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): December 20, 2018

 

American Finance Trust, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Maryland   001-38597   90-0929989

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(I.R.S. Employer

Identification No.)

 

405 Park Avenue, 3rd Floor

New York, New York 10022

(Address, including zip code, of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (212) 415-6500

 

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))

 

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. x

 

 

 

 
 

 

Item 3.03. Material Modification to Rights of Security Holders.

 

Class B-2 Common Stock Conversion Date Set

 

On December 20, 2018, American Finance Trust, Inc. (the “Company”) filed a Certificate of Notice (the “Certificate”) with the State Department of Assessments and Taxation of Maryland providing notice of the determination by the Board of Directors of the Company (the “Board”) to change the date on which all shares of Class B-2 common stock, par value $0.01 per share (“Class B-2 Common Stock”), of the Company will automatically convert into shares of Class A common stock, par value $0.01 per share (“Class A Common Stock”), of the Company and be listed on The Nasdaq Global Select Market (“Nasdaq”) from January 15, 2019 to January 9, 2019. This determination by the Board became effective upon the filing of the Certificate. Upon the completion of the conversion of the Class B-2 Common Stock, all of the Company’s outstanding common stock will be Class A Common Stock listed on Nasdaq.

 

The foregoing summary of the material terms of the Certificate does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Certificate which is attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

The information set forth in Item 3.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 5.03.

 

Item 7.01. Regulation FD Disclosure.

 

On December 20, 2018, the Company published a list of frequently asked questions regarding the conversion of the Class B-2 Common Stock to Class A Common Stock on its website, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information set forth in Item 7.01 of this Current Report on Form 8-K and in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information set forth in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.

 

The statements in this Current Report on Form 8-K include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “strives,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements, including as a result of those factors set forth in the Risk Factors section of the Company’s most recent annual report on Form 10-K and the Company’s most recent quarterly report on Form 10-Q. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, or revise forward-looking unless required by law.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No   Description
3.1   Certificate of Notice of American Finance Trust, Inc. filed with the State Department of Assessments and Taxation of Maryland on December 20, 2018
99.1   Class B-2 Common Stock Conversion Date FAQs

 

   

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  AMERICAN FINANCE TRUST, INC.
   
     
  By: /s/ Edward M. Weil, Jr.
    Edward M. Weil, Jr.
   

Chief Executive Officer and President

(Principal Executive Officer)

 

Dated: December 20, 2018

 

 

 

 

Exhibit 3.1

 

AMERICAN FINANCE Trust, Inc.

 

CERTIFICATE OF NOTICE

 

 

THIS IS TO CERTIFY THAT:

 

FIRST : The Board of Directors of American Finance Trust, Inc., a Maryland corporation (the “Company”), pursuant to the charter of the Company, including the terms of the Class B-2 Common Stock, $0.01 par value per share, of the Company (the “Class B-2 Common Shares”), has determined that each issued and outstanding Class B-2 Common Share shall automatically, and without any action on the part of the holder thereof, convert into one share of Class A Common Stock, $0.01 par value per share, of the Company at 12:01 a.m., Eastern time, on January 9, 2019.

 

SECOND : The undersigned officer acknowledges this Certificate of Notice to be the corporate act of the Company and as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that to the best of such officer’s knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Notice to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Chief Financial Officer on this 19 th day of December, 2018.

 

ATTEST:   AMERICAN FINANCE TRUST, INC.  
             
             
             
/s/ Katie Kurtz   By: /s/ Edward M. Weil, Jr. (SEAL)
Name: Katie Kurtz     Name: Edward M. Weil, Jr.
Title:   Chief Financial Officer     Title: Chief Executive Officer

 

 

 

 

 

Exhibit 99.1

 

 

 

