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 26, 2017 (August 17, 2017)

____________________

 

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

____________________

 

Maryland 001-38106 27-5466153
(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 August 14, 2017, Plymouth Industrial REIT, Inc. (the “Company”) announced that on August 11, 2017 it, through a wholly owned subsidiary of its operating partnership, Plymouth Industrial OP, LP, completed the acquisition of two Class B industrial properties in Indianapolis, Indiana (the “Shadeland Portfolio”) for a total purchase price of $16.875 million, consisting of approximately $8.8 million in cash, which was funded from borrowings under the Company’s Credit Agreement with KeyBank National Association, and the issuance of 421,438 operating partnership units by the operating partnership, valued at $19.00 per unit. The Shadeland Portfolio is comprised of a 562,497 square foot building and a 44,374 square foot building.

 

 This Current Report on Form 8-K/A amends Item 9.01 of the original Form 8-K filed on August 17, 2017 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 Shadeland Portfolio. This report also incorporates information previously disclosed regarding the completion of the acquisition of the Shadeland Portfolio.

 

Item 9.01 Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired

 

The statements of revenues and certain operating expenses of the Shadeland Portfolio 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 June 30, 2017, 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 Shadeland Portfolio 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.

 

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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 26, 2017

 

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EXHIBIT INDEX

 

  99.1 Statements of revenues and certain operating expenses of the Shadeland Portfolio 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.   

 

 

 

 

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shadeland 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)

 

1  

 

Shadeland PORTFOLIO

 

Contents

 

 

Independent Auditors’ Report 3
   
   
Combined Statements of Revenues and Certain Expenses 5
   
   
Notes to Combined Statements of Revenues and Certain Expenses 6

 

 

2  

 

 

 

 

INDEPENDENT AUDITORS’ REPORT

 

 

To the Board of Directors and Stockholders of

Plymouth Industrial REIT, Inc.

 

 

Report on the Financial Statements

 

We have audited the accompanying combined statement of revenues and certain expenses of Shadeland 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 Statements

 

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 this 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 statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the 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 opinion.

 

 

 

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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 Shadeland 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 Shadeland Portfolio’s combined revenues and expenses. Our opinion is not modified with respect to that matter.

 

 

 

Boston, MA

September 26, 2017

 

 

4  

 

shadeland 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
(Unaudited) 		    Year Ended
December 31, 2016 		 
             
Revenues                
Rental revenue   $ 899,299     $ 1,815,158  
Tenant reimbursements     450,470       940,357  
                 
Total Revenues     1,349,769       2,755,515  
                 
Certain Expenses                
Utilities     388,483       778,524  
Real estate tax     106,650       202,458  
Repairs and maintenance     47,452       297,870  
Common area maintenance     40,695       103,987  
Insurance     40,297       75,085  
Management fee     25,807       56,011  
                 
Total Certain Expenses     649,384       1,513,935  
                 
Revenues in Excess of Certain Expenses   $ 700,385     $ 1,241,580  

 

5  

 

shadeland 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

 

Shadeland Portfolio (the “Portfolio”) consists of a group of two fully-constructed industrial properties located in Indianapolis, Indiana with approximately 607,000 square feet of rentable space. Plymouth Industrial REIT, Inc. (the “Company”) acquired the portfolio on August 11, 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 periods 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.

 

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.

 

6  

 

shadeland 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 (Continued)

 

Tenant reimbursements related to reimbursements of common area maintenance, utilities and real estate taxes are recognized as revenue in the period the applicable expenses are incurred.

 

Note 3 – Minimum Future Lease Rentals

 

Future minimum operating lease payments to be collected under non-cancelable operating leases, excluding other lease payments that are not fixed and determinable, in effect as of June 30, 2017, are as follows by year:

 

Year Ending December 31,   Amount  
2017 (six-month period)   $ 866,420  
2018     1,738,635  
2019     1,616,914  
2020     1,214,283  
2021     1,229,236  
Thereafter     4,976,590  
         
Total   $ 11,642,078  

 

Note 4 – Tenant Concentrations

 

Two tenants contributed 81% and 84%, respectively, of rental revenue for both the six- months ended June 30, 2017 and the year ended December 31, 2016.

 

Note 5 – Related Party Transactions

 

The Portfolio executed a management agreement with First Highland Management and Development Co., an affiliate of the Portfolio, that provides for a management fee equal to 3% of collected rental revenues. For the six month period ended June 30, 2017, fees incurred under the agreement were $25,807. For the year ended December 31, 2016, fees incurred under the agreement were $56,011.

