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 March 31, 2002
[ ] 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)419-8747
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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 March 31, 2002, 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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<Table>
<Caption>
MARCH 31, 2002
(UNAUDITED) DECEMBER 31, 2001
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ASSETS
Rental property, net $26,586,462 $26,329,910
Cash - operating 89,163 198,160
Security deposit escrow 10,304 10,275
Tax and insurance escrow 147,252 41,921
Rents receivable 937,714 881,733
Prepaid expenses 10,593 42,371
Lease commissions, net 2,252,201 2,320,415
Loan costs, net 211,920 237,351
Other assets 13,651 13,651
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Total assets $30,259,260 $30,075,787
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LIABILITIES
Note payable $15,759,039 $15,597,329
Accounts payable 380,644 136,309
Accrued expenses 296,813 179,917
Tenant security deposits 9,477 9,477
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Total liabilities 16,445,973 15,923,032
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MEMBERS' EQUITY:
Membership Units (Class A - 10,000,000 authorized,
issued and outstanding) -- --
Paid-in capital 19,810,522 19,810,522
Retained earnings (deficit) (5,997,235) (5,657,767)
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Total members' equity 13,813,287 14,152,755
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Total liabilities and members' equity $30,259,260 $30,075,787
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</Table>
The accompanying notes are an integral part of these financial statements.
EBS BUILDING, L.L.C.
STATEMENTS OF OPERATIONS
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<Table>
<Caption>
FOR THE 3 MONTHS ENDED FOR THE 3 MONTHS ENDED
MARCH 31, 2002 MARCH 31, 2001
(UNAUDITED) (UNAUDITED)
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Income:
Rent $ 898,200 $ 800,212
Other 119,665 103,298
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Total income 1,017,865 903,510
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Expenses:
Maintenance 297,848 226,918
Professional fees 102,509 159,426
Utilities 170,202 167,732
General and administrative 147,751 144,261
Depreciation & amortization 338,204 271,301
Taxes (including real estate taxes) 99,999 99,000
Interest and finance fees 148,814 189,615
Other operating expenses 52,006 47,196
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Total expenses 1,357,333 1,305,449
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Net loss $ (339,468) $ (401,939)
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Net loss per Class A Unit - primary $(0.03) $(0.04)
Net loss per Class A Unit - fully diluted $(0.03) $(0.04)
</Table>
The accompanying notes are an integral part of these financial statements.
EBS BUILDING, L.L.C.
STATEMENT OF CHANGES IN MEMBERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2002
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<Table>
<Caption>
CLASS A
MEMBERSHIP PAID IN RETAINED
UNITS CAPITAL EARNINGS TOTAL
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Balance, December 31, 2001 10,000,000 $ 19,810,522 $ (5,657,767) $ 14,152,755
Year to date loss (unaudited) -- -- (339,468) (339,468)
---------- ------------ ----------- ----------
Balance, March 31, 2002 (unaudited) 10,000,000 $ 19,810,522 $(5,997,235) $13,813,287
========== ============ =========== ===========
</Table>
The accompanying notes are an integral part of these financial statements.
EBS BUILDING, L.L.C.
STATEMENTS OF CASH FLOWS
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<Table>
<Caption>
FOR THE 3 MONTHS ENDED FOR THE 3 MONTHS ENDED
MARCH 31, 2002 MARCH 31, 2001
(UNAUDITED) (UNAUDITED)
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Cash flows from operating activities:
Net loss $ (339,468) $ (401,939)
Reconciliation of net loss to cash flows
provided by operating activities:
Depreciation & amortization expense 338,204 271,301
Changes in operating assets and liabilities:
Increase in escrows, rents receivable,
prepaid expenses and deposits (129,564) (109,817)
Increase in liabilities, excluding note
payable 361,231 465,198
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Cash flows provided by operating activities 230,403 224,743
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Cash flows from investing activities:
Payments for lease commissions -- (642,953)
Additions to rental property (501,110) (705,916)
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Cash flows used by investing activities (501,110) (1,348,869)
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Cash flows from financing activities:
Proceeds from note payable 161,710 1,117,008
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Cash flows provided by financing activities 161,710 1,117,008
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Net decrease in cash (108,997) (7,118)
Cash, beginning of period 198,160 13,248
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Cash, end of period $ 89,163 $ 6,130
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</Table>
The accompanying notes are an integral part of these financial statements.
