SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15 (d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 2001
[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from ________ to ________
Commission file number: 000-24167
EBS Building, L.L.C.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 43-1794872
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
c/o PricewaterhouseCoopers, LLP, 800 Market Street, St. Louis, Missouri 63101-2695
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(Address of Principal Executive Offices)
(678)419-7021
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(Issuer's Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrants filed all documents and reports required
to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes X No
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APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of September 30, 2001,
there were 10,000,000 Class A Membership Units outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EBS BUILDING, L.L.C.
BALANCE SHEETS
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SEPTEMBER 30, 2001 DECEMBER 31, 2000
(UNAUDITED)
ASSETS
Rental property (net) $ 24,871,128 $ 22,036,672
Cash - operating 65,635 13,248
Security deposit escrow 10,260 112,293
Tax and insurance escrow 315,257 91,672
Rents receivable 811,772 565,653
Prepaid expenses 74,149 36,127
Lease commissions (net) 1,732,276 1,145,366
Loan costs (net) 262,782 50,609
Other assets 9,646 273
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Total assets $ 28,152,905 $ 24,051,913
==================== ====================
LIABILITIES
Note payable $ 12,772,550 $ 7,561,599
Accounts payable 320,061 145,491
Accrued expenses 475,335 310,081
Tenant security deposits 9,477 104,999
Prepaid rent 7,076 -
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Total liabilities 13,584,499 8,122,170
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MEMBERS' EQUITY:
Membership Units (Class A - 10,000,000
authorized, issued and outstanding
at June 30, 2000 and December 31, 1999) - -
Paid-in capital 19,810,522 19,810,522
Retained earnings (5,242,116) (3,880,779)
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Total members' equity 14,568,406 15,929,743
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Total liabilities and members' equity $ 28,152,905 $ 24,051,913
==================== ====================
The accompanying notes are an integral part of these financial statements
EBS BUILDING, L.L.C.
STATEMENTS OF OPERATIONS
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FOR THE 3 MONTHS ENDED FOR THE 9 MONTHS ENDED
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SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2001 2000 2001 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
Income:
Rent $ 876,351 $ 808,204 $ 2,528,750 $ 2,591,241
Other 31,926 25,119 185,765 97,889
--------------- -------------- --------------- -------------
Total income 908,277 833,323 2,714,515 2,689,130
--------------- -------------- --------------- -------------
Expenses:
Maintenance 250,309 196,694 662,687 617,771
Professional fees 97,315 171,148 499,404 504,115
Utilities 182,170 210,262 503,892 494,199
General and administrative 143,715 244,835 515,373 545,392
Depreciation and amortization 311,934 252,446 914,498 766,159
Taxes (including real estate 99,000 93,540 297,600 280,620
taxes)
Interest Expense 185,439 174,816 533,008 513,178
Other operating expenses 51,878 47,195 149,390 135,322
--------------- -------------- --------------- -------------
Total expenses 1,321,760 1,390,936 4,075,852 3,856,756
--------------- -------------- --------------- -------------
Net income/(loss) $ (413,483) $ (557,613) $ (1,361,337) $ (1,167,626)
=============== ============== =============== ==============
Net income/(loss) per Class A
Unit - $ (0.04) $ (0.06) $ (0.14) $ (0.12)
primary
Net income/(loss) per Class A
Unit - $ (0.06) $ (0.12)
fully diluted $ (0.04) $ (0.14)
The accompanying notes are an integral part of these financial statements
EBS BUILDING, L.L.C.
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
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CLASS A CLASS B
MEMBERSHIP MEMBERSHIP PAID IN RETAINED
UNITS UNITS CAPITAL EARNINGS TOTAL
Balance, December 31, 2000 10,000,000 - $19,810,522 $(3,880,779) $15,929,743
Units transferred (unaudited) - - - - -
Year to date loss (unaudited) - - - (1,361,337) (1,361,337)
------------- ------------ ------------ ------------- ------------
Balance, September 30, 2001
(unaudited) 10,000,000 - $19,810,522 $(5,242,116) $14,568,406
============= ============ ============ ============= ============
The accompanying notes are an integral part of these financial statements
EBS BUILDING, L.L.C.
