8-K/A - BRST - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 27, 2019

BROAD STREET REALTY, INC.

(Exact name of registrant as specified in its charter)

Delaware<br><br><br>(State or other jurisdiction<br><br><br>of incorporation)	001-09043<br><br><br>(Commission<br><br><br>File Number)	36-3361229<br><br><br>(IRS Employer<br><br><br>Identification No.)
7250 Woodmont Ave, Suite 350<br><br><br>Bethesda, Maryland<br><br><br>(Address of principal executive offices)	20814<br><br><br>(Zip Code)
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Registrant’s telephone number, including area code: 301-828-1200

MedAmerica Properties Trust Inc.

Boca Center, Tower 1, 5200 Town Center Circle,

Suite 550,

Boca Raton, Florida

(Former name or former address, if changed since last report)

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 Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Securities Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Explanatory Note

As described in its Current Report on Form 8-K filed on May 31, 2019 (the “Signing 8-K”), Broad Street Realty, Inc. (formerly known as MedAmerica Properties Inc., the “Company”) and certain of its newly formed subsidiaries described further below entered into 19 separate agreements and plans of merger (collectively, as amended, the “Merger Agreements”) with each of Broad Street Realty, LLC (“BSR”), Broad Street Ventures, LLC (“BSV”) and each of BSV Avondale LLC, BSV Colonial Investor LLC, BSV Coral Hills Investors LLC, BSV Crestview Square LLC, BSV Cromwell Parent LLC, BSV Cypress Point Investors LLC, BSV Dekalb LLC, BSV Greenwood Investors LLC, BSV Highlandtown Investors LLC, BSV Hollinswood LLC, BSV Lamont Investors LLC, BSV Lamonticello Investors LLC, BSV LSP East Investors LLC, BSV Patrick Street Member LLC, BSV Premier Brookhill LLC, BSV Spotswood Investors LLC and BSV West Broad Investors LLC (collectively, the “Broad Street Entities”). The transactions contemplated by the Merger Agreements are referred to collectively as the “Mergers.” Each Broad Street Entity owns, either directly or indirectly, a single real estate property (each a “Property” and collectively, the “Properties”).

On December 27, 2019, the Company filed a Current Report on Form 8-K (the “Initial Closing 8-K”) in connection with the closing of 11 of the Mergers, including the Mergers with BSR and BSV and nine of the Property Mergers. On January 6, 2020, the Company filed an additional Current Report on Form 8-K (the “Second Closing 8-K) in connection with the closing of an additional Merger whereby it acquired one additional Property (such Property, collectively with the nine Properties acquired on December 27, 2019, the “Initial Properties”).

This amendment to the Initial Closing 8-K is being filed for the sole purpose of filing the historical financial statements of BSR, the historical statements of revenues and certain operating expenses of the ten Initial Properties and the related pro forma financial information of the Company required by Item 9.01 of Form 8-K, and should be read in conjunction with the Signing 8-K, the Initial Closing 8-K and the Second Closing 8-K.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the U.S. federal securities laws. These statements are based on current expectations of the Company’s management with respect to the transactions and other matters described in this Current Report on Form 8-K. While the Company’s management believes the assumptions underlying its forward-looking statements and information are reasonable, such information is necessarily subject to uncertainties and may involve certain risks, many of which are difficult to predict and are beyond the control of the Company’s management. These risks include, but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of any of the remaining Merger Agreements; the outcome of any legal proceedings that may be instituted against the Company, the Broad Street Entities or others in connection with the Mergers; the inability to complete the remaining Mergers due to the failure to satisfy other conditions to completion of the remaining Mergers, including the financing condition and obtaining consent from the requisite lenders, or otherwise; the ability to recognize the benefits of the Mergers; the amount of the costs, fees, expenses and charges related to the Mergers; the Company’s substantial leverage as a result of indebtedness incurred and preferred equity issued in connection with the Mergers, which could adversely affect the Company’s ability to pay cash dividends and meet other cash needs; the Company’s ability to repay, refinance, restructure and/or extend its indebtedness as it comes due; the availability of financing and capital to the Company; the Company’s ability to identify, finance, consummate and integrate additional acquisitions or investments; adverse economic or real estate developments, either nationally or in the markets in which the Company’s properties are located, including the impacts of the ongoing COVID-19 pandemic and efforts to mitigate its spread; adverse changes in financial markets or interest rates; the nature and extent of competition for tenants and acquisitions; other factors affecting the retail industry or the real estate industry generally; and other risks that are set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and other documents filed by the Company with the SEC from time to time. All forward-looking statements speak only as of the date of this Current Report on Form 8-K. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section. Except as otherwise may be required by law, the Company undertakes no obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this Current Report on Form 8-K.

Item 9.01.Financial Statements and Exhibits.

(a)	Historical Financial Statements.

The following are set forth in Exhibit 99.1 hereto, which is incorporated by reference herein:

•	Independent Auditor’s Report
•	Balance Sheet of BSR as of December 31, 2018 (audited) and Statements of Operations, Members’ Deficit and Cash Flows for the year ended December 31, 2018 (audited)
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•	Notes to Financial Statements of BSR as of and for the year ending December 31, 2018
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The following ae set forth in Exhibit 99.2 hereto, which is incorporated by reference herein:

•	Balance Sheets of BSR as of September 30, 2019 (unaudited) and December 31, 2018 and Statements of Operations, Members’ Deficit and Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)
•	Notes to Financial Statements of BSR as of and for the nine months ending September 30, 2019 and 2018
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The following are set forth in Exhibit 99.3 hereto, which is incorporated by reference herein:

•	Independent Auditor’s Report
•	Combined Statements of Revenues and Certain Operating Expenses of the Initial Properties for the nine months ended September 30, 2019 and the year ended December 31, 2018
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•	Notes to Combined Statements of Revenues and Certain Operating Expenses
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(b)	Unaudited Pro Forma Financial Information.
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The following are set forth in Exhibit 99.4 hereto, which is incorporated by reference herein:

•	Unaudited Consolidated Balance Sheet of the Company as of September 30, 2019
•	Unaudited Consolidated Statements of Operations of the Company for the nine months ended September 30, 2019 and the year ended December 31, 2018
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•	Notes to Unaudited Consolidated Financial Statements
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(d) Exhibits

Exhibit<br>No.	Description
99.1	Historical Financial Statements of BSR as of and for the year ended December 31, 2018
99.2	Historical Financial Statements of BSR as of and for the nine months ended September 30, 2019 and 2018
99.3	Historical Statements of Revenues and Certain Operating Expenses of the Initial Properties
99.4	Unaudited Consolidated Pro Forma Financial Statements of the Company.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BROAD STREET REALTY INC.
December 22, 2020	By:	/s/ Michael Z. Jacoby
		Michael Z. Jacoby
		Chief Executive Officer

brst-ex991_8.htm

Exhibit 99.1

Broad Street Realty, LLC.

Index to Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	2
Balance Sheet	3
Statement of Operations	4
Statement of Members’ Deficit	5
Statement of Cash Flows	6
Notes to Financial Statements	7

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Broad Street Realty, LLC

Bethesda, Maryland

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Broad Street Realty, LLC (the “Company”) as of December 31, 2018, the related statements of operations, members’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2018.

Philadelphia, Pennsylvania

December 22, 2020

BROAD STREET REALTY, LLC

Balance Sheet

(in thousands)


Assets
Current assets
Cash and cash equivalents	138
Accounts receivable, net of allowances of 171	969
Receivables due from related parties	1,191
Other assets, net	1,579
Total current assets	3,877
Corporate property, net	74
Total Assets	3,951
Liabilities and Members' Deficit
Current liabilities
Current maturities of long-term debt	4,638
Payables due to related parties	2,224
Accounts payable and accrued liabilities	1,801
Deferred revenue	332
Total liabilities	8,995
Commitments and contingencies (Note 6)
Members' Deficit	(5,044	)
Total Liabilities and Members' Deficit	3,951

All values are in US Dollars.

See accompanying notes to financial statements.

BROAD STREET REALTY, LLC

Statement of Operations

(in thousands)

	For the year ended<br><br><br>December 31, 2018
Revenues
Commissions	$	3,476
Management and other fees		2,459
Total revenues		5,935
Expenses
Cost of services		2,167
Depreciation and amortization		29
Bad debt expense		629
General and administrative		4,823
Total operating expenses		7,648
Operating loss		(1,713	)
Other income (expense)
Interest and other income		38
Other expense		(128	)
Merger-related expense		(165	)
Interest expense		(188	)
Total other income (expense)		(443	)
Net loss	$	(2,156	)

See accompanying notes to financial statements.

BROAD STREET REALTY, LLC

Statement of Members’ Deficit

(in thousands)

	Members' Deficit
Balance at December 31, 2017	$	(2,223	)
Net loss		(2,156	)
Member distributions		(665	)
Balance at December 31, 2018	$	(5,044	)

See accompanying notes to financial statements.

BROAD STREET REALTY, LLC

Statement of Cash Flows

(in thousands)

	For the year ended December 31, 2018
Cash flows from operating activities:
Net loss	$	(2,156	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		29
Straight-line rent liability		15
Bad debt expense		629
Changes in operating assets and liabilities
Accounts receivable		(567	)
Other assets		(193	)
Receivables due from related parties		213
Accounts payable and accrued liabilities		563
Payables due to related parties		49
Deferred revenues		322
Net cash used in operating activities		(1,096	)
Cash flows from investing activities
Capitalized pre-acquisition costs		(246	)
Net cash used in investing activities		(246	)
Cash flows from financing activities
Borrowings under debt agreements		2,028
Repayments under debt agreements		(522	)
Capitalized pre-offering costs		(54	)
Distributions to members		(665	)
Proceeds from related parties		1,452
Payments to related parties		(760	)
Net cash provided by financing activities		1,479
Net increase in cash and cash equivalents		137
Cash and cash equivalents at beginning of period		1
Cash and cash equivalents at end of period	$	138
Supplemental Disclosure of Cash Flow Information
Interest paid	$	234
Accrued pre-offering costs		338
Accrued pre-acquisition costs		57

See accompanying notes to financial statements.

BROAD STREET REALTY, LLC

Notes to Financial Statements

December 31, 2018

Note 1 - Organization and Nature of Business

Broad Street Realty, LLC (the “Company”) is a real estate management and brokerage company, which is 50% owned by Michael Z. Jacoby and 50% owned by Thomas M. Yockey. The Company provides property management services and real estate brokerage services for a portfolio of separately owned retail real estate properties. As of December 31, 2018, the Company owned no real properties; therefore, all of its revenues were derived from its property management and brokerage services.

Note 2 – Significant Accounting Policies and Related Matters

Use of Estimates

The preparation of the financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the amounts of revenue and expense reported in the period. Estimates are made for items such as revenues and valuation of receivables. Actual results may differ from those estimates.

Segment Reporting

The Company provides real estate management and brokerage services. The Company is managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making. Therefore, the Company discloses its operating results in a single reportable segment.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. The majority of the Company’s cash and cash equivalents are held at major commercial banks which at times may exceed the Federal Deposit Insurance Corporation limit. The Company has not experienced any losses to date on invested cash.

