true
0001782430
0001782430
2023-08-28
2023-08-28
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): August 28, 2023 (August 25, 2023)
Strawberry
Fields REIT, Inc.
(Exact
name of registrant as specified in its charter)
Maryland |
|
000-56451 |
|
84-2336054 |
(State
or Other Jurisdiction |
|
(Commission |
|
(I.R.S.
Employer |
of
Incorporation) |
|
File
Number) |
|
Identification
No.) |
6101
Nimtz Parkway
South
Bend, Indiana 46628
(Address
of Principal Executive Office) (Zip Code)
(574)
807-0800
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
stock, $0.00001 par value |
|
STRW |
|
NYSE
American |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
This
Amendment No. 1 on Form 8-K/A (this “Amendment No. 1”) is being filed to amend the Current Report on Form 8-K (the “Initial
Form 8-K”) filed by Strawberry Fields REIT, Inc. (the “Company”) with the Securities and Exchange Commission on August
28, 2023. As previously reported in the Initial Form 8-K, on August 25, 2023, the Company completed its acquisition of 24 healthcare
facilities located in Indiana (the “WC-Indiana Acquisition”). In the Initial Form 8-K, the Company stated its intention to
file the financial statements and pro forma financial information required by parts (a) and (b) of Item 9.01 of Form 8-K not later than
seventy-one (71) calendar days after the date that the Initial Form 8-K was required to be filed with the Securities and Exchange Commission.
Pursuant to the instructions to Item 9.01 of Form 8-K, the Company hereby files this Amendment No. 1 to amend the Initial Form 8-K in
order to include the required financial statements and pro forma financial information that were previously omitted.
Item
9.01 |
Financial
Statements and Exhibits. |
(a) |
Financial
Statements of Business Acquired. |
WC-Indiana
Properties Group Combined Statements of Revenues and Certain Expenses for the Two Month Period ended December 31, 2022 and the Six Month
Period ended June 30, 2023
Independent
Auditor’s Report |
F-1 |
|
|
Combined
Statements of Revenues and Certain Expenses |
F-2 |
|
|
Notes
to Combined Statements of Revenues and Certain Expenses |
F-3 |
(b) |
Pro
Forma Financial Information. |
Unaudited
Pro Forma Condensed Combined Financial Information |
F-1 |
|
|
Unaudited
Pro Forma Condensed Combined Balance Sheet as of June 30, 2023 |
F-2 |
|
|
Unaudited
Pro Forma Condensed Combined Statements of Income For The Year Ended December 31, 2022 |
F-3 |
|
|
Unaudited
Pro Forma Condensed Combined Statements of Income For The Six Months Ended June 30, 2023 |
F-4 |
|
|
Notes
to Unaudited Pro Forma Condensed Combined Financial Information |
F-5 |
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
|
Strawberry
Fields REIT, Inc. |
|
|
|
Dated: November 7,
2023 |
By:
|
/s/
Moishe Gubin |
|
|
Moishe
Gubin
Chief
Executive Officer and Chairman |
Exhibit
99.1
WC-Indiana
Properties Group Combined Statements of Revenues and Certain Expenses for the Two Month Period ended December 31, 2022 and the Six Month
Period ended June 30, 2023
Report
of Independent Auditor
To
WC Indiana Properties Group:
We
have audited the combined statements of revenues and certain expenses (the “Statements”) of the WC-Indiana Properties Group
for the two month period ended December 31, 2022 and the six month period ended June 30, 2023, and the related notes to the combined
financial statements.
In
our opinion, the accompanying combined financial statements present fairly, in all material respects, the combined statement of revenues
and certain expenses of WC-Indiana Properties Group for the two month period ended December 31, 2022 and the six month period ended June
30, 2023, and the related notes to the combined financial statements in accordance with the basis of accounting described in Note 2.
