8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

American Realty Investors, Inc.

(Exact name of registrant as specified in its charter)

(469) 522-4200

Registrant’s Telephone Number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 230.425)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Securities Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Securities Act (17 CFR 240.413e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ((17 CFR 230.405 of or Rule 12b-2 of the Securities Act of 1934 (17 CFR 230.405):

☐  Emerging growth company

If an emerging growth company indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 – Financial Information

Item 2.02. Results of Operations and Financial Condition

On August 11, 2021, American Realty Investors, Inc. (“ARL” or the “Company”) announced its operational results for the quarter ended June 30, 2021. A copy of the announcement is attached as Exhibit “99.1.”

The information furnished pursuant to Item 2.02 in this Form 8-K, including Exhibit “99.1” attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. We undertake no duty or obligation to publicly update or revise the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

The following exhibit is furnished with this Report:

_________________________

* Furnished herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Document

American Realty Investors, Inc. reports Earnings for Q2 2021

DALLAS (August 11, 2021) -- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the quarter ended June 30, 2021. For the three months ended June 30, 2021, we reported a net loss attributable to common shares of $27.3 million or $1.69 per diluted share, compared to $2.3 million or $0.14 per diluted share for the same period in 2020.

Financial Highlights

•We collected approximately 96% of our rents for the three months ended June 30, 2021, comprised of approximately 96% from multifamily tenants and approximately 97% from office tenants.

•Total occupancy was 91% at June 30, 2021, which includes 95% at our multifamily properties and 73% at our commercial properties.

•During the quarter, we successfully appealed the previous Clapper decision, and as result, the court vacated the previous $59.0 million judgement against us, and determined that Clapper would take nothing.

•On July 13, 2021, we received the arbitration verdict in connection with our dispute on the measurement of the Earn Out Obligation in connection with the formation of the VAA joint venture. As a result, we are required to pay approximately $39.6 million to Macquarie to satisfy the Earn Out Obligation, which represents a $29.6 million increase over the amount we had previously reserved.

Financial Results

Rental revenues decreased $1.4 million from $11.6 million for the three months ended June 30, 2021 to $10.2 million for the three months ended 2020. The decrease in rental revenue is primarily due to a decrease in revenue from our commercial properties due to a decline in occupancy.

Net operating loss was $8.8 million for three months ended June 30, 2021, compared to operating income of $1.5 million for the same period in 2020. The $10.3 million decrease is primarily due to an increase in legal fees associated with the Clapper litigation and the VAA Earn Out Arbitration.

Net loss attributable to common shares increased $25.0 million from $2.3 million for the three months ended June 30, 2020 to $27.3 million for the three months ended June 30, 2021. The increase in net loss is primarily attributed to to the $29.6 million increase in the earn out obligation.

About American Realty Investors, Inc.

American Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The Company also holds mortgage receivables. The Company’s primary asset and source of its operating results is its investment in Transcontinental Realty Investors, Inc. (NYSE:TCI). For more information, visit the Company’s website at www.americanrealtyinvest.com.

AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)