Revenue Recognition

The Company earns revenue from the following: Leasing Commissions, Property and Asset Management Fees, Development Services, and Capital Transactions.

Leasing Commissions: The Company earns leasing commissions as a result of providing strategic advice and connecting tenants to property owners in the leasing of real estate. The Company records commission revenue on real estate leases at the point in time when the performance obligation is satisfied, which is generally upon lease execution. Terms and conditions of a commission agreement may include, but are not limited to, execution of a signed lease agreement and future contingencies, including tenant’s occupancy, payment of a deposit or payment of first month’s rent (or a combination thereof). The adoption of Accounting Standards Codification (“ASC”) 606, Revenue from Contacts with Customers (as discussed below under the heading “—Recent Accounting Pronouncements”), resulted in an acceleration of some revenues that are based, in part, on future contingent events. The Company’s performance obligation will typically be satisfied upon execution of a lease and the portion of the commission that is contingent on a future event will likely be recognized if deemed not subject to significant reversal, based on the Company’s estimates and judgments. Under legacy revenue recognition, the Company deferred recognition of revenue and commissions contingent on future events until the respective contingencies had been satisfied.

Property and Asset Management Fees: The Company provides real estate management services for owners of properties, representing a series of daily performance obligations delivered over time. Pricing is generally in the form of a monthly management fee based upon a percentage of property-level cash receipts or some other variable metric.

When accounting for reimbursements of third-party expenses incurred on a client’s behalf, the Company determines whether it is acting as a principal or an agent in the arrangement. When the Company is acting as a principal, the Company’s revenue is reported on a gross basis and comprises the entire amount billed to the client and reported cost of services includes all expenses associated with the client. When the Company is acting as an agent, the

Company’s fee is reported on a net basis as revenue for reimbursed amounts is netted against the related expenses. Within ASC 606, control of the service before transfer to the customer is the focal point of the principal versus agent assessments. The Company is a principal if it controls the services before they are transferred to the client. Under legacy revenue recognition, the assessment of being the primary obligor of the service is the focal point of the principal versus agent assessments. The presentation of revenues and expenses pursuant to these arrangements under either a gross or net basis has no impact on corporate fee revenue, net loss or cash flows.

Engineering Services: The Company provides engineering services to property owners on an as needed basis at the properties where the Company is the property or asset manager. The Company receives consideration at agreed upon fixed rates for the time incurred plus a reimbursement for costs incurred and revenue is recognized over time because the customer simultaneously receives and consumes the benefits of the services as they are performed. The Company accounts for performance obligations using the right to invoice practical expedient. The Company applies the right to invoice practical expedient to record revenue as the services are provided, given the nature of the services provided and the frequency of billing under the customer contract. Under this practical expedient, the Company recognizes revenue in an amount that corresponds directly with the value to the customer of performance completed to date and for which there is a right to invoice the customer.

Development Services: The Company provides construction-related services ranging from general contracting to project management for owners and occupiers of real estate. Depending on the terms of the engagement, the Company’s performance obligation is either to arrange for the completion of a project or to assume responsibility for completing a project on behalf of a client. The Company’s obligations to clients are satisfied over time due to the continuous transfer of control of the underlying asset. Therefore, the Company recognizes revenue over time, generally using input measures (e.g., to-date costs incurred relative to total estimated costs at completion). Typically, the Company is entitled to consideration at distinct milestones over the term of an engagement. The Company may receive variable consideration, which can include, but is not limited to, a fee paid upon return of an investor’s original investment in a project. The Company assesses variable consideration on a contract by contract basis, and when appropriate, recognizes revenue based on its assessment of the expected outcome and historical results. The Company recognizes revenue related to variable consideration if it is deemed probable there will not be a significant reversal in the future.

Capital Transactions: The Company provides brokerage and other services for capital transactions, such as real estate sales, real estate acquisitions or financing transactions. The Company’s performance obligation is to facilitate the execution of capital transactions, and the Company is generally entitled to the full consideration at the point in time upon which its performance obligation is satisfied, at which time the Company recognizes revenue.

Contract Assets and Contract Liabilities

Contract assets include amounts recognized as revenue for which the Company is not yet entitled to payment for reasons other than the passage of time, but that do not constrain revenue recognition. As of December 31, 2018, the Company did not have any contract assets.

Contract liabilities include advance payments related to performance obligations that have not yet been satisfied. As of December 31, 2018, the Company had approximately $0.3 million of contract liabilities, which are included in deferred revenue on its balance sheet. The Company recognizes the contract liability as revenue once it has transferred control of service to the customer and all revenue recognition criteria are met.

Accounts Receivable and Allowance for Doubtful Accounts

The Company records accounts receivable for its unconditional rights to consideration arising from its performance under contracts with customers. Additionally, the Company records other receivables, included in Other assets, net on the consolidated balance sheet, which represents commission advances to employees. Further, the Company records receivables from affiliated properties. The carrying value of such receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company estimates its allowance for doubtful accounts for specific accounts and other receivable balances based on historical collection trends, the age of the outstanding accounts and other receivables and existing economic conditions associated with the receivables. Past-due accounts and other receivable balances are written off when the Company’s internal collection efforts have been unsuccessful or the advance has been forgiven. As a practical expedient, the Company does not adjust the promised amount of consideration for the effects of a significant financing component when the Company expects, at contract inception, that the period between its transfer of a promised service to a customer and when the customer pays for that

service will be one year or less. The Company does not typically include extended payment terms in its contracts with customers.

Corporate Property

Corporate property and equipment are stated at cost and depreciation is computed using the straight-line method over the estimated useful lives of the assets (generally 5 to 15 years). Depreciation expense related to corporate property for the year ended December 31, 2018 was less than $0.1 million. As of December 31, 2018, the Company had approximately $0.3 million, gross ($0.1 million, net) in corporate property. The Company evaluates corporate property for impairment whenever events or circumstances indicate the carrying value of an asset may not be recoverable. The Company records an impairment loss to the extent the carrying value exceeds the estimated fair value. The Company did not recognize any impairment loss during the year ended December 31, 2018.

Income Taxes

The Company is structured as a limited liability company and is treated as a partnership for U.S. federal and state income purposes. As such, any taxes are the responsibility of the members, and accordingly no provisions for federal or state income taxes are recorded for the Company. The Company’s federal and state income tax return typically remain open to examination by the tax authorities primarily beginning 2015 through present except for tax jurisdictions where the statute of limitations has yet to begin. There are currently no open examinations with taxing authorities.

In accordance with ASC Topic 740, a tax position is a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. For the Company, as a pass-through entity, any interest, penalties, and income taxes which might arise from uncertain tax positions would pass through to the members.

Deferred Costs

Costs incurred prior to the completion of offerings of equity interests or other capital instruments that directly relate to the offering are deferred and netted against proceeds received from the offering. Following the issuance, these offering costs are reclassified to the equity section of the balance sheet as a reduction of proceeds raised. Additionally, deferred costs include costs incurred prior to the completion of asset acquisitions which, upon completion of the acquisition, are allocated to the various components of the acquisition based upon the relative fair value of each component.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. In calculating fair value, a company must maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements.

A hierarchy of valuation techniques is defined to determine whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy:

•	Level 1- quoted prices for identical instruments in active markets;
•	Level 2- quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
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•	Level 3- fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
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If quoted market prices or inputs are not available, fair value measurements are based upon valuation models that utilize current market or independently sourced market inputs, such as interest rates, option volatilities, credit spreads and market capitalization rates. Items valued using such internally-generated valuation techniques are

classified according to the lowest level input that is significant to the fair value measurement. As a result, the asset or liability could be classified in either Level 2 or 3 even though there may be some significant inputs that are readily observable. Valuation techniques used by the Company include the use of third-party valuations and internal valuations, which may include discounted cash flow models.

Recent Accounting Pronouncements

On January 1, 2018, the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows - Restricted Cash, became effective for the Company. This guidance requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The implementation of this new standard did not have an impact on the Company’s statement of cash flows or related disclosures.

On January 1, 2018, the FASB’s new revenue recognition standard included in ASC 606, Revenue from Contacts with Customers, became effective for the Company. This new revenue recognition standard superseded most of the existing revenue recognition guidance. This standard’s core principle is that a company will recognize revenue when it transfers goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. The Company adopted this standard on a full retrospective basis. The impact of the application of the new revenue recognition guidance resulted in an acceleration of revenues that were based, in part, on future contingent events. For example, some leasing commission revenues were recognized earlier. Prior to adoption, a portion of these lease commission revenues was deferred until a future contingency was resolved (e.g., tenant move-in or payment of first month’s rent). Under the new revenue guidance, the Company’s performance obligation typically will be satisfied at lease signing and, therefore, the portion of the commission that is contingent on a future event has been recognized earlier if deemed probable that there will not be significant reversal in the future.

In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheet and making targeted improvements to lessor accounting. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU 2018-11, Targeted Improvements.

The new standard became effective for the Company on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on January 1, 2019 and used the effective date as its date of initial application. Consequently, financial information prior to that date was not adjusted and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

The new standard provides a number of optional practical expedients in transition. The Company has elected the “package of practical expedients”, which permits it not to reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter not being material to the Company.

The most significant effect for the Company as lessee relates to the recognition of new right-of-use assets and lease liabilities on its balance sheet for four office leases and two equipment leases. Upon adoption, the Company will recognize additional operating liabilities of approximately $1.6 million with corresponding right-of-use assets of the same amount. These amounts are based on the present value of the remaining minimum rental payments under current leasing standards for these six existing operating leases.

In addition, due to the new standard’s narrowed definition of initial direct costs, lease origination costs that were previously capitalized as initial direct costs and amortized to expense over the lease term are now expensed as incurred. The Company is evaluating the impact of adopting this new accounting standard on the Company’s consolidated financial statements and related disclosures.

experience, current conditions and reasonable and supportable forecasts. The standard also requires additional disclosures related to significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The amended guidance is effective for the Company for fiscal years, and interim periods within those years, beginning January 1, 2023. The Company is evaluating the impact of adopting this new accounting standard on the Company’s financial statements and related disclosures.

Note 3 – Related Party Transactions

As of December 31, 2018, the Company had $1.2 million in receivables due from related parties, which includes a loan of approximately $1.0 million due from a member of the Company and approximately $0.2 million due from properties managed by the Company. The loan due from the member of the Company was not completed under a formal agreement and did not include any interest provisions or repayment terms. This loan was collected by the Company during 2019.

Additionally, as of December 31, 2018, the Company had $2.2 million in payables due to related parties, which includes approximately $2.1 million due to properties managed by the Company related to amounts borrowed by the Company for working capital and approximately $0.1 million due to an entity that is owned by the members of the Company.

Approximately $3.1 million of the Company’s total revenue for the year ended December 31, 2018 was generated from related parties. Additionally, approximately $0.2 million of the Company’s accounts receivable, net balance at December 31, 2018 was owed from related parties.

