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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q
 
☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
 ☐    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 001-35713
WHEELER REAL ESTATE INVESTMENT TRUST, INC.
(Exact Name of Registrant as Specified in Its Charter) 
Maryland 45-2681082
(State or Other Jurisdiction of
Incorporation or Organization)		 (I.R.S. Employer
Identification No.)
2529 Virginia Beach Blvd,
Virginia Beach, Virginia
 23452
(Address of Principal Executive Offices) (Zip Code)
 (757) 627-9088
(Registrant’s Telephone Number, Including Area Code)
N/A
(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
 Common Stock, $0.01 par value per share WHLR
Nasdaq Capital Market
 Series B Convertible Preferred Stock WHLRP
Nasdaq Capital Market
 Series D Cumulative Convertible Preferred StockWHLRD
Nasdaq Capital Market
 7.00% Subordinated Convertible Notes due 2031WHLRL
Nasdaq Capital Market

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  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý   No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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.
1
Large accelerated filer 
¨
  Accelerated filer
¨
Non-accelerated filer 
ý
  Smaller reporting company☒
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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         Yes  ☐    No  ý
As of November 6, 2024, there were 1,294,310 common shares, $0.01 par value per share, outstanding.
2
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries 
  Page
PART I – FINANCIAL INFORMATION
Item 1.Financial Statements
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

3


CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the "Form 10-Q") of Wheeler Real Estate Investment Trust, Inc. (the "Trust," the "REIT," the "Company," "WHLR," "we," "our" or "us") contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are subject to risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words "may", "will", "should", "estimates", "projects", "anticipates", "believes", "expects", "intends", "future", and words of similar import, or the negative thereof. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
    
Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this Form 10-Q. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
 
Factors that could cause actual results, performance or achievements to differ materially from any forward-looking statements made in this Form 10-Q include, but are not limited to:

•the use of and demand for retail space;
•general and economic business conditions, including those affecting the ability of individuals to spend in retail shopping centers and/or the rate and other terms on which we are able to lease our properties;
•the loss or bankruptcy of the Company's tenants;
•economic and real estate conditions in the Mid-Atlantic, Southeast and Northeast where our properties are geographically concentrated;
•consumer spending and confidence trends;
•availability, terms and deployment of capital;
•substantial dilution of our common stock, par value $0.01 ("Common Stock") and steep decline in its market value resulting from the exercise by the holders of our Series D Cumulative Convertible Preferred Stock (the "Series D Preferred Stock") of their redemption rights and downward adjustment of the conversion price on our outstanding 7.00% Subordinated Convertible Notes due 2031 (the "Convertible Notes"), each of which has already occurred and is anticipated to continue;
•given the volatility in the trading of our Common Stock, whether we have registered a sufficient number of shares of our Common Stock to cover all Series D Preferred Stock redemptions tendered to us by the holders thereof;
•the degree and nature of our competition;
•changes in governmental regulations, accounting rules, tax rates and similar matters;
•the ability and willingness of the Company’s tenants and other third parties to satisfy their obligations under their respective contractual arrangements with the Company;
•the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration;
•the Company’s ability to re-lease its properties on the same or better terms in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant, and obligations the Company may incur in connection with the replacement of an existing tenant;
•litigation risks generally;
•the risk that shareholder litigation filed by the Company's former CEO, Daniel Khoshaba, may result in significant costs of defense, indemnification and liability, and divert management's attention away from running the Company;
•financing risks, such as the Company’s inability to obtain new financing or refinancing on favorable terms as the result of market volatility or instability and increases in the Company’s borrowing costs as a result of changes in interest rates and other factors;
•the impact of the Company’s leverage on operating performance;
•our ability to successfully execute strategic or necessary asset acquisitions and divestitures;
4
•risks related to the market for retail space generally, including reductions in consumer spending, variability in retailer demand for leased space, adverse impact of e-commerce, ongoing consolidation in the retail sector and changes in economic conditions and consumer confidence;
•risks endemic to real estate and the real estate industry generally;
•the adverse effect of any future pandemic, endemic or outbreak of infectious diseases, and mitigation efforts, including government-imposed lockdowns, to control their spread;
•risks to our information systems - or those of our tenants or vendors - from service interruption, misappropriation of data, breaches of security or information technology, or other cyber-related attacks;
•competitive risks;
•risks related to the geographic concentration of the Company’s properties in the Mid-Atlantic, Southeast and Northeast;
•the Company’s ability to regain compliance with the listing standards of the Nasdaq Capital Market ("Nasdaq") and maintain its listing thereon;
•the effects on the trading market of our Common Stock of the one-for-10 reverse stock split effected on August 17, 2023 (the "August 2023 Reverse Stock Split"), the one-for-24 reverse stock split effected on May 16, 2024 (the "May 2024 Reverse Stock Split"), the one-for-five reverse stock split effected on June 27, 2024 (the "June 2024 Reverse Stock Split", the one-for-three reverse stock split effected on September 19, 2024 (the "September 2024 Reverse Stock Split" and collectively with the May 2024 Reverse Stock Split and June 2024 Reverse Stock Split, the “2024 Reverse Stock Splits”) and any reverse stock splits the Company may effect in the future;
•damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change;
•the risk that an uninsured loss on the Company’s properties or a loss that exceeds the limits of the Company’s insurance policies could subject the Company to lost capital or revenue on those properties;
•the risk that continued increases in the cost of necessary insurance could negatively impact the Company's profitability;
•the Company’s ability and willingness to maintain its qualification as a real estate investment trust ("REIT") in light of economic, market, legal, tax and other considerations;
•the ability of our operating partnership, Wheeler REIT, L.P. (the "Operating Partnership"), and each of our other partnerships and limited liability companies to be classified as partnerships or disregarded entities for federal income tax purposes;
•the impact of e-commerce on our tenants’ business; and
•the inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws.

