Attached files
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: March 31, 2011
Commission File Number: 000-50609
AEI INCOME & GROWTH FUND 25 LLC
(Exact name of registrant as specified in its charter)
State of Delaware 75-3074973
(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 25 LLC
INDEX
Part I - Financial Information
Item 1. Financial Statements (unaudited):
Balance Sheet as of March 31, 2011 and December 31, 2010
Statements for the Three Months ended March 31, 2011 and 2010:
Income
Cash Flows
Changes in Members' Equity (Deficit)
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. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 5. Other Information
Item 6. Exhibits
Signatures
AEI INCOME & GROWTH FUND 25 LLC
BALANCE SHEET
MARCH 31, 2011 AND DECEMBER 31, 2010
ASSETS
2011 2010
CURRENT ASSETS:
Cash $ 2,109,519 $ 2,209,831
INVESTMENTS IN REAL ESTATE:
Land 10,774,559 10,774,559
Buildings and Equipment 23,091,445 23,091,445
Accumulated Depreciation (5,097,470) (4,868,084)
----------- -----------
28,768,534 28,997,920
Real Estate Held for Sale 935,815 935,815
----------- -----------
Net Investments in Real Estate 29,704,349 29,933,735
----------- -----------
Total Assets $31,813,868 $32,143,566
=========== ===========
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 95,815 $ 82,853
Distributions Payable 544,949 651,717
Unearned Rent 6,962 40,353
----------- -----------
Total Current Liabilities 647,726 774,923
----------- -----------
MEMBERS' EQUITY (DEFICIT):
Managing Members (4,150) 1,925
Limited Members, $1,000 per Unit;
50,000 Units authorized; 42,435 Units issued;
41,972 Units outstanding 31,170,292 31,366,718
----------- -----------
Total Members' Equity 31,166,142 31,368,643
----------- -----------
Total Liabilities and Members' Equity $31,813,868 $32,143,566
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 25 LLC
STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31
2011 2010
RENTAL INCOME $ 649,265 $ 616,676
EXPENSES:
LLC Administration - Affiliates 89,663 86,237
LLC Administration and Property
Management - Unrelated Parties 13,096 10,384
Depreciation 229,386 228,263
----------- -----------
Total Expenses 332,145 324,884
----------- -----------
OPERATING INCOME 317,120 291,792
OTHER INCOME:
Interest Income 4,444 3,126
----------- -----------
INCOME FROM CONTINUING OPERATIONS 321,564 294,918
Income from Discontinued Operations 20,884 77,273
----------- -----------
NET INCOME $ 342,448 $ 372,191
=========== ===========
NET INCOME ALLOCATED:
Managing Members $ 10,273 $ 15,719
Limited Members 332,175 356,472
----------- -----------
$ 342,448 $ 372,191
=========== ===========
NET INCOME PER LLC UNIT:
Continuing Operations $ 7.43 $ 6.81
Discontinued Operations .48 1.67
----------- -----------
Total $ 7.91 $ 8.48
=========== ===========
Weighted Average Units Outstanding - Basic and Diluted 41,972 42,019
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 25 LLC
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 342,448 $ 372,191
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 229,386 228,263
Gain on Sale of Real Estate 0 (28,180)
Increase in Payable to
AEI Fund Management, Inc. 12,962 1,149
Decrease in Unearned Rent (33,391) (47,707)
----------- -----------
Total Adjustments 208,957 153,525
----------- -----------
Net Cash Provided By
Operating Activities 551,405 525,716
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Real Estate 0 199,600
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions Paid to Members (651,717) (544,950)
----------- -----------
NET INCREASE (DECREASE) IN CASH (100,312) 180,366
CASH, beginning of period 2,209,831 1,410,759
----------- -----------
CASH, end of period $ 2,109,519 $ 1,591,125
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 25 LLC
STATEMENT OF CHANGES IN MEMBERS' EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31
Limited
Member
Managing Limited Units
Members Members Total Outstanding
BALANCE, December 31, 2009 $ 859 $32,121,530 $32,122,389 42,019.28
Distributions Declared (16,349) (528,601) (544,950)
Net Income 15,719 356,472 372,191
-------- ----------- ----------- ----------
BALANCE, March 31, 2010 $ 229 $31,949,401 $31,949,630 42,019.28
======== =========== =========== ==========
BALANCE, December 31, 2010 $ 1,925 $31,366,718 $31,368,643 41,972.36
Distributions Declared (16,348) (528,601) (544,949)
Net Income 10,273 332,175 342,448
-------- ----------- ----------- ----------
BALANCE, March 31, 2011 $ (4,150) $31,170,292 $31,166,142 41,972.36
======== =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 25 LLC
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2011
(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 25 LLC ("Company"), a Limited
Liability Company, was formed on June 24, 2002 to acquire
and lease commercial properties to operating tenants. The
Company's operations are managed by AEI Fund Management XXI,
Inc. ("AFM"), the Managing Member. Robert P. Johnson, the
President and sole director of AFM, serves as the Special
Managing Member. 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 Company.
