UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2009March 31, 2010
Commission File Number: 000-29274
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
State of Minnesota 41-1789725
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
(Address of principal executive offices)
(651) 227-7333
(Registrant's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has 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. [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (232.405 of this chapter)
during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
[ ] Yes [ ] No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
INDEX
Part I - Financial Information
Item 1. Financial Statements (unaudited):Statements:
Balance Sheet as of September 30, 2009March 31, 2010 and December 31, 20082009
Statements for the PeriodsThree Months ended September 30, 2009March 31, 2010 and 2008:
Income2009:
Operations
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A.Risk1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
Signatures
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 2009MARCH 31, 2010 AND DECEMBER 31, 20082009
ASSETS
2010 2009 2008
CURRENT ASSETS:
Cash $ 1,145,5581,664,422 $ 2,068,2931,008,743
Receivables 0 5,0321,409 10,734
----------- -----------
Total Current Assets 1,145,558 2,073,3251,665,831 1,019,477
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 4,036,576 4,712,8134,124,903 4,124,903
Buildings and Equipment 11,230,229 10,564,859
Construction in Progress 0 72,96411,148,077 11,148,077
Accumulated Depreciation (1,392,786) (1,376,198)(1,615,332) (1,503,853)
----------- -----------
13,874,019 13,974,43813,657,648 13,769,127
Real Estate Held for Sale 1,599,282 2,173,147 1,903,539
----------- -----------
Net Investments in Real Estate 16,047,166 15,877,97715,256,930 15,942,274
----------- -----------
Total Assets $17,192,724 $17,951,302$16,922,761 $16,961,751
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 56,27948,247 $ 43,30056,124
Distributions Payable 294,948 352,283294,947
Unearned Rent 61,335 22,302
Construction Costs Payable 77,235 071,689 43,649
----------- -----------
Total Current Liabilities 489,797 417,885414,884 394,720
----------- -----------
PARTNERS' CAPITAL:
General Partners 4,596 12,901869 1,319
Limited Partners, $1,000 per Unit;
24,000 Units authorized and issued;
22,779 Units outstanding 16,698,331 17,520,51616,507,008 16,565,712
----------- -----------
Total Partners' Capital 16,702,927 17,533,41716,507,877 16,567,031
----------- -----------
Total Liabilities and Partners'Capital $17,192,724 $17,951,302Partners' Capital $16,922,761 $16,961,751
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF INCOMEOPERATIONS
FOR THE PERIODSTHREE MONTHS ENDED SEPTEMBER 30
Three Months Ended Nine Months Ended
9/30/09 9/30/08 9/30/09 9/30/08MARCH 31
2010 2009
RENTAL INCOME $ 280,015296,538 $ 231,917 $ 796,585 $ 671,438258,284
EXPENSES:
Partnership Administration - Affiliates 56,057 54,963 169,666 167,80956,694 58,584
Partnership Administration and Property
Management - Unrelated Parties 5,926 4,382 28,819 29,53611,928 12,265
Depreciation 105,047 85,141 300,631 246,163
--------- --------- --------- ----------111,479 97,792
----------- -----------
Total Expenses 167,030 144,486 499,116 443,508
--------- --------- --------- ----------180,101 168,641
----------- -----------
OPERATING INCOME 112,985 87,431 297,469 227,930116,437 89,643
OTHER INCOME:
Interest Income 11,452 19,067 51,106 52,333
--------- --------- --------- ----------2,374 17,857
----------- -----------
INCOME FROM CONTINUING OPERATIONS 124,437 106,498 348,575 280,263118,811 107,500
Income (Loss) from Discontinued Operations (28,563) 81,178 (300,279) 916,387
--------- --------- --------- ----------116,983 (309,384)
----------- -----------
NET INCOME (LOSS) $ 95,874235,794 $ 187,676 $ 48,296 $1,196,650
========= ========= ========= ==========(201,884)
=========== ===========
NET INCOME (LOSS) ALLOCATED:
General Partners $ 9592,500 $ 1,877 $ 483 $ 11,967(2,019)
Limited Partners 94,915 185,799 47,813 1,184,683
--------- --------- --------- ----------233,294 (199,865)
----------- -----------
$ 95,874235,794 $ 187,676 $ 48,296 $1,196,650
========= ========= ========= ==========(201,884)
=========== ===========
INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT:
Continuing Operations $ 5.415.16 $ 4.63 $ 15.15 $ 12.184.67
Discontinued Operations (1.24) 3.53 (13.05) 39.83
--------- --------- --------- ----------5.08 (13.44)
----------- -----------
Total $ 4.1710.24 $ 8.16 $ 2.10 $ 52.01
========= ========= ========= ==========(8.77)
=========== ===========
Weighted Average Units Outstanding -
Basic and Diluted 22,779 22,779
22,779 22,779
