8-K/A

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): June 4, 2021

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)
---	---

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 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

On June 7, 2021, Broad Street Realty, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Spotswood Closing 8-K”) in connection with its acquisition of Spotswood Valley Square Shopping Center (the “Spotswood Property”). On May 27, 2021, the Company filed a Current Report on Form 8-K (the “Highlandtown and Cromwell Closing 8-K) in connection with its acquisition of the Highlandtown Village Shopping Center and Cromwell Field Shopping Center (collectively with the Spotswood Property, the “Acquired Properties”). The Acquired Properties were under common management prior to their respective Mergers.

This amendment to the Spotswood Closing 8-K is being filed for the sole purpose of filing the historical statements of revenues and certain operating expenses of the three 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 Spotswood Closing 8-K and the Highlandtown and Cromwell 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
•	Combined Statements of Revenues and Certain Operating Expense of the Acquired Properties for the three months ended March 31, 2021 and the year ended December 31, 2020
---	---
•	Notes to Combined Statements of Revenues and Certain Operating Expenses
---	---
(b)	Unaudited Pro Forma Financial Information.
---	---

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

•	Unaudited Pro Forma Consolidated Balance Sheet of the Company as of March 31, 2021
•	Unaudited Pro Forma Consolidated Statements of Operations of the Company for the three months ended March 31, 2021 and the year ended December 31, 2020
---	---
•	Notes to Unaudited Pro Forma Consolidated Financial Statements
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(c)	Exhibits
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Exhibit<br>No.	Description
---	---
23.1	Consent of Independent Registered Public Accounting Firm
99.1	Historical Statements of Revenues and Certain Operating Expenses of the Acquired Properties
99.2	Unaudited Pro Forma Consolidated 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.
August 20, 2021		By:	/s/ Michael Z. Jacoby
			Michael Z. Jacoby
			Chief Executive Officer

3

brst-ex231_134.htm

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Broad Street Realty, Inc.

Bethesda, Maryland

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-256206) of Broad Street Realty, Inc. of our report dated August 20, 2021, relating to the combined statement of revenues and certain operating expenses of the Acquired Properties for the year ended December 31, 2020, which appears in this Form 8­K/A.

/s/ BDO USA, LLP

Potomac, Maryland

August 20, 2021

brst-ex991_6.htm

Exhibit 99.1

Independent Auditor’s Report

Shareholders and Board of Directors

Broad Street Realty, Inc.

Bethesda, Maryland

Opinion

We have audited the accompanying combined statement of revenues and certain operating expenses (the “combined financial statement”) of the Acquired Properties for the year ended December 31, 2020, and the related notes to the combined financial statement.

In our opinion, the accompanying combined financial statement presents fairly, in all material respects, the revenues and certain operating expenses of the Acquired Properties for the year ended December 31, 2020 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 Combined Financial Statement section of our report. We are required to be independent of the Acquired Properties 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 combined financial statement, the accompanying combined 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 Properties’ revenues and expenses.  Our opinion is not modified with respect to that matter.

Responsibilities of Management for the Combined Financial Statement

Management is responsible for the preparation and fair presentation of the combined 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 combined financial statement that are free from material misstatement, whether due to fraud or error.

In preparing the combined financial statement, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Acquired Properties’ ability to continue as a going concern within one year after the date that the combined financial statement is issued or available to be issued.