Basis
for Opinion
We
conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Combined Financial Statements
section of our report. We are required to be independent of the WC-Indiana Properties Group and to meet our other ethical responsibilities,
in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Emphasis
of Matter — Basis of Accounting
As
discussed in notes to the combined financial statements, the accompanying combined financial statements were prepared for the purpose
of complying with certain rules and regulations of the Securities and Exchange Commission for inclusion in the registration statement
on Form S-11 of Strawberry Fields REIT, Inc., as described in note 2 and are not intended to be a complete presentation of the WC-Indiana
Properties Group’s combined revenue and expenses.
Responsibilities
of Management for the Combined Financial Statements
Management
is responsible for the preparation and fair presentation of the combined financial statements in accordance with the basis of accounting
described in Note 1, and for determining that the basis of accounting is an acceptable basis for the preparation of the combined financial
statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal controls
relevant to the preparation and fair presentation of the combined financial statements that are free from material misstatement, whether
due to fraud or error.
Auditor’s
Responsibilities for the Audit of the Combined Financial Statements
Our
objectives are to obtain reasonable assurance about whether the combined financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
certain internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate,
they would influence the judgment made by a reasonable user based on the combined financial statements.
In
performing an audit in accordance with GAAS, we:
|
● |
Exercise
professional judgment and maintain professional skepticism throughout the audit. |
|
|
|
|
● |
Identify
and assess the risks of material misstatement of the combined financial statements, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts
and disclosures in the combined financial statements. |
|
|
|
|
● |
Obtain
an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the WC-Indiana Properties Group’s internal controls.
Accordingly, no such opinion is expressed. |
|
|
|
|
● |
Evaluate
the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluate the overall presentation of the combined financial statements. |
|
|
|
|
● |
Conclude
whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the WC-Indiana
Properties Group’s ability to continue as a going concern for a reasonable period of time. |
We
are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit,
significant audit findings, and certain internal control related matters that we identified during the audit.
HACKER,
JOHNSON & SMITH PA
Tampa,
Florida
August
14, 2023
WC-INDIANA
PROPERTIES GROUP
COMBINED
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
TWO
MONTH PERIOD ENDED DECEMBER 31, 2022 AND SIX MONTH PERIOD ENDED JUNE 30, 2023
(Dollars
in Thousands)
| |
Two
Months Ended December
31 2022 | | |
Six
Months Ended June
30 2023 | |
Revenues: | |
| | | |
| | |
Rental revenue | |
$ | 2,189 | | |
| 6,725 | |
| |
| | | |
| | |
Certain expense: | |
| | | |
| | |
Property taxes | |
| 78 | | |
| 391 | |
| |
| | | |
| | |
REVENUES IN EXCESS OF CERTAIN EXPENSES | |
$ | 2,111 | | |
| 6,334 | |
See
accompanying notes to combined statement of revenue and certain expenses.
WC-INDIANA
PROPERTIES GROUP
NOTES
TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
TWO
MONTH PERIOD ENDED DECEMBER 31, 2022 AND SIX MONTH
PERIOD
ENDED JUNE 30, 2023
NOTE
1. |
ORGANIZATION
AND DESCRIPTION OF BUSINESS |
WC-Indiana
Properties Group (the “Properties Group”), which is not a legal entity, but rather a combination of certain real estate entities
and operations as described below, is engaged in the business of owning and leasing certain healthcare facilities located in the State
of Indiana. The accompanying combined statements of revenue and certain expenses (the “Statements”) relate to the operations
of the Properties Group, consisting of leasing 19 skilled nursing facilities with 1,659 licensed beds and 5 assisted living facilities
with 193 beds, of which 29 beds are licensed (the “Facilities”). The Facilities are owned by WC-Castleton LLC, WC-Chesterfield
LLC, WC-Columbia City LLC, WC-Dunkirk LLC, WC-Fort Wayne LLC, WC-Hartford City LLC, WC-Hobart LLC, WC-Huntington LLC, WC-Lagrange LLC,
WC-Middletown LLC, WC-Peru LLC, WC-Rockport LLC, WC-Rushville LLC, WC-Sullivan LLC, WC-Syracuse LLC, WC-Tipton LLC, WC-Wabash LLC and
WC-Wakarusa LLC (collectively, the “Sellers”), all of which are affiliates of the WC-Indiana, LLC.