========= ========= ========= ===================== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE NINETHREE MONTHS ENDED SEPTEMBER 30MARCH 31
2010 2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 48,296235,794 $ 1,196,650(201,884)
Adjustments toTo Reconcile Net Income to(Loss)
To Net Cash Provided byBy Operating Activities:
Depreciation 308,215 331,106111,479 105,287
Real Estate Impairment 606,839 0 396,839
Gain on Sale of Real Estate (135,884) (635,909)(75,134) 0
(Increase) Decrease in Receivables 5,032 0
Increase (Decrease)9,325 (321)
Decrease in Payable to
AEI Fund Management, Inc. 12,979 7,575(7,877) (22,373)
Increase in Unearned Rent 39,033 13428,040 9,699
----------- -----------
Total Adjustments 836,214 (297,094)65,833 489,131
----------- -----------
Net Cash Provided By
Operating Activities 884,510 899,556301,627 287,247
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (1,200,332) (3,629,090)0 (341,179)
Proceeds from Sale of Real Estate 329,208 3,155,018648,999 0
----------- -----------
Net Cash Used ForProvided By (Used For)
Investing Activities (871,124) (474,072)648,999 (341,179)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions Paid to Partners (936,121) (1,327,892)(294,947) (354,543)
----------- -----------
NET DECREASEINCREASE (DECREASE) IN CASH (922,735) (902,408)655,679 (408,475)
CASH, beginning of period 1,008,743 2,068,293 4,904,162
----------- -----------
CASH, end of period $ 1,145,5581,664,422 $ 4,001,754
=========== ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Capitalized Construction
Costs Payable at Period End $ 77,235 $ 01,659,818
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINETHREE MONTHS ENDED SEPTEMBER 30MARCH 31
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 20072008 $ 15,015 $17,729,799 $17,744,81412,901 $17,520,516 $17,533,417 22,779.11
Distributions Declared (12,990) (1,285,992) (1,298,982)(3,182) (314,999) (318,181)
Net Income 11,967 1,184,683 1,196,650Loss (2,019) (199,865) (201,884)
-------- ----------- ----------- ----------
BALANCE, September 30, 2008March 31, 2009 $ 13,992 $17,628,490 $17,642,4827,700 $17,005,652 $17,013,352 22,779.11
======== =========== =========== ==========
BALANCE, December 31, 20082009 $ 12,901 $17,520,516 $17,533,4171,319 $16,565,712 $16,567,031 22,779.11
Distributions Declared (8,788) (869,998) (878,786)(2,950) (291,998) (294,948)
Net Income 483 47,813 48,2962,500 233,294 235,794
-------- ----------- ----------- ----------
BALANCE, September 30, 2009March 31, 2010 $ 4,596 $16,698,331 $16,702,927869 $16,507,008 $16,507,877 22,779.11
======== =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2009MARCH 31, 2010
(1) The condensed statements included herein have been prepared
by the registrant, 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 registrant
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
registrant's latest annual report on Form 10-K.
(2) Organization -
AEI Income & Growth Fund XXI Limited Partnership
("Partnership") was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XXI, Inc.
("AFM"), the Managing General Partner. Robert P. Johnson,
the President and sole director of AFM, serves as the
Individual General Partner. AFM is a wholly owned
subsidiary of AEI Capital Corporation of which Mr. Johnson
is the majority shareholder. AEI Fund Management, Inc.
("AEI"), an affiliate of AFM, performs the administrative
and operating functions for the Partnership.
The terms of the Partnership offering called for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on April 14, 1995 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 31, 1997, the
offering terminated when the maximum subscription limit of
24,000 Limited Partnership Units was reached. Under the
terms of the Limited Partnership Agreement, the Limited
Partners and General Partners contributed funds of
$24,000,000 and $1,000, respectively.
During operations, any Net Cash Flow, as defined, which the
General Partners determine to distribute will be distributed
90% to the Limited Partners and 10% to the General Partners;
provided, however, that such distributions to the General
Partners will be subordinated to the Limited Partners first
receiving an annual, noncumulative distribution of Net Cash
Flow equal to 10% of their Adjusted Capital Contribution, as
defined, and, provided further, that in no event will the
General Partners receive less than 1% of such Net Cash Flow
per annum. Distributions to Limited Partners will be made
pro rata by Units.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to
10% 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 Partners and 10% to
the General Partners. Distributions to the Limited Partners
will be made pro rata by Units.
