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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
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 3, 2023, there were 3,226,691 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


Forward-Looking Statements

Certain statements made in this Quarterly Report on Form 10-Q or incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, as such, may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Wheeler Real Estate Investment Trust, Inc. (the “Company”) 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.

Important factors that we think could cause our actual results to differ materially from those expressed or forecasted in
the forward-looking statement are summarized below:

•the adverse effect any future pandemic, endemic or outbreak of infectious disease, and mitigation efforts to control their spread;
•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;
•tenant bankruptcies;
•the state of the U.S. economy generally, or specifically in the Southeast, Mid-Atlantic 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 Preferred Stock of their redemption rights and downward adjustment of the conversion price on our outstanding Convertible Notes, each of which has already occurred and is anticipated to continue;
•the degree and nature of our competition;
•changes in governmental regulations, accounting rules, tax rates and similar matters;
•adverse economic or real estate developments in our markets of South Carolina, Georgia, Virginia, Pennsylvania, North Carolina, Massachusetts, New Jersey, Florida, Connecticut, Kentucky, Tennessee, Alabama, Maryland, West Virginia, and Oklahoma;
•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 similar 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;
•increases in the Company’s financing and other costs as a result of changes in interest rates and other factors;
•the Company’s ability to maintain listing on Nasdaq Capital Market;
•the effects of the one-for-ten reverse stock split of our Common Stock (which we refer to as the "Reverse Stock Split") on the trading market of our Common Stock;
•inability to successfully integrate the acquisition of Cedar Realty Trust, Inc.;
•changes in our ability to obtain and maintain financing;
•damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change;
•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;
•continued increases in the cost of necessary insurance could negatively impact the Company's profitability;
•information technology security breaches;
•the Company’s ability and willingness to maintain its qualification as a REIT;
•the ability of our operating partnership, Wheeler REIT, L.P., and each of our other partnerships and limited liability companies to be classified as partnerships or disregarded entities for federal income tax purposes;
4
•the impact of e-commerce on our tenants’ business; and
•inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. 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.

You should carefully consider the risks and uncertainties described in this Quarterly Report on Form 10-Q as they identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
5

