EX-99.1 5 brst-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

Broad Street Realty, Inc.

Pro Forma Condensed Consolidated Financial Statements

(Unaudited)

 

On July 20, 2023, a subsidiary of Broad Street Realty, Inc. (the “Company”) completed the sale of Dekalb Plaza, a retail shopping center located in Philadelphia, Pennsylvania with approximately 178,356 square feet of gross leasable area, for a purchase price of $23.1 million in cash (the “Dekalb Disposition”). In addition, on June 30, 2023, a subsidiary of the Company completed the sale of Spotswood Valley Square Shopping Center (together with Dekalb Plaza, the “Disposed Properties”), a retail shopping center located in Harrisonburg, Virginia with approximately 190,646 square feet of gross leasable area, for a purchase price of $23.0 million in cash (together with the Dekalb Disposition, the “Property Dispositions”).

The accompanying unaudited pro forma condensed consolidated balance sheet as of March 31, 2023, reflects the financial position of the Company as if the Property Dispositions had been completed on March 31, 2023.

The accompanying unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2023 and the year ended December 31, 2022 present the results of operations of the Company as if the Property Dispositions had been completed on January 1, 2023 and January 1, 2022, respectively.

The unaudited pro forma condensed consolidated financial statements (including the notes thereto) are qualified in their entirety by reference to and should be read in conjunction with (i) the unaudited condensed consolidated financial statements of the Company as of and for the three months ended March 31, 2023, included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2023 and (ii) the audited consolidated financial statements of the Company as of and for the year ended December 31, 2022, included in its Annual Report on Form 10-K for the year ended December 31, 2022.

The pro forma adjustments reflected in the unaudited pro forma condensed consolidated financial statements are based upon currently available information and certain assumptions and estimates; therefore, the actual effects of the Property Dispositions will differ from the pro forma adjustments. However, the Company's management considers the applied estimates and assumptions to provide a reasonable basis for the presentation of the expected accounting impact for the Property Dispositions.

The accompanying unaudited pro forma condensed consolidated financial statements are subject to a number of estimates, assumptions, and other uncertainties, and do not purport to be indicative of the actual results of operations that would have occurred had the Property Dispositions occurred on the dates specified, nor do such unaudited pro forma condensed consolidated financial statements purport to be indicative of the results of operations that may be achieved in the future.

These unaudited pro forma condensed consolidated financial statements have been prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the Property Dispositions been consummated as of the dates indicated.

 

 

 

 

Broad Street Realty, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

March 31, 2023

(dollars in thousands)

 

 

Broad Street Realty, Inc. Historical

 

 

Disposition of Spotswood

 

 

Disposition of Dekalb

 

 

Company Pro Forma

 

 

 

A

 

 

B

 

 

B

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Real estate properties

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

$

67,225

 

 

$

(4,716

)

 

$

(7,573

)

 

$

54,936

 

Buildings and improvements

 

 

302,471

 

 

 

(6,482

)

 

 

(18,150

)

 

 

277,839

 

Intangible lease assets

 

 

41,228

 

 

 

(3,473

)

 

 

(3,554

)

 

 

34,201

 

Construction in progress

 

 

4,073

 

 

 

(10

)

 

 

(4

)

 

 

4,059

 

Furniture and equipment

 

 

1,711

 

 

 

—

 

 

 

—

 

 

 

1,711

 

Less accumulated depreciation and amortization

 

 

(47,811

)

 

 

3,645

 

 

 

4,685

 

 

 

(39,481

)

Total real estate properties, net

 

 

368,897

 

 

 

(11,036

)

 

 

(24,596

)

 

 

333,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

8,496

 

 

 

8,259

 

C

 

4,338

 

C

 

21,093

 

Restricted cash

 

 

5,350

 

 

 

—

 

 

 

—

 

 

 

5,350

 

Straight-line rent receivable

 

 

2,790

 

 

 

(132

)

 

 

(327

)

 

 

2,331

 

Tenant and accounts receivable, net of allowance

 

 

1,926

 

 

 

(22

)

 

 

—

 

 

 

1,904

 

Derivative assets

 

 

2,830

 

 

 

—

 

 

 

—

 

 

 

2,830

 

Other assets, net

 

 

3,857

 

 

 

(33

)

 

 

(457

)

 

 