Forward-looking statements in this Form 10-Q should be read in light of these factors. Except for ongoing obligations to disclose material information as required by the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. All of the above factors are difficult to predict, contain uncertainties that may materially affect the Company’s actual results and may be beyond the Company’s control. New factors emerge from time to time, and it is not possible for the Company’s management to predict all such factors or to assess the effects of each factor on the Company’s business. Accordingly, there can be no assurance that the Company’s current expectations will be realized.
5

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except par value and share data)
September 30, 2024December 31, 2023
 (unaudited) 
ASSETS:
Real estate:
Land and land improvements$135,796 $149,908 
Buildings and improvements506,068 510,812 
641,864 660,720 
Less accumulated depreciation(107,514)(95,598)
Real estate, net534,350 565,122 
Cash and cash equivalents37,070 18,404 
Restricted cash17,949 21,403 
Receivables, net12,487 13,126 
Investment securities - related party11,964 10,685 
Assets held for sale25,167 — 
Above market lease intangibles, net1,415 2,114 
Operating lease right-of-use assets9,290 9,450 
Deferred costs and other assets, net23,511 28,028 
Total Assets$673,203 $668,332 
LIABILITIES:
Loans payable, net$482,893 $477,574 
Liabilities associated with assets held for sale163 — 
Below market lease intangibles, net12,275 17,814 
Derivative liabilities53,427 3,653 
Operating lease liabilities10,180 10,329 
Series D Preferred Stock redemptions3,345 369 
Accounts payable, accrued expenses and other liabilities20,721 17,065 
Total Liabilities583,004 526,804 
Commitments and contingencies (Note 8)
Series D Cumulative Convertible Preferred Stock93,591 96,705 
EQUITY:
Series A Preferred Stock (no par value, 4,500 shares authorized, 562 shares issued and outstanding; $0.6 million in aggregate liquidation value)
453 453 
Series B Convertible Preferred Stock (no par value, 5,000,000 authorized, 3,379,142 shares issued and outstanding; $84.5 million aggregate liquidation preference)
45,063 44,998 
Common Stock ($0.01 par value, 200,000,000 shares authorized, 652,768 and 149,360 shares issued and outstanding, respectively)
6 1 
Additional paid-in capital265,597 258,109 
Accumulated deficit(379,066)(324,854)
Total Shareholders’ Deficit(67,947)(21,293)
Noncontrolling interests64,555 66,116 
Total (Deficit) Equity(3,392)44,823 
Total Liabilities and Equity$673,203 $668,332 
See accompanying notes to condensed consolidated financial statements.
6
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
REVENUE:
Rental revenues$24,336 $24,655 $75,925 $74,738 
Other revenues456 549 1,056 1,372 
Total Revenue24,792 25,204 76,981 76,110 
OPERATING EXPENSES:
Property operations8,444 8,771 26,158 26,068 
Depreciation and amortization6,241 6,875 19,212 21,642 
Impairment charges1,195 — 1,195 — 
Corporate general & administrative2,101 2,475 7,488 8,364 
Total Operating Expenses17,981 18,121 54,053 56,074 
Gain on disposal of properties, net7,083 2,204 9,966 2,204 
Operating Income13,894 9,287 32,894 22,240 
Interest income133 163 256 336 
Gain on investment securities, net591 49 779 80 
Interest expense(7,851)(7,469)(24,034)(24,125)
Net changes in fair value of derivative liabilities(39,299)(11,163)(49,774)(6,281)
Loss on conversion of Convertible Notes(368)— (368)— 
Gain on preferred stock redemptions2,526 — 2,739 — 
Other expense(257)(2,233)(1,486)(5,273)
Net Loss Before Income Taxes(30,631)(11,366)(38,994)(13,023)
Income tax expense— (2)(1)(48)
Net Loss (30,631)(11,368)(38,995)(13,071)
Less: Net income attributable to noncontrolling interests2,689 2,693 8,088 8,061 
Net Loss Attributable to Wheeler REIT(33,320)(14,061)(47,083)(21,132)
Preferred stock dividends - undeclared(2,071)(2,415)(6,135)(6,940)
Deemed distribution related to preferred stock redemption value— (13,542)(710)(13,542)
Deemed distribution related to repurchase of noncontrolling interests(284)— (284)— 
Net Loss Attributable to Wheeler REIT Common Shareholders$(35,675)$(30,018)$(54,212)$(41,614)
Loss per share:
Basic and Diluted$(91.99)$(11,019.82)$(215.94)$(15,288.02)
Weighted-average number of shares:
Basic and Diluted387,817 2,724 251,046 2,722 
See accompanying notes to condensed consolidated financial statements.
7
