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): November 22, 2022

BROAD STREET REALTY, INC.

(Exact name of registrant as specified in its charter)

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

Not Applicable

(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 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.

On November 23, 2022, Broad Street Realty, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Closing 8-K”) in connection with its acquisition of Midtown Row and Lamar Station Plaza (together, the “Acquired Properties”).

This amendment to the Closing 8-K is being filed for the sole purpose of filing the historical statements of revenues and certain operating expenses of the Acquired 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 Closing 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

• Statements of Revenues and Certain Operating Expenses of Midtown Row for the nine months ended September 30, 2022 and the year ended December 31, 2021.

• Notes to Statements of Revenues and Certain Operating Expenses

The following are set forth in Exhibit 99.2 hereto, which is incorporated by reference herein:

• Independent Auditor’s Report

• Statements of Revenues and Certain Operating Expenses of Lamar Station Plaza for the nine months ended September 30, 2022 and the year ended December 31, 2021.

• Notes to Statements of Revenues and Certain Operating Expenses

(b) Unaudited Pro Forma Financial Information.

The following are set forth in Exhibit 99.3 hereto, which is incorporated by reference herein:

• Unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company as of September 30, 2022

• Unaudited Pro Forma Condensed Consolidated Statements of Operations of the Company for the nine months ended September 30, 2022 and the year ended December 31, 2021.

• Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(d) Exhibits

Exhibit<br>No.	Description
23.1	Consent of Independent Auditor.
99.1	Historical Statements of Revenues and Certain Operating Expenses of Midtown Row.
99.2	Historical Statements of Revenues and Certain Operating Expenses of Lamar Station Plaza.
99.3	Unaudited Pro Forma Condensed Consolidated Financial Statements of the Company.
104	Cover Page Interactive Data File – The cover page XBRL tags are embedded within the Inline XBRL document

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.


February 9, 2023	By:	/s/ Michael Z. Jacoby
		Michael Z. Jacoby
		Chief Executive Officer

EX-23.1

Exhibit 23.1

Consent of Independent Auditor

Broad Street Realty, Inc.

Bethesda, Maryland

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-260103 and No. 333-256206) of Broad Street Realty, Inc. of (a) our report dated February 9, 2023, relating to the statement of revenues and certain operating expenses of Midtown Row for the year ended December 31, 2021, and (b) our report dated February 9, 2023, relating to the statement of revenues and certain operating expenses of Lamar Station Plaza for the year ended December 31, 2021, which appear in this Form 8-K/A.

/s/ BDO USA, LLP

Potomac, Maryland

February 9, 2023

EX-99.1

Exhibit 99.1

Independent Auditor’s Report

Shareholders and Board of Directors

Broad Street Realty, Inc.

Bethesda, Maryland

Opinion

We have audited the accompanying statement of revenues and certain operating expenses (the “financial statement”) of Midtown Row (the “Acquired Property”) for the year ended December 31, 2021 and the related notes to the financial statement.

In our opinion, the accompanying financial statement presents fairly, in all material respects, the revenues and certain operating expenses of the Acquired Property as described in Note 2 to the financial statement for the year ended December 31, 2021, in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statement section of our report. We are required to be independent of the Acquired Property and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of a Matter

As described in Note 2 to the financial statement, the accompanying statement of revenues and certain operating expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the Acquired Property’s revenues and expenses. Our opinion is not modified with respect to that matter.

Responsibilities of Management for the Financial Statement

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

Auditor’s Responsibilities for the Audit of the Financial Statement

Our objectives are to obtain reasonable assurance about whether the financial statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statement.

In performing an audit in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the financial statement, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement.

• Obtain an understanding of internal control relevant to the audit 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 Acquired Property’s internal control. Accordingly, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statement.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ BDO USA, LLP

Potomac, Maryland

February 9, 2023

Midtown Row

Statements of Revenues and Certain Operating Expenses

For the Nine Months Ended September 30, 2022 and the Year Ended December 31, 2021

(in thousands)

	Nine months ended		Year ended
	September 30, 2022		December 31, 2021
	(unaudited)
Revenues:
Rental income	$	5,619	$	3,358
Total revenues		5,619		3,358
Certain operating expenses:
Real estate taxes and insurance		571		196
Repairs and maintenance		702		316
Property management fees		196		164
Utilities		427		260
Other		713		588
Total certain operating expenses		2,609		1,524
Revenues in excess of certain operating expenses	$	3,010	$	1,834

See accompanying notes.

Midtown Row

Notes to Statements of Revenues and Certain Operating Expenses

For the Nine Months Ended September 30, 2022 (unaudited) and Year Ended December 31, 2021

Note 1. Business

On November 23, 2022, Broad Street Realty, Inc. (the “Company”) completed the purchase and sale agreement where it acquired a mixed-use property ("Midtown Row”) located in Williamsburg, Virginia. As consideration for Midtown Row, the Company paid $118.7 million in cash and issued 448,180 Class A common units of limited partnership interest in Broad Street Operating Partnership, LP, the Company's operating partnership (the "Operating Partnership"), and 1,842,917 Series A preferred units of limited partnership interest in the Operating Partnership. The cash portion of the purchase price was funded with proceeds generated from a $76.0 million mortgage loan secured by the property, a $15.0 million mezzanine loan and $28.4 million from a preferred equity investment that was entered into by various subsidiaries of the Company. The Company incurred approximately $1.2 million of transaction costs.

