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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported) February 7, 2025 (December 19, 2024)
Strawberry
Fields REIT, Inc.
(Exact
name of registrant as specified in its charter)
| Maryland |
|
001-41628 |
|
84-2336054 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
file
number) |
|
(IRS
employer
identification
no.) |
| 6101
Nimtz Parkway |
|
|
|
|
| South
Bend, Indiana |
|
|
|
46628 |
| (Address
of principal executive offices) |
|
|
|
(Zip
Code) |
(574)
807-0800
(Registrant’s
telephone number, including area code)
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 (see General Instruction A.2. below):
| ☐ |
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) |
| |
|
| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
Registered pursuant to Section 12(b) of the Act:
| Title
of each class registered |
|
Trading
Symbol(s) |
|
Name
of exchange on which registered |
| Common Stock, $0.0001
par value |
|
STRW |
|
NYSE American |
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 1933 (§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. ☐
This
Amendment on Form 8-K/A (this “Amendment”) is being filed to amend the Current Report on Form 8-K (the “Initial
Form 8-K”) filed by Strawberry Fields REIT, Inc. (the “Company”) with the Securities and Exchange Commission on December
20, 2024. As previously reported in the Initial Form 8-K, on December 19, 2024, the Company completed its acquisition of 8 healthcare
facilities located in Missouri. In the Initial Form 8-K, the Company stated its intention to file the financial statements and pro forma
financial information required by parts (a) and (b) of Item 9.01 of Form 8-K not later than seventy-one (71) calendar days after the
date that the Initial Form 8-K was required to be filed with the Securities and Exchange Commission. Pursuant to the instructions to
Item 9.01 of Form 8-K, the Company hereby files this Amendment to amend the Initial Form 8-K in order to include the required financial
statements and pro forma financial information that were previously omitted.
| Item 9.01 |
Financial Statements and Exhibits. |
| (a) |
Financial Statements of Business Acquired. |
Missouri
Properties Group Combined Statements of Revenues and Certain Expenses for the Year ended December 31, 2023 and the Nine Months Period
ended September 30, 2024.
| Independent Auditor’s Report |
|
F-1 |
| |
|
|
| Combined Statements of Revenues and Certain Expenses |
|
F-3 |
| |
|
|
| Notes to Combined Statements of Revenues and Certain
Expenses |
|
F-4 |
| (b) |
Pro Forma Financial
Information. |
| Unaudited Pro Forma Condensed Combined Financial Information |
|
F-1 |
| |
|
|
| Unaudited
Pro Forma Condensed Combined Balance Sheet as of September 30, 2024 |
|
F-2 |
| |
|
|
| Unaudited
Pro Forma Condensed Combined Statements of Income For The Nine Months Ended September 30, 2024 |
|
F-3 |
| |
|
|
| Unaudited
Pro Forma Condensed Combined Statements of Income For The Year Ended December 31, 2023 |
|
F-4 |
| |
|
|
| Notes to Unaudited Pro Forma Condensed Combined Financial
Information |
|
F-5 |
(d)
Exhibits
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.
| |
Strawberry Fields REIT, Inc. |
| |
|
|
| Dated: February 7, 2025 |
By: |
/s/ Moishe
Gubin |
| |
|
Moishe
Gubin |
| |
|
Chief
Executive Officer and Chairman |
Exhibit
99.1
Missouri
Properties Group Combined Statements of Revenues and Certain Expenses for the Year Ended December 31, 2023 and the Nine
Month Period ended September 30, 2024
Report
of Independent Auditor
To
Missouri Portfolio Group:
We
have audited the combined statements of revenues and certain expenses (the “Statements”) of the Missouri Portfolio Group
for the year ending December 31, 2023 and for the nine months period ended September 30, 2024, and the related notes to the combined
financial statements.
In
our opinion, the accompanying combined financial statements present fairly, in all material respects, the combined statement of revenues
and certain expenses of Missouri Portfolio Group for the year ending December 31, 2023 and for the nine months period ended September
30, 2024, and the related notes to the combined financial statements in accordance with the basis of accounting described in Note 2.
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 Statements
section of our report. We are required to be independent of the Missouri Portfolio Group 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 Matter — Basis of Accounting
As
discussed in notes to the combined financial statements, the accompanying combined financial statements were prepared for the purpose
of complying with certain rules and regulations of the Securities and Exchange Commission for inclusion in the registration statement
of Strawberry Fields REIT, Inc., as described in Note 2 and are not intended to be a complete presentation of the Missouri Portfolio
Group’s combined revenue and expenses.
