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EX-32 - 906 CERTIFICATION OF CEO AND CFO - Wheeler Real Estate Investment Trust, Inc.ex329-30x2015.htm
EX-31.1 - 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER - Wheeler Real Estate Investment Trust, Inc.ex3119-30x2015.htm
EX-31.2 - 302 CERTIFICATION OF CHIEF FINANCIAL OFFICER - Wheeler Real Estate Investment Trust, Inc.ex3129-30x2015.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 
FORM 10-Q
 
 
 
(Mark One)
ý    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
OR
 ¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-35713
 
WHEELER REAL ESTATE INVESTMENT TRUST, INC.
(Exact Name of Registrant as Specified in Its Charter) 
Maryland
 
45-2681082
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
2529 Virginia Beach Blvd., Suite 200
Virginia Beach. Virginia
 
23452
(Address of Principal Executive Offices)
 
(Zip Code)
 (757) 627-9088
(Registrant’s Telephone Number, Including Area Code)
N/A
(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.    Yes  ý    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) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    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. (Check one):
Large accelerated filer
 
¨
  
Accelerated filer
 
¨
 
 
 
 
Non-accelerated filer
 
¨  (do not check if a smaller reporting company)
  
Smaller reporting company
 
ý
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
As of November 9, 2015, there were 66,160,617 common shares, $0.01 par value per share, outstanding.

1


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries 
 
 
Page
PART I – FINANCIAL INFORMATION
 
 
 
 
Item 1.
Financial Statements
 
 
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
PART II – OTHER INFORMATION
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 

2


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

 
September 30, 2015
 
December 31, 2014
 
(unaudited)
 
 
ASSETS:
 
 
 
Investment properties, net
$
238,211,766

 
$
127,140,394

Cash and cash equivalents
7,993,293

 
9,969,748

Rents and other tenant receivables, net
2,143,239

 
1,874,084

Goodwill
5,485,823

 
7,004,072

Assets held for sale
28,783,341

 
29,093,364

Above market lease intangible, net
7,087,784

 
4,488,900

Deferred costs and other assets, net
49,331,780

 
25,400,706

Total Assets
$
339,037,026

 
$
204,971,268

LIABILITIES:
 
 
 
Loans payable
$
186,283,498

 
$
120,865,586

Liabilities associated with assets held for sale
21,943,128

 
20,722,981

Below market lease intangible, net
8,237,912

 
5,182,437

Accounts payable, accrued expenses and other liabilities
9,189,347

 
5,076,837

Total Liabilities
225,653,885

 
151,847,841

Commitments and contingencies

 

 
 
 
 
EQUITY:
 
 
 
Series A preferred stock (no par value, 4,500 shares authorized, 562 and 1,809 shares issued and outstanding, respectively)
452,971

 
1,458,050

Series B convertible preferred stock (no par value, 3,000,000 shares authorized,
729,119 and 1,648,900 shares issued and outstanding, respectively)
16,996,622

 
37,620,254

Common stock ($0.01 par value, 150,000,000 and 75,000,000 shares authorized, 66,146,331 and 7,512,979 shares issued and outstanding, respectively)
661,463

 
75,129

Additional paid-in capital
219,921,401

 
31,077,060

Accumulated deficit
(134,145,251
)
 
(27,660,234
)
Total Shareholders’ Equity
103,887,206

 
42,570,259

Noncontrolling interests
9,495,935

 
10,553,168

Total Equity
113,383,141

 
53,123,427

Total Liabilities and Equity
$
339,037,026

 
$
204,971,268

See accompanying notes to condensed consolidated financial statements.


3


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
REVENUE:
 
 
 
 
 
 
 
Rental revenues
$
5,552,882

 
$
2,815,486

 
$
13,479,755

 
$
7,462,653

Asset management fees
132,335

 

 
465,817

 

Commissions
86,682

 

 
307,292

 

Tenant reimbursements and other revenues
1,395,314

 
690,928

 
3,961,021

 
2,016,689

Total Revenue
7,167,213

 
3,506,414

 
18,213,885

 
9,479,342

OPERATING EXPENSES:
 
 
 
 
 
 
 
Property operations
2,094,054

 
1,101,006

 
5,474,129

 
2,819,618

Non-REIT management and leasing services
299,566

 

 
901,118

 

Depreciation and amortization
4,824,448

 
1,961,041

 
11,672,780

 
4,996,141

Provision for credit losses
112,580

 
46,774

 
214,316

 
18,742

Corporate general & administrative
4,895,567

 
3,024,675

 
10,710,262

 
5,203,728

Total Operating Expenses
12,226,215

 
6,133,496

 
28,972,605

 
13,038,229

Operating Loss
(5,059,002
)
 
(2,627,082
)
 
(10,758,720
)
 
(3,558,887
)
Interest expense
(2,306,017
)
 
(1,491,749
)
 
(6,406,466
)
 
(3,945,332
)
Net Loss from Continuing Operations
(7,365,019
)
 
(4,118,831
)
 
(17,165,186
)
 
(7,504,219
)
Net Income from Discontinued Operations
206,603

 
117,078

 
488,343

 
351,137

Net Loss
(7,158,416
)
 
(4,001,753
)
 
(16,676,843
)
 
(7,153,082
)
Less: Net loss attributable to noncontrolling interests
(428,702
)
 
(487,284
)
 
(1,331,294
)
 
(655,987
)
Net Loss Attributable to Wheeler REIT
(6,729,714
)
 
(3,514,469
)
 
(15,345,549
)
 
(6,497,095
)
Preferred stock dividends
(2,279,907
)
 
(1,088,062
)
 
(13,116,232
)
 
(1,552,320
)
Deemed dividend related to beneficial conversion feature of preferred stock
(13,124,506
)
 

 
(72,644,506
)
 

Net Loss Attributable to Wheeler REIT Common
Shareholders
$
(22,134,127
)
 
$
(4,602,531
)
 
$
(101,106,287
)
 
$
(8,049,415
)
 
 
 
 
 
 
 
 
Loss per share from continuing operations (basic and diluted):
$
(0.35
)
 
$
(0.64
)
 
$
(3.41
)
 
$
(1.15
)
Income per share from discontinued operations:
0.00

 
0.02

 
0.01

 
0.05

 
$
(0.35
)
 
$
(0.62
)
 
$
(3.40
)
 
$
(1.10
)
Weighted-average number of shares:
 
 
 
 
 
 
 
Basic and Diluted
63,262,408

 
7,430,413

 
29,757,718

 
7,316,147

See accompanying notes to condensed consolidated financial statements.


4


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Equity
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series A
 
Series B
 
Series C
 
Common
 
 
 
 
 
 
 
Noncontrolling
 
 
 
Preferred Stock
 
Preferred Stock
 
Preferred Stock
 
Stock
 
Additional
Paid-in Capital
 
Accumulated Deficit
 
Total
Shareholders’ Equity
 
Interests
 
Total
 
Shares
 
Value
 
Shares
 
Value
 
Shares
 
Value
 
Shares
 
Value
 
 
 
 
Units
 
Value
 
Equity
Balance,
December 
31, 2014
1,809

 
$
1,458,050

 
1,648,900

 
$
37,620,254

 

 
$

 
7,512,979

 
$
75,129

 
$
31,077,060

 
$
(27,660,234
)
 
$
42,570,259

 
3,567,623

 
$
10,553,168

 
$
53,123,427

Accretion of
Series B preferred stock discount

 

 

 
2,252,589

 

 

 

 

 

 

 
2,252,589

 

 

 
2,252,589

Conversion
of Series B
preferred stock to common stock

 

 
(54,300
)
 
(1,239,196
)
 

 

 
271,500

 
2,715

 
1,236,481

 

 

 

 

 

Reclass of Series C preferred stock to equity

 

 

 

 
93,000

 
86,415,894

 

 

 

 

 
86,415,894

 

 

 
86,415,894

Accretion of Series C preferred stock

 

 

 

 

 
6,584,106

 

 

 

 

