x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE ACT OF 1934
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Drive Shack Inc.
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(Exact name of registrant as specified in its charter)
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Maryland
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81-0559116
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(State or other jurisdiction of incorporation
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(I.R.S. Employer Identification No.)
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or organization)
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218 W. 18th Street, 3rd Floor, New York, NY
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10011
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(Address of principal executive offices)
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(Zip Code)
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Title of each class:
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Trading Symbol(s)
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Name of exchange on which registered:
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Common Stock, $0.01 par value per share
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DS
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New York Stock Exchange (NYSE)
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9.75% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share
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DS-PB
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New York Stock Exchange (NYSE)
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8.05% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share
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DS-PC
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New York Stock Exchange (NYSE)
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8.375% Series D Cumulative Redeemable Preferred Stock, $0.01 par value per share
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DS-PD
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New York Stock Exchange (NYSE)
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Large Accelerated Filer o
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Accelerated Filer x
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Non-accelerated Filer o
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Smaller Reporting Company o
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Emerging Growth Company o
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•
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our ability to finance our growth strategy or ongoing operations;
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•
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our financial liquidity;
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•
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the ability to retain and attract members and guests to our properties;
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•
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changes in global, national and local economic conditions, including, but not limited to, changes in consumer spending patterns, a prolonged economic slowdown and a downturn in the real estate market;
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•
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effects of unusual weather patterns and extreme weather events, geographical concentrations with respect to our operations and seasonality of our business;
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•
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competition within the industries in which we operate or may pursue additional investments, including competition for sites for our Entertainment Golf venues;
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•
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material increases in our expenses, including but not limited to unanticipated labor issues, rent or costs with respect to our workforce, and costs of goods, utilities and supplies;
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•
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our inability to sell or exit certain properties, and unforeseen changes to our ability to develop, redevelop or renovate certain properties;
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•
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our ability to further invest in our business and implement our strategies;
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•
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difficulty monetizing our real estate debt investments;
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•
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liabilities with respect to inadequate insurance coverage, accidents or injuries on our properties, adverse litigation judgments or settlements, or membership deposits;
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•
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changes to and failure to comply with relevant regulations and legislation, including in order to maintain certain licenses and permits, and environmental regulations in connection with our operations;
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•
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inability to execute on our growth and development strategy by successfully developing, opening and operating new venues;
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•
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impacts of failures of our information technology and cybersecurity systems;
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•
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the impact of any current or further legal proceedings and regulatory investigations and inquiries; and
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•
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other risks detailed from time to time below, particularly under the heading “Risk Factors,” and in our other reports filed with or furnished to the Securities and Exchange Commission, which we refer to in this Annual Report on Form 10-K as the SEC.
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DRIVE SHACK INC.
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FORM 10-K
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INDEX |
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Page
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•
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Entertainment Golf | Drive Shack
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•
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Traditional Golf | American Golf
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•
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Recent and Planned Growth
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•
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A Modernized Socializing Experience
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•
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Site selection, development, and the experience
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•
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Embracing Local Communities
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•
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Customized Programming and Promotions
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•
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any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding shares; or
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•
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an affiliate or associate of a corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation.
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•
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80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation voting together as a single group; and
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•
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two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder voting together as a single voting group.
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City
|
|
State
|
|
Category
|
|
# of Bays
|
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Orlando
|
|
FL
|
|
Leased
|
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90
|
|
Raleigh
|
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NC
|
|
Owned
|
|
96
|
|
Richmond
|
|
VA
|
|
Leased
|
|
96
|
|
West Palm Beach
|
|
FL
|
|
Leased
|
|
96
|
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Property Name
|
|
City
|
|
State
|
|
Category
|
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Golf Holes
|
|
Rancho San Joaquin
|
|
Irvine
|
|
CA
|
|
Public
|
|
18
|
|
Tanoan
|
|
Albuquerque
|
|
NM
|
|
Private
|
|
27
|
|
Property Name
|
|
City
|
|
State
|
|
Category
|
|
Golf Holes
|
|
Buffalo Creek
|
|
Heath
|
|
TX
|
|
Public
|
|
18
|
|
Chester Washington
|
|
Los Angeles
|
|
CA
|
|
Public
|
|
18
|
|
Clearview
|
|
Bayside Queens
|
|
NY
|
|
Public
|
|
18
|
|
Coyote Hills
|
|
Fullerton
|
|
CA
|
|
Public
|
|
18
|
|
Diamond Bar
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|
Diamond Bar
|
|
CA
|
|
Public
|
|
18
|
|
Dyker Beach
|
|
Brooklyn
|
|
NY
|
|
Public
|
|
18
|
|
El Dorado
|
|
Long Beach
|
|
CA
|
|
Public
|
|
18
|
|
Heartwell
|
|
Long Beach
|
|
CA
|
|
Public
|
|
18
|
|
Knollwood
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|
Granada Hills
|
|
CA
|
|
Public
|
|
18
|
|
La Mirada
|
|
La Mirada
|
|
CA
|
|
Public
|
|
18
|
|
La Tourette
|
|
Staten Island
|
|
NY
|
|
Public
|
|
18
|
|
Lake Forest
|
|
Lake Forest
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|
CA
|
|
Public
|
|
9
|
|
Lake Tahoe
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S. Lake Tahoe
|
|
CA
|
|
Public
|
|
18
|
|
Lakewood
|
|
Lakewood
|
|
CA
|
|
Public
|
|
18
|
|
Lely
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Naples
|
|
FL
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|
Private
|
|
54
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Los Coyotes
|
|
Buena Park
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|
CA
|
|
Private
|
|
27
|
|
Los Verdes
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Rancho PV
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|
CA
|
|
Public
|
|
18
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|
Mission Trails
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San Diego
|
|
CA
|
|
Public
|
|
18
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|
Monarch Bay
|
|
San Leandro
|
|
CA
|
|
Public
|
|
27
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|
Mountain Meadows
|
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Pomona
|
|
CA
|
|
Public