Responsibilities
of Management for the Combined Financial Statements
Management
is responsible for the preparation and fair presentation of the combined financial statements in accordance with the basis of accounting
described in Note 2, and for determining that the basis of accounting is an acceptable basis for the preparation of the combined financial
statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal controls
relevant to the preparation and fair presentation of the combined financial statements that are free from material misstatement, whether
due to fraud or error.
Missouri
Portfolio Group
Page
Two
Auditor’s
Responsibilities for the Audit of the Combined Financial Statements
Our
objectives are to obtain reasonable assurance about whether the combined financial statements as a whole are 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
certain 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 statements.
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 statements, 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 statements. |
| - | Obtain
an understanding of internal controls 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 Missouri Portfolio Group’s internal controls. 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 combined
financial statements. |
| - | Conclude
whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the Missouri Portfolio Group’s ability to continue as
a going concern for a reasonable period of time. |
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/
Hacker, Johnson & Smith PA
HACKER,
JOHNSON & SMITH PA
Tampa,
Florida
December
19, 2024
MISSOURI
PORTFOLIO GROUP
COMBINED
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
YEAR
ENDED DECEMBER 31, 2023 AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2024
(Dollars
in Thousands)
| | |
Year
Ended
December 31, 2023 | | |
Nine
Months
Period Ended
September 30, 2024 | |
| Revenues: | |
| | |
| |
| Rental revenue | |
$ | 8,539 | | |
| 6,554 | |
| Certain expense: | |
| | | |
| | |
| Property insurance | |
| 55 | | |
| 49 | |
| Revenue In Excess of Certain Expenses | |
$ | 8,484 | | |
| 6,505 | |
See
accompanying notes to combined statements of revenue and certain expenses.
MISSOURI
PORTFOLIO GROUP
NOTES
TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
YEAR
ENDED DECEMBER 31, 2023 AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2024
| NOTE
1. |
ORGANIZATION
AND DESCRIPTION OF BUSINESS |
Missouri
Portfolio Group (the “Portfolio Group”), which is not a legal entity, but rather a combination of certain real estate entities
and operations as described below, is engaged in the business of owning and leasing certain healthcare facilities located in the State
of Missouri. The accompanying combined statements of revenue and certain expenses (the “Statements”) relate to the operations
of the Properties Group, consisting of leasing 8 skilled nursing facilities with 1,111 licensed beds (the “Facilities”) located
in Missouri. The Facilities are owned by GAHC4 Kansas City MO SNF, LLC, GAHC4 Salisbury MO SNF, LLC, GAHC4 Florissant MO SNF, LLC, GAHC4
Sedalia MO SNF, LLC, GAHC4 Milan MO SNF, LLC, GAHC4 Trenton MO SNF, LLC, GAHC4 Moberly MO SNF, LLC, GAHC4 St. Elizabeth MO SNF, LLC (collectively,
the “Sellers”), all of which are affiliates of the GAHC4 Missouri SNF Portfolio, LLC.
On
October 8, 2024, the Sellers and Strawberry Fields REIT Inc. (the “Purchaser”) entered into a Purchase and Sale Agreement
(the “Purchase Agreement”), pursuant to with the Purchaser agreed to purchase the Facilities. The Purchaser will assign the
right to acquire the Facilities to newly organized indirect subsidiaries of the Strawberry Fields Realty, LP, the Purchaser’s operating
partnership. The purchase price for the Facilities is $87.5 million, payable at the closing. The Purchaser completed the acquisition
on December 19, 2024.
| NOTE
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
Basis
of Presentation
The
accompanying combined statements of revenue and certain expenses have been prepared for the purpose of complying with Rule 3-14 of Regulation
S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual results
of operations for the periods presented as revenues and certain expenses, which may not be directly attributable to the revenue and expenses
to be incurred in the future operations of the Portfolio Group, have been excluded. Such excluded items include depreciation and amortization,
interest expense, related party fees, management fees, non-recurring professional fees, and other miscellaneous revenue and expenses
not directly related to the proposed future operations of the Portfolio Group.
Revenue
Recognition
Rental
and escalation income from operating real estate is derived from the leasing of healthcare facilities to tenants/operators. The leases
are for fixed terms and provide for annual rentals and expense reimbursements to be paid in monthly installments. Rental revenues relating
to non-contingent leases that contain specified rental increases over the life of the lease are recognized on the straight-line basis.
