UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event
reported): October 14, 2015
REVEN HOUSING REIT, INC.
(Exact Name of Registrant as Specified in
Its Charter)
Maryland |
000-54165 |
84-1306078 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
7911 Herschel Avenue, Suite 201
La Jolla, CA 92037
(Address of principal executive offices)
(858) 459-4000
(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 obligations of the registrant under any of the following provisions.
| o | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)) |
| o | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Explanatory Note
On October 14, 2015, Reven Housing REIT, Inc. (the “Company”),
through a wholly-owned subsidiary, closed on the acquisition of 45 properties located in the Jacksonville, Florida metropolitan
area, pursuant to that Single Family Homes Real Estate Purchase and Sale Agreement dated February 27, 2015, as subsequently amended
(the “Jacksonville 140 Agreement”), between the Company and ADCIP, LLC, a Delaware limited liability company, ADCIP
II, LLC, a Delaware limited liability company, APICDA, LLC, a Delaware limited liability company, BPICDA, LLC, a Delaware limited
liability company, CPICDA, LLC, a Delaware limited liability company, DPICDA, LLC, a Delaware limited liability company, EPICDA,
LLC, a Delaware limited liability company, and FPICDA, LLC, a Delaware limited liability company (collectively, the “Jacksonville
55 Sellers”). An additional 10 properties were purchased on December 15, 2015 from the same sellers under the same agreement.
The 55 acquired properties from this portfolio are part of a portfolio of 140 single-family homes subject to the Jacksonville 140
Agreement. The closing on the remaining properties has been extended until February 15, 2016, should the Company choose to purchase
those remaining homes. The Jacksonville 55 Sellers do not have a material relationship with the Company and the acquisition was
not an affiliated transaction.
The contract purchase price for the 55 acquired properties was
approximately $3,700,000, exclusive of closing costs. The Company funded the purchase price with proceeds from a loan with Silvergate
Bank, of La Jolla, California, totaling approximately $4,876,000.
On October 19, 2015, the Company filed a Current Report on
Form 8-K (the “Initial Report”) with regard to the acquisition of the initial 45 homes in the Jacksonville 55
Homes portfolio. On December 21, 2015, the Company filed a Current Report on Form 8-K with regard to the acquisition of the
remaining 10 homes in the Jacksonville 55 Homes portfolio. This amendment is being filed for the sole purpose of filing the
independent auditors report, financial statements and pro forma financial information with respect to the Jacksonville 55
Homes required by Item 9.01 of Form 8-K, and should be read in conjunction with the Initial Report.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Real Estate Property Acquired.
The following financial statements are submitted with this Current Report on Form 8-K/A and are filed herewith:
Jacksonville 55 Homes
Report of Independent Auditors
Statements of Revenues Over Certain Operating Expenses for the
nine months ended September 30, 2015 (unaudited) and the year ended December 31, 2014
Notes to Statements of Revenues Over Certain Operating Expenses
(b) Unaudited Pro Forma Financial Information. The following
financial information is submitted with this Current Report on Form 8-K/A and is filed herewith:
Reven Housing REIT, Inc.
Unaudited Pro Forma Consolidated Balance Sheet as of September
30, 2015
Notes to Unaudited Pro Forma Consolidated Balance Sheet as of
September 30, 2015
Unaudited Pro Forma Statement of Operations for the Nine Months
Ended September 30, 2015
Notes to Unaudited Pro Forma Statement of Operations for the
Nine Months Ended September 30, 2015
Unaudited Pro Forma Statement of Operations for the Year Ended
December 31, 2014
Notes to Unaudited Pro Forma Statement of Operations for the
year ended December 31, 2014
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.
|
REVEN HOUSING REIT, INC. |
|
|
|
|
Dated: December 24, 2015 |
/s/ Thad L. Meyer |
|
Thad L. Meyer, |
|
Chief Financial Officer |
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Reven Housing REIT, Inc.
We have audited the accompanying statement
of revenues over certain operating expenses of Jacksonville 55 Homes for the year ended December 31, 2014, and the related notes
to the financial statement.
Management’s Responsibility
for the Financial Statement
Management is responsible for the preparation
and fair presentation of the statement of revenues over certain operating expenses in accordance with accounting principles generally
accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of the statement of revenues over certain operating expenses that is free of material
misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion
on the statement of revenues over certain operating expenses based on our audit. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenues over certain operating expenses is free of material misstatement.