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|
18
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|
MountainGate
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|
Los Angeles
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|
CA
|
|
Private
|
|
27
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National City
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National City
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CA
|
|
Public
|
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9
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Pelham Split Rock
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Bronx
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NY
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|
Public
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|
36
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|
Recreation Park 18
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Long Beach
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|
CA
|
|
Public
|
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18
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Recreation Park 9
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Long Beach
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|
CA
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|
Public
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9
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San Dimas
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San Dimas
|
|
CA
|
|
Public
|
|
18
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|
Saticoy
|
|
Ventura
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|
CA
|
|
Public
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|
9
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Scholl Canyon
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Glendale
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|
CA
|
|
Public
|
|
18
|
|
Sea Cliff
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|
Huntington Bch
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|
CA
|
|
Private
|
|
18
|
|
Skylinks
|
|
Long Beach
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|
CA
|
|
Public
|
|
18
|
|
South Shore
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|
Staten Island
|
|
NY
|
|
Public
|
|
18
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|
Tecolote Canyon
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|
San Diego
|
|
CA
|
|
Public
|
|
18
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|
Tilden Park
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|
Berkeley
|
|
CA
|
|
Public
|
|
18
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|
Vineyard at Escondido
|
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Escondido
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|
CA
|
|
Public
|
|
18
|
|
Waterview
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|
Rowlett
|
|
TX
|
|
Public
|
|
18
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|
Whittier Narrows
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Rosemead
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CA
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|
Public
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|
27
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|
Property Name
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City
|
|
State
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Category
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|
Golf Holes
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Bear Creek
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Woodinville
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WA
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Private
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|
18
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|
Brookside
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|
Pasadena
|
|
CA
|
|
Public
|
|
36
|
|
Canyon Oaks
|
|
Chico
|
|
CA
|
|
Private
|
|
18
|
|
Casta Del Sol
|
|
Mission Viejo
|
|
CA
|
|
Public
|
|
18
|
|
El Camino
|
|
Oceanside
|
|
CA
|
|
Private
|
|
18
|
|
Fullerton
|
|
Fullerton
|
|
CA
|
|
Public
|
|
18
|
|
John A White
|
|
Atlanta
|
|
GA
|
|
Public
|
|
9
|
|
Lomas Santa Fe
|
|
Solana Beach
|
|
CA
|
|
Private
|
|
18
|
|
Lomas Santa Fe (Executive)
|
|
Solana Beach
|
|
CA
|
|
Public
|
|
18
|
|
Marbella
|
|
SJ Capistrano
|
|
CA
|
|
Private
|
|
18
|
|
Monterey
|
|
Palm Desert
|
|
CA
|
|
Private
|
|
27
|
|
Oregon Golf Club
|
|
West Linn
|
|
OR
|
|
Private
|
|
18
|
|
Palm Valley
|
|
Palm Desert
|
|
CA
|
|
Private
|
|
36
|
|
Plantation
|
|
Boise
|
|
ID
|
|
Private
|
|
18
|
|
River Ridge
|
|
Oxnard
|
|
CA
|
|
Public
|
|
36
|
|
Sunset Hills
|
|
Thousand Oaks
|
|
CA
|
|
Private
|
|
18
|
|
Tustin Ranch
|
|
Tustin
|
|
CA
|
|
Public
|
|
18
|
|
Vista Valencia
|
|
Valencia
|
|
CA
|
|
Public
|
|
27
|
|
Westchester
|
|
Los Angeles
|
|
CA
|
|
Public
|
|
18
|
|
Wood Ranch
|
|
Simi Valley
|
|
CA
|
|
Private
|
|
18
|
|
Yorba Linda
|
|
Yorba Linda
|
|
CA
|
|
Private
|
|
18
|
|
Plan Category
|
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(a) Number of Securities to be
Issued Upon Exercise of Outstanding Options, Warrants and Rights |
|
(b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights
|
|
(c) Number of Securities Remaining
Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a) |
|
||||
Equity Compensation Plans Approved by Security Holders:
|
|
|
|
|
|
|
|
||||
Newcastle Investment Corp. Nonqualified Stock Option and Incentive Award Plan
|
|
862,601
|
|
|
$
|
1.00
|
|
|
—
|
|
|
2012 Newcastle Investment Corp. Nonqualified Stock Option and Incentive Award Plan
|
|
2,893,078
|
|
|
2.45
|
|
|
25,820
|
|
(D)
|
|
2014 Newcastle Investment Corp. Nonqualified Stock Option and Incentive Award Plan
|
|
765,416
|
|
|
4.01
|
|
|
—
|
|
(E)
|
|
2015 Newcastle Investment Corp. Nonqualified Option and Incentive Award Plan
|
|
333
|
|
|
3.78
|
|
|
—
|
|
(F)
|
|
Drive Shack Inc. 2018 Omnibus Incentive Plan
|
|
1,309,652
|
|
(A)
|
4.75
|
|
(C)
|
5,343,078
|
|
(G)
|
|
Total Approved
|
|
5,831,080
|
|
(B)
|
$
|
2.78
|
|
(C)
|
5,368,898
|
|
|
(A)
|
Includes (i) 789,034 options granted to our officers, (ii) 464,542 RSUs granted to employees (net of forfeitures and releases),and (ii) 56,076 RSUs granted to our directors, net of forfeitures and releases, other than Mr. Wesley R. Edens, representing the aggregate annual automatic stock awards to each such director for the periods subsequent to the adoption of the 2018 Plan.
|
(B)
|
Includes (i) 3,138,097 options held by an affiliate of the former Manager; (ii) 1,382,998 options granted to the former Manager and assigned to certain of Fortress’s former employees, (iii) 333 options and 56,076 RSUs granted to our directors, other than Mr. Edens, (iv) 789,034 options granted to our officers, and (v) 464,542 RSUs granted to employees.
|
(C)
|
Represents the weighted average exercise price of the 789,034 options reported in column (a), and does not include the 520,618 RSUs.
|
(D)
|
The maximum available for issuance is 3,333,333 shares in the aggregate over the term of the 2012 Plan and no award shall be granted on or after May 7, 2022 (but awards granted may extend beyond this date). The number of securities remaining available for future issuance is net of (i) an aggregate of 13,312 shares of our common stock awards to our directors, other than Mr. Edens, representing the annual stock awards to each such director for the periods subsequent to the adoption of the 2012 Plan and prior to the adoption of the 2014 Plan and (ii) an aggregate of 3,294,201 options which have been previously granted under the plan.
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(E)
|
The maximum available for issuance was 166,666 shares in the aggregate over the term of the 2014 Plan and no award (other than a tandem award) may be granted after April 8, 2015 (but awards granted may extend beyond that date).
|
(F)
|
The maximum available for issuance was 300,000 shares in the aggregate over the term of the 2015 Plan and no award (other than a tandem award) may be granted after April 16, 2016 (but awards granted may extend beyond that date).
|
(G)
|
The maximum available for issuance is 5,343,078, subject to an annual limitation as detailed in the 2018 Plan, out of a total of 6,697,710 over the entire five-year term of the 2018 Plan.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Operating Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
272,064
|
|
|
$
|
314,369
|
|
|
$
|
292,594
|
|
|
$
|
298,880
|
|
|
$
|
295,856
|
|
Total operating costs
|
339,348
|
|
|
340,803
|
|
|
337,505
|
|
|
338,054
|
|
|
318,097
|
|
|||||
Operating loss
|
(67,284
|
)
|
|
(26,434
|
)
|
|
(44,911
|
)
|
|
(39,174
|
)
|
|
(22,241
|
)
|
|||||
Other income (expenses)
|
13,071
|
|
|
(11,965
|
)
|
|
3,675
|
|
|
116,699
|
|
|
43,494
|
|
|||||
(Loss) income from continuing operations before income tax
|
(54,213
|
)
|
|
(38,399
|
)
|
|
(41,236
|
)
|
|
77,525
|
|
|
21,253
|
|
|||||
Income tax expense
|
641
|
|
|
284
|
|
|
965
|
|
|
189
|
|
|
345
|
|
|||||
(Loss) income from continuing operations
|
(54,854
|
)
|
|
(38,683
|
)
|
|
(42,201
|
)
|
|
77,336
|
|
|
20,908
|
|
|||||
Income from discontinued operations, net of tax (A)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
646
|
|
|||||
Net (loss) income
|
(54,854
|
)
|
|
(38,683
|
)
|
|
(42,201
|
)
|
|
77,336
|
|
|
21,554
|
|
|||||
Preferred dividends
|
(5,580
|
)
|
|
(5,580
|
)
|
|
(5,580
|
)
|
|
(5,580
|
)
|
|
(5,580
|
)
|
|||||
Net (income) loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(257
|
)
|
|
293
|
|
|||||
(Loss) Income Applicable to Common Stockholders
|
$
|
(60,434
|
)
|
|
$
|
(44,263
|
)
|
|
$
|
(47,781
|
)
|
|
$
|
71,499
|
|
|
$
|
16,267
|
|
(Loss) Income Applicable to Common Stock, per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
1.07
|
|
|
$
|
0.24
|
|
Diluted
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
1.04
|
|
|
$
|
0.24
|
|
(Loss) Income from Continuing Operations per share of Common Stock, after preferred dividends and noncontrolling interest
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
1.07
|
|
|
$
|
0.23
|
|
Diluted
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
1.04
|
|
|
$
|
0.23
|
|
Income from Discontinued Operations per share of Common Stock
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.01
|
|
Diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.01
|
|
Weighted Average Number of Shares of Common Stock Outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
67,039,556
|
|
|
66,993,543
|
|
|
66,903,457
|
|
|
66,709,925
|
|
|
66,479,321
|
|
|||||
Diluted
|
67,039,556
|
|
|
66,993,543
|
|
|
66,903,457
|
|
|
68,788,440
|
|
|
68,647,915
|
|
|||||
Dividends declared per share of common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.48
|
|
|
$
|
0.48
|
|
(A)
|
The impact of the sale of the commercial real estate properties in Beavercreek, OH is included in the results of operations and presented separately in discontinued operations.