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 Partners 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 Partners and 1% to the General Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Partnership Agreement as follows: (i)
first, to those partners with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Partners
and 1% to the General Partners until the aggregate balance
in the Limited Partners' capital accounts equals the sum of
the Limited Partners' Adjusted Capital Contributions plus an
amount equal to 10% 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
Partners and 10% to the General Partners. Losses will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(3) Reclassification -
Certain items related to discontinued operations in the
prior period'syear's financial statements have been reclassified to
conform to 20092010 presentation. These reclassifications had
no effect on Partners' capital, net income or cash flows.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(4) Investments in Real Estate -
On January 31, 2008, the Partnership purchased a 54%
interest in a Best Buy store in Eau Claire, Wisconsin for
$3,637,706. The property is leased to Best Buy Stores, L.P.
under a Lease Agreement with a remaining primary term of 10
years and initial annual rent of $256,001 for the interest
purchased. The remaining interests in the property were
purchased by AEI Income & Growth Fund 23 LLC and AEI Income
& Growth Fund 26 LLC, affiliates of the Partnership.
On October 2, 2008, the Partnership purchased a 55% interest
in a Fresenius Medical Center in Shreveport, Louisiana for
$1,360,617. The property is leased to Bio-Medical
Applications of Louisiana, LLC, a subsidiary of Fresenius
Medical Care Holdings, Inc., under a Lease Agreement with a
remaining primary term of 9.8 years and initial annual rent
of $102,520 for the interest purchased. The remaining
interest in the property was purchased by AEI Income &
Growth Fund 24 LLC, an affiliate of the Partnership.
On November 21, 2008, the Partnership purchased a 63%
interest in a parcel of land in Rapid City, South Dakota for
$576,274. The Partnership obtained title to the land in the
form of an undivided fee simple interest in the 63% interest
purchased. Simultaneous with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership advanced funds to Brad and Dad,
LLC for the construction of a Tractor Supply Company store
on the site. At September 30, 2009, the balance due for
construction costs was $77,235, which was subsequently paid
to Brad and Dad, LLC. The Partnership's share of the total
acquisition costs, including the cost of the land, was
$1,951,559.$1,957,734. The remaining interest in the property was
purchased by AEI Income & Growth Fund 27 LLC, an affiliate
of the Partnership.
The property is leased to Tractor Supply Company under a
Lease Agreement with a primary term of 15 years and initial
annual rent of $141,750 for the interest purchased.
Pursuant to the Lease, the tenant commenced paying rent on
August 6, 2009, the day the store opened for business.
Pursuant to the development agreement,Development Financing Agreement, for the
period from November 21, 2008 to August 5, 2009, Brad and
Dad, LLC paid the Partnership interest at a rate of 6.9% on
the purchase price of the land and the amounts advanced for
construction of the building. Pursuant to the Lease, any
improvements to the land during the term of the Lease become
the property of the Partnership.
(5) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. 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.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(6) Discontinued Operations -
On January 15, 2008, the Partnership sold its remaining
13.4184% interest in the KinderCare daycare center in
Kimberly, Wisconsin to an unrelated third party. The
Partnership received net sale proceeds of $258,749, which
resulted in a net gain of $99,192. The cost and related
accumulated depreciation of the interest sold was $182,253
and $22,696, respectively.
In March 2008, the Partnership entered into an agreement to
sell the Johnny Carino's restaurant in Laredo, Texas to an
unrelated third party. On May 15, 2008, the sale closed
with the Partnership receiving net proceeds of $2,896,269,
which resulted in a net gain of $536,717. At the time of
sale, the cost and related accumulated depreciation was
$2,605,079 and $245,527, respectively.
On December 23, 2008, the Partnership sold 7.767% of the
KinderCare daycare center in Ballwin, Missouri to an
unrelated third party. The Partnership received net sale
proceeds of $175,132, which resulted in a net gain of
$80,947. The cost and related accumulated depreciation of
the interest sold was $117,886 and $23,701, respectively.
On September 3, 2009, the Partnership sold an additional
14.0515% of the KinderCare daycare center in Ballwin,
Missouri to an unrelated third party. The Partnership
received net sale proceeds of $306,486, which resulted in a
net gain of $136,094. The cost and related accumulated
depreciation of the interest sold was $213,271 and $42,879,
respectively. The Partnership is attempting to sell its
remaining 78.1815% interest in the property. At September
30, 2009 and December 31, 2008, the property was classified
as Real Estate Held for Sale with a carrying value of
$948,048 and $1,118,440, respectively.
On May 28, 2009, the Partnership sold its remaining 1.1839%
interest in the Johnny Carino's restaurant in Austin, Texas
to an unrelated third party. The Partnership received net
sale proceeds of $22,722, which resulted in a net loss of
$210. The cost and related accumulated depreciation of the
interest sold was $27,083 and $4,151, respectively.
