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EX-99.1 - SHARE PURCHASE AGREEMENT - Global Income Trust, Inc.d868267dex991.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 30, 2015

 

 

GLOBAL INCOME TRUST, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Maryland   000-54684   26-4386951

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

450 South Orange Ave.

Orlando, Florida 32801

(Address of Principal Executive Offices; Zip Code)

Registrant’s telephone number, including area code: (407) 650-1000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.01. Completion of Acquisition or Disposition of Assets

Consummation of Sale of German Portfolio

As previously reported on a Form 8-K that was filed on January 2, 2015 with the U.S. Securities and Exchange Commission (the “Commission”), Global Income Trust, Inc. (the “Company”), through its various operating subsidiaries, entered into an agreement on December 29, 2014 (the “Share Purchase Agreement”) with German Retail Income 4 S.á.r.l., and German Retail Income 2 S.á.r.l., unaffiliated third parties (the “Buyers”), for the sale of 94.9% of the equity interests (hereinafter, the “Buyers’ Shares”) of the entities that hold the Company’s assets in the Republic of Germany (the “German Portfolio”). A copy of the Share Purchase Agreement is filed herewith as Exhibit 99.1.

On January 30, 2015, the Company and the Buyers completed the sale of the Buyers’ Shares. The proceeds to the Company from the transaction were approximately EUR 7.7 million, including customary holdbacks, but before transaction and closing costs of approximately EUR 0.7 million. Future uses of the proceeds from the sale of the Buyers’ Shares could include the facilitation of strategic alternatives and a potential special distribution to stockholders. As a result of the sale, the Company has a retained 5.1% non-controlling interest in the entities that hold the German Portfolio.

 

Item 8.01 Other Events.

Decision to Sell Austin, Texas Distribution Center

In 2013, the Company formed a special committee to explore strategic alternatives, and engaged SunTrust Robinson Humphrey, Inc. specifically to provide advisory services in regards to the Company’s domestic assets. Following the sale of a 94.9% interest in its foreign assets, described in Item 2.01 of this Current Report, the Company has determined that it will begin to explore a single asset sale of its Royston Lane Distribution Center located in Pflugerville, Texas, near Austin (the “Austin Facility”). The Austin Facility is a 51,189 square foot distribution center that Company acquired in June 2011 for approximately $5 million, and is currently leased to FedEx Ground Package System, Inc. The Austin Facility will be categorized as held for sale as of February 2, 2015, and will be marketed through a commercial real estate broker.

 

Item 9.01 Financial Statements and Exhibits.

 

(b) Pro forma financial information.

The below unaudited pro forma condensed consolidated balance sheet of the Company at September 30, 2014 illustrates the estimated effect of the sale of the Buyer’s Shares described in Item 2.01, above, as if the sale had occurred on such date. The below unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2014 and for the years ended December 31, 2013 and 2012 (the “Pro Forma Periods”) include certain pro forma adjustments to illustrate the estimated effect of the sale of the Buyer’s Shares, as if such sale had occurred prior to the Pro Forma Periods. The German Portfolio was acquired during the year ended December 31, 2012, therefore, the Company’s statement of operations for the year ended December 31, 2011 does not require any pro forma adjustments, and accordingly, is not included with the below pro forma financial information.

The below unaudited pro forma condensed consolidated balance sheet and statements of operations are presented for informational purposes only, and do not purport to be indicative of the Company’s financial results as if the transactions reflected herein had occurred on the date or been in effect during the Pro Forma Periods. Further, the unaudited pro forma condensed consolidated balance sheet and statements of operations should not be viewed as indicative of the Company’s financial results in the future; and they should be read in conjunction with the Company’s financial statements as filed with the Commission on Form 10-Q for the nine months ended September 30, 2014 and on Form 10-K for the years ended December 31, 2013 and 2012.

 

1


(d) Exhibits.

 

99.1    Share Purchase Agreement dated effective December 29, 2014 by and among various operating subsidiaries of the Company, German Retail Income 4 S.á.r.l., and German Retail Income 2 S.á.r.l. (Redacted Agreement filed. Confidential Treatment Requested by Global Income Trust, Inc.)

Cautionary Note Regarding Forward-Looking Statements

The information above contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors.