 
6,584,106

 

 

 
6,584,106

Conversion of Series C preferred stock to common stock

 

 

 

 
(93,000
)
 
(93,000,000
)
 
46,500,000

 
465,000

 
92,535,000

 

 

 

 

 

Conversion
of Operating
Partnership units to common stock

 

 

 

 

 

 
198,754

 
1,988

 
452,113

 

 
454,101

 
(198,754
)
 
(454,101
)
 

Conversion of preferred stock to common stock through tender offer
(1,247
)
 
(1,005,079
)
 
(865,481
)
 
(21,637,025
)
 

 

 
11,442,002

 
114,420

 
22,527,659

 

 
(25
)
 

 

 
(25
)
Issuance of
common stock under Share Incentive Plan

 

 

 

 

 

 
221,096

 
2,211

 
503,789

 

 
506,000

 

 

 
506,000

Noncontrolling
interest
investments

 

 

 

 

 

 

 

 

 

 

 
700,709

 
1,574,551

 
1,574,551

Fair value discount on
common units issued for acquisitions

 

 

 

 

 

 

 

 

 

 

 

 
(1,181,250
)
 
(1,181,250
)
Adjustment for
noncontrolling interest in operating partnership

 

 

 

 

 

 

 

 
(1,055,207
)
 

 
(1,055,207
)
 

 
1,055,207

 

Dividends and
distributions

 

 

 

 

 

 

 

 

 
(18,494,962
)
 
(18,494,962
)
 

 
(720,346
)
 
(19,215,308
)
Deemed distribution

 

 

 

 

 

 

 

 
72,644,506

 
(72,644,506
)
 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 
(15,345,549
)
 
(15,345,549
)
 

 
(1,331,294
)
 
(16,676,843
)
Balance,
September 30, 2015 (Unaudited)
562

 
$
452,971

 
729,119

 
$
16,996,622

 

 
$

 
66,146,331

 
$
661,463

 
$
219,921,401

 
$
(134,145,251
)
 
$
103,887,206

 
4,069,578

 
$
9,495,935

 
$
113,383,141

See accompanying notes to condensed consolidated financial statements.

5


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 
For the Nine Months Ended
September 30,
 
2015
 
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net loss
$
(16,676,843
)
 
$
(7,153,082
)
Adjustments to reconcile consolidated net loss to net cash from operating activities
 
 
 
Depreciation
3,556,869

 
1,769,684

Amortization
8,115,911

 
3,226,457

Loan cost amortization
936,516

 
327,319

Above (below) market lease amortization
566,646

 
(2,990
)
Share-based compensation
506,000

 
190,000

Provision for credit losses
214,316

 
18,742

Changes in assets and liabilities, net of acquisitions
 
 
 
Rent and other tenant receivables, net
(748,159
)
 
(353,830
)
Unbilled rent
190,082

 
163,963

Deferred costs and other assets, net
(6,193,177
)
 
(3,728,645
)
Accounts payable, accrued expenses and other liabilities
1,989,304

 
164,046

Net operating cash flows provided by discontinued operations
834,091

 
654,299

Net cash used in operating activities
(6,708,444
)
 
(4,724,037
)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Investment property acquisitions
(62,027,081
)
 
(11,416,213
)
Capital expenditures
(263,242
)
 
(195,529
)
Net investing cash flows from discontinued operations
914,388

 

Net cash used in investing activities
(61,375,935
)
 
(11,611,742
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Dividends and distributions paid
(10,083,178
)
 
(3,360,817
)
Proceeds from sales of preferred stock, net of expenses
83,415,894

 
37,449,628

Conversion of preferred stock
(25
)
 

Net proceeds (payments) to related parties
85,583

 
(403,395
)
Loan proceeds

 
8,384,435

Loan principal payments
(7,189,600
)
 
(6,945,596
)
Net financing cash flows from discontinued operations
(120,750
)
 
(80,345
)
Net cash from financing activities
66,107,924

 
35,043,910

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(1,976,455
)
 
18,708,131

CASH AND CASH EQUIVALENTS, beginning of period
9,969,748

 
1,155,083

CASH AND CASH EQUIVALENTS, end of period
$
7,993,293

 
$
19,863,214

Supplemental Disclosures:
 
 
 
Non-Cash Transactions:
 
 
 
Debt incurred for acquisitions
$
75,652,464

 
$
33,921,261

Noncontrolling interests resulting from the issuance of common units
$
1,574,551

 
$
1,240,234

Conversion of senior convertible debt into Series C preferred stock
$
3,000,000

 
$

Accretion of preferred stock discounts
$
8,836,695

 
$

Deemed dividend for beneficial conversion feature
$
72,644,506

 
$

Other Cash Transactions:
 
 
 
Cash paid for interest
$
5,979,476

 
$
4,431,852

See accompanying notes to condensed consolidated financial statements.

6


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Organization and Basis of Presentation and Consolidation
Wheeler Real Estate Investment Trust, Inc. (the “Trust” or “REIT”) is a Maryland corporation formed on June 23, 2011. The Trust serves as the general partner of Wheeler REIT, L.P. (the “Operating Partnership”), which was formed as a Virginia limited partnership on April 5, 2012. As of September 30, 2015, the Trust, through the Operating Partnership, owned and operated forty-five centers, ten undeveloped properties and one office building in Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Oklahoma, Tennessee, Kentucky, New Jersey and West Virginia. Accordingly, the use of the word “Company” refers to the Trust and its consolidated subsidiaries, except where the context otherwise requires.
The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (the “Form 10-Q”) are unaudited and the results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for future periods or the year. However, amounts presented in the condensed consolidated balance sheet as of December 31, 2014 are derived from the Company’s audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The Company prepared the accompanying condensed consolidated financial statements in accordance with GAAP for interim financial statements. All material balances and transactions between the consolidated entities of the Company have been eliminated. You should read these condensed consolidated financial statements in conjunction with our 2014 Annual Report filed on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”).
2. Summary of Significant Accounting Policies
Rents and Other Tenant Receivables, net
Tenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of September 30, 2015 and December 31, 2014, the Company’s allowance for uncollectible accounts totaled $382,681 and $186,517, respectively. During the three and nine months ended September 30, 2015, the Company recorded bad debt expenses in the amounts of $112,580 and $214,316, respectively, related to tenant receivables that were specifically identified as potentially uncollectible based on an assessment of the tenant’s credit-worthiness. During the three and nine months ended September 30, 2014, the Company recorded bad debt expenses in the amounts of $46,774 and $18,742, respectively.  During the three and nine months ended September 30, 2015 and 2014, the Company did not realize any recoveries related to tenant receivables previously written off.

Above and Below Market Lease Intangibles, net

The Company determines the above and below market lease intangibles upon acquiring a property. Above and below market lease intangibles are amortized over the life of the respective leases. Amortization of above and below market lease intangibles is recorded as a component of rental revenues.
    
Deferred Costs and Other Assets, net
The Company’s deferred costs and other assets consist primarily of leasing commissions, fees incurred in order to obtain long-term financing, leases in place intangible assets, legal and marketing costs, tenant relationship intangible assets and deposits associated with acquisitions, and various property escrow accounts for real estate taxes, insurance, tenant improvements and replacements. The Company records amortization of financing costs using the straight-line method over the terms of the respective loans or agreements. The Company’s lease origination costs consist primarily of commissions paid in connection with lease originations and renewals. The Company records amortization of lease origination costs on a straight-line basis over the terms of the related leases. The Company’s leases in place intangible asset relates to values assigned leases associated with acquired properties. Leases in place are amortized over the term of the respective leases, while legal and marketing and tenant relationship intangible assets are amortized over their estimated useful lives. Acquisition deposits and escrows relate to advance funding of acquisitions to be completed.

