UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

____________________

 

FORM 8-K/A

____________________

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): October 5, 2017 (July 20, 2017)

____________________

 

Plymouth Industrial REIT Inc.
(Exact name of registrant as specified in its charter)

____________________

 

Maryland 001-38106 27-54466153
(State or Other Jurisdiction
of Incorporation) 		(Commission
File Number) 		(I.R.S. Employer
Identification No.)
     
 

260 Franklin Street, 6 th Floor
Boston, MA
02110

 
  (Address of Principal Executive Offices)
(Zip Code) 		 

 

(617) 340-3814
(Registrant’s Telephone Number, Including Area Code)

____________________

 

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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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. ☑

 

 

 

Explanatory Note

 

On July 21, 2017, Plymouth Industrial REIT, Inc. (the “Company”) announced that on July 20, 2017 it, through a wholly owned subsidiary of its operating partnership, Plymouth Industrial OP, LP, completed the acquisition of six (6) industrial properties (the “South Bend Properties”) for an aggregate purchase price of $26 million. The South Bend Properties consist of an aggregate of approximately 667,000 rentable square feet and are located in South Bend, Indiana.

 

This Current Report on Form 8-K/A amends Item 9.01 of the original Form 8-K filed on July 21, 2017 (the “Prior Report”) to present the historical financial statements and the unaudited pro forma financial information required to be filed by Item 9.01 (a) and (b), for the Company’s acquisition of the South Bend Properties. This report also incorporates information previously disclosed regarding the completion of the acquisition of the South Bend Properties.

 

  Item 2.01 Completion of Acquisition or Disposition of Assets.

 

The information contained in Item 1.01 of the Prior Report is incorporated herein by reference.

 

  Item 9.01 Financial Statements and Exhibits.

 

  (a) Financial Statements of Business Acquired

 

The statements of revenues and certain operating expenses of the South Bend Properties for the six months ended June 30 2017 (unaudited) and the year ended December 31, 2016, along with the accompanying notes to the statements of revenues and certain operating expenses for the periods presented, are filed as Exhibit 99.1 to this Current Report on Form 8-K/A and are incorporated by reference herein.

 

  (b) Pro-forma Financial Information

 

This Current Report on Form 8-K/A includes the Company’s unaudited pro forma consolidated balance sheet as of December 31, 2016, the Company’s unaudited pro forma consolidated statements of operations for the six months ended June 30, 2017 and the year ended December 31, 2016, and notes to the unaudited pro forma consolidated financial statements. This unaudited consolidated financial information is filed as Exhibit 99.2 to this Current Report on Form 8-K/A and is incorporated herein by reference.

 

This unaudited pro forma financial information is not necessarily indicative of the expected financial position or results of the Company’s operations for any future period. Differences could result from numerous factors, including future changes in the Company’s portfolio of investments, changes in interest rates, changes in the Company’s capital structure, changes in property level operating expenses, changes in property level revenues, including rents expected to be received from the Company’s existing leases or leases the Company may enter into during and after 2017, and for other reasons.

 

  (d) Exhibits

 

  99.1 Statements of revenues and certain operating expenses of the South Bend Properties for the six months ended June 30, 2017 (unaudited) and the year ended December 31, 2016, and the notes to the statements of revenues and certain operating expenses for the periods presented.

 

  99.2 Unaudited pro forma consolidated balance sheet as of June 30, 2017, unaudited pro forma consolidated statements of operations for the six months ended June 30, 2017 and for the year ended December 31, 2016, and notes to the unaudited pro forma consolidated financial statements.

 

 

 

 

 

SIGNATURES

 

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

 

  Plymouth Industrial REIT Inc.
     
     
  By: /s/  Jeffrey E. Witherell
    Jeffrey E. Witherell
    Chief Executive Officer

 

Dated: October 5, 2017

 

 

 

 

EXHIBIT INDEX

 

  99.1 Statements of revenues and certain operating expenses of the South Bend Properties for the six months ended June 30, 2017 (unaudited) and the year ended December 31, 2016, and the notes to the statements of revenues and certain operating expenses for the periods presented.