Auditor’s Responsibilities for the Audit of the Combined Financial Statement

Our objectives are to obtain reasonable assurance about whether the combined 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 combined 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 combined 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 combined 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 Properties’ internal control. Accordingly, no such opinion is expressed.
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•	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 combined financial statement.
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•	Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Acquired Properties’ ability to continue as a going concern for a reasonable period of time.
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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

August 20, 2021

Acquired Properties

Combined Statements of Revenues and Certain Operating Expenses

For the Three Months Ended March 31, 2021 (unaudited) and the Year Ended December 31, 2020

(Dollars in thousands)

	Three months ended		Year ended
	March 31, 2021		December 31, 2020
	(unaudited)
Revenues:
Rental revenue	$	1,369	$	5,749
Total revenues		1,369		5,749
Certain operating expenses:
Real estate taxes and insurance		174		701
Repairs and maintenance		287		752
Property management fees		57		197
Utilities		24		92
Other		42		367
Total certain operating expenses		584		2,109
Revenues in excess of certain operating expenses	$	785	$	3,640

See accompanying notes

Acquired Properties

Notes to Combined Statements of Revenues and Certain Operating Expenses

For the Three Months Ended March 31, 2021 (unaudited) and Year Ended December 31, 2020

(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 three retail shopping centers (the “Acquired Properties”) located in Maryland and Virginia. The merger transaction pursuant to which the Company acquired Highlandtown Village Shopping Center was completed on May 21, 2021, the merger transaction pursuant to which the Company acquired Cromwell Field Shopping Center was completed on May 26, 2021 and the merger transaction pursuant to which the Company acquired Spotswood Valley Square was completed on June 4, 2021. The total consideration for all three transactions was approximately $8.2 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 Acquired Properties revenues and expenses. The revenues and certain operating expenses are presented on a combined basis due to the common management of the Acquired Properties.

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 Acquired Properties, 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 Statements of Revenue and Certain Operating Expenses may not be comparable to a statement of operations for the Acquired Properties after their acquisition by the Company.

The combined financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States.

Note 3.  Significant Accounting Policies

Revenue Recognition

The Acquired Properties 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 Acquired Properties 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 Acquired Properties have tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property.  These reimbursements are accrued in the same periods as the expenses are incurred.
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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 and ground rent, are expected to continue in the ongoing operations of the Acquired Properties. Expenditures for repairs and maintenance are expensed as incurred.

Use of Estimates

The preparation of the Combined Statements of Revenue and Certain Operating Expenses in accordance with accounting principles generally accepted in the United States of America requires management of the Acquired Properties 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 reimbursed costs, as of December 31, 2020, are shown in the table below (in thousands):

2021	$	4,463
2022		3,976
2023		3,048
2024		2,254
2025		1,689
Thereafter		3,071
Total	$	18,501

Note 5. Related Party Transactions

The entities that own the Acquired Properties paid an affiliate of the Company property management fees, totaling approximately $57,000 for the three months ended March 31, 2021 and approximately $197,000 for the year ended December 31, 2020.

The entities that own the Acquired Properties paid an affiliate of the Company, which owns the fee simple interest in the land that the Cromwell Field Shopping Center is located on under a leasehold interest, ground rent totaling approximately $36,000 for the three months ended March 31, 2021 and approximately $146,000 for the year ended December 31, 2020.

Note 6.  Commitments and Contingencies

Impact of COVID-19

Management is closely monitoring the impact of the COVID-19 pandemic on the operations of the Acquired Properties, including the impact on its tenants and rental revenue. Management has observed the impact of COVID-19 manifest in the form of limited operations among its tenants, 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. The extent of the COVID-19 pandemic’s effect on the Acquired Properties’ future operational and financial performance, financial condition and liquidity will depend on future developments, including the duration and intensity of the pandemic, the effectiveness, including the deployment, of COVID-19 vaccines and treatments, 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.

Beginning in April 2020 and through March 31, 2021, Management entered into lease modifications that deferred approximately $0.1 million of contractual revenue and waived approximately $0.1 million of contractual revenue. To date, the weighted average payback period of deferred rent is approximately 10 months which commenced at various times beginning in August 2020 through January 2021. Collections and rent deferrals to date may not be indicative of collections or rent deferrals in any future period.

Litigation

The Acquired Properties 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 Acquired Properties combined results of operations.