Some factors that might cause such a difference include, but are not limited to, the following: the Company’s inability to identify a liquidity event or, even if identified, complete a transaction on favorable terms; risks associated with the Company’s investment strategy; a worsening economic environment in the U.S. or globally, including financial market fluctuations; risks associated with real estate markets, including declining real estate values; risks associated with the limited amount of proceeds raised in the Company’s offering of its shares, including the limited number of investments made; risks of doing business internationally, including currency risks; the Company’s failure to obtain, renew or extend necessary financing or to access the debt or equity markets; the use of debt to finance the Company’s business activities, including refinancing and interest rate risk and the Company’s failure to comply with debt covenants; the Company’s inability to make necessary improvements to properties on a timely or cost-efficient basis; risks related to property expansions and renovations; competition for properties and/or tenants; defaults on or non-renewal of leases by tenants; failure to lease properties on favorable terms or at all; the impact of current and future environmental, zoning and other governmental regulations affecting the Company’s properties; the impact of changes in accounting rules; the impact of regulations requiring periodic valuation of the Company on a per share basis; inaccuracies of the Company’s accounting estimates; unknown liabilities of acquired properties or liabilities caused by property managers or operators; consequences of the Company’s net operating losses; increases in operating costs and other expenses; uninsured losses or losses in excess of the Company’s insurance coverage; the impact of outstanding and/or potential litigation; risks associated with the Company’s tax structuring; failure to maintain the Company’s REIT qualification; and the Company’s inability to protect its intellectual property and the value of its brand.

Given these uncertainties, the Company cautions you not to place undue reliance on such statements. For further information regarding risks and uncertainties associated with the Company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s documents filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained from the Company’s website at www.incometrust.com. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

 

2


GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2014

 

     Historical
September 30,
2014
    German Portfolio
Pro Forma
Adjustments (a)
    Pro Forma
September 30,
2014
 
ASSETS       

Real estate investment properties, net

   $ 64,890,721      $ —        $ 64,890,721   

Assets held for sale

     22,299,057        (22,299,057 ) (b)      —     

Lease intangibles, net

     15,094,552        —          15,094,552   

Cash and cash equivalents

     7,195,462        8,233,369  (c)      15,428,831   

Deferred rent

     2,137,020        —          2,137,020   

Restricted cash

     1,861,266        —          1,861,266   

Loan costs, net

     522,749        —          522,749   

Other assets

     331,672        —          331,672   

Investment in and advances to unconsolidated entities

     —          447,445  (d)      447,445   
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 114,332,499      $ (13,618,243   $ 100,714,256   
  

 

 

   

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY       

Mortgage notes payable

   $ 56,471,137      $ —        $ 56,471,137   

Liabilities held for sale

     14,186,890        (14,186,890 ) (b)      —     

Unearned rent

     705,831        —          705,831   

Accounts payable and accrued expenses

     617,364        —          617,364   

Other liabilities

     441,144        —          441,144   

Real estate taxes payable

     795,915        —          795,915   

Due to related parties

     148,518        —          148,518   
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     73,366,799        (14,186,890     59,179,909   
  

 

 

   

 

 

   

 

 

 

Commitments and contingencies

      

Stockholders’ equity:

      

Preferred stock, $0.01 par value per share, authorized and unissued 200,000,000 shares

     —          —          —     

Common stock, $0.01 par value per share, 1,120,000,000 shares authorized, 8,419,689 shares issued and 8,257,410 shares outstanding as of September 30, 2014

     82,575        —          82,575   

Capital in excess of par value

     70,070,012        —          70,070,012   

Accumulated distributions

     (13,587,267     —          (13,587,267

Accumulated deficit

     (15,345,818     568,647  (e)      (15,003,064
       (225,893 ) (f)   

Accumulated other comprehensive loss

     (253,802     225,893  (f)      (27,909
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     40,965,700        568,647        41,534,347   
  

 

 

   

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 114,332,499      $ (13,618,243   $ 100,714,256   
  

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

3


GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

 

     Historical
September 30,
2014
    German Portfolio
Pro Forma
Adjustments (a)
    Pro Forma
September 30,
2014
 

Revenues:

      

Rental income from operating leases

   $ 7,212,850      $ —        $ 7,212,850   

Tenant reimbursement income

     1,089,190        —          1,089,190   
  

 

 

   

 

 

   

 

 

 

Total revenues

     8,302,040        —          8,302,040   
  

 