The development of Midtown Row was completed in phases in May 2021, July 2021 and August 2021 with tenants taking occupancy beginning in May 2021. Since Midtown Row’s operations began in May 2021, the twelve months ended December 31, 2021 is not indicative of the property’s revenue and operating expenses for an entire year. Management is not aware of any other material factors relating to the property’s revenue and operating expenses that would cause the Statements of Revenues and Certain Operating Expenses not to be indicative of future operating results.

Note 2. Basis of Presentation

The accompanying 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 Midtown Row’s revenues and expenses.

The 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 Midtown Row, have been excluded. Such items include depreciation, asset management fees, certain general and administrative expenses, interest expense, interest income, income taxes and amortization of certain lease intangible assets and liabilities. Therefore, the Statements of Revenues and Certain Operating Expenses may not be comparable to a statement of operations for Midtown Row after its acquisition by the Company.

The financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States. In the opinion of management, the financial statement for the unaudited interim period includes all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of Midtown Row's results of operations for such period. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of full year results of operations.

Note 3. Significant Accounting Policies

Revenue Recognition

Midtown Row has the following revenue sources and revenue recognition policies, which are included in rental income on the Statements of Revenues and Certain Operating Expenses:

• Base Rent – Midtown Row also recognizes 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.

• Other revenue – Midtown Row recognizes income relating to nonrefundable reservation fees upon the signing of the student housing leases.

• Expense reimbursements – Midtown Row has tenant leases which provide for the recovery of all or a portion of the operating expenses, including, but not limited to, real estate taxes, property insurance, routine maintenance and repairs, utilities and property management expenses. Midtown Row collects these estimated expenses and is reimbursed by tenants for any actual expense in excess of estimates or reimburses tenants if collected estimates exceed actual operating results. The reimbursements are recorded in rental income, and the expenses are recorded in property operating expenses. These reimbursements are accrued in the same periods as the expenses are incurred.

Certain Operating Expenses

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

Use of Estimates

The preparation of the Statements of Revenues and Certain Operating Expenses in accordance with accounting principles generally accepted in the United States of America requires management of Midtown Row 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. Future Minimum Rentals

Future minimum lease payments due under the non-cancelable operating leases with tenants, excluding any reimbursable costs, as of December 31, 2021, are shown in the table below:

(in thousands)
2022	$	3,961
2023		294
2024		300
2025		306
2026		313
Thereafter		1,098
Total	$	6,272

Note 5. Related Party Transactions

Michael Z. Jacoby, the Company's chairman and Chief Executive Officer, Alexander Topchy, the Company's Chief Financial Officer, Thomas M. Yockey, Daniel J.W. Neal, and Jeffrey H. Foster, members of the Company's board of directors, and Aras Holden, the Company's Vice President of Asset Management and Acquisitions, have indirect ownership interests in BBL Current, which owned Midtown Row. Mr. Jacoby also serves as the chief executive officer and a director of BBL Current. The Company served as the development manager for Midtown Row and serves as the property manager and leasing broker for the retail portion of Midtown Row. No development fees were paid for the nine months ended September 30, 2022 and the year ended December 31, 2021. Midtown Row paid an affiliate of the Company property management fees and engineering service fees totaling approximately $0.2 million for the year ended December 31, 2021. No property management fees were paid for the nine months ended September 30, 2022.

Note 6. Commitments and Contingencies

Litigation

Midtown Row is 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 Midtown Row’s results of operations.

Note 7. Subsequent Events

Midtown Row has been evaluated for subsequent events through February 9, 2023, the date the Statements of Revenues and Certain Operating Expenses were available to be issued and has determined that there are no subsequent events requiring disclosure in accordance with FASB ASC Topic 855, “Subsequent Events”.

EX-99.2

Exhibit 99.2

Independent Auditor’s Report

Shareholders and Board of Directors

Broad Street Realty, Inc.

Bethesda, Maryland

Opinion

We have audited the accompanying statement of revenues and certain operating expenses (the “financial statement”) of Lamar Station Plaza (the “Acquired Property”) for the year ended December 31, 2021 and the related notes to the financial statement.

