Business Context and Reporting Period
Company: Medalist Diversified REIT, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 5, 2021
Reporting Period: Event date January 5, 2021; Signed January 8, 2021.
The Company is a Maryland corporation with securities registered on the Nasdaq Capital Market (Common Stock: MDRR; Preferred Stock: MDRRP). It is designated as an Emerging Growth Company.
Key Financial Metrics
This filing reports a specific financing transaction rather than periodic financial performance metrics (e.g., revenue, net income, or operating cash flow).
- Debt Issuance: $1,500,000 principal amount.
- Instrument: Third Convertible Debenture.
- Purchaser: YA II PN, LTD.
- Liquidity Impact: Proceeds from the sale of the debenture increase cash liquidity, though the exact cash receipt amount is not explicitly detailed beyond the principal.
Material Changes
The primary material change is the creation of a direct financial obligation through the issuance of the Third Convertible Debenture on January 5, 2021. This issuance follows two previous convertible debentures sold to the same purchaser under a Securities Purchase Agreement dated October 27, 2020. The terms of this third debenture are identical to the prior two issuances.
Guidance, Outlook, and Risks
Management Commentary: The filing confirms the execution of the financing agreement previously disclosed on November 2, 2020. No forward-looking guidance or outlook regarding future operations is provided in this specific report.
Risks and Contingencies:
- Unregistered Sale: The debenture was issued in reliance on the Section 4(a)(2) exemption from registration under the Securities Act of 1933.
- Investor Status: The exemption relied on the Purchaser's representation as an accredited investor.
- Terms: Specific terms (interest rate, conversion price, maturity) are not detailed in the text but are incorporated by reference to the Form of Convertible Debenture (Exhibit 4.1).
Investor Verification Checklist
- Verify the specific terms of the Third Convertible Debenture (interest rate, conversion ratio, maturity date) in Exhibit 4.1 of this filing or the November 2, 2020 Form 8-K.
- Confirm the total outstanding debt obligation to YA II PN, LTD. by aggregating this $1.5 million issuance with the two prior convertible debentures.
- Review the Company's most recent 10-Q or 10-K to assess the impact of this new debt on leverage ratios and liquidity.
- Check for any subsequent filings regarding the conversion of these debentures into equity.