UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 4, 2022
Bluerock Homes Trust, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 001-41322 | 87-4211187 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
1345 Avenue of the Americas, 32nd Floor
New York, NY 10105
(Address of principal executive offices)
(212) 843-1601
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Class A Common Stock, $0.01 par value per share | BHM | NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company x
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. ¨
| ITEM 7.01 | REGULATION FD DISCLOSURE |
As reported in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (“SEC”) by Bluerock Homes Trust, Inc. (the “Company”) on October 6, 2022, on October 6, 2022, the Company consummated the transactions contemplated by the Separation and Distribution Agreement (the “Separation and Distribution Agreement”) dated October 5, 2022, by and among Bluerock Residential Growth REIT, Inc. (“BRG”), Badger Parent LLC, Badger Holdco LLC and Bluerock Residential Holdings, L.P. (the “Operating Partnership"), pursuant to which, among other things, BRG agreed to separate the Company from BRG (the “Separation”), and distribute (the “Distribution”) all of the outstanding common stock of the Company to BRG stockholders who held shares of BRG common stock as of the close of business on September 29, 2022, the record date for the Distribution (the transactions contemplated by the Separation and Distribution Agreement, collectively, the “Transactions”).
This Current Report on Form 8-K provides unaudited pro forma combined financial statements of the Company, as described in Item 9.01 below and which are incorporated into this Item 7.01 by reference, which give effect to the Company’s post-Separation capital structure in which the Company owns approximately 34% of the Operating Partnership, with the remaining 66% being owned by the persons who are limited partners (other than the Company) of the Operating Partnership. The unaudited pro forma combined financial statements also give effect to the cash contributed to the Company on October 6, 2022. Pursuant to the Separation and Distribution Agreement, BRG contributed to the Company the SpinCo Cash Amount (as that term is defined the Separation and Distribution Agreement) of approximately $73.8 million in cash; in addition, the Company held $22.0 million at its properties for a total cash and restricted cash balance of $95.8 million on October 6, 2022.
The unaudited pro forma combined financial statements present how the Company’s financial statements may have appeared had the Company completed the Transactions as of January 1, 2022.
In accordance with General Instruction B.2 of Form 8-K, the information set forth herein is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Exchange Act. The information set forth in this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(b) Pro forma financial information
The following unaudited pro forma combined financial information of the Company, giving effect to the Transactions, attached as Exhibit 99.1 hereto:
| · | Unaudited Pro Forma Combined Financial Statements as of September 30, 2022 and for the three and nine months ended September 30, 2022; and |
| · | Notes to the Unaudited Pro Forma Combined Financial Statements |
(d) Exhibits
The following exhibit relating to Item 7.01 of this Current Report on Form 8-K is intended to be furnished to, not filed with, the SEC pursuant to Regulation FD.
| Exhibit No. | Exhibit |
| 99.1 | Unaudited Pro Forma Combined Financial Statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 |
| 104 | The cover page from this Current Report on Form 8-K, formatted in inline XBRL |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BLUEROCK HOMES TRUST, INC. | ||
| DATE: November 4, 2022 | By: | /s/ Christopher J. Vohs |
| Christopher J. Vohs | ||
| Chief Financial Officer and Treasurer | ||
Exhibit 99.1
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
As of September 30, 2022 and for the Three and Nine Months Ended September 30, 2022
On October 6, 2022, Bluerock Homes Trust, Inc. (the “Company” or “Bluerock Homes”) consummated the transactions contemplated by the Separation and Distribution Agreement (the “Separation and Distribution Agreement”) dated October 5, 2022, by and among Bluerock Residential Growth REIT, Inc. (“BRG”), Badger Parent LLC, Badger Holdco LLC and Bluerock Residential Holdings, L.P. (the “Operating Partnership”), pursuant to which, among other things, BRG agreed to separate the Company from BRG by contributing certain single-family properties and other assets held through investments in the general and limited partner interests in the Operating Partnership, to the Company (the “Separation,” and such properties, the “Single-Family Properties”), and distribute (the “Distribution”) all of the outstanding common stock of the Company to BRG stockholders who held shares of BRG common stock as of the close of business on September 29, 2022, the record date for the Distribution.