Basis for Opinion

Emphasis of a Matter

Responsibilities of Management for the Financial Statement

Auditor’s Responsibilities for the Audit of the Financial Statement

In performing an audit in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

/s/ BDO USA, LLP

Potomac, Maryland

February 9, 2023

Lamar Station Plaza

Statements of Revenues and Certain Operating Expenses

For the Nine Months Ended September 30, 2022 and the Year Ended December 31, 2021

(in thousands)

	Nine months ended		Year ended
	September 30, 2022		December 31, 2021
	(unaudited)
Revenues:
Rental income	$	1,469	$	2,276
Total revenues		1,469		2,276
Certain operating expenses:
Real estate taxes and insurance		368		389
Repairs and maintenance		239		316
Property management fees		35		78
Utilities		83		116
Other		158		187
Total certain operating expenses		883		1,086
Revenues in excess of certain operating expenses	$	586	$	1,190

See accompanying notes.

Lamar Station Plaza

Notes to Statements of Revenues and Certain Operating Expenses

For the Nine Months Ended September 30, 2022 (unaudited) and Year Ended December 31, 2021

Note 1. Business

Broad Street Realty, Inc. (the “Company”) and one of its subsidiaries entered into an agreement and plan of merger to acquire a retail shopping center (“Lamar Station Plaza”) located in Lakewood, Colorado. The merger transaction pursuant to which the Company acquired Lamar Station Plaza was completed on November 23, 2022. The total consideration for the transaction was approximately $9.1 million. The Company issued 573,529 Class A common units of limited partnership interest in Broad Street Operating Partnership, LP, the Company's operating partnership, to prior investors in the property-owning entity, paid off approximately $7.8 million of bonds and loans held by a prior member of the property-owning entity and incurred approximately $0.3 million of transaction costs. The Company also assumed the $15.5 million mortgage loan secured by Lamar Station Plaza and issued to Lamont Street warrants to purchase 500,000 shares of the Company’s common stock.

Note 2. Basis of Presentation

The 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 Lamar Station Plaza, have been excluded. Such items include depreciation, asset management fees, certain general and administrative expenses, interest expense, interest income, income taxes and amortization of certain lease intangible assets and liabilities. Therefore, the Statements of Revenues and Certain Operating Expenses may not be comparable to a statement of operations for Lamar Station Plaza after its acquisition by the Company.

The financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States. In the opinion of management, the financial statement for the unaudited interim period includes all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of Lamar Station Plaza's results of operations for such period. Operating results for the nine months ended September 30, 2022 are not necessarily indicative of full year results of operations.

Note 3. Significant Accounting Policies

Revenue Recognition

Lamar Station Plaza has the following revenue sources and revenue recognition policies, which are included in rental income on the Statements of Revenues and Certain Operating Expenses:

• Base Rent – Lamar Station Plaza recognizes 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 – Lamar Station Plaza has tenant leases which provide for the recovery of all or a portion of the operating expenses, including, but not limited to, real estate taxes, property insurance, routine maintenance and repairs, utilities and property management expenses. Lamar Station Plaza collects these estimated expenses and is reimbursed by tenants for any actual expense in excess of estimates or reimburses tenants if collected estimates exceed actual operating results. The reimbursements are recorded in rental income, and the expenses are recorded in property operating expenses. These reimbursements are accrued in the same periods as the expenses are incurred.

Certain Operating Expenses

Operating expenses represent the direct expenses of operating the property and include repairs and maintenance, utilities, property taxes and insurance, management fees and other property expenses that, with the exception of asset management fees that are excluded from the Statements of Revenues and Certain Operating Expenses, are expected to continue in the ongoing operations of Lamar Station Plaza. Expenditures for repairs and maintenance are expensed as incurred.

Use of Estimates

The preparation of the Statements of Revenues and Certain Operating Expenses in accordance with accounting principles generally accepted in the United States of America requires management of Lamar Station Plaza 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. Future Minimum Rentals

Future minimum lease payments due under the non-cancelable operating leases with tenants, excluding any reimbursable costs, as of December 31, 2021, are shown in the table below:

(in thousands)
2022	$	1,863
2023		2,035
2024		2,017
2025		2,015
2026		1,838
Thereafter		7,245
Total	$	17,013

Note 5. Related Party Transactions

Michael Z. Jacoby, the Company's chairman and Chief Executive Officer, Alexander Topchy, the Company's Chief Financial Officer, and Thomas M. Yockey, a member of the Company's board of directors have direct ownership interests in Lamar Station Plaza. Lamar Station Plaza paid an affiliate of the Company property management fees and engineering service fees, totaling approximately $0.1 million for the nine months ended September 30, 2022, and for the year ended December 31, 2021. On January 13, 2022, Lamar Station Plaza made an equity distribution of $0.3 million to its owners. On October 6, 2022, Lamar Station Plaza advanced a subsidiary of the Company $1.1 million for deposits related to a potential future financing.

Note 6. Commitments and Contingencies

Impact of COVID-19

Management continues to monitor and address risks related to the COVID-19 pandemic. Certain tenants experiencing economic difficulties during the pandemic have previously sought rent relief, which had been provided on a case-by-case basis primarily in the form of rent deferrals and, in more limited cases, in the form of rent abatements.

