SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended August 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ To _____
Commission file number 0-11023
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(Exact name of small business issuer as specified in its charter)
Missouri 43-1250566
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
104 Armour Road, North Kansas City, Missouri 64116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 303-4500
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. Yes [X] No [ ]
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INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Balance Sheets 3
Statements of Operations ....................... 4
Statements of Partners' Deficit ................. 5
Statements of Cash Flows ....................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS .................................. 8
PART II - OTHER INFORMATION ................................ 10
ITEM 1. LEGAL PROCEEDINGS ................................. 10
ITEM 2. CHANGES IN SECURITIES ............................. 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ................... 10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10
ITEM 5. OTHER INFORMATION ................................. 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .................. 10
SIGNATURES ................................................. 11
EXHIBIT INDEX .............................................. 12
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MAXUS REAL PROPERTY INVESTORS - FOUR, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
August 31, November 30,
2001 2000
(Unaudited)
ASSETS:
Investment property
Land ........................................................................... $ 1,014,000 1,014,000
Buildings and improvements ........................................................ 15,490,000 15,313,000
------------ ----------
16,504,000 16,327,000
Less accumulated depreciation .................................................. 9,692,000 9,259,000
------------ ----------
Total investment property .................................................. 6,812,000 7,068,000
Cash and cash equivalents ......................................................... 1,085,000 1,186,000
Accounts receivable, less allowance for doubtful accounts ......................... 139,000 51,000
Prepaid expenses .................................................................. 7,000 12,000
Deferred expenses, less accumulated amortization .................................. 96,000 93,000
------------ ----------
Total Assets ............................................................... $ 8,139,000 8,410,000
============ ==========
LIABILITIES AND PARTNERS' DEFICIT:
Liabilities:
Mortgage notes payable ......................................................... $ 9,900,000 9,900,000
Accounts payable and accrued expenses .......................................... 318,000 124,000
Refundable tenant deposits ..................................................... 101,000 99,000
------------ ----------
Total liabilities .......................................................... 10,319,000 10,123,000
Partners' deficit ................................................................. (2,180,000) (1,713,000)
------------- ----------
Total liabilities and partners' deficit .................................... $ 8,139,000 8,410,000
============= ==========
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MAXUS REAL PROPERTY INVESTORS - FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
August 31, August 31, August 31, August 31,
2001 2000 2001 2000
Revenues:
Rental ................................................. $ 681,000 655,000 1,999,000 2,133,000
Other .................................................. 70,000 55,000 183,000 239,000
------- ------- --------- ---------
Total revenues ..................................... 751,000 710,000 2,182,000 2,372,000
------- ------- --------- ---------
Expenses:
Depreciation and amortization .......................... 154,000 160,000 441,000 512,000
Repairs and maintenance, including common
area maintenance .................................... 120,000 105,000 272,000 290,000
Real estate taxes ...................................... 34,000 34,000 102,000 194,000
Interest ............................................... 184,000 221,000 553,000 826,000
Professional fees ...................................... 73,000 37,000 161,000 96,000
General and administrative ............................. 61,000 53,000 164,000 146,000
Utilities .............................................. 44,000 42,000 113,000 144,000
Management fees - related parties ...................... 50,000 61,000 135,000 142,000
Other .................................................. 60,000 53,000 180,000 187,000
------- ------- --------- ---------
Total expenses ..................................... 780,000 766,000 2,121,000 2,537,000
------- ------- --------- ---------
Income (loss) before gain on sale .................. (29,000) (56,000) 61,000 (165,000)
======= ======= ========= =========
Gain on sale of Cobblestone Court ......................... --- --- --- 1,541,000
------- ------- --------- ---------
Net income (loss) .................................. $ (29,000) (56,000) 61,000 1,376,000
========= ======= ========= =========
Net income (loss) allocation:
General partners ....................................... $ (1,000) (1,000) 1,000 24,000
Limited partners ....................................... (28,000) (55,000) 60,000 1,352,000
--------- ------- -------- ---------
$ (29,000) (56,000) 61,000 1,376,000
========= ======= ======== =========
Limited partners' data:
Net income (loss) per unit:
Loss before gain on sale ............................ $ (2.31) (4.07) 4.61 (11.95)
Gain on sale of Cobblestone Court ................... --- --- --- 111.90
--------- ------- ------- ---------
Total .............................................. $ (2.31) (4.07) 4.61 99.95
========= ======= ======= =========