STATEMENTS OF CASH FLOWS
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FOR THE 9 MONTHS FOR THE 9 MONTHS
ENDED ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 2000
(UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net loss $ (1,361,337) $ (1,167,626)
Reconciliation of net loss to cash flows
Used by operating activities:
Depreciation and amortization expense 914,498 766,159
Changes in operating assets and liabilities:
Increase in escrows, rents receivable, prepaid
expenses
and other assets (415,064) (267,237)
Increase in liabilities, excluding note payable 251,378 199,615
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Cash flows used in operating activities (610,525) (469,089)
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Cash flows from investing activities:
Additions to rental property (3,522,929) (74,756)
Payments for lease commissions (719,943) (57,391)
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Cash flows used in investing activities (4,242,872) (132,147)
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Cash flows from financing activities:
Proceeds from note payable 5,210,951 163,125
Payments for loan costs (305,167) -
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Cash flows provided by financing activities 4,905,784 163,125
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Net increase/(decrease) in cash 52,387 (438,111)
Cash, beginning of period 13,248 520,774
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Cash, end of period $ 65,635 $ 82,663
================ ===============
The accompanying notes are an integral part of these financial statements
EBS BUILDING, L.L.C.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2001
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1. The accompanying unaudited financial statements, in the opinion of the
Manager, include all adjustments necessary for a fair presentation of
the results for the interim periods presented. These adjustments consist
of normal recurring accruals. The financial statements are presented in
accordance with the requirements of Form 10-QSB and consequently do not
include all the disclosures required by generally accepted accounting
principles. For further information, refer to the financial statements
and notes thereto for the period ended December 31, 2000 included in the
Company's Annual Report on Form 10-KSB filed on April 13, 2001.
2. The following table sets forth the computation of primary and fully
diluted earnings (loss) per unit for the periods ended:
For the 3 Months Ended For the 9 Months Ended
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September 30, 2001 September 30, 2000 September 30, 2001 September 30, 2000
(unaudited) (unaudited) (unaudited) (unaudited)
Numerator:
Net Earnings/(Loss) - Primary and
Diluted $ (413,482) $ (557,613) $ (1,361,337) $ (1,167,626)
============= ============= =============== ===============
Denominator:
Weighted Average Units
Outstanding - Primary 10,000,000 10,000,000 10,000,000 10,000,000
Effect of Potentially
Dilutive Units - - - -
------------- ------------- --------------- ---------------
Units Outstanding - Diluted 10,000,000 10,000,000 10,000,000 10,000,000
============= ============= =============== ===============
Primary Earnings/(Loss) per Unit $ (0.04) $ (0.06) $ (0.14) $ (0.12)
============= ============= =============== ===============
Diluted Earnings/(Loss) per Unit $ (0.04) $ (0.06) $ (0.14) $ (0.12)
============= ============= =============== ===============
3. Rental property consists of the following:
September 30, 2001 December 31, 2000
(unaudited)
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Land $ 2,250,520 $ 2,250,520
Building 17,765,629 17,765,629
Building Improvements 1,249,192 841,042
Tenant Improvements 4,032,442 3,521,860
Construction in progress 2,708,882 104,686
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28,006,665 24,483,737
Less Accumulated Depreciation 3,135,537 2,447,065
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$ 24,871,128 $ 22,036,672
================== ====================
The building and building improvements are depreciated using the
straight-line method over their estimated useful life of 38 and 39
years, respectively. Tenant improvements are depreciated over the term
of the tenant's lease.
EBS BUILDING, L.L.C.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2001
PAGE 2
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4. Rents receivable include an accrual for the straight-line recognition of
escalating tenant rental rates in accordance with Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 13,
Accounting for Leases. Such tenant rents are recognized on a
straight-line basis over the term of the lease.