Since April 2020, management has entered into lease modifications that deferred approximately $0.2 million of contractual revenue and waived less than $0.1 million of contractual revenue for rent that pertained to April 2020 through December 2021. Less than $0.1 million of the total deferred rent from all lease modifications since April 2020 remained outstanding and to be billed as of September 30, 2022.

Litigation

Lamar Station Plaza is 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 Lamar Station Plaza’s results of operations.

Note 7. Subsequent Events

Lamar Station Plaza has been evaluated for subsequent events through February 9, 2023, the date the Statements of Revenues and Certain Operating Expenses were available to be issued and has determined that there are no subsequent events requiring disclosure in accordance with FASB ASC Topic 855, “Subsequent Events”.

EX-99.3

Exhibit 99.3

Broad Street Realty, Inc.

Pro Forma Condensed Consolidated Financial Statements

(Unaudited)

On November 23, 2022, Broad Street Realty, Inc. (the “Company”) and its subsidiaries completed the acquisition of Midtown Row (“Midtown Row Acquisition”), a mixed-used property located in Williamsburg, Virginia comprised of 240 student housing units with 620 beds and a retail component consisting of 63,573 square feet of gross leasable area. As consideration for the Midtown Row Acquisition, the Company paid $118.7 million in cash and issued 448,180 Class A common units of limited partnership interest (“Common OP Units”) in Broad Street Operating Partnership, LP, the Company’s operating partnership (the “Operating Partnership”), and 1,842,917 Series A preferred units of limited partnership interest in the Operating Partnership (the "Preferred OP Units" and, together with the Common OP Units, the “OP Units”). The cash portion of the purchase price was funded with proceeds generated from a $76.0 million mortgage loan secured by the property, a $15.0 million mezzanine loan, $28.4 million from the Preferred Equity Investment (as defined below) and $0.5 million that was paid directly to the seller. Approximately $1.2 million of transaction costs were capitalized since the transaction was accounted for as an asset acquisition.

The Company also completed the merger (the “Lamar Station Plaza Merger”) pursuant to which it acquired Lamar Station Plaza, a retail shopping center located in Lakewood, Colorado with approximately 187,000 square feet of gross leasable area (“Lamar Station Plaza” and, together with Midtown Row, the "Acquired Properties"). As consideration for the Lamar Station Plaza Merger, the Company issued 573,529 of Common OP Units to prior investors in the property-owning entity that was party to the Lamar Station Plaza Merger and assumed the $15.5 million mortgage loan. In addition, total consideration for the property included the payoff of approximately $7.8 million of bonds and loans held by Lamont Street Partners, LLC (“Lamont Street”), a prior member of the property-owning entity, and approximately $0.3 million of transaction costs that were capitalized since the transaction was accounted for as an asset acquisition.

On November 22, 2022, the Company entered into a Preferred Equity Investment Agreement pursuant to which CF Flyer PE Investor LLC ("Fortress Member"), an affiliate of Fortress Investment Group LLC, invested $80.0 million (the "Preferred Equity Investment") in Broad Street Eagles JV LLC ("Eagles Sub-OP"), one of the Company's subsidiaries, in exchange for a preferred membership interest. The Fortress Member is entitled to monthly distributions, a portion of which is paid in cash (the "Current Preferred Return") and a portion that accrues on and is added to the Preferred Equity Investment each month ("Capitalized Preferred Return" and, together with the Current Preferred Return, the "Preferred Return"). The initial Preferred Return is 12% per annum, comprised of a 5% Current Preferred Return and a 7% Capitalized Preferred Return, provided that, until certain properties are contributed to the Eagles Sub-OP, the Capitalized Preferred Return is increased by 4.75%. The Capitalized Preferred Return increases each year by 1%. Commencing on November 22, 2027, the Preferred Return will be 19% per annum, all payable in cash, and will increase an additional 3% each year thereafter. The Company used some of the proceeds to redeem 100% of the preferred membership interests in the Basis Sub-OP held by a subsidiary of Basis Management Group, LLC for $8.5 million and to repay in full the Company's term loans and credit facility with MVB Bank, Inc.

In connection with the Preferred Equity Investment, the Company issued to CF Flyer Mezz Holdings, LLC warrants to purchase 2,560,000 shares of the Company's common stock at an exercise price of $0.01 per share (the "Fortress Warrants"). Also, in connection with the Lamar Station Plaza Merger, the Company issued to Lamont Street warrants to purchase 500,000 shares of the Company's common stock at an exercise price of $0.01 per share (the "Lamont Street Warrants").

The accompanying unaudited pro forma condensed consolidated financial statements primarily give effect to the following (collectively, the "Transactions"):

• the Midtown Row Acquisition and the Lamar Station Plaza Merger;

• the issuance of the Lamont Street Warrants;

• the issuance of the Fortress Warrants;

• the incurrence of $76.0 million of mortgage indebtedness and $15.0 million mezzanine loan in connection with the Midtown Row Acquisition; and

• the incurrence and assumption of $15.5 million of mortgage indebtedness in connection with Lamar Station Plaza Merger; and

• the Preferred Equity Investment.