7

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
2. Summary of Significant Accounting Policies (continued)

Details of these deferred costs, net of amortization, and other assets are as follows:
 
September 30, 2015
 
December 31, 2014
 
(unaudited)
 
 
Lease origination costs, net
$
1,418,570

 
$
1,742,333

Leases in place, net
20,888,176

 
10,522,597

Financing costs, net
4,752,392

 
3,193,442

Property reserves
7,389,534

 
4,242,499

Acquisition deposits and escrows
746,400

 
623,350

Legal and marketing costs, net
137,950

 
198,169

Tenant relationships, net
13,532,740

 
4,485,699

Other
466,018

 
392,617

Total Deferred Costs and Other Assets, net
$
49,331,780

 
$
25,400,706

Amortization of lease origination costs, leases in place and legal and marketing costs represents a component of depreciation and amortization expense. The Company reports amortization of financing costs, amortization of premiums, and accretion of discounts as part of interest expense. Future amortization of lease origination costs, leases in place, financing costs, legal and marketing costs and tenant relationships is as follows:
For the Periods Ending September 30,
Lease
Origination
Costs
 
Leases In
Place
 
Financing
Costs
 
Legal &
Marketing
Costs
 
Tenant
Relationships
2016
$
323,320

 
$
6,292,291

 
$
914,521

 
$
22,962

 
$
4,853,942

2017
296,085

 
4,764,415

 
711,934

 
27,433

 
3,258,110

2018
226,273

 
3,397,349

 
555,923

 
21,281

 
2,189,374

2019
152,053

 
2,327,671

 
440,322

 
17,215

 
1,445,695

2020
102,758

 
1,480,526

 
433,922

 
13,214

 
851,383

Thereafter
318,081

 
2,625,924

 
1,695,770

 
35,845

 
934,236

 
$
1,418,570

 
$
20,888,176

 
$
4,752,392

 
$
137,950

 
$
13,532,740

Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90% of its taxable income to shareholders and meet certain other asset and income tests, as well as other requirements. Thus, the Company made no provision for federal income taxes for the REIT in the accompanying condensed consolidated financial statements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it failed to qualify. If the Company loses its REIT status, it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to a reasonable cause and certain other conditions were satisfied.
Use of Estimates
The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported periods. The Company’s actual results could differ from these estimates.
Noncontrolling Interests
Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. Accordingly, the Company has reported noncontrolling interests in equity on the September 30, 2015 unaudited condensed consolidated balance sheet but separate from the Company’s shareholders’ equity. On the September 30, 2015 and 2014 unaudited condensed consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The unaudited condensed consolidated statement of equity includes

8

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
2. Summary of Significant Accounting Policies (continued)

beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.
The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s consolidated net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are redeemed for either cash or, if preferred by the Company, common stock. In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital.

Assets Held For Sale

The Company records assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year.

Corporate General and Administrative Expense
    
A detail for the "corporate general & administrative" line item from the Statements of Operations is presented below:
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2015
 
2014
 
2015
 
2014
 
 
(unaudited)
Acquisition costs
 
$
1,733,639

 
$
1,728,907

 
$
3,167,378

 
$
1,823,587

Professional fees
 
274,006

 
704,100

 
1,166,279

 
1,843,730

Compensation and benefits
 
620,463

 
34,314

 
2,413,895

 
134,314

Corporate administration
 
291,590

 
347,999

 
850,137

 
900,366

Equity, debt and refinancing costs
 
1,826,240

 

 
2,447,890

 

Travel
 
61,993

 
146,088

 
363,803

 
269,110

Advertising
 
44,280

 
44,526

 
151,526

 
104,247

Taxes and licenses
 
43,356

 
18,741

 
149,354

 
128,374

Total
 
$
4,895,567

 
$
3,024,675

 
$
10,710,262

 
$
5,203,728

Recent Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08"). This ASU changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under this ASU, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have major effect on the Company's operations and financial results. Examples include a disposal of a major geographical area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 is effective prospectively for reporting periods beginning on or after December 15, 2014. The Company adopted ASU 2014-08 on January 1, 2015 and used its guidance in determining the effect of discontinued operations as disclosed in Note 5.

In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to

9

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
2. Summary of Significant Accounting Policies (continued)

be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new standard will be effective for the Company in the first quarter of the year ended December 31, 2018 and can be applied either retrospectively to all periods presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently evaluating the impact of adoption of the new standard on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40)." This ASU defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and provides guidance on required financial statement footnote disclosures. This ASU is effective for annual periods ending after December 15, 2016. The Company will adopt the ASU in 2016.    
    
In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." This new guidance requires the presentation of unamortized debt issuance costs to be shown in the liabilities section of the consolidated balance sheets as a reduction of the principal amount of the associated debt, rather than as an asset. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a retrospective approach by restating prior period comparative consolidated balance sheets. The Company does not expect the adoption of ASU 2015-03 to materially impact its financial position or results of operations.

In September 2015, the FASB issued ASU 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments". This new guidance requires that the acquirer recognizes adjustments to preliminary acquisition values and account for the cumulative effect of any required adjustments in the period in which they are determined. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a prospective approach for adjustments that occur after the effective date. The Company does not expect the adoption of ASU 2015-16 to materially impact its financial position or results of operations.

Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows.

Reclassifications
    
Certain reclassifications have been made to prior period amounts to make their presentation comparable with the current period. These reclassifications had no impact on net income.

3. Investment Properties
Investment properties consist of the following:
 
September 30, 2015
 
December 31, 2014
 
(unaudited)
 
 
Land
$
52,835,489

 
$
31,674,506

Land held for improvement
9,780,355

 
6,846,918

Buildings and improvements
185,361,332

 
94,944,020

Investment properties at cost
247,977,176

 
133,465,444

Less accumulated depreciation and amortization
(9,765,410
)
 
(6,325,050
)
Investment properties, net
$
238,211,766

 
$
127,140,394

A significant portion of the Company’s land, buildings and improvements serves as collateral for its mortgage loans payable portfolio. Accordingly, restrictions exist as to the encumbered property’s transferability, use and other common rights typically associated with property ownership.

10

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

Acquisitions
    
Laskin Road Land
    
On January 9, 2015, the Company completed its acquisition of 1.50 acres of undeveloped land located on Laskin Road in Virginia Beach, Virginia ("Laskin Road") for a contract price of $1.6 million. The Company acquired Laskin Road for future development opportunities. The Company paid cash of $150,000 with the balance of the contract price to be paid in common units on the earlier of the one year anniversary of the acquisition or the completion of any development activities. The number of units issued will be determined using the Company's common stock price on the day prior to issuance.
        
Pierpont Centre
    
On January 14, 2015, the Company completed its acquisition of Pierpont Centre, a 122,259 square foot shopping center located in Morgantown, West Virginia ("Pierpont Centre") for a contract price of $13.9 million, paid through a combination of cash and debt. Pierpont Centre was 100% leased as of the acquisition date and its major tenants include GNC, Hallmark, Michael's, Ruby Tuesday and Outback Steakhouse.
        
Brook Run Properties
    
On March 27, 2015, the Company completed its acquisition of Brook Run Properties, LLC ("Brook Run Properties"), consisting of a 2.0 acre parcel of undeveloped real estate located adjacent to the Brook Run Shopping Center in Richmond, Virginia, for a contract price of $300,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center.
        
Alex City Marketplace
    
On April 1, 2015, the Company completed its acquisition of Alex City Marketplace, a 147,791 square foot shopping center located in Alexander City, Alabama ("Alex City Marketplace") for a contract price of $10.3 million, paid through a combination of cash and debt. Alex City Marketplace was 86% leased as of the the acquisition date and its major tenants include Winn Dixie and Goody's.

Butler Square

On April 15, 2015, the Company completed its acquisition of Butler Square, a 82,400 square foot shopping center located in Mauldin, South Carolina ("Butler Square") for a contract price of $9.4 million, paid through a combination of cash and debt. Butler Square was 100% leased as of the acquisition date and its major tenants include Bi-Lo and Dollar Tree.

