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 September 30, 2000.
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.)
Maryland 84-1240264
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
1800 Glenarm Place, Suite 500
Denver, Colorado 80202
---------------- -----
(Zip Code)
(303) 297-1800
--------------
(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 November 14, 2000 the Registrant had outstanding 2,960,634 shares of
common stock, par value $.001.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
FORM 10-QSB
SEPTEMBER 30, 2000
Table of Contents
-----------------
Page No.
--------
Part I
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 2000 (Unaudited) and December 31, 1999 3
Condensed Consolidated Statements of Operations for the
Three Months and Nine Months ended September 30, 2000
and 1999 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2000 and 1999 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements
(Unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
2
<PAGE>
<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS As of As of
September 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Investment in real estate
Land $ 8,850,720 $ 6,052,418
Buildings and improvements 31,402,271 27,643,666
Furniture, fixtures and equipment 84,666 323,838
Tenant improvements 560,966 670,267
Less accumulated depreciation and amortization (2,949,327) (6,610,743)
------------ ------------
Net Investment in real estate 37,949,296 28,079,446
Cash and cash equivalents 1,630,999 458,336
Investment in affiliate 672,439 --
Escrow deposit -- 509,556
Tenant accounts receivable 69,864 61,886
Straight-line rents receivable 402,746 --
Deferred financing costs, net 422,320 547,609
Tenant leasing commissions, net 515,816 52,005
Prepaid expenses and other assets 646,338 605,620
------------ ------------
$ 42,309,818 $ 30,314,458
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Mortgage loans and notes payable $ 27,982,897 $ 22,467,915
Accounts payable and accrued expenses 993,643 186,802
Accrued interest 104,759 142,551
Accrued real estate taxes 662,114 624,880
Prepaid rents and security deposits 618,434 366,072
Dividends payable 370,079 267,462
------------ ------------
Total Liabilities 30,731,926 24,055,682
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value
Authorized - 5,000,000 shares
Issued and outstanding - none -- --
Common stock, $.001 par value
Authorized - 15,000,000 shares
Issued and outstanding - 2,960,634 shares (2000)
and 2,228,850 shares (1999) 2,961 2,229
Capital in excess of par value 11,769,050 8,179,723
Distributions in excess of accumulated earnings (194,119) (1,923,176)
------------ ------------
Total Stockholders' Equity 11,577,892 6,258,776
------------ ------------
$ 42,309,818 $ 30,314,458
============ ============
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REAL ESTATE OPERATING REVENUE
Rental Revenue
Commercial properties $ 1,696,813 $ 1,294,684 $ 4,409,999 $ 3,254,198
Storage properties 217,208 377,343 861,535 1,057,981
----------- ----------- ----------- -----------
1,914,021 1,672,027 5,271,534 4,312,179
----------- ----------- ----------- -----------
REAL ESTATE OPERATING EXPENSES
Property operating expenses
Operating expenses 557,756 493,477 1,448,454 1,202,773
Real estate taxes 162,223 163,429 492,474 430,488
Management fees 81,826 39,464 241,793 83,688
General and administrative 135,222 192,497 378,771 503,733
Severance payments 255,442 -- 255,442 --
Interest 577,303 464,571 1,532,063 1,185,215
Depreciation and amortization 291,208 291,784 860,865 782,102
----------- ----------- ----------- -----------
2,060,980 1,645,222 5,209,862 4,187,999
----------- ----------- ----------- -----------
OTHER INCOME
Interest income 18,082 3,784 34,973 9,160
Share in results of affiliate (19,424) -- (19,424) --
Gain on sale of real estate 2,556,839 -- 2,556,839 --
----------- ----------- ----------- -----------
2,555,497 3,784 2,572,388 9,160
----------- ----------- ----------- -----------
NET INCOME $ 2,408,538 $ 30,589 $ 2,634,060 $ 133,340
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE:
BASIC $ 0.95 $ 0.02 $ 1.13 $ 0.08
=========== =========== =========== ===========
DILUTED $ 0.95 $ 0.02 $ 1.13 $ 0.08
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
BASIC 2,545,560 1,988,202 2,335,190 1,768,581
=========== =========== =========== ===========
DILUTED 2,548,563 1,992,702 2,336,932 1,773,081
=========== =========== =========== ===========
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
2000 1999
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,634,060 $ 133,340
Adjustments to reconcile net income to net cash
provided by operating activities
Gain on sale of real estate (2,556,839) --
Depreciation and amortization 860,865 782,102
Share in results of affiliate 19,424 --
Accrued interest added to mortgage payable 219,877 --
Other -- 16,203
Increase in straight-line rents receivable (402,746) --
Changes in assets and liabilities
(Increase in tenant accounts receivable (7,978) (18,067)
Increase in prepaid expenses & other assets (40,718) (44,488)
