Strategic Realty Trust : Unaudited Pro Forma Consolidated Financial Statements - Form 8-K
October 17, 2022 at 01:33 pm EDT
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Unaudited Pro Forma Consolidated Financial Statements
On October 11, 2022, Strategic Realty Trust, Inc. (the "Company") consummated the disposition of the Wilshire Joint Venture Property, located in Santa Monica, California, to an unrelated third-party, for $16.5 million in cash, before customary closing and transaction costs.
The following unaudited pro forma consolidated financial statements of the Company have been prepared to show the pro forma effect of the disposal of the Wilshire Joint Venture Property by applying pro forma adjustments to our historical financial information. The unaudited pro forma consolidated financial statements are based upon the historical consolidated financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2021, and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. The pro forma consolidated balance sheet has been presented as if the sale of the Wilshire Joint Venture Property had occurred as of June 30, 2022. The pro forma consolidated statements of operations for the six months ended June 30, 2022 and for the year ended December 31, 2021 are presented as if the sale of the Wilshire Joint Venture Property had occurred on January 1, 2021.
The following unaudited pro forma consolidated financial information is intended to provide investors with information about the impact of the sale of the Wilshire Joint Venture Property by showing how specific transactions might have affected historical financial statements, illustrating the scope of the change in the historical financial position and results of operations. This pro forma financial information should not be viewed as indicative of the Company's financial results in the future and should be read in conjunction with the Company's financial statements as filed on Form 10-K for the year ended December 31, 2021 and on Form 10-Q for the six-month period ended June 30, 2022.
F-1
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 30, 2022
(in thousands, except shares and per share amounts)
Historical (a)
Transaction (b)
Pro Forma
ASSETS
Investments in real estate
Land
$
12,374
$
-
$
12,374
Building and improvements
22,334
-
22,334
Tenant improvements
1,132
-
1,132
35,840
-
35,840
Accumulated depreciation
(4,956)
-
(4,956)
Investments in real estate, net
30,884
-
30,884
Property under development and development costs
Land
12,958
-
12,958
Development costs
687
-
687
Property under development and development costs
13,645
-
13,645
Cash, cash equivalents and restricted cash
1,378
2,239
(c)
3,617
Prepaid expenses and other assets
95
-
95
Tenant receivables, net of $19 bad debt reserve
788
-
788
Deferred leasing costs, net
205
-
205
Lease intangibles, net
346
-
346
Assets held for sale
16,119
(16,119)
-
TOTAL ASSETS (1)
$
63,460
$
(13,880)
$
49,580
LIABILITIES AND EQUITY
LIABILITIES
Notes payable, net
$
41,561
$
(12,711)
$
28,850
Accounts payable and accrued expenses
434
(227)
207
Amounts due to affiliates
62
-
62
Other liabilities
216
(69)
147
Below-market lease liabilities, net
119
-
119
TOTAL LIABILITIES (1)
42,392
(13,007)
29,385
Commitments and contingencies (Note 12)
EQUITY
Stockholders' equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding
-
-
-
Common stock, $0.01 par value; 400,000,000 shares authorized; 10,752,966 shares issued and outstanding at June 30, 2022
110
-
110
Additional paid-in capital
94,644
-
94,644
Accumulated deficit
(74,001)
(857)
(74,858)
Total stockholders' equity
20,753
(857)
19,896
Non-controlling interests
315
(16)
299
TOTAL EQUITY
21,068
(873)
20,195
TOTAL LIABILITIES AND EQUITY
$
63,460
$
(13,880)
$
49,580
(a)Historical financial information derived from Strategic Realty Trust Inc. Quarterly Report on Form 10-Q as of June 30, 2022.
(b)Represents adjustments to reflect the disposition of the Wilshire Joint Venture Property. The sale price was $16.5 million, excluding closing costs and disposition fees.
(c)Represents the amount of proceeds from the Wilshire Joint Venture Property disposition after third-party closing costs of approximately $1.6 million and the repayment of $12.7 million of outstanding principal due under the Wilshire Construction Loan.
F-2
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the six months ended June 30, 2022
(in thousands, except shares and per share amounts)
Historical (a)
Transaction (b)
Pro Forma
Revenue:
Rental and reimbursements
$
1,455
$
(98)
$
1,357
Expense:
Operating and maintenance
1,050
(274)
776
General and administrative
948
(5)
943
Depreciation and amortization
592
(94)
498
Interest expense
632
(477)
155
Loss on early lease termination
190
-
190
Loss on impairment of real estate
5,883
(2,400)
3,483
9,295
(3,250)
6,045
Operating loss
(7,840)
3,152
(4,688)
Net loss
(7,840)
3,152
(4,688)
Net loss attributable to non-controlling interests
(146)
59
(87)
Net loss attributable to common stockholders
$
(7,694)
$
3,093
$
(4,601)
Loss per common share - basic and diluted
$
(0.72)
$
0.29
$
(0.43)
Weighted average shares outstanding used to calculate loss per common share - basic and diluted
10,752,966
10,752,966
10,752,966
(a)Historical financial information derived from Strategic Realty Trust Inc. Quarterly Report on Form 10-Q for the six months ended June 30, 2022.
(b)Amounts represent the historical operations of the Wilshire Joint Venture Property as reflected in the historical statement of operations of Strategic Realty Trust Inc. for the six months ended June 30, 2022.
F-3
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2021
(in thousands, except shares and per share amounts)
Historical (a)
Transaction (b)
Pro Forma
Revenue:
Rental and reimbursements
$
2,495
$
(156)
$
2,339
Expense:
Operating and maintenance
2,082
(574)
1,508
General and administrative
1,335
(10)
1,325
Depreciation and amortization
2,085
(473)
1,612
Interest expense
1,265
(1,001)
264
Loss on impairment of real estate
6,897
(5,628)
1,269
13,664
(7,686)
5,978
Operating loss
(11,169)
7,530
(3,639)
Other income:
Net gain on disposal of real estate
422
-
422
Net loss
(10,747)
7,530
(3,217)
Net loss attributable to non-controlling interests
(211)
147
(64)
Net loss attributable to common stockholders
$
(10,536)
$
7,383
$
(3,153)
Loss per common share - basic and diluted
$
(0.98)
$
0.69
$
(0.29)
Weighted average shares outstanding used to calculate loss per common share - basic and diluted
10,740,882
10,740,882
10,740,882
(a)Historical audited financial information derived from Strategic Realty Trust Inc. Annual Report on Form 10-K for the year ended December 31, 2021.
(b)Amounts represent the historical operations of the Wilshire Joint Venture Property as reflected in the historical statement of operations of Strategic Realty Trust Inc. for the year ended December 31, 2021.
F-4
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Strategic Realty Trust Inc. published this content on 17 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 October 2022 17:31:59 UTC.
Strategic Realty Trust, Inc. is a real estate investment trust (REIT). The Company invests in and manages a portfolio of income-producing retail properties located in the United States. The Companyâs business is conducted through Strategic Realty Operating Partnership, L.P. It owns substantially all of its assets and conducts its operations through its operating partnership, of which it is the sole general partner. Its property portfolio includes six retail properties, comprising an aggregate of approximately 27,000 square feet of multi-tenant, commercial retail space located in California. Its properties include 400 Grove Street, 8 Octavia Street, Fulton Shops, 450 Hayes, 388 Fulton and Silver Lake.