3,367

 

Total Assets

 

$

394,146

 

 

$

(2,964

)

 

$

(21,042

)

 

$

370,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage and other indebtedness, net

 

$

262,658

 

 

$

(14,120

)

D

$

(17,459

)

D

$

231,079

 

Accounts payable and accrued liabilities

 

 

14,599

 

 

 

(333

)

 

 

(340

)

 

 

13,926

 

Unamortized intangible lease liabilities, net

 

 

1,360

 

 

 

(52

)

 

 

(364

)

 

 

944

 

Deferred tax liabilities

 

 

2,285

 

 

 

—

 

 

 

—

 

 

 

2,285

 

Payables due to related parties

 

 

54

 

 

 

—

 

 

 

—

 

 

 

54

 

Deferred revenue

 

 

1,528

 

 

 

(122

)

 

 

(33

)

 

 

1,373

 

Total liabilities

 

 

282,484

 

 

 

(14,627

)

 

 

(18,196

)

 

 

249,661

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Temporary Equity

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling Fortress preferred interest

 

 

76,525

 

 

 

—

 

 

 

—

 

 

 

76,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Permanent Equity

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 1,000,000 shares authorized: Series A preferred stock, 20,000 shares authorized, 500 shares issued and outstanding at March 31, 2023

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Common stock, $0.01 par value, 50,000,000 shares authorized, 32,412,278 shares issued and outstanding at March 31, 2023

 

 

324

 

 

 

—

 

 

 

—

 

 

 

324

 

Additional paid in capital

 

 

68,350

 

 

 

—

 

 

 

—

 

 

 

68,350

 

Accumulated deficit

 

 

(33,940

)

 

 

11,663

 

C

 

(2,846

)

C

 

(25,123

)

Accumulated other comprehensive income

 

 

1,788

 

 

 

—

 

 

 

—

 

 

 

1,788

 

Total Broad Street Realty, Inc. stockholders' equity

 

 

36,522

 

 

 

11,663

 

 

 

(2,846

)

 

 

45,339

 

Noncontrolling interest

 

 

(1,385

)

 

 

—

 

 

 

—

 

 

 

(1,385

)

Total permanent equity

 

 

35,137

 

 

 

11,663

 

 

 

(2,846

)

 

 

43,954

 

Total Liabilities, Temporary Equity and Permanent Equity

 

$

394,146

 

 

$

(2,964

)

 

$

(21,042

)

 

$

370,140

 

 

 

 

 

 

Broad Street Realty, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the three months ended March 31, 2023

(dollars in thousands, except per share amounts)

 

 

Broad Street Realty, Inc. Historical

 

 

Disposition of Spotswood

 

 

Disposition of Dekalb

 

 

Company Pro Forma

 

 

Revenues

 

AA

 

 

BB

 

 

BB

 

 

 

 

 

Rental income

 

$

10,208

 

 

$

(558

)

 

$

(683

)

 

$

8,967

 

 

Commissions

 

 

856

 

 

 

—

 

 

 

—

 

 

 

856

 

 

Management fees and other income

 

 

68

 

 

 

—

 

 

 

—

 

 

 

68

 

 

Total revenues

 

 

11,132

 

 

 

(558

)

 

 

(683

)

 

 

9,891

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

415

 

 

 

—

 

 

 

—

 

 

 

415

 

 

Depreciation and amortization

 

 

5,568

 

 

 

(264

)

 

 

(431

)

 

 

4,873

 

 

Property operating

 

 

3,061

 

 

 

(75

)

 

 

(85

)

 

 

2,901

 

 

Bad debt expense

 

 

42

 

 

 

—

 

 

 

—

 

 

 

42

 

 

General and administrative

 

 

3,671

 

 

 

(7

)

 

 

—

 

 

 

3,664

 

 

Total operating expenses

 

 

12,757

 

 

 

(346

)

 

 

(516

)

 

 

11,895

 

 

Operating loss

 

 

(1,625

)

 

 

(212

)

 

 

(167

)

 

 

(2,004

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

13

 

 

 

—

 

 

 

—

 

 

 

13

 

 

Derivative fair value adjustment

 

 

(179

)

 

 

—

 

 

 

—

 

 

 

(179

)

 

Net gain on fair value change of debt held under the fair value option

 

 

3,235

 

