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 February 29, 2000 ----------------- 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) 1100 Main St., Ste 2100 Kansas City, Missouri 64105 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (816) 421-4670 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 1 INDEX Page PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: Balance Sheet 3 Statements of Operations 4 Statements of Cash Flows 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS 8 PART II - OTHER INFORMATION 11 ITEM 1. LEGAL PROCEEDINGS ITEM 2. CHANGES IN SECURITIES ITEM 3. DEFAULTS UPON SENIOR SECURITIES ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K SIGNATURES 12 EXHIBIT INDEX 13 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MAXUS REAL PROPERTY INVESTORS - FOUR, L.P. (A LIMITED PARTNERSHIP) BALANCE SHEET (UNAUDITED) (in thousands except unit information) February 29, 2000 ASSETS: Investment property Land $ 1,014 Buildings and improvements 15,244 ------ 16,258 Less accumulated depreciation 8,807 ----- 7,451 Investment property held for sale 3,400 ----- Total investment property 10,851 Cash 10 Accounts receivable, less allowance for doubtful accounts 125 Prepaid expenses 13 Deferred expenses, less accumulated amortization 89 ------- Total assets $ 11,088 ====== LIABILITIES AND PARTNERS' DEFICIT: Liabilities: Mortgage notes payable $ 13,763 Accounts payable and accrued expenses 385 Refundable tenant deposits 75 ------- Total liabilities 14,223 Partners' deficit (3,135) ------- Total liabilities and partners' deficit $ 11,088 ====== 3 MAXUS REAL PROPERTY INVESTORS - FOUR, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands except unit information) Three Months Ended February 29 February 28 2000 1999 Revenues: Rental $ 684 705 Other 115 102 --- --- Total revenues 799 807 ---- --- Expenses: Depreciation and amortization 164 13 Repairs and maintenance, including common area maintenance 82 118 Real estate taxes 90 92 Interest, net 317 275 Professional fees 41 76 General and administrative 42 56 Utilities 51 32 Property management fees - related parties 37 40 Other 63 69 --- --- Total expenses 887 771 --- --- Income (loss) before adjustment to liquidation basis (88) 36 Adjustment to liquidation basis -- 68 ----- ---- Net Income (loss) $ (88) 104 ======= === Net income (loss) allocation: General partners $ (1) 2 Limited partners (87) 102 ------ --- $ (88) 104 ====== ==== Limited partners' data: Net income (loss) per unit: Income (loss) before adjustment to liquidation basis $ (6.41) 2.57 Adjustment to liquidation basis -- 4.96 --------- --------- Total $ (6.41) 7.53 ========= ========= Weighted average limited partnership units outstanding 13,529 13,529 ======== ======== 4 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P. (A LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands except unit information) Three Months Ended February 29 February 28 2000 1999 Cash flows from operating activities: Net income (loss) $ (88) 104 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Adjustment to liquidation basis -- (68) Depreciation and amortization 164 13 Changes in accounts affecting operations: Accounts receivable 64 14 Prepaid expenses 6 -- Accounts payable and accrued expenses (80) 77 Refundable tenant deposits 5 4 ----- ----- Net cash provided by operating activities 71 144 ----- ----- Cash flows from investing activities - capital expenditures (19) (22) ----- ----- Cash flows from financing activities -principal payments on mortgage notes payable (63) (47) ----- ----- Net (decrease) increase in cash (11) 75 Cash, beginning of period 21 227 ----- ---- Cash, end of period $ 10 302 ===== ===== Supplemental disclosure of cash flow information - cash paid during the quarter for interest $ 404 275 ===== ===== 5 MAXUS REAL PROPERTY INVESTORS-FOUR, L.P. (A LIMITED PARTNERSHIP) NOTES TO UNAUDITED FINANCIAL STATEMENTS THREE MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999 (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, 1999, which are contained in the Partnership's Annual Report on Form 10-K, 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 February 29, 2000 and for all periods presented have been made. The results for the three-month period ended February 29, 2000 are not necessarily indicative of the results which may be expected for the entire year. (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 building located in West St. Louis County, Missouri (Woodhollow Apartments) which generated 76% of total revenues for the quarter ended February 29, 2000, and a retail shopping center (Cobblestone Court) located in Burnsville, Minnesota, a suburb of Minneapolis, which generated the remaining 24% of total revenues for the quarter ended February 29, 2000. On December 21, 1999, the Partnership's Certificate of Limited Partnership was amended to change the name of the Partnership from Nooney Real Property Investors-Four, L.P. to Maxus Real Property Investors-Four, L.P. (b) Basis of Accounting On January 21, 1999, a plan to sell the Partnership's Woodhollow Apartments property and Cobblestone Court property was approved by a majority of the limited partners by proxy. The Partnership entered into sales contracts on both properties with American Spectrum Realty, Inc., an affiliate of Nooney Capital Corporation, corporate general partner of the Partnership at that time. As a result of the partners' approval to sell the properties and liquidate the Partnership, the Partnership's financial statements as of November 30, 1998 and for the year then ended were prepared on a liquidation basis. Accordingly, assets were valued at estimated net realizable value and liabilities included estimated costs associated with carrying out the plan of liquidation. 