The terms of the offering called for a subscription price of
$1,000 per LLC Unit, payable on acceptance of the offer.
The Company commenced operations on September 11, 2003 when
minimum subscriptions of 1,500 LLC Units ($1,500,000) were
accepted. The offering terminated May 12, 2005, when the
extended offering period expired. The Company received
subscriptions for 42,434.763 Units. Under the terms of the
Operating Agreement, the Limited Members and Managing
Members contributed funds of $42,434,763 and $1,000,
respectively. The Company shall continue until December 31,
2053, unless dissolved, terminated and liquidated prior to
that date.
During operations, any Net Cash Flow, as defined, which the
Managing Members determine to distribute will be distributed
97% to the Limited Members and 3% to the Managing Members.
Distributions to Limited Members will be made pro rata by
Units.
AEI INCOME & GROWTH FUND 25 LLC
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the Managing Members determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Members and 1% to the Managing Members until the
Limited Members receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to 7%
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 Members and 10% to the
Managing Members. Distributions to the Limited Members 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 97% to the Limited Members and 3% to the Managing
Members. Net losses from operations will be allocated 99%
to the Limited Members and 1% to the Managing Members.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Operating Agreement as follows: (i)
first, to those Members with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Members
and 1% to the Managing Members until the aggregate balance
in the Limited Members' capital accounts equals the sum of
the Limited Members' Adjusted Capital Contributions plus an
amount equal to 7% 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
Members and 10% to the Managing Members. Losses will be
allocated 99% to the Limited Members and 1% to the Managing
Members.
The Managing Members are not required to currently fund a
deficit capital balance. Upon liquidation of the Company or
withdrawal by a Managing Member, the Managing Members will
contribute to the Company an amount equal to the lesser of
the deficit balances in their capital accounts or 1.01% of
the total capital contributions of the Limited Members over
the amount previously contributed by the Managing Members.
(3) Investments in Real Estate -
On October 20, 2010, the Company purchased a 21% interest in
a Scott & White Clinic in College Station, Texas for
$771,868. The Company incurred $16,922 of acquisition
expenses related to the purchase that were expensed. The
property is leased to Scott & White Healthcare under a Lease
Agreement with a remaining primary term of 9.7 years (as of
the date of purchase) and initial annual rent of $64,680 for
the interest purchased. The remaining interests in the
property were purchased by AEI Net Lease Income & Growth
Fund XX Limited Partnership and AEI Income & Growth Fund XXI
Limited Partnership, affiliates of the Company.
AEI INCOME & GROWTH FUND 25 LLC
NOTES TO FINANCIAL STATEMENTS
(Continued)
(4) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Company. 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.
(5) Discontinued Operations -
During 2010, the Company sold 47.0843% of the Applebee's
restaurant in Macedonia, Ohio, in six separate transactions,
to unrelated third parties. The Company received total net
sale proceeds of $1,571,988, which resulted in a net gain of
$218,688. The cost and related accumulated depreciation of
the interests sold was $1,475,997 and $122,697,
respectively. For the three months ended March 31, 2011,
the net gain was $28,180.
On April 20, 2011, the Company sold an additional 6.5771% of
the Applebee's restaurant in Macedonia, Ohio to an unrelated
third party. The Company received net sale proceeds of
approximately $223,000, which resulted in a net gain of
approximately $34,000. The cost and related accumulated
depreciation of the interest sold was $206,179 and $17,139,
respectively. The Company is attempting to sell its
remaining 25.9818% interest in the property. At March 31,
2011 and December 31, 2010, the property was classified as
Real Estate Held for Sale with a carrying value of $935,815.