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except par value and share data)
September 30, 2023December 31, 2022
 (unaudited) 
ASSETS:
Real estate:
           Land and land improvements$149,272 $144,537 
           Buildings and improvements504,123 494,668 
653,395 639,205 
           Less accumulated depreciation(91,176)(78,225)
Real estate, net562,219 560,980 
Cash and cash equivalents25,419 28,491 
Restricted cash23,438 27,374 
Receivables, net11,691 13,544 
Investment securities - related party6,580 — 
Above market lease intangibles, net2,347 3,134 
Operating lease right-of-use assets9,502 15,133 
Deferred costs and other assets, net30,741 35,880 
Total Assets$671,937 $684,536 
LIABILITIES:
Loans payable, net$477,432 $466,029 
Below market lease intangibles, net19,022 23,968 
Derivative liabilities13,392 7,111 
Operating lease liabilities10,377 16,478 
Series D Preferred Stock redemptions6,448 — 
Accounts payable, accrued expenses and other liabilities18,291 18,398 
Total Liabilities544,962 531,984 
Series D Cumulative Convertible Preferred Stock117,353 101,518 
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)
44,976 44,911 
Common Stock ($0.01 par value, 200,000,000 shares authorized, 980,857 and 979,396 shares issued and outstanding, respectively)
10 10 
Additional paid-in capital235,295 235,081 
Accumulated deficit(337,231)(295,617)
Total Stockholders’ Deficit(56,497)(15,162)
Noncontrolling interests66,119 66,196 
Total Equity9,622 51,034 
Total Liabilities and Equity$671,937 $684,536 
See accompanying notes to condensed consolidated financial statements.
6
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
 Three Months Ended
September 30,		Nine Months Ended September 30,
 2023202220232022
REVENUE:
Rental revenues$24,655 $18,486 $74,738 $49,142 
Other revenues549 232 1,372 552 
Total Revenue25,204 18,718 76,110 49,694 
OPERATING EXPENSES:
Property operations8,771 6,655 26,068 16,637 
Depreciation and amortization6,875 4,981 21,642 12,222 
Impairment of assets held for sale— — — 760 
Corporate general & administrative2,475 2,498 8,364 5,434 
Total Operating Expenses18,121 14,134 56,074 35,053 
Gain (loss) on disposal of properties2,204 — 2,204 (15)
Operating Income9,287 4,584 22,240 14,626 
Interest income163 15 336 42 
Gain on investment securities, net49 — 80 — 
Interest expense(7,469)(6,949)(24,125)(19,079)
Net changes in fair value of derivative liabilities(11,163)(656)(6,281)(2,533)
Other expense(2,233)— (5,273)(691)
Net Loss Before Income Taxes(11,366)(3,006)(13,023)(7,635)
Income tax expense(2)— (48)— 
Net Loss(11,368)(3,006)(13,071)(7,635)
Less: Net income attributable to noncontrolling interests2,693 1,234 8,061 1,237 
Net Loss Attributable to Wheeler REIT(14,061)(4,240)(21,132)(8,872)
Preferred Stock dividends - undeclared(2,415)(2,264)(6,940)(6,792)
Deemed distribution related to preferred stock redemptions(13,542)— (13,542)— 
Net Loss Attributable to Wheeler REIT Common Stockholders$(30,018)$(6,504)$(41,614)$(15,664)
Loss per share:
Basic and Diluted$(30.61)$(6.64)$(42.46)$(16.07)
Weighted average number of shares:
Basic and Diluted980,654 979,282 980,031 974,965 
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
 Preferred StockPreferred StockCommon StockAdditional
Paid-in Capital 		Accumulated Deficit
 SharesValueSharesValueSharesValue
Balance, December 31, 2022562 $453 3,379,142 $44,911 979,396 $10 $235,081 $(295,617)$(15,162)
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 
Conversion of Series D Preferred
  Stock to Common Stock		— — — — 625 — 140 — 140 
Adjusted for noncontrolling
  interest in operating partnership		— — — — — — (13)— (13)
Dividends and distributions— — — — — — — (2,264)(2,264)
Net (Loss) Income— — — — — — — (3,101)(3,101)
Balance, March 31, 2023 (Unaudited)562 453 3,379,142 44,933 980,021 10 235,208 (300,982)(20,378)
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 
Dividends and distributions— — — — — — — (2,261)(2,261)
Net (Loss) Income— — — — — — — (3,970)(3,970)
Balance, June 30, 2023 (Unaudited)562 453 3,379,142 44,955 980,021 10 235,208 (307,213)(26,587)
Accretion of Series B Preferred
  Stock discount		— — — 21 — — — — 21 
Conversion of Operating Partnership
  units to Common Stock		— — — — 898 — 57 — 57 
Adjustments for noncontrolling
  interest in operating partnership		— — — — — — 30 — 30 
Adjustment of Series D Preferred Stock
   to redemption value		— — — — — — — (13,542)(13,542)
Redemption of fractional units
   as a result of reverse stock split		— — — — (62)— — — — 
Dividends and distributions— — — — — — — (2,415)(2,415)
Net (Loss) Income— — — — — — — (14,061)(14,061)
Balance,
  September 30, 2023 (Unaudited)		562 $453 3,379,142 $44,976 980,857 $10 $235,295 $(337,231)$(56,497)
8
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of (Deficit) Equity (Unaudited, in thousands, except share data) Continued
Noncontrolling Interests
Operating PartnershipConsolidated SubsidiaryTotalTotal
Equity
Balance, December 31, 2022$1,351 $64,845 $66,196 $51,034 
Accretion of Series B Preferred
  Stock discount		— — — 22 
Conversion of Series D Preferred
  Stock to Common Stock		— — — 140 
Adjusted for noncontrolling
  interest in operating partnership		13 — 13 — 
Dividends and distributions— (2,688)(2,688)(4,952)
Net (Loss) Income4 2,688 2,692 (409)
Balance, March 31, 2023 (Unaudited)1,368 64,845 66,213 45,835 
Accretion of Series B Preferred
  Stock discount		— — — 22 
Dividends and distributions— (2,688)(2,688)(4,949)
Net (Loss) Income(12)2,688 2,676 (1,294)
Balance, June 30, 2023 (Unaudited)1,356 64,845 66,201 39,614 
Accretion of Series B Preferred
  Stock discount		— — — 21 
Conversion of Operating Partnership
  units to Common Stock		(57)— (57)— 
Adjustments for noncontrolling
  interest in operating partnership		(30)— (30)— 
Adjustment of Series D Preferred Stock
   to redemption value		— — — (13,542)
Redemption of fractional units
   as a result of reverse stock split		— — — — 
Dividends and distributions— (2,688)(2,688)(5,103)
Net (Loss) Income5 2,688 2,693 (11,368)
Balance,
  September 30, 2023 (Unaudited)		$1,274 $64,845 $66,119 $9,622 