 

  99.2 Unaudited pro forma consolidated balance sheet as of June 30, 2017, unaudited pro forma consolidated statements of operations for the six months ended June 30, 2017 and for the year ended December 31, 2016, and notes to the unaudited pro forma consolidated financial statements.

 

 

Exhibit 99.1

 

 

 

INDEPENDENT AUDITORS’ REPORT

 

To the Board of Directors and Stockholders

Plymouth Industrial REIT, Inc.

 

Report on the Financial Statement

 

We have audited the accompanying combined statement of revenues and certain expenses of CS – South Bend Portfolio for the year ended December 31, 2016, and the related notes to the combined statement of revenues and certain expenses.

 

Management's Responsibility for the Financial Statement

 

Management is responsible for the preparation and fair presentation of this financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is free from material misstatement, whether due to fraud or error.

 

Auditors’ Responsibility

 

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the combined financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opini on.

 

 

1  

 

 

Opinion

 

In our opinion, the financial statement referred to above presents fairly, in all material respects, the combined revenues and certain expenses, described in Note 2, of CS – South Bend Portfolio for the year ended December 31, 2016, in accordance with accounting principles generally accepted in the United States of America.

 

Emphasis of Matter

 

We draw attention to Note 2 to the financial statement, which describes that the accompanying combined financial statement was prepared for the purpose of complying with rules and regulations of the U.S. Securities and Exchange Commission and it is not intended to be a complete presentation of CS – South Bend Portfolio’s combined revenues and expenses. Our opinion is not modified with respect to that matter.

 

 

 

Boston, MA
September 26, 2017

 

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CS - South bend PORTFOLIO

 

COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

 

FOR THE YEAR ENDED DeCEMBER 31, 2016 and

for the six months ended june 30, 2017 (unaudited)

 

    Six Months Ended        
    June 30, 2017     Year Ended  
    (Unaudited)     December 31, 2016  
             
Revenues                
Rental revenue   $ 1,201,501     $ 2,403,000  
Tenant reimbursements     242,445       568,880  
                 
Total Revenues     1,443,946       2,971,880  
                 
Certain Expenses                
Real estate taxes     242,445       568,880  
                 
Total Certain Expenses     242,445       568,880  
                 
Revenues in Excess of Certain Expenses   $ 1,201,501     $ 2,403,000  

 

The accompanying notes are an integral part of the combined statements of revenue and certain expenses .

 

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CS - South bend PORTFOLIO

 

Notes to CoMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

 

FOR THE YEAR ENDED DeCEMBER 31, 2016 and

for the six months ended june 30, 2017 (unaudited)

 

Note 1 – Description of portfolio

 

CS - South Bend Portfolio (the “Portfolio”) consists of a group of six fully-constructed industrial complex facilities located in South Bend, Indiana with approximately 667,000 square feet of rentable space. Plymouth Industrial REIT, Inc. (the “Company”) acquired the Portfolio on July 20, 2017.

 

Note 2 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying combined statements of revenues and certain expenses include the operations of the Portfolio and have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual operations for the period presented as revenues and certain expenses, which may not be directly attributable to the revenues and expenses expected to be incurred in the future operations of the Portfolio, have been excluded. Such items include depreciation, amortization, interest expense, interest income, and amortization of above- and below-market leases. Management is not aware of any material factors relating to the properties that would cause the reported financial information not to be indicative of future operating results.

 

Interim Unaudited Information

 

The statement of revenue and certain expenses for the six month period ended June 30, 2017 is unaudited. In the opinion of the Company, such statement reflects all adjustments necessary for a fair presentation of revenue and certain expenses in accordance with Rule 3-14 of Regulation S-X as described above. All such adjustments are of normal recurring nature.