EBS BUILDING, L.L.C.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2002
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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 year ended December 31,
2001 included in the Company's Annual Report on Form 10-KSB filed on
March 29, 2002.
2. The following table sets forth the computation of primary and fully
diluted earnings (loss) per unit for the periods ended:
<Table>
<Caption>
For the For the
3 Months Ended 3 Months Ended
March 31, 2002 March 31, 2001
(unaudited) (unaudited)
-------------- --------------
Numerator:
Net Earnings/(Loss) - Primary and Diluted $ (339,468) $ (401,939)
============ ============
Denominator:
Weighted Average Units Outstanding - Primary 10,000,000 10,000,000
Effect of Potentially Dilutive Units -- --
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Units Outstanding - Diluted 10,000,000 10,000,000
============ =============
Primary Earnings/(Loss) per Unit $ (0.03) $ (0.04)
============= =============
Diluted Earnings/(Loss) per Unit $ (0.03) $ (0.04)
============= =============
</Table>
3. Rental property consists of the following:
<Table>
<Caption>
March 31, 2002
(unaudited) December 31, 2001
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Land $ 2,250,520 $ 2,250,520
Building 17,765,629 17,765,629
Building Improvements 1,371,326 1,346,013
Tenant Improvements 4,259,129 4,195,574
Construction in progress 4,557,084 4,144,841
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30,203,688 29,702,577
Less Accumulated Depreciation
3,617,226 3,372,667
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$ 26,586,462 $ 26,329,910
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</Table>
The building and building improvements are depreciated using the
straight-line method over its estimated useful life of 38 and 39 years,
respectively. Tenant improvements are depreciated over the term of the
tenant's lease.
4. Rents receivable include an accrual for the straight-line recognition
of escalating tenant rental rates in accordance with Financial
EBS BUILDING, L.L.C.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2002
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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 March 31, 2002, the Company had
outstanding borrowings of $15,759,039 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 March 31, 2002, the Company's rental
income increased by 12.2% over the first quarter of the prior year, from
$800,212 during the first quarter of 2001 to $898,200 during the first quarter
of 2002. Such increase is primarily attributed to the commencement of rent
payments in the fourth quarter of 2001 on a new lease that was signed in
February 2001. The Company's total expenses increased by 4.0% over the first
quarter of the prior year, with the largest increase in maintenance expense and
depreciation and amortization. Depreciation and amortization expense increased
from $271,301 during the first quarter of 2001 to $338,204 during the first
quarter of 2002 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 31.3% over the prior year due
to increased occupancy in the building. Professional fees declined by over 35.7%
from the first quarter of 2001. Professional fees decreased from $159,426 during
the first quarter of 2001 to $102,509 during the first quarter of 2002 due to
higher legal and professional fees incurred in 2001 associated with the signing
of the Seabury & Smith, Inc. and Jacobs Engineering Group, Inc. leases. Interest
expense for the first quarter of 2002 declined by 21.5% from the first quarter
of 2001 due to a reduction in bank fees incurred under the new Credit Facility.
Interest expense for the first three months of 2002 was $148,814 compared to
$189,615 for the first three months of 2001.
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. The Issuer did not file any reports on
Form 8-K during the first fiscal quarter.
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
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Keith F. Cooper, Partner
Date: May 15, 2002
Exhibit Index
<Table>
<Caption>
Exhibit No. Description
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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.
</Table>