Business Context and Reporting Period
This Form 8-K filing by Broadstone Net Lease, Inc. reports on events occurring on September 28, 2018. The Company is a real estate investment trust focused on net leased properties. The report details the completion of a monthly closing of its ongoing private offering of common stock.
Key Financial Metrics
- Capital Raised: $20,000,000.00 in aggregate proceeds from the September 28, 2018 closing.
- Shares Issued (Private Offering): 235,484.688 shares at a weighted average price of $84.93 per share.
- Shares Issued (DRIP): 55,134.650 shares issued on September 14, 2018, generating $4,592,717.83 in proceeds at $83.30 per share.
- Outstanding Equity: 21,076,572.463 shares of common stock issued and outstanding as of September 28, 2018.
- Operating Company Units: 22,813,619.549 units outstanding, with the Company owning approximately 92.39% and noncontrolling interests holding 7.61%.
- Investment Cap: A $20.0 million monthly cap on new and additional investments is in place (excluding DRIP and UPREIT transactions).
Material Changes
The primary material change is the increase in outstanding common stock and capital raised through the September 28, 2018 private offering. Additionally, the filing notes a queue of approximately $5,572,969.70 in subscriptions held for subsequent closings at a Determined Share Value of $85.00 per share.
Guidance, Outlook, and Risks
- Use of Proceeds: The Company intends to use substantially all net proceeds from the closing, supplemented by additional borrowings, to invest in additional net leased properties and for general corporate purposes.
- Regulatory Status: The sale of shares was conducted under the exemption from registration provided by Rule 506(c) under Regulation D.
- Capital Structure: The filing highlights the existence of noncontrolling interests in the Operating Company, which are convertible into common stock on a one-for-one basis subject to limitations.
Investor Verification Checklist
- Verify the current status of the $5.57 million in queued subscriptions and their expected closing dates.
- Confirm the specific allocation of the $20 million proceeds between new property acquisitions and general corporate purposes in subsequent filings.
- Review the impact of the 7.61% noncontrolling interest on future earnings per share calculations.
- Monitor the Company's leverage levels as it utilizes "additional borrowings" alongside equity proceeds for acquisitions.