 

 

—

 

 

 

—

 

 

 

3,235

 

 

Interest expense

 

 

(4,781

)

 

 

188

 

 

 

311

 

 

 

(4,282

)

 

Other expense

 

 

(6

)

 

 

—

 

 

 

1

 

 

 

(5

)

 

Total other expense

 

 

(1,718

)

 

 

188

 

 

 

312

 

 

 

(1,218

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

1,683

 

 

 

—

 

 

 

 

 

 

1,683

 

 

Net loss

 

 

(1,660

)

 

 

(24

)

 

 

145

 

 

 

(1,539

)

 

Less: Preferred equity return on Fortress preferred equity

 

 

(3,427

)

 

 

—

 

 

 

—

 

 

 

(3,427

)

 

Less: Preferred equity accretion to redemption value

 

 

(415

)

 

 

—

 

 

 

—

 

 

 

(415

)

 

Less: Preferred OP units return

 

 

(112

)

 

 

—

 

 

 

—

 

 

 

(112

)

 

Plus: Net loss attributable to noncontrolling interests

 

 

1,014

 

 

 

—

 

 

 

—

 

 

 

1,014

 

 

Net loss attributable to common stockholders

 

$

(4,600

)

 

$

(24

)

 

$

145

 

 

$

(4,479

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding- basic and diluted

 

 

35,374,216

 

 

 

35,374,216

 

 

 

35,374,216

 

 

 

35,374,216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders per share

 

$

(0.13

)

 

$

(0.00

)

 

$

0.00

 

 

$

(0.13

)

CC

 

 

 

 

Broad Street Realty, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the year ended December 31, 2022

(dollars in thousands, except per share amounts)

 

 

Broad Street Realty, Inc. Historical

 

 

Disposition of Spotswood

 

 

Disposition of Dekalb

 

 

Company Pro Forma

 

 

 

 

AA

 

 

BB

 

 

BB

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

29,871

 

 

$

(2,392

)

 

$

(2,325

)

 

$

25,154

 

 

Commissions

 

 

2,523

 

 

 

—

 

 

 

—

 

 

 

2,523

 

 

Management and other fees

 

 

557

 

 

 

—

 

 

 

—

 

 

 

557

 

 

Total revenues

 

 

32,951

 

 

 

(2,392

)

 

 

(2,325

)

 

 

28,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

1,917

 

 

 

—

 

 

 

—

 

 

 

1,917

 

 

Depreciation and amortization

 

 

17,436

 

 

 

(1,872

)

 

 

(1,378

)

 

 

14,186

 

 

Property operating

 

 

8,672

 

 

 

(467

)

 

 

(456

)

 

 

7,749

 

 

Bad debt expense

 

 

235

 

 

 

—

 

 

 

—

 

 

 

235

 

 

General and administrative

 

 

13,513

 

 

 

(86

)

 

 

—

 

 

 

13,427

 

 

Total operating expenses

 

 

41,773

 

 

 

(2,425

)

 

 

(1,834

)

 

 

37,514

 

 

Operating loss

 

 

(8,822

)

 

 

33

 

 

 

(491

)

 

 

(9,280

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and other income (expense)

 

 

26

 

 

 

—

 

 

 

2

 

 

 

28

 

 

Derivative fair value adjustment

 

 

2,638

 

 

 

—

 

 

 

—

 

 

 

2,638

 

 

Net loss on fair value change on debt held under the fair value option

 

 

(3,151

)

 

 

—

 

 

 

—

 

 

 

(3,151

)

 

Interest expense

 

 

(12,710

)

 

 

823

 

 

 

1,118

 

 

 

(10,769

)

 

Loss on extinguishment of debt

 

 

(59

)

 

 

—

 

 

 

—

 

 

 

(59

)

 

Other expense

 

 

(52

)

 

 

—

 

 

 

3

 

 

 

(49

)

 

Total other expense

 

 

(13,308

)

 

 

823

 

 

 

1,123

 

 

 

(11,362

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

5,857

 

 

 

—

 

 

 

—

 

 

 

5,857

 

 

Net loss

 

 

(16,273

)

 

 

856

 

 

 

632

 

 

 

(14,785

)

 

Less: Preferred equity return on Fortress preferred equity

 

 

(1,492

)

 

 

—

 

 

 