Weighted average limited partnership units outstanding . 12,247 13,529 13,098 13,529
========= ======= ======= =========
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MAXUS REAL PROPERTY INVESTORS - FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' DEFICIT
(UNAUDITED)
Nine Months Ended Nine Months Ended
August 31, 2001 August 31, 2000
Deficit at beginning of year ................. $(1,713,000) $(3,046,000)
Net income for the nine month period ......... 61,000 1,376,000
Repurchase of Partnership units .............. (406,000) ---
Distribution ................................. (122,000) ---
----------- -----------
Deficit at end of period ..................... $(2,180,000) $(1,670,000)
=========== ===========
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MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
August 31, August 31,
2001 2000
Cash flows from operating activities:
Net income .......................................................... $ 61,000 1,376,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on sale of Cobblestone Court ............................... --- (1,541,000)
Depreciation and amortization ................................... 441,000 512,000
Changes in accounts affecting operations:
Accounts receivable ......................................... (88,000) 156,000
Prepaid expenses ............................................ 5,000 19,000
Deferred expense ............................................ (11,000) ---
Accounts payable and accrued expenses ....................... 194,000 (154,000)
Refundable tenant deposits .................................. 2,000 26,000
---------- ----------
Net cash provided by operating activities ............ 604,000 394,000
---------- ----------
Cash flows from investing activities:
Capital expenditures ................................................ (177,000) (60,000)
Proceeds from sale of Cobblestone Court, net of
related expenses ............................................... --- 4,941,000
---------- ----------
Net cash provided by (used in) by investing activities (177,000) 4,881,000
---------- ----------
Cash flows from financing activities:
Principal payments on mortgage notes payable ........................ --- (4,667,000)
Repurchase of Partnership Units ..................................... (406,000) ---
Distribution paid ($10.00 per share) ................................ (122,000) ---
---------- ----------
Net cash used in financing activities ................ (528,000) (4,667,000)
---------- ----------
Net increase (decrease) in cash ...................... (101,000) 608,000
Cash, beginning of period .............................................. 1,186,000 21,000
---------- ----------
Cash, end of period .................................................... $ 1,085,000 629,000
========== ==========
Supplemental disclosure of cash flow information -
cash paid during the nine months for interest ....................... $ 553,000 826,000
========== ==========
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MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED AUGUST 31, 2001 AND AUGUST 31, 2000
(1) Summary of Significant Accounting Policies
Refer to the financial statements of Maxus Real Property Investors - Four, L.P.,
formerly known as Nooney Real Property Investors - Four, L.P. (the
"Partnership"), for the year ended November 30, 2000, which are contained in the
Partnership's Annual Report on Form 10-KSB, for a description of the accounting
policies which have been continued without change except as noted below. Also,
refer to the footnotes to those statements for additional details of the
Partnership's financial condition. The details in those notes have not changed
except as a result of normal transactions in the interim or as noted below. In
the opinion of the general partner, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and changes in financial position at August 31, 2001 and
for all periods presented have been made. The results for the three and nine-
month periods ended August 31, 2001 are not necessarily indicative of the
results which may be expected for the entire year.
Certain reclassifications have been made to the prior period amounts to conform
to the current period presentation.
(a) Description of Business
The Partnership is a limited partnership organized under the laws of the State
of Missouri on February 9, 1982. The Partnership was organized to invest
primarily in income-producing real properties such as shopping centers, office
buildings and other commercial properties, apartment buildings, warehouses, and
light industrial properties. The Partnership's portfolio is comprised of an
apartment complex located in West St. Louis County, Missouri (Woodhollow
Apartments) which generated 100% of total revenues for the quarter ended August
31, 2001 and 97.5% of total revenues for the quarter ended August 31, 2000. A
retail shopping center (Cobblestone Court) located in Burnsville, Minnesota, a
suburb of Minneapolis, which generated 2.5% of total revenues for the quarter
ended August 31, 2000, was sold on May 24, 2000.
(b) Basis of Accounting
The financial statements include only those assets, liabilities, and results of
operations of the partners which relate to the business of Maxus Real Property
Investors-Four, L.P. The statements do not include assets, liabilities, revenues
or expenses attributable to the partners' individual activities. No provision
has been made for federal and state income taxes since these taxes are the
responsibility of the partners.
(the remainder of this page left blank intentionally)
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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
This 10-QSB contains forward-looking information (as defined in the Private
Securities Litigation Reform Act of 1995) that involves risk and uncertainty,
including trends in the real estate investment market, projected leasing and
sales, and future prospects for the Partnership. Actual results could differ
materially from those contemplated by such statements.