Note 4 - Other Assets

Items included in other assets, net on the Company’s balance sheet as of December 31, 2018 are detailed in the table below (dollars in thousands):

	December 31, 2018
Other receivables, net of allowance of $143	$	611
Pre-offering costs		393
Pre-acquisition costs		309
Prepaid assets and deposits		266
	$	1,579

Note 5 – Debt

The table below details the Company’s debt balance as of December 31, 2018 (dollars in thousands):

	Maturity Date	Rate Type			Balance Outstanding<br><br><br>at December 31, 2018
Acquisitions Line of Credit	April 1, 2019	Floating ^(1)^	6.5	%	$	1,000
Accounts Receivable Based Line of Credit	April 1, 2019	Floating ^(1)^	6.5	%		1,250
Working Capital Line of Credit	April 1, 2019	Floating ^(1)^	6.5	%		750
Guidance Line of Credit	April 30, 2019	Fixed	7.00	%		658
Business Term Loan	December 7, 2022	Fixed	5.25	%		1,010
Unamortized deferred financing costs						(30	)
Total Debt					$	4,638
^(1)^	The interest rate is the greater of (i) 5.25% and (ii) LIBOR plus 4.0%.
---	---

In December 2017, the Company entered into a $3.25 million loan agreement with EagleBank, which was comprised of (i) a $1.25 million term loan, (ii) a $1.25 million accounts receivable line of credit and (iii) a $0.75 million working capital line of credit.

monthly and bears a rate of 5.5% for outstanding balances greater than $1,010,000 and 5.25% for balances equal to or less than $1,010,000. The Company has the option to make a single curtailment payment of $0.5 million, which would reduce the interest payment on the loan to 5.0%. The outstanding balance at December 31, 2018 was $1.0 million and the interest rate was 5.25%.

The accounts receivable line of credit allows for the Company to borrow up to $1.25 million provided that the outstanding principal balance does not exceed 80% of Eligible Accounts Receivable, as defined in the loan agreement. The accounts receivable line of credit matured in April 2019, required interest only payments until maturity and carried an interest rate equal to the greater of (i) LIBOR plus 4.0% and (ii) 5.25%. The interest rate on the accounts receivable line of credit at December 31, 2018 was 6.5%. The $1.25 million line of credit was advanced in full to the Company as of December 31, 2018.

The working capital line of credit allows for the Company to borrow up to $0.75 million for working capital needs and matured on April 1, 2019. The working capital line of credit carried an interest rate equal to the greater of (i) LIBOR plus 4.0% and (ii) 5.25%. The interest rate on the working capital line of credit at December 31, 2018 was 6.5%. The $0.75 million line of credit was advanced in full to the Company as of December 31, 2018.

In December 2017, the Company entered into a $1.0 million loan agreement with EagleBank for an acquisitions line of credit that matured in April 2019. Advances under the acquisition line of credit required an executed purchase agreement for the acquisition of a property and approval by the lender. Interest on the acquisitions line of credit was the greater of (i) LIBOR plus 4.0% and (ii) 5.25%. The interest rate on the acquisitions line of credit at December 31, 2018 was 6.5%. The $1.0 million acquisition line of credit was advanced in full to the Company as of December 31, 2018.

In October 2015, the Company entered into a loan agreement with EagleBank for a $2.0 million revolving line of credit. The line of credit had a one-year term and is reviewed by the lender annually for renewal. Each request for advance under the line of credit is evidenced by a sub-note that carried a maturity of nine months subsequent to the advance. The $2.0 million line of credit has expired; therefore, the Company had no availability under the line at December 31, 2018. One sub-note remained outstanding at December 31, 2018, which had an outstanding balance of $0.7 million and matured on April 30, 2019. The outstanding interest rate on the sub-note as of December 31, 2018 was 7.0%.

All outstanding debt balances were paid off on December 27, 2019 in conjunction with the mergers described in Note 10 under the heading (“—Merger with MedAmerica Properties Inc.”).

Debt Maturities

The following table details the Company’s scheduled principal repayments and maturities during each of the next five years and thereafter as of December 31, 2018 (dollars in thousands):

Year	Amount Due ^(1)^
2019	$	3,898
2020		240
2021		240
2022		290
2023		-
Thereafter		-
Total	$	4,668
^(1)^	As noted below, as of December 31, 2018, the Company has classified the balances of the $1.25 million term loan that are not scheduled to mature in 2019 as current liabilities. This table presents the scheduled maturities of the loan per the loan agreement.
---	---

Covenants

required, the lender has the right to increase the applicable interest rates under each of the loans by 0.25% until the minimum deposit balance is achieved for a semi-annual period. As of December 31, 2018, the Company was not compliance with the covenants under the loan agreements; therefore, the outstanding amounts have been reflected as current maturities on the balance sheet regardless of their scheduled maturity.

Note 6 - Commitments and Contingencies

Commitments

As of December 31, 2018, the Company was obligated under operating lease agreements consisting primarily of the Company’s corporate office lease, which expires in 2023, three additional office leases and two equipment leases. Annual base rent on the corporate office lease increases approximately 4.0% annually. Rent expense relating to the operating leases, including straight-line rent, was approximately $0.4 million for the year ended December 31, 2018.

The Company’s future minimum lease payments for its operating leases as of December 31, 2018 were as follows (dollars in thousands):

For the year ending:
2019	$	440
2020		410
2021		391
2022		360
2023		303
Thereafter		1
Total	$	1,905

Contingencies

From time to time, the Company may be subject to claims and suits in the ordinary course of business. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on its financial condition, results of operations or cash flows.

Note 7 – Revenues

Disaggregated Revenue

The following tables represents a disaggregation of revenues from contracts with customers for the year ended December 31, 2018 and by type of service (dollars in thousands):

	Topic 606<br><br><br>Revenue Recognition	Year ended<br><br><br>December 31, 2018
Topic 606 Revenues
Leasing commissions	Point in time	$	3,139
Property and asset management fees	Over time		1,534
Engineering services	Over time		453
Sales commissions	Point in time		337
Equity fees	Point in time		166
Development fees	Over time		101
Acquisition and disposition fees	Point in time		81
Guaranty fees	Over time		31
Topic 606 Revenue			5,842
Out of Scope of Topic 606 revenue
Sublease income			93
Total Out of Scope of Topic 606 revenue			93
Total Revenue		$	5,935

Note 8 – Employee Benefit Plan

The Company has a 401(k) retirement plan (the “Plan”), which permits all eligible employees to defer a portion of their compensation under the Internal Revenue Code of 1986, as amended. Pursuant to the provisions of the Plan, the Company may make discretionary contributions on behalf of the eligible employees. The Company made contributions to the Plan of less than $0.1 million for the year ended December 31, 2018.

Note 9 - Fair Value of Financial Instruments

Financial Assets and Liabilities Not Carried at Fair Value

The carrying amounts of cash and cash equivalents, receivables and payables are reasonable estimates of their fair value as of December 31, 2018 due to their short-term nature of these instruments (Level 1).

As of December 31, 2018, the Company’s indebtedness was comprised of borrowings that bear interest at LIBOR plus a margin and borrowings at fixed rates. The fair value of the Company’s $3.0 million in borrowings under variable rates approximate their carrying values as the debt is at variable rates currently available and resets on a monthly basis.

The fair value of the Company’s fixed rate debt as of December 31, 2018 is estimated by using Level 2 inputs such as discounting the estimated future cash flows using current market rates for similar loans that would be made to borrowers with similar credit ratings and for the same remaining maturities. As of December 31, 2018, the fair value of the Company’s $1.7 million fixed rate debt was estimated to be approximately $1.8 million.

Fair value estimates are made at a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement at such fair value amounts may not be possible.

Note 10 – Subsequent Events

Merger with MedAmerica Properties Inc.

On May 28, 2019, MedAmerica Properties Inc. and certain of its subsidiaries (“MedAmerica”) entered into 19 separate agreements and plans of merger (collectively, the “Merger Agreements”) with each of the Company, Broad Street Ventures, LLC (“BSV”) and each of the 17 property entities to be acquired (the “Broad Street Entities”), all of which are related parties. The Merger Agreements relate to a series of 19 mergers (“Mergers”) whereby the Company, BSV and each Broad Street Entity would become subsidiaries of MedAmerica.

On December 27, 2019 (the “Merger Date”), MedAmerica completed 11 of the Mergers (the “Initial Mergers”), including the Mergers with the Company and BSV and Mergers with nine other Broad Street Entities. The Merger between the Company and a wholly owned subsidiary of MedAmerica was accounted for as a reverse acquisition and recapitalization, with the Company being treated as the accounting acquirer. In addition, upon completion of the Initial Mergers, MedAmerica’s name was changed to “Broad Street Realty, Inc.” MedAmerica, after completion of the Initial Mergers, is referred to herein as “Broad Street.”

On December 31, 2019, Broad Street completed one additional Merger whereby it acquired Brookhill Azalea Shopping Center. As consideration for the Mergers that had closed as of December 31, 2019, Broad Street issued an aggregate of 18,776,768 shares of common stock and 2,827,904 units of limited partnership interest in its operating partnership (“OP units”) to investors in the Broad Street Entities party to the Mergers. In addition, certain prior investors in the Broad Street Entities received an aggregate of $0.9 million in cash as a portion of the consideration for the Initial Mergers.

In July 2020, Broad Street closed one Merger whereby it acquired Lamar Station Plaza East, issuing an aggregate of 884,143 shares of common stock as consideration for the Mergers.

As of the date of the issuance of these financial statements, there are six Mergers that have not been completed. Broad Street expects to issue an aggregate of 10,400,779 shares of common stock and 573,529 OP units as consideration for the additional Mergers. Until the closing of the remaining Mergers, Broad Street will continue to manage these six properties and receive management fees.

Impact of COVID-19

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic and, on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The pandemic has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to mitigate its spread, including restrictions on freedom of movement and business operations, such as travel bans, border closings, business closures, quarantines and shelter-in-place or similar orders.

The full impact of the COVID-19 pandemic continues to evolve as of the date of the issuance of these financial statements. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the COVID-19 pandemic and related government measures on its financial condition, liquidity, operations, suppliers, industry and workforce. Given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, the Company cannot accurately predict the effect on future periods, but it expects the pandemic and the related government measures will have a material adverse impact on its financial condition, liquidity, results of operations and cash flows in 2020 and beyond.

CARES Act

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property.

It also appropriated funds for the Small Business Administration (“SBA”) Paycheck Protection Program (the “PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. The Company received funds under the PPP as described below under the heading (“—PPP Loan”).

The Company continues to examine the impact that the CARES Act may have on its business. Currently, the Company is unable to determine the impact that the CARES Act will have on its financial condition, results of operation, or liquidity.