The following unaudited pro forma combined financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 have been derived from the historical combined financial statements of the Operating Partnership and Bluerock REIT Operator, LLC, as well as the following investments and certain related entities: Alexan Southside Place, ARIUM Grandewood, Ballast, Golden Pacific, ILE, James at South First, Marquis at The Cascades, Mira Vista, Navigator Villas, Peak Housing (Axelrod, DFW 189, Granbury, Granbury 2.0, Indy, Lubbock, Lubbock 2.0, Lubbock 3.0, Lynnwood, Lynnwood 2.0, Peak I, Savannah 319, Springfield, Springtown, Springtown 2.0, Texarkana and Texas Portfolio 183), Park & Kingston, Plantation Park, The Conley, The Cottages at Myrtle Beach, The Cottages at Warner Robins, The Cottages of Port St. Lucie, The District at Scottsdale, The Hartley at Blue Hill, The Woods at Forest Hill, Thornton Flats, Vickers Historic Roswell, Wayford at Concord, Wayford at Innovation Park, Weatherford 185, Willow Park and Yauger Park Villas (collectively, the “Predecessor Entity”). The following unaudited pro forma combined financial statements give effect to our post-Separation capital structure of which common stockholders indirectly own approximately 34% of the Single-Family Properties and certain other assets (collectively, the “Bluerock Homes Business”) and the unitholders in the Operating Partnership own approximately 66% of the Bluerock Homes Business and give effect to the cash contributed to the Company on October 6, 2022. Pursuant to the Separation and Distribution Agreement, BRG contributed to the Company the SpinCo Cash Amount (as that term is defined the Separation and Distribution Agreement) of approximately $73.8 million in cash; in addition, the Company held $22.0 million at its properties for a total cash and restricted cash balance of $95.8 million on October 6, 2022.
Our unaudited pro forma combined financial statements and explanatory notes present how our financial statements may have appeared had we completed the above transaction as of the dates noted above.
The following unaudited pro forma combined financial statements were prepared using the assumptions set forth in the notes to our unaudited pro forma combined financial statements. The unaudited pro forma combined financial statements are presented for illustrative purposes only and do not purport to reflect the results we may achieve in future periods or the historical results that would have been obtained had the above transactions been completed on January 1, 2022. The unaudited pro forma combined financial statements also do not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transactions described above.
The unaudited pro forma combined financial statements do not indicate results expected for any future period. The unaudited pro forma combined financial statements are derived from and should be read in conjunction with the historical combined financial statements and accompanying notes of the Predecessor Entity.