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of (Deficit) Equity
(Unaudited, in thousands, except share data)
Series ASeries BTotal
Stockholders’
(Deficit) Equity
Total (Deficit) Equity
 Preferred StockPreferred StockCommon StockAdditional
Paid-in Capital 		Accumulated Deficit Noncontrolling Interest
 SharesValueSharesValueSharesValueOperating PartnershipConsolidated SubsidiaryTotal
Balance, December 31, 2023562 $453 3,379,142 $44,998 149,360 $1 $258,109 $(324,854)$(21,293)$1,271 $64,845 $66,116 $44,823 
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 — — — 22 
Adjustments for noncontrolling
  interest in operating partnership		— — — — — — 6 — 6 (6)— (6)— 
Redemption of Series D
  Preferred Stock to Common
  Stock		— — — — 39,594 — 2,983 — 2,983 — — — 2,983 
Dividends and distributions— — — — — — — (2,042)(2,042)— (2,688)(2,688)(4,730)
Net (Loss) Income— — — — — — — (8,707)(8,707)13 2,688 2,701 (6,006)
Balance, March 31, 2024 562 453 3,379,142 45,020 188,954 1 261,098 (335,603)(29,031)1,278 64,845 66,123 37,092 
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 — — — 22 
Adjustments for noncontrolling
  interest in operating partnership		— — — — — — 411 — 411 (411)— (411)— 
Adjustments of Series D
Preferred Stock to redemption
value
— — — — — — — (710)(710)— — — (710)
Redemption of fractional units as
  a result of reverse stock split		— — — — (16)— — — — — — — — 
Dividends and distributions— — — — — — — (2,022)(2,022)— (2,688)(2,688)(4,710)
Net (Loss) Income— — — — — — — (5,056)(5,056)10 2,688 2,698 (2,358)
Balance, June 30, 2024 562 453 3,379,142 45,042 188,938 1 261,509 (343,391)(36,386)877 64,845 65,722 29,336 
Accretion of Series B Preferred
  Stock discount		— — — 21 — — — — 21 — — — 21 
Conversion of debt to Common Stock— — — — 28,105 — 434 — 434 — — — 434 
Redemption of Series D
  Preferred Stock to Common
  Stock		— — — — 435,767 5 3,223 — 3,228 — — — 3,228 
Adjustments for noncontrolling
  interest in operating partnership		— — — — — — 431 — 431 (431)— (431)— 
Redemption of fractional units
   as a result of reverse stock split		— — — — (42)— — — — — — — — 
Noncontrolling interest
   repurchases 		— — — — — — — (284)(284)— (751)(751)(1,035)
Dividends and distributions— — — — — — — (2,071)(2,071)— (2,674)(2,674)(4,745)
Net (Loss) Income— — — — — — — (33,320)(33,320)15 2,674 2,689 (30,631)
Balance, September 30, 2024 562 $453 3,379,142 $45,063 652,768 $6 $265,597 $(379,066)$(67,947)$461 $64,094 $64,555 $(3,392)
8
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of (Deficit) Equity
(Unaudited, in thousands, except share data)
Continued
Series ASeries BTotal
Stockholders’
(Deficit) Equity
 Preferred StockPreferred StockCommon StockAdditional
Paid-in Capital 		Accumulated Deficit Noncontrolling Interest
 SharesValueSharesValueSharesValueOperating PartnershipConsolidated SubsidiaryTotalTotal Equity
Balance, December 31, 2022562 $453 3,379,142 $44,911 2,720 $— $235,091 $(295,617)$(15,162)$1,351 $64,845 $66,196 $51,034 
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 — — — 22 
Conversion of Series D Preferred
  Stock to Common Stock		— — — — 1 — 140 — 140 — — — 140 
Adjustment for noncontrolling
  interest in operating partnership		— — — — — — (13)— (13)13 — 13 — 
Dividends and distributions— — — — — — — (2,264)(2,264)— (2,688)(2,688)(4,952)
Net (Loss) Income— — — — — — — (3,101)(3,101)4 2,688 2,692 (409)
Balance, March 31 2023562 453 3,379,142 44,933 2,721 — 235,218 (300,982)(20,378)1,368 64,845 66,213 45,835 
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 — — — 22 
Dividends and distributions— — — — — — — (2,261)(2,261)— (2,688)(2,688)(4,949)
Net (Loss) Income— — — — — — — (3,970)(3,970)(12)2,688 2,676 (1,294)
Balance, June 30, 2023562 453 3,379,142 44,955 2,721 — 235,218 (307,213)(26,587)1,356 64,845 66,201 39,614 
Accretion of Series B Preferred Stock discount— — — 21 — — — — 21 — — — 21 
Conversion of Operating Partnership units to Common Stock— — — — 2 — 57 — 57 (57)— (57)— 
Adjustments for noncontrolling interest in operating partnership— — — — — — 30 — 30 (30)— (30)— 
Adjustments of preferred stock to redemption value— — — — — — — (13,542)(13,542)— — — (13,542)
Dividends and distributions— — — — — — — (2,415)(2,415)— (2,688)(2,688)(5,103)
Net (Loss) Income— — — — — — — (14,061)(14,061)5 2,688 2,693 (11,368)
Balance, September 30, 2023562 $453 3,379,142 $44,976 2,723 $— $235,305 $(337,231)$(56,497)$1,274 $64,845 $66,119 $9,622 


