RETL VALU The Company was formed in
EXECUTIVE SUMMARY
On
The Company remains focused on managing the wind-up activities, including the payment of known and contingent liabilities (including the wind-up expenses) and the distribution of available funds to the Company's common shareholders. The dissolution and wind-up process and the amount and timing of additional distributions to shareholders entail risks and uncertainties. Accordingly, it is not possible to predict the timing or aggregate amount that will ultimately be distributed to shareholders, and no assurance can be given that future distributions will equal or exceed the estimate of net assets in liquidation presented in the Company's Consolidated Statement of Net Assets. See further discussion below under "Liquidity, Capital Resources and Financing Activities-Winding Up and Dissolution."
The Company intends to seek to avail itself of relief provided by the
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would no longer be assignable or transferrable on the Company's books, other
than transfers by will, intestate succession or operation of law. Additionally,
the Company anticipates that as part of such process the OTC Pink Market would
no longer quote prices for the Company's common shares and the
Transaction Highlights
From its formation in
Total Owned Gross
Date Sold Property Name City, State GLA Sales Price
04/17/18 Silver Spring Square Mechanicsburg, PA 343 $ 80,810 (1)
The Walk at Highwoods
06/27/18 Preserve Tampa, FL 138 25,025 (1)
07/06/18 Tequesta Shoppes Tequesta, FL 110 14,333
07/10/18 Lake Walden Square Plant City, FL 245 29,000
08/01/18 East Lloyd Commons Evansville, IN 160 23,000
08/13/18 Grandville Marketplace Grandville, MI 224 16,700
08/29/18 Brandon Blvd Shoppes Valrico, FL 86 14,650
09/14/18 Gresham Station Gresham, OR 342 64,500
10/18/18 Palm Valley Pavilions West Goodyear, AZ 233 44,800
International Drive Value
11/13/18 Center Orlando, FL 186 26,157
11/20/18 Douglasville Pavilion Atlanta, GA 266 35,120
12/14/18 Kyle Crossing Kyle, TX 121 27,600
02/08/19 Millenia Plaza Orlando, FL 412 56,400
02/27/19 Homestead Pavilion (TD Bank) Homestead, FL 4 4,091
West Allis Center
03/01/19 (Chick-Fil-A) Milwaukee, WI 5 2,211
03/04/19 Lowe's Home Improvement Hendersonville, TN 129 16,058
03/26/19 Midway Marketplace St. Paul, MN 324 31,210
04/05/19 Mariner Square Spring Hill, FL 194 17,000
05/23/19 Shoppers World of Brookfield Brookfield, WI 203 19,450
05/31/19 Homestead Pavilion Homestead, FL 295 62,250
06/13/19 Beaver Creek Crossings Apex, NC 321 52,750
08/07/19 Harbison Court Columbia, SC 242 36,500
08/09/19 West Allis Center West Allis, WI 259 18,100
12/19/19 Marketplace at Towne Centre Mesquite, TX 180 19,150
Newnan Crossing (Except
01/15/20 Lowe's Parcel) Newnan, GA 92 11,600
02/19/20 Hamilton Commons Mays Landing, NJ 403 60,000
Tucson Spectrum Shopping
02/26/20 Center Tucson, AZ 717 84,000
06/30/20 Big Oaks Crossing Tupelo, MS 348 21,000
Newnan Crossing (Lowe's
07/27/20 Parcel) Newnan, GA 130 15,550
09/24/20 Riverdale Village Coon Rapids, MN 788 70,000
Peach Street Marketplace
(Longhorn Steakhouse
12/21/20 Parcel) Erie, PA 5 2,075
12/22/20 Plaza Palma Real Humacao, PR 448 50,000
04/09/21 Marketplace of Brown Deer Brown Deer, WI 405 10,250
04/13/21 Noble Town Center Jenkintown, PA 168 14,000
04/14/21 Plaza Vega Baja Vega Baja, PR 185 4,500
04/21/21 Uptown Solon Solon, OH 182 10,100
06/03/21 Señorial Plaza Rio Piedras, PR 202 20,350
Puerto Rico Portfolio (9
08/27/21 properties) Puerto Rico 3,538 550,000
Continental U.S. Portfolio (5
10/01/21 properties) Various 2,623 264,000
12/06/21 Green Ridge Square Grand Rapids, MI 216 23,250
12/15/21 Willowbrook Plaza Houston, TX 385 37,100
04/12/22 Crossroads Center Gulfport, MS 555 38,500
16,412 $ 2,023,140
Asset sales (Post Spin-Off) 15,931 $ 1,917,305
(1)
Sold prior to the spin-off which occurred on
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The Company does not have any employees. In connection with the Company's
separation from SITE Centers on
Effective
The New Management Agreement also obligates the Company to pay or reimburse the Manager for all commercially reasonable third-party costs and expenses incurred in the performance of its duties under the New Management Agreement, including but not limited to, all fees and expenses paid to outside advisors (including legal and accounting fees), consultants, architects, engineers and other professionals reasonably required for the performance of the Manager's duties.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires management to make estimates and