Recognizing income on a straight-line basis requires the Facilities to calculate the total non-contingent rent
MISSOURI
PORTFOLIO GROUP
NOTES
TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES, CONTINUED
| NOTE
2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
Revenue
Recognition (Cont.)
containing
specified rental increases over the life of the lease and to recognize the revenue evenly over that life. This method results in rental
income in the early years of a lease being higher than actual cash received. At some point during the lease, depending on its terms,
the cash rent payments eventually exceed the straight-line rent which results in the straight-line rent receivable asset decreasing to
zero over the remainder of the lease term. The Portfolio Group assesses the collectability of straight-line rent in accordance with the
applicable accounting standards and reserve policy. If the lessee becomes delinquent in rent owed under the terms of the lease, the Portfolio
Group may provide a reserve against the recognized straight-line rent receivable asset for a portion, up to its full value, that the
Portfolio Group estimates may not be recoverable.
Use
of Estimates
The
preparation of the Statements in conformity with generally accepted accounting principles in the United States requires management to
make estimates and assumptions that could affect the amounts of reported revenues and certain operating expenses. Actual results could
differ from those estimates.
Commitments
and Contingencies
The
Portfolio Group may be subject to legal claims and disputes in the ordinary course of business. Management believes any settlement of
any existing potential claims and dispute would not have a material impact on the Portfolio Groups revenues and certain expenses.
| NOTE
3. |
MINIMUM
FUTURE LEASE RENTALS |
There
is a master lease agreement with the tenant to lease the Facilities. As of September 30, 2024, the minimum future cash rents receivable
under noncancelable operating leases in each of the next five years and thereafter are as follows (dollars in thousands):
Years
Ending: | |
| |
| 2024 (three-month period) | |
$ | 2,233 | |
| 2025 | |
| 9,000 | |
| 2026 | |
| 9,270 | |
| 2027 | |
| 9,549 | |
| 2028 | |
| 9,835 | |
| Thereafter | |
| 50,868 | |
| Total | |
$ | 90,755 | |
| NOTE
4. |
TENANT
CONCENTRATIONS |
For
the year ended December 31, 2023 and the nine months period ended September 30, 2024, no single tenant accounted for a significant amount
of rental revenue.
| NOTE
5. |
SUBSEQUENT
EVENTS |
Management
has evaluated the events and transactions that have occurred through December 19, 2024, the date which the Statements were available
to be issued, and noted no items requiring adjustment of the Statements or additional disclosure.
Exhibit 99.2
Unaudited
Pro Forma Condensed Combined Financial Information
On
October 8, 2024, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”), with GAHC4 Kansas City
MO SNF, LLC, GAHC4 Salisbury MO SNF, LLC, GAHC4 Florissant MO SNF, LLC, GAHC4 Sedalia MO SNF, LLC, GAHC4 Milan MO SNF, LLC, GAHC4 Trenton
MO SNF, LLC, GAHC4 Moberly MO SNF, LLC, GAHC4 St. Elizabeth MO SNF, LLC, (collectively, the “Sellers”) with respect to the
purchase of eight healthcare Facilities located in Missouri (the “Facilities”). The Sellers are not affiliates of the Company.
The Company assigned the right to acquire the Facilities to newly organized indirect subsidiaries of the Strawberry Fields Realty, LP,
the Company’s operating partnership. The Company closed on the acquisition of the Facilities on December 19, 2024.
The
purchase price for the Facilities was $87,500,000. The Company made a deposit of $2,500,000 under the Purchase Agreement, which was applied
to pay a portion of the purchase price at the closing. The Company paid the balance of the purchase price utilizing funds provided by
a third-party lender and the Company’s working capital.
The
Facilities are currently leased under an initial 15-year master lease agreement to a group of third party tenants; the lease is currently
in its sixth year. Under the master lease, (i) the tenants are currently on a triple net basis (ii) the tenants have 2 ten-year options
to extend the lease. The material terms of the master lease will not be modified as a result of the purchase of the Facilities. The tenants
operate the Facilities as skilled nursing facilities.
The
eight Facilities are comprised of 1,111 licensed beds.
The
unaudited pro forma condensed combined balance sheet as of September 30, 2024 is presented as if the acquisition was completed on September
30, 2024. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2023, and for the nine months
ended September 30, 2024 are presented as if the acquisition was completed on January 1, 2023.