See accompanying notes to condensed consolidated financial statements.

9
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

 For the Nine Months Ended September 30,
 20242023
OPERATING ACTIVITIES:
Net Loss$(38,995)$(13,071)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
Depreciation and amortization19,212 21,642 
Deferred financing cost amortization2,157 2,357 
Changes in fair value of derivative liabilities 49,774 6,281 
Loss on conversion of Convertible Notes368 — 
Above (below) market lease amortization, net(2,607)(3,865)
Paid-in-kind interest2,031 2,006 
Loss on repurchase of debt securities700 1,647 
Gain on preferred stock redemptions(2,739)— 
Unrealized gain on investment securities, net (779)(80)
Straight-line expense (income)(51)7 
Gain on disposal of properties, net
(9,966)(2,204)
Credit adjustments on operating lease receivables 540 481 
Impairment charges1,195 — 
Net changes in assets and liabilities:
Receivables, net(445)1,373 
Deferred costs and other assets, net(2,722)(3,166)
Accounts payable, accrued expenses and other liabilities2,915 1,624 
Net cash provided by operating activities20,588 15,032 
INVESTING ACTIVITIES:
Investment property acquisitions— (4,259)
Expenditures for real estate improvements (18,658)(11,618)
Purchases of investment securities(500)(6,500)
Cash received from disposal of properties20,720 2,759 
Net cash provided by (used in) investing activities
1,562 (19,618)
FINANCING ACTIVITIES:
Payments for deferred financing costs(1,597)(4,440)
Dividends and distributions paid on noncontrolling interest(8,064)(8,064)
Repurchase of noncontrolling interest(1,035)— 
Loan proceeds33,223 123,230 
Loan principal payments(27,815)(108,274)
Repurchase of debt securities(1,282)(3,116)
Loan prepayment penalty(368)(1,758)
Net cash used in financing activities(6,938)(2,422)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH15,212 (7,008)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period39,807 55,865 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$55,019 $48,857 
Supplemental Disclosure:
The following table provides a reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$37,070 $25,419 
Restricted cash17,949 23,438 
Cash, cash equivalents, and restricted cash$55,019 $48,857 
See accompanying notes to condensed consolidated financial statements.
10
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

1. Business and Organization

Wheeler Real Estate Investment Trust, Inc. is a Maryland corporation formed on June 23, 2011. The Trust serves as the general partner of Wheeler REIT, L.P. (the "Operating Partnership"), which was formed as a Virginia limited partnership on April 5, 2012. At September 30, 2024, the Company owned 99.69% of the Operating Partnership. As of September 30, 2024, the Trust owned and operated seventy-three retail shopping centers and two undeveloped properties in South Carolina, Georgia, Virginia, Pennsylvania, North Carolina, New Jersey, Massachusetts, Florida, Connecticut, Kentucky, Tennessee, Alabama, Maryland and West Virginia. These centers and undeveloped properties include the properties acquired through the Cedar Acquisition (defined below). Accordingly, the use of the word "Company", "we," "our" or "us" refers to the Trust and consolidated subsidiaries, except where the context otherwise requires.

The Trust through the Operating Partnership owns Wheeler Interests ("WI") and Wheeler Real Estate, LLC ("WRE") (WRE and, together with WI, the "Operating Companies"). The Operating Companies are taxable REIT subsidiaries ("TRS") to accommodate serving the non-REIT properties since applicable REIT regulations consider the income derived from these services to be "bad" income subject to taxation. The regulations allow for costs incurred by the Company commensurate with the services performed for the non-REIT properties to be allocated to a TRS.