On
June 8, 2023, the Sellers and Strawberry Fields REIT Inc. (the “Purchaser”) entered into a Purchase and Sale Agreement (the
“Purchase Agreement”), pursuant to with the Purchaser agreed to purchase the Facilities. The Purchaser is not an affiliate
of the Sellers. The Purchaser will assign the right to acquire the Facilities to newly organized indirect subsidiaries of the Strawberry
Fields Realty, LP, the Purchaser’s operating partnership. The purchase price for the Facilities is $102.0 million, payable at the
closing. Under the Purchase Agreement, the Purchaser will also make a loan of approximately $6.5 million to the Properties, which will
be scheduled to be repaid within 60 days of the closing. The Purchaser anticipates closing the acquisition in August 2023; however, there
are no assurance that the closing will occur within this timeframe, or at all. The potential acquisition of these Facilities is subject
to substantial conditions to closing.
The
accompanying combined statements of revenues and certain expenses (the “Statements”) relate to the operations of the Properties.
NOTE
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
Basis
of Presentation
The
accompanying combined statements of revenue and certain expenses have been prepared for the purpose of complying with Rule 3-14 of Regulation
S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual results
of operations for the periods presented as revenues and certain expenses, which may not be directly attributable to the revenue and expenses
to be incurred in the future operations of the Properties Group, have been excluded. Such excluded items include depreciation and amortization,
interest expense, related party fees, management fees, non-recurring professional fees, and other miscellaneous revenue and expenses
not directly related to the proposed future operations of the Properties Group.
Revenue
Recognition
Rental
income from the Facilities is derived from the leasing of healthcare facilities to tenants/operators under a master lease. The lease
is for a fixed term and provides for annual rentals and expense reimbursements to be paid in monthly installments. Rental revenues relating
to the lease, which contains specified rental increases over the life of the lease are recognized on the straight-line basis. Recognizing
income on a straight-line basis requires the Properties Group to calculate the total non-contingent rent containing specified rental
increases over the life of the lease and to recognize the revenue evenly over that life. This method results in rental income in the
early years of a lease being higher than actual cash received. At some point during the lease, depending on its terms, the cash rent
payments eventually exceed the straight-line rent which results in the straight-line rent receivable asset decreasing to zero over the
remainder of the lease term. The Properties Group assesses the collectability of straight-line rent in accordance with the applicable
accounting standards and reserve policy. If the lessees becomes delinquent in rent owed under the terms of the lease, the Properties
Group may provide a reserve against the recognized straight-line rent receivable asset for a portion, up to its full value, that the
Properties Group estimates may not be recoverable
NOTE
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
Use
of Estimates
The
preparation of the Statements in conformity with generally accepted accounting principles in the United States requires management to
make estimates and assumptions that could affect the amounts of reported revenues and certain operating expenses. Actual results could
differ from those estimates.
Commitments
and Contingencies
The
Properties Group may be subject to legal claims and disputes in the ordinary course of business. Management believes any settlement of
any existing potential claims and dispute would not have a material impact on the Properties Group’s revenues and certain expenses.
NOTE
3. |
MINIMUM
FUTURE LEASE RENTALS |
The
Facilities are leased under a master lease agreement with a group of tenants. As of June 30, 2023, the minimum future cash rents receivable
under this non-cancelable operating lease in each of the next five years and thereafter are as follows (dollars in thousands):
Years Ending: | |
| |
2023 (six-month period) | |
$ | 4,750 | |
2024 | |
| 9,854 | |
2025 | |
| 12,065 | |
2026 | |
| 14,324 | |
2027 | |
| 14,611 | |
Thereafter | |
| 27,528 | |
Total | |
$ | 83,132 | |
NOTE
4. |
TENANT
CONCENTRATIONS |
For
the two month period ended December 31, 2022 and the six month period ended June 30, 2023, the properties were leased under a master
lease to a group of related tenants. No single tenant accounted for a significant amount of rental revenue.
NOTE
5. |
SUBSEQUENT
EVENTS |
Management
has evaluated the events and transactions that have occurred through August 14, 2023, the date which the Statements were available to
be issued, and noted no items requiring adjustment of the Statements.