Brook Run Shopping Center

On June 2, 2015, the Company completed its acquisition of Brook Run Shopping Center, a 147,738 square foot shopping center located in Richmond, Virginia ("Brook Run") for a contract price of $18.5 million. Brook Run was 92% leased as of the acquisition date and its major tenants include Martin's Food Store and CVS. The Company acquired Brook Run from a related party through a combination of cash, the issuance of 574,743 common units in the Operating Partnership and debt.

Beaver Ruin Village

On July 1, 2015, the Company completed its acquisition of Beaver Ruin Village, a 74,048 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village") for a contract price of $12.4 million, paid through a combination of cash and debt. Beaver Ruin Village was 91% leased as of the acquisition date and its major tenants include Chase Bank, Firehouse Subs and State Farm Insurance.

Beaver Ruin Village II

On July 1, 2015, the Company completed its acquisition of Beaver Ruin Village II, a 34,925 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village II") for a contract price of $4.4 million, paid through a combination of

11

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

cash and debt. Beaver Ruin Village II was 100% leased as of the acquisition date and its major tenants include AutoZone and Metro PCS.

Columbia Fire Station

On July 1, 2015, the Company completed its acquisition of Columbia Fire Station, consisting of two vacant buildings on a 1.0 acre land parcel located in Columbia, South Carolina ("Columbia Fire Station") for a contract price of $2.4 million, paid through a combination of cash and debt. The Company plans to redevelop this property for retail use.
    
Chesapeake Square

On July 10, 2015, the Company completed its acquisition of Chesapeake Square, a 99,848 square foot shopping center located in Onley, Virginia ("Chesapeake Square") for a contract price of $6.3 million. Chesapeake Square was 76% leased as of the acquisition date and is anchored by a Food Lion grocery store. The Company acquired Chesapeake Square from a related party through a combination of cash and the issuance of 125,966 common units in the Operating Partnership.
        
Sunshine Plaza

On July 21, 2015, the Company completed its acquisition of Sunshine Plaza, a 111,189 square foot shopping center located in Lehigh Acres, Florida ("Sunshine Plaza") for a contract price of $10.4 million. Sunshine Plaza was 96% leased as of the acquisition date and is anchored by a Winn-Dixie grocery store. The Company acquired Sunshine Plaza through a combination of cash and debt.

Carolina Place

On July 24, 2015, the Company completed its acquisition of Carolina Place consisting of a 2.14 acre parcel of land adjacent to Chesapeake Square for a contract price of $250,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center.

Hilton Head Land

On August 14, 2015, the Company completed its acquisition of 10.39 acres located in Hilton Head, South Carolina ("Hilton Head Land") for a contract price of $1.0 million paid in cash. The Company acquired the property for potential development and to compliment an adjacent redevelopment project.
    
Barnett Portfolio

On August 21, 2015, the Company completed its acquisition of Cardinal Plaza, located in Henderson, North Carolina, Franklinton Square, located in Franklinton, North Carolina and Nashville Commons, located in Nashville, North Carolina (collectively known as the "Barnett Portfolio") for a contract price of $15.3 million. The Barnett Porfolio properties total 171,466 square feet, were 91% leased as of the acquisition date and all are anchored by Food Lion grocery stores. The Company acquired the Barnett Portfolio through a combination of cash and debt.

Grove Park

On September 9, 2015, the Company completed its acquisition of Grove Park Shopping Center, a 106,557 square foot shopping center located in Orangeburg, South Carolina ("Grove Park") for a contract price of $6.6 million. Grove Park was 90% leased as of the acquisition date and is anchored by a Bi-Lo grocery store. The Company acquired Grove Park through a combination of cash and debt.

Parkway Plaza

On September 15, 2015, the Company completed its acquisition of Parkway Plaza Shopping Center, a 52,365 square foot shopping center and 2.1 acres of adjacent undeveloped land located in Brunswick, Georgia ("Parkway Plaza") for a

12

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

contract price of $6.1 million. Parkway Plaza was 97% leased as of the acquisition date and is anchored by a Winn Dixie grocery store. The Company acquired Parkway Plaza through a combination of cash and debt.

Fort Howard Square

On September 30, 2015, the Company completed its acquisition of Fort Howard Square Shopping Center, a 113,652 square foot shopping center located in Rincon, Georgia ("Fort Howard Square") for a contract price of $11.5 million. Fort Howard Square was 95% leased as of the acquisition date and is anchored by nationally recognized tenants Goodwill and Dollar Tree. The Company acquired Fort Howard Square through a combination of cash and debt.

Conyers Crossing

On September 30, 2015, the Company completed its acquisition of Conyers Crossing Shopping Center, a 170,475 square foot shopping center located in Conyers, Georgia ("Conyers Crossing") for a contract price of $10.8 million. Conyers Crossing was 99% leased as of the acquisition date and is anchored by nationally recognized tenants Hobby Lobby and Burlington Coat Factory. The Company acquired Conyers Crossing through a combination of cash and debt.
    
The following summarizes the consideration paid and the preliminary estimated fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties. The valuations and purchase price allocations for these acquisitions remain preliminary but are expected to be finalized prior to December 31, 2015.
 
 
 
 
Total
Preliminary estimated fair value of assets acquired and liabilities assumed:
 
 
Investment property (a)
$
114,211,725

 
Lease intangibles and other assets (b)
26,827,214

 
Above market leases (b)
4,166,440

 
Below market leases (b)
(4,021,671
)
 
 
 
 
 
 
Preliminary fair value of net assets acquired
$
141,183,708

 
 
 
 
 
Purchase consideration:
 
 
 
Consideration paid with cash and debt
$
138,115,158

 
Consideration paid with common units
3,068,550

 
 
 
 
 
 
Total consideration (c)
$
141,183,708

a.
Represents the preliminary estimated fair value of the investment property acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using the following approaches:
i. the market approach valuation methodology for land by considering similar transactions in the markets;
ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, "go dark" analyses and residual calculations incorporating the land values; and
iii.
the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates.
b.
Represents the preliminary estimated fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, leases in place, above/below market leases and legal and marketing fees associated with replacing

13

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

existing leases. The income approach was used to determine the fair value of these intangible assets which included estimated market rates and expenses. It was determined that carrying value approximated fair value for other asset amounts.
c.
Represents the components of purchase consideration paid. Consideration paid with common units includes units issued for acquisitions and those amounts currently due for acquisitions that, per the original contract, are to be settled by issuing common units subsequent to September 30, 2015.
The Company incurred $3,167,378 in acquisition expenses for the nine months ended September 30, 2015. These costs are included on the unaudited condensed consolidated statement of operations under the caption "Corporate general & administrative." Please see the corporate general & administrative table in Note 2 for acquisition expenses for all periods presented
Unaudited pro forma financial information in the aggregate is presented below for certain acquisitions. The unaudited pro forma information presented below includes the effects of the acquisitions as if they had been consummated as of the beginning of the prior fiscal year. The pro forma results include adjustments for depreciation and amortization associated with acquired tangible and intangible assets, straight-line rent adjustments and interest expense related to debt incurred. Unaudited pro forma financial information has not been presented for Laskin Road, Brook Run Properties, Columbia Fire Station, Carolina Place and the Hilton Head Land as the Company's management has determined that their inclusion would not be meaningful due to the lack of operating history.
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2015
 
2014
 
2015
 
2014
Rental revenue
 
$
6,685,630

 
$
5,910,333

 
$
19,119,095

 
$
16,747,195

Net loss
 
$
(7,582,514
)
 
$
(5,212,040
)
 
$
(18,153,485
)
 
$
(10,766,008
)
Net loss attributable to Wheeler REIT
$
(6,913,737
)
 
$
(4,405,216
)
 
$
(16,175,631
)
 
$
(9,140,123
)
Net loss attributable to Wheeler REIT common shareholders
$
(22,318,150
)
 
$
(5,493,278
)
 
$
(101,936,369
)
 
$
(10,692,443
)
Basic loss per share
 
$
(0.35
)
 
$
(0.74
)
 
$
(3.43
)
 
$
(1.46
)
Diluted loss per share
 
$
(0.35
)
 
$
(0.74
)
 