Acquisition of Cedar Realty Trust

On August 22, 2022, the Company completed a merger transaction (the "Cedar Acquisition") with Cedar Realty Trust, Inc. ("Cedar"). As a result of the merger, the Company acquired all of the outstanding shares of Cedar’s common stock, which ceased to be publicly traded on the New York Stock Exchange ("NYSE"). Through this acquisition, the Company acquired an additional 19 retail shopping centers in the Northeast. Cedar’s outstanding 7.25% Series B Preferred Stock and 6.50% Series C Preferred Stock ("Cedar Series C Preferred Stock") remain outstanding and continue to trade on the NYSE. As a result of the Cedar Acquisition, Cedar became a subsidiary of the REIT.

2. Summary of Significant Accounting Policies

Principles of Consolidation/Basis of Preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles ("GAAP") for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. All material balances and transactions between the consolidated entities of the Company have been eliminated. All per share amounts, common units and shares outstanding, warrants, and conversion features of the Convertible Notes for all periods presented reflect our August 2023 Reverse Stock Split, May 2024 Reverse Stock Split, June 2024 Reverse Stock Split and September 2024 Reverse Stock Split, which took effect on August 17, 2023, May 16, 2024, June 27, 2024 and September 19, 2024, respectively. The unaudited condensed consolidated financial statements are prepared on the accrual basis in accordance with GAAP, which requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial statements. Actual results could differ from these estimates. The unaudited condensed consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K").

The unaudited condensed consolidated financial statements included in this Form 10-Q include Cedar starting from the date of the Cedar Acquisition. We have determined that this acquisition is not a variable interest entity, as defined under the consolidation topic of the Financial Accounting Standards Board (the "FASB"), Accounting Standards Codification ("ASC"), and we evaluated such entity under the voting model and concluded we should consolidate the entity. Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights.

11
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Supplemental Condensed Consolidated Statements of Cash Flows Information

For the Nine Months Ended September 30,
20242023
Non-Cash Transactions:
Conversion of common units to Common Stock$— $57 
Conversion of Series D Preferred Stock to Common Stock— 140 
Accretion of Preferred Stock discounts65 438 
Redemption of Series D Preferred Stock to Common Stock6,206 — 
Buildings and improvements included in accounts payable, accrued expenses and other liabilities2,389 1,979 
Other Cash Transactions:
Cash paid for amounts included in the measurement of operating lease liabilities$719 $798 
Cash paid for interest19,308 18,951 

Other Expense

Other expense represents expenses which are non-operating in nature. Other expenses were $0.3 million and $1.5 million for the three and nine months ended September 30, 2024, respectively, which primarily consisted of capital structure costs, including repurchase of Convertible Notes and legal and other expenses incurred in connection with the 2024 Reverse Stock Splits, the registration of our Common Stock to issue in settlement of Series D Preferred Stock redemptions and redemptions of the Series D Preferred Stock by holders thereof. Other expenses were $2.2 million and $5.3 million for the three and nine months ended September 30, 2023, respectively, which primarily consisted of capital structure costs including repurchase of Convertible Notes and legal and other expenses incurred in connection with an exchange offer for the Company's outstanding shares of Series D Preferred Stock (the "Exchange Offer"), redemptions by holders of the Series D Preferred Stock and the August 2023 Reverse Stock Split.

Recently Issued and Adopted Accounting Pronouncements

Accounting standards that have been recently issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows.

Reclassifications

The Company has reclassified certain prior period amounts in the accompanying condensed consolidated financial statements in order to be consistent with the current period presentation. These reclassifications had no effect on net loss.

3. Real Estate

A significant portion of the Company’s land, buildings and improvements serve as collateral for its secured term loans. Accordingly, restrictions exist as to the encumbered property’s transferability, use and other common rights typically associated with property ownership.

The Company’s depreciation expense on investment properties for the three months ended September 30, 2024 and 2023 totaled $4.7 million and $4.5 million, respectively. The Company’s depreciation expense on investment properties for the nine months ended September 30, 2024 and 2023 totaled $14.0 million and $13.6 million, respectively.
During the three and nine months ended September 30, 2024, the Company recorded impairment charges of $1.2 million on Oregon Avenue, located in Philadelphia, Pennsylvania. These impairment charges are included in operating income in the accompanying condensed consolidated statements of operations.

12
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

Assets Held for Sale and Dispositions

At September 30, 2024, assets held for sale include South Philadelphia, as the Company has committed to a plan to sell components of the property. There were no assets held for sale as of December 31, 2023.