BLUEROCK HOMES TRUST, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2022
(In thousands)
| Predecessor Historical | Transaction Accounting Adjustments | Pro Forma Total | ||||||||||||||
| ASSETS | ||||||||||||||||
| Net Real Estate Investments | ||||||||||||||||
| Land | $ | 68,944 | $ | — | $ | 68,944 | ||||||||||
| Building and improvements | 406,264 | — | 406,264 | |||||||||||||
| Furniture, fixtures and equipment | 6,496 | — | 6,496 | |||||||||||||
| Total Gross Real Estate Investments | 481,704 | — | 481,704 | |||||||||||||
| Accumulated depreciation | (14,017 | ) | — | (14,017 | ) | |||||||||||
| Total Net Real Estate Investments | 467,687 | — | 467,687 | |||||||||||||
| Cash and cash equivalents | 186,278 | (95,044 | ) | A | 91,234 | |||||||||||
| Restricted cash | 4,566 | — | 4,566 | |||||||||||||
| Accounts receivable, prepaids and other assets | 15,954 | — | 15,954 | |||||||||||||
| Preferred equity investments in unconsolidated real estate joint ventures | 82,932 | — | 82,932 | |||||||||||||
| Total Assets | $ | 757,417 | $ | (95,044 | ) | $ | 662,373 | |||||||||
| LIABILITIES AND NET PARENT INVESTMENT | ||||||||||||||||
| Mortgages payable | $ | 98,634 | $ | — | $ | 98,634 | ||||||||||
| Revolving credit facilities | 55,000 | — | 55,000 | |||||||||||||
| Accounts payable | 2,276 | — | 2,276 | |||||||||||||
| Other accrued liabilities | 14,141 | — | 14,141 | |||||||||||||
| Due to affiliates | 410 | — | 410 | |||||||||||||
| Distributions payable | 1,276 | — | 1,276 | |||||||||||||
| Total Liabilities | 171,737 | — | 171,737 | |||||||||||||
| Net Parent Investment | ||||||||||||||||
| Bluerock Homes equity | 561,740 | (403,063 | ) | B | 158,677 | |||||||||||
| Noncontrolling Interests | ||||||||||||||||
| Operating Partnership units | — | 308,019 | C | 308,019 | ||||||||||||
| Partially owned properties | 23,940 | — | 23,940 | |||||||||||||
| Total Noncontrolling Interests | 23,940 | 308,019 | 331,959 | |||||||||||||
| Total Net Parent Investment | 585,680 | (95,044 | ) | 490,636 | ||||||||||||
| TOTAL LIABILITIES AND NET PARENT INVESTMENT | $ | 757,417 | $ | (95,044 | ) | $ | 662,373 | |||||||||
See Notes to Unaudited Pro Forma Combined Balance Sheet
BLUEROCK HOMES TRUST, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022
(In thousands)
| Predecessor Historical | Transaction Accounting Adjustments | Pro Forma Total | ||||||||||||||
| Revenues | ||||||||||||||||
| Rental and other property revenues | $ | 8,608 | $ | — | $ | 8,608 | ||||||||||
| Interest income from loan investments | 69 | — | 69 | |||||||||||||
| Total revenues | 8,677 | — | 8,677 | |||||||||||||
| Expenses | ||||||||||||||||
| Property operating | 4,440 | — | 4,440 | |||||||||||||
| Property management and asset management fees | 1,098 | — | 1,098 | |||||||||||||
| General and administrative | 1,802 | — | 1,802 | |||||||||||||
| Acquisition and pursuit costs | 28 | — | 28 | |||||||||||||
| Depreciation and amortization | 3,631 | — | 3,631 | |||||||||||||
| Total expenses | 10,999 | — | 10,999 | |||||||||||||
| Operating loss | (2,322 | ) | — | (2,322 | ) | |||||||||||
| Other income (expense) | ||||||||||||||||
| Preferred returns on unconsolidated real estate joint ventures | 2,613 | — | 2,613 | |||||||||||||
| Provision for credit losses | (4 | ) | — | (4 | ) | |||||||||||
| Interest expense, net | (22 | ) | — | (22 | ) | |||||||||||
| Total other income | 2,587 | — | 2,587 | |||||||||||||
| Net income from continuing operations | 265 | — | 265 | |||||||||||||
| Discontinued operations | ||||||||||||||||
| Income on operations of rental property | 53 | — | 53 | |||||||||||||
| Gain from sale of assets from discontinued operations | 258 | — | 258 | |||||||||||||
| Income from discontinued operations | 311 | — | 311 | |||||||||||||
| Net income | 576 | — | 576 | |||||||||||||
| Net (loss) income attributable to noncontrolling interests | ||||||||||||||||
| Operating Partnership units | — | 556 | D | 556 | ||||||||||||
| Partially owned properties | (265 | ) | — | (265 | ) | |||||||||||