On September 3, 2009, the Partnership sold 14.0515% of the
KinderCare daycare center in Ballwin, Missouri to an
unrelated third party. The Partnership received net sale
proceeds of $306,486, which resulted in a net gain of
$136,094. The cost and related accumulated depreciation of
the interest sold was $213,271 and $42,879, respectively.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(6) Discontinued Operations - (Continued)
On March 29, 2010, the Partnership sold an additional
11.0393% of the KinderCare daycare center in Ballwin,
Missouri to an unrelated third party. The Partnership
received net sale proceeds of $220,983, which resulted in a
net gain of $87,118. The cost and related accumulated
depreciation of the interest sold was $167,552 and $33,687,
respectively. The Partnership is attempting to sell its
remaining 67.1422% interest in the property. At March 31,
2010 and December 31, 2009, the property was classified as
Real Estate Held for Sale with a carrying value of $814,183
and $948,048, respectively.
The Partnership is attempting to sell its 20.4025% interest
in the Winn-Dixie store in Panama City, Florida. At September 30, 2009March
31, 2010 and December 31, 2008,2009, the property was classified
as Real Estate Held for Sale with a carrying value of
$785,099.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(6) Discontinued Operations -
In March 2009, Tumbleweed, Inc., the tenant of the
Tumbleweed restaurant in Fort Wayne, Indiana filed for
Chapter 11 bankruptcy reorganization. Tumbleweed closed the
restaurant and filed a motion with the bankruptcy court to
reject the Lease for this property. The court approved the
motion and Tumbleweed returned possession of the property to
the Partnership. The Partnership has listed the property
for sale with a real estate broker in the Fort Wayne area.
While the property iswas vacant, the Partnership iswas
responsible for real estate taxes and other costs associated
with maintaining the property. Based on an analysis of
market conditions in the area, the Partnership determined
the property was impaired. As a result, in the first
quarter of 2009, a charge to discontinued operations for
real estate impairment of $396,839 was recognized, which was
the difference between the carrying value at March 31, 2009
of $1,046,839 and the estimated fair value of $650,000.
Based on marketing efforts to date and an updated analysis of market
conditions in the area, the Partnership recognized an
additional real estate impairment of $210,000 to decrease
the carrying value to the estimated fair value of $440,000
as of September 30, 2009. The charges were recorded against
the cost of the land and building.
In December 2009, the Partnership entered into an agreement
to sell the Tumbleweed restaurant to an unrelated third
party. On March 12, 2010, the sale closed with the
Partnership receiving net sale proceeds of $428,016, which
resulted in a net loss of $11,984. At September 30,December 31, 2009,
the property was classified as Real Estate Held for Sale.
During the first ninethree months of 20092010 and 2008,2009, the
Partnership distributed net sale proceeds of $51,320$22,808 and
$407,134$17,938 to the Limited and General Partners as part of their
quarterly distributions, which represented a return of
capital of $2.23$0.99 and $17.70$0.78 per Limited Partnership Unit,
respectively. The Partnership anticipates the remaining net
sale proceeds will either be reinvested in additional
property or distributed to the Partners in the future.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(6) Discontinued Operations - (Continued)
The financial results for these properties are reflected as
Discontinued Operations in the accompanying financial
statements. The following are the results of discontinued
operations for the periodsthree months ended September 30:
Three Months Ended Nine Months Ended
9/30/09 9/30/08 9/30/09 9/30/08March 31:
2010 2009
Rental Income $ 56,25649,919 $ 97,346 $ 225,230 $ 375,33195,032
Property Management Expenses (10,913) (1,086) (46,970) (9,910)(8,070) (82)
Depreciation 0 (15,082) (7,584) (84,943)(7,495)
Real Estate Impairment (210,000) 0 (606,839) 0(396,839)
Gain on Disposal of Real Estate 136,09475,134 0
135,884 635,909
--------- -------- ---------- ---------
Income (Loss) from Discontinued Operations $ (28,563) $ 81,178 $ (300,279) $ 916,387116,983 $(309,384)
========= ======== ========== =========
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(7) Fair Value Measurements -
Fair value, as defined by United States Generally Accepted
Accounting Principles ("US GAAP"), is the price that would
be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the
measurement date in the principal or most advantageous
market. US GAAP establishes a hierarchy in determining the
fair value of an asset or liability. The fair value
hierarchy has three levels of inputs, both observable and
unobservable. US GAAP requires the utilization of the lowest
possible level of input to determine fair value. Level 1
inputs include quoted market prices in an active market for
identical assets or liabilities. Level 2 inputs are market
data, other than Level 1 inputs, that are observable either
directly or indirectly. Level 2 inputs include quoted market
prices for similar assets or liabilities, quoted market
prices in an inactive market, and other observable
information that can be corroborated by market data. Level 3
inputs are unobservable and corroborated by little or no
market data.
The Partnership had no financial assets or liabilities
measured at fair value on a recurring basis or nonrecurring
basis that would require disclosure under this
pronouncement.