|
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
28,423
|
|
|
$
|
79,235
|
|
|
$
|
167,692
|
|
|
$
|
140,140
|
|
|
$
|
45,651
|
|
Property and equipment, net
|
179,641
|
|
|
132,605
|
|
|
241,258
|
|
|
217,611
|
|
|
227,907
|
|
|||||
Total assets
|
515,991
|
|
|
401,947
|
|
|
536,648
|
|
|
1,171,958
|
|
|
1,467,982
|
|
|||||
Total debt
|
70,471
|
|
|
67,178
|
|
|
167,965
|
|
|
767,465
|
|
|
970,842
|
|
|||||
Total liabilities
|
450,416
|
|
|
267,280
|
|
|
365,597
|
|
|
953,891
|
|
|
1,257,860
|
|
|||||
Common stockholders’ equity
|
3,992
|
|
|
73,084
|
|
|
109,468
|
|
|
156,484
|
|
|
148,796
|
|
|||||
Preferred stock
|
61,583
|
|
|
61,583
|
|
|
61,583
|
|
|
61,583
|
|
|
61,583
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(257
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Supplemental Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares outstanding
|
67,068,751
|
|
|
67,027,104
|
|
|
66,977,104
|
|
|
66,824,304
|
|
|
66,654,598
|
|
|||||
Book value per share of common stock
|
$
|
0.06
|
|
|
$
|
1.09
|
|
|
$
|
1.63
|
|
|
$
|
2.34
|
|
|
$
|
2.23
|
|
(A)
|
Includes $52.4 million and $22.1 million for the years ended December 31, 2019 and 2018, respectively, due to management contract reimbursements reported under the new revenue standard.
|
Comparison of Results of Operations for the years ended December 31, 2018 and 2017
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Golf operations (A)
|
$
|
244,646
|
|
|
$
|
221,737
|
|
|
$
|
22,909
|
|
|
10.3
|
%
|
Sales of food and beverages
|
69,723
|
|
|
70,857
|
|
|
(1,134
|
)
|
|
(1.6
|
)%
|
|||
Total revenues
|
314,369
|
|
|
292,594
|
|
|
21,775
|
|
|
7.4
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Operating costs
|
|
|
|
|
|
|
|
|||||||
Operating expenses (A)
|
251,794
|
|
|
232,796
|
|
|
18,998
|
|
|
8.2
|
%
|
|||
Cost of sales - food and beverages
|
20,153
|
|
|
20,959
|
|
|
(806
|
)
|
|
(3.8
|
)%
|
|||
General and administrative expense
|
38,560
|
|
|
31,413
|
|
|
7,147
|
|
|
22.8
|
%
|
|||
Management fee and termination payment to affiliate
|
—
|
|
|
21,410
|
|
|
(21,410
|
)
|
|
(100.0
|
)%
|
|||
Depreciation and amortization
|
19,704
|
|
|
24,304
|
|
|
(4,600
|
)
|
|
(18.9
|
)%
|
|||
Pre-opening costs
|
2,483
|
|
|
320
|
|
|
2,163
|
|
|
N.M.
|
|
|||
Impairment and other losses
|
8,240
|
|
|
60
|
|
|
8,180
|
|
|
N.M.
|
|
|||
Realized and unrealized (loss) gain on investments
|
(131
|
)
|
|
6,243
|
|
|
(6,374
|
)
|
|
(102.1
|
)%
|
|||
Total operating costs
|
340,803
|
|
|
337,505
|
|
|
3,298
|
|
|
1.0
|
%
|
|||
Operating loss
|
(26,434
|
)
|
|
(44,911
|
)
|
|
(18,477
|
)
|
|
(41.1
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other income (expenses)
|
|
|
|
|
|
|
|
|||||||
Interest and investment income
|
1,794
|
|
|
23,162
|
|
|
(21,368
|
)
|
|
(92.3
|
)%
|
|||
Interest expense, net
|
(16,639
|
)
|
|
(19,581
|
)
|
|
(2,942
|
)
|
|
(15.0
|
)%
|
|||
Other income, net
|
2,880
|
|
|
94
|
|
|
2,786
|
|
|
N.M.
|
|
|||
Total other income (expenses)
|
(11,965
|
)
|
|
3,675
|
|
|
(15,640
|
)
|
|
(425.6
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Loss before income tax
|
$
|
(38,399
|
)
|
|
$
|
(41,236
|
)
|
|
$
|
2,837
|
|
|
6.9
|
%
|
(A)
|
Includes $22.1 million for the year ended December 31, 2018 due to management contract reimbursements reported under the new revenue standard adopted on January 1, 2018.
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash (used in) provided by:
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
(28,118
|
)
|
|
$
|
(7,202
|
)
|
|
$
|
(12,375
|
)
|
Investing activities
|
|
(11,993
|
)
|
|
25,929
|
|
|
656,566
|
|
|||
Financing activities
|
|
(10,744
|
)
|
|
(109,596
|
)
|
|
(617,047
|
)
|
|||
Net (Decrease) Increase in Cash and Cash Equivalents, Restricted Cash and Restricted Cash, noncurrent
|
|
$
|
(50,855
|
)
|
|
$
|
(90,869
|
)
|
|
$
|
27,144
|
|
•
|
Operating cash flows decreased by:
|
◦
|
$9.9 million of general and administrative expenses due to increased headcount and professional fees primarily due to the development of the Entertainment Golf business; and
|
◦
|
$10.1 million due to decreased revenue from the Traditional Golf business due to the sale of properties during 2019; and
|
◦
|
$4.4 million of pre-open costs primarily due to the opening of three Entertainment Golf venues in 2019 compared to one venue opened in 2018.
|
•
|
Operating cash flows increased by:
|
◦
|
$1.8 million due to management fees paid in 2018 that were incurred in 2017 when the Company was externally managed; and
|
◦
|
$1.7 million in operating cash flows primarily due to the opening of Entertainment Golf venues in Raleigh, North Carolina, Richmond, Virginia and West Palm Beach, Florida.
|
•
|
Operating cash flows increased by:
|
◦
|
$18.7 million due to lower management fees paid in 2018 as a result of the Internalization;
|
◦
|
$4.1 million due to lower general and professional fees paid in 2018 ;
|
◦
|
$1.7 million due to lower income taxes paid in 2018; and
|
◦
|
$0.6 million due to higher interest earned on overnight cash deposits.
|
•
|
Operating cash flows decreased by:
|
◦
|
$5.0 million in lower operating cash flows from Traditional Golf, primarily related to the legal dispute settled in July 2018;
|
◦
|
$7.5 million of payroll costs primarily due to the Internalization and increased employee hiring associated with the Entertainment Golf business;
|
◦
|
$0.1 million due to cash flows from operations from the first Entertainment Golf venue in Orlando; and
|
◦
|
$7.9 million in lower net interest proceeds primarily due to the sale of agency RMBS in August 2017.
|
•
|
In April 2006, we securitized Subprime Portfolio I. The loans were sold to a securitization trust, of which 80% were treated as a sale, which is an off-balance sheet financing.
|
•
|
In July 2007, we securitized Subprime Portfolio II. The loans were sold to a securitization trust, of which 90% were treated as a sale, which is an off-balance sheet financing.
|
|
|
Fixed and Determinable Payments Due by Period
|
||||||||||||||||||
Contract
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Thereafter
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance lease obligations - Equipment (A)
|
|
7,222
|
|
|
10,171
|
|
|
4,302
|
|
|
33
|
|
|
21,728
|
|
|||||
Junior subordinated notes payable (A)
|
|
2,182
|
|
|
4,364
|
|
|
4,364
|
|
|
73,372
|
|
|
84,282
|
|
|||||
Operating lease obligations (B)
|
|
33,151
|
|
|
63,648
|
|
|
55,826
|
|
|
205,108
|
|
|
357,733
|
|
|||||
Membership deposit liabilities (C)
|
|
10,869
|
|
|
7,229
|
|
|
9,406
|
|
|
218,512
|
|
|
246,016
|
|
|||||
Credit facilities, Traditional Golf (A)
|
|
6
|
|
|
11
|
|
|
11
|
|
|
306
|
|
|
334
|
|
|||||
Total
|
|
$
|
53,430
|
|
|
$
|
85,423
|
|
|
$
|
73,909
|
|
|
$
|
497,331
|
|
|
$
|
710,093
|
|
(A)
|
Includes interest based on rates existing at December 31, 2019 and assumes no prepayments. Obligations that are repayable prior to maturity at our option are reflected at their contractual maturity dates. See Note 8 to our Consolidated Financial Statements for further discussions.