The accompanying unaudited pro forma condensed consolidated balance sheet as of September 30, 2022, reflects the financial position of the Company as if the Transactions had been completed on September 30, 2022.

The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2022, and the year ended December 31, 2021, present the results of operations of the Company as if the Transactions had been completed on January 1, 2021.

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 the Company as of and for the nine months ended September 30, 2022, included in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2022, (ii) the audited financial statements of the Company as of and for the year ended December 31, 2021, included in its Annual Report on Form 10-K for the year ended December 31, 2021, and (iii) the statements of revenues and certain operating expenses of each of the Acquired Properties included as Exhibit 99.1 and 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.

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 the 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 expected accounting impact for the Transactions.

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 Transactions occurred on the dates specified, nor do such financial statements purport to be indicative of the results of operations that may be achieved in the future. In addition, the unaudited pro forma condensed consolidated financial statements include pro forma allocations of the purchase price of the Acquired Properties discussed in the accompanying notes based upon preliminary estimates of the fair value of the assets acquired and liabilities assumed in connection with the acquisitions and are subject to change.

While the Company has given pro forma effect of the Transactions to the condensed consolidated financial statements, as of the date of this filing, the Company’s accounting analysis for the Preferred Equity Investment, warrants, mortgage indebtedness, earnings per share and noncontrolling interest are not complete and therefore is subject to change.

Broad Street Realty, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

September 30, 2022

(dollars in thousands)

			Acquisition of Midtown Row				Acquisition of Lamar Station Plaza			Preferred Equity Investment			Other Pro Forma Adjustments				Company Pro Forma
			B				B			C
Assets
Real estate properties
Land	49,413		$	7,817			$	9,057		$	1,048		$	—			$	67,335
Buildings and improvements	174,341			110,216				11,246			1,331			—				297,134
Intangible lease assets	35,289			2,687				3,689			—			—				41,665
Construction in progress	2,751			—				—			—			—				2,751
Less accumulated depreciation and amortization	(36,605	)		—				—			—			—				(36,605	)
Total real estate properties, net	225,189			120,720				23,992			2,379			—				372,280
Cash and cash equivalents	1,559			67				120			51,767			(37,730	)	D		15,783
Restricted cash	5,197			500				823			(10	)		—				6,510
Accounts receivable, net of allowances	1,424			-				1,619			—			(213	)	E		2,830
Other assets, net	10,200			2,004				1,789			—			1,545				15,538
Total Assets	243,569		$	123,291			$	28,343		$	54,136		$	(36,398	)		$	412,941
Liabilities, Temporary Equity and Permanent Equity
Liabilities
Mortgage and other indebtedness, net	179,136		$	89,750		F	$	15,407	F	$	(18,039	)	$	—			$	266,254
Accounts payable and accrued liabilities	13,427			68				3,011			(1,792	)		—				14,714
Unamortized intangible lease liabilities, net	1,645			114				101			—			—				1,860
Deferred tax liabilities	6,513			—				—			—			—				6,513
Payables due to related parties	997			—				37			—			—				1,034
Deferred revenue	694			369				55			—			—				1,118
Total liabilities	202,412			90,301				18,611			(19,831	)		—				291,493
Commitments and Contingencies
Temporary Equity
Preferred Equity Investment	—		$	—			$	—		$	71,961		$	—			$	71,961
Permanent Equity
Preferred stock, 0.01 par value, 1,000,000 shares authorized: Series A preferred stock, 20,000 shares authorized, 500 shares issued and outstanding at September 30, 2022	—			—				—			—			—				—
Common stock, 0.01 par value, 50,000,000 shares authorized, 32,270,452 shares issued and outstanding at September 30, 2022	323			—				—			—			—				323
Additional paid in capital	71,877			28,426				8,150			2,006			(36,185	)	D		74,274
Accumulated deficit	(27,354	)		(18	)			—			—			(197	)	E		(27,569	)
Total Broad Street Realty, Inc. stockholders' equity	44,846			28,408				8,150			2,006			(36,382	)			47,028
Noncontrolling interest	(3,689	)		4,582		G		1,582	G		-			(16	)	E		2,459
Total permanent equity	41,157			32,990				9,732			2,006			(36,398	)			49,487
Total Liabilities, Temporary Equity and Permanent Equity	243,569		$	123,291			$	28,343		$	54,136		$	(36,398	)		$	412,941

All values are in US Dollars.