 

Use of Estimates

 

The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues and certain expenses during the reporting period. Actual results could differ from these estimates.

 

4  

 

 

CS - South bend PORTFOLIO

 

Notes to CoMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

 

FOR THE YEAR ENDED DeCEMBER 31, 2016 and

for the six months ended june 30, 2017 (unaudited)

 

Note 2 – Summary of Significant Accounting Policies (Continued)

 

Revenue Recognition

 

The Portfolio recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset.

 

Tenant reimbursements related to reimbursements of real estate taxes are recognized as revenue in the period the applicable expenses are incurred.

 

 

Note 3 – Minimum Future Lease Rentals

 

There are various lease agreements in place with a single tenant to lease space in the Portfolio, all of which are set to expire on March 2, 2021. As of June 30, 2017, the minimum future rentals receivable under noncancelable operating leases are as follows by year:

 

Year Ending December 31, Amount
   
2017 $ 1,201,500
2018 2,403,000
2019 2,403,000
2020 2,403,000
2021 400,500
   
Total $ 8,811,000

 

5  

 

 

CS - South bend PORTFOLIO

 

Notes to CoMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

 

FOR THE YEAR ENDED DeCEMBER 31, 2016 and

for the six months ended june 30, 2017 (unaudited)

 

Note 4 – Tenant Concentrations

 

As of June 30, 2017 and December 31, 2016, the same tenant occupies all six properties.

 

The following tables summarizes total rental revenues for each property:

 

                6 Months Ended        
    Tenants     Square Feet     June 30, 2017     %  
5861 West Cleveland     Single       62,550     $ 93,671       8%  
5502 West Brick Road # 1     Single       51,200       76,674       6%  
5502 West Brick Road # 2     Single       50,250       75,656       6%  
4491 North Mayflower Road     Single       77,000       115,500       10%  
5855 West Carbonmill Drive     Single       198,000       396,000       33%  
4955 Ameritech Drive     Single       228,000       444,000       37%  
                                 
      Total       667,000     $ 1,201,500       100%  

 

                Year Ended        
    Tenants     Square Feet     December 31, 2016     %  
5861 West Cleveland     Single       62,550     $ 187,341       8%  
5502 West Brick Road # 1     Single       51,200       153,348       6%  
5502 West Brick Road # 2     Single       50,250       151,311       6%  
4491 North Mayflower Road     Single       77,000       231,000       10%  
5855 West Carbonmill Drive     Single       198,000       792,000       33%  
4955 Ameritech Drive     Single       228,000       888,000       37%  
                                 
      Total       667,000     $ 2,403,000       100%  

 

Note 5 – Commitments and Contingencies

 

The Portfolio is comprised of six properties which are covered in four lease agreements with a single tenant.

 

Note 6 – Subsequent Events

 

The Company’s management evaluated subsequent events through September 26, 2017, the date the financial statement was available to be issued.

 

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Exhibit 99.2

 

 

PLYMOUTH INDUSTRIAL REIT INC.

Overview to Unaudited Pro Forma Consolidated Financial Statements

 

The accompanying unaudited pro forma consolidated financial statements have been derived from our historical consolidated financial statements. The unaudited pro forma consolidated balance sheet as of June 30, 2017 is presented to reflect pro forma adjustments to our historical consolidated balance sheet as of June 30, 2017 as if the Company’s acquisition on July 20, 2017 of six (6) industrial properties (the “South Bend Properties”) was completed on June 30, 2017. The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2017 and the twelve months ended December 31, 2016 are presented as if the acquisition of the South Bend Properties on July 20, 2017 was completed on the first day of the respective period.