assumptions in certain circumstances that affect amounts reported in the
accompanying consolidated financial statements and related notes. Estimates and
assumptions include, among other things, the collectability of receivables. It
is possible that the ultimate outcome as anticipated by management in
formulating its estimates inherent in these financial statements might not
materialize. Accordingly, actual results could differ from these estimates.
Subsequent to the Company's adoption of the liquidation basis of accounting as
of
Revenue Recognition and Accounts Receivable
Prior to the adoption of the liquidation basis of accounting, rental income was reduced for the elimination of unpaid contractual lease payments for tenants that are on the cash basis of accounting due to collectability concerns.
Upon the adoption of the liquidation basis of accounting, receivable balances were assessed for collectability and upon the determination that the collection of the receivable is probable. Prior to the adoption of the liquidation basis of accounting, the Company made estimates of the collectability of its accounts receivable. The Company analyzed tenant credit worthiness, as well as both current economic and tenant-specific sector trends when evaluating the probability of collection of accounts receivable. In evaluating tenant credit worthiness, the Company's assessment may have included a review of payment history, tenant sales performance and financial position. The time to resolve these amounts may exceed one year. These estimates have a direct impact on the Company's net assets because once the amount is not considered probable of being collected, assets are reduced. While the Company is working to maximize payments, collection of past due amounts is not guaranteed.
COMPARISON OF 2022 AND 2021 RESULTS OF OPERATIONS
The discussion of the Company's 2021 performance compared to 2020 is set forth
in "Comparison of 2021 and 2020 Results of Operations" included in Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Part II of the Company's Annual Report on Form 10-K for the fiscal
year ended
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Period from
As a result of the adoption of the liquidation basis of accounting as of
Period from
For the four months ended
LIQUIDITY, CAPITAL RESOURCES AND FINANCING ACTIVITIES
The Company maintains a cash balance to satisfy projected expenses and known and unknown claims which might arise during the winding up and dissolution process. The Company's capital source primarily is unrestricted cash. See further discussion below under "- Winding Up and Dissolution."
In addition to the Liability for Estimated Wind-Up Expenses included in the
Consolidated Statement of Net Assets, the Company may be subject to other
expenses such as insurance deductibles or costs incurred in connection with any
litigation which may arise during the winding up and dissolution process. These
costs cannot be reasonably estimated and, thus are not included as a deduction
from the Net Assets in Liquidation at
Common Share Dividends
In
The amount of the 2022 dividends is expected to exceed the amount of REIT taxable income generated by the Company in 2022. Accordingly, federal income taxes were not incurred by the Company in 2022.
Dividend Distributions
Prior to
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There are many factors that will affect the timing and amount of any additional distributions to shareholders, including, among other things, the amount of current cash balances utilized to satisfy projected expenses and known and unknown claims which might arise during the Company's winding up and dissolution process. Accordingly, it is not possible to predict the timing or aggregate amount that will ultimately be distributed to shareholders, and no assurance can be given that any future distributions will be made or that any future distributions will equal or exceed the estimate of net assets in liquidation presented in the Company's Consolidated Statement of Net Assets.