Assets held for sale and associated liabilities consisted of the following (in thousands, unaudited):
September 30, 2024December 31, 2023
Real estate, net$24,408 $— 
Receivables, net - unbilled straight-line rent431 — 
Deferred costs and other assets, net328 — 
Total assets held for sale$25,167 $— 

September 30, 2024December 31, 2023
Below market lease intangibles, net$163 $— 
Total liabilities associated with assets held for sale$163 $— 

The following properties were sold during the nine months ended September 30, 2024 and 2023 (in thousands, unaudited):
Disposal DatePropertyContract PriceGain (Loss)Net Proceeds
September 12, 2024Kings Plaza$14,200 $6,509 $13,746 
September 11, 2024Edenton Commons Land Parcel1,400 574 1,312 
June 26, 2024Oakland Commons6,000 3,363 5,662 
June 18, 2024Harbor Point Land Parceln/a(480)n/a
July 11, 2023Carll's Corner Outparcel 3,000 2,204 2,759 

Harbor Point Land Parcel Disposition

On June 18, 2024, the Company entered into a settlement agreement (the "Harbor Point Settlement Agreement") with the City of Grove, Oklahoma and the Grove Economic Development Authority of Grove, Oklahoma (collectively, the "City of Grove"), which, among other things, provided for the transfer of the Harbor Point Land Parcel and a one-time payment of $160 thousand to the City of Grove in exchange for a release of the Company from all increment taxes and other obligations under the Economic Development Agreement the Company had entered into with the City of Grove and the dismissal of the litigation commenced by the City of Grove against the Company related thereto.

4. Investment Securities - Related Party
In 2023, the Company subscribed for an investment in the amount of $10.0 million for limited partnership interests in Stilwell Activist Investments, L.P., a Delaware limited partnership ("SAI"). On June 1, 2024, the Company subscribed for an additional investment in the amount of $0.5 million for limited partnership interests in SAI. The investment objective of SAI is to seek long-term capital appreciation through investing primarily in publicly-traded undervalued financial institutions or businesses with a strong financial component, or the securities of any of them, and pursuing an activist shareholder agenda with respect to those institutions.

Stilwell Value LLC ("Value") is the general partner of SAI. Joseph Stilwell, a member of the Company's Board of Directors, is the managing member of Value and a limited partner in funds advised by Value. Additionally, E.J. Borrack, a member of the Board of Directors, serves as the General Counsel to Value and its affiliated entities, including SAI and related funds, and is a limited partner in one of the funds advised by Value. Megan Parisi, a member of the Company’s Board of Directors, serves as the Director of Communications to Value and its affiliated entities, including SAI and related funds, is a non-managing member of Value and is a limited partner in one of the funds advised by Value.

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Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The Company’s subscriptions were approved by the disinterested directors of the Company, and, after the formation of the Related Person Transactions Committee, by that Committee.

A portion of SAI's underlying investments are in the Company's own equity and debt securities.

SAI records investment transactions based on trade date. Realized gains and losses from investment transactions are determined on a specific identification basis. Dividend income, net of withholding taxes, and dividend expense are recognized on the ex-dividend date, and interest income and expense are recognized on an accrual basis. Discounts and premiums to the face amount of debt securities are accreted and amortized using the effective interest rate method over the lives of the respective debt securities.

A limited partner in SAI may request a withdrawal after the expiration of the first anniversary of the date its investment was accepted into SAI. After the expiration of this lock-up period, withdrawal requests can be made quarterly and are generally paid out on a quarterly basis in accordance with the terms of the SAI limited partnership agreement.

In consideration for management, administrative and operational services, limited partners of SAI pay a management fee to an affiliate of Value each calendar quarter, in advance, equal to 0.25% (an annualized rate of 1%) of each limited partner’s capital account balance on the first day of such calendar quarter. In addition, as of the last day of each specified performance period, an incentive allocation of 20% of the amount by which the "positive performance change," if any, that has been credited to the capital account of a limited partner during such period exceeds any positive balance in such limited partner’s "carryforward account," is debited from the limited partner’s capital account and is simultaneously credited to the capital account of Value.

The Company’s SAI investment is accounted for under the equity method and measured at net asset value as a practical expedient and has not been classified within the fair value hierarchy. All gains and losses, realized and unrealized, and fees are recorded through "gains (losses) on investment securities, net" in the condensed consolidated statements of operations. As of September 30, 2024, the fair value of the Company’s SAI investment was $12.0 million. For the three and nine months ended September 30, 2024, the gain on investment securities, net was $0.6 million and $0.8 million, respectively. For the three and nine months ended September 30, 2023, gain on investment securities, net was $0.0 million and $0.1 million, respectively.

5. Deferred Costs and Other Assets, Net
Deferred costs and other assets, net of accumulated amortization are as follows (in thousands, unaudited):
September 30, 2024December 31, 2023
Leases in place, net$11,326 $16,663 
Lease origination costs, net6,621 7,461 
Ground lease sandwich interest, net914 1,119 
Tenant relationships, net178 280 
Legal and marketing costs, net194 278 
Prepaid expenses4,278 2,224 
Other— 3 
    Total$23,511 $28,028 
As of September 30, 2024 and December 31, 2023, the Company’s intangible accumulated amortization totaled $70.1 million and $69.9 million, respectively. During the three months ended September 30, 2024 and 2023, the Company’s intangible amortization expense totaled $1.5 million and $2.4 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company’s intangible amortization expense totaled $5.2 million and $8.1 million, respectively.

