Medalist Diversified, Inc 8-K/A, filed Sep 10, 2025
Medalist Diversified, Inc. (MDRR)
About this 8-K/A
Medalist Diversified, Inc filed this 8-K/A on September 10, 2025, reporting on events of July 18, 2025.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(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): September 10, 2024 (
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Explanatory Note
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
(a) Financial Statements of Property Acquired
The Tesla Pensacola Property underwent extensive renovations immediately prior to the acquisition and a change of use from a trade college to an automotive sales, service and distribution facility. As a result, the Company is not filing the financial statements of the Property because the leasing history of the Tesla Pensacola Property is not representative of its future operations.
(b) Unaudited Pro Forma Financial Information
The following unaudited pro forma financial statements for the Company are set forth in Exhibit 99.2, which is incorporated herein by reference.
Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2025.
Notes to Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2025.
Unaudited Pro Forma Consolidated Statement of Operations for the six months ended June 30, 2025.
Notes to Unaudited Pro Forma Consolidated Statement of Operations for the six months ended June 30, 2025.
Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2024.
Notes to Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2024.
(c) Not applicable.
(d) Exhibits
Exhibit No. |
| Description |
99.1 |
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104 |
| Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
SIGNATURE
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.
| MEDALIST DIVERSIFIED REIT, INC. | |
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Dated: September 10, 2025 | By: | /s/ C. Brent Winn, Jr. |
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| C. Brent Winn, Jr. |
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| Chief Financial Officer |
Exhibit 99.1
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2025
and
Unaudited Pro Forma Consolidated Statements of Operations for the
six months ended June 30, 2025 and the year ended December 31, 2024
Summary of Unaudited Pro Forma Consolidated Financial Statements
On July 18, 2025, Medalist Diversified REIT, Inc. (the “Company”) announced that Medalist Diversified Holdings, LP (the “Operating Partnership”), through a wholly owned subsidiary, completed the acquisition of that certain tract of real property containing a building at 312 East Nine Mile Road, Pensacola, Florida 32514 (the “Tesla Pensacola Property”) from Drake Motor Partners Pensacola, LLC, a Colorado limited liability company.
The following unaudited pro forma consolidated financial statements and accompanying notes should be read in conjunction with the condensed consolidated balance sheet of Medalist Diversified REIT, Inc. and Subsidiaries as of June 30, 2025 (unaudited), the condensed consolidated statement of operations of Medalist Diversified REIT, Inc. and Subsidiaries for the six months ended June 30, 2025 (unaudited), and the audited consolidated statement of operations of Medalist Diversified REIT, Inc. and Subsidiaries for the year ended December 31, 2024.
The following unaudited pro forma consolidated balance sheet as of June 30, 2025 has been prepared to give effect to the acquisition of the Tesla Pensacola Property, as if this transaction had occurred on June 30, 2025.
The following unaudited pro forma consolidated statement of operations for the six months ended June 30, 2025 has been prepared to give effect to the acquisition of the Tesla Pensacola Property, as if this transaction had occurred on January 1, 2025.
The following unaudited pro forma consolidated statement of operations for year ended December 31, 2024 has been prepared to give effect to the acquisition of the Tesla Pensacola Property, as if this transaction had occurred on January 1, 2024.
The Company has based the unaudited pro forma adjustments on available information and assumptions that it believes are reasonable. These unaudited pro forma consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisition of the Tesla Pensacola Property been consummated as of the date indicated.