The
following unaudited pro forma condensed combined financial information has been prepared to comply with Article 11 of Regulation S-X,
as promulgated by the SEC. The unaudited pro forma condensed combined financial information should be read in conjunction with the consolidated
financial statements of the Company and notes thereto presented elsewhere in this prospectus for the nine months ended September 30,
2024, and for the year ended December 31, 2023 and the combined statement of revenues and certain expenses for the year ending December
31, 2023 and for the nine months period ended September 30, 2024 of the Missouri Portfolio Group. The unaudited pro forma condensed combined
balance sheet and condensed combined statement of income are not necessarily indicative of what the actual financial position and operating
results would have been had the acquisition had occurred on the dates indicated nor are they indicative of future operating results of
the Company.
Unaudited
Pro Forma Condensed Combined Balance Sheet
AS
OF SEPTEMBER 30, 2024
(In
thousands)
| | |
Strawberry Fields
REIT Inc. | | |
Missouri Property Acquisition | | |
Proforma Adjustments | | |
Proforma Combined | |
| Assets | |
| | | |
| | | |
| | | |
| | |
| Real estate investments, net | |
$ | 528,741 | | |
$ | 87,500 | (a) | |
| - | | |
$ | 616,241 | |
| Cash and cash equivalents | |
| 29,286 | | |
| (87,500 | )(b) | |
| 87,500 | (b) | |
| 29,286 | |
| Restricted cash and equivalents | |
| 23,963 | | |
| - | | |
| - | | |
| 23,963 | |
| Straight-line rent receivable, net | |
| 26,335 | | |
| - | | |
| - | | |
| 26,335 | |
| Right of use lease asset | |
| 1,290 | | |
| - | | |
| - | | |
| 1,290 | |
| Goodwill, other intangible assets and lease rights | |
| 23,286 | | |
| - | | |
| - | | |
| 23,286 | |
| Deferred financing expenses | |
| 5,547 | | |
| - | | |
| 708 | (c) | |
| 6,255 | |
| Notes receivable, net | |
| 16,819 | | |
| - | | |
| - | | |
| 16,819 | |
| Other assets | |
| 6,278 | | |
| - | | |
| - | | |
| 6,278 | |
| Total Assets | |
| 661,545 | | |
| - | | |
| 88,208 | | |
| 749,753 | |
| Liabilities | |
| | | |
| | | |
| | | |
| | |
| Accounts payable and accrued liabilities | |
| 13,004 | | |
| - | | |
| - | | |
| 13,004 | |
| Bonds, net | |
| 150,786 | | |
| - | | |
| - | | |
| 150,786 | |
| Notes payable and other debt | |
| 428,843 | | |
| - | | |
| 59,000 | (d) | |
| 487,843 | |
| Operating lease liability | |
| 1,290 | | |
| - | | |
| - | | |
| 1,290 | |
| Other liabilities | |
| 12,403 | | |
| - | | |
| - | | |
| 12,403 | |
| Total Liabilities | |
| 606,326 | | |
| - | | |
| 59,000 | | |
| 665,326 | |
| Equity | |
| | | |
| | | |
| | | |
| | |
| Additional paid in capital | |
| 10,350 | | |
| - | | |
| 29,208 | (e) | |
| 39,558 | |
| Accumulated other comprehensive income | |
| 925 | | |
| - | | |
| - | | |
| 925 | |
| Retained earnings | |
| 1,339 | | |
| - | | |
| - | | |
| 1,339 | |
| Total Stockholders’ Equity | |
| 12,614 | | |
| - | | |
| 29,208 | | |
| 41,822 | |
| Non-controlling interest | |
| 42,605 | | |
| - | | |
| - | | |
| 42,605 | |
| Total Equity | |
| 55,219 | | |
| - | | |
| 29,208 | | |
| 84,427 | |
| Total Liabilities and Equity | |
$ | 661,545 | | |
$ | - | | |
$ | 88,208 | | |
$ | 749,753 | |
See
accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information
Unaudited
Pro Forma Condensed Combined Statements of Income
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(In
thousands)
| | |
Strawberry Fields REIT Inc. | | |
Missouri Property Acquisition | | |
Proforma Adjustments | | |
Proforma Combined | |
| Revenues | |
| | | |
| | | |
| | | |
| | |
| Rental revenues | |
$ | 86,570 | | |
$ | 6,554 | (f) | |
| 179 | (g) | |
$ | 93,303 | |