Exhibit
99.2
Unaudited
Pro Forma Condensed Combined Financial Information
On
June 8, 2023, Strawberry Fields REIT Inc (the “Company”) entered into a Purchase and Sale Agreement (the “Purchase
Agreement”), with WC-Castleton LLC, WC-Chesterfield LLC, WC-Columbia City LLC, WC-Dunkirk LLC, WC-Fort Wayne LLC, WC-Hartford City
LLC, WC-Hobart LLC, WC-Huntington LLC, WC-Lagrange LLC, WC-Middletown LLC, WC-Peru LLC, WC-Rockport LLC, WC-Rushville LLC, WC-Sullivan
LLC, WC-Syracuse LLC, WC-Tipton LLC, WC-Wabash LLC and WC-Wakarusa LLC (collectively, the “Sellers”) with respect to the
purchase of 24 healthcare facilities located in Indiana (the “Facilities”). The Sellers are not affiliates of the Company.
The Company will assign the right to acquire the Facilities to newly organized indirect subsidiaries of the Strawberry Fields Realty,
LP, the Company’s operating partnership.
The
purchase price for the Facilities is $102.0 million, payable at the closing. The Company has made a deposit of $4.0 million under the
Purchase Agreement, which will be applied to pay a portion of the purchase price at the closing. The Company plans to pay the balance
of the purchase price utilizing funds provided by a third-party lender and the Company’s current working capital.
Under
the Purchase Agreement, the Company will also make a loan of approximately $6.5 million to the Sellers, which will be due and payable
within 60 days of the closing.
The
Facilities are currently leased under an initial seven-year master lease agreement to a group of tenants affiliated with two of the Company’s
directors, Moishe Gubin and Michael Blisko. Under the master lease, (i) the tenants are paying annual first year rent of $9.5 million,
on a triple net basis (ii) the tenants have three options to extend the lease. The first option is for three years, the two remaining
options are for five years each, and (iii) the tenants have an option to buy the properties after six years for $127 million. The material
terms of the master lease will not be modified as a result of the purchase of the Facilities. The tenants operate the Facilities as skilled
nursing and assisted living facilities.
The
24 Facilities are comprised of nineteen skilled nursing facilities with 1,659 licensed beds and five assisted living facilities with
193 beds, of which 29 beds are licensed.
The
material terms of the Purchase Agreement include: (i) a deposit of $4.0 million made at the signing of the Purchase Agreement, which
is non-refundable except as otherwise specifically provided in the Purchase Agreement; (ii) as a condition precedent to Sellers’
obligation to close, the Company’s performance of and satisfaction of covenants and representations and warranties as detailed
in the Purchase Agreement; (iii) as the Company’s sole and exclusive remedy in the event of Sellers’ material breach of failure
to perform any of its covenants under the Purchase Agreement, the Company’s right to either file an action for specific performance
of Sellers’ obligation to perform under the Purchase Agreement or to declare the Purchase Agreement terminated and have the deposit
returned to the Company, as liquidated damages; (iv) as Sellers’ sole and exclusive remedy in the event of the Company’s
material breach or failure to perform any of its covenants under the Purchase Agreement, Sellers’ right to terminate the Purchase
Agreement in its entirety and retain the deposit as liquidated damages; and (v) the Company’s agreement that the Facilities are
being purchased “as-is”, except for the limited representations and covenants of the Sellers under the Purchase Agreement.
The
Company anticipates closing the acquisition in August 2023; however, we can give no assurance that the closing will occur within this
timeframe, or at all. The potential acquisition of these Facilities is subject to substantial conditions to closing.
The
unaudited pro forma condensed consolidated balance sheet as of June 30, 2023 is presented as if the acquisition was completed on June
30, 2023. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2022, and for the six
months ended June 30, 2023 are presented as if the acquisition was completed on November 1, 2022.
The
unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2022 only includes the operating results
of the WC-Indiana Properties Group for the period from November 1, 2022 through December 31, 2022. The operating results of the WC-Indiana
Properties Group for the period from January 1, 2022 to October 31, 2022, were excluded because the Facilities were leased to unaffiliated
tenants on substantially different terms during this period, including significantly higher rent for the first six months of 2022 and
no rent for the period from June 1, 2022 through October 31, 2022.