Note 7.  Subsequent Events

The Acquired Properties have been evaluated for subsequent events through August 20, 2021, the date the Combined Statements of Revenues and Certain Operating Expenses were available to be issued.

brst-ex992_12.htm

Exhibit 99.2

Broad Street Realty, Inc.

Pro Forma Consolidated Financial Statements

(Unaudited)

During May and June 2021, Broad Street Realty, Inc. (the “Company”) completed three mergers (the “2021 Mergers”) pursuant to which it acquired: (i) Highlandtown Village Shopping Center, a retail shopping center located in Baltimore, Maryland with approximately 57,513 square feet of gross leasable area; (ii) Cromwell Field Shopping Center, a retail shopping center located in Glen Burnie, Maryland with approximately 233,486 square feet of gross leasable area; and (iii) Spotswood Valley Square Shopping Center, a retail shopping center located in Harrisonburg, Virginia with approximately 190,650 square feet of gross leasable area (collectively, the “Acquired Properties”).

As consideration for the 2021 Mergers, the Company issued an aggregate of 6,331,162 shares of common stock to prior investors in the property-owning entities that were party to the 2021 Mergers. In addition, certain prior investors in those entities received an aggregate of approximately $0.8 million in cash as a portion of the consideration for the mergers.

On May 21, 2021 and June 4, 2021, in connection with the closing of two of the 2021 Mergers, Lamont Street Partners LLC (“Lamont Street”) contributed an aggregate of $3.9 million in exchange for a 1.0% preferred membership interest in BSV Highlandtown Investors LLC and BSV Spotswood Investors LLC designated as Class A units (the “Lamont Street Preferred Investment”). Lamont Street is entitled to a cumulative annual return of 13.5% on its capital contribution.

In connection with the Lamont Street Preferred Investment, the Company issued to Lamont Street warrants to purchase 200,000 shares of the Company’s common stock at an exercise price of $2.50 per share (the “Warrants”).

In addition, the Company assumed an aggregate of $31.5 million of mortgage indebtedness secured by the Acquired Properties in connection with the 2021 Mergers.

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

•	the acquisitions by the Company of the Acquired Properties in connection with the 2021 Mergers;
•	the issuance of the shares of common stock and the payments of cash in connection with the 2021 Mergers;
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•	the incurrence of indebtedness under the Lamont Street Preferred Investment and the issuance of the Warrants to Lamont Street; and
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•	the incurrence and assumption of $31.5 million of mortgage indebtedness in connection with the acquisitions of the Acquired Properties.
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The accompanying unaudited pro forma condensed consolidated balance sheet as of March 31, 2021, reflects the financial position of the Company as if each of the foregoing had been completed on March 31, 2021.

The accompanying unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2021 and the year ended December 31, 2020, present the results of operations of the Company as if each of the foregoing had been completed on January 1, 2020.

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 three months ended March 31, 2021 included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2021, (ii) the audited financial statements of the Company as of and for the year ended December 31, 2020 included in its Annual Report on Form 10-K for the year ended December 31, 2020, and (iii) the combined statements of revenues and certain operating expenses of the Acquired Properties included as 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.

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 represent the expected accounting impact for the 2021 Mergers 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 2021 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

March 31, 2021

(Dollars in thousands)