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Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

6. Loans Payable

The Company’s loans payable consist of the following (in thousands, except monthly payment, unaudited):
Property/DescriptionMonthly PaymentInterest
Rate		MaturitySeptember 30, 2024December 31, 2023
Cypress Shopping Center$34,360 4.70%July 2024$— $5,769 
Conyers CrossingInterest only4.67%October 2025— 5,960 
Winslow Plaza$24,295 4.82%December 20254,271 4,331 
Tuckernuck$32,202 5.00%March 20264,658 4,771 
Chesapeake Square$23,857 4.70%August 2026— 4,014 
Sangaree/Tri-County$32,329 4.78%December 2026— 5,990 
Timpany PlazaInterest only7.27%September 202811,560 9,060 
Village of Martinsville$89,664 4.28%July 202914,426 14,755 
Laburnum Square$37,842 4.28%September 20297,655 7,665 
Rivergate (1)
$100,222 4.25%September 203117,209 17,557 
Convertible NotesInterest only7.00%December 203130,882 31,530 
Term loan, 22 properties
Interest only4.25%July 203275,000 75,000 
JANAF (2)
Interest only5.31%July 203260,000 60,000 
Cedar term loan, 10 properties
Interest only5.25%November 2032110,000 110,000 
Patuxent Crossing/Coliseum MarketplaceInterest only6.35%January 203325,000 25,000 
Term loan, 12 properties
Interest only6.19%June 203361,100 61,100 
Term loan, 8 properties
Interest only6.24%June 203353,070 53,070 
Term loan, 5 properties
Interest only6.80%July 203425,500 — 
Total Principal Balance 500,331 495,572 
Unamortized deferred financing cost (17,438)(17,998)
Total Loans Payable, net $482,893 $477,574 

(1) In October 2026, the interest rate under this loan resets based on the 5-year U.S. Treasury Rate, plus 2.70%, with a floor of 4.25%.
(2) Collateralized by JANAF properties.

Cedar Revolving Credit Agreement

On February 29, 2024, the Company entered into a revolving credit agreement with KeyBank National Association to draw up to $9.5 million (the "Cedar Revolving Credit Agreement"). The interest rate under the Cedar Revolving Credit Agreement was the daily SOFR, plus applicable margins of 0.10% plus 2.75%. Interest payments were due monthly, and any outstanding principal was due at maturity on February 28, 2025. The Cedar Revolving Credit Agreement could have been extended, at the Company's option, for up to two additional three-month periods, subject to customary conditions. The Cedar Revolving Credit Agreement was collateralized by 6 properties, consisting of Carll's Corner, Fieldstone Marketplace, Oakland Commons, Kings Plaza, Oregon Avenue and South Philadelphia, and proceeds were used for capital expenditures and tenant improvements for such properties. Upon the dispositions of Oakland Commons and Kings Plaza, the properties were released from collateral, the outstanding borrowings were repaid and the Cedar Revolving Credit Agreement was closed on September 12, 2024.

Timpany Plaza Loan Agreement

On March 28, 2024, the Company received $1.0 million of $2.5 million in deferred loan proceeds under the Timpany Plaza Loan Agreement following the Company's satisfaction of certain lease-related contingencies. On September 30, 2024, the Company received the remaining balance of $1.5 million following the Company's satisfaction of other lease-related contingencies.

Term Loan, Five Properties

On June 28, 2024, the Company entered into a term loan agreement (the "Term Loan Agreement, 5 Properties") with Guggenheim Real Estate, LLC, for $25.5 million at a fixed rate of 6.80% with interest-only payments due monthly. Commencing on August 10, 2029, until the maturity date of July 10, 2034, monthly principal and interest payments will be made based on a 30-year amortization schedule calculated based on the principal amount outstanding at that time. The Term Loan Agreement, 5 Properties' proceeds were used to refinance four loans, including paying $0.4 million in defeasance. The Term Loan Agreement, 5 Properties is collateralized by Cypress Shopping Center, Conyers Crossing, Chesapeake Square, Sangaree Plaza and Tri-County Plaza.

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Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)


Scheduled Principal Payments

The Company’s scheduled principal repayments on indebtedness as of September 30, 2024 are as follows (in thousands, unaudited):

For the remaining three months ending December 31, 2024$355 
December 31, 20255,953 
December 31, 20266,450 
December 31, 20272,824 
December 31, 202816,091 
December 31, 202924,434 
Thereafter444,224 
Total principal repayments and debt maturities$500,331 

Convertible Notes

On January 17, 2024, the Company paid down $0.6 million of the Convertible Notes through an open market purchase of 23,280 units at a total purchase price of $1.3 million. As a result of that transaction, the Company recognized a $0.7 million loss, which represents the fair value of the purchase price over the amount of principal reduction. The loss is included in "other expense" in the condensed consolidated statements of operations.