|
(B)
|
Includes leases of golf courses and related facilities, carts and equipment. Excludes escalation charges which per our lease agreements are not fixed and determinable payments. Also excludes four month-to-month property leases which are cancellable by the parties with 30 days written notice and various month-to-month operating leases for carts and equipment. The aggregate monthly expense of these leases was $0.2 million. See Notes 2 and 6 to our Consolidated Financial Statements for further discussions.
|
(C)
|
Amounts represent gross initiation fee deposits refundable 30 years after the date of acceptance of a member. See Notes 2 and 13 to our Consolidated Financial Statements for further discussion.
|
(D)
|
Includes primarily ground leases for Entertainment Golf venues. See Notes 2 and 6 to our Consolidated Financial Statements for further discussions.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
28,423
|
|
|
$
|
79,235
|
|
Restricted cash
|
3,103
|
|
|
3,326
|
|
||
Accounts receivable, net
|
5,249
|
|
|
7,518
|
|
||
Real estate assets, held-for-sale, net
|
16,948
|
|
|
75,862
|
|
||
Real estate securities, available-for-sale
|
3,052
|
|
|
2,953
|
|
||
Other current assets
|
17,521
|
|
|
20,505
|
|
||
Total Current Assets
|
74,296
|
|
|
189,399
|
|
||
Restricted cash, noncurrent
|
438
|
|
|
258
|
|
||
Property and equipment, net of accumulated depreciation
|
179,641
|
|
|
132,605
|
|
||
Operating lease right-of-use assets
|
215,308
|
|
|
—
|
|
||
Intangibles, net of accumulated amortization
|
17,565
|
|
|
48,388
|
|
||
Other investments
|
24,020
|
|
|
22,613
|
|
||
Other assets
|
4,723
|
|
|
8,684
|
|
||
Total Assets
|
$
|
515,991
|
|
|
$
|
401,947
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Obligations under finance leases
|
$
|
6,154
|
|
|
$
|
5,489
|
|
Membership deposit liabilities
|
10,791
|
|
|
8,861
|
|
||
Accounts payable and accrued expenses
|
25,877
|
|
|
45,284
|
|
||
Deferred revenue
|
26,268
|
|
|
18,793
|
|
||
Real estate liabilities, held-for-sale
|
4
|
|
|
2,947
|
|
||
Other current liabilities
|
23,964
|
|
|
22,285
|
|
||
Total Current Liabilities
|
93,058
|
|
|
103,659
|
|
||
Credit facilities and obligations under finance leases - noncurrent
|
13,125
|
|
|
10,489
|
|
||
Operating lease liabilities - noncurrent
|
187,675
|
|
|
—
|
|
||
Junior subordinated notes payable
|
51,192
|
|
|
51,200
|
|
||
Membership deposit liabilities, noncurrent
|
95,805
|
|
|
90,684
|
|
||
Deferred revenue, noncurrent
|
6,283
|
|
|
6,016
|
|
||
Other liabilities
|
3,278
|
|
|
5,232
|
|
||
Total Liabilities
|
$
|
450,416
|
|
|
$
|
267,280
|
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Equity
|
|
|
|
||||
Preferred stock, $0.01 par value, 100,000,000 shares authorized, 1,347,321 shares of 9.75% Series B Cumulative Redeemable Preferred Stock, 496,000 shares of 8.05% Series C Cumulative Redeemable Preferred Stock, and 620,000 shares of 8.375% Series D Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, issued and outstanding as of December 31, 2019 and 2018
|
$
|
61,583
|
|
|
$
|
61,583
|
|
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 67,068,751 and 67,027,104 shares issued and outstanding at December 31, 2019 and 2018, respectively
|
671
|
|
|
670
|
|
||
Additional paid-in capital
|
3,177,183
|
|
|
3,175,843
|
|
||
Accumulated deficit
|
(3,175,572
|
)
|
|
(3,105,307
|
)
|
||
Accumulated other comprehensive income
|
1,710
|
|
|
1,878
|
|
||
Total Equity
|
$
|
65,575
|
|
|
$
|
134,667
|
|
|
|
|
|
||||
Total Liabilities and Equity
|
$
|
515,991
|
|
|
$
|
401,947
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Golf operations
|
$
|
216,497
|
|
|
$
|
244,646
|
|
|
$
|
221,737
|
|
Sales of food and beverages
|
55,567
|
|
|
69,723
|
|
|
70,857
|
|
|||
Total revenues
|
272,064
|
|
|
314,369
|
|
|
292,594
|
|
|||
Operating costs
|
|
|
|
|
|
||||||
Operating expenses
|
229,306
|
|
|
251,794
|
|
|
232,796
|
|
|||
Cost of sales - food and beverages
|
15,217
|
|
|
20,153
|
|
|
20,959
|
|
|||
General and administrative expense
|
47,976
|
|
|
38,560
|
|
|
31,413
|
|
|||
Management fee and termination payment to affiliate
|
—
|
|
|
—
|
|
|
21,410
|
|
|||
Depreciation and amortization
|
22,396
|
|
|
19,704
|
|
|
24,304
|
|
|||
Pre-opening costs
|
9,040
|
|
|
2,483
|
|
|
320
|
|
|||
Impairment and other losses
|
15,413
|
|
|
8,240
|
|
|
60
|
|
|||
Realized and unrealized (gain) loss on investments
|
—
|
|
|
(131
|
)
|
|
6,243
|
|
|||
Total operating costs
|
339,348
|
|
|
340,803
|
|
|
337,505
|
|
|||
Operating loss
|
(67,284
|
)
|
|
(26,434
|
)
|
|
(44,911
|
)
|
|||
Other income (expenses)
|
|
|
|
|
|
||||||
Interest and investment income
|
955
|
|
|
1,794
|
|
|
23,162
|
|
|||
Interest expense, net
|
(8,760
|
)
|
|
(16,639
|
)
|
|
(19,581
|
)
|
|||
Other income, net
|
20,876
|
|
|
2,880
|
|
|
94
|
|
|||
Total other income (expenses)
|
13,071
|
|
|
(11,965
|
)
|
|
3,675
|
|
|||
Loss before income tax
|
(54,213
|
)
|
|
(38,399
|
)
|
|
(41,236
|
)
|
|||
Income tax expense
|
641
|
|
|
284
|
|
|
965
|
|
|||
Net Loss
|
(54,854
|
)
|
|
(38,683
|
)
|
|
(42,201
|
)
|
|||
Preferred dividends
|
(5,580
|
)
|
|
(5,580
|
)
|
|
(5,580
|
)
|
|||
Loss Applicable To Common Stockholders
|
$
|
(60,434
|
)
|
|
$
|
(44,263
|
)
|
|
$
|
(47,781
|
)
|
|
|
|
|
|
|
||||||
Loss Applicable to Common Stock, per share
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
Diluted
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
|
|
|
|
|
|
||||||
Weighted Average Number of Shares of Common Stock Outstanding
|
|
|
|
|
|
||||||
Basic
|
67,039,556
|
|
|
66,993,543
|
|
|
66,903,457
|
|
|||
Diluted
|
67,039,556
|
|
|
66,993,543
|
|
|
66,903,457
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(54,854
|
)
|
|
$
|
(38,683
|
)
|
|
$
|
(42,201
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net unrealized (loss) gain on available-for-sale securities
|
(168
|
)
|
|
508
|
|
|
2,547
|
|
|||
Reclassification of net realized (gain) on securities into earnings
|
—
|
|
|
—
|
|
|
(2,345
|
)
|
|||
Other comprehensive (loss) income
|
(168
|
)
|
|
508
|
|
|
202
|
|
|||
Total comprehensive loss
|
$
|
(55,022
|
)
|
|
$
|
(38,175
|
)
|
|
$
|
(41,999
|
)
|
Comprehensive loss attributable to Drive Shack Inc. stockholders' equity
|
$
|
(55,022
|
)
|
|
$
|
(38,175
|
)
|
|
$
|
(41,999
|
)
|
|
Drive Shack Inc. Stockholders
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Accumulated
Other Comp. Income (Loss) |
|
Total Equity (Deficit)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
Additional
Paid in Capital |
|
|
|
|
||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
|
Accumulated
Deficit |
|
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Equity (deficit) - December 31, 2016
|
2,463,321
|
|
|
$
|
61,583
|
|
|
66,824,304
|
|
|
$
|
668
|
|
|
$
|
3,172,720
|
|
|
$
|
(3,018,072
|
)
|
|
$
|
1,168
|
|
|
$
|
218,067
|
|
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,580
|
)
|
|
—
|
|
|
(5,580
|
)
|
||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
152,800
|
|
|
2
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
563
|
|
||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,201
|
)
|
|
—
|
|
|
(42,201
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|
202
|
|
||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(41,999
|
)
|
|||||||||||||
Equity (deficit) - December 31, 2017
|
2,463,321
|
|
|
$
|
61,583
|
|
|
66,977,104
|
|
|
$
|
670
|
|
|
$
|
3,173,281
|
|
|
$
|
(3,065,853
|
)
|
|
$
|
1,370
|
|
|
$
|
171,051
|
|
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,580
|
)
|
|
—
|
|
|
(5,580