9
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
 SharesValueSharesValueSharesValue
Balance,
  December 31, 2021		562 $453 1,872,448 $41,189 972,053 $10 $234,316 $(274,107)$1,861 
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 
Conversion of Series B Preferred
  Stock to Common Stock		— — (4,105)(90)256 — 90 — — 
Dividends and distributions— — — — — — — (2,264)(2,264)
Net (Loss) Income— — — — — — — (4,580)(4,580)
Balance,
March 31, 2022 (Unaudited)
562 453 1,868,343 41,121 972,309 10 234,406 (280,951)(4,961)
Accretion of Series B Preferred
  Stock discount		— — — 22 — — — — 22 
Conversion of Operating Partnership
  units to Common Stock		— — — — 6,962 — 159 — 159 
Adjustments for noncontrolling
  interest in operating partnership		— — — — — — 470 — 470 
Paid-in-kind interest, issuance of
  Series B Preferred Stock		— — 432,994 2,099 — — — — 2,099 
Dividends and distributions— — — — — — — (2,264)(2,264)
Net Loss— — — — — — — (52)(52)
Balance,
June 30, 2022 (Unaudited)
562 453 2,301,337 43,242 979,271 10 235,035 (283,267)(4,527)
Accretion of Series B Preferred
  Stock discount		— — — 21 — — — — 21 
Conversion of Operating Partnership
  units to Common Stock		— — — — 78 — 2 — 2 
Adjustments for noncontrolling
  interest in operating partnership		— — — — — — 7 — 7 
Noncontrolling interests assumed
   from the acquisition		— — — — — — — — — 
Dividends and distributions— — — — — — — (2,264)(2,264)
Net Loss— — — — — — — (4,240)(4,240)
Balance,
September 30, 2022 (Unaudited)
562 $453 2,301,337 $43,263 979,349 $10 $235,044 $(289,771)$(11,001)
10
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of (Deficit) Equity
 (Unaudited, in thousands, except share data)
Continued
Noncontrolling Interests
Operating PartnershipConsolidated SubsidiaryTotalTotal
Equity
Balance,
  December 31, 2021		$1,941 $— $1,941 $3,802 
Accretion of Series B Preferred
  Stock discount		— — — 22 
Conversion of Series B Preferred
  Stock to Common Stock		— — — — 
Dividends and distributions— — — (2,264)
Net (Loss) Income4 — 4 (4,576)
Balance,
March 31, 2022 (Unaudited)
1,945 — 1,945 (3,016)
Accretion of Series B Preferred
  Stock discount		— — — 22 
Conversion of Operating Partnership
  units to Common Stock		(159)— (159)— 
Adjustments for noncontrolling
  interest in operating partnership		(470)— (470)— 
Paid-in-kind interest, issuance of
  Series B Preferred Stock		— — — 2,099 
Dividends and distributions— — — (2,264)
Net Loss(1)— (1)(53)
Balance,
June 30, 2022 (Unaudited)
1,315 — 1,315 (3,212)
Accretion of Series B Preferred
  Stock discount		— — — 21 
Conversion of Operating Partnership
  units to Common Stock		(2)— (2)— 
Adjustments for noncontrolling
  interest in operating partnership		(7)— (7)— 
Noncontrolling interests assumed
   from acquisition		— 64,845 64,845 64,845 
Dividends and distributions— (1,225)(1,225)(3,489)
Net Loss9 1,225 1,234 (3,006)
Balance,
September 30, 2022 (Unaudited)
$1,315 $64,845 $66,160 $55,159 


See accompanying notes to condensed consolidated financial statements.