An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the statement of revenues over certain operating expenses. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the statement
of revenues over certain operating expenses, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the statement of revenues over certain operating
expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the statement of revenues over certain operating expenses.
We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the statement of revenues
over certain operating expenses referred to above presents fairly, in all material respects, the revenues and certain operating
expenses described in Note 2 of Jacksonville 55 Homes for the year ended December 31, 2014, in accordance with accounting principles
generally accepted in the United States of America.
Other Matters
As described in Note 2, the statement of
revenues over certain operating expenses was prepared for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission (for inclusion in Form 8-K/A), and is not intended to be a complete presentation of the revenues and expenses
of Jacksonville 55 Homes. Our opinion is not modified with respect to this matter.
Newport Beach, California
December 24, 2015
JACKSONVILLE 55 HOMES
STATEMENTS OF REVENUES OVER CERTAIN OPERATING
EXPENSES
| |
Nine Months | | |
Year | |
| |
Ended | | |
Ended | |
| |
Sept, 30 | | |
December 31, | |
| |
2015 | | |
2014 | |
| |
(unaudited) | | |
| |
| |
| | |
| |
Rental income | |
$ | 348,448 | | |
$ | 440,200 | |
| |
| | | |
| | |
Operating expenses: | |
| | | |
| | |
Property operating and maintenance | |
| 156,839 | | |
| 170,368 | |
Real estate taxes | |
| 47,191 | | |
| 62,061 | |
| |
| | | |
| | |
Total operating expenses | |
| 204,030 | | |
| 232,429 | |
| |
| | | |
| | |
Revenues over certain operating expenses | |
$ | 144,418 | | |
$ | 207,771 | |
See accompanying notes to statements
of revenues over certain operating expenses.
JACKSONVILLE 55 HOMES
NOTES TO STATEMENTS OF REVENUES OVER CERTAIN
OPERATING EXPENSES
For the Nine Months Ended September 30,
2015 (unaudited)
and the Year Ended December 31, 2014
| 1. | DESCRIPTION OF REAL ESTATE PROPERTY |
On October 14, 2015, Reven Housing REIT,
Inc. (the “Company”), through a wholly-owned subsidiary, closed on the acquisition of 45 properties located in the
Jacksonville, Florida metropolitan area, pursuant to that Single Family Homes Real Estate Purchase and Sale Agreement dated February
27, 2015, as subsequently amended (the “Jacksonville 140 Agreement”), between the Company and ADCIP, LLC, a Delaware
limited liability company, ADCIP II, LLC, a Delaware limited liability company, APICDA, LLC, a Delaware limited liability company,
BPICDA, LLC, a Delaware limited liability company, CPICDA, LLC, a Delaware limited liability company, DPICDA, LLC, a Delaware limited
liability company, EPICDA, LLC, a Delaware limited liability company, and FPICDA, LLC, a Delaware limited liability company (collectively,
the “Jacksonville 55 Sellers”). An additional 10 properties were purchased on December 15, 2015 from the same sellers
under the same agreement. The 55 acquired properties are part of a portfolio of 140 single-family homes subject to the Jacksonville
140 Agreement. The Company has extended the closing on the remaining properties until February 15, 2016, should the Company choose
to purchase those remaining homes. The Jacksonville 55 Sellers do not have a material relationship with the Company and the acquisition
was not an affiliated transaction.
The aggregate contract purchase price for
the 55 acquired properties was approximately $3,662,000, exclusive of closing costs. The Company funded the purchase price with
proceeds from a loan with Silvergate Bank, of La Jolla, California, totaling approximately $4,876,000.
Reven Housing REIT is a Maryland corporation
formed to invest in and manage a diverse portfolio of single family homes located throughout the United States.
The accompanying audited statements of revenues
over certain operating expenses have been prepared to comply with the rules and regulations of the Securities and Exchange Commission
(“SEC”).