IMPORTANT INFORMATION AMERICAN FINANCE TRUST SETS THE CONVERSION DATE FOR ITS CLASS B-2 SHARES TO CONVERT INTO CLASS A SHARES American Finance Trust, Inc. (“AFIN”) announced on December 20, 2018 that all issued and outstanding shares of its Class B-2 common stock (“Class B-2 Shares”) will automatically convert into shares of its Class A common stock (“Class A Shares”) on January 9, 2019 (the “Conversion Date”). AFIN’s Class A Shares trade on the Nasdaq under the ticker symbol AFIN. The Class B-2 Shares represent approximately 25% of AFIN’s total outstanding shares. As of the Conversion Date 100% of AFIN’s common stock will be tradeable. FREQUENTLY ASKED QUESTIONS WHAT DO I NEED TO DO IN ADVANCE OF THE CONVERSION DATE? 1) Financial advisors should confirm access to DST Vision and accuracy of information on client accounts, especially Tax IDs. 2) Financial advisors or shareholders should confirm DRS instructions and necessary forms with your broker dealer or preferred brokerage (for more information on DRS, please see below). 3) Submit any account maintenance or transfer requests as soon as possible. Maintenance and transfers will be frozen from January 2, 2019 until after the Conversion Date. WHAT IS DRS? 1) DRS is an electronic transfer of shares from the transfer agent. 2) All non-custodial accounts must be sent to brokerage accounts via DRS system. 3) DRS takes three business days to complete. 4) DRS is a “pull” process, AFIN cannot “push” shares out to your brokerage account. 5) Information needed to initiate a DRS request includes: a. An account confirmation showing the shares you own (we will mail you a confirmation shortly after the conversion of your Class B-2 Shares into Class A Shares, this is also available online at www.ar-global.com for shareholders or www.dstvision.com for financial advisors). b. AFIN’s Class A CUSIP: 02607T109 c. Our Transfer Agent’s DTC Identifier: 07889 d. Any other documents your broker may require. YOU MUST CONTACT YOUR BROKER TO DETERMINE THEIR REQUIREMENTS. 6) Should shareholders wish to sell shares, we recommend that you first move shares owned to a brokerage account. 7) Most custodial held accounts will automatically move shares to the custodian.

 

 

 

 

 

 

IMPORTANT INFORMATION HOW DO I SELL MY AFIN SHARES AFTER THE CONVERSION? After the Conversion Date, any shareholder wishing to sell shares may do so in one of two ways: 1) For maximum flexibility, we suggest moving shares into a brokerage account with a firm of your choice. 2) Alternatively, DST Systems, Inc. can facilitate a trade for you. Shares sold through this method will be sold only at current market price and could take up to 24 hours to be executed. Please call 866-902-0063 for more information. DST Systems, Inc. will charge you $20.00 plus $0.03 per share transaction fee to sell your shares. WHAT TAX CONSIDERATIONS SHOULD I BE AWARE OF? HOW WILL COST BASIS BE DETERMINED AND TRANSMITTED? 1) The conversion of Class B-2 Shares into Class A Shares is not expected to have any tax impact to current AFIN shareholders or affect their cost basis or original purchase date for purposes of determining long-term capital gains or losses. 2) Cost basis will be transmitted to brokerage accounts if and when shares are moved out of our transfer agent’s records. 3) Shareholders should consult a qualified tax professional with any questions about the tax effects of selling Class A Shares received in the conversion and the purchase of fractional Class B-2 Shares for cash discussed below. FRACTIONAL SHARE REPURCHASE Many holders of Class B-2 Shares own fractional shares. The DRS system allows only for whole shares to be moved through its system and does not allow for fractional shares to be transmitted to brokerage accounts. As a result, on the Conversion Date, AFIN will run a process to purchase any fractional Class B-2 Shares you might have and issue a cash payment to you in a taxable transaction. The price for the fractional Class B-2 share repurchase will be based on the closing price of Class A Shares on the Nasdaq on the Conversion Date. Participants in AFIN’s distribution reinvestment plan will see Class A share balances which may include fractional shares held on the books of our transfer agent. ACCOUNT CONSOLIDATION Many shareholders who purchased shares of both AFIN and ARC Retail Centers of America during their initial equity raises currently own AFIN Class B-2 Shares in two accounts with identical registration. When we convert these shares to Class A Shares on the Conversion Date we will deposit ALL of these shares into only ONE Class A account. For example, if you own 500 Class B-2 Shares in account 160012345 and 200 Class B-2 Shares in account 150012345, we will convert these into 700 Class A Shares in account 150012345 and both Class B-2 accounts will be closed.