The following unaudited pro forma consolidated financial statements should be read in conjunction with (i) our historical unaudited consolidated financial statements as of June 30, 2017 and for the six months ended June 30, 2017 and (ii) our consolidated financial statements for the twelve months ended December 31, 2016 in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

We have based the unaudited pro forma adjustments on available information and assumptions that we believe are reasonable. The following unaudited pro forma consolidated financial statements are presented for informational purposes only and are not necessarily indicative of what our actual consolidated financial position would have been as of June 30, 2017 assuming our acquisition of the South Bend Properties had been completed on June 30, 2017, and what our actual consolidated results of operations would have been for the six months ended June 30, 2017 and the twelve months ended December 31, 2016 assuming the acquisition of the facilities had been completed on January 1, 2016, and additionally are not indicative of our consolidated future results of operations or financial condition, and should not be viewed as indicative of our future consolidated results of operations or financial condition.

 

1  

 

Pro Forma Consolidated Balance Sheet
As of June 30, 2017
(Unaudited and in thousands)

 

    Plymouth     Proceeds              
    Industrial     from IPO     CS- South Bend     Company  
    REIT, Inc.     over allotment     Portfolio     Pro Forma  
    (A)     (B)     (C)        
                         
Assets                                
Real estate properties   $ 139,326     $ —     $ 26,019     $ 165,345  
Less Accumulated Depreciation     (19,816 )     —       —       (19,816 )
Real estate properties, net     119,510       —       26,019       145,529  
                                 
Cash     28,981       2,817       (26,019 )     5,779  
Restricted Cash     687       —       —       687  
Cash held in escrow     3,221       —       —       3,221  
Deferred Leasing Intangibles     8,680       —       —       8,680  
Other Current Assets     2,733       —       —       2,733  
Total Assets   $ 163,812     $ 2,817     $ —     $ 166,629  
                                 
Liabilities & Equity                                
Liabilities                                
Senior secured debt, net   $ 116,402     $ —     $ —     $ 116,402  
Mezzanine debt to investor, net     29,319       —       —       29,319  
Secured Revolving Credit     —       —       —       —  
Deferred Interest     200       —       —       200  
Accounts Payable and Other Liabilities     5,363       —       —       5,363  
Deferred Leasing-Intangibles     1,150                       1,150  
Total Liabilities     152,434       —       —       152,434  
                                 
Equity                                
Common Shares     37       2       —       39  
Additional Paid in Capital     123,448       2,815       —       126,263  
Accumulated Deficit     (112,107 )             —       (112,107 )
Total Plymouth Industrial REIT, Inc. stockholders' equity     11,378       2,817       —       14,195  
Non-controlling Interest     —       —       —       —  
Total Equity     11,378       2,817       —       14,195  
                                 
Total Liabilities and Equity   $ 163,812     $ 2,817     $ —     $ 166,629  

 

2  

 

 

Pro Forma Consolidated Statements of Operations
For the Six Months Ended June 30, 2017
(Unaudited and in thousands)

 

    Plymouth     Company           Company  
    Industrial     Pro Forma     CS- South Bend     Pro  
    REIT, Inc.     Adjustments     Portfolio     Forma  
    (A)     (B)     (C)        
                         
Revenues:                                
Rental revenue   $ 9,964     $ —     $ 1,444     $ 11,408  
Other income     1       —       —       1  
Total revenues     9,965       —       1,444       11,409  
                                 
Operating expenses:                                
Property expenses     2,925       —       242       3,167  
General and administrative     1,933       385       —       2,318  
Acquisition expenses     82       —       —       82  
Depreciation and amortization     5,557       —       390       5,947  
Total Operating expenses     10,497       385       632       11,514  
                                 
Operating income (loss)     (532 )     (385 )     812       (105 )
                                 
Other income (expense):                                
Interest expense     (5,743 )     —       —       (5,743 )
Total other income (expense)     (5,743 )             —       (5,743 )
Net income (loss)     (6,275 )     (385 )     812       (5,848 )
Net Loss attributable to non-controlling interest     (4,674 )     4,674       —       —  
Net Loss attributable to Plymouth Industrial REIT, Inc.     (1,601 )     (5,059 )     812       (5,848 )
                                 