The Tumbleweed restaurant, with a carrying amount of
$1,046,839 at March 31, 2009, was written down to its
estimated fair value of $650,000 after completing our long-
lived asset valuation analysis. The resulting impairment
charge in the first quarter of $396,839 was included in earnings for the period.first
quarter of 2009. At September 30, 2009, after completing
our long-lived asset valuation analysis, the Tumbleweed
restaurant was further written down to $440,000, its
estimated fair value at that date. The resulting impairment
charge in the third quarter of $210,000 was included in earnings for the period.third
quarter of 2009. In both instances, the fair value of the
property was based upon comparable sales of similar
properties, which are considered Level 32 inputs in the
valuation hierarchy. (8) Subsequent Events -
The property was sold on March 12,
2010.
At March 31, 2010, the Partnership has evaluated subsequent events through
November 10, 2009, the date which the financial statements
were available to be issued. Subsequent events, if any,
were disclosed in the appropriate note in the Notes to
Financial Statements.had no assets or
liabilities measured at fair value on a recurring basis or
nonrecurring basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
This section contains "forward-looking statements" 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, the
sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward-
looking statements, should be evaluated in the context of a
number of factors that may affect the Partnership's financial
condition and results of operations, including the following:
Market and economic conditions which affect the value
of the properties the Partnership 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
effects of these consequences for the Partners;
resolution by the General Partners of conflicts with
which they may be confronted;
the success of the General Partners 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 Partnership operate.
Application of Critical Accounting Policies
The preparation of the Partnership's financial statements
requires management to make estimates and assumptions that may
affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and
liabilities. Management evaluates these estimates on an ongoing
basis, including those related to the carrying value of real
estate and the allocation by AEI Fund Management, Inc. of
expenses to the Partnership as opposed to other funds they
manage.
Prior to January 1, 2009, the Partnership purchased
properties and recorded them in the financial statements at cost
(including capitalized acquisition expenses). For acquisitions
completed on or after January 1, 2009, acquisition-related
transaction costs will be expensed as incurred as a result of the
Partnership adopting new guidance on business combinations that
expands the scope of acquisition accounting. The Partnership
tests long-lived assets for recoverability when events or changes
in circumstances indicate that the carrying value may not be
recoverable. For properties the Partnership will hold and
operate, management determines whether impairment has occurred by
comparing the property's probability-weighted future undiscounted
cash flows to its current carrying value. For properties held
for sale, management determines whether impairment has occurred
by comparing the property's estimated fair value less cost to
sell to its current carrying value. If the carrying value is
greater than the realizable value, an impairment loss is recorded
to reduce the carrying value of the property to its realizable
value. Changes in these assumptions or analysis may cause
material changes in the carrying value of the properties.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
AEI Fund Management, Inc. allocates expenses to each of
the funds they manage primarily on the basis of the number of
hours devoted by their employees to each fund's affairs. They
also allocate expenses at the end of each month that are not
directly related to a fund's operations based upon the number of
investors in the fund and the fund's capitalization relative to
other funds they manage. The Partnership reimburses these
expenses subject to detailed limitations contained in the
Partnership Agreement.
Management of the Partnership has discussed the
development and selection of the above accounting estimates and
the management discussion and analysis disclosures regarding them
with the managing partner of the Partnership.
Results of Operations
For the ninethree months ended September 30,March 31, 2010 and 2009, and 2008, the
Partnership recognized rental income from continuing operations
of $796,585$296,538 and $671,438,$258,284, respectively. In 2009,2010, rental income
increased due to additional rent received from threeone property
acquisitionsacquisition in 2008 and 2009 and a rent increase on one property.
For the ninethree months ended September 30,March 31, 2010 and 2009, and 2008, the
Partnership incurred Partnership administration expenses from
affiliated parties of $169,666$56,694 and $167,809,$58,584, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and communication with the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $28,819$11,928 and $29,536,$12,265, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit costs, taxes,
insurance and other property costs.
For the ninethree months ended September 30,March 31, 2010 and 2009, and 2008, the
Partnership recognized interest income of $51,106$2,374 and $52,333,$17,857,
respectively. In 2009,2010 interest income decreased as result ofdue to the
Partnership having less money invested in a money market account
due to a property acquisitions and lower money market rates
in 2009, when compared to 2008. This decrease was partially
offset by $40,189acquisition. In addition, the Partnership
received $13,026 of interest receivedincome on construction advances in
2009.
Upon complete disposal of a property or classification of
a property as Real Estate Held for Sale, the Partnership includes
the operating results and sale of the property in discontinued
operations. In addition, the Partnership reclassifies the prior
periods' operating results of the property to discontinued
operations. For the ninethree months ended September 30,March 31, 2010, the
Partnership recognized income from discontinued operations of
$116,983, representing rental income less property management
expenses of $41,849 and a gain on disposal of real estate of
$75,134. For the three months ended March 31, 2009, the
Partnership recognized a loss from discontinued operations of
$300,279,$309,384, representing a real estate impairment loss of $606,839,$396,839,
which was partially offset by rental income less property
management expenses and depreciation of $170,676 and a gain on
disposal of real estate of $135,884. For the nine months ended
September 30, 2008, the Partnership recognized income from
discontinued operations of $916,387, representing rental income
less property management expenses and depreciation of $280,478
and gain on disposal of real estate of $635,909.$87,455.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
On January 15, 2008, the Partnership sold its remaining
13.4184% interest in the KinderCare daycare center in Kimberly,
Wisconsin to an unrelated third party. The Partnership received
net sale proceeds of $258,749, which resulted in a net gain of
$99,192. The cost and related accumulated depreciation of the
interest sold was $182,253 and $22,696, respectively.