 

   

 

 

   

 

 

 

Expenses:

      

Property operating expenses

     2,156,089        —          2,156,089   

General and administrative

     957,386        —          957,386   

Property management fees

     215,911        —          215,911   

Depreciation and amortization

     4,657,435        —          4,657,435   
  

 

 

   

 

 

   

 

 

 

Total expenses

     7,986,821        —          7,986,821   
  

 

 

   

 

 

   

 

 

 

Operating income

     315,219        —          315,219   
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest and other income

     18,614        —          18,614   

Equity in earnings of unconsolidated entities

     —          20,037  (e)      20,037   

Interest expense and loan cost amortization

     (2,615,421     —          (2,615,421
  

 

 

   

 

 

   

 

 

 

Total other expense

     (2,596,807     20,037        (2,576,770
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (2,281,588     20,037        (2,261,551

Income tax expense

     (38,596     —          (38,596
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations

   $ (2,320,184   $ 20,037      $ (2,300,147
  

 

 

   

 

 

   

 

 

 

Net income (loss) per share of common stock (basic and diluted)

   $ (0.28     $ (0.28
  

 

 

     

 

 

 

Weighted average number of shares of common stock outstanding (basic and diluted)

     8,257,410          8,257,410   
  

 

 

     

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

4


GLOBAL INCOME TRUST PROPERTIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2013

 

     Historical
December 31,
2013
    German Portfolio
Pro Forma
Adjustments (b)
    Pro Forma
December 31,
2013
 

Revenues:

      

Rental income from operating leases

   $ 12,278,141      $ (2,305,011   $ 9,973,130   

Tenant reimbursement income

     1,443,619        (183,713     1,259,906   
  

 

 

   

 

 

   

 

 

 

Total revenues

     13,721,760        (2,488,724     11,233,036   
  

 

 

   

 

 

   

 

 

 

Expenses:

      

Property operating expenses

     2,913,256        (290,713     2,622,543   

General and administrative

     1,883,585        (258,279     1,625,306   

Acquisition fees and expenses

     58,298        (58,094     204   

Asset management fees

     1,206,116        (238,039 ) (c)      968,077   

Property management fees

     404,543        (111,302     293,241   

Adjustment to contingent purchase price consideration

     108,500        —          108,500   

Depreciation and amortization

     7,015,582        (810,302     6,205,280   
  

 

 

   

 

 

   

 

 

 

Total expenses

     13,589,880        (1,766,729     11,823,151   

Expense support

     (1,764,373     238,039  (c)      (1,526,334
  

 

 

   

 

 

   

 

 

 

Net expenses

     11,825,507        (1,528,690     10,296,817   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     1,896,253        (960,034     936,219   
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest and other income

     51,194        —          51,194   

Equity in earnings of unconsolidated entities

     —          11,290  (e)      11,290   

Interest expense and loan cost amortization

     (4,280,334     496,371  (d)      (3,783,963
  

 

 

   

 

 

   

 

 

 

Total other expense

     (4,229,140     507,661        (3,721,479
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (2,332,887     (452,373     (2,785,260

Income tax expense

     (59,959     4,236        (55,723
  

 

 

   

 

 

   

 

 

 

Net loss from continuing operations

   $ (2,392,846   $ (448,137   $ (2,840,983
  

 

 

   

 

 

   

 

 

 

Net loss per share of common stock (basic and diluted)

   $ (0.30     $ (0.36
  

 

 

     

 

 

 

Weighted average number of shares of common stock outstanding (basic and diluted)

     7,931,165          7,931,165   
  

 

 

     

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

5


GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2012

 

     Historical
December 31,
2012
    German Portfolio
Pro Forma
Adjustments (b)
    Pro Forma
December 31,
2012
 

Revenues:

      

Rental income from operating leases

   $ 7,786,602      $ (679,217   $ 7,107,385   

Tenant reimbursement income

     1,266,189        (27,393     1,238,796   
  

 

 

   

 

 

   

 

 

 

Total revenues

     9,052,791        (706,610     8,346,181   
  

 

 

   

 

 

   

 

 

 

Expenses:

      