5. On May 31, 2001, the Company entered into an $18,600,000 revolving line
of credit with Commerce Bank, N.A. (the "Line of Credit"). The Line of
Credit, which expires in May 2004, replaces the $12,000,000 line of
credit previously extended by FINPRO. L.L.C. which became due and
payable on May 31, 2001. The Company presently intends to use the Line
of Credit for working capital needs, tenant improvements and lease
commissions. Borrowings under the Line of Credit bear interest at a rate
equal to the ninety (90) day LIBOR interest rate plus one hundred ninety
(190) basis points. As of September 30, 2001, the Company had
outstanding borrowings of $12,772,550 under the Line of Credit.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the forthcoming twelve months of operations, the Company intends
to continue owning, managing, maintaining, repairing, leasing, selling,
hypothecating, mortgaging or otherwise dealing with the building located at 501
North Broadway, St. Louis, Missouri (the "Building"). Further, the Company
intends to continue actively marketing the Building for sale during the
forthcoming twelve months as well as to continue to secure additional tenant
leasing agreements.
On May 31, 2001, the Company entered into an $18,600,000.00 credit
facility (the "Credit Facility") with Commerce Bank, N.A in order to refinance
its existing mortgage loan and obtain funds for improvements, interest carry and
other working capital needs. Borrowings under the Credit Facility will be at an
interest rate equal to the ninety (90) day LIBOR interest rate plus one hundred
ninety (190) basis points. Borrowings under the Credit Facility are secured by
substantially all of the assets of the Company. Management believes that funds
from operations and the Company's present availability under its revolving line
of credit provide sufficient resources to meet the Company's present and
anticipated financing needs.
During the three months ended September 30, 2001, the Company's rental
income increased by 8.4% over the third quarter of the prior year, from $808,204
during the third quarter of 2000 to $876,351 during the third quarter of 2001.
Such increase is attributed to the commencement on February 1, 2001 of a new
tenant lease for 35,005 square feet offset by the expiration on April 30, 2001
of a tenant lease for 18,661 square feet. The Company's total expenses decreased
by 5.0% over the third quarter of the prior year. Such decrease is primarily
attributable to a decline in professional fees associated with securing new
leases and a reduction in bank fees incurred under the new Credit Facility.
Professional fees decreased from $171,148 during the third quarter of 2000 to
$97,315 during the third quarter of 2001. In addition, general and
administrative expenses decreased 41.3% as the result of lower loan fees
incurred under the new Credit Facility. Depreciation expense increased from
$252,446 during the third quarter of 2000 to $311,934 during the third quarter
of 2001 due to the capitalization of additional tenant improvements associated
with the Jacobs Engineering Group, Inc. lease entered into on February 22, 2001.
Maintenance expense increased 27.3% over the prior year due to increase
occupancy in the building.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits (listed by numbers corresponding to the Exhibit Table of
Item 601 of Regulation S-B)
3.1: Articles of Organization of the Issuer filed with the
Delaware Secretary of State on September 24, 1997
incorporated by reference to the Issuer's Registration
Statement on Form 10-SB filed on April 30, 1998, Exhibit
2.1.
3.2: Members Agreement of EBS Building, L.L.C. a Limited
Liability Company, dated as of September 26, 1997
incorporated by reference to the Issuer's Registration
Statement on Form 10-SB filed on April 30, 1998, Exhibit
2.2.
4: See the Members Agreement, referenced as Exhibit 3.2.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
the third quarter of 2001.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
REGISTRANT:
EBS Building, L.L.C.
By: PricewaterhouseCoopers LLP, as Manager
By: /s/Keith F. Cooper
------------------------------------
Keith F. Cooper, Partner
Date: November 13, 2001
Exhibit Index
3.1: Articles of Organization of the Issuer filed with the
Delaware Secretary of State on September 24, 1997
incorporated by reference to the Issuer's Registration
Statement on Form 10-SB filed on April 30, 1998, Exhibit
2.1.
3.2: Members Agreement of EBS Building, L.L.C. a Limited
Liability Company, dated as of September 26, 1997
incorporated by reference to the Issuer's Registration
Statement on Form 10-SB filed on April 30, 1998, Exhibit
2.2.
4: See the Members Agreement, referenced as Exhibit 3.2.