PPP Loan

On April 20, 2020, the Company entered into a promissory note (the “PPP Note”) with MVB Bank, Inc. (“MVB”) with respect to an unsecured loan of approximately $0.8 million (the “PPP Loan”) pursuant to the PPP. The PPP Loan bears interest at a rate of 1.0% per year. The PPP Note contains certain events of default relating to, among other things, failure to make any payment when due and material adverse changes in the borrower’s financial condition. The occurrence of an event of default, following any applicable cure period, would permit MVB to declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the PPP Note to be immediately due and payable.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of a loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs and certain mortgage interest, rent and utility expenses. The terms of any forgiveness may also be subject to further requirements under any regulations and guidelines the SBA may adopt. The Company can provide no assurances that it will obtain forgiveness of the PPP Loan in whole or in part. If the Company does not obtain forgiveness it is required to make 24 monthly payments of principal and interest in the amount of $32,032. The PPP Loan matures on October 20, 2022.

brst-ex992_9.htm

Exhibit 99.2

Broad Street Realty, LLC.

Index to Financial Statements

	Page
Balance Sheets	2
Statements of Operations	3
Statements of Members’ Deficit	4
Statements of Cash Flows	5
Notes to Financial Statements	6

BROAD STREET REALTY, LLC

Balance Sheets

(in thousands)

			December 31, 2018

Assets
Current assets
Cash and cash equivalents	348		$	138
Accounts receivable, net of allowances of 46 and 171	1,352			969
Receivables due from related parties	1,288			1,191
Other assets, net	3,438			1,579
Total current assets	6,426			3,877
Right-of-use assets, net	1,290			-
Corporate property, net	93			74
Total Assets	7,809		$	3,951
Liabilities and Members' Deficit
Current liabilities
Current maturities of long-term debt	4,419		$	4,638
Payables due to related parties	5,522			2,224
Accounts payable and accrued liabilities	3,499			1,801
Deferred revenue	245			332
Total current liabilities	13,685			8,995
Operating lease liabilities	1,389			-
Total liabilities	15,074			8,995
Commitments and contingencies (Note 6)
Members' Deficit	(7,265	)		(5,044	)
Total Liabilities and Members' Deficit	7,809		$	3,951

All values are in US Dollars.

See accompanying notes to interim financial statements.

BROAD STREET REALTY, LLC

Statements of Operations

(in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Revenues
Commissions	$	2,916		$	2,559
Management and other fees		1,940			1,884
Total revenues		4,856			4,443
Expenses
Cost of services		2,011			1,241
Depreciation and amortization		13			22
Bad debt expense		153			218
General and administrative		3,917			3,645
Total operating expenses		6,094			5,126
Operating loss		(1,238	)		(683	)
Other income (expense)
Interest and other income		-			42
Other expense		(88	)		(105	)
Merger-related expense		(464	)		-
Interest expense		(213	)		(174	)
Total other income (expense)		(765	)		(237	)
Net loss	$	(2,003	)	$	(920	)

See accompanying notes to interim financial statements.

BROAD STREET REALTY, LLC

Statements of Members’ Deficit

(in thousands)

(Unaudited)

	Members' Deficit
Balance at December 31, 2017	$	(2,223	)
Net loss		(920	)
Member distributions		(521	)
Balance at September 30, 2018	$	(3,664	)
	Members' Deficit
---	---	---	---
Balance at December 31, 2018	$	(5,044	)
Net loss		(2,003	)
Member distributions		(218	)
Balance at September 30, 2019	$	(7,265	)

See accompanying notes to interim financial statements.

BROAD STREET REALTY, LLC

Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(2,003	)	$	(920	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		13			22
Straight-line rent liability		2			12
Bad debt expense		153			218
Changes in operating assets and liabilities
Accounts receivable		(499	)		(387	)
Other assets		391			(143	)
Receivables due from related parties		(79	)		215
Accounts payable and accrued liabilities		606			86
Payables due to related parties		21			75
Deferred revenues		(87	)		248
Net cash used in operating activities		(1,482	)		(574	)
Cash flows from investing activities
Capitalized pre-acquisition costs		(979	)		-
Capital expenditures for corporate property, net		(32	)		-
Net cash used in investing activities		(1,011	)		-
Cash flows from financing activities
Borrowings under debt agreements		-			1,125
Repayments under debt agreements		(219	)		(445	)
Capitalized pre-offering costs		(82	)		-
Distributions to members		(218	)		(521	)
Proceeds from related parties		3,612			762
Payments to related parties		(390	)		(346	)
Net cash provided by financing activities		2,703			575
Net increase in cash and cash equivalents		210			1
Cash and cash equivalents at beginning of period		138			1
Cash and cash equivalents at end of period	$	348		$	2
Supplemental Disclosure of Cash Flow Information
Interest paid	$	253		$	173
Accrued pre-offering costs		1,184			-
Accrued pre-acquisition costs		405			-

See accompanying notes to interim financial statements.

BROAD STREET REALTY, LLC

Notes to Interim Financial Statements

Unaudited

September 30, 2019

Note 1 - Organization and Nature of Business

Broad Street Realty, LLC (the “Company”) is a real estate management and brokerage company, which is 50% owned by Michael Z. Jacoby and 50% owned by Thomas M. Yockey. The Company provides property management services and real estate brokerage services for a portfolio of separately owned retail real estate properties. As of September 30, 2019, the Company owned no real properties; therefore, all of its revenues were derived from its property management and brokerage services.

Note 2 – Significant Accounting Policies and Related Matters

The accompanying unaudited financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of its financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for a full year. The financial statements and related notes do not include all information and footnotes required by GAAP for annual financial statements. These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2018, included in the Form 8-K/A filed by Broad Street Realty, Inc. with the Securities and Exchange Commission (the “SEC”) on December 22, 2020.

For information about significant accounting policies, refer to the Company’s audited financial statements and notes thereto for the year ended December 31, 2018 included in the Form 8-K/A filed by Broad Street Realty, Inc. with the SEC on December 22, 2020. During the nine months ended September 30, 2019, there were no material changes to these policies except as noted below.

Recent Accounting Pronouncements

The new standard provides a number of optional practical expedients in transition. The Company has elected the “package of practical expedients,” which permits it not to reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs. The Company made an accounting policy election to exempt short-term leases of 12 months or less from balance sheet recognition requirements associated with the new standard. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter not being material to the Company.

The most significant effect for the Company as lessee relates to the recognition of new right-of-use assets and lease liabilities on its balance sheet for four office leases and two equipment leases. Upon adoption, the Company recognized additional operating liabilities of approximately $1.6 million with corresponding right-of-use assets of the same amount. These amounts are based on the present value of the remaining minimum rental payments under current leasing standards for these six existing operating leases. As of September 30, 2019, the value of the lease liabilities and right-of-use assets, net included on the Company’s balance sheet was approximately $1.4 million and $1.3 million, respectively.

In addition, due to the new standard’s narrowed definition of initial direct costs, lease origination costs that were previously capitalized as initial direct costs and amortized to expense over the lease term are now expensed as incurred. See Note 6, Commitment and Contingencies, for additional information on the impact of ASC 842 adoption.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The standard also requires additional disclosures related to significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The amended guidance is effective for the Company for fiscal years, and interim periods within those years, beginning January 1, 2023. The Company is evaluating the impact of adopting this new accounting standard on the Company’s financial statements and related disclosures.

Note 3 – Related Party Transactions

As of September 30, 2019, the Company had approximately $1.3 million in receivables due from related parties, which includes a loan of approximately $0.9 million due from a member of the Company and approximately $0.4 million due from properties managed by the Company. The loan due from a member of the Company was not completed under a formal agreement and did not include any interest provisions or repayment terms. This loan was collected by the Company during the fourth quarter of 2019. As of September 30, 2019, the Company had approximately $5.5 million in payables due to related parties which includes approximately $5.4 million due to properties managed by the Company related to amounts borrowed by the Company for working capital and approximately $0.1 million due to an entity that is owned by the members of the Company. Approximately $0.1 million and $4.6 million of these receivables and payables outstanding as of September 30, 2019, respectively, were settled with the mergers completed in December 2019, which are described in Note 10 under the heading “—Merger with MedAmerica Properties Inc.”

As of December 31, 2018, the Company had $1.2 million in receivables due from related parties, which includes a loan of approximately $1.0 million due from a member of the Company and approximately $0.2 million due from properties managed by the Company. Additionally, as of December 31, 2018, the Company had $2.2 million in payables due to related parties, which includes approximately $2.1 million due to properties managed by the Company related to amounts borrowed by the Company for working capital and approximately $0.1 million due to an entity that is owned by the members of the Company.

Approximately $2.2 million and $2.4 million of the Company’s total revenue for the nine months ended September 30, 2019 and September 30, 2018, respectively, was generated from related parties. Additionally, approximately $0.4 million and $0.2 million of the Company’s accounts receivable, net balance at September 30, 2019 and December 31, 2018, respectively, was owed from related parties.

Note 4 - Other Assets

Items included in other assets, net on the Company’s balance sheets as of September 30, 2019 and December 31, 2018 are detailed in the table below (dollars in thousands):

		December 31, 2018
Pre-acquisition costs	1,630	$	309
Pre-offering costs	1,321		393
Other receivables, net of allowance of 143 and 143	315		611
Prepaid assets and deposits	172		266
	3,438	$	1,579

All values are in US Dollars.

Note 5 – Debt

The table below details the Company’s debt balance as of September 30, 2019 and December 31, 2018 (dollars in thousands):

	Maturity Date ^(1)^	Rate Type			Balance Outstanding<br><br><br>at September 30, 2019			Balance Outstanding<br><br><br>at December 31, 2018
Acquisitions Line of Credit	April 1, 2019	Floating ^(2)^	6.0	%	$	1,000		$	1,000
Accounts Receivable Based Line of Credit	April 1, 2019	Floating ^(2)^	6.0	%		1,250			1,250
Working Capital Line of Credit	April 1, 2019	Floating ^(2)^	6.0	%		750			750
Guidance Line of Credit	April 30, 2019	Fixed	7.00	%		619			658
Business Term Loan	December 7, 2022	Fixed	5.25	%		830			1,010
Unamortized deferred financing costs						(30	)		(30	)
Total Debt					$	4,419		$	4,638
^(1)^	The Company’s debt includes multiple loans with a maturity date of April 1, 2019 that were not paid off at maturity and were not formally extended with the lender due to anticipation of payoff upon closing of the mergers. All outstanding debt balances were paid off on December 27, 2019 in conjunction with the mergers described in Note 10 under the heading “—Merger with MedAmerica Properties Inc.”
---	---
^(2)^	The interest rate is the greater of (i) 5.25% and (ii) LIBOR plus 4.0%
---	---

The $1.25 million term loan was advanced in full to the Company in December 2017 and requires principal payments of approximately $0.2 million per year until maturity in December 2022. Interest on the term loan is payable monthly and bears a rate of 5.5% for outstanding balances greater than $1,010,000 and 5.25% for balances equal to or less than $1,010,000. The Company has the option to make a single curtailment payment of $0.5 million, which would reduce the interest payment on the loan to 5.0%. The outstanding balance at September 30, 2019 was $0.8 million and the interest rate was 5.25%.