			Acquisition of Acquired Properties				Other Pro Forma Adjustments				Company Pro Forma
			B
Assets
Real estate properties
Land	38,458		$	7,707			$	-			$	46,165
Buildings and improvements	124,344			21,621				-				145,965
Intangible lease assets	20,619			9,037				-				29,656
Construction in progress	2,924			-				-				2,924
Less accumulated depreciation and amortization	(12,959	)		-				-				(12,959	)
Total real estate properties, net	173,386			38,365				-				211,751
Cash and cash equivalents	2,744			(553	)			3,900		C		6,091
Restricted cash	8,397			2,559				-				10,956
Accounts receivable, net of allowances	2,062			287				(262	)	F		2,087
Other assets, net	4,400			(42	)			-				4,358
Total Assets	190,989		$	40,616			$	3,638			$	235,243
Liabilities and Equity
Liabilities
Mortgage and other indebtedness, net	125,037		$	31,036			$	4,845		C, E	$	160,918
Accounts payable and accrued liabilities	9,334			1,998				39		C		11,371
Unamortized intangible lease liabilities, net	2,180			987				-				3,167
Deferred tax liabilities	11,245			(1,117	)			-				10,128
Payables due to related parties	1,145			(615	)			-				530
Deferred revenue	501			289				-				790
Total liabilities	149,442			32,578				4,884				186,904
Equity
Preferred stock, 0.01 par value, 20,000 shares authorized, 500 shares outstanding at March 31, 2021	-			-				-				-
Common stock, 0.01 par value, 50,000,000 shares authorized, 28,955,541 pro forma shares issued and outstanding at March 31, 2021	225			63		D		-				288
Additional paid in capital	54,627			7,975		D		30		C		62,632
Accumulated deficit	(11,712	)		-				(1,162	)	E, F		(12,874	)
Total Broad Street Realty, Inc. stockholders' equity	43,140			8,038				(1,132	)			50,046
Noncontrolling interest	(1,593	)		-				(114	)	E, F		(1,707	)
Total equity	41,547			8,038				(1,246	)			48,339
Total Liabilities and Equity	190,989		$	40,616			$	3,638			$	235,243

All values are in US Dollars.

Broad Street Realty, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the three months ended March 31, 2021

(Dollars in thousands, except per share amounts)

	Broad Street Realty, Inc. Historical			Revenues and Certain<br><br><br>Direct Operating Expenses<br><br><br>of Acquired Properties		Historical Combined			Other Pro Forma Adjustments				Company Pro Forma
Revenues	AA			BB
Rental income	$	3,938		$	1,369	$	5,307		$	26		CC, DD	$	5,333
Commissions		635			-		635			(7	)	DD		628
Management and other fees		345			-		345			(112	)	DD		233
Total revenues		4,918			1,369		6,287			(93	)			6,194
Operating expenses
Cost of services		343			-		343			-				343
Depreciation and amortization		2,313			-		2,313			943		CC		3,256
Property operating		1,250			584		1,834			(147	)	DD		1,687
Bad debt expense		55			-		55			-				55
General and administrative		2,586			-		2,586			30		DD		2,616
Total operating expenses		6,547			584		7,131			826				7,957
Operating income (loss)		(1,629	)		785		(844	)		(919	)			(1,763	)
Other income (expense)
Derivative fair value adjustment		191			-		191			-				191
Interest expense		(1,878	)		-		(1,878	)		(799	)	EE		(2,677	)
Gain on extinguishment of debt		757			-		757			-				757
Other expense		(7	)		-		(7	)		-				(7	)
Total other income (expense)		(937	)		-		(937	)		(799	)			(1,736	)
Income tax benefit		624			-		624			186		FF		810
Net income (loss)		(1,942	)		785		(1,157	)		(1,532	)			(2,689	)
Less: Net loss attributable to noncontrolling interests		265			-		265			46		GG		311
Net income (loss) attributable to common stockholders	$	(1,677	)	$	785	$	(892	)	$	(1,486	)		$	(2,378	)
Weighted average shares outstanding- basic and diluted		22,471,479												28,802,641
Net loss attributable to common stockholders per share	$	(0.07	)										$	(0.08	)	HH

Broad Street Realty, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the year ended December 31, 2020

(Dollars in thousands, except per share amounts)