6 In 1999, certain contingencies of the sale contracts were not fulfilled and the sale contracts were rendered null and void. As a result of the cancellation of the planned liquidation and the partners' intent to continue operations of the Woodhollow Apartments property, the financial statements are no longer presented on the liquidation basis of accounting. The cost of liquidation and other accruals made in 1998 when adopting the liquidation basis were reversed in 1999. $68 of the 1999 reversals were made during the first quarter of 1999. On January 28, 2000, a sales agreement was signed on the Cobblestone Court property that provides for a net sales price of $5,100. The sale is subject to a due diligence period and, if completed, is expected to close by the end of the second quarter of 2000. 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 is left blank intentionally.) 7 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR 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 reserves as of February 29, 2000 are $10, a decrease of $11 from November 30, 1999. Cash provided from operating activities for the three months ended February 29, 2000 was $71. Investing activities used $19 due to property and equipment purchases. Financing activities, composed of principal payments on mortgage notes payable, used $63. On January 28, 2000, the Partnership entered into a contract to sell the Cobblestone Court Shopping Center ("Cobblestone"), located at 14150 Nicollet Avenue South in Burnsville, Minnesota, a suburb of Minneapolis, to an unrelated third party, Farrington Properties, Inc., a Minnesota corporation. The sale price is $5,100. The contract was subject to a fifteen (15) day due diligence period pursuant to which Farrington had the right to terminate the contract without liability to the Partnership. The due diligence period expired February 12, 2000. The sale was tentatively scheduled to close on March 28, 2000 with the contract providing for one 45 day extension. The extension was exercised and the sale is now tentatively scheduled to close in May 2000. The sale is subject to certain conditions, including but not limited to delivery of satisfactory title and delivery of satisfactory subordination, non-disturbance and attornment agreements and estoppel letters from all tenants of the Property. The Cobblestone sales contract provides for a net sale price of $5,100. If consummated as currently structured, the transaction will result in a gain of approximately $1,529. There is no assurance at this time, however, that the transaction will be consummated or that the gain will be realized. On November 30, 1998, the Partnership refinanced the debt on both of its properties. A new loan agreement with a balance of $13,500 secured by both Cobblestone Court and Woodhollow Apartments was obtained. The loan agreement includes two notes, which are at a floating interest rate of LIBOR + 2.75% and call for monthly principal payments of $16. The loan matures November 30, 2001. In 1999, additional funds of $500 were borrowed on these notes. Results of Operations The results of operations for the Partnership's properties for the quarters ended February 29, 2000 and February 28, 1999 are detailed in the schedule below. Expenses of the Partnership are excluded. 2000 Woodhollow Apartments Cobblestone Court Revenues $ 610 $189 Expenses 637 251 ----- ----- Net Loss $ (27) $ (62) ====== ====== 1999 Woodhollow Apartments Cobblestone Court Revenues $ 608 $196 Expenses 486 285 ----- ----- Net Income (Loss) $ 122 $ (89) ===== ====== 8 2000 Property Comparisons At Woodhollow Apartments, revenues increased $2 in first quarter of 2000 compared to the same period in 1999. Expenses increased $151 when compared to first quarter of last year,. This increase is primarily due to an increase in depreciation and amortization of $151, and interest expense of $35. The increased expenses were partially offset by a decrease in repairs and maintenance of $34. Woodhollow Apartments was held for sale from the period of December 1998 through June 1999. The property's sale status was halted effective July 1, 1999 and liquidation basis accounting was reversed. Commencing in July 1999, entries were posted to depreciate all new and existing assets for the previous held for sale period. Woodhollow Apartments' assets have been depreciated in the first quarter of 2000. The increase in depreciation and amortization is due to both properties being classified as held for sale in 1999, while only Cobblestone Court is held for sale in 2000. No depreciation was recorded in 1999 or 2000 for the properties held for sale. The increase in interest expense is due to additional funds being borrowed in 1999 as described above in Item 2, under the heading Liquidity and Capital Resources. At Cobblestone Court, the net loss for the quarters ended February 29, 2000 and February 28, 1999 was $62 and $89, respectively. The decrease in the net loss is primarily attributable to a decrease in expenses. Expenses decreased $34 in the first quarter 