Broad Street Realty, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the nine months ended September 30, 2022

(dollars in thousands, except per share amounts)

	Broad Street Realty, Inc. Historical			Revenues and Certain <br>Direct Operating <br>Expenses of Midtown Row		Revenues and Certain <br>Direct Operating <br>Expenses of Lamar<br>Station Plaza		Historical Combined			Preferred Equity Investment				Other Pro Forma Adjustments				Company Pro Forma
Revenues	AA			BB		BB
Rental income	$	21,034		$	5,619	$	1,469	$	28,122		$	—			$	(42	)	CC	$	28,080
Commissions		2,142			—		—		2,142			—				(148	)	DD		1,994
Management fees and other income		450			—		—		450			—				(110	)	DD		340
Total revenues		23,626			5,619		1,469		30,714			—				(300	)			30,414
Operating expenses
Cost of services		1,588			—		—		1,588			—				—				1,588
Depreciation and amortization		12,240			—		—		12,240			—				5,163		CC		17,403
Property operating		5,924			2,609		883		9,416			—				(217	)	DD		9,199
Bad debt expense		47			—		—		47			—				—				47
General and administrative		10,150			—		—		10,150			—				41		DD		10,191
Total operating expenses		29,949			2,609		883		33,441			—				4,987				38,428
Operating (loss) income		(6,323	)		3,010		586		(2,727	)		—				(5,287	)			(8,014	)
Other income (expense)
Interest and other income		26							26			—				—				26
Derivative fair value adjustment		3,819			—		—		3,819			—				—				3,819
Interest expense		(8,346	)		—		—		(8,346	)		—				(5,922	)	EE		(14,268	)
Other expense		(15	)		—		—		(15	)		—				—				(15	)
Total other expense		(4,516	)		—		—		(4,516	)		—				(5,922	)			(10,438	)
Income tax benefit		2,309			—		—		2,309			—				1,935		FF		4,244
Net (loss) income		(8,530	)		3,010		586		(4,934	)		—				(9,274	)			(14,208	)
Less: Preferred equity return on Preferred Equity Investment		—			—		—		—			(3,439	)	GG		—				(3,439	)
Less: Deferred preferred equity return on Preferred Equity Investment		—			—		—		—			(5,502	)	GG		—				(5,502	)
Less: Dividends on Preferred OP Units		—			—		—		—			—				(154	)	HH		(154	)
Less: Deferred dividends on Preferred OP Units		—			—		—		—			—				(247	)	HH		(247	)
Plus: Net loss attributable to noncontrolling interests		719			—		—		719			—				1,993		II		2,712
Net (loss) income attributable to common stockholders	$	(7,811	)	$	3,010	$	586	$	(4,215	)	$	(8,941	)		$	(7,682	)		$	(20,838	)
Weighted average shares outstanding- basic and diluted		32,030,500																		32,030,500
Net loss attributable to common stockholders per share	$	(0.24	)																$	(0.65	)	JJ

Broad Street Realty, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the year ended December 31, 2021

(dollars in thousands, except per share amounts)

	Broad Street Realty, Inc. Historical			Revenues and Certain <br>Direct Operating <br>Expenses of Midtown Row		Revenues and Certain <br>Direct Operating <br>Expenses of Lamar<br>Station Plaza		Historical Combined			Preferred Equity Investment				Other Pro Forma Adjustments				Company Pro Forma
	AA			BB		BB
Revenues
Rental income	$	21,408		$	3,358	$	2,276	$	27,042		$	—			$	(56	)	CC	$	26,986
Commissions		2,836			—		—		2,836			—				(282	)	DD		2,554
Management and other fees		1,105			—		—		1,105			—				(414	)	DD		691
Total revenues		25,349			3,358		2,276		30,983			—				(752	)			30,231
Operating expenses
Cost of services		1,824			—		—		1,824			—				—				1,824
Depreciation and amortization		12,501			—		—		12,501			—				6,883		CC		19,384
Property operating		5,694			1,524		1,086		8,304			—				(154	)	DD		8,150
Bad debt expense		34			—		—		34			—				—				34
General and administrative		11,360			—		—		11,360			—				39		DD		11,399
Total operating expenses		31,413			1,524		1,086		34,023			—				6,768				40,791
Operating (loss) income		(6,064	)		1,834		1,190		(3,040	)		—				(7,520	)			(10,560	)
Other income (expense)
Net interest and other income (expense)		(33	)		—		—		(33	)		—				—				(33	)
Derivative fair value adjustment		353			—		—		353			—				—				353
Interest expense		(9,961	)		—		—		(9,961	)		—				(7,660	)	EE		(17,621	)
Gain on extinguishment of debt		1,528			—		—		1,528			—				-				1,528
Other expense		(100	)		—		—		(100	)		—				—				(100	)
Total other expense		(8,213	)		—		—		(8,213	)		—				(7,660	)			(15,873	)
Income tax benefit		3,533			—		—		3,533			—				2,631		FF		6,164
Net (loss) income		(10,744	)		1,834		1,190		(7,720	)		—				(12,549	)			(20,269	)
Less: Preferred equity return on Preferred Equity Investment		—			—		—		—			(4,270	)	GG		—				(4,270	)
Less: Deferred preferred equity return on Preferred Equity Investment		—			—		—		—			(8,283	)	GG		—				(8,283	)
Less: Dividends on Preferred OP Units		—			—		—		—			—				(193	)	HH		(193	)
Less: Deferred dividends on Preferred OP Units		—			—		—		—			—				(270	)	HH		(270	)
Plus: Net loss attributable to noncontrolling interests		1,236			—		—		1,236			—				2,649		II		3,885
Net (loss) income attributable to common stockholders	$	(9,508	)	$	1,834	$	1,190	$	(6,484	)	$	(12,553	)		$	(10,363	)		$	(29,400	)
Weighted average shares outstanding- basic and diluted		26,928,510																		26,928,510
Net loss attributable to common stockholders per share	$	(0.35	)																$	(1.09	)	JJ

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

Note 1 — Basis of Presentation

The unaudited pro forma condensed consolidated financial statements are derived from the historical consolidated financial statements of the Company and the historical statements of revenues and certain operating expenses of the Acquired Properties.