11
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
 For the Nine Months
Ended September 30,
 20232022
OPERATING ACTIVITIES:
Net Loss$(13,071)$(7,635)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
Depreciation and amortization21,642 12,222 
Deferred financing cost amortization2,357 2,154 
Changes in fair value of derivative liabilities6,281 2,533 
Above (below) market lease amortization, net(3,865)(478)
Paid-in-kind interest2,006 2,099 
Loss on repurchase of debt securities1,647 — 
Unrealized gain on investment securities, net(80)— 
Straight-line expense7 24 
(Gain) loss on disposal of properties(2,204)15 
Credit losses on operating lease receivables481 267 
Impairment of assets held for sale— 760 
Net changes in assets and liabilities:
Receivables, net1,373 222 
Deferred costs and other assets, net(3,166)3,074 
Accounts payable, accrued expenses and other liabilities1,624 12,697 
Net cash provided by operating activities15,032 27,954 
INVESTING ACTIVITIES:
Investment property acquisitions(4,259)(135,510)
Expenditures for real estate improvements(11,618)(6,382)
Purchase of investment securities(6,500)— 
Cash received from disposal of properties2,759 1,786 
Net cash used in investing activities(19,618)(140,106)
FINANCING ACTIVITIES:
Payments for deferred financing costs(4,440)(8,748)
Dividends and distributions paid on noncontrolling interests(8,064)— 
Loan proceeds123,230 265,000 
Loan principal payments(108,274)(127,603)
Repurchase of debt securities(3,116)— 
Loan prepayment penalty(1,758)(2,614)
Net cash (used in) provided by financing activities(2,422)126,035 
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(7,008)13,883 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period55,865 40,419 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$48,857 $54,302 
Supplemental Disclosure:
The following table provides a reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$25,419 $24,057 
Restricted cash23,438 30,245 
Cash, cash equivalents, and restricted cash$48,857 $54,302 
See accompanying notes to condensed consolidated financial statements.
12
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. (the "Trust," the "REIT," the "Company," "we," "our" or "us") 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, 2023, the Trust owned 99.11% of the Operating Partnership. As of September 30, 2023, the Trust, through the Operating Partnership, owned and operated seventy-five retail shopping centers and four undeveloped properties in South Carolina, Georgia, Virginia, Pennsylvania, North Carolina, Massachusetts, New Jersey, Florida, Connecticut, Kentucky, Tennessee, Alabama, Maryland, West Virginia, and Oklahoma. These centers and undeveloped properties include the properties acquired through the Cedar Acquisition (defined below). Accordingly, the use of the word “Company” refers to the Trust and its 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 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 our 7.00% Subordinated Convertible Notes due 2031 (the "Convertible Notes") for all periods presented reflect the one-for-ten Reverse Stock Split, which took effect on August 17, 2023. The 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 Quarterly Report on 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, 2022 (the "2022 Form 10-K").

The unaudited condensed consolidated financial statements included in this Quarterly Report on 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, or 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.