In March 2008, the Partnership entered into an agreement
to sell the Johnny Carino's restaurant in Laredo, Texas to an
unrelated third party. On May 15, 2008, the sale closed with the
Partnership receiving net proceeds of $2,896,269, which resulted
in a net gain of $536,717. At the time of sale, the cost and
related accumulated depreciation was $2,605,079 and $245,527,
respectively.
On December 23, 2008, the Partnership sold 7.767% of the
KinderCare daycare center in Ballwin, Missouri to an unrelated
third party. The Partnership received net sale proceeds of
$175,132, which resulted in a net gain of $80,947. The cost and
related accumulated depreciation of the interest sold was
$117,886 and $23,701, respectively.
On September 3, 2009, the Partnership sold an additional
14.0515% of the KinderCare daycare center in Ballwin, Missouri to
an unrelated third party. The Partnership received net sale
proceeds of $306,486, which resulted in a net gain of $136,094.
The cost and related accumulated depreciation of the interest
sold was $213,271 and $42,879, respectively. The Partnership is
attempting to sell its remaining 78.1815% interest in the
property. At September 30, 2009 and December 31, 2008, the
property was classified as Real Estate Held for Sale with a
carrying value of $948,048 and $1,118,440, respectively.
On May 28, 2009, the Partnership sold its remaining
1.1839% interest in the Johnny Carino's restaurant in Austin,
Texas to an unrelated third party. The Partnership received net
sale proceeds of $22,722, which resulted in a net loss of $210.
The cost and related accumulated depreciation of the interest
sold was $27,083 and $4,151, respectively.
On September 3, 2009, the Partnership sold 14.0515% of the
KinderCare daycare center in Ballwin, Missouri to an unrelated
third party. The Partnership received net sale proceeds of
$306,486, which resulted in a net gain of $136,094. The cost and
related accumulated depreciation of the interest sold was
$213,271 and $42,879, respectively.
On March 29, 2010, the Partnership sold an additional
11.0393% of the KinderCare daycare center in Ballwin, Missouri to
an unrelated third party. The Partnership received net sale
proceeds of $220,983, which resulted in a net gain of $87,118.
The cost and related accumulated depreciation of the interest
sold was $167,552 and $33,687, respectively. The Partnership is
attempting to sell its remaining 67.1422% interest in the
property. At March 31, 2010 and December 31, 2009, the property
was classified as Real Estate Held for Sale with a carrying value
of $814,183 and $948,048, respectively.
The Partnership is attempting to sell its 20.4025%
interest in the Winn-Dixie store in Panama City, Florida. At
September 30, 2009March 31, 2010 and December 31, 2008,2009, the property was classified
as Real Estate Held for Sale with a carrying value of $785,099.
In March 2009, Tumbleweed, Inc., the tenant of the
Tumbleweed restaurant in Fort Wayne, Indiana filed for Chapter 11
bankruptcy reorganization. Tumbleweed closed the restaurant and
filed a motion with the bankruptcy court to reject the Lease for
this property. The court approved the motion and Tumbleweed
returned possession of the property to the Partnership. The
Partnership has listed the property for sale with a real estate
broker in the Fort Wayne area. While the property iswas vacant,
the Partnership iswas responsible for real estate taxes and other
costs associated with maintaining the property. Based on an
analysis of market conditions in the area, the Partnership
determined the property was impaired. As a result, in the first
quarter of 2009, a charge to discontinued operations for real
estate impairment of $396,839 was recognized, which was the
difference between the carrying value at March 31, 2009 of
$1,046,839 and the estimated fair value of $650,000. Based on
marketing efforts to date and an updated analysis of market conditions in
the area, the Partnership recognized an additional real estate
impairment of $210,000 to decrease the carrying value to the
estimated fair value of $440,000 as of September 30, 2009. The
charges were recorded against the cost of the land and building.