The unaudited pro forma condensed consolidated financial statements present the impact of the Transactions, as described in the introduction to the pro forma financial statements, on the Company’s financial position as of September 30, 2022 and results of operations for the nine months ended September 30, 2022 and year ended December 31, 2022.

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

A. – Derived from the Company’s unaudited consolidated balance sheet as of September 30, 2022.

B. – Represents the pro forma adjustments for (i) the acquisition of the Acquired Properties in accordance with the applicable merger agreement for the Lamar Station Plaza Merger and the purchase agreement for the Midtown Row Acquisition; and (ii) the related origination of mortgage indebtedness and a mezzanine loan by one of its subsidiaries to fund the acquisitions. The Company accounted for the acquisitions of Midtown Row and Lamar Station Plaza 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 Midtown Row and Lamar Station Plaza will be capitalized. The Company allocated the purchase price, including acquisition costs, to the individual assets acquired and liabilities assumed on a preliminary relative fair value basis.

The following table provides additional information regarding the total consideration for the Acquired Properties:

(in thousands)
Cash paid to prior owners using Preferred Equity Investment proceeds	$	28,426
Cash paid to prior owners		450
Value of Common OP Units issued		2,869
Value of Preferred OP Units issued		3,686
Prior owner debt paid off at closing using Preferred Equity Investment proceeds		7,759
Cash paid to prior owners using net proceeds from mortgage and mezzanine debt		89,750
Transaction costs		1,482
Cash acquired in acquisitions		(943	)
Total Cost of Acquisitions	$	133,479

The following table represents the preliminary estimated relative fair value of the assets acquired and liabilities assumed related to the acquisition of the Acquired Properties:

(in thousands)
Land	$	16,874
Building		114,980
Building and site improvements		6,482
Intangible lease assets		6,376
Total real estate assets acquired		144,712
Other assets		7,524
Total assets acquired		152,236
Accounts payable and accrued expenses and deferred revenue		(3,076	)
Intangible lease liabilities		(215	)
Assumed mortgage and other indebtedness		(15,466	)
Total liabilities assumed		(18,757	)
Assets acquired net of liabilities assumed	$	133,479

C. – Reflects the pro forma adjustments for the Preferred Equity Investment. The Company used proceeds from the Preferred Equity Investment to (i) fund $28.4 million of the Midtown Row Acquisition, (ii) payoff approximately

$18.9 million of existing debt including interest and fees, (iii) payoff approximately $7.8 million of bonds and loans held by Lamont Street and (iv) fund $2.1 million of the Colfax parcel acquisition relating to a purchase and sale agreement that the Company had entered into on September 29, 2022. The Company also used proceeds from the Preferred Equity Investment to pay off outstanding payables and other expenses. In addition, the Company issued the Fortress Warrants.

D. – Reflects the payments of $34.6 million related to the Acquired Properties. The Company used proceeds from the Preferred Equity Investment to (i) fund $28.4 million of the Midtown Row Acquisition and (ii) payoff approximately $7.8 million of bonds and loans held by Lamont Street. During October 2022, a subsidiary of the Company funded a $1.5 million deposit relating to the Midtown Row acquisition.

E. – Reflects the elimination of $0.2 million in accounts receivable related to management and other fees and commissions included in the Company’s historical balance sheet as of September 30, 2022, related to the Acquired Properties.

F. – Reflects the indebtedness originated or assumed by the Company in connection with its acquisition of the Acquired Properties.

The following table provides a summary of the Company’s pro forma indebtedness in connection with the Acquired Properties.

(in thousands)	Maturity Date	Interest Rate	Balance
Lamar Station Plaza Shopping Center Loan	December 4, 2023 (1)	1-month SOFR plus 2.75% (2)	$	15,466
Unamortized deferred financing costs				(59	)
Total debt assumed			$	15,407
Midtown Row Mortgage Loan	December 1, 2027	6.48%	$	76,000
Fortress Mezzanine Loan (net of discount of $411)	December 1, 2027	12.00% (3)		14,589
			$	90,589
Unamortized deferred financing costs				(839	)
Total debt issued to fund acquisitions			$	89,750
Pro forma net debt			$	105,157

(1) In December 2022, the Company refinanced this loan with an interest rate of 5.67% and matures on December 10, 2027.