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,252
|
|
|
|
|
|
|
2,252
|
|
||||||||
Adoption of ASC 606
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,809
|
|
|
—
|
|
|
4,809
|
|
||||||
Purchase of common stock (directors)
|
—
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,683
|
)
|
|
—
|
|
|
(38,683
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
508
|
|
|
508
|
|
||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(38,175
|
)
|
||||||||||||
Equity (deficit) - December 31, 2018
|
2,463,321
|
|
|
$
|
61,583
|
|
|
67,027,104
|
|
|
$
|
670
|
|
|
$
|
3,175,843
|
|
|
$
|
(3,105,307
|
)
|
|
$
|
1,878
|
|
|
$
|
134,667
|
|
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,580
|
)
|
|
—
|
|
|
(5,580
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,317
|
|
|
—
|
|
|
—
|
|
|
1,317
|
|
||||||
Purchase of common stock (directors)
|
—
|
|
|
—
|
|
|
6,000
|
|
|
1
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||||
Shares issued from restricted stock units
|
—
|
|
|
—
|
|
|
35,647
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adoption of ASC 842
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,831
|
)
|
|
—
|
|
|
(9,831
|
)
|
||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,854
|
)
|
|
—
|
|
|
(54,854
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|
(168
|
)
|
||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(55,022
|
)
|
||||||||||||
Equity (deficit) - December 31, 2019
|
2,463,321
|
|
|
$
|
61,583
|
|
|
67,068,751
|
|
|
$
|
671
|
|
|
$
|
3,177,183
|
|
|
$
|
(3,175,572
|
)
|
|
$
|
1,710
|
|
|
$
|
65,575
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows From Operating Activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(54,854
|
)
|
|
$
|
(38,683
|
)
|
|
$
|
(42,201
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
22,396
|
|
|
19,704
|
|
|
24,304
|
|
|||
Amortization of discount and premium
|
(275
|
)
|
|
1,159
|
|
|
(3,457
|
)
|
|||
Other amortization
|
7,225
|
|
|
10,965
|
|
|
10,564
|
|
|||
Net interest income on investments accrued to principal balance
|
—
|
|
|
—
|
|
|
(8,458
|
)
|
|||
Amortization of revenue on golf membership deposit liabilities
|
(1,422
|
)
|
|
(1,549
|
)
|
|
(1,264
|
)
|
|||
Amortization of prepaid golf member dues
|
(14,569
|
)
|
|
(26,545
|
)
|
|
(28,919
|
)
|
|||
Non-cash operating lease expense
|
7,043
|
|
|
—
|
|
|
—
|
|
|||
Stock based compensation
|
1,317
|
|
|
2,304
|
|
|
563
|
|
|||
Impairment and other losses
|
15,413
|
|
|
8,240
|
|
|
60
|
|
|||
Equity in earnings from equity method investment
|
(1,381
|
)
|
|
(1,471
|
)
|
|
(1,536
|
)
|
|||
Other (gains) losses, net
|
(19,303
|
)
|
|
(9,651
|
)
|
|
5,429
|
|
|||
Realized and unrealized (gain) loss on investments
|
—
|
|
|
(131
|
)
|
|
1,128
|
|
|||
Loss on extinguishment of debt, net
|
230
|
|
|
1,542
|
|
|
294
|
|
|||
Change in:
|
|
|
|
|
|
||||||
Accounts receivable, net, other current assets and other assets - noncurrent
|
2,727
|
|
|
3,075
|
|
|
(2,159
|
)
|
|||
Accounts payable and accrued expenses, deferred revenue, other current liabilities and other liabilities - noncurrent
|
7,335
|
|
|
23,839
|
|
|
33,277
|
|
|||
Net cash used in operating activities
|
(28,118
|
)
|
|
(7,202
|
)
|
|
(12,375
|
)
|
|||
Cash Flows From Investing Activities
|
|
|
|
|
|
||||||
Proceeds from sale of property and equipment
|
62,899
|
|
|
78,888
|
|
|
—
|
|
|||
Deposits received on real estate held-for-sale
|
—
|
|
|
9,400
|
|
|
—
|
|
|||
Acquisition and additions of property and equipment and intangibles
|
(74,868
|
)
|
|
(62,352
|
)
|
|
(34,292
|
)
|
|||
Proceeds from sale of securities and loans
|
—
|
|
|
—
|
|
|
595,850
|
|
|||
Principal repayments from investments
|
—
|
|
|
—
|
|
|
100,020
|
|
|||
Net payments for settlement of TBAs
|
—
|
|
|
—
|
|
|
(4,669
|
)
|
|||
Contributions to equity method investment
|
(24
|
)
|
|
(7
|
)
|
|
(343
|
)
|
|||
Net cash (used in) provided by investing activities
|
(11,993
|
)
|
|
25,929
|
|
|
656,566
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows From Financing Activities
|
|
|
|
|
|
||||||
Preferred stock dividends paid
|
(5,580
|
)
|
|
(5,580
|
)
|
|
(5,580
|
)
|
|||
Repayments of debt obligations
|
(7,440
|
)
|
|
(107,790
|
)
|
|
(606,568
|
)
|
|||
Golf membership deposits received
|
2,262
|
|
|
3,143
|
|
|
3,431
|
|
|||
Borrowings under debt obligations
|
—
|
|
|
—
|
|
|
1,651
|
|
|||
Margin deposits under repurchase agreements and derivatives
|
—
|
|
|
—
|
|
|
(89,692
|
)
|
|||
Return of margin deposits under repurchase agreements and derivatives
|
—
|
|
|
—
|
|
|
87,785
|
|
|||
Common stock dividends paid
|
—
|
|
|
—
|
|
|
(8,019
|
)
|
|||
Other financing activities
|
14
|
|
|
631
|
|
|
(55
|
)
|
|||
Net cash used in financing activities
|
(10,744
|
)
|
|
(109,596
|
)
|
|
(617,047
|
)
|
|||
Net (Decrease) Increase in Cash and Cash Equivalents, Restricted Cash and Restricted Cash, noncurrent
|
(50,855
|
)
|
|
(90,869
|
)
|
|
27,144
|
|
|||
Cash and Cash Equivalents, Restricted Cash and Restricted Cash, noncurrent, Beginning of Period
|
82,819
|
|
|
173,688
|
|
|
146,544
|
|
|||
Cash and Cash Equivalents, Restricted Cash and Restricted Cash, noncurrent, End of Period
|
$
|
31,964
|
|
|
$
|
82,819
|
|
|
$
|
173,688
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid during the period for interest expense
|
$
|
3,854
|
|
|
$
|
10,607
|
|
|
$
|
12,414
|
|
Cash paid during the period for income taxes
|
$
|
124
|
|
|
$
|
225
|
|
|
$
|
1,700
|
|
Supplemental Schedule of Non-Cash Investing and Financing Activities
|
|
|
|
|
|
||||||
Preferred stock dividends declared but not paid
|
$
|
930
|
|
|
$
|
930
|
|
|
$
|
930
|
|
Additions to finance lease assets and liabilities
|
$
|
12,776
|
|
|
$
|
4,442
|
|
|
$
|
4,265
|
|
Increases (decreases) in accounts payable and accrued expenses related to the purchase of property and equipment
|
$
|
(7,508
|
)
|
|
$
|
3,174
|
|
|
$
|
8,557
|
|
Property and equipment sold but not settled
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
800
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(Gain) on settlement of real estate securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,345
|
)
|
Loss on settlement of real estate securities
|
—
|
|
|
—
|
|
|
2,803
|
|
|||
Realized (gain) loss on settlement of non-hedge derivatives, net
|
—
|
|
|
(227
|
)
|
|
4,669
|
|
|||
(Gain) loss on settlement of loans held-for-sale
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||
Unrealized loss on securities, intent-to-sell
|
—
|
|
|
—
|
|
|
558
|
|
|||
Unrealized loss (gain) on non-hedge derivative instruments
|
—
|
|
|
96
|
|
|
570
|
|
|||
Realized and unrealized loss (gain) on investments
|
$
|
—
|
|
|
$
|
(131
|
)
|
|
$
|
6,243
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Gain (loss) on sale of long-lived assets and intangibles
|
$
|
19,338
|
|
|
$
|
8,704
|
|
|
$
|
(295
|
)
|
(Loss) on lease modifications and terminations
|
—
|
|
|
(939
|
)
|
|
(161
|
)
|
|||
(Loss) on extinguishment of debt, net
|
(230
|
)
|
|
(1,542
|
)
|
|
(294
|
)
|
|||
Collateral management fee income, net
|
440
|
|
|
575
|
|
|
387
|
|
|||
Equity in earnings of equity method investments
|
1,381
|
|
|
1,471
|
|
|
1,536
|
|
|||
Other (loss) (A)
|
(53
|
)
|
|
(5,389
|
)
|
|
(1,079
|
)
|
|||
Other income, net
|
$
|
20,876
|
|
|
$
|
2,880
|
|
|
$
|
94
|
|
(A)
|
During the year ended December 31, 2018, the Company recorded a net loss of approximately $4.9 million related to the settlement of a legal dispute and a related discharge of liabilities assumed by the counterparty to the settlement. See Note 13 for additional information.