Loss Per Share   $ (2.55 )                   $ (1.53 )
                                 
Weighted Average Shares Outstanding     629,057       3,183,829               3,812,886  

 

3  

 

 

Pro Forma Consolidated Statements of Operations
For the Year Ended December 31, 2016
(Unaudited and in thousands)

 

    Plymouth     Company           Company  
    Industrial     Pro Forma     CS- South Bend     Pro  
    REIT, Inc.     Adjustments     Portfolio     Forma  
    (A)     (B)     (C)        
                         
Revenues:                                
Rental revenue   $ 19,658     $ —     $ 2,972     $ 22,630  
Other income     230       —       —       230  
Total revenues     19,888       —       2,972       22,860  
                                 
Operating expenses:                                
Property expenses     5,927       —       569       6,496  
General and administrative     3,742       770       —       4,512  
Depreciation and amortization     11,674       —       780       12,454  
Total Operating expenses     21,343       770       1,349       23,462  
                                 
Operating income (loss)     (1,455 )     (770 )     1,623       (602 )
                                 
Other income (expense):                                
Gain on equity investment     2,846                       2,846  
Interest expense     (40,679 )     490       —       (40,189 )
Total other income (expense)     (37,833 )     490       —       (37,343 )
Net income (loss)     (39,288 )     (280 )     1,623       (37,945 )
Net Loss attributable to non-controlling interest     (2,301 )     2,301       —       —  
Net Loss attributable to Plymouth Industrial REIT, Inc.     (36,987 )     (2,581 )     1,623       (37,945 )
                                 
Loss Per Share   $ (111.42 )                   $ (9.95 )
                                 
Weighted Average Shares Outstanding     331,965       3,480,921               3,812,886  

 

4  

 

 

Plymouth Industrial REIT, Inc.

 

Notes to Unaudited Pro Forma

Condensed Consolidated Financial Statements

(dollars in thousands)

 

1. Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2017

(A) Reflects the historical Condensed Consolidated Balance Sheet of Plymouth Industrial REIT, Inc. as of June 30, 2017.

(B) Reflects $2,817 in net proceeds from the sale of 160,000 shares of common stock pursuant to the partial exercise of the underwriters’ overallotment option that that closed July 12, 2017.

(C) Reflects the acquisition of the CS South Bend Portfolio as reflected in the Statements of Revenues and Certain Expenses included herein. The pro forma adjustments do not include an allocation of the purchase price to reflect the intangible components of the acquisition as this evaluation is in process and will be reflected in future filings of actual results.

2. Notes to the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2017

(A) Reflects the historical condensed consolidated statement of operations of Plymouth Industrial REIT, Inc. for the six months ended June 30, 2017.

(B) Reflects an adjustment for stock-based compensation associated with the issuance of an aggregate of 157,763 shares of the Company’s common stock issued to the Company’s executive officers, independent directors and certain employees upon the closing of the offering, recognized over the applicable annual vesting and related service period.

(C) Reflects the results of operations and depreciation for the acquisition of the CS-South Bend portfolio as reflected in the Statements of Revenues and Certain Expenses included herein.

3 . Notes to the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2016

(A) Reflects the historical consolidated statement of operations of Plymouth Industrial REIT, Inc. for the year ended December 31, 2016.

(B) Reflects an adjustment for the elimination of interest expense related to the preferred member interest considered redeemed as of the first day of the year ended December 31, 2016 and reflects stock-based compensation associated with the issuance of an aggregate of 157,763 shares of the Company’s common stock issued to the Company’s executive officers, independent directors and certain employees upon the closing of the offering recognized over the applicable annual vesting and related service period.

(C) Reflects the results of operations and depreciation for the acquisition of the CS-South Bend portfolio as reflected in the Statements of Revenues and Certain Expenses included herein.

 

5