Property operating expenses

     2,675,793        (32,216     2,643,577   

General and administrative

     1,879,149        (122,125     1,757,024   

Acquisition fees and expenses

     3,206,690        (2,284,015     922,675   

Asset management fees

     679,802        (65,920 ) (c)      613,882   

Property management fees

     255,615        (28,497     227,118   

Depreciation and amortization

     4,464,681        (251,568     4,213,113   
  

 

 

   

 

 

   

 

 

 

Total expenses

     13,161,730        (2,784,341     10,377,389   

Expense support

     (1,073,984     65,920  (c)      (1,008,064
  

 

 

   

 

 

   

 

 

 

Net expenses

     12,087,746        (2,718,421     9,369,325   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (3,034,955     2,011,811        (1,023,144
  

 

 

   

 

 

   

 

 

 

Other income (expense):

      

Interest and other income

     4,743        —          4,743   

Equity in earnings of unconsolidated entities

     —          9,564  (e)      9,564   

Interest expense and loan cost amortization

     (3,429,551     153,799  (d)      (3,275,752
  

 

 

   

 

 

   

 

 

 

Total other expense

     (3,424,808     163,363        (3,261,445
  

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (6,459,763     2,175,174        (4,284,589

Income tax benefit (expense)

     225,175        (270,205     (45,030
  

 

 

   

 

 

   

 

 

 

Net loss from continuing operations

   $ (6,234,588   $ 1,904,969      $ (4,329,619
  

 

 

   

 

 

   

 

 

 

Net loss per share of common stock (basic and diluted)

   $ (1.27     $ (0.88
  

 

 

     

 

 

 

Weighted average number of shares of common stock outstanding (basic and diluted)

     4,908,673          4,908,673   
  

 

 

     

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

6


GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1. Basis of Presentation

The accompanying unaudited pro forma condensed consolidated balance sheet of the Company is presented as if the disposition of German Portfolio described in Note 2. “Pro Forma Transaction” had occurred as of September 30, 2014. The accompanying unaudited pro forma condensed consolidated statements of operations of the Company are presented for the nine months ended September 30, 2014 and for the years ended December 31, 2013 and 2012 (the “Pro Forma Periods”), and include certain pro forma adjustments to illustrate the estimated effect of the Company’s disposition, described in Note 2. “Pro Forma Transaction”, as if the disposition had occurred prior to the Pro Forma Period. The amounts included in the historical columns represent the Company’s historical balance sheet and operating results for the respective Pro Forma Periods presented as filed with the Securities and Exchange Commission.

The accompanying unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the information and note disclosures required by generally accepted accounting principles of the United States (“GAAP”). Pro forma financial information is intended to provide information about the continuing impact of a transaction by showing how a specific transaction or group of transactions might have affected historical financial statements. Pro forma financial information illustrates only the isolated and objectively measurable (based on historically determined amounts) effects of a particular transaction, and excludes effects based on judgmental estimates of how historical management practices and operating decisions may or may not have changed as a result of the transaction. Therefore, pro forma financial information does not include information about the possible or expected impact of current actions taken by management in response to the pro forma transaction, as if management’s actions were carried out in previous reporting periods.

This unaudited pro forma condensed consolidated financial information is presented for informational purposes only and does not purport to be indicative of the Company’s financial results or financial position as if the transactions reflected herein had occurred, or been in effect during the Pro Forma Periods. In addition, this unaudited pro forma condensed consolidated financial information should not be viewed as indicative of the Company’s expected financial results for future periods.

 

2. Pro Forma Transaction

On December 29, 2014, the Company entered into a Share Purchase Agreement with unaffiliated third-parties for the sale of 94.9% of its equity interest in two wholly-owned subsidiaries in Luxembourg that hold its five properties in Germany (“German Portfolio”). The sale price for the 94.9% interest is based on an aggregate current valuation of approximately €18.6 million for the German Portfolio (subject to adjustment for certain receivables and operational fees and expenses). The proceeds to the Company for the sale of its 94.9% interest in the German Portfolio is expected to be approximately €7.7 million, excluding transaction costs of approximately €0.7 million, as the German Portfolio will retain its approximate €10.9 million in third-party indebtedness.

On January 30, 2015, the Company completed the sale of 94.9% of its interest in the German Portfolio. The Company has determined that it will not control of the German Portfolio and, therefore, the German Portfolio will be deconsolidated as of January 30, 2015. The Company will retain a 5.1% non-controlling interest in the German portfolio, which will be reflected as an investment in and advances to unconsolidated entities in the Company’s consolidated balance sheet.