|
|
|
|
Buildings and improvements
|
10-40 years
|
Finance leases - equipment
|
2-6 years
|
Furniture, fixtures, and equipment
|
2-7 years
|
|
|
|
Trade name
|
30 years
|
Management contracts
|
2 - 26 years
|
Internally-developed software
|
3 - 5 years
|
Membership base
|
7 years
|
Liquor licenses
|
Nonamortizable
|
|
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
CDO trustee accounts
|
$
|
114
|
|
|
$
|
127
|
|
Restricted cash for construction-in-progress
|
1,536
|
|
|
2,008
|
|
||
Restricted cash - Traditional Golf
|
1,656
|
|
|
1,266
|
|
||
Restricted cash - Entertainment Golf
|
235
|
|
|
183
|
|
||
Restricted cash, current and noncurrent
|
$
|
3,541
|
|
|
$
|
3,584
|
|
|
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Managed property receivables
|
5,426
|
|
|
4,225
|
|
||
Prepaid expenses
|
3,608
|
|
|
2,651
|
|
||
Deposits
|
1,374
|
|
|
2,494
|
|
||
Inventory
|
2,762
|
|
|
2,855
|
|
||
Miscellaneous current assets, net
|
4,351
|
|
|
8,280
|
|
||
Other current assets
|
$
|
17,521
|
|
|
$
|
20,505
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Prepaid expenses
|
$
|
317
|
|
|
$
|
277
|
|
Deposits
|
2,123
|
|
|
2,140
|
|
||
Miscellaneous assets, net
|
2,283
|
|
|
6,267
|
|
||
Other assets
|
$
|
4,723
|
|
|
$
|
8,684
|
|
|
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Security deposits payable
|
$
|
—
|
|
|
$
|
14,188
|
|
Operating lease liabilities
|
16,922
|
|
|
—
|
|
||
Accrued rent
|
2,769
|
|
|
2,885
|
|
||
Dividends payable
|
930
|
|
|
930
|
|
||
Miscellaneous current liabilities
|
3,343
|
|
|
4,282
|
|
||
Other current liabilities
|
$
|
23,964
|
|
|
$
|
22,285
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Service obligation intangible
|
$
|
1,776
|
|
|
$
|
2,759
|
|
Accrued rent
|
—
|
|
|
1,617
|
|
||
Miscellaneous liabilities
|
1,502
|
|
|
856
|
|
||
Other liabilities
|
$
|
3,278
|
|
|
$
|
5,232
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Accretion of net discount on securities, loans and other investments
|
$
|
(267
|
)
|
|
$
|
(151
|
)
|
|
$
|
(4,698
|
)
|
Amortization of net discount on debt obligations and deferred financing costs
|
(8
|
)
|
|
1,310
|
|
|
1,241
|
|
|||
Amortization of discount and premium
|
$
|
(275
|
)
|
|
$
|
1,159
|
|
|
$
|
(3,457
|
)
|
|
|
|
|
|
|
||||||
Amortization of leasehold intangibles
|
$
|
—
|
|
|
$
|
4,093
|
|
|
$
|
4,111
|
|
Accretion of membership deposit liability
|
7,225
|
|
|
6,872
|
|
|
6,453
|
|
|||
Other amortization
|
$
|
7,225
|
|
|
$
|
10,965
|
|
|
$
|
10,564
|
|
|
|
|
|
|
For Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||||||||||
|
|
Ent. golf venues
|
|
Public golf properties
|
|
Private golf properties
|
|
Managed golf properties (A)
|
|
Total
|
|
Ent. golf venues
|
|
Public golf properties
|
|
Private golf properties
|
|
Managed golf properties (A)
|
|
Total
|
||||||||||||||||||||
Golf operations
|
|
7,806
|
|
|
96,777
|
|
|
53,728
|
|
|
58,186
|
|
|
216,497
|
|
|
2,191
|
|
|
116,009
|
|
|
101,669
|
|
|
24,777
|
|
|
244,646
|
|
||||||||||
Sales of food and beverages
|
|
11,974
|
|
|
32,347
|
|
|
11,246
|
|
|
—
|
|
|
55,567
|
|
|
2,713
|
|
|
39,280
|
|
|
27,730
|
|
|
—
|
|
|
69,723
|
|
||||||||||
Total revenues
|
|
$
|
19,780
|
|
|
$
|
129,124
|
|
|
$
|
64,974
|
|
|
$
|
58,186
|
|
|
$
|
272,064
|
|
|
$
|
4,904
|
|
|
$
|
155,289
|
|
|
$
|
129,399
|
|
|
$
|
24,777
|
|
|
$
|
314,369
|
|
(A)
|
Includes $52.4 million and $22.1 million for the years ended December 31, 2019 and 2018, respectively, due to management contract reimbursements reported under ASC 606.
