Broad Street Realty, Inc. [BRST] Filings

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Accelerated filer

Non-accelerated filer

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Emerging growth company

10-Q 1 brst-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-09043

BROAD STREET REALTY, INC.

(Exact name of registrant as specified in its charter)


Delaware	36-3361229
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11911 Freedom Drive, Suite 450 Reston, Virginia	20190
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (301) 828-1200

7250 Woodmont Ave, Suite 350, Bethesda, Maryland

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

None

N/A

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 8, 2023, the registrant had 33,139,326 shares of common stock outstanding.

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Condensed and Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
	Signatures	49

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)


	September 30, 2023			December 31, 2022
				(audited)
Assets
Real estate properties
Land	$	54,936		$	67,225
Building and improvements		278,650			300,699
Intangible lease assets		33,899			41,228
Construction in progress		6,739			4,231
Furniture and equipment		1,711			1,711
Less accumulated depreciation and amortization		(48,312	)		(42,047	)
Total real estate properties, net		327,623			373,047

Cash and cash equivalents		13,931			12,356
Restricted cash		4,829			4,675
Straight-line rent receivable		2,839			2,397
Tenant and accounts receivable, net of allowance of $174 and $165, respectively		1,698			1,874
Derivative assets		2,060			3,426
Other assets, net		5,024			4,511
Total Assets	$	358,004		$	402,286

Liabilities and Equity
Liabilities
Mortgage and other indebtedness, net (includes $16,741 and $17,895, respectively, at fair value under the fair value option)	$	233,445		$	267,616
Accounts payable and accrued liabilities		15,536			15,411
Unamortized intangible lease liabilities, net		756			1,553
Payables due to related parties		51			44
Deferred tax liabilities		—			3,968
Deferred revenue		906			1,252
Total liabilities		250,694			289,844

Commitments and contingencies

Temporary Equity
Redeemable noncontrolling Fortress preferred interest		82,984			73,697

Permanent Equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized: Series A preferred stock, 20,000 shares authorized, 500 shares issued and outstanding at each of September 30, 2023 and December 31, 2022		—			—
Common stock, $0.01 par value, 50,000,000 shares authorized, 33,132,043 and 32,256,974 issued and outstanding at September 30, 2023 and December 31, 2022, respectively		331			323
Additional paid in capital		60,384			72,097
Accumulated deficit		(34,268	)		(33,294	)
Accumulated other comprehensive income		743			56
Total Broad Street Realty, Inc. stockholders' equity		27,190			39,182
Noncontrolling interest		(2,864	)		(437	)
Total permanent equity		24,326			38,745
Total Liabilities, Temporary Equity and Permanent Equity	$	358,004		$	402,286

The accompanying notes are an integral part of these condensed consolidated financial statements.

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues
Rental income	$	9,206		$	7,369		$	29,671		$	21,034
Commissions		751			413			2,270			2,142
Management fees and other income		90			149			211			450
Total revenues		10,047			7,931			32,152			23,626
Operating Expenses
Cost of services		544			315			1,353			1,588
Depreciation and amortization		3,986			4,029			14,844			12,240
Property operating		3,027			1,926			9,233			5,924
Impairment of real estate assets		762			—			929			—
Impairment of real estate assets held for sale		396			—			2,353			—
Bad debt expense		40			12			106			47
General and administrative		3,139			3,053			9,765			10,150
Total operating expenses		11,894			9,335			38,583			29,949
(Loss) gain on disposal of property		(108	)		—			11,511			—
Operating (loss) income		(1,955	)		(1,404	)		5,080			(6,323	)

Other income (expense)
Interest and other income		106			—			136			26
Derivative fair value adjustment		(33	)		1,249			(18	)		3,819
Net (loss) gain on fair value change of debt held under the fair value option		(816	)		—			1,288			—
Interest expense		(4,585	)		(3,073	)		(14,101	)		(8,346	)
Loss on extinguishment of debt		(21	)		—			(36	)		—
Other expense		(51	)		(9	)		(70	)		(15	)
Total other expense		(5,400	)		(1,833	)		(12,801	)		(4,516	)
Net loss before income taxes		(7,355	)		(3,237	)		(7,721	)		(10,839	)
Income tax benefit		2,276			795			3,968			2,309
Net loss	$	(5,079	)	$	(2,442	)	$	(3,753	)	$	(8,530	)
Less: Preferred equity return on Fortress preferred equity		(3,716	)		—			(10,712	)		—
Less: Preferred equity accretion to redemption value		(583	)		—			(1,754	)		—
Less: Preferred OP units return		(122	)		—			(352	)		—
Plus: Net loss attributable to noncontrolling interest		1,633			202			2,779			719
Net loss attributable to common stockholders	$	(7,867	)	$	(2,240	)	$	(13,792	)	$	(7,811	)