Jacksonville 55 Homes is not a legal entity
and the accompanying statements of revenues over certain operating expenses are not representative of the actual operations for
the periods presented, as certain revenues and expenses have been excluded on the basis that they may not be comparable to the
revenues and expenses Reven Housing REIT expects to incur in the future operations of Jacksonville 55 Homes. Excluded items include
interest, depreciation and amortization, and general and administrative costs not directly comparable to the future operations
of Jacksonville 55 Homes.
The accompanying unaudited statement of
revenues over certain operating expenses for the nine months ended September 30, 2015 has been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained
within the Financial Accounting Standards Board Accounting Standards Codification and the rules and regulations of the SEC, including
the instructions to Form 8-K and Article 3-14 of Regulation S-X. Accordingly, the unaudited statement of revenues over certain
operating expenses does not include all of the information and footnotes required by GAAP for audited financial statements. In
the opinion of management, the statement of revenues over certain operating expenses for the unaudited interim period presented
includes all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results
for such period. Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2015.
An audited statement of revenues over certain
operating expenses for the year ended December 31, 2014 is being presented for the most recent fiscal year available instead of
the two most recent years based on the following factors: (i) Jacksonville 55 Homes was acquired from an unaffiliated party and
(ii) based on due diligence of Jacksonville 55 Homes by the Company, management is not aware of any material factors relating to
Jacksonville 55 Homes that would cause this financial information not to be indicative of future operating results.
JACKSONVILLE 55 HOMES
NOTES TO STATEMENTS OF REVENUES OVER CERTAIN
OPERATING EXPENSES
For the Nine Months Ended September 30,
2015 (unaudited)
and the Year Ended December 31, 2014
| 3. | SIGNIFICANT ACCOUNTING POLICIES |
Revenue Recognition
Jacksonville 55 Homes leases single family
homes under operating leases generally with terms of one year or less. Rental revenue, net of concessions, is recognized on a
straight-line basis over the terms of the leases.
Use of Estimates
The preparation of financial statements,
as described in Note 2 and in conformity with GAAP, requires management to make estimates and assumptions that affect the reported
amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.
| 4. | COMMITMENTS AND CONTINGENCIES |
Legal Matters
From time to time, Jacksonville 55 Homes
may become party to legal proceedings that arise in the ordinary course of its business. The Company is not aware of any legal
proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its financial condition
or results of operations for the periods presented.
Reven Housing REIT evaluates subsequent
events up until the date the statements of revenues over certain operating expenses are issued.
REVEN HOUSING REIT, INC.
SUMMARY OF UNAUDITED PRO FORMA FINANCIAL
STATEMENTS
The following unaudited pro forma
financial statements and accompanying notes should be read in conjunction with the consolidated balance sheets of Reven Housing
REIT, Inc. (“Reven Housing REIT” or the “Company”) as of December 31, 2014 and September 30, 2015 (unaudited),
the related consolidated statements of operations, stockholders' equity, and cash flows for the year ended December 31, 2014 and
for the nine months ended September 30, 2015 (unaudited), and the notes thereto. The consolidated financial statements of the Company
as of and for the year ended December 31, 2014 and the consolidated financial statements as of and for the nine months ended September
30, 2015 (unaudited) have been included in the Company’s prior filings with the SEC. In addition, this unaudited pro forma
information should be read in conjunction with the statements of revenues over certain operating expenses and the notes thereto
of Jacksonville 55 Homes, which are included herein.
The following unaudited pro forma consolidated
balance sheet as of September 30, 2015 has been prepared to give effect to the acquisition of Jacksonville 55 Homes as if the acquisition
occurred on September 30, 2015. Additionally, the following unaudited pro forma consolidated balance sheet has been prepared to
give effect to the Company’s additional note payable borrowing as if it occurred on September 30, 2015.
The following unaudited pro forma statements
of operations for the nine months ended September 30, 2015 and for the year ended
December 31, 2014 have been prepared to give effect to the acquisition
of Jacksonville 55 Homes and the effect of the additional note payable borrowing as if these transactions occurred on January 1,
2014. The unaudited pro forma statements of operations additionally include pro forma information relating to other acquisitions
completed by the Company during 2015 as reported in the previously filed Form 8-K/A’s indicated.
These unaudited pro forma 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 Jacksonville 55 Homes been consummated as of the dates indicated. In addition, the pro
forma consolidated balance sheet includes pro forma preliminary estimates of the fair value of the assets and liabilities acquired
in connection with the acquisition. These preliminary estimates may be adjusted in the future upon finalization of the purchase
accounting.
