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. |