Business Context and Reporting Period
Company: Wheeler Real Estate Investment Trust, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: December 17, 2013
Reporting Period: Specific event date (December 17, 2013)
This filing reports the closing of a real estate acquisition and the entry into a material definitive agreement involving the exchange of equity securities for property interests.
Key Financial Metrics and Transaction Details
- Transaction Type: Acquisition of real property via cash and equity exchange.
- Property Acquired: Real property located at 404 South Elm Street, Jenks, Oklahoma (owned by Jenks Plaza Associates, LLC).
- Total Purchase Price: $1,741,950.
- Equity Issued: 44,671 Common Units of Wheeler REIT.
- Value of Equity Issued: $193,425.
- Dilution: The issued units represent 2.16% of the total Common Units in Wheeler REIT.
- Cash Proceeds: Wheeler REIT received no cash proceeds from the equity exchange; it received membership interests in Jenks Plaza Associates, LLC.
- Redemption Terms: Common Units are redeemable for cash or one share of Registrant common stock, commencing 12 months post-exchange.
Material Changes and Related Party Transactions
The filing details the closing of a Purchase and Sale Agreement originally dated May 10, 2013. The transaction was completed on December 17, 2013, utilizing a combination of cash and the issuance of Common Units.
Related Party Disclosure: Jon Wheeler, the Registrant's Chairman and Chief Executive Officer, is a Contributor to the transaction and the managing member of Jenks Plaza Associates, LLC (the seller). No other directors, officers, or affiliates of the Registrant are affiliated with the remaining Contributors.
Guidance, Outlook, and Regulatory Status
- Regulatory Exemption: The issuance of Common Units was exempt from registration under Rule 506 of Regulation D of the Securities Act of 1933.
- Management Commentary: A press release dated December 18, 2013, was issued to announce the acquisition (attached as Exhibit 99.1).
- Financial Statements: The filing states that financial statements of the acquired business and pro forma financial information are "Not Applicable."
- Outlook: The filing text does not provide specific forward-looking guidance or outlook beyond the completion of this specific acquisition.
Investor Verification Checklist
- Verify the fair market value of the property at 404 South Elm Street, Jenks, Oklahoma, relative to the $1,741,950 purchase price.
- Confirm the cash portion of the purchase price, as the filing only explicitly states the value of the equity portion ($193,425).
- Review the full text of the Contribution and Subscription Agreement (Exhibit 10.1) for specific covenants and redemption mechanics.
- Assess the impact of the 2.16% equity dilution on existing shareholders.
- Examine the related party nature of the transaction involving the CEO and the seller entity.