REVEN HOUSING REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE
SHEET
As of September 30, 2015
| |
Actual | | |
| | |
| | |
Pro Forma | |
| |
September 30, | | |
Pro Forma Adjustments | | |
September 30, | |
| |
2015(a) | | |
Proceeds from | | |
Jacksonville 55 | | |
2015 | |
| |
(Unaudited) | | |
Note Payable (b) | | |
Acquisition (c) | | |
(Unaudited) | |
| |
| | |
| | |
| | |
| |
ASSETS | |
| | | |
| | | |
| | | |
| | |
Investment in real estate, net | |
| | | |
| | | |
| | | |
| | |
Land | |
$ | 6,208,327 | | |
$ | - | | |
$ | 559,773 | | |
$ | 6,768,100 | |
Buildings and improvements | |
| 28,564,472 | | |
| - | | |
| 3,077,261 | | |
| 31,641,733 | |
| |
| 34,772,799 | | |
| - | | |
| 3,637,034 | | |
| 38,409,833 | |
Accumulated depreciation | |
| (1,343,323 | ) | |
| - | | |
| - | | |
| (1,343,323 | ) |
Investment in real estate, net | |
| 33,429,476 | | |
| - | | |
| 3,637,034 | | |
| 37,066,510 | |
Cash | |
| 1,301,453 | | |
| 4,769,018 | | |
| (3,593,076 | ) | |
| 2,477,395 | |
Rents and other receivables | |
| 218,533 | | |
| - | | |
| - | | |
| 218,533 | |
Prepaid expenses and deposits | |
| 53,801 | | |
| - | | |
| - | | |
| 53,801 | |
Escrow deposits | |
| 181,177 | | |
| - | | |
| (37,295 | ) | |
| 143,882 | |
Lease origination costs, net | |
| 186,046 | | |
| - | | |
| 24,537 | | |
| 210,583 | |
Deferred loan fees, net | |
| 402,622 | | |
| 106,880 | | |
| - | | |
| 509,502 | |
Deferred stock issuance costs | |
| 554,990 | | |
| - | | |
| - | | |
| 554,990 | |
| |
| | | |
| | | |
| | | |
| | |
Total Assets | |
$ | 36,328,098 | | |
$ | 4,875,898 | | |
$ | 31,200 | | |
$ | 41,235,196 | |
| |
| | | |
| | | |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 1,129,475 | | |
$ | - | | |
$ | - | | |
$ | 1,129,475 | |
Security deposits | |
| 382,329 | | |
| - | | |
| 41,200 | | |
| 423,529 | |
Note payable | |
| 15,049,125 | | |
| 4,875,898 | | |
| - | | |
| 19,925,023 | |
| |
| | | |
| | | |
| | | |
| | |
Total Liabilities | |
| 16,560,929 | | |
| 4,875,898 | | |
| 41,200 | | |
| 21,478,027 | |
| |
| | | |
| | | |
| | | |
| | |
Stockholders' Equity | |
| | | |
| | | |
| | | |
| | |
Common stock, 7,016,796 issued and outstanding | |
| 7,017 | | |
| - | | |
| - | | |
| 7,017 | |
Additional paid-in capital | |
| 24,601,295 | | |
| - | | |
| - | | |
| 24,601,295 | |
Accumulated deficit | |
| (4,841,143 | ) | |
| - | | |
| (10,000 | ) | |
| (4,851,143 | ) |
Total Stockholders' Equity | |
| 19,767,169 | | |
| - | | |
| (10,000 | ) | |
| 19,757,169 | |
| |
| | | |
| | | |
| | | |
| | |
Total Liabilities and Stockholders' Equity | |
$ | 36,328,098 | | |
$ | 4,875,898 | | |
$ | 31,200 | | |
$ | 41,235,196 | |
See accompanying notes to unaudited pro
forma consolidated balance sheet.