The accounts receivable line of credit allows for the Company to borrow up to $1.25 million provided that the outstanding principal balance does not exceed 80% of Eligible Accounts Receivable, as defined in the loan agreement. The accounts receivable line of credit matured in April 2019, required interest only payments until maturity and carried an interest rate equal to the greater of (i) LIBOR plus 4.0% and (ii) 5.25%. The interest rate on the accounts receivable line of credit at September 30, 2019 was 6.0%. The $1.25 million line of credit was advanced in full to the Company as of September 30, 2019.

The working capital line of credit allows for the Company to borrow up to $0.75 million for working capital needs and matured on April 1, 2019. The working capital line of credit carried an interest rate equal to the greater of (i) LIBOR plus 4.0% and (ii) 5.25%. The interest rate on the working capital line of credit at September 30, 2019 was 6.0%. The $0.75 million line of credit was advanced in full to the Company as of September 30, 2019.

In December 2017, the Company entered into a $1.0 million loan agreement with EagleBank for an acquisitions line of credit that matured in April 2019. Advances under the acquisition line of credit required an executed purchase agreement for the acquisition of a property and approval by the lender. Interest on the acquisitions line of credit was the greater of (i) LIBOR plus 4.0% and (ii) 5.25%. The interest rate on the acquisitions line of credit at September 30, 2019 was 6.0%. The $1.0 million acquisition line of credit was advanced in full to the Company as of September 30, 2019.

advance under the line of credit is evidenced by a sub-note that carried a maturity of nine months subsequent to the advance. The $2.0 million line of credit has expired; therefore, the Company had no availability under the line at September 30, 2019. One sub-note remained outstanding at September 30, 2019, which had an outstanding balance of $0.6 million and matured on April 30, 2019. The outstanding interest rate on the sub-note as of September 30, 2019 was 7.0%.

All outstanding debt balances were paid off on December 27, 2019 in conjunction with the mergers described in Note 10 under the heading “—Merger with MedAmerica Properties Inc.”.

Covenants

The Company’s $3.25 million loan agreement requires the Company maintain a debt service coverage ratio of not less than 1.25 to 1. Additionally, both the $3.25 million loan agreement and the $1.0 million acquisition line of credit loan agreement require the Company to maintain a deposit balance, as defined by the agreements, of not less than 12% of the aggregate face amount of the loans. If the Company fails to maintain the minimum deposit balance required, the lender has the right to increase the applicable interest rates under each of the loans by 0.25% until the minimum deposit balance is achieved for a semi-annual period. As of September 30, 2019, the Company was not compliance with the covenants under the loan agreements; therefore, the outstanding amounts have been reflected as current maturities on the balance sheets regardless of their scheduled maturity.

Note 6 - Commitments and Contingencies

Commitments

Leases

At the inception of a lease and over its term, the Company evaluates each lease to determine the proper lease classification. Certain of these leases provide the Company with the contractual right to use and economically benefit from all of the space specified in the lease. Therefore, the Company has determined that they should be evaluated as lease arrangements. As of September 30, 2019, the Company was obligated under operating lease agreements consisting primarily of the Company’s four office and two equipment leases. The majority of our office leases contain provisions for specified annual increases over the rents of the prior year and are computed based on a specified annual increase over the prior year’s rent, generally between 3.0% and 4.0%. Our office leases have initial terms ranging from 3 to 7 years.

In accordance with the adoption of the new lease accounting standard (see Note 2 “—Recent Accounting Pronouncements”) the Company recorded right-of-use assets and related lease liabilities for these leases as of January 1, 2019. As of September 30, 2019, the Company’s weighted average remaining lease term is approximately 3.8 years and the weighted average discount rate used to calculate the Company’s lease liability is approximately 6.3%. The Company has not recognized a right-of-use asset and lease liability for leases with terms of 12 months or less and without an option to purchase the underlying asset.

In calculating the right-of-use assets and related lease liabilities, the Company’s lease payments are typically discounted at its incremental borrowing rate because the interest rate implicit in the lease cannot be readily determined in the absence of key inputs which are typically not reported by our lessors. Judgment was used to estimate the secured borrowing rate associated with our leases and reflects the lease term specific to each lease.

The Company remeasures its lease liabilities monthly at the present value of the future lease payments using the discount rate determined at lease commencement. Rent expense relating to these operating leases, including straight-line rent, was approximately $0.3 million for each of the nine months ended September 30, 2019 and 2018 and is recorded in general and administrative in our statements of operations.

The Company’s future minimum lease payments for its operating leases as of September 30, 2019 under ASC 842 were as follows (dollars in thousands):

For the year ending:
2019 (3 months)	$	111
2020		410
2021		391
2022		360
2023		303
2024		1
Total undiscounted future minimum lease payments		1,576
Discount		(187	)
Operating lease liabilities	$	1,389

The Company’s future minimum lease payments as of December 31, 2018 under ASC 840 were as follows (dollars in thousands):

For the year ending:
2019	$	440
2020		410
2021		391
2022		360
2023		303
Thereafter		1
Total	$	1,905

Contingencies

Note 7 – Revenues

Disaggregated Revenue

The following tables represents a disaggregation of revenues from contracts with customers for the nine months ended September 30, 2019 and 2018 and by type of service (dollars in thousands):

	Topic 606	For the nine months ended September 30,
	Revenue Recognition	2019		2018
Topic 606 Revenues
Leasing commissions	Point in time	$	2,916	$	2,222
Property and asset management fees	Over time		1,213		1,132
Engineering services	Over time		395		341
Sales commissions	Point in time		-		337
Equity fees	Point in time		100		166
Development fees	Over time		168		70
Acquisition and disposition fees	Point in time		-		81
Guaranty fees	Over time		23		23
Topic 606 Revenue			4,815		4,372
Out of Scope of Topic 606 revenue
Sublease income			41		71
Total Out of Scope of Topic 606 revenue			41		71
Total Revenue		$	4,856	$	4,443

Note 8 – Employee Benefit Plan

Note 9 - Fair Value of Financial Instruments

Financial Assets and Liabilities Not Carried at Fair Value

The carrying amounts of cash and cash equivalents, receivables and payables are reasonable estimates of their fair value as of September 30, 2019 and December 31, 2018 due to their short-term nature of these instruments (Level 1).

As of September 30, 2019 and December 31, 2018, the Company’s indebtedness was comprised of borrowings that bear interest at LIBOR plus a margin and borrowings at fixed rates. The fair value of the Company’s $3.0 million in borrowings under variable rates at both September 30, 2019 and December 31, 2018 approximate their carrying values as the debt is at variable rates currently available and resets on a monthly basis.

The fair value of the Company’s fixed rate debt as of September 30, 2019 and December 31, 2018 is estimated by using Level 2 inputs such as discounting the estimated future cash flows using current market rates for similar loans that would be made to borrowers with similar credit ratings and for the same remaining maturities. As of September 30, 2019, the fair value of the Company’s $1.4 million fixed rate debt was estimated to be approximately $1.5 million. As of December 31, 2018, the fair value of the Company’s $1.7 million fixed rate debt was estimated to be approximately $1.8 million.

Note 10 – Subsequent Events

Merger with MedAmerica Properties Inc.

On December 31, 2019, Broad Street completed one additional Merger whereby it acquired Brookhill Azalea Shopping Center. As consideration for the Mergers had closed as of December 31, 2019, Broad Street has issued an aggregate of 18,776,768 shares of common stock and 2,827,904 units of limited partnership interest in its operating partnership (“OP units”) to investors in the Broad Street Entities party to the Mergers. In addition, certain prior investors in the Broad Street Entities received an aggregate of $0.9 million in cash as a portion of the consideration for the Initial Mergers.

In July 2020, Broad Street closed one Merger whereby it acquired Lamar Station Plaza East, issuing an aggregate of 884,143 shares of common stock as consideration for the Merger.

Impact of COVID-19

CARES Act

PPP Loan

brst-ex993_6.htm

Exhibit 99.3

Independent Auditor’s Report

Shareholders and Board of Directors

Broad Street Realty, Inc.

Bethesda, Maryland

We have audited the accompanying combined statements of revenues and certain operating expenses (the “financial statements”) of the 10 retail shopping center portfolio (the “Initial Centers”) for the nine-months ended September 30, 2019 and for the year ended December 31, 2018, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and certain operating expenses of the Initial Centers for the nine-months ended September 30, 2019 and for the year ended December 31, 2018 in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As described in Note 2 to the financial statements, the accompanying combined statements of revenues and certain operating expenses were prepared for the purposes of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the Initial Centers’ revenues and expenses. Our opinion is not modified with respect to that matter.

/s/ BDO USA, LLP

Philadelphia, Pennsylvania

December 22, 2020

Initial Centers

Combined Statements of Revenues and Certain Operating Expenses

(Dollars in thousands)

	Nine months ended		Year ended
	September 30, 2019		December 31, 2018
Revenues:
Rental revenue	$	11,629	$	15,145
Total revenues		11,629		15,145
Certain operating expenses:
Real estate taxes and insurance		1,388		1,776
Repairs and maintenance		1,290		1,830
Property management fees		475		605
Utilities		456		564
Other		77		702
Total certain operating expenses		3,686		5,477
Revenues in excess of certain operating expenses	$	7,943	$	9,668

Initial Centers

Notes to Combined Statements of Revenues and Certain Operating Expenses

For the Nine Months Ended September 30, 2019 and Year Ended December 31, 2018

(Dollars in thousands)

Note 1. Business

Broad Street Realty, Inc. (the “Company”) and certain of its subsidiaries entered into separate agreements and plans of merger to acquire a portfolio of 10 retail shopping centers (the “Initial Centers”) located in Colorado, Maryland, Pennsylvania, Virginia and Washington D.C. The merger transactions were completed on December 27, 2019 and December 31, 2019 for total consideration of approximately $130.7 million.

Note 2. Basis of Presentation

The accompanying Combined Statements of Revenues and Certain Operating Expenses have been prepared for the purpose of complying with Rule 8-06 of Regulation S-X of the U.S. Securities and Exchange Commission for the acquisition of real estate properties and are not intended to be a complete representation of the Initial Centers’ revenues and expenses. The revenues and certain operating expenses are presented on a combined basis due to the common management of each of the Initial Centers.

The combined financial statements are not representative of the actual operations for the periods presented as certain items, which may not be comparable to the future operations of the Initial Centers, have been excluded. Such items include depreciation, amortization, asset management fees, general and administrative expenses, interest expense, interest income, income taxes and amortization of certain lease intangible assets. Therefore, the combined financial statements may not be comparable to a statement of operations for the Initial Centers after their acquisition by the Company.

The combined financial statements have been prepared on the accrual basis of accounting.

Note 3. Significant Accounting Policies

Revenue Recognition

The Initial Centers have the following revenue sources and revenue recognition policies, which are included in rental income on the Combined Statements of Revenues and Certain Operating Expenses:

•	Base Rent – the Initial Centers recognize income arising from minimum lease payments from tenant leases. These rents are recognized over the non-cancelable lease term of the related leases on a straight-line basis which includes the effects of scheduled rent increases and abatements under the leases.
•	Expense reimbursements – the Initial Centers have revenues arising from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property. This revenue is accrued in the same periods as the expenses are incurred.
---	---

Certain Operating Expenses

Operating expenses represent the direct expenses of operating the properties and include repairs and maintenance, utilities, property taxes and insurance, management fees and other property expenses that, with the exception of management fees, are expected to continue in the ongoing operations of the Initial Centers. Expenditures for repairs and maintenance are expensed as incurred.