In December 2009, the Partnership entered into an
agreement to sell the Tumbleweed restaurant to an unrelated third
party. On March 12, 2010, the sale closed with the Partnership
receiving net sale proceeds of $428,016, which resulted in a net
loss of $11,984. At September
30,December 31, 2009, the property was
classified as Real Estate Held for Sale.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Management believes inflation has not significantly
affected income from operations. Leases may contain rent
increases, based on the increase in the Consumer Price Index over
a specified period, which will result in an increase in rental
income over the term of the leases. Inflation also may cause the
real estate to appreciate in value. However, inflation and
changing prices may have an adverse impact on the operating
margins of the properties' tenants, which could impair their
ability to pay rent and subsequently reduce the Net Cash Flow
available for distributions.
Liquidity and Capital Resources
During the ninethree months ended September 30, 2009,March 31, 2010, the
Partnership's cash balances decreased $922,735increased $655,679 as a result of
cash used to purchase property, which was partially offset by
cash generated from the sale of property and cash generated from
operating activities in excess of distributions paid to the
Partners. During the ninethree months ended September 30, 2008,March 31, 2009, the
Partnership's cash balances decreased $902,408$408,475 as a result of
cash used to purchase property and distributions paid to the
Partners in excess of cash generated from operating activities,
which were partially offset by cash generated from the sale of
property.activities.
Net cash provided by operating activities decreasedincreased from
$899,556$287,247 in 20082009 to $884,510$301,627 in 20092010 as a result of a decrease in
total rental and interest income in 2009 and an increase in
Partnership administration and property management expenses in
2009, which were partially offset by net timing
differences in the collection of payments from the tenants and
the payment of expenses.expenses, which were partially offset by a
decrease in total rental and interest income in 2010 and an
increase in Partnership administration and property management
expenses in 2010.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the ninethree months ended
September 30, 2009 and 2008,March 31, 2010, the Partnership generated cash flow from the sale
of real estate of $329,208 and $3,155,018,
respectively.$648,999. During the same periods,three months ended March
31, 2009, the Partnership expended $1,200,332 and $3,629,090, respectively,$341,179 to invest in real
properties as the Partnership reinvested cash generated from
property sales.
On January 31, 2008, the Partnership purchased a 54%
interestsales completed in a Best Buy store in Eau Claire, Wisconsin for
$3,637,706. The property is leased to Best Buy Stores, L.P.
under a Lease Agreement with a remaining primary term of 10 years
and initial annual rent of $256,001 for the interest purchased.
The remaining interests in the property were purchased by AEI
Income & Growth Fund 23 LLC and AEI Income & Growth Fund 26 LLC,
affiliates of the Partnership.
On October 2, 2008, the Partnership purchased a 55%
interest in a Fresenius Medical Center in Shreveport, Louisiana
for $1,360,617. The property is leased to Bio-Medical
Applications of Louisiana, LLC, a subsidiary of Fresenius Medical
Care Holdings, Inc., under a Lease Agreement with a remaining
primary term of 9.8 years and initial annual rent of $102,520 for
the interest purchased. The remaining interest in the property
was purchased by AEI Income & Growth Fund 24 LLC, an affiliate of
the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)2008.
On November 21, 2008, the Partnership purchased a 63%
interest in a parcel of land in Rapid City, South Dakota for
$576,274. The Partnership obtained title to the land in the form
of an undivided fee simple interest in the 63% interest
purchased. Simultaneous with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership advanced funds to Brad and Dad, LLC for the
construction of a Tractor Supply Company store on the site. At
September 30, 2009, the balance due for construction costs was
$77,235, which was subsequently paid to Brad and Dad, LLC. The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,951,559.$1,957,734. The remaining interest in the
property was purchased by AEI Income & Growth Fund 27 LLC, an
affiliate of the Partnership.
The property is leased to Tractor Supply Company under a
Lease Agreement with a primary term of 15 years and initial
annual rent of $141,750 for the interest purchased. Pursuant to
the Lease, the tenant commenced paying rent on August 6, 2009,
the day the store opened for business. Pursuant to the
development agreement,Development Financing Agreement, for the period from November 21,
2008 to August 5, 2009, Brad and Dad, LLC paid the Partnership
interest at a rate of 6.9% on the purchase price of the land and
the amounts advanced for construction of the building. Pursuant
to the Lease, any improvements to the land during the term of the
Lease become the property of the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Partnership's primary use of cash flow, other than
investment in real estate, is distribution and redemption
payments to Partners. The Partnership 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 Partnership attempts to maintain a stable distribution rate
from quarter to quarter. Redemption payments are paid to
redeeming Partners in the fourth quarter of each year.
For the ninethree months ended September 30,March 31, 2010 and 2009, and 2008, the
Partnership declared distributions of $878,786$294,948 and $1,298,982,$318,181,
respectively, which were distributed 99% to the Limited Partners
and 1% to the General Partners. The Limited Partners received
distributions of $869,998$291,998 and $1,285,992$314,999 and the General Partners
received distributions of $8,788$2,950 and $12,990$3,182 for the periods,
respectively. In March 2008 and June 2008, the Partnership
declared special distributions of net sale proceeds of $58,586
and $176,768, respectively. In 2009,2010, distributions were lower due to decreasesa
decrease in the distribution rate per Unit, effective January 1, 2009 and April 1,
2009, and the special distributions
in 2008.2009.