Increase in accounts payable and accrued expenses 806,841 1,158
Increase in other accrued liabilities 354,421 297,439
------------ ------------
Net cash provided from operating activities 1,887,207 1,167,687
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Release of escrow deposit 509,556 --
Increase in leasing commissions (500,087) --
Additions to investments in real estate (16,091,220) (283,612)
Proceeds from sale of real estate 1,818,161 54,997
------------ ------------
Net cash flows from investing activities (14,263,590) (228,615)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to mortgages and notes payable 12,565,301 --
Payments on mortgage loans (904,253) (202,844)
Payment of deferred financing costs (138,140) --
Net proceeds from stock and warrants offering 2,931,141 --
Dividends paid (905,003) (665,567)
------------ ------------
Net cash flows from financing activities 13,549,046 (868,411)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,172,663 70,661
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 458,336 441,316
------------ ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 1,630,999 $ 511,977
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest during the period $ 1,352,414 $ 1,147,066
============ ============
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
5
</TABLE>
<PAGE>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES
On September 29, 2000, the Company purchased a 9.639% preferred limited
liability company membership interest in Sheridan Investments, LLC (see Note 4
to consolidated financial statements). The aggregate purchase price for this
investment consisted of $658,918, which the Company paid by issuing 65,892
units, with each unit consisting of two shares of common stock and one
redeemable common stock purchase warrant.
6
<PAGE>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000
1. General
----------
The unaudited financial statements included herein were prepared from the
records of AmeriVest Properties Inc. and Subsidiaries (the "Company") in
accordance with generally accepted accounting principles in the United States
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 presented. 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 31,1999. The
current interim period reported herein should be read in conjunction with the
Company's Form 10-KSB for the year ended December 31, 1999.
The results of operations for the nine months ended September 30, 2000 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2000.
2. Agreement with Sheridan Realty Advisors, LLC
-----------------------------------------------
Effective January 1, 2000, all of the Company's properties are managed
under an agreement with Sheridan Realty Advisors, LLC ("Sheridan"), which also
manages day-to-day operations of the Company and assists and advises the Board
of Directors on real estate acquisitions and investment opportunities. Certain
senior members of Sheridan are members of the Company's management team and of
the Company's Board of Directors. Sheridan receives an administrative fee and a
property management and accounting fee for these services. Our agreement with
Sheridan provides that the cost for these services in fiscal year 2000 will be
no greater than the costs incurred by us for providing these services ourselves,
or from obtaining them from other outside sources, in fiscal year 1999. In
addition, Sheridan may receive incentive compensation in the form of five-year
warrants to purchase up to 750,000 shares of our common stock at $5.00 per share
and an advisory fee based on new property acquisitions. Issuance of the warrants
was approved by the shareholders at the annual meeting on June 6, 2000.
According to the agreement, 225,000 of these warrants were granted and vested on
the approval date. The vested warrants have an estimated fair value of $6,712,
which are being amortized over the life of this agreement.
3. Stock Offering
-----------------
On March 29, 2000, our Registration Statement became effective with the
Securities and Exchange Commission for an offering of units consisting of common
stock and warrants. As modified in June 2000, the offering was for a maximum of
300,000 units ($3 million), and the units were offered at a price of $10.00
each. Each unit consisted of two shares of common stock and one redeemable
common stock purchase warrant. The warrants are exercisable at $5.00 per share
7
<PAGE>
until July 10, 2005. The offering period was extended to August 31, 2000,
whereupon it terminated after raising the maximum amount of $3,000,000. Proceeds
from the sale of these units, after payment of expenses of the offering, have
been used to acquire real estate properties, to repay debt and to increase
working capital.
4. Acquisitions and Dispositions
--------------------------------
On December 13, 1999, we completed the sale of our Broadway industrial
office and showroom building ("Broadway property") in Denver, Colorado for $2.1
million, resulting in a gain on the sale of the property of approximately
$720,000.