Net loss attributable to common stockholders per share
Basic and diluted	$	(0.22	)	$	(0.07	)	$	(0.39	)	$	(0.24	)

Weighted average shares outstanding
Basic and diluted		35,691,830			32,079,861			35,576,699			32,030,500

The accompanying notes are an integral part of these condensed consolidated financial statements.

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net loss	$	(5,079	)	$	(2,442	)	$	(3,753	)	$	(8,530	)
Other comprehensive income:
Change in fair value due to credit risk on debt held under the fair value option		287			—			687			—
Total other comprehensive income		287			—			687			—
Comprehensive loss	$	(4,792	)	$	(2,442	)	$	(3,066	)	$	(8,530	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

BROAD STREET REALTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(in thousands, except share amounts)

(Unaudited)


	Preferred Stock				Common Stock
	Shares		Par Value		Shares			Par Value		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income		Non- controlling Interest			Total Equity
Balance at December 31, 2021		500	$	—		31,873,428		$	319	$	70,022		$	(19,543	)	$	—	$	(2,674	)	$	48,124
Stock-based compensation		—		—		165,700			1		784			—			—		—			785
Tax effect of change in ownership percentage of OP		—		—		—			—		(3	)		—			—		—			(3	)
Net loss		—		—		—			—		—			(2,943	)		—		(247	)		(3,190	)
Balance at March 31, 2022		500		—		32,039,128			320		70,803			(22,486	)		—		(2,921	)		45,716
Issuance of common stock		—		—		60,106			1		184			—			—		(185	)		—
Grants of restricted stock		—		—		138,262			—		—			—			—		—			—
Forfeiture of restricted stock		—		—		(10,923	)		—		—			—			—		—			—
Shares surrendered for taxes upon vesting		—		—		(104	)		—		—			—			—		—			—
Stock-based compensation		—		—		9,708			1		399			—			—		—			400
Net loss		—		—		—			—		—			(2,628	)		—		(270	)		(2,898	)
Balance at June 30, 2022		500		—		32,236,177			322		71,386			(25,114	)		—		(3,376	)		43,218
Issuance of common stock		—		—		36,064			1		110			—			—		(111	)		—
Forfeiture of restricted stock		—		—		(1,789	)		—		—			—			—		—			—
Stock-based compensation		—		—		—			—		381			—			—		—			381
Net loss		—		—		—			—		—			(2,240	)		—		(202	)

Broad Street Realty, Inc. [BRST] Filings
10-Q	[2023-11-14]
10-Q	[2023-08-14]
10-Q	[2023-06-02]
10-K	[2023-05-01]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-04-15]
10-Q	[2021-11-15]
10-Q	[2021-08-16]
10-Q	[2021-05-17]
10-Q	[2021-04-15]
10-K	[2021-04-15]
10-Q	[2021-04-15]
10-Q	[2021-04-15]
10-K	[2020-12-22]
10-Q	[2019-11-12]
10-Q	[2019-08-12]
10-Q	[2019-05-14]
10-K	[2019-04-11]
10-Q	[2018-11-13]
10-Q	[2018-08-03]
10-Q	[2018-05-14]
10-K	[2018-04-02]
10-Q	[2017-11-20]
10-Q	[2017-08-14]
10-Q	[2017-05-15]
10-K	[2017-03-31]
10-Q	[2016-11-14]
10-Q	[2016-08-12]
10-Q	[2016-05-13]
10-K	[2016-03-22]
10-Q	[2015-11-06]
10-Q	[2015-08-05]
10-Q	[2015-05-13]
10-K	[2015-03-25]
10-Q	[2014-11-19]
10-Q	[2014-08-14]
10-Q	[2014-05-15]
10-K	[2014-03-27]
10-Q	[2013-11-13]
10-Q	[2013-08-02]
10-Q	[2013-08-01]
10-K	[2013-03-25]
10-Q	[2012-11-19]
10-Q	[2012-08-14]
10-Q	[2012-05-15]
10-K	[2012-03-28]