$
(3.43
)
 
$
(1.46
)
4. Goodwill
As part of the acquisition of Wheeler Interests, LLC, Wheeler Real Estate, LLC and WHLR Management, LLC (the "Operating Companies") on October 24, 2014, the Company recorded preliminary goodwill of $7,004,072. In June 2015, the Company finalized its valuation of the Operating Companies. In accordance with the valuation, the Company has recorded a fair value discount to the $6,750,000 in common units issued for the acquisition of the Operating Companies due to the one year restriction on their conversion into shares of common stock, and reallocated a portion of goodwill to finite-lived intangibles as follows:
Beginning balance, January 1, 2015
$
7,004,072

Fair value discount on common units issued for acquisition
(1,181,250
)
Allocation to finite-lived intangibles
(336,999
)
Ending balance, September 30, 2015
$
5,485,823

5. Assets Held for Sale and Discontinued Operations
In August 2015, the Company’s management and Board of Directors committed to a plan to sell Amscot, Monarch Bank, Bixby Commons, Jenks Reasors, Harps at Harbor Point, Starbucks/Verizon and the ground leases for Ruby Tuesday’s and Outback Steakhouse at Pierpont Centre (the “Freestanding Properties”) as part of the Company’s continuous evaluation of strategic alternatives. Accordingly, the Freestanding Properties have been classified as held for sale and the results of their

14

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
5. Assets Held for Sale and Discontinued Operations (continued)

operations have been classified as discontinued operations for all periods presented. Management expects that the sale of the Freestanding Properties will occur within one year and the Company will receive no residual cash flows once the Freestanding Properties are disposed.
As of September 30, 2015 and December 31, 2014, assets held for sale consisted of the following:
 
 
September 30, 2015
 
December 31, 2014
 
 
(unaudited)
 
 
Investment properties, net
 
$
24,902,125

 
$
25,110,592

Rents and other tenant receivables, net
 
120,250

 
111,382

Deferred costs and other assets, net
 
3,760,966

 
3,871,390

Total assets held for sale
 
$
28,783,341

 
$
29,093,364

As of September 30, 2015 and December 31, 2014, liabilities associated with assets held for sale consisted of the following:
 
 
September 30, 2015
 
December 31, 2014
 
 
(unaudited)
 
 
Loans payable
 
$
21,813,806

 
$
20,584,557

Below market lease intangible, net
 
80,976

 
84,636

Accounts payable, accrued expenses and other liabilities
48,346

 
53,788

Total liabilities associated with assets held for sale
$
21,943,128

 
$
20,722,981


The condensed consolidated statements of operations reflect reclassifications of rental revenue, property operating expenses, corporate general and administrative expenses and interest expense from continuing operations to income from discontinued operations for all periods presented. All interest expense disclosed below is directly related to the debt incurred to acquire the Freestanding Properties.
    
The following is a summary of the income from discontinued operations for the three and nine months ended September 30, 2015 and 2014:

 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2015
 
2014
 
2015
 
2014
 
 
(unaudited)
Revenues
 
$
700,119

 
$
661,416

 
$
2,108,949

 
$
1,986,334

Expenses
 
255,131

 
315,252

 
886,613

 
954,119

Operating income
 
444,988

 
346,164

 
1,222,336

 
1,032,215

Interest expense
 
238,385

 
229,086

 
733,993

 
681,078

Income from discontinued operations
 
$
206,603

 
$
117,078

 
$
488,343

 
$
351,137




15

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)


6. Loans Payable
The Company’s loans payable consist of the following:
 
 
 
 
 
 
 
 
 
 
Property/Description
Monthly Payment
 
Interest
Rate
 
Maturity
 
September 30, 2015
 
December 31, 2014
 
 
 
 
 
 
 
(unaudited)
 
 
Shoppes at Eagle Harbor
$
25,100

 
4.34
%
 
March 2018
 
$
3,670,562

 
$
3,773,319

Lumber River Plaza
$
18,414

 
5.65
%
 
May 2015
 

 
2,894,862

Perimeter Square
$
28,089

 
6.38
%
 
June 2016
 
4,198,947

 
4,294,216

Riversedge North
$
8,802

 
6.00
%
 
January 2019
 
973,975

 
1,007,856

Walnut Hill Plaza
$
24,273

 
5.50
%
 
July 2017
 
3,559,055

 
3,626,945

Twin City Commons
$
17,827

 
4.86
%
 
January 2023
 
3,239,229

 
3,279,076

Shoppes at TJ Maxx
$
33,880

 
3.88
%
 
May 2020
 
6,123,650

 
6,248,349

Bank Line of Credit
Interest only

 
4.25
%
 
September 2015
 

 
2,074,432

Forrest Gallery
$
50,973

 
5.40
%
 
September 2023
 
8,957,445

 
9,045,880

Tampa Festival
$
50,797

 
5.56
%
 
September 2023
 
8,658,145

 
8,746,860

Winslow Plaza
Interest only

 
5.22
%
 
December 2015
 
5,000,000

 
5,000,000

Cypress Shopping Center
Interest only

 
4.70
%
 
July 2024
 
6,625,000

 
6,625,000

Harrodsburg Marketplace
$
19,112

 
4.55
%
 
September 2024
 
3,692,427

 
3,735,739

Port Crossing
$
34,788

 
4.84
%
 
August 2024
 
6,496,619

 
6,568,918

LaGrange Marketplace
$
13,813

 
5.50
%
 
March 2020
 
2,430,046

 
2,463,909

Freeway Junction
Interest only

 
4.60
%
 
September 2024
 
8,150,000

 
8,150,000

DF I-Courtland
$
1,411

 
6.50
%
 
January 2019
 

 
115,728

DF I-Edenton
$
250,000

1 
3.75
%
 
September 2016
 
1,150,000

 
1,650,000

DF I-Moyock
$
10,665

 
5.00
%
 
July 2019
 
445,021

 
522,430

Graystone Crossing
$
20,386

 
4.55
%
 
October 2024
 
4,000,000

 
4,000,000

Bryan Station
Interest only

 
4.52
%
 
November 2024
 
4,625,000

 
4,625,000

Crockett Square
Interest only

 
4.47
%
 
December 2024
 
6,337,500

 
6,337,500

Harbor Point
$
11,024

 
5.85
%
 
December 2016
 
754,706

 
1,544,567

Pierpont Centre
Interest only

 
3.95
%
 
February 2025
 
8,450,000

 

Alex City Marketplace
Interest only

 
3.90
%
 
April 2025
 
5,750,000

 

Butler Square
Interest only

 
4.08
%
 
April 2025
 
5,640,000

 

Brook Run Shopping Center
Interest only

 
3.90
%
 
June 2025
 
10,950,000

 

Beaver Ruin Village I and II
Interest only

 
4.73
%
 
July 2025
 
9,400,000

 

Columbia Fire Station
Interest only

 
8.00
%
 
December 2017
 
441,171

 

Sunshine Shopping Plaza
Interest only

 
4.57
%
 
August 2025
 
5,900,000

 

Barnett Portfolio
Interest only

 
4.30
%
 
September 2025
 
8,770,000

 

Grove Park Shopping Center
Interest only

 
4.52
%
 
October 2025
 
3,800,000

 

Parkway Plaza
Interest only

 
4.57
%
 
October 2025
 
3,500,000

 

Conyers Crossing
Interest only

 
4.67
%
 
October 2025
 
5,960,000

 

Fort Howard Shopping Center
Interest only

 
4.57
%
 
October 2025
 
7,100,000

 

Senior convertible notes
Interest only

 
9.00
%
 
December 2018
 
3,000,000

 
6,000,000

Senior non-convertible notes
Interest only

 
9.00
%
 
December 2015
 
4,000,000

 
4,000,000

Senior non-convertible notes
Interest only

 
9.00
%
 
January 2016
 
2,160,000

 
2,160,000

South Carolina Food Lions note
Interest only

 
5.25
%
 
January 2024
 
12,375,000

 
12,375,000

Total Loans Payable
 
 
 
 
 
 
$
186,283,498

 
$
120,865,586

(1) $250,000 plus accrued interest paid quarterly until maturity.


