UNAUDITED FINANCIAL STATEMENT
The financial statement for the six months ended June 30, 1998 is
unaudited; however, in the opinion of management, all adjustments
(consisting solely of normal recurring adjustments) necessary to a fair
presentation of the financial statement for that interim period have been
made. The results of the interim period are not necessarily indicative of
the results to be obtained for a full fiscal year.
F-4
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AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
In August 1998 AmeriVest, through its wholly owned subsidiary, AmeriVest
Buildings Texas Inc., ("AmeriVest Buildings"), acquired four office buildings in
the State of Texas. In June and July 1998 AmeriVest had previously acquired,
through its wholly owned subsidiaries, AmeriVest Properties Texas Inc. and
AmeriVest Properties Odessa Inc., eleven office buildings in Texas. These
acquisitions were previously reported on Form 8-K filed as of July 13, 1998.
The accompanying pro forma consolidated balance sheet presents, as of June 30,
1998,(i) the historical financial information of AmeriVest as of June 30, 1998
in the "AmeriVest (Historical)" column, (ii) the pro forma financial information
reflecting the acquistions of 11 buildings on July 13, 1998 in the "Pro Forma
(Previously Reported)" column as if those acquisitions had occurred on June 30,
1998, and (iii) the pro forma combined financial information, as adjusted for
the acquisition of the Acquired Buildings by AmeriVest Buildings on August 18,
1998 as if the acquisition had occurred on June 30, 1998, in the "Pro Forma
Combined" column. A pro forma balance sheet setting forth the information
included in the column entitled "Pro Forma (Previously Reported)" was previoulsy
reported in the Company's Form 8-K Report filed as of July 13, 1998.
The accompanying pro forma consolidated statements of operations for the six
months ended June 30, 1998 and for the year ended December 31, 1997,
respectively, combine the pro forma financial information of AmeriVest, which is
set forth in the respective "Pro Forma (Previously Reported)" columns and was
previously reported on the Form 8-K filed July 13, 1998, with the historical
real estate operating revenues and expenses of the four Acquired Buildings as if
the acquisitions had occurred at the beginning of each of the periods presented.
The pro forma consolidated financial statements have been prepared by AmeriVest
management based upon the historical financial statements of AmeriVest, the Pro
Forma (Previously Reported) financial information, and the historical real
estate operating revenues and expenses of the Acquired Buildings. 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 and notes thereto of the
Acquired Buildings contained elsewhere in this document, the historical
financial statements of AmeriVest for the periods ended June 30, 1998 and
December 31, 1997 included in AmeriVest's Form 10-QSB and Form 10-KSB filed for
each of those periods, respectively, and the Form 8-K filed by AmeriVest as of
July 13, 1998.
F-5
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<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(Unaudited)
Pro Forma
AmeriVest (Previously Pro Forma Pro Forma
(Historical) Reported) Adjustments Combined
Assets
Investment in Real Estate
<S> <C> <C> <C> <C>
Land $ 2,726,698 $ 3,689,118 $ 1,023,000 (a) $ 4,712,118
Building and improvements 13,192,757 19,454,637 2,702,000 (a) 22,156,637
Furniture, Fixtures and Equipment 249,675 249,675 -- 249,675
Tenant Improvements 539,490 539,490 -- 539,490
Less Accumulated depreciation and amortization (5,399,504) (5,399,504) -- (5,399,504)
------------ ------------ ------------ ------------
Net Investment in Real Estate 11,309,116 18,533,416 3,725,000 22,258,416
Cash and cash equivalents 209,874 209,874 302,000 (c) 511,874
Tenant accounts receivable 33,811 33,811 -- 33,811
Deferred Financing Costs, Net 101,347 176,894 -- 176,894
Prepaid Expenses and Other Assets 617,150 829,615 (200,000) (d) 629,615
------------ ------------ ------------ ------------
Total Assets $ 12,271,298 $ 19,783,610 $ 3,827,000 $ 23,610,610
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Mortgage loans and notes payable $ 8,393,704 $ 14,833,634 $ 4,127,000 (b) $ 18,960,634
Accounts payable and accrued expenses 74,473 74,473 -- 74,473
Accrued interest 56,219 56,219 -- 56,219
Accrued real estate taxes 188,099 260,981 -- 260,981
Prepaid rents and security deposits 89,913 89,913 -- 89,913
Dividends payable 161,783 161,783 -- 161,783
------------ ------------ ------------ ------------
Total Liabilities 8,964,191 15,477,003 4,127,000 19,604,003
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY
Common stock 1,445 1,645 -- 1,645
Capital in excess of par value 4,540,938 5,540,238 -- 5,540,238
Distributions in excess of accumulated earnings (1,235,276) (1,235,276) (300,000) (e) (1,535,276)
------------ ------------ ------------ ------------
Total Stockholders' Equity 3,307,107 4,306,607 (300,000) 4,006,607
------------ ------------ ------------ ------------
Total Liabilities and Stockholders' Equity $ 12,271,298 $ 19,783,610 $ 3,827,000 $ 23,610,610
============ ============ ============ ============
See notes to the pro forma consolidated financial statements.
