EX-99.2 3 exhibit99-2.htm UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF JUNE 30, 2021, THE UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2021 Filed by Avantafile.com - The Parking REIT, Inc. - Exhibit 99.2

Exhibit 99.2 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

On January 8, 2021, the Company, entered into an equity purchase and contribution agreement (the “Purchase Agreement”) by and among the Company, the Operating Partnership, Michael V. Shustek (“Mr. Shustek”), Vestin Realty Mortgage I, Inc., (“VRMI”) Vestin Realty Mortgage II, Inc. (“VRMII” and together with VRMI and Mr. Shustek, the “Advisor”) and Color Up, LLC, a Delaware limited liability company (the “Purchaser”). The transactions contemplated by the Purchase Agreement are referred to herein collectively as the “Transaction.”

 

On August 25, 2021, the closing of the Transaction occurred. As a result of the Transaction, the Company acquired three multi-level parking garages consisting of approximately 765 and 1,625 parking spaces located in Cincinnati Ohio and approximately 1,154 parking spaces located in Chicago, Illinois, respectively. In addition to the parking garages contributed, proprietary technology was contributed to the Company, which will provide Management real-time information on the performance of assets. Management is currently working with employees to assess the timing to implement this technology in the legacy garages. Pursuant to the Closing, the Operating Partnership issued 7,481,668 newly issued common units of limited partnership, as consideration for a cash contribution of $35,000,000, three parking assets (“Contributed Interests”) and technology from Purchaser. The Company issued to Purchaser Warrants to purchase up to 1,702,128 shares of Common Stock at an exercise price of $11.75 for an aggregate cash purchase price of up to $20 million. Of the 7,481,668 issued, 4,127,952 and 340,426 common units were issued for the Contributed Interests and technology, respectively.

 

The accompanying Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2021, reflects the financial position of the Company as if the acquisition described in the Notes to the Unaudited Pro Forma Condensed Combined Financial Statements had been completed on June 30, 2021.  The accompanying Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended June 30, 2021, and the year ended December 31, 2020, present the results of operations of the Company as if the transactions described in the Notes to the Unaudited Pro Forma Condensed Combined Financial Statements had been completed on January 1, 2021 and January 1, 2020, respectively.

 

The accompanying Unaudited Pro Forma Condensed Combined 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 acquisitions reflected therein in fact occurred on the dates specified, nor do such financial statements purport to be indicative of the results of operations that may be achieved in the future. In addition, the Unaudited Pro Forma Condensed Combined Financial Statements include pro forma allocations of the purchase price for the properties discussed in the accompanying notes based upon preliminary estimates of the fair values of the assets acquired and liabilities assumed in connection with the acquisitions and are subject to change.

The Parking REIT, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

June 30, 2021

 

    The Parking REIT, Inc.       Pro Forma
    June 30, 2021   Pro Forma Adjustments   June 30, 2021
    (A)   (B)    
ASSETS
Cash $ 2,834,000 $ 1,800,000 $ 4,634,000
Cash - restricted   4,085,000       4,085,000
Prepaid expenses   650,000   27,000   677,000
Accounts receivable   1,003,000   150,000   1,153,000
Investments in real estate and fixed assets (C) (F)            
Land and improvements   128,284,000   23,714,000   151,998,000
Buildings and improvements   163,792,000   71,139,000   234,931,000
Construction in progress   1,454,000       1,454,000
Intangible assets   2,107,000       2,107,000
             
Accumulated depreciation   (19,536,000)   --   (19,536,000)
Total investments in real estate and fixed assets, net   276,101,000   94,853,000   370,954,000
Other assets   84,000   --   84,000
Investment in DST   2,821,000   --   2,821,000
Right of use leased asset   1,225,000   --   1,225,000
Fixed assets   44,000   --   44,000
Total assets $ 288,847,000 $ 96,830,000 $ 385,677,000
             
LIABILITES AND STOCKHOLDERS’ EQUITY
Liabilities            
Accounts payable and accrued liabilities $ 14,079,000 $ 2,910,000 $ 16,989,000
Due to related parties   18,000       18,000
Deferred revenue   99,000   --   99,000
Paycheck protection program loan   328,000       328,000
Right to use lease liability   1,225,000       1,225,000
Deferred management internalization   10,040,000       10,040,000
Security Deposits   157,000   8,000   165,000
Notes payable, net of unamortized loan issuance costs (D)   159,922,000   44,475,000   204,397,000
Total liabilities   185,868,000   47,393,000   233,261,000
             
Stockholders’ equity            
Non-voting, non-participating convertible stock   --   --   --
Common stock   --   --   --
Additional paid-in capital   197,413,000   --   197,413,000
Accumulated deficit   (96,458,000)   14,000   (96,444,000)
Total stockholders’ equity   100,955,000   14,000   100,969,000
Non-controlling interest   2,024,000   49,423,000   51,447,000
Total equity   102,979,000   49,437,000   152,416,000
Total liabilities and stockholders’ equity $ 288,847,000 $ 96,830,000 $ 385,677,000

 

See notes to unaudited pro forma condensed combined financial statements.