	Broad Street Realty, Inc. Historical			Revenues and Certain<br><br><br>Direct Operating Expenses<br><br><br>of Acquired Properties		Historical Combined			Other Pro Forma Adjustments				Company Pro Forma
	AA			BB
Revenues
Rental income	$	15,864		$	5,749	$	21,613		$	109		CC, DD	$	21,722
Commissions		2,437			-		2,437			(69	)	DD		2,368
Management and other fees		1,358			-		1,358			(385	)	DD		973
Total revenues		19,659			5,749		25,408			(345	)			25,063
Operating expenses
Cost of services		1,685			-		1,685			-				1,685
Depreciation and amortization		9,939			-		9,939			3,771		CC		13,710
Property operating		3,914			2,109		6,023			(513	)	DD		5,510
Bad debt expense		320			-		320			-				320
General and administrative		8,911			-		8,911			119		DD		9,030
Total operating expenses		24,769			2,109		26,878			3,377				30,255
Operating income (loss)		(5,110	)		3,640		(1,470	)		(3,722	)			(5,192	)
Other income (expense)
Interest and other income		55			-		55			-				55
Derivative fair value adjustment		(639	)		-		(639	)		-				(639	)
Interest expense		(6,676	)		-		(6,676	)		(3,196	)	EE		(9,872	)
Other expense		(187	)		-		(187	)		-				(187	)
Total other income (expense)		(7,447	)		-		(7,447	)		(3,196	)			(10,643	)
Income tax benefit		3,033			-		3,033			682		FF		3,715
Net income (loss)		(9,524	)		3,640		(5,884	)		(6,236	)			(12,120	)
Less: Net loss attributable to noncontrolling interests		1,379			-		1,379			30		GG		1,409
Net income (loss) attributable to common stockholders	$	(8,145	)	$	3,640	$	(4,505	)	$	(6,206	)		$	(10,711	)
Weighted average shares outstanding- basic and diluted		22,029,408												28,360,570
Net loss attributable to common stockholders per share	$	(0.37	)										$	(0.38	)	HH

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 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 2021 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.

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

A. – Derived from the Company’s unaudited consolidated balance sheet as of March 31, 2021.

B. – Represents the pro forma adjustments for (i) the acquisitions of the Acquired Properties in accordance with the applicable merger agreements for the 2021 Mergers; and (ii) the related assumption of certain mortgage indebtedness by the Company and certain of its subsidiaries. The Company accounted for the acquisition of the Acquired 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 Acquired 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 Acquired Properties (dollars in thousands):

Cash paid to prior owners	$	840
Value of common shares issued		8,038
Prior owner debt and preferred equity paid off at closing		400
Settlement of notes payable owed to properties		(700	)
Transaction costs		905
Cash acquired in acquisitions		(1,241	)
Total Cost of Acquisitions	$	8,242

The following table represents the relative fair value of the assets acquired and liabilities assumed related to the acquisition of the Acquired Properties (dollars in thousands):

Land	$	7,707
Building		15,225
Building and site improvements		6,396
Intangible lease assets		9,037
Total real estate assets acquired		38,365
Other assets		3,074
Deferred tax assets		1,117
Total assets acquired		42,556
Accounts payable and accrued expenses		(1,813	)
Intangible lease liabilities		(987	)
Assumed mortgage and other indebtedness		(31,514	)
Total liabilities assumed		(34,314	)
Assets acquired net of liabilities assumed	$	8,242

C. – Represents the incurrence of indebtedness under the Lamont Street Preferred Investment and the issuance of the Warrants to Lamont Street assuming each had been completed on March 31, 2021. The Lamont Street Preferred Investment, including the Lamont Street Minimum Multiple Amount (as defined below), are mandatorily redeemable and, therefore, are classified as indebtedness.

Presented below is a summary of the Company’s pro forma indebtedness described in Note 2(B) and 2(C) (dollars in thousands).

