Attached files
| file | filename |
|---|---|
| EX-32.2 - EXHIBIT 32.2 - Resource Apartment REIT III, Inc. | reit3-20160930x10qex322.htm |
| EX-32.1 - EXHIBIT 32.1 - Resource Apartment REIT III, Inc. | reit3-2016930x10qex321.htm |
| EX-31.2 - EXHIBIT 31.2 - Resource Apartment REIT III, Inc. | reit3-2016930x10qex312.htm |
| EX-31.1 - EXHIBIT 31.1 - Resource Apartment REIT III, Inc. | reit3-2016930x10qex311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2016
o | 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 333-207740
RESOURCE APARTMENT REIT III, Inc.
(Exact name of registrant as specified in its charter)
Maryland | 47-4608249 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
1845 Walnut Street, 18th Floor, Philadelphia, PA, 19103 |
(Address of principal executive offices) (Zip code) |
(215) 231-7050 |
(Registrant's telephone number, including area code) |
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 þ No o
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o
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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer þ | (Do not check if a smaller reporting company) | Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ
As of November 10, 2016, there were 320,137 outstanding shares of Class A common stock and 71,176 outstanding shares of Class T common stock of Resource Apartment REIT III, Inc.
EXPLANATORY NOTE
Resource Apartment REIT III, Inc. (the "Company") is filing this Amendment No. 1 of Form 10-Q/A (this "amendment") to amend its Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the "Original Filing"), originally filed with the U.S. Securities and Exchange Commission on November 14, 2016. In Part II, Other Information, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, the Original Filing included the statement, “As of September 30, 2016, our Advisor has incurred costs on our behalf of approximately $1.3 million.” After the Original Filing was made, the Company discovered that the amount was incorrect. The correct amount is $2.3 million.
In addition, the Company discovered that the Class T Shares as of November 10, 2016 on the cover of the Original Filing were presented as 71,175 and should have been 71,176.
The Company is amending the Original Filing to correct these two errors by restating subsection Part II, Item 2 in its entirety and has also updated the Class T share count on the cover page. No revisions are being made to the Company's financial statements. This amendment speaks as of the Original Filing date, does not reflect events occurring after the filing of the Original Filing, or modify or update those disclosures that may be affected by subsequent events, and no other changes are being made to any other disclosure contained in the Original Filing.
PART II. OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
During the period covered by this report, we did not sell any unregistered securities.
Use of Proceeds
On April 28, 2016, our Registration Statement on Form S-11 (File No. 333-207740), covering our initial public offering of up to $1.1 billion in shares of common stock, consisting of up to $1.0 billion in our primary offering in any combination of Class A and Class T shares and up to $100.0 million of common stock under our distribution reinvestment plan ("DRIP") in any combination of Class A and Class T shares, was declared effective under the Securities Act of 1933. We retained Resource Securities, an affiliate of our Advisor, as the dealer-manager for our offering. The initial offering price for shares in the primary offering is $10.00 per share for Class A and $9.47 per share for Class T. The initial offering price for shares offered pursuant to the DRIP is $9.60 per share for Class A and $9.09 per share for Class T. As of September 30, 2016, our Advisor has incurred costs on our behalf of approximately $2.3 million.
We expect to use substantially all of the net proceeds from our ongoing initial public offering to invest in and manage a diverse portfolio of commercial real estate assets. As of September 30, 2016, a total of 264,722 Class A shares and 10,982 Class T shares have been issued in connection with our public offering resulting in gross offering proceeds of $2.4 million.
Types of Expense | Amount | |||
Selling commissions | $ | 21,330 | ||
Dealer manager fees | 6,405 | |||
Other organization and offering costs (excluding underwriting compensation) | 4,965 | |||
Total expenses | $ | 32,700 | ||
From the commencement of the public offering through September 30, 2016, we incurred selling commissions, dealer manager fees, other underwriting compensation and other organization and offering costs in the amounts set forth above. We pay selling commissions and dealer manager fees to Resource Securities, and Resource Securities reallows all selling commissions and a portion of the dealer manager fees to participating broker-dealers. In addition, we reimburse our Advisor and Resource Securities for certain offering expenses as described in our prospectus, as amended and supplemented.