Use of Estimates

The preparation of the combined financial statements in accordance with accounting principles generally accepted in the United States of America requires management of the Initial Centers to make certain estimates and assumptions relating to the reporting and disclosure of revenues and certain operating expenses during the reporting periods. Actual results could differ from those estimates.

Note 4. Leases

Future minimum lease payments due under the non-cancelable operating leases, excluding any reimbursed costs, at September 30, 2019 are shown in the table below (in thousands):

2019 (three months ended December 31, 2019)	$	2,937
2020		11,185
2021		10,816
2022		10,504
2023		9,743
2024		7,877
Thereafter		24,247
Total	$	77,309

One Initial Center is subject to a ground lease related to a parcel of land adjacent to the property. The ground lease rent is $8,000 annually and the ground lease expires in 2035.

Note 5. Related Party Transactions

Certain of the Initial Centers paid an affiliate of the Company property management fees, totaling $0.4 million for the nine months ended September 30, 2019 and $0.5 million for the year ended December 31, 2018.

Note 6. Commitments and Contingencies

The Initial Centers are subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. Management is not aware of any legal proceedings in which the outcome is probable or reasonably possible to have a material adverse effect on the Initial Centers’ combined results of operations.

Note 7. Subsequent Events

The Initial Centers have been evaluated for subsequent events through December 22, 2020, the date the combined financial statements were available to be issued. Management has determined that there are no subsequent events other than disclosed below that require disclosure under Financial Standards Board Accounting Standards Codification Topic 855, Subsequent Events.

Impact of COVID-19

Management is closely monitoring the impact of the COVID-19 pandemic on the operations of the Initial Centers, including the impact on its tenants and rental revenue. Management has observed the impact of COVID-19 manifest in the form of temporary closures or significantly limited operations among its tenants, with the exception of tenants operating in certain “essential” businesses, which has resulted, and may in the future result in, a decline in on-time rental payments and increased requests from tenants for temporary rental relief. In some cases, Management may have to restructure tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable as those currently in place. In addition, lease renewals and new leasing activity are expected to be adversely impacted as businesses delay executing leases amidst the immediate and uncertain future economic impacts of the COVID-19 pandemic. The extent of the COVID-19 pandemic’s effect on the Initial Center’s future operational and financial performance, financial condition and liquidity will depend on future developments, including the duration, spread and intensity of the pandemic, the duration of government measures to mitigate the pandemic and how quickly and to what extent normal economic and operating conditions can resume, all of which are uncertain and difficult to predict. Given this uncertainty, Management cannot accurately predict the effect on future periods, but expects the pandemic and the related government measures to have an adverse impact on the Initial Center’s financial condition, liquidity, results of operations and cash flows during the remainder of 2020 and beyond and the impact could be material.

Management has entered into lease modifications that deferred approximately $0.3 million of contractual revenue and waived approximately $0.3 million of contractual revenue. To date, the weighted average payback period of deferred rent is approximately seven months. Collections and rent deferrals to date may not be indicative of collections or rent deferrals in any future period.

brst-ex994_7.htm

Exhibit 99.4

Broad Street Realty, Inc.

Pro Forma Consolidated Financial Statements

(Unaudited)

On May 28, 2019, Broad Street Realty, Inc. (formerly known as MedAmerica Properties Inc., the “Company”) and certain of its subsidiaries, including Broad Street Operating Partnership, LP (the “Operating Partnership”), entered into 19 separate agreements and plans of merger (collectively, the “Merger Agreements”) with each of Broad Street Realty, LLC (“BSR”), Broad Street Ventures, LLC (“BSV”) and each of BSV Avondale LLC, BSV Colonial Investor LLC, BSV Coral Hills Investors LLC, BSV Crestview Square LLC, BSV Cromwell Parent LLC, BSV Cypress Point Investors LLC, BSV Dekalb LLC, BSV Greenwood Investors LLC, BSV Highlandtown Investors LLC, BSV Hollinswood LLC, BSV Lamont Investors LLC, BSV Lamonticello Investors LLC, BSV LSP East Investors LLC, BSV Patrick Street Member LLC, BSV Premier Brookhill LLC, BSV Spotswood Investors LLC and BSV West Broad Investors LLC (collectively, the “Broad Street Entities”). The Merger Agreements relate to a series of 19 mergers (“Mergers”) whereby BSR, BSV and each Broad Street Entity would become subsidiaries of the Company. Each Broad Street Entity owns, either directly or indirectly, a single real estate property, each of which is listed in the table below (each, a “Property” and, collectively, the “Properties”). The 17 Mergers involving the Broad Street Entities are referred to herein as the “Property Mergers.” The Company prior to the completion of the Initial Mergers (as defined below) is referred to herein as “MedAmerica.”

On December 27, 2019, the Company completed 11 of the Mergers (the “Initial Mergers”), including the Mergers with BSR and BSV and nine of the Property Mergers. As a result, the Company succeeded to the business operations of BSR and BSV and acquired nine Properties. On December 31, 2019, the Company completed one additional Property Merger whereby it acquired an additional Property (such Property, collectively with the nine Properties acquired on December 27, 2019, the “Initial Properties”). As consideration for the Mergers that had closed as of December 31, 2019, the Company issued an aggregate of 18,776,768 shares of its common stock and 2,827,904 units of limited partnership interest in the Operating Partnership (“OP units”) to prior investors in BSR, BSV and the Broad Street Entities party to the Mergers that had closed as of such date. In addition, certain prior investors in the Broad Street Entities received an aggregate of $0.9 million in cash as a portion of the consideration for the Initial Mergers. In connection with the closing of the Initial Mergers, the Company also issued 200,000 shares of common stock to an affiliate of Gary O. Marino, the Company’s former chairman.

Subsequent to December 31, 2019, the Company has completed one additional Property Merger pursuant to which it issued 884,143 shares of its common stock. As of December 22, 2020, there are six Property Mergers that have not been completed. The Company expects to issue an aggregate of 10,400,779 shares of its common stock and 573,529 OP units as consideration for the six additional Property Mergers. The accompanying unaudited pro forma condensed consolidated financial statements do not give effect to the Property Mergers that closed subsequent to December 31, 2019 or that have not yet closed.

The status of each Property Merger is set forth in the table below.

Property	Broad Street Entity	Status of<br><br><br>Property Merger
Avondale Shops	BSV Avondale LLC	Closed 12/27/2019
Coral Hills Shopping Center	BSV Coral Hills Investors LLC	Closed 12/27/2019
Crestview Square	BSV Crestview Square LLC	Closed 12/27/2019
Dekalb Plaza	BSV Dekalb LLC	Closed 12/27/2019
Hollinswood Shopping Center	BSV Hollinswood LLC	Closed 12/27/2019
Midtown Colonial	BSV Colonial Investor LLC	Closed 12/27/2019
Midtown Lamonticello	BSV Lamonticello Investors LLC	Closed 12/27/2019
Vista Shops at Golden Mile	BSV Patrick Street Member LLC	Closed 12/27/2019
West Broad Commons	BSV West Broad Investors LLC	Closed 12/27/2019
Brookhill Azalea Shopping Center	BSV Premier Brookhill LLC	Closed 12/31/2019
Lamar Station Plaza East	BSV LSP East Investors LLC	Closed 7/2/2020
Cromwell Field Shopping Center	BSV Cromwell Parent LLC	Pending
Cypress Point Shopping Center	BSV Cypress Point Investors LLC	Pending
The Shops at Greenwood Village	BSV Greenwood Investors LLC	Pending
Highlandtown Village Shopping Center	BSV Highlandtown Investors LLC	Pending
Lamar Station Plaza	BSV Lamont Investors LLC	Pending
Spotswood Valley Square	BSV Spotswood Investors LLC	Pending

On December 27, 2019, in connection with the closing of the Initial Mergers, certain indirect subsidiaries of the Company, as Borrowers, and Big Real Estate Finance I, LLC, a subsidiary of a real estate fund managed by Basis Management Group, LLC, as lender (the “Basis Lender”), entered into a loan agreement (the “Basis Loan Agreement”) pursuant to which the Basis Lender made a senior secured term loan of up to $66.9 million (the “Basis Term Loan”) to the Borrowers, of which $63.8 million was drawn at the time of the closing of the Initial Mergers. The Basis Term Loan is secured by mortgages on six of the Properties acquired in connection with the Initial Mergers.

On December 27, 2019, in connection with the closing of the Initial Mergers, the Operating Partnership and Big BSP Investments, LLC, a subsidiary of a real estate fund managed by Basis Management Group, LLC (the “Preferred Investor”), entered into an amended and restated operating agreement (the “Operating Agreement”) of Broad Street Big First OP LLC, a newly formed subsidiary of the Operating Partnership (the “Sub-OP”). Pursuant to the Operating Agreement, among other things, the Preferred Investor committed to make an investment of up to $10.7 million in the Sub-OP, of which $6.9 million was funded in connection with the closing of the Initial Mergers, in exchange for a 1.0% membership interest in the Sub-OP designated as Class A units. Pursuant to the Operating Agreement, the Preferred Investor is entitled to a cumulative annual return of 14.0% on its initial capital contribution, and the Preferred Investor will be entitled to a 20% return on any additional capital contribution made to the Sub-OP. Additionally, at the Redemption Date, the Preferred Investor is entitled to an amount equal to (a) the product of (i) the aggregate amount of capital contributions made and (ii) 0.4, less (b) the aggregate amount of Class A return payments made to the Preferred Investor (the “Minimum Multiple Amount”). The Minimum Multiple Amount was approximately $2.8 million. The Preferred Investor’s interests, including the Minimum Multiple Amount, are mandatorily redeemable and, therefore, are classified as indebtedness in the accompanying unaudited pro forma condensed consolidated financial statements.

On December 27, 2019, in connection with the closing of the Initial Mergers, the Company, the Operating Partnership and BSR entered into a loan agreement (the “MVB Loan Agreement”) with MVB Bank, Inc. (“MVB”) with respect to a $6.5 million loan consisting of a $4.5 million secured term loan (the “MVB Term Loan”) and a $2.0 million secured revolving credit facility (the “MVB Revolver”). The MVB Term Loan and the MVB Revolver were fully drawn at the time of the closing of the Initial Mergers.

In addition, the Company assumed an aggregate of $21.9 million of mortgage indebtedness secured by the Initial Properties that had been acquired in connection with the Property Mergers that had closed as of December 31, 2019.

The Merger of BSR with and into a subsidiary of the Company (the “BSR Merger”) is accounted for as a reverse recapitalization under generally accepted accounting principles in the United States (“GAAP”). BSR was determined to be the accounting acquirer of MedAmerica based upon the terms of the Mergers.