On February 24, 2000, the Company entered into an Agreement of Sale to
purchase for $5.9 million a three-story office building ("Panorama Falls")
containing approximately 62,000 square feet on approximately six acres of land
in southeast Denver, Colorado. The transaction closed on May 25, 2000. Funds for
closing included approximately $514,000 held in escrow and on deposit as part of
the "1031 Exchange" from the sale of the Broadway property in December 1999,
together with mortgage financing and short-term financing which was partially
repaid in August 2000 with proceeds from the stock and warrant offering.
On June 6, 2000, the Company entered into a contract to sell its four
self-storage facilities in the metropolitan Denver area for $8.4 million. This
sale closed on August 25, 2000, resulting in a gain on sale of approximately
$2.56 million. The proceeds from this sale were used to complete an IRS Section
1031 exchange for office building assets.
On June 2, 2000, the Company entered into a contract to purchase three
office buildings ("Writer Buildings") in southeast Denver, Colorado for $9.6
million. The buildings contain approximately 140,500 square feet and are located
on approximately 3.74 acres of land. The transaction closed on August 31, 2000.
Funds for closing included approximately $1,818,000 held in escrow and on
deposit as part of the "1031 Exchange" from the sale of the self-storage
facilities, together with mortgage financing and a portion of the proceeds from
the stock offering.
The following pro forma financial information is presented for
informational purposes only and may not be indicative of what actual results of
operations would have been had the transactions occurred as of the beginning of
each period presented, nor does it purport to represent the results of future
operations.
Nine Months Ended
September 30,
2000 1999
---- ----
(Unaudited) (Unaudited)
---------- ----------
Revenues from rental property $6,297,165 $5,445,967
Net operating income $3,175,856 $2,711,041
Net income $ 160,788 $ 62,394
Net income per common share:
Basic $ 0.07 $ .03
Diluted $ 0.07 $ .03
8
<PAGE>
In September, 2000, the Company entered into a contract to purchase a
9.639% preferred limited liability company membership interest in Sheridan
Investments, LLC. Sheridan Investments, LLC is the sole owner of Sheridan Plaza
at Inverness, LLC, which owns two office buildings in Englewood, Colorado,
containing approximately 118,000 square feet and located on approximately 6.7
acres of land. The transaction closed on September 29, 2000. The aggregate
purchase price for the limited liability company interest was $658,918, which
the Company paid by issuing 65,892 units, with each unit consisting of two
shares of common stock and one redeemable common stock purchase warrant. The
acquired interest is being accounted for under the equity method of accounting
and is included in "Investment in affiliate" in the accompanying consolidated
balance sheets.
9
<PAGE>
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 September 30, 2000 Compared With Three Months Ended September
30, 1999.
--------------------------------------------------------------------------------
Revenues for third quarter 2000 increased approximately $242,000, and
operating expenses, real estate taxes, interest, and depreciation and
amortization increased (decreased) approximately $64,000, ($1,000), $113,000 and
($1,000), respectively, for a total net increase of $175,000 as compared with
the quarter ended September 30, 1999. Such increases resulted primarily from
inclusion of the operations of the Writer Buildings beginning September 1, 2000
and the operations of Panorama Falls for the entire third quarter 2000, offset
by the elimination of income and expenses from the operations of the Broadway
property, which was sold on December 13, 1999, and from the operations of the
self-storage facilities, which were sold on August 25, 2000. Revenues for the
third quarter 2000 were increased by approximately $276,000 of straight-line
rents, primarily from Panorama Falls. Management fees increased by approximately
$42,000 and general and administrative expenses decreased approximately $57,000,
both of which were due primarily to the acquisitions of Panorama Falls and the
Writer Buildings and the management agreement with Sheridan Realty Advisors, LLC
in 2000 versus internal management in 1999. The Company also had interest income
of $18,082 for the 2000 period, as compared with $3,784 for the 1999 period,
primarily as a result of the investment of funds from the stock and warrant
offering.
Net income for the three months ended September 30, 2000 was $2,408,538, or
$.95 per share (basic and diluted), as compared to $30,589, or $.02 per share
(basic and diluted), for the three months ended September 30, 1999.
Nine Months Ended September 30, 2000 Compared With Nine Months Ended September
30, 1999.