—

 

 

 

(1,492

)

 

Less: Preferred OP units return

 

 

(48

)

 

 

—

 

 

 

—

 

 

 

(48

)

 

Plus: Net loss attributable to noncontrolling interests

 

 

2,522

 

 

 

—

 

 

 

—

 

 

 

2,522

 

 

Net loss attributable to common stockholders

 

$

(15,291

)

 

$

856

 

 

$

632

 

 

$

(13,803

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding- basic and diluted

 

 

32,378,526

 

 

 

32,378,526

 

 

 

32,378,526

 

 

 

32,378,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders per share

 

$

(0.47

)

 

$

0.03

 

 

$

0.01

 

 

$

(0.43

)

CC

 

 

 

 

 

 

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

Note 1 — Basis of Presentation

The unaudited pro forma condensed consolidated financial statements are derived from the historical condensed consolidated financial statements of the Company.

The unaudited pro forma condensed consolidated financial statements present the impact of the Property Dispositions, as described in the introduction to the unaudited pro forma condensed consolidated financial statements, on the Company’s financial position as of March 31, 2023 and results of operations for the three months ended March 31, 2023 and year ended December 31, 2022.

Note 2 – Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet

A. – Derived from the Company’s unaudited condensed consolidated balance sheet as of March 31, 2023.

B. – Reflects the removal of the assets and liabilities disposed in connection with the Property Dispositions.

C. – The Disposed Properties had an aggregate gross sales price of $46.1 million. The pro forma net gain on disposition of the real estate is based on the Company's historical unaudited condensed consolidated balance sheet information as of March 31, 2023 and is subject to change based upon, among other things, the actual balance sheet on the closing dates of the Property Dispositions and finalization of the Company’s financial closing procedures and may differ significantly from the actual net gain on disposition of real estate that the Company recognizes.

The following table reflects the sales proceeds and removal of the carrying value of the Disposed Properties:

(in thousands)

 

Gross sales price

 

$

46,100

 

Closing and transaction costs

 

 

(1,924

)

Net sales proceeds

 

 

44,176

 

Less: Carrying value of real estate assets

 

 

(35,632

)

Less: Carrying value of straight-line rent receivable

 

 

(459

)

Less: Carrying value of other assets

 

 

(512

)

Plus: Carrying value of unamortized lease intangibles liabilities

 

 

416

 

Plus: Carrying value of other liabilities

 

 

828

 

Pro forma gain on disposition of real estate, net

 

$

8,817

 

The pro forma gain is not reflected in the unaudited pro forma condensed consolidated statements of operations as the effect of the gain is nonrecurring.

D. – In connection with the sale of the Disposed Properties, debt of $31.6 million was repaid. The remaining net sales proceeds of $12.9 million are reflected as an increase to cash on the unaudited pro forma condensed consolidated balance sheet.

Note 3 – Adjustments to the Unaudited Pro Forma Condensed Consolidated Statements of Operations

AA. – Derived from the Company’s condensed consolidated statements of operations for the year ended December 31, 2022, and the three months ended March 31, 2023 (unaudited).

BB. – These pro forma adjustments remove the actual historical revenue and expenses from the operations of the Disposed Properties for the three months ended March 31, 2023 and the year ended December 31, 2022.

CC. – Pro forma net loss attributable to common stockholders per share-basic is calculated based on the pro forma weighted average common shares outstanding for the three months ended March 31, 2023 and for the year ended December 31, 2022. Net loss attributable to common stockholders per share-diluted is calculated by including the effect of dilutive securities. Potential dilution from (i) 500 common shares issuable upon conversion of shares of convertible preferred stock that were outstanding as of March 31, 2023 and December 31, 2022; (ii) 10,000 and 70,000 stock options that were outstanding as of March 31, 2023 and December 31, 2022, respectively; (iii) 93,137 and 159,439 restricted shares of common stock that were outstanding as of March 31, 2023 and December 31, 2022, respectively; and (iv) 3,260,000 warrants that were outstanding as of March 31, 2023 and December 31, 2022 are excluded from the diluted shares calculation because the effect is antidilutive. Units of limited partnership interest in Broad Street Operating Partnership, LP, the Company’s operating partnership, were excluded from the denominator because earnings were allocated to the noncontrolling interests in the calculation of the numerator.