Medalist Diversified REIT, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of June 30, 2025
| | | | Pro Forma | | | | |||
| | | | Adjustments | | | | |||
| | | | Tesla Pensacola | | | | |||
| | | | Property | | | | |||
| | Historical (a) | | Acquisition (b) | | | Pro Forma | |||
ASSETS | | | | | | | | | | |
Investment properties, net | | $ | 59,850,435 | | $ | — | | | $ | 59,850,435 |
Cash | | | 1,950,829 | | | (303,260) | (i) | | | 1,647,569 |
Restricted cash | | | 1,686,953 | | | — | | | | 1,686,953 |
Rent and other receivables, net of allowance | | | 160,518 | | | — | | | | 160,518 |
Assets held for sale | | | 9,432,904 | | | 15,080,451 | (ii) | | | 24,513,355 |
Unbilled rent | | | 1,167,753 | | | — | | | | 1,167,753 |
Intangible assets, net | | | 1,925,758 | | | — | | | | 1,925,758 |
Other intangible assets | | | 55,004 | | | — | | | | 55,004 |
Other assets | | | 1,426,994 | | | — | | | | 1,426,994 |
Total Assets | | $ | 77,657,148 | | $ | 14,777,191 | | | $ | 92,434,339 |
| | | | | | | | | | |
LIABILITIES | | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 1,385,444 | | $ | — | | | $ | 1,385,444 |
Liabilities associated with assets held for sale | | | 6,545,968 | | | 14,777,191 | (iii) | | | 21,323,159 |
Intangible liabilities, net | | | 895,349 | | | — | | | | 895,349 |
Mortgages payable, net | | | 43,509,578 | | | — | | | | 43,509,578 |
Total Liabilities | | $ | 52,336,339 | | $ | 14,777,191 | | | $ | 67,113,530 |
| | | | | | | | | | |
EQUITY | | | | | | | | | | |
Common stock | | $ | 13,524 | | $ | — | | | $ | 13,524 |
Additional paid-in capital | | | 54,531,595 | | | — | | | | 54,531,595 |
Offering costs | | | (3,404,055) | | | — | | | | (3,404,055) |
Accumulated deficit | | | (37,732,004) | | | — | | | | (37,732,004) |
Total Shareholders' Equity | | | 13,409,060 | | | — | | | | 13,409,060 |
Noncontrolling interests - Parkway Property | | | 390,826 | | | — | | | | 390,826 |
Noncontrolling interests - Operating Partnership | | | 11,520,923 | | | — | | | | 11,520,923 |
Total Equity | | $ | 25,320,809 | | $ | — | | | $ | 25,320,809 |
Total Liabilities and Equity | | $ | 77,657,148 | | $ | 14,777,191 | | | $ | 92,434,339 |
See notes to unaudited pro forma consolidated financial statements
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2025
Notes to unaudited pro forma consolidated balance sheet as of June 30, 2025
| (a) | Historical financial information was derived from the condensed consolidated balance sheet of the Company as of June 30, 2025 (unaudited). |
| (b) | Represents the impact of the acquisition of the Tesla Pensacola Property as if it had occurred on June 30, 2025. The Tesla Pensacola Property was acquired by MDRR XXV Depositor 1, LLC, a wholly owned subsidiary of the Operating Partnership, on July 18, 2025. The net purchase price of the property was $14,554,504 plus capitalized due diligence and closing costs of $70,134. The purchase price and closing costs were paid by a combination of cash, and proceeds from a line of credit, short term. The Company intends to contribute the Tesla Pensacola Property to a newly formed Delaware Statutory Trust (“DST”). Accordingly, since the Company has committed to a plan to dispose of the Tesla Pensacola Property, under Accounting Standards Codification (“ASC”) 360, the Company has recorded the Tesla Pensacola Property as an asset held for sale, and the liabilities associated with the Tesla Pensacola Property as liabilities associated with assets held for sale, on its unaudited pro forma condensed consolidated balance sheets. |
| (i) | The acquisition cost, net of debt, was funded with $303,260 in cash from the Company. Cash from the Company on the unaudited pro forma consolidated balance sheet as of June 30, 2025 has been adjusted by $48,441 to reflect the impact of removing prorated revenues and expenses arising from the acquisition. |
| (ii) | Amounts recorded to assets held for sale include tangible assets acquired at closing, including land, site improvements, building and tenant improvements, and lease intangibles, including leasing commissions, leases in place, above market leases, and legal and marketing costs associated with replacing existing leases, and are recorded at fair value in accordance with ASC 805. |
| (iii) | Liabilities associated with assets held for sale includes (a) a line of credit, short term, totaling $14,700,000 from Farmers and Marchants Bank (the “Farmers Line of Credit”) with deferred financing costs totaling $378,622, which are presented as a direct reduction of the associated debt and (b) intangible lease liabilities consisting of below market leases of $455,813. |
Medalist Diversified REIT, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the six months ended June 30, 2025
| | | | | | | | | |||
| | | | | Pro Forma | | | | |||
| | | | | Adjustments | | | | |||
| | | | | Tesla Property | | | | |||
| | Historical (a) | | | Acquisition (b) | | | Pro Forma | |||