| Expenses: | |
| | | |
| | | |
| | | |
| | |
| Depreciation | |
| 21,348 | | |
| - | | |
| 1,683 | (h) | |
| 23,031 | |
| Amortization | |
| 3,318 | | |
| - | | |
| - | | |
| 3,318 | |
| General and administrative expenses | |
| 5,064 | | |
| 49 | | |
| - | | |
| 5,113 | |
| Property taxes | |
| 10,650 | | |
| - | | |
| 179 | (g) | |
| 10,829 | |
| Facility rent expenses | |
| 577 | | |
| - | | |
| - | | |
| 577 | |
| Total expenses | |
| 40,957 | | |
| 49 | | |
| 1,862 | | |
| 42,868 | |
| Income from operations | |
| 45,613 | | |
| 6,505 | | |
| (1,683 | ) | |
| 50,435 | |
| Interest expense, net | |
| (24,028 | ) | |
| - | | |
| (3,522 | )(d) | |
| (27,550 | ) |
| Amortization of deferred financing costs | |
| (488 | ) | |
| - | | |
| (106 | )(c) | |
| (594 | ) |
| Mortgage insurance premium | |
| (1,164 | ) | |
| - | | |
| - | | |
| (1,164 | ) |
| Total interest expense | |
| (25,680 | ) | |
| - | | |
| (3,628 | ) | |
| (29,308 | ) |
| Net income | |
$ | 19,933 | | |
$ | 6,505 | | |
$ | (5,311 | ) | |
$ | 21,127 | |
See
accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information
Unaudited
Pro Forma Condensed Combined Statements of Income
FOR
THE YEAR ENDED DECEMBER 31, 2023
(In
thousands)
| | |
Strawberry Fields REIT Inc. | | |
Missouri Property Acquisition | | |
Proforma Adjustments | | |
Proforma Combined | |
| Revenues | |
| | | |
| | | |
| | | |
| | |
| Rental revenues | |
$ | 99,805 | | |
$ | 8,539 | (f) | |
| 238 | (g) | |
$ | 108,582 | |
| Expenses: | |
| | | |
| | | |
| | | |
| | |
| Depreciation | |
| 26,207 | | |
| - | | |
| 2,244 | (h) | |
| 28,451 | |
| Amortization | |
| 3,028 | | |
| - | | |
| - | | |
| 3,028 | |
| Loss on real estate investment impairment | |
| 2,451 | | |
| - | | |
| - | | |
| 2,451 | |
| General and administrative expenses | |
| 5,662 | | |
| 55 | | |
| - | | |
| 5,717 | |
| Property taxes | |
| 14,459 | | |
| - | | |
| 238 | (g) | |
| 14,697 | |
| Facility rent expenses | |
| 559 | | |
| - | | |
| - | | |
| 559 | |
| Total expenses | |
| 52,366 | | |
| 55 | | |
| 2,482 | | |
| 54,903 | |
| Income from operations | |
| 47,439 | | |
| 8,484 | | |
| (2,244 | ) | |
| 53,679 | |
| Interest expense, net | |
| (24,443 | ) | |
| - | | |
| (4,696 | )(d) | |
| (29,139 | ) |
| Amortization of deferred financing costs | |
| (560 | ) | |
| - | | |
| (142 | )(c) | |
| (702 | ) |
| Mortgage insurance premium | |
| (1,671 | ) | |
| - | | |
| - | | |
| (1,671 | ) |
| Total interest expense | |
| (26,674 | ) | |
| - | | |
| (4,838 | ) | |
| (31,512 | ) |
| Other income (loss): | |
| | | |
| | | |
| | | |
| | |
| Foreign currency transaction gain | |
| 462 | | |
| - | | |
| - | | |
| 462 | |
| Other loss | |
| (983 | ) | |
| - | | |
| - | | |
| (983 | ) |
| Total other loss | |
| (521 | ) | |
| - | | |
| - | | |
| (521 | ) |
| Net income | |
$ | 20,244 | | |
$ | 8,484 | | |
$ | (7,082 | ) | |
$ | 21,646 | |
See
accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information
Notes
to Unaudited Pro Forma Condensed Combined Financial Information
On
December 19, 2024, Strawberry Fields REIT Inc. (the “Company’) completed the acquisition with multiple sellers with respect
to the purchase of eight healthcare facilities located in Missouri (the “Facilities”). The sellers are not affiliates of
the Company. The Company will assign the right to acquire the Facilities to newly organized indirect subsidiaries of Strawberry Fields
Realty, LP, the Company’s operating partnership.
The
historical financial statements have been adjusted in the pro forma condensed combined financial statements to give effect for (i) transaction
accounting adjustments (ii) autonomous entity adjustments and (iii) management’s adjustments, as required.