The
following unaudited pro forma condensed consolidated financial information has been prepared to comply with Article 11 of Regulation
S-X, as promulgated by the SEC. The unaudited pro forma condensed consolidated financial information should be read in conjunction with
the consolidated financial statements of the Company and notes thereto presented elsewhere in this prospectus for the six months ended
June 30, 2023, and the fiscal year ended December 31, 2022, and the combined statements of revenues and certain expenses for two month
period ended December 31, 2022 and six month period ended June 30, 2023 of WC-Indiana Properties Group. The unaudited pro forma balance
sheet and statement of operations are not necessarily indicative of what the actual financial position and operating results would have
been had the acquisition had occurred on the dates indicated nor are they indicative of future operating results of the Company.
Unaudited
Pro Forma Condensed Combined Balance Sheet
As
of June 30, 2023
(In
thousands)
|
|
Strawberry
Fields REIT Inc. |
|
|
Indiana
Property Acquisition |
|
|
Proforma
Combined |
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate investments, net |
|
$ |
430,030 |
|
|
|
102,000 |
|
(a) |
|
532,030 |
|
Cash
and cash equivalents |
|
|
37,600 |
|
|
|
(24,386 |
) |
(b) |
|
13,214 |
|
Restricted
cash and equivalents |
|
|
29,500 |
|
|
|
- |
|
|
|
29,500 |
|
Straight-line
rent receivable, net |
|
|
24,321 |
|
|
|
- |
|
|
|
24,321 |
|
Right
of use lease asset |
|
|
1,675 |
|
|
|
- |
|
|
|
1,675 |
|
Goodwill,
other intangible assets and lease rights |
|
|
10,118 |
|
|
|
- |
|
|
|
10,118 |
|
Deferred
financing expenses |
|
|
5,650 |
|
|
|
1,076 |
|
(c) |
|
6,726 |
|
Notes
receivable, net |
|
|
17,809 |
|
|
|
6,500 |
|
(d) |
|
24,309 |
|
Other
assets |
|
|
950 |
|
|
|
- |
|
|
|
950 |
|
Total
Assets |
|
$ |
557,653 |
|
|
|
85,190 |
|
|
|
642,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities |
|
$ |
14,666 |
|
|
|
- |
|
|
|
14,666 |
|
Bonds,
net |
|
|
102,744 |
|
|
|
19,190 |
|
(e) |
|
121,934 |
|
Notes
payable and other debt |
|
|
375,840 |
|
|
|
66,000 |
|
(f) |
|
441,840 |
|
Operating
lease liability |
|
|
1,675 |
|
|
|
- |
|
|
|
1,675 |
|
Other
liabilities |
|
|
10,636 |
|
|
|
- |
|
|
|
10,636 |
|
Total
Liabilities |
|
$ |
505,561 |
|
|
|
85,190 |
|
|
|
590,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Additional
paid in capital |
|
|
5,792 |
|
|
|
- |
|
|
|
5,792 |
|
Accumulated
other comprehensive income |
|
|
905 |
|
|
|
- |
|
|
|
905 |
|
Retained
earnings |
|
|
1,401 |
|
|
|
- |
|
|
|
1,401 |
|
Total
Stockholders’ Equity |
|
$ |
8,098 |
|
|
|
- |
|
|
|
8,098 |
|
Non-controlling
interest |
|
$ |
43,994 |
|
|
|
|
|
|
|
43,994 |
|
Total
Equity |
|
$ |
52,092 |
|
|
|
- |
|
|
|
52,092 |
|
Total
Liabilities and Equity |
|
$ |
557,653 |
|
|
|
85,190 |
|
|
|
642,843 |
|
See
accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.