 

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.

 

7  

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 August 11, 2017 of two (2) industrial properties (the “Shadeland Portfolio”) 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 Shadeland Portfolio on August 11, 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 Shadeland Portfolio 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
Industrial 		    Shadeland     Company  
    REIT, Inc.     Portfolio     Pro Forma  
    (A)     (B)        
Assets                        
Real estate properties   $ 139,326     $ 16,964     $ 156,290  
Less Accumulated Depreciation     (19,816 )             (19,816 )
Real estate properties, net     119,510       16,964       136,474  
                         
Cash     28,981       (8,957 )     20,024  
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     $ 8,007     $ 171,819  
                         
Liabilities & Equity                        
Liabilities                        
Senior secured debt, net   $ 116,402     $ —     $ 116,402  
Mezzanine debt to investor, net     29,319       —       29,319  
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       —       37  
Additional Paid in Capital     123,448       —       123,448  
Accumulated Deficit     (112,107 )     —       (112,107 )
Total Plymouth Industrial REIT, Inc. stockholders' equity     11,378               14,195  
Non-controlling Interest     —       8,007       8,007  
Total Equity     11,378       8,007       19,385  
                         
Total Liabilities and Equity   $ 163,812     $ 8,007     $ 171,819  

 

2  

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

 

    Plymouth
Industrial 		    Company
Pro Forma 		    Shadeland     Company  
    REIT, Inc.     Adjustments     Portfolio     Pro Forma  
    (A)     (B)     (C)        
                         
Revenues:                                
Rental revenue   $ 9,964     $ —       1,350     $ 11,314  
Equity investment income (loss)     1       —       —       1  
Total revenues     9,965       —       1,350       11,315  
                                 
Operating expenses:                                
Property expenses     2,925       —       649       3,574  
General and administrative     1,933       385       —       2,318  
Acquisition expenses     82       —       —       82  
Depreciation and amortization     5,557       —       255       5,812  
Total Operating expenses     10,497       385       904       11,786  
                                 
Operating income (loss)     (532 )     (385 )     446       (471 )
                                 
Other income (expense):                                
Interest expense     (5,743 )     —       —       (5,743 )
Total other expense (income)     (5,743 )     —       —       (5,743 )
Net income (loss)     (6,275 )     (385 )     446       (6,214 )
Net Loss Attributable to non-controlling interest     (4,674 )     4,056       —       (618 )
Net Loss attributable to Plymouth Industrial REIT, Inc.     (1,601 )     4,441       446       (5,596 )
                                 
Loss Per Share   $ (2.55 )                   $ (1.47 )
                                 
Weighted Average Shares Outstanding     629,057       3,183,829               3,812,886  

 

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

    Plymouth     Company              
    Industrial     Pro Forma     Shadeland     Company  
    REIT, Inc.     Adjustments     Portfolio     Pro Forma  
    (A)     (B)     (C)        
Revenues:                                
Rental revenue   $ 19,658     $ —     $ 2,756     $ 22,414  
Equity investment income (loss)     230       —       —       230  
Total revenues     19,888       —       2,756       22,644  
                                 
Operating expenses:                                
Property expenses     5,927       —       1,514       7,441  
General and administrative     3,742       770       —       4,512  
Depreciation and amortization     11,674       —       510       12,184  
Total Operating expenses     21,343       770       2,024       24,137  
                                 
Operating income (loss)     (1,455 )     (770 )     732       (1,493 )
                                 
Other income (expense):                                
Gain on equity investment     2,846       —       —       2,846  
Interest expense     (40,679 )     490       —       (40,189 )
Total other expense (income)     (37,833 )     490       —       (37,343 )
Net income (loss)     (39,288 )     (280 )     732       (38,836 )
Net Loss Attributable to non-controlling interest     (2,301 )     (1,563 )     —       (3,864 )
Net Income (Loss) attributable to Plymouth Industrial REIT, Inc.     (36,987 )     (1,283 )     732       (34,972 )
                                 
Loss Per Share   $ (111.42 )                   $ (9.17 )
                                 
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 the acquisition of the Shadeland 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. The acquisition included the issuance of Operating Partnership Units equal to approximately $8,007 for a non-controlling interest of approximately 9.95%.

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, and reflects adjustments for the issuance of Operating Partnership Units as a non-controlling interest.

(C) Reflects the results of operations and depreciation for the acquisition of the Shadeland 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, and reflects adjustments for the issuance of Operating Partnership Units as a non-controlling interest.

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

 

5