The accompanying unaudited pro forma condensed consolidated financial statements primarily give effect to:

•	the BSR Merger;
•	the acquisitions by the Company of the ten Initial Properties in connection with the Property Mergers that had closed as of December 31, 2019;
---	---
•	the issuance of the shares of common stock and OP units in connection with the Mergers that had closed as of December 31, 2019;
---	---
•	the incurrence of indebtedness under the Basis Loan Agreement, the Operating Agreement and the MVB Loan Agreement; and
---	---
•	the incurrence and assumption of $21.9 million of mortgage indebtedness in connection with the acquisitions of the Initial Properties that had been acquired by the Company as of December 31, 2019.
---	---

The accompanying unaudited pro forma condensed consolidated balance sheet as of September 30, 2019, reflects the financial position of BSR as if each of the foregoing had been completed on September 30, 2019.

The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2019 and the year ended December 31, 2018, present the results of operations of BSR as if each of the foregoing had been completed on January 1, 2018.

The unaudited pro forma condensed consolidated financial statements (including notes thereto) are qualified in their entirety by reference to and should be read in conjunction with (i) the unaudited financial statements of BSR as of and for the nine months ended September 30, 2019 included in Exhibit 99.2 to the Company’s Current Report on Form 8-K/A to which these unaudited pro forma condensed consolidated financial statements are also filed as an exhibit, (ii) the audited financial statements of BSR as of and for the year ended December 31, 2018 included in Exhibit 99.1 to the Company’s Current Report on Form 8-K/A to which these unaudited pro forma condensed consolidated financial statements are also filed as an exhibit, (iii) the unaudited financial statements of MedAmerica as of and for the nine months ended September 30, 2019, included in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2019, (iv) the audited financial statements of MedAmerica as of and for the year ended December 31, 2018, included in its Annual Report on Form 10-K for the year ended December 31, 2018, and (iv) the combined statements of revenues and certain operating expenses of the Initial Properties included as Exhibit 99.3 to the Company’s Current Report on Form 8-K/A to which these unaudited pro forma condensed consolidated financial statements are also filed as an exhibit.

The pro forma adjustments reflected in the unaudited pro forma condensed consolidated financial statements are based upon currently available information and certain assumptions and estimates; therefore, the actual effects of these transactions will differ from the pro forma adjustments. However, the Company's management considers the applied estimates and assumptions to provide a reasonable basis for the presentation of the significant effects of certain transactions that are expected to have a continuing impact on the Company. In addition, the Company's management considers the pro forma adjustments to be factually supportable and to appropriately represent the expected impact of items that are directly attributable to the Mergers that had closed as of December 31, 2019 and the related transactions described above.

The accompanying unaudited pro forma condensed consolidated 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 applicable Mergers and related transactions 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.

Broad Street Realty, Inc.

Unaudited Pro Forma Consolidated Balance Sheet

September 30, 2019

(Dollars in thousands)

			MedAmerica Historical			Acquisition of Initial Properties				Other Pro Forma Adjustments				Company Pro Forma
			B			C
Assets
Real estate properties
Land	-		$	-		$	34,350			$	-			$	34,350
Buildings and improvements, and intangible lease assets	-			-			139,194				-				139,194
Less accumulated depreciation and amortization	-			-			-				-				-
Total real estate properties, net	-			-			173,544				-				173,544
Cash and cash equivalents	348			32			17,654				(5,162	)	G, I		12,872
Accounts receivable, net of allowances	1,352			-			520				(148	)	J		1,724
Other assets	6,109			27			1,725				(1,321	)	I		6,540
Total Assets	7,809		$	59		$	193,443			$	(6,631	)		$	194,680
Liabilities and Equity
Liabilities
Mortgage and other indebtedness, net	4,419		$	-		$	109,725			$	(4,419	)	G	$	109,725
Accounts payable and accrued liabilities	4,888			294			6,412				365		K		11,959
Unamortized intangible lease liabilities	-			-			3,451				-				3,451
Deferred tax liabilities	-			-			16,985				-				16,985
Payables due to related parties	5,522			-			(4,552	)			-				970
Deferred revenue	245			-			402				-				647
Total liabilities	15,074			294			132,423				(4,054	)			143,737
Equity
Series A Preferred stock, 0.01 par value, 20,000 shares authorized, 500 issued at September 30, 2019	-			-			-				-				-
Common stock, 0.01 par value, 50,000,000 shares authorized, 21,587,336 issued at September 30, 2019	-			26			188		D		2		F		216
Additional paid in capital	-			111,862			57,457		D		(116,621	)	F, H, I		52,698
Accumulated deficit	-			(112,123	)		(2,440	)	E		111,758		F, K		(2,805	)
Total Broad Street Realty, Inc. stockholders' equity	-			(235	)		55,205				(4,861	)			50,109
Noncontrolling interests	(7,265	)		-			5,815		D, E		2,284		F, H, J		834
Total Equity	(7,265	)		(235	)		61,020				(2,577	)			50,943
Total Liabilities and Equity	7,809		$	59		$	193,443			$	(6,631	)		$	194,680

All values are in US Dollars.

Broad Street Realty, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the nine months ended September 30, 2019

(Dollars in thousands, except per share amounts)

	BSR Historical			MedAmerica Historical			Revenues and Certain<br><br><br>Direct Operating Expenses<br><br><br>of Initial Properties		Historical Combined			Other Pro Forma Adjustments				Company Pro Forma
Revenues	AA			BB			CC
Rental income	$	-		$	-		$	11,629	$	11,629		$	249		DD	$	11,878
Management and other fees		1,940			-			-		1,940			(841	)	EE		1,099
Commissions		2,916			-			-		2,916			(239	)	EE		2,677
Total revenues		4,856			-			11,629		16,485			(831	)			15,654
Operating expenses
Property operating		-			-			3,686		3,686			(782	)	EE		2,904
Cost of services		2,011			-			-		2,011			-				2,011
General and administrative		3,917			273			-		4,190			486		EE, FF		4,676
Bad debt expense		153			-			-		153			-				153
Depreciation and amortization		13			-			-		13			6,103		DD		6,116
Total operating expenses		6,094			273			3,686		10,053			5,807				15,860
Operating income (loss)		(1,238	)		(273	)		7,943		6,432			(6,638	)			(206	)
Other income (expense)
Interest and other income		-			-			-		-			-				-
Other expense		(88	)		-			-		(88	)		-				(88	)
Merger-related expenses		(464	)		-			-		(464	)		464		GG		-
Interest expense		(213	)		(1	)		-		(214	)		(4,476	)	HH		(4,690	)
Total other income (expense)		(765	)		(1	)		-		(766	)		(4,012	)			(4,778	)
Income tax benefit		-			-			-		-			925		II		925
Net income (loss)		(2,003	)		(274	)		7,943		5,666			(9,725	)			(4,059	)
Less: Preferred stock dividends		-			(4	)		-		(4	)		-				(4	)
Less: Net (income) loss attributable to noncontrolling interests		2,003			-			-		2,003			(1,425	)	JJ		578
Net income (loss) attributable to common stockholders	$	-		$	(278	)	$	7,943	$	7,665		$	(11,150	)		$	(3,485	)
Weighted average shares outstanding- basic and diluted					2,610,568												21,587,336
Net loss attributable to common stockholders per share				$	(0.11	)										$	(0.16	)	KK

Broad Street Realty, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the year ended December 31, 2018

(Dollars in thousands, except per share amounts)

	BSR Historical			MedAmerica Historical			Revenues and Certain<br><br><br>Direct Operating Expenses<br><br><br>of Initial Properties		Historical Combined			Other Pro Forma Adjustments				Company Pro Forma
	AA			BB			CC
Revenues
Rental income	$	-		$	-		$	15,145	$	15,145		$	332		DD	$	15,477
Management and other fees		2,459			-			-		2,459			(1,119	)	EE		1,340
Commissions		3,476			-			-		3,476			(391	)	EE		3,085
Total revenues		5,935			-			15,145		21,080			(1,178	)			19,902
Operating expenses
Property operating		-			-			5,477		5,477			(967	)	EE		4,510
Cost of services		2,167			-			-		2,167			-				2,167
General and administrative		4,823			601			-		5,424			658		EE, FF		6,082
Bad debt expense		629			-			-		629			-				629
Depreciation and amortization		29			-			-		29			8,137		DD		8,166
Total operating expenses		7,648			601			5,477		13,726			7,828				21,554
Operating income (loss)		(1,713	)		(601	)		9,668		7,354			(9,006	)			(1,652	)
Other income (expense)
Interest and other income		38			-			-		38			-				38
Other expense		(128	)		-			-		(128	)		-				(128	)
Merger-related expenses		(165	)		-			-		(165	)		165		GG		-
Interest expense		(188	)		(2	)		-		(190	)		(8,814	)	HH		(9,004	)
Total other income (expense)		(443	)		(2	)		-		(445	)		(8,649	)			(9,094	)
Income tax benefit		-			-			-		-			1,995		II		1,995
Net income (loss)		(2,156	)		(603	)		9,668		6,909			(15,660	)			(8,751	)
Less: Preferred stock dividends		-			(5	)		-		(5	)		-				(5	)
Less: Net (income) loss attributable to noncontrolling interests		2,156			-			-		2,156			(909	)	JJ		1,247
Net income (loss) attributable to common stockholders	$	-		$	(608	)	$	9,668	$	9,060		$	(16,569	)		$	(7,509	)
Weighted average shares outstanding- basic and diluted					2,610,568												21,587,336
Net loss attributable to common stockholders per share				$	(0.23	)										$	(0.35	)	KK

Notes to the Unaudited Pro Forma Consolidated Financial Statements

Note 1 — Basis of Presentation

The unaudited pro forma condensed consolidated financial statements are based on the historical consolidated financial statements of BSR, MedAmerica and the historical statements of revenues and certain operating expenses of the Initial Properties.

The unaudited pro forma condensed consolidated financial statements present the impact of the Mergers and related transactions, as described in the introduction to the pro forma financial statements, on the Company's financial position and results of operations.

For accounting purposes, BSR is considered to be the acquirer of MedAmerica and the BSR Merger is accounted for as a reverse recapitalization of MedAmerica by BSR. Under reverse recapitalization accounting, the assets and liabilities of MedAmerica are recorded as of the completion of the BSR Merger at their fair value and any excess consideration transferred over the fair value of the net assets of MedAmerica is reflected as a reduction to equity. Consequently, the consolidated financial statements of the Company reflect the operations of BSR, the acquirer for accounting purposes, together with a deemed issuance of shares, equivalent to the shares held by the stockholders of MedAmerica prior to the completion of the Initial Mergers and a recapitalization of the equity of BSR. As OP units were issued as consideration for the BSR Merger, the activities of BSR have been adjusted to reflect a noncontrolling interest in the Company.