--------------------------------------------------------------------------------
Revenues for the first nine months of 2000 increased approximately $959,000, and
operating expenses, real estate taxes, interest, and depreciation and
amortization increased approximately $245,000, $62,000, $347,000 and $79,000,
respectively, for a total increase of $733,000 as compared with the nine months
ended September 30, 1999. Such increases resulted primarily from inclusion of
the operations of the Keystone Office Park beginning July 1, 1999, together with
the Writer Buildings beginning September 1, 2000 and the operations of Panorama
Falls beginning May 25, 2000, offset by the elimination of income and expenses
from the operations of the Broadway property which was sold on December 13,
1999, and from the operations of the self-storage facilities which were sold on
10
<PAGE>
August 25, 2000. Revenues for the period ended September 30, 2000 were increased
by approximately $276,000 of straight-line rents, primarily from Panorama Falls.
Management fees increased by approximately $158,000 and general and
administrative expenses decreased approximately $125,000, both of which were due
primarily to the acquisitions of Keystone Office Park, Panorama Falls and the
Writer Buildings, and the management agreement with Sheridan Realty Advisors,
LLC in 2000 versus internal management in 1999. The Company also had interest
income of $34,973 for the 2000 period, as compared with $9,160 for the 1999
period, primarily as a result of funds being held in escrow from the sale of the
Broadway property for an IRS Section 1031 exchange and the investment of funds
from the stock and warrants offering.
Net income for the nine months ended September 30, 2000 was $2,634,060, or
$1.13 per share (basic and diluted), as compared to $133,340, or $.08 per share
(basic and diluted), for the nine months ended September 30, 1999.
Financial Condition, Liquidity And Capital Resources
----------------------------------------------------
IRS Section 1031 Exchange
-------------------------
On December 13, 1999, we completed the sale of our Broadway industrial
office and showroom building in Denver, Colorado for $2.1 million, resulting in
a gain on the sale of the property of approximately $720,000.
On February 24, 2000, the Company entered into an Agreement of Sale to
purchase for $5.9 million the Panorama Falls building containing approximately
62,000 square feet on approximately six acres of land in southeast Denver,
Colorado. The transaction closed on May 25, 2000. Funds for closing included
approximately $514,000 being in escrow and on deposit as part of the "1031
Exchange" from the sale of the Broadway property, together with mortgage
financing and short-term financing which was partially repaid in August 2000
with proceeds from the stock offering.
On June 6, 2000, the Company entered into a contract to sell its four
self-storage facilities in the metropolitan Denver area for $8.4 million. This
sale closed on August 25, 2000, resulting in a gain on sale of approximately
$2.56 million. The proceeds from this sale were used to complete an IRS Section
1031 exchange for office building assets, as further described below.
On June 2, 2000, the Company entered into a contract to purchase the three
Writer Buildings in southeast Denver, Colorado for $9.6 million. The buildings
contain approximately 140,500 square feet and are located on approximately 3.74
acres of land. The transaction closed on August 31, 2000. Funds for closing
included approximately $1,818,000 held in escrow and on deposit as part of the
"1031 Exchange" from the sale of the self-storage facilities, together with
mortgage financing and a portion of the proceeds from the stock offering.
In September, 2000, the Company entered into a contract to purchase a
9.639% preferred limited liability company membership interest in Sheridan
Investments, LLC. Sheridan Investments, LLC is the sole owner of Sheridan Plaza
11
<PAGE>
at Inverness, LLC, which owns two office buildings in Englewood, Colorado,
containing approximately 118,000 square feet and located on approximately 6.7
acres of land. The transaction closed on September 29, 2000. The aggregate
purchase price for the limited liability company interest was $658,918, which
the Company paid by issuing 65,892 units, with each unit consisting of two
shares of common stock and one redeemable common stock purchase warrant.
From December 31, 1999 to September 30, 2000, net investment in real estate
increased approximately $9,870,000. The net increase was primarily due to the
acquisitions of Panorama Falls and the Writer Buildings plus other capitalized
improvements, offset by the elimination of the self-storage facilities and less
normal depreciation and amortization for the nine-month period of approximately
$861,000.
At September 30, 2000, the Company had approximately $1,631,000 of cash and
cash equivalents, including approximately $370,079 of cash to be utilized for a
stockholder dividend distribution, which was paid on October 16, 2000. Tenant
receivables increased by approximately $8,000 compared to 1999 due the new
acquisitions. Straight-line rents receivable increased by approximately $403,000
due primarily to the addition of the Panorama Falls office building. Deferred
financing costs decreased approximately $125,000 due to the retirement of debt
related to the sale of the self-storage facilities and net of new costs related
to the acquisitions of Panorama Falls and the Writer Buildings, plus normal
amortization. Tenant leasing commissions increased by approximately $464,000 as
a result of leasing activity at Keystone Office Park and the Panorama Falls
office building. Prepaid expenses and other assets increased by approximately
$41,000 primarily as a result of normal business fluctuations. Investment in
affiliate increased by $672,439 due to the acquisition of the limited liability
company interest.