(2) This floating rate loan was based on the one-month Secured Overnight Financing Rate (“SOFR”) of 3.55%, as of November 23, 2022.

(3) Pursuant to the loan agreement, a portion of the interest on this loan will be paid in cash (the “Current Interest”) and a portion of the interest will be capitalized and added to the principal amount of the loan each month (the “Capitalized Interest” and, together with the Current Interest, the “Mezzanine Loan Interest”). The initial Mezzanine Loan Interest rate is 12% per annum, comprised of a 5% Current Interest rate and a 7% Capitalized Interest rate. The Capitalized Interest rate increases each year by 1%.

G. – Reflects the issuance of 1,021,709 Common OP Units and 1,842,917 Preferred OP Units in connection with the Company’s acquisition of the Acquired Properties. The value of the Common OP Units and Preferred OP Units was $2.9 million and $3.7 million, respectively. The OP Units represent the noncontrolling interests of the limited partners in the Operating Partnership. The Company owns 85.3% of the Common OP Units.

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

AA. – Derived from the Company’s consolidated statements of operations for the year ended December 31, 2021, and the nine months ended September 30, 2022 (unaudited).

BB. – Represents the historical revenues and certain direct operating expenses of the Acquired Properties derived from the statements of revenues and certain direct operating expenses included as Exhibits 99.1 and 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.

CC. – The Company made certain pro forma adjustments related to the historical revenues and expenses of the Acquired Properties for the nine months ended September 30, 2022, and the year ended December 31, 2021, in order to derive consolidated pro forma results of operations from continuing operations for the Company for the nine months ended September 30, 2022, and the year ended December 31, 2021, respectively. These pro forma adjustments include the following:

• Amortization of certain above- and below-market lease intangibles recorded as part of the acquisitions of less than $0.1 million included as an adjustment to rental income for the nine months ended September 30, 2022, and the year ended December 31, 2021.

• Depreciation and amortization expense based on the Company’s allocation of the purchase price to land, building, and lease intangibles as required by ASC 805. 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 in connection with the Acquired Properties range from 12.5 to 49 years. The estimated remaining lives for the related site improvements range from 5 years to 14 years. A range of one year to 12 years was estimated for the other lease intangibles acquired. These estimates, allocations and valuations are subject to change; therefore, these adjustments may not be reflective of the actual depreciation and amortization expense to be recognized by the Company.

DD. – Represents the elimination of historical commissions, property management and other fees, and allocated wages paid by certain of the property-owning entities to the Company or affiliates of the Company for management of the Acquired Properties. The commissions, property management and other fees adjustments eliminate the revenue recorded by the Company and the expense recorded by the Acquired Properties. The allocated wages adjustment eliminates the reduction in expense recorded by the Company and the expense recorded by the Acquired Properties.

EE. – Represents the adjustment to interest expense to reflect (i) the incurrence of the debt described in Note 2(F) above, and (ii) amortization of deferred financing costs and debt discounts associated with such debt as if such debt was outstanding beginning on January 1, 2021. 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 less than $0.1 million for each of the nine months ended September 30, 2022, and the year ended December 31, 2021.

FF. – Reflects the income tax effect of the acquisitions of the Acquired Properties using a 21% estimated statutory tax rate.

GG. – Reflects a portion of the Current Preferred Return and a portion of the Capitalized Preferred Return. The initial Preferred Return is 12% per annum, comprised of a 5% Current Preferred Return and a 7% Capitalized Preferred Return. There is an additional 4.75% Capitalized Preferred Return until the Company contributes certain properties to the Eagles Sub-OP. The Capitalized Preferred Return increases each year by 1%.

HH. – Reflects a portion of the dividends on the Preferred OP Units that will be paid in cash (the “Current Preferred OP Unit Return”) and a portion of the dividends on the Preferred OP Units that will be capitalized and added to the noncontrolling investment each month (the “Capitalized Preferred OP Unit Return” and, together with the Current Preferred OP Unit Return, the “Preferred OP Unit Return”). The initial Preferred OP Unit Return is 12% per annum, comprised of a 5% Current Preferred OP Unit Return and a 7% Capitalized Preferred OP Unit Return. The Capitalized Preferred OP Unit Return increases each year by 1%.

II. – Represents the proportionate share of income (loss) attributable to noncontrolling interests of the Operating Partnership.

JJ. – Pro forma net loss attributable to common stockholders per share-basic is calculated based on the pro forma weighted average common shares outstanding for the nine months ended September 30, 2022 and for the year ended December 31, 2021. 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, 2022, and December 31, 2021; (ii) 10,000 and 70,000 stock options that were outstanding as of September 30, 2022, and December 31, 2021, respectively; (iii) 190,591 and 237,621 restricted shares of common stock that were outstanding as of September 30, 2022, and December 31, 2021, respectively; (iv) 200,000 warrants that were outstanding as of September 30, 2022, and December 31, 2021; and (v) 3,060,000 warrants issued on November 23, 2022 (as described above) 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.