Note 2 – Adjustments to the Unaudited Pro Forma Consolidated Balance Sheet

A. – Derived from BSR’s unaudited consolidated balance sheet as of September 30, 2019.

B. – Derived from MedAmerica’s unaudited consolidated balance sheet as of September 30, 2019.

C. – Represents the pro forma adjustments for (i) the acquisitions of the 10 Initial Properties in accordance with the Merger Agreements for the 10 Property Mergers that closed on or before December 31, 2019, (ii) the related incurrence and assumption of certain mortgage indebtedness by the Company and certain of its subsidiaries, and (iii) the incurrence of indebtedness under the Basis Loan Agreement, the Operating Agreement and the MVB Loan Agreement, assuming each had been completed on September 30, 2019. The Company accounted for the acquisition of the Initial Properties as asset acquisitions in accordance with Accounting Standards Codification Topic 805, Business Combinations. Amounts incurred by the Company or its affiliates attributable to the acquisition of the Initial Properties have been capitalized. The Company allocated the purchase price, including acquisition costs, to the individual assets acquired and liabilities assumed on a relative fair value basis.

The following table provides additional information regarding the total consideration for the properties (dollars in thousands).

Cash paid to prior owners	$	910
Value of common shares issued		57,645
Value of OP Units issued		6,135
Prior owner debt and preferred equity paid off at closing		64,945
Transaction costs		4,216
Cash acquired in acquisitions		(3,081	)
Total Cost of Acquisitions	$	130,770

The following table reflects the relative fair value of the assets acquired and liabilities assumed related to the acquisition of the Initial Properties (dollars in thousands).

Land	$	34,350
Building		103,238
Building and site improvements		15,734
Intangible lease assets		20,222
Total real estate assets acquired		173,544
Other assets		2,725
Total assets acquired		176,269
Accounts payable and accrued expenses		(6,814	)
Intangible lease liabilities		(3,451	)
Deferred tax liabilities		(16,985	)
Assumed mortgage and other indebtedness		(18,249	)
Total liabilities assumed		(45,499	)
Assets acquired net of liabilities assumed	$	130,770

Presented below is a summary of the Company’s pro forma indebtedness (dollars in thousands).

	Maturity Date	Interest Rate ^(1)^	Principal Balance
Basis Term Loan (net of discount of $1,118)^(2)^	January 1, 2023	Greater of (i) LIBOR plus 3.850% per annum and (ii) 6.125% per annum	$	62,996
Basis Preferred Interest (net of discount of $224) ^(3)^	Earlier of (i) January 1, 2023, subject to extension and (ii) the date on which the Basis Mortgage Loan is paid in full	14%		9,471
MVB Term Loan	December 27, 2022	6.75%		4,500
MVB Revolving Credit Facility	December 27, 2021	Prime Rate plus 1.5%, not to exceed 6.75%		2,000
Hollinswood Loan ^(4)^	December 1, 2024	1M LIBOR plus 2.25%		10,200
Debt issued to fund acquisitions			$	89,167
Avondale Shops Loan	June 1, 2025	4.00%	$	3,275
Vista Shops at Golden Mile Loan	January 25, 2021	1M LIBOR + 2.50%		8,950
Brookhill Azalea Shopping Center Loan^(5)^	January 31, 2025	1M LIBOR + 2.75%		9,650
Total assumed debt			$	21,875
Total debt			$	111,042
Deferred financing costs				(1,317	)
Pro forma net debt			$	109,725
^(1)^	The one-month LIBOR of 0.15% and the Prime Rate of 3.25% as of December 17, 2020 were used in the pro forma interest expense adjustments.
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^(2)^	The Company has entered into an interest rate cap that caps the LIBOR rate on this loan at 3.5%. This loan is secured by the Company's Coral Hills Shopping Center, Crestivew Square, Midtown Colonial, Midtown Lamonticello, West Broad Commons and Dekalb Plaza Properties.
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^(3)^	The outstanding balance includes approximately $2.8 million of indebtedness related to the Multiple Minimum Amount owed to the Preferred Investor as described below under item "E".
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^(4)^	The Company has entered into an interest rate swap which fixes the interest rate of the loan at 4.06%.
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^(5)^	The Company assumed debt of approximately $6.0 million and also modified the loan agreement in connection with the closing of the applicable Property Merger to draw an additional $3.7 million on the loan at closing.
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D. – Reflects the issuance of (i) 18,776,768 shares of common stock and 1,998,479 OP units in connection with the 10 Property Mergers that had closed as of December 31, 2019 valued at $3.07 per share and unit based on the last reported sales price of the Company’s common stock on the OTC on each of December 27, 2019 and December 31, 2019. The OP units represent the noncontrolling interests of the limited partners in the Operating Partnership. The Company owns an 88.4% interest in the Operating Partnership.

E. – Reflects a return to the Preferred Investor of an amount equal to (a) the product of (i) the aggregate amount of capital contributions made and (ii) 0.4, less (b) the aggregate amount of Class A return payments made to the Preferred Investor (the “Minimum Multiple Amount”). As of September 30, 2019, the Minimum Multiple Amount was approximately $2.8 million on a pro forma basis, which is included as indebtedness on the consolidated balance sheet. The accumulated deficit and noncontrolling interest accounts have also been adjusted to reflect the related interest expense.

F. – Reflects (i) the elimination of the MedAmerica historical equity accounts, (ii) the excess consideration transferred over the fair value of the net assets of MedAmerica, reflected as a reduction to equity, (iii) the issuance of 200,000 shares of the Company’s common stock to an affiliate of Gary O. Marino, the Company’s former chairman, and (iv) the issuance of 829,426 OP units in connection with the Mergers of BSR and BSV, valued at $3.07 per unit based on the last reported sales price of the Company’s common stock on the OTC on December 27, 2019.

G. – Reflects the payoff of the outstanding indebtedness of BSR at the closing of the Initial Mergers.

H. – Reflects the elimination of the BSR Members’ equity accounts at the closing of the BSR Merger.

I. – Reflects approximately $2.1 million in equity issuance costs, of which approximately $1.3 million were included in other assets on the BSR balance sheet at September 30, 2019.

J. – Reflects the elimination of approximately $0.1 million in accounts receivable included in the BSR historical balance sheet due from the Initial Properties related to leasing commissions and property management fees.

K. – Represents transaction costs of approximately $0.4 million directly attributable to the Merger that are not included in the historical financial statements.

Note 3 – Adjustments to the Unaudited Pro Forma Consolidated Statements of Operations

AA. – Derived from BSR’s consolidated statements of operations for the year ended December 31, 2018 and the nine months ended September 30, 2019 (unaudited).

BB. – Derived from MedAmerica’s consolidated statements of operations for the year ended December 31, 2018 and the nine months ended September 30, 2019 (unaudited).

CC. – Represents the combined historical revenues and certain direct operating expenses of the Initial Properties derived from the combined statements of revenues and certain direct operating expenses included as Exhibit 99.3 to the Company’s Current Report on Form 8-K/A to which these unaudited pro forma condensed consolidated financial statements are also filed as an exhibit.

DD. – Represents certain pro forma adjustments related to the historical revenues and expenses of the Initial Properties for the nine months ended September 30, 2019 and the year ended December 31, 2018. These pro forma adjustments include the following:

•	Amortization of certain above- and below-market lease intangibles recorded as part of the acquisitions of approximately $0.2 million and $0.3 million included as an adjustment to rental income for the nine months ended September 30, 2019 and the year ended December 31, 2018, respectively.
•	Depreciation and amortization expense based on the Company’s allocation of the purchase price to land, building, and in-place lease intangibles as reflected in the pro forma balance sheet. Depreciation and amortization are calculated on a straight-line basis using the estimated remaining life of the assets. The estimated remaining lives for the buildings acquired range from 20 years to 45 years. The estimated remaining lives for the related site improvements range from 7.5 years to 15 years. A range of less than one month to 19.3 years was estimated for the other lease intangibles acquired.
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•

Amortization of certain above- and below-market lease intangibles recorded as part of the acquisitions of approximately $0.2 million and $0.3 million included as an adjustment to rental income for the nine months ended September 30, 2019 and the year ended December 31, 2018, respectively.

•

Depreciation and amortization expense based on the Company’s allocation of the purchase price to land, building, and in-place lease intangibles as reflected in the pro forma balance sheet. Depreciation and amortization are calculated on a straight-line basis using the estimated remaining life of the assets. The estimated remaining lives for the buildings acquired range from 20 years to 45 years. The estimated remaining lives for the related site improvements range from 7.5 years to 15 years. A range of less than one month to 19.3 years was estimated for the other lease intangibles acquired.

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EE. – Represents the elimination of historical commissions, property management and other fees and allocated wages paid by certain of the Initial Properties to BSR or affiliates of BSR for management of the Initial Properties. The commissions, property management and other fee adjustments eliminate the revenue recorded by BSR and the expense recorded by the Initial Properties. The allocated wages adjustment eliminates the reduction in expense recorded by BSR and the expense recorded by the initial properties.

FF. – Represents (i) the adjustments necessary to reflect the salaries of Michael Z. Jacoby and Alexander Topchy, the Company’s two executive officers appointed pursuant to the Merger Agreements upon the completion of the Initial Mergers, in accordance with the provisions of each executive officers employment agreement entered into on December 27, 2019, (ii) the elimination of the compensation for MedAmerica executives who resigned in connection with the Initial Mergers pursuant to the terms of the Merger Agreements; and (iii) additional expense related to the Company’s Directors and Officers insurance policy entered into in connection with the completion of the Initial Mergers.

GG. – Represents the elimination of nonrecurring transaction costs incurred that are directly related to the Mergers.

HH. – Represents the adjustment to interest expense to reflect (i) the incurrence or assumption, as applicable, of the debt described in Note 2(C) above, (ii) amortization of deferred financing costs associated with such debt and (iii) the elimination of historical interest expense related to the historical debt paid off at the closing of the Initial Mergers described in Note 2(G) above. A 0.125% increase or decrease in interest rates on the Company’s variable rate debt would result in a change in interest expense of approximately $0.1 million for each of the nine months ended September 30, 2019 and the year ended December 31, 2018.

II. – Reflects the income tax effect of the pro forma results using a 21% estimated statutory tax rate.

JJ. – Represents the proportionate share of income (loss) attributable to noncontrolling interests of the Operating Partnership. The noncontrolling interest collectively own an 11.6% interest in the Operating Partnership.

KK. – Net loss attributable to common stockholders per share-basic is calculated based on the pro forma weighted average common shares outstanding, which was previously 2,610,568 for each of the periods presented and assumes the issuance of 18,776,768 common shares in connection with the acquisitions of the Initial Properties and the issuance of 200,000 common shares to an affiliate of Gary O. Marino, the Company’s former chairman occurred on January 1, 2018, resulting in a total weighted average of 21,587,336 common shares outstanding for each period presented. Net loss attributable to common stockholders per share-diluted is calculated by including the effect of dilutive securities. Potential dilution from (i) 500 common shares issuable upon conversion of shares of convertible preferred stock that were outstanding as of September 30, 2019 and December 31, 2018 and (ii) 70,000 stock options that were outstanding as of September 30, 2019 and December 31, 2018 are excluded from the diluted shares calculation because the effect is antidilutive. The OP units were excluded from the denominator because earnings were allocated to the noncontrolling interests in the calculation of the numerator.