The financial results for this property are reflected as
Discontinued Operations in the accompanying financial
statements. The following are the results of discontinued
operations for the three months ended March 31:
2011 2010
Rental Income $ 20,884 $ 49,628
Property Management Expenses 0 (535)
Gain on Disposal of Real Estate 0 28,180
--------- ---------
Income from Discontinued Operations $ 20,884 $ 77,273
========= =========
(6) Fair Value Measurements
As of March 31, 2011, the Company 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 Company's financial
condition and results of operations, including the following:
Market and economic conditions which affect the value
of the properties the Company 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 Members;
resolution by the Managing Members of conflicts with
which they may be confronted;
the success of the Managing Members 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 Company operate.
Application of Critical Accounting Policies
The preparation of the Company'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
investments in real estate and the allocation by AEI Fund
Management, Inc. of expenses to the Company as opposed to other
funds they manage.
The Company purchases properties and records them in the
financial statements at cost (not including acquisition
expenses). The Company tests long-lived assets for
recoverability when events or changes in circumstances indicate
that the carrying value may not be recoverable. For properties
the Company 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 net realizable
value, an impairment loss is recorded to reduce the carrying
value of the property to its net realizable value. Changes in
these assumptions or analysis may cause material changes in the
carrying value of the properties.
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 Company reimburses these expenses
subject to detailed limitations contained in the Operating
Agreement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Management of the Company has discussed the development
and selection of the above accounting estimates and the
management discussion and analysis disclosures regarding them
with the managing member of the Company.
Results of Operations
For the three months ended March 31, 2011 and 2010, the
Company recognized rental income from continuing operations of
$649,265 and $616,676, respectively. In 2011, rental income
increased due to additional rent received from one property
acquisition in 2010 and rent increases on five properties. Based
on the scheduled rent for the properties owned as of April 30,
2011, the Company expects to recognize rental income from
continuing operations of approximately $2,598,000 in 2011.
For the three months ended March 31, 2011 and 2010, the
Company incurred LLC administration expenses from affiliated
parties of $89,663 and $86,237, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and communicating with the Limited Members. During
the same periods, the Company incurred LLC administration and
property management expenses from unrelated parties of $13,096
and $10,384, 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 three months ended March 31, 2011 and 2010, the
Company recognized interest income of $4,444 and $3,126,
respectively. In 2011, interest income increased due to the
Company having more money invested in a money market account due
to property sales.
Upon complete disposal of a property or classification of
a property as Real Estate Held for Sale, the Company includes the
operating results and sale of the property in discontinued
operations. In addition, the Company reclassifies the prior
periods' operating results of the property to discontinued
operations. For the three months ended March 31, 2011, the
Company recognized income from discontinued operations of $20,884
representing rental income. For the three months ended March 31,
2010, the Company recognized income from discontinued operations
of $77,273 representing rental income less property management
expenses of $49,093 and gain on disposal of real estate of
$28,180.
During 2010, the Company sold 47.0843% of the Applebee's
restaurant in Macedonia, Ohio, in six separate transactions, to
unrelated third parties. The Company received total net sale
proceeds of $1,571,988, which resulted in a net gain of $218,688.
The cost and related accumulated depreciation of the interests
sold was $1,475,997 and $122,697, respectively. For the three
months ended March 31, 2011, the net gain was $28,180.
On April 20, 2011, the Company sold an additional 6.5771%
of the Applebee's restaurant in Macedonia, Ohio to an unrelated
third party. The Company received net sale proceeds of
approximately $223,000, which resulted in a net gain of
approximately $34,000. The cost and related accumulated
depreciation of the interest sold was $206,179 and $17,139,
respectively. The Company is attempting to sell its remaining
25.9818% interest in the property. At March 31, 2011 and
December 31, 2010, the property was classified as Real Estate
Held for Sale with a carrying value of $935,815.
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 three months ended March 31, 2011, the
Company's cash balances decreased $100,312 as a result of
distributions paid to the Members in excess of cash generated
from operating activities. During the three months ended March
31, 2010, the Company's cash balances increased $180,366 as a
result of cash generated from the sale of property, which was
partially offset by distributions paid to the Members in excess
of cash generated from operating activities.
Net cash provided by operating activities increased from
$525,716 in 2010 to $551,405 in 2011 as a result of an increase
in total rental and interest income in 2011 and net timing
differences in the collection of payments from the tenants and
the payment of expenses, which were partially offset by an
increase in LLC administration and property management expenses
in 2011.
