Wheeler | Pro Forma | Pro Forma | ||||||||||||
REIT | Adjustments | Consolidated | ||||||||||||
(A) | (B) | |||||||||||||
ASSETS: | ||||||||||||||
Net investment properties | $ | 238,764,631 | $ | 58,595,869 | $ | 297,360,500 | ||||||||
Cash and cash equivalents | 11,306,185 | — | 11,306,185 | |||||||||||
Tenant and other receivables | 3,452,700 | — | 3,452,700 | |||||||||||
Goodwill | 5,485,823 | — | 5,485,823 | |||||||||||
Assets held for sale | 1,707,709 | — | 1,707,709 | |||||||||||
Above market lease intangible, net | 6,517,529 | 2,942,219 | 9,459,748 | |||||||||||
Deferred costs, reserves, intangibles and other assets | 46,735,275 | 12,124,143 | 58,859,418 | |||||||||||
Total Assets | $ | 313,969,852 | $ | 73,662,231 | $ | 387,632,083 | ||||||||
LIABILITIES: | ||||||||||||||
Mortgages and other indebtedness | $ | 189,340,456 | $ | 69,000,000 | $ | 258,340,456 | ||||||||
Liabilities associated with assets held for sale | 2,007,554 | — | 2,007,554 | |||||||||||
Below market lease intangibles | 7,721,335 | 2,662,231 | 10,383,566 | |||||||||||
Accounts payable, accrued expenses and other liabilities | 7,533,769 | — | 7,533,769 | |||||||||||
Total Liabilities | 206,603,114 | 71,662,231 | 278,265,345 | |||||||||||
Commitments and contingencies | — | — | — | |||||||||||
EQUITY: | ||||||||||||||
Series A preferred stock | 452,971 | — | 452,971 | |||||||||||
Series B convertible preferred stock | 17,085,147 | — | 17,085,147 | |||||||||||
Common stock | 662,596 | — | 662,596 | |||||||||||
Additional paid-in capital | 220,370,984 | — | 220,370,984 | |||||||||||
Accumulated deficit | (140,306,846 | ) | — | (140,306,846 | ) | |||||||||
Noncontrolling interest | 9,101,886 | 2,000,000 | 11,101,886 | |||||||||||
Total Equity | 107,366,738 | 2,000,000 | 109,366,738 | |||||||||||
Total Liabilities and Equity | $ | 313,969,852 | $ | 73,662,231 | $ | 387,632,083 |
Wheeler REIT | Properties | Pro Forma Adjustments | Pro Forma Consolidated | |||||||||||||||
(A) | (B) | (C) | ||||||||||||||||
REVENUES: | ||||||||||||||||||
Rental revenues | $ | 20,553,870 | $ | 6,751,693 | $ | 95,171 | (1) | $ | 27,400,734 | |||||||||
Asset management fees | 588,990 | — | — | 588,990 | ||||||||||||||
Commissions | 361,984 | — | — | 361,984 | ||||||||||||||
Tenant reimbursements and other income | 6,229,361 | 1,752,195 | — | 7,981,556 | ||||||||||||||
Total Revenues | 27,734,205 | 8,503,888 | 95,171 | 36,333,264 | ||||||||||||||
OPERATING EXPENSES AND CERTAIN OPERATING | ||||||||||||||||||
EXPENSES: | ||||||||||||||||||
Property operating | 8,351,456 | 2,923,607 | — | 11,275,063 | ||||||||||||||
Non-REIT management and leasing services | 1,110,705 | — | — | 1,110,705 | ||||||||||||||
Depreciation and amortization | 16,882,462 | — | 3,697,682 | (2) | 20,580,144 | |||||||||||||
Provision for credit losses | 243,029 | — | — | 243,029 | ||||||||||||||
Corporate general & administrative and other | 13,480,089 | 26,089 | — | 13,506,178 | ||||||||||||||
Total Operating Expenses and Certain Operating | ||||||||||||||||||
Expenses | 40,067,741 | 2,949,696 | 3,697,682 | 46,715,119 | ||||||||||||||
Operating Income (Loss) and Excess of Acquired | ||||||||||||||||||
Revenues Over Certain Operating Expenses | (12,333,536 | ) | 5,554,192 | (3,602,511 | ) | (10,381,855 | ) | |||||||||||
Interest expense | (9,043,761 | ) | — | (3,912,300 | ) | (3) | (12,956,061 | ) | ||||||||||
Net Income (Loss) from Continuing Operations | (21,377,297 | ) | 5,554,192 | (7,514,811 | ) | (23,337,916 | ) | |||||||||||
Less: Net income (loss) from continuing operations attributable to noncontrolling interests | (1,426,478 | ) | 370,624 | (802,105 | ) | (4) | (1,857,959 | ) | ||||||||||
Net Income (Loss) from Continuing Operations Attributable to Wheeler REIT | $ | (19,950,819 | ) | $ | 5,183,568 | $ | (6,712,706 | ) | $ | (21,479,957 | ) | |||||||
Net (loss) from continuing operations per share: | ||||||||||||||||||
Basic and diluted | $ | (0.51 | ) | $ | (0.55 | ) | ||||||||||||
Net (loss) from continuing operations per unit: | ||||||||||||||||||
Basic and diluted | $ | (0.37 | ) | $ | (0.39 | ) | ||||||||||||
Weighted-average outstanding: | ||||||||||||||||||
Common shares | 38,940,463 | 38,940,463 | ||||||||||||||||
Common units | 3,863,339 | 4,752,228 | ||||||||||||||||
Basic and diluted | 42,803,802 | 43,692,691 |
A. | Reflects the audited consolidated balance sheet of the Company as of December 31, 2015 included in the Company's Form 10-K filed with the SEC on March 10, 2016 . |
B. | Represents the estimated pro forma effect of the Company’s $71.0 million acquisition of the Properties, assuming it occurred on December 31, 2015. The Company has initially allocated the purchase price of the acquired Properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their preliminary estimated fair values. Identifiable intangibles include amounts allocated to above/below market leases, the value of in-place leases and customer relationships value, if any. The Company estimated fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the Properties. Factors considered by management in its analysis of estimating the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to above/below market leases and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. |
A. | Reflects the audited consolidated statement of operations of the Company for the year ended December 31, 2015 down to the Net Income (Loss) from Continuing Operations line of $(21,377,297). All other amounts properly exclude discontinued operations as reflected in the Company's Form 10-K. |
B. | Amounts reflect the audited historical operations of the Properties for the year ended December 31, 2015, unless otherwise noted. |
C. | Represents the estimated unaudited pro forma adjustments related to the acquisition for the period presented. |
(1) | Represents estimated amortization of above/below market leases which are being amortized on a straight-line basis over the remaining terms of the related leases. |
(2) | Represents the estimated depreciation and amortization of the buildings and related improvements, leasing commissions, in place leases and capitalized legal/marketing costs resulting from the preliminary estimated purchase price allocation in accordance with accounting principles generally accepted in the United States of America. The buildings and site improvements are being depreciated on a straight-line basis over their estimated useful lives up to 40 years. The tenant improvements, leasing commissions, in place leases and capitalized legal/marketing costs are being amortized on a straight-line basis over the remaining terms of the related leases. |
(3) | Represents expected interest expense on debt used to finance the acquisition, which is expected to accrue interest at a weighted average rate of 5.67% per annum. |
(4) | Represents the estimated additional net loss attributed to noncontrolling interests resulting from the increase in the noncontrolling interests ownership percentage relating to the 888,889 common units contributed as part of the acquisition. |