16

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
6. Loans Payable (continued)


On May 1, 2015, the Lumber River Plaza note was paid in full from cash on hand.

On May 29, 2015, the Operating Partnership entered into a credit agreement (the "Credit Agreeement") with KeyBank National Association ("KeyBank") for a $45,000,000 revolving credit facility. The facility has a three year term and the interest rate will be based on LIBOR. As of September 30, 2015, the Operating Partnership has not drawn on the revolving credit facility.
Debt Maturity
The Company’s scheduled principal repayments on indebtedness as of September 30, 2015 are as follows:
 
For the Periods Ending September 30,
 
 
(unaudited)
2016
$
17,701,213

2017
5,864,764

2018
5,592,500

2019
5,530,929

2020
9,179,177

Thereafter
142,414,915

Total principal maturities
$
186,283,498

 
7. Rentals under Operating Leases

Future minimum rentals to be received under noncancelable tenant operating leases for each of the next five years and thereafter, excluding Common Area Maintenance and percentage rent based on tenant sales volume, as of September 30, 2015 are as follows: 
 
For the Periods Ending September 30,
 
(unaudited)
2016
$
26,026,215

2017
23,175,191

2018
18,503,066

2019
13,963,958

2020
9,952,436

Thereafter
16,213,972

Total minimum rentals
$
107,834,838

8. Equity
Earnings per share
Basic earnings per share for the Company’s common shareholders is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net loss attributable to noncontrolling interests, by the Company’s weighted-average shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) attributable to common shareholders, excluding amounts attributable to preferred shareholders and the net loss attributable to noncontrolling interests, by the weighted-average number of common shares including any dilutive shares.
As of September 30, 2015, 1,852,316 of the Operating Partnership’s common units outstanding to noncontrolling interests are eligible to be converted into shares of common stock on a one-to-one basis. Additionally, 729,119 shares of Series B convertible preferred stock ("Series B Preferred Stock") and $3,000,000 of senior convertible debt are eligible to be

17

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
8. Equity (continued)


converted into 5,062,674 shares of the Company's common stock and warrants to purchase 2,635,025 shares of the Company's common stock were outstanding at September 30, 2015. The common units, convertible preferred stock, senior convertible debt and warrants have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive.
Dividends
Dividends were made to holders of common units, common shares and preferred shares as follows:
 
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
 
2015
 
2014
 
2015
 
2014
Common unit and common shareholders
 
$
3,683,804

 
$
996,657

 
$
6,099,075

 
$
2,930,094

Preferred shareholders
 
2,279,907

 
1,088,062

 
13,116,233

 
1,552,320

Total
 
$
5,963,711

 
$
2,084,719

 
$19,215,308
 
$4,482,414
 

On September 17, 2015, the Company declared a $0.0175 per share dividend payable on or about October 31, 2015 to shareholders and unitholders of record as of September 30, 2015. Accordingly, the Company has accrued $1,228,779 as of September 30, 2015 for this dividend.
During the three months ended September 30, 2015, the Company declared quarterly dividends of $422,774 to preferred shareholders of record as of September 30, 2015 to be paid on October 15, 2015. Accordingly, the Company has accrued $422,774 as of September 30, 2015 for this dividend.

Series C Preferred Stock Offering

On March 19, 2015, the Company entered into securities purchase agreements dated as of March 19, 2015 (the “Securities Purchase Agreements”), with certain accredited investors (the “Investors”), pursuant to which, among other things, the Company sold an aggregate of 93,000 shares of Series C Mandatorily Convertible Cumulative Perpetual Preferred Stock, liquidation value $1,000 per share (the “Series C Preferred Stock”), in a private placement (the “Private Placement”) to the Investors in exchange for aggregate consideration of $93,000,000, consisting of $90,000,000 in cash and the exchange of $3,000,000 in senior convertible debt. Each share of Series C Preferred Stock was sold to the Investors at an offering price of $1,000 per share. Net proceeds from the Private Placement totaled $83,415,894, which includes the impact of the underwriters' selling commissions and legal, accounting and other professional fees. The Company is using the net offering proceeds to acquire properties and for general working capital.

From March 19, 2015 until June 11, 2015, the holders of Series C Preferred Stock were entitled to receive, when, and if authorized by the Company’s Board of Directors and declared by the Company out of legally available funds, a dividend, on an as converted basis, that mirrors any dividend payable on shares of common stock and also were entitled to share in any other distribution made on the common stock on an as converted basis (other than dividends or other distributions payable in common stock). Any dividends or other distributions on the Series C Preferred Stock during this time period were to be paid, on an as converted basis, pro rata from the date of issuance.
 
The Series C Preferred Stock was automatically converted into shares of common stock on June 11, 2015, which was the fifth business day following the June 4, 2015 approval by the requisite holders of the common stock of the conversion of the Series C Preferred Stock into Common Stock and the issuance of Common Stock upon such conversion. Each share of Series C Preferred Stock converted into 500 shares of common stock at the conversion price of $2.00 per share. The conversion of the Series C Preferred stock into Common Stock at this rate was considered to be a beneficial conversion feature, which resulted in a deemed distribution of $59,520,000, which is included in the condensed consolidated statement of equity and also in the condensed consolidated statements of cash flows as a non-cash transaction.
    
    

18

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
8. Equity (continued)


Series A and Series B Preferred Stock Exchange Offer

On June 15, 2015, the Company entered into an exchange offer (the “Exchange Offer”) to holders of its Series A Preferred Stock, no par value per share, $1,000 liquidation preference per share (the “Series A Preferred Stock”) and Series B Preferred Stock. The Exchange Offer permitted tendering shareholders to exchange their shares of Series A Preferred Stock or Series B Preferred Stock for an aggregate of up to 20,853,250 of newly issued shares of the Company’s common stock, $0.01 par value per share.

Each share of Series A Preferred Stock was exchangeable for 500 shares of common stock, and each share of the Series B Preferred Stock was exchangeable for 12.5 shares of common stock. On July 20, 2015, the Company completed the Exchange Offer, under which 1,247 shares of Series A Preferred Stock and 865,481 shares of Series B Preferred Stock were tendered for 11,442,002 newly issued shares of the Company's common stock. The Company paid cash in lieu of any fractional shares of common stock upon the exchange of the Series A Preferred Stock and Series B Preferred Stock. The Exchange Offer was considered to be a beneficial conversion feature, which resulted in a deemed distribution of $13,124,506, which is included in the condensed consolidated statement of equity and also in the condensed consolidated statements of cash flows as a non-cash transaction.

On June 1, 2015, in conjunction with the Exchange Offer, the Company increased the number of common stock shares authorized from 75,000,000 to 150,000,000 shares.
    
2015 Long-Term Incentive Plan

On June 4, 2015, the Company's shareholders approved the 2015 Long-Term Incentive Plan (the "2015 Incentive Plan"). The 2015 Incentive Plan allows for issuance of up to 1,000,000 shares of the Company's common stock to employees, directors, officers and consultants for services rendered to the Company.