The major components of the Company's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the three months ended
March 31, 2010, the Company generated cash flow from the sale of
real estate of $199,600.
On October 20, 2010, the Company purchased a 21% interest
in a Scott & White Clinic in College Station, Texas for $771,868.
The property is leased to Scott & White Healthcare under a Lease
Agreement with a remaining primary term of 9.7 years (as of the
date of purchase) and initial annual rent of $64,680 for the
interest purchased. The remaining interests in the property were
purchased by AEI Net Lease Income & Growth Fund XX Limited
Partnership and AEI Income & Growth Fund XXI Limited Partnership,
affiliates of the Company.
The Company's primary use of cash flow, other than
investment in real estate, is distribution and redemption
payments to Members. The Company 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 Company attempts to maintain a stable distribution rate from
quarter to quarter. Redemption payments are paid to redeeming
Members on a semi-annual basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
For the three months ended March 31, 2011 and 2010, the
Company declared distributions of $544,949 and $544,950,
respectively. Pursuant to the Operating Agreement, distributions
of Net Cash Flow were allocated 97% to the Limited Members and 3%
to the Managing Members. Distributions of Net Proceeds of Sale
were allocated 99% to the Limited Members and 1% to the Managing
Members. The Limited Members received distributions of $528,601
and $528,601 and the Managing Members received distributions of
$16,348 and $16,349 for the periods, respectively. In December
2010, the Company declared a special distribution of net sale
proceeds of $106,768, which resulted in a higher distribution
payable at December 31, 2010.
The Company may acquire Units from Limited Members who
have tendered their Units to the Company. Such Units may be
acquired at a discount. The Company will not be obligated to
purchase in any year more than 2% of the total number of Units
outstanding on January 1 of such year. In no event shall the
Company be obligated to purchase Units if, in the sole discretion
of the Managing Member, such purchase would impair the capital or
operation of the Company.
During the first three months of 2011, the Company did not
redeem any Units from the Limited Members. On April 1, 2010, two
Limited Members redeemed a total of 46.92 Units for $29,702 in
accordance with the Operating Agreement. The Company acquired
these Units using Net Cash Flow from operations. In prior years,
eight Limited Members redeemed a total of 415.48 Units for
$305,680. The redemptions increase the remaining Limited
Members' ownership interest in the Company. As a result of these
redemption payments and pursuant to the Operating Agreement, the
Managing Members received distributions of $918 in 2010.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Company 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 investment funds. However, the absence of mortgage
financing on the Company's properties eliminates the risks of
foreclosure and debt-refinancing that can negatively impact the
value and distributions of leveraged real estate investment
funds. Nevertheless, a prolonged economic downturn may adversely
affect the operations of the Company's tenants and their cash
flows. If a tenant were to default on its lease obligations, the
Company's income would decrease, its distributions would likely
be reduced and the value of its properties might decline.
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 Member of the Company 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 Member 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 Member, in a manner that allows timely decisions
regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting.
(i) 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 Company is a party or of which the Company's property is
subject.
ITEM 1A. RISK FACTORS.
Not required for a smaller reporting company.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(a) None.
(b) Not applicable.
(c) Pursuant to Section 7.7 of the Operating Agreement,
each Limited Member has the right to present Units to the Company
for purchase by submitting notice to the Managing Member during
January or July of each year. The purchase price of the Units is
equal to 80% of the net asset value per Unit, as of the first
business day of January or July of each year, as determined by
the Managing Member in accordance with the provisions of the
Operating Agreement. Units tendered to the Company during
January and July are redeemed on April 1st and October 1st,
respectively, of each year subject to the following limitations.
The Company will not be obligated to purchase in any year more
than 2% of the total number of Units outstanding on January 1 of
such year. In no event shall the Company be obligated to
purchase Units if, in the sole discretion of the Managing Member,
such purchase would impair the capital or operation of the
Company. During the period covered by this report, the Company
did not purchase any Units.
PART II - OTHER INFORMATION
(Continued)
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
31.1 Certification of Chief Executive Officer of Managing
Member 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 Managing
Member 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 Managing Member 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: May 12, 2011 AEI Income & Growth Fund 25 LLC
By: AEI Fund Management XXI, Inc.
Its: Managing Member
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