Unaudited
Pro Forma Condensed Combined Statements of Income
FOR
THE YEAR ENDED DECEMBER 31, 2022
|
|
Strawberry
Fields REIT Inc. |
|
|
WC-Indiana
Properties Group |
|
|
Proforma
Adjustments |
|
|
Proforma
Combined |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenues |
|
$ |
92,543 |
|
|
|
2,189 |
|
(g) |
|
72 |
|
(h) |
|
94,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
$ |
25,530 |
|
|
|
- |
|
|
|
1,051 |
|
(i) |
|
26,581 |
|
Amortization |
|
|
3,028 |
|
|
|
- |
|
|
|
- |
|
|
|
3,028 |
|
General
and administrative expenses |
|
|
6,012 |
|
|
|
- |
|
|
|
- |
|
|
|
6,012 |
|
Property
taxes |
|
|
13,131 |
|
|
|
78 |
|
|
|
72 |
|
(h) |
|
13,281 |
|
Facility
rent expenses |
|
|
532 |
|
|
|
- |
|
|
|
- |
|
|
|
532 |
|
Provision
for credit losses |
|
|
(5,636 |
) |
|
|
- |
|
|
|
- |
|
|
|
(5,636 |
) |
Total
expenses |
|
$ |
42,597 |
|
|
|
78 |
|
|
|
1,123 |
|
|
|
43,798 |
|
Income
from operations |
|
|
49,946 |
|
|
|
2,111 |
|
|
|
(1,051 |
) |
|
|
51,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
$ |
(20,507 |
) |
|
|
- |
|
|
|
(1,226 |
) |
(e)(f) |
|
(21,733 |
) |
Amortization
of deferred financing costs |
|
|
(504 |
) |
|
|
- |
|
|
|
(49 |
) |
(c) |
|
(553 |
) |
Mortgage
insurance premium |
|
|
(1,704 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,704 |
) |
Total
interest expense |
|
$ |
(22,715 |
) |
|
|
- |
|
|
|
(1,275 |
) |
|
|
(23,990 |
) |
Other
income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income |
|
|
120 |
|
|
|
- |
|
|
|
- |
|
|
|
120 |
|
Foreign
currency transaction loss |
|
|
(10,932 |
) |
|
|
- |
|
|
|
- |
|
|
|
(10,932 |
) |
Total
other income (loss) |
|
|
(10,812 |
) |
|
|
- |
|
|
|
- |
|
|
|
(10,812 |
) |
Net
income |
|
$ |
16,419 |
|
|
|
2,111 |
|
|
|
(2,326 |
) |
|
|
16,204 |
|
See
accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.
Unaudited
Pro Forma Condensed Combined Statements of Income
FOR
THE SIX MONTHS ENDED JUNE 30, 2023
|
|
Strawberry Fields
REIT Inc. |
|
|
WC-Indiana
Properties Group |
|
|
Proforma
Adjustments |
|
|
Proforma
Combined |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenues |
|
$ |
48,554 |
|
|
|
6,725 |
|
(g) |
|
59 |
|
(h) |
|
55,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
$ |
12,461 |
|
|
|
- |
|
|
|
3,154 |
|
(i) |
|
15,615 |
|
Amortization |
|
|
1,514 |
|
|
|
- |
|
|
|
- |
|
|
|
1,514 |
|
Loss
on real estate investment impairment |
|
|
2,451 |
|
|
|
- |
|
|
|
- |
|
|
|
2,451 |
|
General
and administrative expenses |
|
|
2,413 |
|
|
|
- |
|
|
|
- |
|
|
|
2,413 |
|
Property
taxes |
|
|
7,435 |
|
|
|
391 |
|
|
|
59 |
|
(h) |
|
7,885 |
|
Facility
rent expenses |
|
|
272 |
|
|
|
- |
|
|
|
- |
|
|
|
272 |
|
Total
expenses |
|
$ |
26,546 |
|
|
|
391 |
|
|
|
3,213 |
|
|
|
30,150 |
|
Income
from operations |
|
|
22,008 |
|
|
|
6,334 |
|
|
|
(3,154 |
) |
|
|
25,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
$ |
(10,118 |
) |
|
|
- |
|
|
|
(3,678 |
) |
(e)(f) |
|
(13,796 |
) |
Amortization
of deferred financing costs |
|
|
(253 |
) |
|
|
- |
|
|
|
(146 |
) |
(c) |
|
(399 |
) |
Mortgage
insurance premium |
|
|
(833 |
) |
|
|
- |
|
|
|
- |
|
|
|
(833 |
) |
Total
interest expense |
|
$ |
(11,204 |
) |
|
|
- |
|
|
|
(3,824 |
) |
|
|
(15,028 |
) |
Other
expense |
|
|
(983 |
) |
|
|
- |
|
|
|
- |
|
|
|
(983 |
) |
Net
income |
|
$ |
9,821 |
|
|
|
6,334 |
|
|
|
(6,978 |
) |
|
|
9,177 |
|
See
accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information
Notes
to Unaudited Pro Forma Condensed Combined Financial Information
On
June 8, 2023, Strawberry Fields REIT Inc. (the “Company’) entered into a Purchase Agreement, with multiple sellers with respect
to the purchase of 24 healthcare facilities located in Indiana (the “Facilities”). The sellers are not affiliates of the
Company. The Company will assign the right to acquire the Facilities to newly organized indirect subsidiaries of Strawberry Fields Realty,
LP, the Company’s operating partnership.