Mortgage loans payable increased by approximately $5,515,500 due to the
addition of the mortgages on Panorama Falls and the Writer Buildings, offset by
the elimination of the mortgages on the self-storage facilities and scheduled
principal payments. Accounts payable, accrued expenses and interest payable
increased by approximately $769,000 due primarily to deferred leasing
commissions for Panorama Falls and the accrual of severance payments due to a
former officer. Prepaid rents and security deposits increased by approximately
$252,000 due primarily to a $335,000 security deposit from a Panorama Falls
tenant. Dividends payable increased by approximately $103,000 due to the
increased number of shares outstanding from the stock offering and acquisition
of the limited liability company interest. Accrued real estate taxes increased
by approximately $37,000 due to normal accruals of current taxes on a larger
real estate base. The Company's common stock and capital in excess of par value
increase by $3,590,000 as a result of the stock offering and issuance of stock
for the acquisition of the limited liability company interest. Costs related to
the stock offering were approximately $69,000 and were comprised of legal fees,
filing fees, listing fees and printing costs.
The Company desires to acquire additional properties and, in order to do
so, it will need to raise additional debt or equity capital. The Company also
intends to obtain credit facilities for short and long-term borrowing with
12
<PAGE>
commercial banks or other financial institutions. The issuance of such
securities or increase in debt for additional properties, of which there is no
assurance on the ability to obtain additional debt or equity capital, could
adversely affect the amount of dividends paid to stockholders.
Management believes that the cash flow from its properties, together with
its existing cash reserves, will be sufficient to meet the Company's working
capital needs for the next year.
Management believes that inflation should not have a material adverse
effect on the Company. The Company's office leases require the tenants to pay
increases in operating expenses, and the self-storage leases are short-term so
that there are no contractual restraints against increasing rents to attempt to
respond to inflationary pressures, if any inflationary pressures should
materialize.
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.
Problems related to year 2000 compliance 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 and air conditioning units installed in our
buildings. Prior to December 31, 1999, we evaluated all our systems that may
have had year 2000 issues. We also surveyed our major vendors and suppliers for
year 2000 compliance. Our cost of year 2000 compliance was not material.
To date, neither we nor any of our service contractors have encountered any
year 2000 problems. Our contingency plans if year 2000 issues arise include
manual record keeping and use of alternate suppliers.
New Accounting Principles
-------------------------
The FASB recently issued Statement of Financial Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"),
which requires that companies recognize all derivatives as either assets or
liabilities in the balance sheet at fair value. Under SFAS 133, accounting for
changes in fair value of a derivative depends on its intended use and
designation. SFAS 133 is effective for fiscal years beginning after June 15,
2000. The Company is currently assessing the effect of this new standard.
In December 1999, the staff of the Securities and Exchange Commission
("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101") "Views on Selected
Revenue Recognition Issues" which provides the staff's views in applying
generally accepted accounting principles to selected revenue recognition issues.
During July 2000, the SEC delayed the effective date of SAB 101 to the fourth
quarter of 2000, retroactive to January 1, 2000. The Company is currently
assessing the effect of implementing SAB 101.
13
<PAGE>
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.
14
<PAGE>
Part II. Other Information
Item 5. Other Information
-------------------------
None.
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) On January 18, 2000, the Registrant filed a Current Report on Form 8-K
describing the agreement with Sheridan Realty Advisors, LLC which
became effective on January 1, 2000.
(c) On April 7, 2000, the Registrant filed a Current Report on Form 8-K
describing the appointment of Arthur Andersen LLP as its auditors.
(d) On June 9, 2000, the Registrant filed a Current Report on Form 8-K
describing the acquisition of the Panorama Falls office building on
May 25, 2000.
(e) On September 8, 2000, the Registrant filed a Current Report on Form
8-K describing the sale of self-storage properties, the acquisition of
Denver office buildings and the completion of a public offering of
Units of common stock and warrants.
(f) On November 13, 2000, the Registrant filed an amended Current Report
on Form 8-K financial statements of the Denver office buildings
acquired, together with unaudited pro forma financial information.
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.
November 13, 2000
By: /s/ D. Scott Ikenberry
--------------------------
D. Scott Ikenberry
Chief Financial Officer
15