Equity Issuances under Share Incentive Plan

During the nine months ended September 30, 2015, the Company issued 221,096 shares to consultants for services rendered to the Company. The market value of these shares at the time of issuance was approximately $506,000. As of September 30, 2015, there are 856,164 shares available for issuance under the Company’s 2015 Stock Incentive Plan.
9. Commitments and Contingencies
The Company is involved in various legal proceedings arising in the ordinary course of its business, including, but not limited to commercial disputes. The Company believes that such litigation, claims and administrative proceedings will not have a material adverse impact on its financial position or its results of operations. The Company records a liability when it considers the loss probable and the amount can be reasonably estimated.
On July 10, 2008, one of the Company’s subsidiaries, Perimeter Associates, LLC (“Perimeter”), sued a tenant for breach of contract, guaranty of the contract and fraud related to an executed lease. In response, on August 22, 2008, the defendant filed a counterclaim against Perimeter for breach of contract, unjust enrichment and fraud. On April 8, 2013, the court found in favor of the defendant and assessed damages against Perimeter in the amount of $13,300. On or about May 8, 2013, Perimeter appealed the judgment of the lower court to the Oklahoma Supreme Court. Subsequent to the initial judgment, the defendant’s attorney applied to the court to be reimbursed for approximately $368,000 in legal fees incurred by the defendant during litigation. On July 9, 2013, the lower court awarded the defendant approximately $267,000 of the defendant’s legal fees. On July 24, 2015, the Oklahoma Court of Civil Appeals affirmed the judgment against Perimeter, resulting in a total award of approximately $352,000 which includes interest and other fees. The Company will appeal the judgment to the Oklahoma Supreme Court. The Company has posted bonds for both judgments and has accrued for the judgments in its financial statements. The Company will continue to vigorously litigate the issues raised upon appeal.
10. Related Party Transactions
Prior to being acquired by the Company in October 2014, Wheeler Interests, LLC (“Wheeler Interests”), which was controlled by Jon S. Wheeler (“Mr. Wheeler”), the Company’s Chairman and Chief Executive Officer, leased the Company’s Riversedge property under a 10 year operating lease expiring in November 2017, with four five year renewal options available. The lease required monthly base rent payments of $24,000 and provided for annual increases throughout the term of the lease

19

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
10. Related Party Transactions (continued)


and subsequent option periods. Additionally, Wheeler Interests reimbursed the Company for a portion of the property’s operating expenses and real estate taxes.
The following summarizes related party activity as of and for the nine months ended September 30, 2015 and 2014 (unaudited):
 
September 30,
 
2015
 
2014
Amounts paid to affiliates
$
247,863

 
$
2,798,847

Amounts due from (to) affiliates
$
388,675

 
$
(193,532
)
Rent and reimbursement income received from Wheeler Interests
$

 
$
296,403

Rent and other tenant receivables due from Wheeler Interests
$

 
$
509,331

11. Subsequent Events
Sale of Jenks Reasors
On October 19, 2015, the Company completed its sale of Jenks Reasors for a contract price of approximately $12.2 million. As of September 30, 2015, the carrying of this property was approximately $10.9 million.
Sale of Harps at Harbor Point
On October 20, 2015, the Company completed its sale of Harps at Harbor Point for a contract price of approximately $5.0 million. As of September 30, 2015, the carrying value of this property was approximately $4.3 million.
Sale of Bixby Commons
On October 27, 2015, the Company completed its sale of Bixby Commons for a contract price of approximately
$11.0 million. As of September 30, 2015, the carrying value of this property was approximately $10.0 million.


    
    



20


Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this Form 10-Q, along with the consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2014 Form 10-K for the year ended December 31, 2014. For more detailed information regarding the basis of presentation for the following information, you should read the notes to the unaudited condensed consolidated financial statements included in this Form 10-Q.
This Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, including discussion and analysis of our financial condition, anticipated capital expenditures required to complete projects, amounts of anticipated cash distributions to our shareholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “potential,” “predicts,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or the negative of such terms and variations of these words and similar expressions, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. You are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this Form 10-Q. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
The forward-looking statements should be read in light of these factors and the factors identified in the “Risk Factors” sections of our Registration Statement on Form S-11 (as amended) filed with the Securities and Exchange Commission (“SEC”) on September 9, 2014.
Executive Overview
The September 30, 2015 three and nine month periods includes the combined operations of all properties owned at December 31, 2014 as described in our 2014 Form 10-K, approximately nine months of operations for Pierpont Centre, six months of Alex City Marketplace, a full quarter of operations for Butler Square and Brook Run and a partial quarter of operations for Beaver Ruin Village I and II, Chesapeake Square, Sunshine Plaza, Barnett Portfolio, Grove Park, Parkway Plaza, Fort Howard Square and Conyers Crossing. Conversely, the September 30, 2014 three and nine month periods only include a full period of combined operations for all properties owned at December 31, 2013 as described in our 2013 Annual Report on Form 10-K for the year ended December 31, 2013 ("2013 Form 10-K"), and partial periods of operations for Cypress Shopping Center, Harrodsburg Marketplace, Port Crossing, LaGrange Marketplace, Freeway Junction and Graystone Crossing. The September 30, 2015 three and nine month period results also include the full impact from internalizing the Operating Companies. In providing the following discussion and analysis of our results of operations, we have separately identified the activities of properties owned for the entire 2014 annual and 2015 nine month periods (collectively referred to as “same stores”) and of those properties acquired during 2014 and 2015 (collectively referred to as “new stores”). This illustrates the significant impact the properties acquired during 2014 and 2015 had on our results of operations.
Leasing Activity
Renewals during the three months ended September 30, 2015 consisted of sixteen deals totaling 76,980 square feet with a weighted-average increase of $1.15 per square foot, representing an increase of 12.60% over prior rates. The rates on negotiated renewals resulted in a weighted-average increase of $1.55 per square foot on nine renewals, a $0.21 decrease on two renewal and no change per square foot on five renewals. Three renewals represented options being exercised. Additionally, we signed ten new leases totaling 19,258 square feet during the three months ended September 30, 2015 with weighted-average rents of $14.55.
Renewals during the first nine months of 2015 were comprised of forty-two deals totaling 232,943 square feet with a weighted-average increase of $0.82 per square foot, representing an increase of 9.01% over prior rates. The rates on negotiated renewals resulted in a weighted-average increase of $1.15 per square foot on twenty-seven renewals, a $1.60 weighted-average decrease on four renewals and no changes per square foot on eleven renewals. Ten renewals represented options being exercised. Additionally, we signed sixteen new leases totaling 28,720 square feet during the nine months ended September 30, 2015, with weighted-average rents of $14.04.

21


Approximately 5.30% of our gross leasable area is subject to leases that expire during the twelve months ending September 30, 2016 that have not already been renewed. Based on recent market trends, we believe that these leases will be renewed at amounts and terms comparable to existing lease agreements.
Acquisitions
On January 9, 2015, the Company completed its acquisition of 1.50 acres of undeveloped land located on Laskin Road in Virginia Beach, Virginia ("Laskin Road") for a contract price of $1.6 million. The Company acquired Laskin Road for future development opportunities. The Company paid cash of $150,000 with the balance of the contract price to be paid in common units on the earlier of the one year anniversary of the acquisition or the completion of any development activities. The number of units issued will be determined using the Company's Common Stock price on the day prior to issuance.

On January 14, 2015, the Company completed its acquisition of Pierpont Centre, a 122,259 square foot shopping center located in Morgantown, West Virginia ("Pierpont Centre") for a contract price of $13.9 million, paid through a combination of cash and debt. Pierpont Centre was 100% leased as of the acquisition date and its major tenants include GNC, Hallmark, Michael's, Ruby Tuesday and Outback Steakhouse.

On March 27, 2015, the Company completed its acquisition of Brook Run Properties, LLC ("Brook Run Properties"), consisting of a 2.0 acre parcel of undeveloped real estate located adjacent to the Brook Run Shopping Center in Richmond, Virginia, for a contract price of $300,000, paid in cash. The Company acquired the property for potential development and to complement the adjacent shopping center.

On April 1, 2015, the Company completed its acquisition of Alex City Marketplace, a 147,791 square foot shopping center located in Alexander City, Alabama ("Alex City Marketplace") for a contract price of $10.3 million, paid through a combination of cash and debt. Alex City Marketplace was 86% leased as of the acquisition date and its major tenants include Winn Dixie and Goody's.

On April 15, 2015, the Company completed its acquisition of Butler Square, a 82,400 square foot shopping center located in Mauldin, South Carolina ("Butler Square") for a contract price of $9.4 million, paid through a combination of cash and debt. Butler Square was 100% leased as of the acquisition date and its major tenants include Bi-Lo and Dollar Tree.