Liquidity and Capital Resources
Cash as of August 31, 2001 was $1,085,000, a decrease of $101,000 from November
30, 2000. Cash provided from operating activities for the nine months ended
August 31, 2001 was $604,000. Investing activities used $177,000 due to property
and equipment purchased. Financing activities used $528,000, of which $406,000
was used to repurchase 1,356 units at $300 per unit and $122,000 was due to a
distribution of $10 per limited partner unit paid in July, 2001.
Results of Operations
The results of operations for the Partnership's properties for the three and
nine months ended August 31, 2001 and August 31, 2000 are detailed in the
schedule below.
Woodhollow Apartments Cobblestone Court
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
August 31, 2001 August 31, 2001
Revenues .................................................. $ 751,000 2,182,000 $ --- ---
Expenses .................................................. 780,000 2,121,000 --- ---
---------- ---------- ---------- ----------
Net income (loss) before
gain on sale ............................................ $ (29,000) 61,000 $ --- ---
========== ========== ========== ==========
Woodhollow Apartments Cobblestone Court
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
August 31, 2000 August 31, 2000
Revenues .................................................. $ 692,000 2,000,000 $ 18,000 372,000
Expenses .................................................. 709,000 1,997,000 27,000 510,000
---------- ---------- ---------- ----------
Net income (loss) before
gain on sale ............................................ (17,000) 3,000 $ (9,000) (138,000)
========== ========== ========== ==========
Pro Forma Results
The table below presents the pro-forma results of operations without Cobblestone
Court for the three and nine months ended August 31, 2001 and August 31, 2000.
Cobblestone Court was sold May 24, 2000. These pro forma operating results are
not necessarily indicative of what the actual results would have been had the
Cobblestone Court property been sold at the beginning of the earliest period
presented.
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Pro Forma Results, Continued
Three Months Ended Nine Months Ended
August 31, August 31, August 31, August 31,
2001 2000 2001 2000
(Pro Forma) (Pro Forma)
Revenues $ 751,000 692,000 2,182,000 2,000,000
Repairs and maintenance, including
common area maintenance 120,000 98,000 272,000 205,000
Interest, net 184,000 221,000 553,000 631,000
Depreciation 154,000 159,000 441,000 476,000
General and administrative 61,000 53,000 164,000 144,000
Other 261,000 208,000 691,000 571,000
-------- -------- --------- ---------
Total expenses 780,000 739,000 2,121,000 2,027,000
-------- -------- --------- ---------
Net income (loss) before gain on sale $ (29,000) (47,000) 61,000 (27,000)
======== ======== ========= =========
Net income (loss) before gain on sale
per limited partnership unit: $ (2.31) (3.44) 4.61 (1.99)
======== ======== ========= =========
Cobblestone Court was sold May 24, 2000, and accordingly is not included in the
2001 results.
Results of Operations - Woodhollow
At Woodhollow Apartments, revenues increased $59,000 (8.5%) in the third quarter
of 2001 compared to the same period in 2000. Occupancy and rental rates have
increased contributing to the increased revenue. Expenses increased $71,000
(10.0%) when compared to the third quarter of last year. The increase in
expenses is primarily due to an increase in professional fees of $50,000,
repairs and maintenance of $22,000 and property management fees of $20,000. The
increase in professional fees was due primarily to an increase in legal fees.
The increased expenses were partially offset by a decrease in interest expense
of $37,000. At Woodhollow Apartments, the occupancy increased to 98% from 95% at
November 30, 2000.
Results of Operations - Consolidated
For the three and nine month periods ended August 31, 2001, the Partnership's
consolidated revenues were $751,000 and $2,182,000, respectively. Revenues for
the three months ended August 31, 2001 increased by $41,000 (5.8%), while
revenue for the nine months ended August 31, 2001 decreased by $190,000 (8.0%)
as compared to the same period in 2000. Revenue at Woodhollow for the three
months ended August 31, 2001 increased by $59,000 and was partially offset by a
decrease in income due to the sale of Cobblestone Court of $18,000. For the nine
months ended August 31, 2001, revenue increased at Woodhollow by $182,000 offset
by a decrease in revenue from Cobblestone Court of $372,000, primarily due to
the sale of Cobblestone Court.