We also pay Resource Securities an annual distribution and shareholder servicing fee of 1.0% of the purchase price (or, once reported, the NAV) per share of Class T common stock sold in the primary offering for five years from the date on which each share is issued up to a total of 5.0%. The distribution and shareholder servicing fee is an ongoing fee that is not paid at the time of purchase and is not intended to be a principal use of offering proceeds; it is therefore not included in the table above. As of September 30, 2016, we had accrued approximately $5,200 in distribution and shareholder servicing fees, which is the maximum amount of the distribution and shareholder servicing fee payable with respect to all Class T shares sold in the primary portion of our initial public offering.
From the commencement of our ongoing initial public offering through September 30, 2016, the net offering proceeds to us, after deducting the total expenses incurred as described above, were approximately $2.3 million. As of September 30, 2016, we have used the net proceeds from our ongoing initial public offering and debt financing to acquire approximately $2.5 million in real estate investments. Of the amount used for the purchase of these investments, approximately $51,505 is payable to our Advisor, as acquisition fees and acquisition expense reimbursements.
Share Repurchase Program
Our common stock is currently not listed on a national securities exchange and we will not seek to list our common stock
unless and until such time as our Board of Directors determines that the listing of our common stock would be in the
best interests of our stockholders. In order to provide stockholders with the benefit of some interim liquidity, our Board of Directors has adopted a share repurchase program that enables our stockholders to sell their shares back to us after they have held them for at least one year, subject to significant conditions and limitations. The terms of our share repurchase program are more flexible in cases involving the death or disability of a stockholder. We may reject any request for repurchase of shares. Repurchases of
shares of our common stock, when requested, generally will be made quarterly. We will limit the number of shares repurchased during any calendar year to 5.0% of the number of shares of our common stock outstanding on December 31 of the previous calendar year. In addition, we are only authorized to repurchase shares using proceeds from our DRIP plus 1.0% of the operating cash flow from the previous fiscal year (to the extent positive) and any additional operating funds, if any, as our Board in its sole discretion may reserve for this purpose. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests.
Unless the shares of our common stock are being repurchased in connection with a stockholder’s death or qualifying
disability, the purchase price for shares repurchased under our share repurchase program will be as set forth below until November 15, 2018 (the "NAV pricing date"), which is two years and 150 days after we satisfied the minimum offering requirement. Prior to the NAV pricing date, and unless the shares are being repurchased in connection with a stockholder’s death or qualifying disability, we will initially repurchase shares at a price equal to, or at a discount from, the purchase price paid for the shares being repurchased as follows:
Share Purchase Anniversary | Repurchase Price as a Percentage of Purchase Price | |
Less than 1 year | No Repurchase Allowed | |
1 year | 92.5% | |
2 years | 95.0% | |
Notwithstanding the foregoing, until the NAV pricing date, shares received as a stock distribution will be redeemed at a
purchase price of $0.00. In addition, the purchase price per share will be adjusted for any stock combinations, splits, recapitalizations
and the like with respect to the shares of common stock and reduced by the aggregate amount of net sale or refinance proceeds
per share, if any, distributed to the stockholder prior to the repurchase date. Shares repurchased in connection with a stockholder’s death or qualifying disability will be repurchased at a price per share equal to 100% of the amount the stockholder paid for each share, or, once we have established an estimated NAV per share, 100% of such amount, as determined by our Board of Diretors, subject to any special distributions previously made to our stockholders. Shares repurchased in connection with a stockholder’s other exigent circumstances, such as bankruptcy, within one year from the purchase date, will be repurchased at a price per share equal to the price per share we would pay had the stockholder held the shares for one year from the purchase date, and at all other times in accordance with the terms described above. A stockholder must have beneficially held the shares for at least one year prior to offering them for sale to us through our share repurchase program, unless the shares are being repurchased in connection with a stockholder’s death, qualifying disability, or certain other exigent circumstances. Our Board of Directors reserves the right, in its sole discretion, at any time and from time to time, to waive the one-year holding period requirement in the event of the death or qualifying disability of a stockholder, other involuntary exigent circumstances such as bankruptcy, or a mandatory distribution requirement under a stockholder’s IRA.
During the period covered by this report, we did not repurchase any of our securities as no securities were eligible for repurchase.
ITEM 6. EXHIBITS
Exhibit No. | Description | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Chief Executive Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of Chief Financial Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
RESOURCE APARTMENT REIT III, INC. | |
November 17, 2016 | By: /s/ Kevin M. Finkel |
Kevin M. Finkel | |
Chief Executive Officer | |
(Principal Executive Officer) | |
November 17, 2016 | By: /s/ Steven R. Saltzman |
Steven R. Saltzman | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) | |