The
pro forma combined financial information does not necessarily reflect what the combined company’s financial condition or results
of operations would have been if the acquisition of the Missouri Portfolio Group occurred on the dates indicated. They also may not be
useful in predicting the future financial condition and results of operations of the combined company. The actual financial position
and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
| 2. |
Purchase
Price Allocation |
The
Company intends to account for the planned acquisition as an asset acquisition. We will measure the value of the acquired physical assets
(land, building and building improvements, site improvements, and furniture fixtures and equipment) by allocating the total cost of the
acquisition on a relative fair value basis. The Company expects to allocate the total cost as follows (in thousands):
| Land | |
$ | 2,186 | |
| Building and building improvements | |
| 85,314 | |
| Total purchase price | |
$ | 87,500 | |
| |
(a) |
Represents
the adjustment to record the assets purchased in the acquisition of the Facilities at relative fair value based on the total cost
of the acquisition. |
| |
(b) |
Represents
the cash and cash equivalents to be utilized to pay the purchase price for the Facilities at closing. |
| |
(c) |
Represents
debt issuance costs of $708.0 thousand related to the funding of the acquisition that are deferred and recorded as a reduction of
the related debt liability and amortized to interest expense over the remaining term of the related debt liability utilizing the
interest method. |
| |
(d) |
Represents
the borrowing under a new commercial bank mortgage facility to be established by the Company, which will be utilized to fund a portion
of the acquisition price. Loans under the facility bear interest at the Secured Overnight Financing Rate (“SOFR”) plus
a margin of 3.0% and mature in 5 years from the date of the loans. For purposes of the pro forma statements of income, the interest
rate is assumed to be 7.96%, which is equal to SOFR plus the 3.0% margin on September 30, 2024. |
| |
(e) |
Represents
the $35.0 million raised in December 2024 through a follow-on offering of Strawberry Fields REIT Inc. (“STRW”) stock. |
| |
(f) |
Represents
straight-line monthly income for the period stated. The Company recognizes rental revenue for operating leases on a straight-line
basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical
use of a leased asset. |
| |
(g) |
Represents
real estate taxes for the stated period. The Company reports revenues and expenses within our triple-net leased properties for real
estate taxes that are escrowed and obligations of the tenants in accordance with their respective leases with us. |
| |
(h) |
Real estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected life
of the asset on a straight-line basis. The Company considers the period of future benefit of an asset to determine its appropriate
useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term
or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: |
| Building
and improvements |
|
7-53
years |
| Equipment
and personal property |
|
1-14
years |
v3.25.0.1
Cover
|
Dec. 19, 2024 |
| Cover [Abstract] |
|
| Document Type |
8-K/A
|
| Amendment Flag |
true
|
| Amendment Description |
This
Amendment on Form 8-K/A (this “Amendment”) is being filed to amend the Current Report on Form 8-K (the “Initial
Form 8-K”) filed by Strawberry Fields REIT, Inc. (the “Company”) with the Securities and Exchange Commission on December
20, 2024. As previously reported in the Initial Form 8-K, on December 19, 2024, the Company completed its acquisition of 8 healthcare
facilities located in Missouri. In the Initial Form 8-K, the Company stated its intention to file the financial statements and pro forma
financial information required by parts (a) and (b) of Item 9.01 of Form 8-K not later than seventy-one (71) calendar days after the
date that the Initial Form 8-K was required to be filed with the Securities and Exchange Commission. Pursuant to the instructions to
Item 9.01 of Form 8-K, the Company hereby files this Amendment to amend the Initial Form 8-K in order to include the required financial
statements and pro forma financial information that were previously omitted.
|
| Document Period End Date |
Dec. 19, 2024
|
| Entity File Number |
001-41628
|
| Entity Registrant Name |
Strawberry
Fields REIT, Inc.
|
| Entity Central Index Key |
0001782430
|
| Entity Tax Identification Number |
84-2336054
|
| Entity Incorporation, State or Country Code |
MD
|
| Entity Address, Address Line One |
6101
Nimtz Parkway
|
| Entity Address, City or Town |
South
Bend
|
| Entity Address, State or Province |
IN
|
| Entity Address, Postal Zip Code |
46628
|
| City Area Code |
(574)
|
| Local Phone Number |
807-0800
|
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false
|
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|
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|
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|
| Title of 12(b) Security |
Common Stock, $0.0001
par value
|
| Trading Symbol |
STRW
|
| Security Exchange Name |
NYSEAMER
|
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