The
historical financial statements have been adjusted in the pro forma condensed combined financial statements to give effect for (i) transaction
accounting adjustments (ii) autonomous entity adjustments and (iii) management’s adjustments, as required.
The
pro forma combined financial information does not necessarily reflect what the combined company’s financial condition or results
of operations would have been if the acquisition of the WC-Indiana Properties Group occurred on the dates indicated. They also may not
be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position
and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
2. |
Purchase
Price Allocation |
The
Company intends to account for the planned acquisition as an asset acquisition. We will measure the value of the acquired physical assets
(land, building and building improvements, site improvements, and furniture fixtures and equipment) by allocating the total cost of the
acquisition on a relative fair value basis. The Company expects to allocate the total cost as follows (in thousands):
Land | |
$ | 4,667 | |
Building and building improvements | |
| 79,778 | |
Furniture, fixtures and equipment | |
| 17,555 | |
Total purchase price | |
$ | 102,000 | |
|
(a) |
Represents
the adjustment to record the assets to be purchased in the planned acquisition of the Facilities at relative fair value based on
the total cost of the acquisition. |
|
(b) |
Represents
the cash and cash equivalents to be utilized to pay a portion of the purchase price for the Facilities at closing, to fund the $6,500,000
loan to the sellers and to pay related debt issuance costs. |
|
(c) |
Represents
debt issuance costs of $1,076,000 related to the funding of the acquisition that are deferred and recorded as a reduction of the
related debt liability and amortized to interest expense over the remaining term of the related debt liability utilizing the interest
method. |
|
(d) |
Represents
the $6,500,000 loan to be made to the sellers, which will be due and payable 60 days after the closing. |
|
(e) |
Represents
Series D bonds issued to finance the acquisition. The Series D bonds bear interest at a the rate 9.1% per annum and mature in June
2026. |
|
(f) |
Represents
the planned borrowing under a new commercial bank mortgage facility to be established by the Company, which will be utilized to fund
a portion of the acquisition price. Loans under the facility bear interest at the Secured Overnight Financing Rate (“SOFR”)
plus a margin of 3.5% and mature in 5 years from the date of the loans. For purposes of the pro forma statements of operations, the
interest rate is assumed to be 8.67%, which is equal to SOFR plus the 3.5% margin on June 30, 2023. |
|
(g) |
Represents
straight-line monthly income for the period stated. The Company recognizes rental revenue for operating leases on a straight-line
basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical
use of a leased asset. |
|
(h) |
Represents
real estate taxes for the stated period. The Company reports revenues and expenses within our triple-net leased properties for real
estate taxes that are escrowed and obligations of the tenants in accordance with their respective leases with us. |
|
(i) |
Real
estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected life of the
asset on a straight-line basis. The Company considers the period of future benefit of an asset to determine its appropriate useful
life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected
useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: |
Building
and improvements |
|
7-53
years |
Equipment
and personal property |
|
1-14
years |
v3.23.3
Cover
|
Aug. 28, 2023 |
Cover [Abstract] |
|
Document Type |
8-K/A
|
Amendment Flag |
true
|
Amendment Description |
This
Amendment No. 1 on Form 8-K/A (this “Amendment No. 1”) is being filed to amend the Current Report on Form 8-K (the “Initial
Form 8-K”) filed by Strawberry Fields REIT, Inc. (the “Company”) with the Securities and Exchange Commission on August
28, 2023. As previously reported in the Initial Form 8-K, on August 25, 2023, the Company completed its acquisition of 24 healthcare
facilities located in Indiana (the “WC-Indiana Acquisition”). In the Initial Form 8-K, the Company stated its intention to
file the financial statements and pro forma financial information required by parts (a) and (b) of Item 9.01 of Form 8-K not later than
seventy-one (71) calendar days after the date that the Initial Form 8-K was required to be filed with the Securities and Exchange Commission.