REVEN HOUSING REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
BALANCE SHEET
as of September 30,
2015
| a) | Historical financial information was derived from Reven Housing REIT’s quarterly report on Form 10-Q as of September
30, 2015. |
| b) | Represents the proceeds and loan costs related to a note payable between Reven Housing REIT and Silvergate Bank entered into
on October 14, 2015. The proceeds were used in the purchase of Jacksonville 55 Homes. |
| c) | Represents the acquisition of Jacksonville 55 Homes. The purchase price of Jacksonville Homes
was approximately $3,662,000 plus closing and acquisition costs of approximately $10,000. Reven Housing REIT recorded the cost
of tangible assets and identifiable intangibles (consisting of lease origination costs) acquired in a business combination based
on their estimated fair values. |
REVEN HOUSING REIT, INC.
UNAUDITED PRO FORMA
STATEMENT OF OPERATIONS
For the Nine Months Ended September 30,
2015
| |
Actual | | |
| | |
| | |
| | |
Pro Forma | |
| |
Nine months ended | | |
Pro Forma Adjustments | | |
Nine months ended | |
| |
September 30, 2015 | | |
Jacksonville 53 | | |
Jacksonville 55 | | |
Other | | |
September 30, 2015 | |
| |
(Unaudited) (a) | | |
Purchase (b) | | |
Acquisition | | |
Adjustments | | |
(Unaudited) | |
| |
| | |
| | |
| | |
| | |
| |
Rental income, net | |
$ | 3,602,192 | | |
$ | 99,740 | | |
$ | 440,200 | (c) | |
$ | - | | |
$ | 4,142,132 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | | |
| | |
Property operating and maintenance | |
| 1,133,704 | | |
| 29,922 | | |
| 170,368 | (d) | |
| - | | |
| 1,333,994 | |
Real estate taxes | |
| 546,702 | | |
| 12,745 | | |
| 62,061 | (d) | |
| - | | |
| 621,508 | |
Acquisition costs | |
| 362,447 | | |
| - | | |
| - | | |
| - | | |
| 362,447 | |
Depreciation and amortization | |
| 848,587 | | |
| 28,000 | | |
| 85,000 | (e) | |
| - | | |
| 961,587 | |
General and administration | |
| 1,379,431 | | |
| - | | |
| - | | |
| - | | |
| 1,379,431 | |
Legal and accounting | |
| 311,970 | | |
| - | | |
| - | | |
| - | | |
| 311,970 | |
Interest expense | |
| 517,009 | | |
| - | | |
| - | | |
| 195,000 | (f) | |
| 712,009 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total operating expenses | |
| 5,099,850 | | |
| 70,667 | | |
| 317,429 | | |
| 195,000 | | |
| 5,682,946 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | (1,497,658 | ) | |
$ | 29,073 | | |
$ | 122,771 | | |
$ | (195,000 | ) | |
$ | (1,540,814 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss per share, basic and diluted | |
$ | (0.21 | ) | |
| | | |
| | | |
| | | |
$ | (0.22 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted average number of common | |
| | | |
| | | |
| | | |
| | | |
| | |
shares outstanding | |
| 7,016,796 | | |
| | | |
| | | |
| | | |
| 7,016,796 | |
See accompanying notes to unaudited pro
forma statement of operations
REVEN HOUSING REIT, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF
OPERATIONS
For the Nine Months Ended September 30,
2015
| a) | Historical financial information was derived from Reven Housing REIT’s quarterly report
on Form 10-Q for the nine months ended September 30, 2015. |
| b) | Represents the proforma effects of the acquisition of the Jacksonville 53 Homes as reported on
Form 8-K/A filed on May 12, 2015. Reflects two and one half months estimated rental revenue and expenses for the Jacksonville 53
homes purchased on March 13, 2015 and not included in the historical statement of operations as of September 30, 2015. |
| c) | Represents net rental income for the Jacksonville 55 Homes from tenants (not reflected in the historical statement of operations
of Reven Housing REIT) for the nine months ended September 30, 2015, based on historical operations of the previous owner. |
| d) | Represents operating expenses and real estate taxes of the Jacksonville 55 Homes (not reflected in the historical statement
of operations of Reven Housing REIT) for the nine months ended September 30, 2015, based on historical operations of the previous
owner. |
| e) | Represents adjustments to depreciation and amortization expense for the Jacksonville 55 Homes
(not reflected in the historical statement of operations of Reven Housing REIT) for the nine months ended September 30, 2015. Depreciation
expense is calculated using the straight-line method over the estimated useful life of 27.5 years for the buildings. Amortization
expense on lease intangible costs is recognized using the straight-line method over the life of the lease. |
| f) | Represents interest expense on the total outstanding note payable proceeds as if it had been advanced on January 1, 2014. Interest
is calculated at 4.25% which reflects the rate in effect over the period. |
REVEN HOUSING REIT, INC.