	Maturity Date	Interest Rate	Balance
Highlandtown Village Shopping Center Loan (net of discount of $66)	May 6, 2023	4.13%	$	5,430
Cromwell Field Shopping Center Loan	November 15, 2022	LIBOR + 5.40%^(1)^		12,150
Cromwell Field Shopping Center Mezzanine Loan	November 15, 2022	10.00%		1,500
Spotswood Valley Square Shopping Center Loan (net of discount of $130)	July 6, 2023	4.82%		12,237
				31,317
Unamortized deferred financing costs				(281	)
Total debt assumed			$	31,036
Lamont Street Preferred Interest (net of discount of $69) ^(2)^	September 30, 2023	13.50%	$	4,845
Total debt issued to fund acquisitions			$	4,845
Pro forma net debt			$	35,881
^(1)^	The interest rate on the Cromwell Field Shopping Center Loan is LIBOR plus 5.40% per annum with a minimum LIBOR rate of 0.50%
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^(2)^	The outstanding balances includes approximately $1.0 million of indebtedness related to the Lamont Street Minimum Multiple Amount owed to Lamont Street as described below in Note E.
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D. – Reflects the issuance of 6,331,162 shares of common stock in connection with the 2021 Mergers that closed during the second quarter of 2021 valued based on the last reported sales price of the Company’s common stock on the OTC on the date of each Merger.

E. – Reflects a return to Lamont Street of amount equal to (a) the product of (i) the aggregate amount of capital contributions made and (ii) 0.26, less (b) the aggregate amount of Class A return payments made to Lamont Street (the “Lamont Street Minimum Multiple Amount”). As of March 31, 2021, the Minimum Multiple Amount was approximately $1.0 million, 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 the elimination of approximately $0.3 million in accounts receivable related to management and other fees and commissions included in the Company’s historical balance sheet as of March 31, 2021 related to the three properties acquired in the 2021 Mergers.

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

AA. – Derived from the Company’s consolidated statements of operations for the year ended December 31, 2020 and the three months ended March 31, 2021 (unaudited).

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

CC. – The Company made certain pro forma adjustments related to the historical revenues and expenses of the Acquired Properties for the three months ended March 31, 2021 and the year ended December 31, 2020 in order to derive consolidated pro forma results of operations from continuing operations for the Company for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively. These pro forma adjustments include the following:

•	Amortization of certain above- and below-market lease intangibles recorded as part of the acquisitions of approximately $0.1 million and $0.25 million included as an adjustment to rental income for the three months ended March 31, 2021 and the year ended December 31, 2020, respectively.
•	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 2021 Mergers range from 15 years to 25 years. The estimated remaining lives for the related site improvements range from 7.5 years to 10 years. A range of one year to nine 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.
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DD. – Represents the elimination of historical commissions, property management and other fees, ground rent 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, and ground rent 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 or assumption, as applicable, of the debt described in Note 2(B) and Note 2(C) 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, 2020. 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 three months ended March 31, 2021 and the year ended December 31, 2020.

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

GG. – Represents the proportionate share of income (loss) attributable to noncontrolling interests of the Broad Street Operating Partnership, LP, the Company’s operating partnership (the “Operating Partnership”).

HH. – Net loss attributable to common stockholders per share-basic is calculated based on the pro forma weighted average common shares outstanding, which was 22,471,479 for the three months ended March 31, 2021 and 22,029,408 for the year ended December 31, 2020 and assumes the issuance of 6,331,162 common shares in connection with the acquisitions of the Acquired Properties, resulting in a total of

28,802,641 weighted average common shares outstanding for the three months ended March 31, 2021 and a total of 28,360,570 weighted average common shares outstanding for the year ended December 31, 2020. 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 March 31, 2021 and December 31, 2020; (ii) 70,000 stock options that were outstanding as of March 31, 2021 and December 31, 2020; (iii) 153,200 restricted shares of common stock that were outstanding as of March 31, 2021 and December 31, 2020; and (iv) 200,000 warrants issued on June 4, 2021 (as described above) are excluded from the diluted shares calculation because the effect is antidilutive. The units of limited partnership interest in the Operating Partnership were excluded from the denominator because earnings were allocated to the noncontrolling interests in the calculation of the numerator.