2000 compared to the first quarter of 1999, largely due to a decrease in professional fees of $22, and a decrease in real estate taxes of $16. The occupancy levels at February 29, 2000 and February 28 1999 are as follows: Occupancy levels as of: February 29 February 28 Property 2000 1999 Cobblestone Court Shopping Center 56% 59% Woodhollow Apartments 89% 94% At Cobblestone Court Shopping Center, occupancy decreased to 56% compared to 61% at November 30, 1999. Two seasonal tenants vacated which occupied 5,823 square feet. One major tenant exercised their renewal option in March of 2000 for five additional years. The property has two major tenants that occupy approximately 26% and 9% of the available space under leases that expire January 2001 and December 2005, respectively. At Woodhollow Apartments the occupancy increased to 89% from 87% at November 30, 1999. A rental increase was implemented on each floorplan during 1999. There were a high number of vacant one bedroom units at November 30, 1999. The rent on these units has since been reduced in an effort to increase the demand for one bedroom rental apartments. 9 Results of Operations - Consolidated For the three month period ended February 29, 2000, the Partnership's consolidated revenues were $799 compared with $807 for the three months end February 28, 1999. The decrease in revenue of $8 (1.0%) can be attributed to the decrease in revenue from Cobblestone Court due to decreased occupancy. The Partnership's consolidated expenses for the three months ended February 29, 2000 and the three months ended February 28, 1999 were $887 and $771 respectively. The increase in expenses of $116 (15.0%) is primarily due to an increase in depreciation and amortization of $151, increased interest expenses of $42 (15.3%), and increased utilities expense of $19 (59.3%). The increase in expenses was partially offset by a decrease in repairs and maintenance expense of $36 (30.5%), decreased professional fees of $35 (46.1%), and decreased general and administrative expense of $14 (25.1%). The property's sale status was halted effective July 1, 1999 and liquidation basis accounting was reversed. Commencing in July 1999, entries were posted to depreciate all new and existing assets for the previous held for sale period. Woodhollow Apartments' assets have been depreciated in the first quarter of 2000. The increase in depreciation and amortization is due to both properties being classified as held for sale in 1999, while only Cobblestone Court is held for sale in 2000. No depreciation was recorded in 1999 or 2000 for the properties held for sale. The increase in interest expense is due to additional funds being borrowed in 1999 as described in Item 2, under the heading Liquidity and Capital Resources. The increase in utilities expense is partially due to higher utility expense for vacant units and corporate suites in the first three months of 2000 compared to the same period of 1999. The decrease in repairs and maintenance, professional fees and general and administrative fees can be attributed to the change in management companies in November, 1999. Year 2000 Issues Information Technology Systems Subsequent to December 31, 1999, the Partnership has not experienced any material information technology ("IT") or embedded ("non-IT") systems disruptions or failures and anticipates no material systems problems at Cobblestone Court or Woodhollow Apartments. Material Third Parties' Systems Failures Evaluation of material third parties' Year 2000 readiness status was essentially complete as of December 31, 1999. The Partnership continues to monitor for any additional information pertaining to these parties' Year 2000 readiness. The Partnership has not experienced and does not anticipate any Year 2000 performance issues related to its material third parties. 10 PART II. OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS None 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 None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See Exhibit Index on Page 13 (b) Reports on Form 8-K The following reports on Form 8-K were filed by the Registrant during the first quarter of 2000, each of which are incorporated herein by reference (File No. 000-11023): On January 21, 2000, the Registrant filed a Form 8-K reporting the change of the Registrant's name and the change of its general partner's name (Item 5). On January 25, 2000, the Registrant filed a Form 8-K reporting the dismissal of Deloitte and Touche L.L.P. as its certifying accountant. On February 16, 2000, the Registrant filed Amendment No. 1 to this Form 8-K (Items 4 and 7). On February 11, 2000, the Registrant filed a report on Form 8-K reporting the appointment of KPMG L.L.P. as its certifying accountant (Item 4). On February 17, 2000, the Registrant filed a Form 8-K reporting an agreement entered into by the Registrant to sell Cobblestone Court Shopping Center (Items 5 and 7). 11 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: April 14, 2000 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) 12 EXHIBIT INDEX Exhibit Number Description 3.1 Amended and Restated Agreement and Certificate of Limited Partnership date April 7, 1982, is incorporated by reference to the Prospectus contained in the Registration Statement on Form S-11 under the Securities Act of 1933 (File No. 2-76046) 27 Financial Data Schedule for the period ended February 29, 2000. 13