Pursuant to the instructions to Item 9.01 of Form 8-K, the Company hereby files this Amendment No. 1 to amend the Initial Form 8-K in
order to include the required financial statements and pro forma financial information that were previously omitted.
|
Document Period End Date |
Aug. 28, 2023
|
Entity File Number |
000-56451
|
Entity Registrant Name |
Strawberry
Fields REIT, Inc.
|
Entity Central Index Key |
0001782430
|
Entity Tax Identification Number |
84-2336054
|
Entity Incorporation, State or Country Code |
MD
|
Entity Address, Address Line One |
6101
Nimtz Parkway
|
Entity Address, City or Town |
South
Bend
|
Entity Address, State or Province |
IN
|
Entity Address, Postal Zip Code |
46628
|
City Area Code |
(574)
|
Local Phone Number |
807-0800
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Title of 12(b) Security |
Common
stock, $0.00001 par value
|
Trading Symbol |
STRW
|
Security Exchange Name |
NYSE
|
Entity Emerging Growth Company |
true
|
Elected Not To Use the Extended Transition Period |
false
|
X |
- DefinitionDescription of changes contained within amended document.
+ References
+ Details
Name: |
dei_AmendmentDescription |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:stringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
+ References
+ Details
Name: |
dei_EntityAddressAddressLine1 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Definition
+ References
+ Details
Name: |
dei_EntityAddressCityOrTown |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCode for the postal or zip code
+ References
+ Details
Name: |
dei_EntityAddressPostalZipCode |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the state or province.
+ References
+ Details
Name: |
dei_EntityAddressStateOrProvince |
Namespace Prefix: |
dei_ |
Data Type: |
dei:stateOrProvinceItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionIndicate if registrant meets the emerging growth company criteria.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityEmergingGrowthCompany |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
+ Details
Name: |
dei_EntityFileNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:fileNumberItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
+ References
+ Details
Name: |
dei_EntityIncorporationStateCountryCode |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarStateCountryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityTaxIdentificationNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:employerIdItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionLocal phone number for entity.
+ References
+ Details
Name: |
dei_LocalPhoneNumber |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 13e -Subsection 4c
+ Details
Name: |
dei_PreCommencementIssuerTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 14d -Subsection 2b
+ Details
Name: |
dei_PreCommencementTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTitle of a 12(b) registered security.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b
+ Details
Name: |
dei_Security12bTitle |
Namespace Prefix: |
dei_ |
Data Type: |
dei:securityTitleItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the Exchange on which a security is registered.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection d1-1
+ Details
Name: |
dei_SecurityExchangeName |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarExchangeCodeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Section 14a -Number 240 -Subsection 12
+ Details
Name: |
dei_SolicitingMaterial |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
+ References
+ Details
Name: |
dei_TradingSymbol |
Namespace Prefix: |
dei_ |
Data Type: |
dei:tradingSymbolItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Securities Act -Number 230 -Section 425
+ Details
Name: |
dei_WrittenCommunications |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
Strawberry Fields REIT (AMEX:STRW)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
Strawberry Fields REIT (AMEX:STRW)
Historical Stock Chart
Von Dez 2023 bis Dez 2024