In connection with the sale of Crossroads Center, the Company's last property,
on
The Company filed a certificate of dissolution with the Secretary of State of
the
Contracts governing property dispositions typically allow the purchaser to make
claims for breaches of most representations and other provisions under the sale
agreement for a period of nine to12 months following the disposition, subject to
a cap, which is typically 2% to 3% of the gross sales price. As of
The Company also maintains cash balances to pay, among other items, fees to SITE
Centers under the New Management Agreement, professional fees (accountants and
law firms) and potential insurance deductibles (specifically, a
In
Through its winding up and dissolution, the Company will be required to continue
to comply with the applicable reporting requirements of the Exchange Act, even
if compliance with these reporting requirements is economically burdensome. In
order to curtail expenses, the Company intends to seek to avail itself of relief
provided by the
Qualifying for such relief involves, among other steps, the closing of a
corporation's stock transfer books. If this were to occur at the Company, the
Company's common shares would no longer be assignable or transferrable on the
Company's books, other than transfers by will, intestate succession or operation
of law. Additionally, the Company anticipates that as part of such process the
OTC Pink Market would no longer quote prices for the Company's common shares and
the
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See "Risk Factors-Risks Related to the Company's Common Shares-
Cash Flow Activity
The Company's cash flow activities are summarized as follows (in thousands):
Four Months The Year
Ended April 30, Ended December 31,
2022 2021
Cash flow provided by operating activities $ 3,099 $ 61,741
Cash flow provided by investing activities 36,196 892,013
Cash flow used for financing activities (69,053 ) (1,014,079 )
Changes in cash flow compared to the prior year are described as follows:
Operating Activities: Cash provided by operating activities decreased$58.6 million primarily due to the following: • Decrease in operating income due to asset sales, partially offset by • Reduction of interest payments. Investing Activities: Cash provided by investing activities decreased$855.8 million primarily due to the following: • Decrease in proceeds from dispositions of real estate of$865.7 million , partially offset by • Decrease in payments for real estate improvements of$9.9 million . Financing Activities: Cash used for financing activities decreased by$945.0 million primarily due to the following: • Decrease in dividends paid of$400.8 million ; • Decrease in repayment of mortgage debt and credit facility costs of$354.2 million and • Dividend paid in 2021 on redeemable equity of$190.0 million . FORWARD-LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company's consolidated financial statements and the notes thereto appearing elsewhere in this report. Historical results and percentage relationships set forth in the Company's consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act, both as amended, with respect to the Company's expectations for future periods. Forward-looking statements include, without limitation, statements related to the wind-up of the Company's operations and the timing or amount of any future distributions to shareholders. Although the Company believes that the expectations reflected in these forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words "will," "believes," "anticipates," "plans," "expects," "seeks," "estimates" and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because such statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and that could materially affect the Company's actual results, performance or achievements. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, see Item 1A. Risk Factors in Part I of this Annual Report on Form 10-K.
Factors that could cause actual results, performance or achievements (including amounts available for distribution to shareholders) to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:
•
The occurrence and outcome of litigation, including litigation with former tenants and purchasers of its properties;
•
The Company may be unable to collect amounts owed to it by third parties;
•
The Company is subject to potential environmental liabilities;
•
Changes in accounting or other standards;
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A change in the Company's relationship with SITE Centers and SITE Centers' ability to retain qualified personnel and adequately manage the Company;
•
Potential conflicts of interest with SITE Centers and the Company's ability to replace SITE Centers as manager (and the fees to be paid to any replacement manager) in the event the New Management Agreement is terminated and
•
The Company and its vendors, including SITE Centers, could sustain a disruption, failure or breach of their respective networks and systems, including as a result of cyber-attacks, which could disrupt the wind-up of the Company's operations, compromise the confidentiality of sensitive information and result in fines and penalties.
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