| Net (loss) income attributable to noncontrolling interests | (265 | ) | 556 | 291 | ||||||||||||
| Net income attributable to Bluerock Homes | $ | 841 | (556 | ) | 285 | |||||||||||
See Notes to Unaudited Pro Forma Combined Statement of Operations
BLUEROCK HOMES TRUST, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022
(In thousands)
| Predecessor Historical | Transaction Accounting Adjustments | Pro Forma Total | ||||||||||||||
| Revenues | ||||||||||||||||
| Rental and other property revenues | $ | 23,136 | $ | — | $ | 23,136 | ||||||||||
| Interest income from loan investments | 1,285 | — | 1,285 | |||||||||||||
| Total revenues | 24,421 | — | 24,421 | |||||||||||||
| Expenses | ||||||||||||||||
| Property operating | 10,994 | — | 10,994 | |||||||||||||
| Property management and asset management fees | 2,591 | — | 2,591 | |||||||||||||
| General and administrative | 4,991 | — | 4,991 | |||||||||||||
| Acquisition and pursuit costs | 98 | — | 98 | |||||||||||||
| Depreciation and amortization | 12,159 | — | 12,159 | |||||||||||||
| Total expenses | 30,833 | — | 30,833 | |||||||||||||
| Operating loss | (6,412 | ) | — | (6,412 | ) | |||||||||||
| Other income (expense) | ||||||||||||||||
| Other income | 100 | — | 100 | |||||||||||||
| Preferred returns on unconsolidated real estate joint ventures | 5,801 | — | 5,801 | |||||||||||||
| Recovery of credit losses | 369 | — | 369 | |||||||||||||
| Interest expense, net | (2,982 | ) | — | (2,982 | ) | |||||||||||
| Total other income | 3,288 | — | 3,288 | |||||||||||||
| Net loss from continuing operations | (3,124 | ) | — | (3,124 | ) | |||||||||||
| Discontinued operations | ||||||||||||||||
| Income on operations of rental property | 53 | — | 53 | |||||||||||||
| Gain from sale of assets from discontinued operations | 258 | — | 258 | |||||||||||||
| Income from discontinued operations | 311 | — | 311 | |||||||||||||
| Net loss | (2,813 | ) | — | (2,813 | ) | |||||||||||
| Net (loss) income attributable to noncontrolling interests | ||||||||||||||||
| Operating Partnership units | — | 21 | D | 21 | ||||||||||||
| Partially owned properties | (2,844 | ) | — | (2,844 | ) | |||||||||||
| Net income attributable to noncontrolling interests | (2,844 | ) | 21 | (2,823 | ) | |||||||||||
| Net income attributable to Bluerock Homes | $ | 31 | (21 | ) | 10 | |||||||||||
See Notes to Unaudited Pro Forma Combined Statement of Operations
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Adjustments to the Unaudited Pro Forma Combined Balance Sheet
The unaudited pro forma combined balance sheet as of September 30, 2022 reflects the following adjustments:
A. Cash
On October 6, 2022, pursuant to the Separation and Distribution Agreement, BRG contributed to the Company the SpinCo Cash Amount (as that term is defined the Separation and Distribution Agreement) of approximately $73.8 million in cash; in addition, the Company held $22.0 million at its properties for a total cash and restricted cash balance of $95.8 million on October 6, 2022.
B. Equity
Represents the equity of Bluerock Homes’ common stockholders. Following the Separation and the Distribution, the stockholders who receive shares of Bluerock Homes in the Distribution indirectly own approximately 34% of the Bluerock Homes Business.
C. Noncontrolling interests – Operating Partnership units
The operating partnership units adjustment represents the interests of the Operating Partnership’s unitholders. Following the Separation and the Distribution, the unitholders indirectly own approximately 66% of the Bluerock Homes Business.
Adjustments to the Unaudited Pro Forma Combined Statement of Operations
The unaudited pro forma combined statement of operations for the three and nine months ended September 30, 2022 reflects the following adjustment:
D. Net income (loss) attributable to noncontrolling interests
Represents the adjustment to allocate net income (loss) to noncontrolling interests for Operating Partnership unitholders.