REVENUE | | | | | | | | | | | |
Retail center property revenues | | $ | 3,106,392 | | | $ | — | | | $ | 3,106,392 |
Flex center property revenues | | | 1,342,983 | | | | — | | | | 1,342,983 |
Single tenant net lease property revenues | | | 337,438 | | | | 527,796 | (i) | | | 865,234 |
Total Revenue | | $ | 4,786,813 | | | $ | 527,796 | | | $ | 5,314,609 |
| | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | |
Retail center property operating expenses | | $ | 837,545 | | | $ | — | | | $ | 837,545 |
Flex center property operating expenses | | | 375,647 | | | | — | | | | 375,647 |
Single tenant net lease property expenses | | | 30,609 | | | | — | (ii) | | | 30,609 |
Bad debt expense | | | 1,321 | | | | — | | | | 1,321 |
Share based compensation expenses | | | 397,182 | | | | — | | | | 397,182 |
Legal, accounting and other professional fees | | | 742,354 | | | | — | | | | 742,354 |
Corporate general and administrative expenses | | | 772,933 | | | | — | | | | 772,933 |
Loss on impairment | | | 67,503 | | | | — | | | | 67,503 |
Depreciation and amortization | | | 1,898,503 | | | | — | (iii) | | | 1,898,503 |
Total Operating Expenses | | | 5,123,597 | | | | — | | | | 5,123,597 |
Loss on redemption of mandatorily redeemable preferred stock | | | (9,375) | | | | — | | | | (9,375) |
Loss on extinguishment of debt | | | (27,066) | | | | — | | | | (27,066) |
Operating (Loss) Income | | | (373,225) | | | | 527,796 | | | | 154,571 |
Interest expense | | | 1,131,856 | | | | 532,875 | (iv) | | | 1,664,731 |
Net Loss from Operations | | | (1,505,081) | | | | (5,079) | | | | (1,510,160) |
Other income | | | 134,035 | | | | — | | | | 134,035 |
Other expense | | | 49,216 | | | | — | | | | 49,216 |
Net Loss | | | (1,420,262) | | | | (5,079) | | | | (1,425,341) |
Less: Net loss attributable to Parkway Property noncontrolling interests | | | (6,043) | | | | — | | | | (6,043) |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | | | 111,266 | | | | (1,981) | (v) | | | 109,285 |
Net Loss Attributable to Medalist Common Shareholders | | $ | (1,525,485) | | | $ | (3,098) | | | $ | (1,528,583) |
| | | | | | | | | | | |
Loss per share from operations - basic and diluted | | $ | (1.13) | | | | | | | $ | (1.13) |
Weighted-average number of shares - basic and diluted | | | 1,355,091 | | | | | | | | 1,355,091 |
| | | | | | | | | | | |
Dividends paid per common share | | $ | 0.1325 | | | | | | | $ | 0.1325 |
See notes to unaudited pro forma consolidated financial statements
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2025
Notes to unaudited pro forma consolidated statement of operations for the six months ended June 30, 2025
| (a) | Historical financial information was derived from the condensed consolidated statement of operations of the Company for the six months ended June 30, 2025 (unaudited). |
| (b) | Adjustments to give effect to the acquisition of the Tesla Pensacola Property as if the acquisition had occurred on January 1, 2025. |
| (i) | Represents rental revenues for the Tesla Pensacola Property that would have been recognized for the six months ended June 30, 2025 based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis. |
| (ii) | Under the net-lease structure of the lease, all operating expenses, including maintenance, real estate taxes and insurance, are the responsibility of the tenant. Accordingly, no operating expenses are projected to be incurred. |
| (iii) | Under ASC 360, depreciation and amortization on assets held for sale is not recorded. |
| (iv) | Represents the interest expense for the Tesla Pensacola Property that would have been incurred for the six months ended June 30, 2025, based on the terms of the Farmers Line of Credit. The Farmers Line of Credit is variable-rate, interest-only loan with a one-year term. The variable rate adjusts monthly based on the prime rate and has a floor of 7.25%, the prime rate in effect as of the date of closing. The pro forma interest expense reflected in the unaudited pro forma consolidated statement of operations is based on the current 7.25% rate, and actual results may differ if the prime rate changes. A hypothetical 100 basis point increase or decrease in the prime rate would change annual interest expense on this loan by approximately $73,500 for the six month pro forma period. |
| (v) | Represents the Operating Partnership’s pro forma 39.0% weighted average noncontrolling ownership interest’s share of the Tesla Pensacola Property’s net income that would have been recorded for the six months ended June 30, 2025. |
Medalist Diversified REIT, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the year ended December 31, 2024
| | | | | | | | | | | ||
| | | | Pro Forma | | | | | | |||
| | | | Adjustments | | | | | | |||
| | | | Tesla Property | | | | | | |||
| Historical (a) | | | Acquisition (b) | | | | Pro Forma | | |||
REVENUE | | | | | | | | | | | | |
Retail center property revenues | $ | 6,624,734 | | | $ | — | | | | $ | 6,624,734 | |