See the Company's audited 2022 Form 10-K for further disclosure regarding the Cedar Acquisition.
13
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
2. Summary of Significant Accounting Policies (continued)

Supplemental Condensed Consolidated Statements of Cash Flows Information

For the Nine Months
Ended September 30,
20232022
Non-Cash Transactions:
Conversion of common units to Common Stock$57 $160 
Conversion of Series B Preferred Stock to Common Stock$— $90 
Conversion of Series D Preferred Stock to Common Stock$140 $— 
Accretion of Preferred Stock discounts$438 $438 
Buildings and improvements included in accounts payable, accrued expenses and other liabilities$1,979 $736 
Other Cash Transactions:
Cash paid for amounts included in the measurement of operating lease liabilities$798 $700 
Cash paid for interest$18,951 $14,137 

Other Expense

Other expense represents expenses which are non-operating in nature. Other expenses were $2.2 million and $5.3 million for the three and nine months ended September 30, 2023, respectively, which consisted of $0.0 million and $2.4 million for an exchange offer (the "Exchange Offer") for outstanding shares of the Company's Series D Cumulative
Convertible Preferred Stock (the “Series D Preferred Stock”) and $1.1 million and $1.6 million for the three and nine months ended September 30, 2023, respectively, for the repurchases of the Company's Convertible Notes described in Note 7 in this Form 10-Q. Additionally, other expense included transaction costs related to the redemptions by holders of the Series D Preferred Stock and Reverse Stock Split for $1.1 million and $1.3 million for the three and nine months ended September 30, 2023, respectively.

Other expenses were $0.0 million and $0.7 million for the three and nine months ended September 30, 2022, respectively, which consisted of legal settlement costs.

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. All per share amounts, common units and shares outstanding, warrants, and conversion features of the Convertible Notes for all periods presented reflect our one-for-ten Reverse Stock Split which was effective August 17, 2023.

3. Real Estate

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

St. George Plaza Land Acquisition

14
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Real Estate (continued)
On February 21, 2023 the Company purchased a 2.5 acre land parcel adjacent to St. George Plaza, located in St.
George, South Carolina, for $0.2 million.

Devine Street Land Acquisition

On August 18, 2023, the Company purchased a 3.25 acre land parcel within Devine Street, located in Columbia, South Carolina, for $4.1 million (the "Devine Street Land Acquisition"). The Devine Street Land Acquisition terminated the Company's ground lease associated with this property.

Assets Held for Sale, Impairment and Dispositions

Impairment expenses on assets held for sale are a result of reducing the carrying value for the amount that exceeded the property's fair value less estimated selling costs. The valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 inputs. No impairment expense was recorded for the three and nine months ended September 30, 2023. Impairment expense was $0.0 million and $0.8 million for the three and nine months ended September 30, 2022, respectively, resulting from reducing the carrying value of Harbor Pointe Associates, LLC, an approximate 5 acre land parcel ("Harbor Pointe Land Parcel"). The Harbor Pointe Land Parcel did not meet the requirements to be classified as held for sale at September 30, 2023 or December 31, 2022.

The following properties were sold during the nine months ended September 30, 2023 and 2022 (in thousands, unaudited):
Disposal DatePropertyContract PriceGain (Loss)Net Proceeds
July 11, 2023Carll's Corner Outparcel$3,000 $2,204 $2,759 
January 11, 2022Walnut Hill Plaza$1,986 $(15)$1,786 

4. Investment Securities - Related Party
On June 1, 2023, the Company subscribed for an investment in the amount of $3.0 million for limited partnership interests in Stilwell Activist Investments, L.P., a limited partnership formed in the State of Delaware (“SAI”). On September 1, 2023, the Company subscribed for an additional investment in the amount of $3.5 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 (the "Board"), is the managing member of Value and a limited partner in funds advised by Value. Additionally, E.J. Borrack, a member of the Board, 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, 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.

The Company’s initial subscription was approved by the disinterested directors of the Company, and, after the formation of the Related Person Transactions Committee, the second subscription was approved 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.