F-6
</TABLE>
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<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(Unaudited)
Pro Forma
AmeriVest (Previously Acquired Pro Forma Pro Forma
(Historical) Reported) Buildings Adjustments Combined
REAL ESTATE OPERATING REVENUE
<S> <C> <C> <C> <C> <C>
Rental revenue
Commercial properties $ 661,001 $ 1,395,577 $ 427,727 $ -- $ 1,823,304
Storage properties 721,138 721,138 -- -- 721,138
----------- ----------- ----------- ----------- -----------
1,382,139 2,116,715 427,727 -- 2,544,442
----------- ----------- ----------- ----------- -----------
REAL ESTATE OPERATING EXPENSES
Property operating expenses
Operating expenses 302,091 551,780 157,782 -- 709,562
Real estate taxes 149,603 228,131 38,678 -- 266,809
Management fees 75,491 112,219 18,000 -- 130,219
General and administrative 197,309 211,853 546 -- 212,399
Interest 356,527 583,527 -- 87,000 (f) 670,527
Depreciation and amortization 294,755 414,112 -- 52,600 (g) 466,712
----------- ----------- ----------- ----------- -----------
1,375,776 2,101,622 215,006 139,600 2,456,228
----------- ----------- ----------- ----------- -----------
OTHER INCOME
Interest Income 1,742 1,742 -- -- 1,742
----------- ----------- ----------- ----------- -----------
NET INCOME $ 8,105 $ 16,835 $ 212,721 $ (139,600) $ 89,956
=========== =========== =========== =========== ===========
NET INCOME PER COMMON SHARE $ 0.05
===========
NET INCOME PER COMMON SHARE
ASSUMING DILUTION $ 0.05
===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 1,645,270
===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING ASSUMING DILUTION 1,650,270
===========
See notes to the pro forma consolidated financial statements.
F-7
</TABLE>
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<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(Unaudited)
AmeriVest Pro Forma Acquired Pro Forma Pro Forma
(Historical) (Previously Reported) Buildings Adjustments Combined
REAL ESTATE OPERATING REVENUE
<S> <C> <C> <C> <C> <C>
Rental revenue
Commercial properties $ 1,132,849 $ 2,586,385 $ 845,288 $ -- $ 3,431,673
Storage properties 1,349,333 1,349,333 -- 1,349,333
----------- ----------- ----------- ----------- -----------
2,482,182 3,935,718 845,288 -- 4,781,006
----------- ----------- ----------- ----------- -----------
REAL ESTATE OPERATING EXPENSES
Property operating expenses
Operating expenses 559,304 1,035,362 315,616 -- 1,350,978
Real estate taxes 282,860 439,913 77,356 -- 517,269
Management fees 141,136 213,813 36,000 -- 249,813
General and administrative 400,376 426,263 1,779 -- 428,042
Interest 685,429 1,143,129 -- 209,000 (f) 1,352,129
Depreciation and amortization 570,307 809,021 -- 105,000 (g) 914,021
----------- ----------- ----------- ----------- -----------
2,639,412 4,067,501 430,751 314,000 4,812,252
----------- ----------- ----------- ----------- -----------
OTHER INCOME
Interest Income 36,778 36,778 -- -- 36,778
----------- ----------- ----------- ----------- -----------
NET (LOSS) INCOME $ (120,452) $ (95,005) $ 414,537 $ (314,000) $ 5,532
=========== =========== =========== =========== ===========
NET INCOME PER COMMON SHARE $ 0.003
===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 1,604,470
===========
See notes to the pro forma consolidated financial statements.
F-8
</TABLE>
<PAGE>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited pro forma financial statements are presented to
reflect the acquisition of the four Acquired Buildings by AmeriVest's
wholly owned subsidiary, AmeriVest Buildings.
NOTE 2 - PRO FORMA ADJUSTMENTS
The unaudited pro forma financial statements reflect the following pro
forma adjustments:
(a) Purchase price of the four Acquired Buildings by AmeriVest Buildings.
(b) Increase in mortgage loans and notes payable related to the Acquired
Buildings by AmeriVest Buildings consisting of the assumption of
$1.672 million existing debt on the Acquired Buildings (interest at
9%), and refinancing of debt on properties other than those acquired,
owned by other subsidiaries of AmeriVest.
(c) Net cash available after refinancing of existing debt and properties
owned by other subsidiaries of AmeriVest.
(d) Reduction in deposit previously paid on Acquired Buildings.
(e) Prepayment penalty on refinancing of existing debt on properties owned
by other subsidiaries of AmeriVest.
(f) Additional interest expense related to the assumption of existing debt
on the Acquired Buildings by AmeriVest Buildings, and additional
interest expense due to refinancing the existing debt on properties
owned by other subsidiaries of AmeriVest.
(g) Additional depreciation expense on the four Acquired Buildings.
NOTES 3 - INCOME PER SHARE
Pro forma income per common share for the six months ended June 30, 1998
and the year ended December 31, 1997 is computed based on the weighted
average number of common shares outstanding during the periods, assuming
that 207,200 shares issued in conjunction with the acquisition of the
eleven buildings on July 13, 1998 were issued at the beginning of the
periods.
F-9
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SIGNATURE
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 hereunto duly authorized.
Date: October 30, 1998 AMERIVEST PROPERTIES INC.
By: /s/ James F. Etter
--------------------------------
James F. Etter
President