On June 2, 2015, the Company completed its acquisition of Brook Run Shopping Center, a 147,738 square foot shopping center located in Richmond, Virginia ("Brook Run") for a contract price of $18.5 million, paid through a combination of cash and debt. Brook Run was 92% leased as of the acquisition date and its major tenants include Martin's Food Store and CVS.

On July 1, 2015, the Company completed its acquisition of Beaver Ruin Village, a 74,048 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village") for a contract price of $12.4 million, paid through a combination of cash and debt. Beaver Ruin Village was 91% leased as of the acquisition date and its major tenants include Chase Bank, Firehouse Subs and State Farm Insurance.

On July 1, 2015, the Company completed its acquisition of Beaver Ruin Village II, a 34,925 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village II") for a contract price of $4.4 million, paid through a combination of cash and debt. Beaver Ruin Village II was 100% leased as of the acquisition date and its major tenants include AutoZone and Metro PCS.

On July 1, 2015, the Company completed its acquisition of Columbia Fire Station, consisting of two vacant buildings on a 1.0 acre land parcel located in Columbia, South Carolina ("Columbia Fire Station") for a contract price of $2.4 million, paid through a combination of cash and debt. The Company plans to redevelop this property for retail use.

On July 10, 2015, the Company completed its acquisition of Chesapeake Square, a 99,848 square foot shopping center located in Onley, Virginia ("Chesapeake Square") for a contract price of $6.3 million. Chesapeake Square was 76% leased as of the acquisition date and is anchored by a Food Lion grocery store. The Company acquired Chesapeake Square from a related party through a combination of cash and the issuance of 125,966 common units in the Operating Partnership.

On July 21, 2015, the Company completed its acquisition of Sunshine Plaza, a 111,189 square foot shopping center located in Lehigh Acres, Florida ("Sunshine Plaza") for a contract price of $10.4 million. Sunshine Plaza was 96% leased as of the acquisition date and is anchored by a Winn-Dixie grocery store. The Company acquired Sunshine Plaza through a combination of cash and debt.


22


On July 24, 2015, the Company completed its acquisition of Carolina Place consisting of a 2.14 acre parcel of land adjacent to Chesapeake Square for a contract price of $250,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center.

On August 14, 2015, the Company completed its acquisition of 10.39 acres located in Hilton Head, South Carolina ("Hilton Head Land") for a contract price of $1.0 million paid in cash. The Company acquired the property for potential development and to compliment an adjacent redevelopment project.

On August 21, 2015, the Company completed its acquisition of Cardinal Plaza, located in Henderson, North Carolina, Franklinton Square, located in Franklinton, North Carolina and Nashville Commons, located in Nashville, North Carolina (collectively known as the "Barnett Portfolio") for a contract price of $15.3 million. The Barnett Porfolio totals 171,466 square feet, was 91% leased as of the acquisition date and all anchored by Food Lion grocery stores. The Company acquired the Barnett Portfolio through a combination of cash and debt.

On September 9, 2015, the Company completed its acquisition of Grove Park Shopping Center, a 106,557 square foot shopping center located in Orangeburg, South Carolina ("Grove Park") for a contract price of $6.6 million. Grove Park was 90% leased as of the acquisition date and is anchored by a Bi-Lo grocery store. The Company acquired Grove Park through a combination of cash and debt.

On September 15, 2015, the Company completed its acquisition of Parkway Plaza Shopping Center, a 52,365 square foot shopping center and 2.1 acres of adjacent undeveloped land located in Brunswick, Georgia ("Parkway Plaza") for a contract price of $6,075,000. Parkway Plaza was 97% leased as of the acquisition date and is anchored by a Winn Dixie grocery store. The Company acquired Parkway Plaza through a combination of cash and debt.

On September 30, 2015, the Company completed its acquisition of Ft. Howard Square Shopping Center, a 113,652 square foot shopping center located in Rincon, Georgia ("Ft. Howard Square") for a contract price of $11.5 million. Ft. Howard Square was 95% leased as of the acquisition date and is leased by nationally recognized tenants Goodwill and Dollar Tree. The Company acquired Ft. Howard Square through a combination of cash and debt.

On September 30, 2015, the Company completed its acquisition of Conyers Crossing Shopping Center, a 170,475 square foot shopping center located in Conyers, Georgia ("Conyers Crossing") for a contract price of $10.8 million. Conyers Crossing was 99% leased as of the acquisition date and is leased by nationally recognized tenants Hobby Lobby and Burlington Coat Factory. The Company acquired Conyers Crossing through a combination of cash and debt.

Critical Accounting Policies

In preparing the condensed consolidated financial statements, we have made estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results may differ from these estimates. A summary of our critical accounting policies is included in our 2014 Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no significant changes to these policies during the nine months ended September 30, 2015. For disclosure regarding recent accounting pronouncements and the anticipated impact they will have on our operations, please refer to Note 2 of the condensed consolidated financial statements included in this Form 10-Q.

23


Three and Nine Months Ended September 30, 2015 Compared to the Three and Nine Months Ended September 30, 2014
Results of Operations
The following table presents a comparison of the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014, respectively.
 
Three Months Ending 
September 30,
 
Nine Months Ending
September 30,
 
Three Months Ended Changes
 
Nine Months Ended Changes
 
2015
 
2014
 
2015
 
2014
 
Change
 
% Change
 
Change
 
% Change
PROPERTY DATA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of properties owned and operated at period end(1)
45

 
28

 
45

 
28

 
17

 
60.71
 %
 
17

 
60.71
 %
Aggregate gross leasable area at period end(1)
3,338,858

 
1,755,845

 
3,338,858

 
1,755,845

 
1,583,013

 
90.16
 %
 
1,583,013

 
90.16
 %
Ending occupancy rate at period end (1)
94.25
%
 
95.20
%
 
94.25
%
 
95.20
%
 
(0.95
)%
 
(1.00
)%
 
(0.95
)%
 
(1.00
)%
FINANCIAL DATA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenues
$
5,552,882

 
$
2,815,486

 
$
13,479,755

 
$
7,462,653

 
$
2,737,396

 
97.23
 %
 
$
6,017,102

 
80.63
 %
Asset management fees
132,335

 

 
465,817

 

 
132,335

 
 %
 
465,817

 
 %
Commissions
86,682

 

 
307,292

 

 
86,682

 
 %
 
307,292

 
 %
Tenant reimbursements and other revenues
1,395,314

 
690,928

 
3,961,021

 
2,016,689

 
704,386

 
101.95
 %
 
1,944,332

 
96.41
 %
Total Revenue
7,167,213

 
3,506,414

 
18,213,885

 
9,479,342

 
3,660,799

 
104.40
 %
 
8,734,543

 
92.14
 %
EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property operations
2,094,054

 
1,101,006

 
5,474,129

 
2,819,618

 
993,048

 
90.19
 %
 
2,654,511

 
94.14
 %
Non-REIT management and leasing services
299,566

 

 
901,118

 

 
299,566

 
 %
 
901,118

 
 %
Depreciation and amortization
4,824,448

 
1,961,041

 
11,672,780

 
4,996,141

 
2,863,407

 
146.01
 %
 
6,676,639

 
133.64
 %
Provision for credit losses
112,580

 
46,774

 
214,316

 
18,742

 
65,806

 
140.69
 %
 
195,574

 
1,043.51
 %
Corporate general & administrative
4,895,567

 
3,024,675

 
10,710,262

 
5,203,728

 
1,870,892

 
61.85
 %
 
5,506,534

 
105.82
 %
Total Operating Expenses
12,226,215

 
6,133,496

 
28,972,605

 
13,038,229

 
6,092,719

 
99.34
 %
 
15,934,376

 
122.21
 %
Operating Loss
(5,059,002
)
 
(2,627,082
)
 
(10,758,720
)
 
(3,558,887
)
 
(2,431,920
)
 
92.57
 %
 
(7,199,833
)
 
202.31
 %
Interest expense
(2,306,017
)
 
(1,491,749
)
 
(6,406,466
)
 
(3,945,332
)
 
(814,268
)