The Company may not withdraw its capital from SAI for a period of one year measured from the date of the Company's initial investment, subject to certain exceptions.
15
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
4. Investment securities (continued)

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" on the condensed consolidated statements of operations. As of September 30, 2023, the fair value of the Company’s SAI investment was $6.6 million, which includes $6.5 million from subscriptions and $33 thousand in fees. Unrealized gains on investment securities, net of fees were $49 thousand and $80 thousand for the three and nine months ended September 30, 2023, 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, 2023December 31, 2022
Leases in place, net$18,374 $24,956 
Lease origination costs, net6,573 7,165 
Ground lease sandwich interest, net1,188 1,393 
Tenant relationships, net328 500 
Legal and marketing costs, net331 389 
Prepaid expenses3,944 1,456 
Other3 21 
    Total deferred costs and other assets, net$30,741 $35,880 
As of September 30, 2023 and December 31, 2022, the Company’s intangible accumulated amortization totaled $68.2 million and $62.4 million, respectively.

6. Rental Revenue and Tenant Receivables

Tenant Receivables

As of September 30, 2023 and December 31, 2022, the Company’s allowance for uncollectible tenant receivables totaled $1.3 million and $3.1 million, respectively.

Lease Contract Revenue

At September 30, 2023 and December 31, 2022, there were $7.5 million and $6.5 million, respectively, in unbilled straight-line rent, which is included in "receivables, net."








16
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)

6. Rental Revenue and Tenant Receivables (continued)
The below table disaggregates the Company’s revenue by type of service (in thousands, unaudited):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Base rent$18,190 $13,791 $54,316 $37,607 
Tenant reimbursements - variable lease revenue5,030 3,875 15,467 10,455 
Above (below) market lease amortization1,232 494 3,865 478 
Straight-line rents285 314 1,004 547 
Percentage rent - variable lease revenue217 89 567 322 
Lease termination fees— 10 115 117 
Other549 222 1,257 435 
     Total25,503 18,795 76,591 49,961 
Credit losses on operating lease receivables(299)(77)(481)(267)
     Total$25,204 $18,718 $76,110 $49,694 
17
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)



7. Loans Payable

The Company’s loans payable consist of the following (in thousands, except monthly payment):
Property/DescriptionMonthly PaymentInterest
Rate		MaturitySeptember 30, 2023December 31,
2022
Cypress Shopping Center$34,360 4.70%July 2024$5,804 $5,903 
Conyers Crossing Interest only 4.67%October 20255,960 5,960 
Winslow Plaza$24,295 4.82%December 20254,351 4,409 
Tuckernuck$32,202 5.00%March 20264,807 4,915 
Chesapeake Square$23,857 4.70%August 20264,038 4,106 
Sangaree/Tri-County$32,329 4.78%December 20266,014 6,086 
Timpany PlazaInterest only7.27%September 20289,060 — 
Village of Martinsville$89,664 4.28%July 202914,864 15,181 
Laburnum Square Interest only 4.28%September 20297,665 7,665 
Rivergate (1)$100,222 4.25%September 203117,670 18,003 
Convertible NotesInterest only7.00%December 203131,530 33,000 
Guggenheim Loan Agreement (2)Interest only4.25%July 203275,000 75,000 
JANAF Loan Agreement (3)Interest only5.31%July 203260,000 60,000 
Guggenheim-Cedar Loan Agreement (4)Interest only5.25%November 2032110,000 110,000 
Patuxent Crossing/Coliseum Marketplace Loan AgreementInterest only6.35%January 203325,000 25,000 
Term loan, 12 properties
Interest only6.19%June 203361,100 — 
Term loan, 8 properties
Interest only6.24%June 203353,070 — 
Term loans - fixed interest ratevarious
      4.47% (5)
various— 107,219 
Total Principal Balance 495,933 482,447 
Unamortized deferred financing cost (18,501)(16,418)
Total Loans Payable, net$477,432 $466,029 

(1) In October 2026, the interest rate changes to variable interest rate equal to the 5 years U.S. Treasury Rate plus 2.70%, with a floor of 4.25%.
(2) Collateralized by 22 properties.
(3) Collateralized by JANAF properties.
(4) Collateralized by 10 Cedar properties.
(5) Contractual interest rate weighted average.