During the nine months ended September 30, 2024, the Company issued an aggregate of 28,105 shares of its Common Stock, having an aggregate fair value of $0.4 million, to settle conversion requests of the holders of the Convertible Notes comprising an aggregate principal amount of $0.1 million, which resulted in an aggregate net loss on conversion of Convertible Notes of $0.4 million.

As of September 30, 2024, the conversion price for the Convertible Notes was approximately $2.37 per share of the Company’s Common Stock (approximately 10.53 shares of Common Stock for each $25.00 of principal amount of the Convertible Notes being converted).

Interest expense on the Convertible Notes consisted of the following (in thousands, except for shares):
For the Nine Months Ended September 30,
Series B Preferred Stock
number of shares (1)
Series D Preferred Stock
number of shares (1)
Convertible Note interest at 7% coupon
Fair value adjustmentInterest expense
2024— 109,676 $1,624 $948 $2,572 
2023— 160,455 $1,718 $851 $2,569 
   (1) Shares issued as interest payment on Convertible Notes.

Fair Value Measurements

The fair value of the Company’s fixed rate secured term loans was estimated using available market information and discounted cash flow analyses based on borrowing rates the Company believes it could obtain with similar terms and maturities. As of September 30, 2024 and December 31, 2023, the fair value of the Company’s fixed rate secured term loans, which were determined to be Level 3 within the valuation hierarchy, was $470.1 million and $420.8 million, respectively, and the carrying value of such loans, was $456.6 million and $451.2 million, respectively.

The fair value of the Convertible Notes was estimated using available market information. As of September 30, 2024, and December 31, 2023, the fair value of the Convertible Notes, which were determined to be Level 1 within the valuation hierarchy, was $183.4 million and $75.7 million, respectively, and the carrying value, was $26.3 million and $26.4 million, respectively.

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Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)


7. Derivative Liabilities

Fair Value of Warrants

The Company utilized the Black-Scholes valuation method to calculate the fair value of the warrants noted below. Significant observable and unobservable inputs include stock price, conversion price, risk-free rate, term, likelihood of an event of contractual conversion and expected volatility. The Black-Scholes valuation method simulation is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. The warrants noted below contain terms and features that give rise to derivative liability classification.

As of the close of business on March 12, 2024 (the third anniversary of the issuance of that certain Common Stock Purchase Warrant, dated March 12, 2021, to the holders thereof (the "Warrant")), the exercise price of the Warrant was reset to an amount equal to the product of the Common Stock volume weighted average price as provided under the Warrant, multiplied by a factor of 1.25 for Tranche A, 1.50 for Tranche B and 2.50 for Tranche C: approximately $83.43, $100.12, and $166.87, respectively.

Warrants to purchase shares of Common Stock outstanding at September 30, 2024 and December 31, 2023 are as follows:

Warrant NameWarrantsExercise PriceExpiration Date
Wilmington Warrant Tranche A142$83.43 3/12/2026
Wilmington Warrant Tranche B118100.12 3/12/2026
Wilmington Warrant Tranche C35166.87 3/12/2026

In measuring the warrant liability, the Company used the following inputs:
September 30, 2024
December 31, 2023
Common Stock price$8.09
$0.31 (1)
Weighted average contractual term to maturity (years)1.5 years2.2 years
Range of expected market volatility %247.25%137.71%
Range of risk free interest rate3.82%4.23%
   (1) Common stock price as of December 31, 2023 and was not restated for any subsequent stock splits.

Fair Value of Conversion Features Related to Convertible Notes

The Company identified certain embedded derivatives related to the conversion features of the Convertible Notes. In accordance with ASC 815-40, Derivatives and Hedging Activities, the embedded conversion options contained within the Convertible Notes were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through each reporting date. The Company utilized a binomial lattice model to calculate the fair value of the embedded derivatives. Significant observable and unobservable inputs include conversion price, stock price, dividend rate, expected volatility, risk-free rate, optional conversion price and term. The binomial lattice model is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators.

In measuring the embedded derivative liability, the Company used the following inputs:

17
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)



September 30, 2024December 31, 2023
Conversion price
$2.38 (1)
$0.16 (1) (2)
Common Stock price$8.09
$0.31 (2)
Contractual term to maturity (years)7.3 years8.0 years
Expected market volatility %155.00%100.00%
Risk-free interest rate3.70%3.90%
Traded WHLRL price, % of par594.00%240.00%
   (1) Represents the volume weighted average of the Company's closing Common Stock price for the 10 trading days
         preceding the valuation, less a discount of 45%.
   (2) Value as of December 31, 2023 and was not restated for any subsequent stock splits.

The following table sets forth a summary of the changes in fair value of the Company's derivative liabilities, which include both the warrant and embedded derivative liabilities (in thousands, unaudited):

Nine Months Ended September 30, 2024Year Ended December 31, 2023
Balance at the beginning of period$3,653 $7,111 
Changes in fair value - Warrants9 (495)
Changes in fair value - Convertible Notes49,765 (2,963)
Balance at end of period$53,427 $