For the three and nine month periods ended August 31, 2001, the Partnership's
consolidated expenses were $780,000 and $2,121,000, respectively. Expenses for
the three months ended August 31, 2001 increased by $14,000 (1.8%) while
expenses for the nine months ended August 31, 2001 decreased by $416,000 (16.4%)
when compared to the same periods in 2000. Expenses at Woodhollow for the three
months ended August 31, 2001 increased by $71,000, primarily due to an increase
in professional fees of $50,000 and repairs and maintenance of $22,000. The sale
of Cobblestone Court resulted in reduced expenses of $27,000. The increased
expenses were partially offset by decreases in interest expenses of $37,000. For
the nine months ended August 31, 2001, expenses at Woodhollow increased by
$124,000, primarily due to an increase in professional fees of $65,000. This
increase was offset by a reduction in expenses of $510,000 due to the sale of
Cobblestone Court.
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PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
On July 10, 2001, O. Bruce Mills ("Mills") commenced a tender offer to
purchase any and all of the outstanding limited partnership units of
the Partnership at a purchase price of $400 per unit in cash upon the
terms and subject to the conditions set forth in the Offer to Purchase
dated July 10, 2001 and the related letter of transmittal, copies of
which were sent to the limited partners. On July 16, 2001, the
Partnership filed its response on Schedule 14D-9, in which it urged
the limited partners to reject the offer because the offer would
breach the terms of the Partnership's limited partnership agreement
and might cause a default under the Partnership's mortgage loan. On
August 21, 2001, Mills announced that, in connection with his offer, a
total of 473 limited partnership units were tendered to Mills,
representing 3.9% of the outstanding units of the Partnership.
On September 5, 2001, the Partnership and its general partner, Maxus
Capital Corp. ("Maxus Capital"), filed a lawsuit against Mills in the
United States District Court for the Western District of Missouri for
securities fraud, tortious interference with contract, and injunctive
and declaratory relief. This lawsuit was necessary because the
Partnership believes Mills made material misstatements in attempting
to convince the limited partners of the Partnership to accept his
tender offer for units. The Partnership believes Mills made false
statements regarding the status of units tendered to him, the tax
consequences of accepting Mills' tender offer, and the reason for the
Partnership's self-tender offer. Also, Mills attempted in his tender
offer to induce the limited partners to breach their obligations under
the limited partnership agreement by tendering units that could result
in a tax termination of the partnership. Mills has yet to answer the
complaint filed by the Partnership and Maxus Capital.
ITEM 2: CHANGES IN SECURITIES
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5: OTHER INFORMATION
On September 17, 2001, the Board of Directors of the Partnerships'
general partner (Maxus Capital Corp.)declared a cash distribution of
$10 per limited partnership unit payable to the limited partners of
record on October 1, 2001. The General Partner anticipates that the
distribution will be paid on October 10, 2001. The Partnership
anticipates declaring a quarterly cash distribution of $10 per limited
partnership unit each quarter. ITEM 6: EXHIBITS AND REPORTS ON FORM
8-K
(a) Exhibits
See Exhibits Index on Page 12
(b) Reports on Form 8-K
None
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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: October ____, 2001 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
By: MAXUS CAPITAL CORP.
General Partner
By: /s/John W. Alvey
John W. Alvey
Director, Vice President
Secretary and Treasurer
(Principal Financial Officer)
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EXHIBIT INDEX
Exhibit Number Description
3.1 Amended and Restated Agreement and Certificate of Limited Partnership dated
April 7, 1982, is incorporated by reference from Exhibit 3.1 to the
Registrant's Form 10-K for the fiscal year ended November 30, 1999 (File
No. 000-11023).
3.2 Amendment of Certificate of Limited Partnership dated December 21, 1999 is
incorporated by reference to the Form 8-K filed by the Registrant (File No.
000-11023).
10.1 Contract for the sale of Cobblestone Court Shopping Center dated January
28, 2000 is incorporated by reference to the Form 8-K filed by the
Registrant under the Securities Act of 1933 (File No. 000- 11023).
10.2 Letter agreement dated March 29, 2000 amending the Contract for the Sale of
Cobblestone Court Shopping Center is incorporated by reference to the Form
10-QSB filed by the Registrant under the Securities Act of 1933 (File No.
000-11023).
10.3 Letter agreement dated May 3, 2000 amending the Contract for the Sale of
Cobblestone Court Shopping Center is incorporated by reference to the Form
10-QSB filed by the Registrant under the Securities Act of 1933 (File No.
000-11023).
10.4 Letter agreement date May 19, 2000 amending the Contract for the Sale of
Cobblestone Court Shopping Center is incorporated by reference to the Form
10-QSB filed by the Registrant under the Securities Act of 1933 (File No.
000-11023).
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