Debt Maturity

The Company’s scheduled principal repayments on indebtedness as of September 30, 2023 are as follows (in thousands, unaudited):

For the remaining three months ended December 31, 2023$361 
December 31, 20247,220 
December 31, 202512,313 
December 31, 202616,260 
December 31, 20273,049 
December 31, 202812,924 
Thereafter443,806 
    Total principal repayments and debt maturities$495,933 

Term Loan Agreement, 12 properties

On May 5, 2023, the Company entered into a loan agreement (the "Term Loan Agreement, 12 properties") for $61.1 million at a fixed rate of 6.194% and interest-only payments due monthly through June 2025. Commencing in July 2025, until the maturity date of June 1, 2033, monthly principal and interest payments will be $0.4 million. Loan proceeds were used to refinance 12 properties, including $1.1 million in defeasance.

Term Loan Agreement, 8 properties

18
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
7. Loans Payable (continued)

On May 18, 2023, the Company entered into a loan agreement (the "Term Loan Agreement, 8 properties") for $53.1 million at a fixed rate of 6.24% and interest-only payments due monthly through June 2028. Commencing in July 2028, until the maturity date of June 10, 2033, monthly principal and interest payments will be $0.3 million. Loan proceeds were used to refinance 8 properties, including $0.7 million in defeasance.

Timpany Plaza Loan Agreement
On September 12, 2023, the Company entered into a term loan agreement with Cornerstone Bank for $11.6 million at a fixed rate of 7.27% with interest-only payments due monthly for the first twelve months (the "Timpany Plaza Loan Agreement"). Commencing on September 12, 2024, until the maturity date of September 12, 2028, monthly principal and interest payments will be made based on a 30-year amortization schedule calculated based on the principal amount as of that time. On the closing date, the Company received $9.1 million of the $11.6 million, and the remaining $2.5 million will be received upon certain lease-related contingencies being met. The Timpany Plaza Loan Agreement is collateralized by the Timpany Plaza shopping center.

Convertible Notes

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
number of shares (1)
Series D Preferred Stock
number of shares (1)
Convertible Note interest at 7% coupon
Fair value adjustmentInterest expense
2023— 160,455 $1,718 $851 $2,569 
2022432,994 — $1,733 $944 $2,677 
   (1) Shares issued as interest payment on Convertible Notes.

On June 8, 2023, the Company paid down $0.6 million of the Convertible Notes through an open market purchase
of 23,784 units totaling $1.2 million. On September 11, 2023, the Company paid down $0.9 million of the Convertible Notes through an open market purchase of 35,000 units totaling $1.9 million. As a result of these transactions, the Company recognized a $1.1 million and $1.6 million loss for the three and nine months ended September 30, 2023, respectively, which represents the fair value of the purchase over principal pay down. The loss is included in "other expense" on the condensed consolidated statements of operations.

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 a similar term and maturities. As of September 30, 2023 and December 31, 2022, the fair value of the Company’s fixed rate secured term loans, which were determined to be Level 3 within the valuation hierarchy, was $441.8 million and $429.1 million, respectively, and the carrying value of such loans, was $451.2 million and $440.2 million, respectively.

The fair value of the Convertible Notes was estimated using available market information. As of September 30, 2023 and December 31, 2022, the fair value of the Convertible Notes, which were determined to be Level 1 within the valuation hierarchy, was $69.4 million and $40.9 million, respectively, and the carrying value, was $26.2 million and $25.8 million, respectively.



8. Derivative Liabilities

Fair Value of Warrants

The Company utilized the Monte Carlo simulation model to calculate the fair value of the two warrant agreements (the "Warrant Agreements") described within the 2022 Form 10-K. 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 Monte
19

Table of Contents      Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
8. Derivative Liabilities (continued)


Carlo simulation is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. The Warrant Agreements contain terms and features that give rise to derivative liability classification.

Warrants to purchase shares of Common Stock outstanding at September 30, 2023 and December 31, 2022 are as follows:

Warrant NameWarrantsExercise PriceExpiration Date
Powerscourt Warrant49,641$31.2012/22/2023
Wilmington Warrant Tranche A51,020$34.303/12/2026
Wilmington Warrant Tranche B42,424$41.253/12/2026
Wilmington Warrant Tranche C12,727$68.753/12/2026