 

7


GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

3. Adjustments to Unaudited Pro Forma Condensed Consolidated Balance Sheet

The adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet represent adjustments needed in order to present the Company’s historical balance sheet as if the disposition of the German Portfolio occurred as of September 30, 2014.

 

  (a) These adjustments reflect the elimination of certain account balances relating to the German Portfolio as if the sale was consummated as of September 30, 2014. Other adjustments, as described in (b) through (e), reflect the elimination of the net carrying value, receipt of the net cash proceeds on the completed sale of the 94.9% equity interest in the German Portfolio, assumption of the indebtedness collateralized by the German Portfolio, and the retained 5.1% non-controlling interest in the German Portfolio.

 

  (b) This amount reflects the elimination of the net book value of the assets and liabilities, including the related lease intangibles assets, net and mortgage notes payable, related to the German Portfolio.

 

  (c) Cash and cash equivalents has been increased to reflect the net cash proceeds received by the Company on the completed sale of its 94.9% equity interest in the German Portfolio.

 

  (d) Investment in unconsolidated entities increased to reflect the retained 5.1% non-controlling interest in the German Portfolio, as described in Note 2. “Pro Forma Transaction,” calculated as follows:

 

5.1% of the carrying value of assets held for sale

   $ 1,137,252   

Plus: 5.1% of the cash and cash equivalents

     33,724   

Less: 5.1% of the carrying value of liabilities assumed

     (723,531
  

 

 

 

Investment in and advances to unconsolidated entities

   $ 447,445   
  

 

 

 

 

  (e) Accumulated deficit and accumulated other comprehensive loss have been adjusted to reflect the gain (loss) recognized on the sale of the 94.9% equity interest in the German Portfolio, which is calculated based on a Euro to U.S. Dollar exchange rate of $1.27 as of September 30, 2014 as follows:

 

Net sales proceeds

   $ 8,894,637   

Less: 94.9% of the carrying value of assets held for sale

     (21,161,805

Less: 94.9% of the cash and cash equivalents

     (627,544

Plus: 94.9% of the carrying value of liabilties assumed

     13,463,359   
  

 

 

 

Excess net sales proceeds over carrying value, net

   $ 568,647   
  

 

 

 

 

  (f) Reclassification from accumulated other comprehensive loss of 94.9% of the cumulative translation adjustment attributable to the German Portfolio.

 

8


GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

4. Adjustments to Unaudited Pro Forma Condensed Consolidated Statements of Operations

The adjustments to the unaudited pro forma condensed consolidated statements of operations represent adjustments needed to the Company’s historical results in order to remove the historical operating results related to the German Portfolio for the Pro Forma Periods and present the financial statements as if the German Portfolio had been sold prior to January 1, 2012.

 

  (a) The assets and liabilities for the German Portfolio were classified as held for sale as of September 30, 2014. As a result, the historical results of operations for the German Portfolio were included as part of income or loss from discontinued operations for the nine months ended September 30, 2014 and therefore are not included in the accompanying unaudited pro forma condensed consolidated statement of operations for the period then ended.

 

  (b) Except as described in (c) and (d) below, these amounts represent the elimination of the operations for the German Portfolio from the historical amounts included in continuing operations for the years ended December 31, 2013 and 2012 to reflect the sale of the Company’s 94.9% equity interest in the German Portfolio as if the disposition had occurred as of the first day of the first Pro Forma Period presented.

 

  (c) Amounts include the elimination of asset management fees, calculated at an annual rate of approximately 1% of the Company’s real estate assets under management. These fees were historically deferred and subordinated by the Company to its Advisor in accordance with the terms of the original expense support agreement and would not have been incurred subsequent to the disposition of these assets.

 

  (d) Represents the elimination of interest expense and loan cost amortization to reflect the buyer’s assumption of the indebtedness collateralized by the German Portfolio as if the assumption had occurred as of the first day of the first Pro Forma Period presented.

 

  (e) This amount reflects the recording of equity in earnings on the retained 5.1% equity interest in the German portfolio.

 

9


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 hereunto duly authorized.

 

Date: February 5, 2015       GLOBAL INCOME TRUST, INC.
      a Maryland Corporation
    By:  

/s/ Scott C. Hall

      Scott C. Hall
      Senior Vice President of Operations