Flex center property revenues | | 2,750,499 | | | | — | | | | | 2,750,499 | |
Single tenant net lease property revenues | | 359,894 | | | | 1,055,592 | | (i) | | | 1,415,486 | |
Total Revenue | $ | 9,735,127 | | | $ | 1,055,592 | | | | $ | 10,790,719 | |
| | | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | | |
Retail center property operating expenses | $ | 1,621,898 | | | $ | - | | | | $ | 1,621,898 | |
Flex center property operating expenses | | 697,864 | | | | - | | | | | 697,864 | |
Single tenant net lease property expenses | | 31,977 | | | | - | | (ii) | | | 31,977 | |
Bad debt expense | | 39,910 | | | | - | | | | | 39,910 | |
Share based compensation expenses | | 277,500 | | | | - | | | | | 277,500 | |
Legal, accounting and other professional fees | | 1,170,270 | | | | - | | | | | 1,170,270 | |
Corporate general and administrative expenses | | 968,435 | | | | - | | | | | 968,435 | |
Loss on impairment | | 182 | | | | - | | | | | 182 | |
Depreciation and amortization | | 3,915,483 | | | | - | | (iii) | | | 3,915,483 | |
Total Operating Expenses | | 8,723,519 | | | | — | | | | | 8,723,519 | |
Gain on disposal of investment property | | 2,819,502 | | | | - | | | | | 2,819,502 | |
Loss on extinguishment of debt | | (51,837) | | | | - | | | | | (51,837) | |
loss on redemption of mandatorily redeemable preferred stock | | (47,680) | | | | - | | | | | (47,680) | |
Operating Income | | 3,731,593 | | | | 1,055,592 | | | | | 4,787,185 | |
Interest expense | | 3,019,799 | | | | 1,065,750 | | (iv) | | | 4,085,549 | |
Net Income (Loss) from Operations | | 711,794 | | | | (10,158) | | | | | 701,636 | |
Other income | | 88,856 | | | | - | | | | | 88,856 | |
Other expense | | (56,325) | | | | - | | | | | (56,325) | |
Net Income (Loss) | | 744,325 | | | | (10,158) | | | | | 790,492 | |
Less: Net income attributable to Hanover Square Property noncontrolling interests | | 453,928 | | | | - | | | | | 453,928 | |
Less: Net loss attributable to Parkway Property noncontrolling interests | | (3,234) | | | | - | | | | | (3,234) | |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | | 266,107 | | | | (3,950) | | (v) | | | 262,157 | |
Net Income (Loss) Attributable to Medalist Common Shareholders | $ | 27,524 | | | $ | (6,208) | | | | $ | 77,641 | |
| | | | | | | | | | | | |
Net Income per share from operations - basic | $ | 0.024 | | | | | | | | $ | 0.069 | |
Weighted-average number of shares - basic | | 1,127,768 | | | | | | | | | 1,127,768 | |
| | | | | | | | | | | | |
Net Income per share from operations - diluted | $ | 0.024 | | | | | | | | $ | 0.069 | |
Weighted-average number of shares - diluted | | 1,132,588 | | | | | | | | | 1,132,588 | |
| | | | | | | | | | | | |
Dividends paid per common share | $ | 0.17 | | | | | | | | $ | 0.17 | |
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See notes to unaudited pro forma consolidated financial statements
MEDALIST DIVERSIFIED REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2024
Notes to unaudited pro forma consolidated statement of operations for the year ended December 31, 2024
| (a) | Historical financial information was derived from the audited consolidated financial statements of the Company for the year ended December 31, 2024. |
| (b) | Adjustments to give effect to the acquisition of the Tesla Pensacola Property as if the acquisition had occurred on January 1, 2024 |
| (i) | Represents rental revenues for the Tesla Pensacola Property that would have been recognized for the year ended December 31, 2024, based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis. |
| (ii) | Under the net-lease structure of the lease, all operating expenses, including maintenance, real estate taxes and insurance, are the responsibility of the tenant. Accordingly, no operating expenses are projected to be incurred. |
| (iii) | Under ASC 360, depreciation and amortization on assets held for sale is not recorded. |
| (iv) | Represents the interest expense for the Tesla Pensacola Property that would have been incurred for the year ended December 31, 2024, based on the terms of the Farmers Line of Credit. The Farmers Line of Credit is variable-rate, interest-only loan with a one-year term. The variable rate adjusts monthly based on the prime rate and has a floor of 7.25%, the prime rate in effect as of the date of closing. The pro forma interest expense reflected in the unaudited pro forma consolidated statement of operations is based on the current 7.25% rate, and actual results may differ if the prime rate changes. A hypothetical 100 basis point increase or decrease in the prime rate would change annual interest expense on this loan by approximately $147,500 annually. |
| (v) | Represents the Operating Partnership’s 38.89% weighted average noncontrolling ownership interest’s share of the Tesla Pensacola Property’s net income that would have been recorded for the year ended December 31, 2024. |