|
|
|
|
|
|
|
|
Entertainment Golf
|
|
Traditional Golf
|
|
Corporate
|
|
Total
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||
Golf operations
|
$
|
7,806
|
|
|
$
|
208,691
|
|
|
$
|
—
|
|
|
$
|
216,497
|
|
Sales of food and beverages
|
11,974
|
|
|
43,593
|
|
|
—
|
|
|
55,567
|
|
||||
Total revenues
|
19,780
|
|
|
252,284
|
|
|
—
|
|
|
272,064
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Operating expenses (A)
|
16,403
|
|
|
212,903
|
|
|
—
|
|
|
229,306
|
|
||||
Cost of sales - food and beverages
|
2,984
|
|
|
12,233
|
|
|
—
|
|
|
15,217
|
|
||||
General and administrative expense (B)
|
14,081
|
|
|
16,812
|
|
|
12,008
|
|
|
42,901
|
|
||||
General and administrative expense - acquisition and transaction expenses (C)
|
3,490
|
|
|
798
|
|
|
787
|
|
|
5,075
|
|
||||
Depreciation and amortization
|
5,935
|
|
|
16,266
|
|
|
195
|
|
|
22,396
|
|
||||
Pre-opening costs (D)
|
9,040
|
|
|
—
|
|
|
—
|
|
|
9,040
|
|
||||
Impairment and other losses
|
10,196
|
|
|
5,217
|
|
|
—
|
|
|
15,413
|
|
||||
Realized and unrealized loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total operating costs
|
62,129
|
|
|
264,229
|
|
|
12,990
|
|
|
339,348
|
|
||||
Operating loss
|
(42,349
|
)
|
|
(11,945
|
)
|
|
(12,990
|
)
|
|
(67,284
|
)
|
||||
Other income (expenses)
|
|
|
|
|
|
|
|
||||||||
Interest and investment income
|
321
|
|
|
105
|
|
|
529
|
|
|
955
|
|
||||
Interest expense (E)
|
(355
|
)
|
|
(8,238
|
)
|
|
(2,415
|
)
|
|
(11,008
|
)
|
||||
Capitalized interest (E)
|
—
|
|
|
586
|
|
|
1,662
|
|
|
2,248
|
|
||||
Other income (loss), net
|
—
|
|
|
19,069
|
|
|
1,807
|
|
|
20,876
|
|
||||
Total other income (expenses)
|
(34
|
)
|
|
11,522
|
|
|
1,583
|
|
|
13,071
|
|
||||
Income tax expense
|
62
|
|
|
8
|
|
|
571
|
|
|
641
|
|
||||
Net loss
|
(42,445
|
)
|
|
(431
|
)
|
|
(11,978
|
)
|
|
(54,854
|
)
|
||||
Preferred dividends
|
—
|
|
|
—
|
|
|
(5,580
|
)
|
|
(5,580
|
)
|
||||
Loss applicable to common stockholders
|
$
|
(42,445
|
)
|
|
$
|
(431
|
)
|
|
$
|
(17,558
|
)
|
|
$
|
(60,434
|
)
|
|
Entertainment Golf
|
|
Traditional Golf
|
|
Corporate (F)
|
|
Total
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Total assets
|
163,583
|
|
|
308,456
|
|
|
43,952
|
|
|
515,991
|
|
||||
Total liabilities
|
36,375
|
|
|
350,968
|
|
|
63,073
|
|
|
450,416
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
|
61,583
|
|
|
61,583
|
|
||||
Equity (loss) attributable to common stockholders
|
$
|
127,208
|
|
|
$
|
(42,512
|
)
|
|
$
|
(80,704
|
)
|
|
$
|
3,992
|
|
|
|
|
|
|
|
|
|
||||||||
Additions to property and equipment (including finance leases) during the year ended December 31, 2019
|
$
|
62,543
|
|
|
$
|
14,966
|
|
|
$
|
1,764
|
|
|
$
|
79,273
|
|
|
|
|
|
Entertainment Golf
|
|
Traditional Golf
|
|
Corporate
|
|
Total
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Golf operations
|
$
|
2,191
|
|
|
$
|
242,455
|
|
|
$
|
—
|
|
|
$
|
244,646
|
|
Sales of food and beverages
|
2,713
|
|
|
67,010
|
|
|
—
|
|
|
69,723
|
|
||||
Total revenues
|
4,904
|
|
|
309,465
|
|
|
—
|
|
|
314,369
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Operating expenses (A)
|
5,398
|
|
|
246,396
|
|
|
—
|
|
|
251,794
|
|
||||
Cost of sales - food and beverages
|
640
|
|
|
19,513
|
|
|
—
|
|
|
20,153
|
|
||||
General and administrative expense (B)
|
6,382
|
|
|
16,702
|
|
|
11,271
|
|
|
34,355
|
|
||||
General and administrative expense - acquisition and transaction expenses (C)
|
2,679
|
|
|
1,024
|
|
|
502
|
|
|
4,205
|
|
||||
Depreciation and amortization
|
1,886
|
|
|
17,814
|
|
|
4
|
|
|
19,704
|
|
||||
Pre-opening costs (D)
|
2,483
|
|
|
—
|
|
|
—
|
|
|
2,483
|
|
||||
Impairment and other losses
|
—
|
|
|
8,093
|
|
|
147
|
|
|
8,240
|
|
||||
Realized and unrealized loss on investments
|
—
|
|
|
(131
|
)
|
|
—
|
|
|
(131
|
)
|
||||
Total operating costs
|
19,468
|
|
|
309,411
|
|
|
11,924
|
|
|
340,803
|
|
||||
Operating (loss) income
|
(14,564
|
)
|
|
54
|
|
|
(11,924
|
)
|
|
(26,434
|
)
|
||||
Other income (expenses)
|
|
|
|
|
|
|
|
||||||||
Interest and investment income
|
281
|
|
|
194
|
|
|
1,319
|
|
|
1,794
|
|
||||
Interest expense (E)
|
—
|
|
|
(16,046
|
)
|
|
(2,274
|
)
|
|
(18,320
|
)
|
||||
Capitalized interest (E)
|
—
|
|
|
1,121
|
|
|
560
|
|
|
1,681
|
|
||||
Other income, net
|
—
|
|
|
846
|
|
|
2,034
|
|
|
2,880
|
|
||||
Total other income (expenses)
|
281
|
|
|
(13,885
|
)
|
|
1,639
|
|
|
(11,965
|
)
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
284
|
|
|
284
|
|
||||
Net loss
|
(14,283
|
)
|
|
(13,831
|
)
|
|
(10,569
|
)
|
|
(38,683
|
)
|
||||
Preferred dividends
|
—
|
|
|
—
|
|
|
(5,580
|
)
|
|
(5,580
|
)
|
||||
Loss applicable to common stockholders
|
$
|
(14,283
|
)
|
|
$
|
(13,831
|
)
|
|
$
|
(16,149
|
)
|
|
$
|
(44,263
|
)
|
|
Entertainment Golf
|
|
Traditional Golf
|
|
Corporate (F)
|
|
Total
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Total assets
|
117,416
|
|
|
225,904
|
|
|
58,627
|
|
|
401,947
|
|
||||
Total liabilities
|
13,561
|
|
|
196,836
|
|
|
56,883
|
|
|
267,280
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
|
61,583
|
|
|
61,583
|
|
||||
Equity attributable to common stockholders
|
$
|
103,855
|
|
|
$
|
29,068
|
|
|
$
|
(59,839
|
)
|
|
$
|
73,084
|
|
|
|
|
|
|
|
|
|
||||||||
Additions to property and equipment (including finance leases) during the year ended December 31, 2018
|
$
|
55,924
|
|
|
$
|
14,042
|
|
|
$
|
—
|
|
|
$
|
69,966
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Entertainment Golf
|
|
Traditional Golf
|
|
Corporate
|
|
Total
|
||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Golf operations
|
$
|
—
|
|
|
$
|
221,737
|
|
|
$
|
—
|
|
|
$
|
221,737
|
|
Sales of food and beverages
|
—
|
|
|
70,857
|
|
|
—
|
|
|
70,857
|
|
||||
Total revenues
|
—
|
|
|
292,594
|
|
|
—
|
|
|
292,594
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Operating expenses (A)
|
—
|
|
|
232,796
|
|
|
—
|
|
|
232,796
|
|
||||
Cost of sales - food and beverages
|
—
|
|
|
20,959
|
|
|
—
|
|
|
20,959
|
|
||||
General and administrative expense (B)
|
147
|
|
|
16,073
|
|
|
6,456
|
|
|
22,676
|
|
||||
General and administrative expense - acquisition and transaction expenses (C)
|
7,139
|
|
|
677
|
|
|
921
|
|
|
8,737
|
|
||||
Management fee and termination payment to affiliate
|
—
|
|
|
—
|
|
|
21,410
|
|
|
21,410
|
|
||||
Depreciation and amortization
|
44
|
|
|
24,260
|
|
|
—
|
|
|
24,304
|
|
||||
Pre-opening costs (D)
|
320
|
|
|
—
|
|
|
—
|
|
|
320
|
|
||||
Impairment and other losses
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
||||
Realized and unrealized loss on investments
|
—
|
|
|
199
|
|
|
6,044
|
|
|
6,243
|
|
||||
Total operating costs
|
7,650
|
|
|
294,964
|
|
|
34,891
|
|
|
337,505
|
|
||||
Operating loss
|
(7,650
|
)
|
|
(2,370
|
)
|
|
(34,891
|
)
|
|
(44,911
|
)
|
||||
Other income (expenses)
|
|
|
|
|
|
|
|
||||||||
Interest and investment income
|
—
|
|
|
159
|
|
|
23,003
|
|
|
23,162
|
|
||||
Interest expense (E)
|
—
|
|
|
(15,523
|
)
|
|
(4,304
|
)
|
|
(19,827
|
)
|
||||
Capitalized interest (E)
|
—
|
|
|
246
|
|
|
—
|
|
|
246
|
|
||||
Other (loss) income, net
|
—
|
|
|
(1,762
|
)
|
|
1,856
|
|
|
94
|
|
||||
Total other income (expenses)
|
—
|
|
|
(16,880
|
)
|
|
20,555
|
|
|
3,675
|
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
965
|
|
|
965
|
|
||||
Net loss
|
(7,650
|
)
|
|
(19,250
|
)
|
|
(15,301
|
)
|
|
(42,201
|
)
|
||||
Preferred dividends
|
—
|
|
|
—
|
|
|
(5,580
|
)
|
|
(5,580
|
)
|
||||
Loss applicable to common stockholders
|
$
|
(7,650
|
)
|
|
$
|
(19,250
|
)
|
|
$
|
(20,881
|
)
|
|
$
|
(47,781
|
)
|
|
|
|
|
|
|
|
|
||||||||
Additions to property and equipment (including finance leases) during the year ended December 31, 2017
|
$
|
27,295
|
|
|
$
|
16,284
|
|
|
$
|
67
|
|
|
$
|
43,646
|
|
(A)
|
Operating expenses includes rental expenses recorded under operating leases for carts and equipment in the amount of $0.9 million, $1.9 million and $3.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.