During the first ninethree months of 20092010 and 2008,2009, the
Partnership distributed net sale proceeds of $51,320$22,808 and $407,134$17,938
to the Limited and General Partners as part of their quarterly
distributions, which represented a return of capital of $2.23$0.99 and
$17.70$0.78 per Limited Partnership Unit, respectively. The
Partnership anticipates the remaining net sale proceeds will
either be reinvested in additional property or distributed to the
Partners in the future.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership will not be obligated
to purchase in any year any number of Units that, when aggregated
with all other transfers of Units that have occurred since the
beginning of the same calendar year (excluding Permitted
Transfers as defined in the Partnership Agreement), would exceed
5% of the total number of Units outstanding on January 1 of such
year. In no event shall the Partnership be obligated to purchase
Units if, in the sole discretion of the Managing General Partner,
such purchase would impair the capital or operation of the
Partnership. During 20092010 and 2008,2009, the Partnership did not
redeem any Units from the Limited Partners. In prior years, a
total of 60 Limited Partners redeemed 1,220.89 Partnership Units
for $958,469. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
The Economy and Market Conditions
The impact of conditions in the current economy, including
the turmoil in the credit markets, has adversely affected many
real estate companies.investment funds. However, the absence of mortgage
financing on the Partnership's properties eliminates the risks of
foreclosure and debt-refinancing that can negatively impact the
value and distributions of leveraged real estate companies.investment
funds. Nevertheless, a prolonged economic downturn may adversely
affect the operations of the Partnership's tenants and their cash
flows. If a tenant were to default on its lease obligations, the
Partnership's income would decrease, its distributions would
likely be reduced and the value of its properties might decline.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Historically, the Partnership has sold properties at a
gain and distributed the gain proceeds as part of its regular
quarterly distributions, and to make special distributions on
occasion. The remaining sales proceeds were reinvested in
additional properties. Beginning in the fourth quarter of 2008,
general economic conditions caused the volume of property sales
to slow dramatically for all real estate sellers. In 2009,2010, the
Partnership will likely complete fewer property sales than it has
in the past. Until property sales occur,such time as economic conditions allow the
Partnership to begin selling properties at attractive prices,
quarterly distributions
going forward will reflect the distribution of net core
rental income and capital reserves, if any. Distribution rates in
20092010 are expected to be variable and less than recentconsistent with distribution rates until such time as economic conditions allow the
Partnership to, once again, begin selling properties at
acceptable prices and generating gains for distribution.in
2009.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for a smaller reporting company.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures.
Under the supervision and with the participation of
management, including its President and Chief Financial Officer,
the Managing General Partner of the Partnership evaluated the
effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based
upon that evaluation, the President and Chief Financial Officer
of the Managing General Partner concluded that, as of the end of
the period covered by this report, our disclosure controls and
procedures were effective in ensuring that information required
to be disclosed by us in the reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in applicable rules and forms
and that such information is accumulated and communicated to
management, including the President and Chief Financial Officer
of the Managing General Partner, in a manner that allows timely
decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting.
During the most recent period covered by this report,
there has been no change in our internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act)
that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's property
is subject.
ITEM 1A. RISK FACTORS.
Not required for a smaller reporting company.
PART II - OTHER INFORMATION
(Continued)
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(a) None.
(b) Not applicable.
(c) Pursuant to Section 7.7 of the Partnership Agreement,
each Limited Partner has the right to present Units to the
Partnership for purchase by submitting notice to the Managing
General Partner during September of each year. The purchase
price of the Units is based on a formula specified in the
Partnership Agreement. Units tendered to the Partnership are
redeemed on October 1st of each year subject to the following
limitations. The Partnership will not be obligated to purchase
in any year any number of Units that, when aggregated with all
other transfers of Units that have occurred since the beginning
of the same calendar year (excluding Permitted Transfers as
defined in the Partnership Agreement), would exceed 5% of the
total number of Units outstanding on January 1 of such year. In
no event shall the Partnership be obligated to purchase Units if,
in the sole discretion of the Managing General Partner, such
purchase would impair the capital or operation of the
Partnership. During the period covered by this report, the
Partnership did not purchase any Units.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
31.1 Certification of Chief Executive Officer of General
Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer of General
Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and
Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief
Financial Officer of General Partner pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
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.
Dated: November 10, 2009May 12, 2010 AEI Income & Growth Fund XXI
Limited Partnership
By: AEI Fund Management XXI, Inc.
Its: Managing General Partner
By: /s/ ROBERT P JOHNSON
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ PATRICK W KEENE
Patrick W. Keene
Chief Financial Officer
(Principal Accounting Officer)