The Parking REIT, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the six months ended June 30, 2021

 

    The Parking REIT, Inc.   Pro Forma Adjustments   Pro Forma
Revenues   (A)   (B)    
Base rent income   $           5,500,000   $       2,093,000   $        7,593,000
Management income   1,004,000   -   1,004,000
Percentage rent income   240,000   -   240,000
Licensee Revenue   -   407,000   407,000
Retail Rent   -   83,000   83,000
Total revenues   6,744,000     2,583,000   9,327,000
             
Operating expenses            
Property taxes   1,792,000   1,133,000   2,925,000
Property operating expense   556,000   393,000   949,000
General and administrative   2,860,000       2,860,000
Professional fees, net of reimbursement of insurance proceeds   1,830,000       1,830,000
Depreciation and amortization   2,516,000   650,000   3,166,000
Total operating expenses   9,554,000   2,176,000   11,730,000
             
Income (loss) from operations   (2,810,000)   407,000   (2,403,000)
             
Other income (expense)            
Interest expense   (4,296,000)   (729,000)   (5,025,000)
PPP loan forgiveness   348,000  
  348,000
Other Income   275,000   -   275,000
Total other income (expense)   (3,673,000)   (729,000)   (4,402,000)
             
Income (loss) from continuing operations   $        (6,483,000)   $         (322,000)   $        (6,805,000)

 

See notes to unaudited pro forma condensed combined financial statements.

The Parking REIT, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

Year ended December 31, 2020

 

    The Parking REIT, Inc.   Pro Forma Adjustments   Pro Forma
Revenues   (A)   (B)    
Base rent income   $         14,034,000   $        3,052,000   $        17,086,000
Management income   448,000   -   448,000
Percentage rent income   827,000   -   827,000
Licensee Revenue   -   1,090,000   1,090,000
Retail Rent   -   140,000   140,000
Total revenues   15,309,000   4,282,000     19,591,000
             
Operating expenses            
Property taxes   3,514,000   1,835,000   5,349,000
Property operating expense   1,496,000   1,150,000   2,646,000
General and administrative   6,029,000   -   6,029,000
Professional fees, net of reimbursement of insurance proceeds   970,000   -   970,000
Acquisition expenses (E)   3,000   -   3,000
Provision for impairment of investments in real estate   14,115,000   -   14,115,000
Depreciation and amortization   5,206,000   2,139,000   7,345,000
Total operating expenses   31,333,000   5,124,000   36,457,000
             
Income (loss) from operations   (16,024,000)   (842,000)   (16,866,000)
             
Other income (expense)            
Interest expense   (9,274,000)   (1,414,000)   (10,688,000)
Gain on sale of investments in real estate   694,000   -   694,000
Other Income   151,000   6,000   157,000
Settlement income   370,000   -   370,000
Income from DST   34,000   -   34,000
Total other income (expense)   (8,025,000)   (1,408,000)   (9,433,000)
             
Income (loss) from continuing operations   $     (24,049,000)   $      (2,250,000)   $      (26,299,000)

 

See notes to unaudited pro forma condensed combined financial statements.

The Parking REIT, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

 

A. Reflects the Company’s statements of operations for the six months ended June 30, 2021, and the year ended December 30, 2020. Please refer to the Company’s historical financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2021.
B. Figures reflect the financial position as of June 30, 2021, and the results of the operations for the year ended December 31, 2020, and for the period from January 1, 2021 through June 30, 2021, unless otherwise noted. The 1 West 7th and the 222 West 7th properties are leased by Parking Company of America, Inc. (PCA), under a lease agreement where PCA pays a management fee of 3% of Gross Profit for a month. Gross Profit is Net Revenue less Operating Expenses. PCA pays all Operating Expenses. Capital Expenditures are not included. The term of the agreement is for 5 years. The 322 Streeter property is leased by SP Plus Corporation (SP+), a national parking operator, under a lease agreement where SP+ pays a base Management Fee of $18k per year with a 3% increase each year for the term of the lease. The term of the lease is for 5 years. In addition, SP+ pays a percentage management fee of 5% of Net Profits. Operating Expenses does not include the cost of repairs and maintenance or property taxes.
C. Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years in accordance with U.S. generally accepted accounting principles, as if the Company had acquired the Property on January 1, 2020.
D. The notes payable balance and related interest expense is reflective of the Company's assumption of a promissory note of $35 million. Pursuant to the closing of the Transaction, the Company assumed the debt outstanding on each asset as follows:
  Associated Bank                 $10,352,000         variable interest rate
  Associated Bank                 $  8,223,000         variable interest rate
  ANICO(a)                           $25,900,000         3.5%
          a.       American National Insurance Company.
E. Costs related to the acquisition of the property are excluded from the unaudited pro forma condensed combined statement of operations because such costs are nonrecurring.
F.
 On January 8, 2021, the Company, entered into an equity purchase and contribution agreement (the “Purchase Agreement”) by and among the Company, the Operating Partnership, Michael V. Shustek (“Mr. Shustek”), Vestin Realty Mortgage I, Inc., (“VRMI”) Vestin Realty Mortgage II, Inc. (“VRMII” and together with VRMI and Mr. Shustek, the “Advisor”) and Color Up, LLC, a Delaware limited liability company (the “Purchaser”). The transactions contemplated by the Purchase Agreement are referred to herein collectively as the “Transaction.” On August 25, 2021, the closing of the Transaction occurred. As a result of the Transaction, the Company acquired three multi-level parking garages consisting of approximately 765 and 1,625 parking spaces located in Cincinnati Ohio and approximately 1,154 parking spaces located in Chicago, Illinois, respectively. In addition to the parking garages contributed, proprietary technology was contributed to the Company, which will provide Management real-time information on the performance of assets. Management is currently working with employees to assess the timing to implement this technology in the legacy garages. Pursuant to the Closing, the Operating Partnership issued 7,481,668 newly issued common units of limited partnership, as consideration for a cash contribution of $35,000,000, three parking assets (“Contributed Interests”) and technology from Purchaser. The Company issued to Purchaser Warrants to purchase up to 1,702,128 shares of Common Stock at an exercise price of $11.75 for an aggregate cash purchase price of up to $20 million. Of the 7,481,668 issued, 4,127,952 and 340,426 common units were issued for the Contributed Interests and technology, respectively.