UNAUDITED PRO FORMA
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2014
| |
Actual | | |
| | |
| | |
| | |
Pro Forma | |
| |
Year ended | | |
Pro Forma Adjustments | | |
Year ended | |
| |
December 31, 2014 | | |
Jacksonville 53 | | |
Jacksonville 55 | | |
Other | | |
December 31, 2014 | |
| |
(Audited) (a) | | |
Purchase (b) | | |
Acquisition | | |
Adjustments | | |
(Unaudited) | |
| |
| | |
| | |
| | |
| | |
| |
Rental income, net | |
$ | 2,620,128 | | |
$ | 434,145 | | |
$ | 440,200 | (c) | |
$ | - | | |
$ | 3,494,473 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | | |
| | |
Property operating and maintenance | |
| 730,965 | | |
| 181,236 | | |
| 170,368 | (d) | |
| - | | |
| 1,082,569 | |
Real estate taxes | |
| 384,877 | | |
| 55,286 | | |
| 62,061 | (d) | |
| - | | |
| 502,224 | |
Acquisition costs | |
| 454,554 | | |
| 48,574 | | |
| 10,000 | (e) | |
| - | | |
| 513,128 | |
Depreciation and amortization | |
| 613,572 | | |
| 136,100 | | |
| 115,000 | (f) | |
| - | | |
| 864,672 | |
General and administrative | |
| 1,298,513 | | |
| - | | |
| - | | |
| - | | |
| 1,298,513 | |
Legal and accounting | |
| 272,713 | | |
| - | | |
| - | | |
| - | | |
| 272,713 | |
Interest expense | |
| 194,363 | | |
| - | | |
| - | | |
| 755,000 | (g) | |
| 949,363 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total operating expenses | |
| 3,949,557 | | |
| 421,196 | | |
| 357,429 | | |
| 755,000 | | |
| 5,483,182 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | (1,329,429 | ) | |
$ | 12,949 | | |
$ | 82,771 | | |
$ | (755,000 | ) | |
$ | (1,988,709 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss per share, basic and diluted | |
$ | (0.22 | ) | |
| | | |
| | | |
| | | |
$ | (0.33 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted average number of common | |
| | | |
| | | |
| | | |
| | | |
| | |
shares outstanding | |
| 5,946,159 | | |
| | | |
| | | |
| | | |
| 5,946,159 | |
See accompanying notes to unaudited pro
forma statement of operations
REVEN HOUSING REIT, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF
OPERATIONS
For the Year Ended December 31, 2014
| a) | Historical financial information derived from Reven Housing REIT’s annual report on Form 10-K for the year ended December
31, 2014. |
| b) | Represents the pro forma effects of the acquisition of the Jacksonville 53 Homes as reported on Form 8-K/A filed on May 12,
2015. |
| c) | Represents net rental income for the Jacksonville 55 Homes from tenants (not reflected in the historical statement of operations
of Reven Housing REIT) for the year ended December 31, 2014, based on historical operations of the previous owner. |
| d) | Represents operating expenses and real estate taxes of the Jacksonville 55 Homes (not reflected
in the historical statement of operations of Reven Housing REIT) for the year ended December 31, 2014, based on historical operations
of the previous owner. |
| e) | Represents acquisition and closing costs relating to the purchase of the real estate had it
occurred on January 1, 2014. |
| f) | Represents adjustments to depreciation and amortization expense for the Jacksonville 55 Homes
(not reflected in the historical statement of operations of Reven Housing REIT) for the year ended December 31, 2014. Depreciation
expense is calculated using the straight-line method over the estimated useful life of 27.5 years for the buildings. Amortization
expense on lease intangible costs is recognized using the straight-line method over the life of the lease. |
| g) | Represents interest expense on the total outstanding note payable proceeds as if it had been advanced on January 1, 2014. Interest
is calculated at 4.25% which reflects the rate in effect over the period. |
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