|
(B)
|
General and administrative expenses include severance expense in the amount of $2.3 million, $0.1 million and zero for the years ended December 31, 2019, 2018 and 2017, respectively.
|
(C)
|
Acquisition and transaction expense includes costs related to completed and potential acquisitions and transactions and strategic initiatives which may include advisory, legal, accounting and other professional or consulting fees.
|
(D)
|
Pre-opening costs are expensed as incurred and consist primarily of site-related marketing expenses, lease expense, employee payroll, travel and related expenses, training costs, food, beverage and other operating expenses incurred prior to opening an Entertainment Golf venue.
|
(E)
|
Interest expense includes the accretion of membership deposit liabilities in the amount of $7.2 million, $6.9 million and $6.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Interest expense and capitalized interest total to interest expense, net on the Consolidated Statements of Operations.
|
(F)
|
Total assets in the corporate segment includes an equity method investment in the amount of $24.0 million and $22.6 million as of December 31, 2019 and 2018, respectively, recorded in other investments on the Consolidated Balance Sheets. See Note 2 for additional information.
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Depreciation
|
|
Net Carrying Value
|
|
Gross Carrying Amount
|
|
Accumulated Depreciation
|
|
Net Carrying Value
|
||||||||||||
Land
|
$
|
6,770
|
|
|
$
|
—
|
|
|
$
|
6,770
|
|
|
$
|
6,747
|
|
|
$
|
—
|
|
|
$
|
6,747
|
|
Buildings and improvements
|
147,146
|
|
|
(36,349
|
)
|
|
110,797
|
|
|
78,833
|
|
|
(30,540
|
)
|
|
48,293
|
|
||||||
Furniture, fixtures and equipment
|
52,327
|
|
|
(19,484
|
)
|
|
32,843
|
|
|
26,726
|
|
|
(16,729
|
)
|
|
9,997
|
|
||||||
Finance leases - equipment
|
36,166
|
|
|
(16,047
|
)
|
|
20,119
|
|
|
28,745
|
|
|
(12,843
|
)
|
|
15,902
|
|
||||||
Construction in progress
|
9,112
|
|
|
—
|
|
|
9,112
|
|
|
51,666
|
|
|
—
|
|
|
51,666
|
|
||||||
Total Property and Equipment
|
$
|
251,521
|
|
|
$
|
(71,880
|
)
|
|
$
|
179,641
|
|
|
$
|
192,717
|
|
|
$
|
(60,112
|
)
|
|
$
|
132,605
|
|
Date
|
|
Location
|
|
Leased or Managed Property
|
|
Description
|
February 2018
|
|
Oklahoma
|
|
Leased
|
|
agreement terminated
|
June 2018
|
|
California
|
|
Leased
|
|
agreement terminated, 10 year management agreement executed
|
September 2018
|
|
Texas
|
|
Leased
|
|
agreement terminated
|
November 2018
|
|
California
|
|
Leased
|
|
agreement expired
|
December 2018
|
|
Michigan
|
|
Managed
|
|
agreement terminated, course closing
|
July 2019
|
|
California
|
|
Managed
|
|
agreement executed
|
October 2019
|
|
California
|
|
Managed
|
|
agreement terminated, course closing
|
December 2019
|
|
California
|
|
Managed
|
|
agreement terminated, course closing
|
|
|
|
During the three months ended
|
|
Number of Golf Properties Sold
|
|
Sale Price
|
|
Net Proceeds (A)
|
|
Transaction Costs
|
|
Carrying Value
|
|
Gain (Loss) (B)
|
|
Management Agreements Executed Subsequent to Sale
|
||||||||||||
September 30, 2018
|
|
1
|
|
|
$
|
3.5
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
(0.1
|
)
|
|
—
|
|
December 31, 2018 (C)
|
|
12
|
|
|
$
|
86.2
|
|
|
$
|
73.5
|
|
|
$
|
1.2
|
|
|
$
|
62.7
|
|
|
$
|
10.8
|
|
|
8
|
|
March 31, 2019 (D)
|
|
3
|
|
|
$
|
28.7
|
|
|
$
|
25.5
|
|
|
$
|
0.5
|
|
|
$
|
20.3
|
|
|
$
|
5.2
|
|
|
1
|
|
June 30, 2019 (E)
|
|
4
|
|
|
$
|
19.7
|
|
|
$
|
17.9
|
|
|
$
|
0.8
|
|
|
$
|
18.3
|
|
|
$
|
(0.4
|
)
|
|
1
|
|
September 30, 2019
|
|
1
|
|
|
$
|
12.5
|
|
|
$
|
12.3
|
|
|
$
|
0.2
|
|
|
$
|
5.2
|
|
|
$
|
7.0
|
|
|
1
|
|
December 31, 2019
|
|
3
|
|
|
$
|
19.1
|
|
|
$
|
18.6
|
|
|
$
|
0.4
|
|
|
$
|
10.9
|
|
|
$
|
7.7
|
|
|
2
|
|
(A)
|
Net proceeds are inclusive of transaction costs.
|
(B)
|
The gain (loss) on sale is recorded in other income (loss), net on the Consolidated Statements of Operations.
|
(C)
|
The difference between the sales price and the net proceeds was primarily due to prepaid membership dues that we are obligated to remit to the buyer. The Company received proceeds of $75.7 million as of December 31, 2018 and recorded $2.2 million of net payables related to the sales, which was settled in the first quarter of 2019.
|
(D)
|
The Company received sale proceeds of $17.7 million during the three months ended March 31, 2019, consisting of $18.2 million for the golf properties sold during the three months ended March 31, 2019, and $2.2 million for golf properties that were sold during December 2018, less $2.7 million that was remitted to buyers for golf properties that were sold during December 2018. The Company previously received a $9.4 million cash deposit in 2018 related to a golf property that was sold in 2019. The difference between the sales price and the net proceeds was primarily due to prepaid membership dues that we are obligated to remit to the buyer, including $2.1 million payable to the buyer of a golf property sold during the three months ended March 31, 2019.
|
(E)
|
The Company received sale proceeds of $14.9 million during the three months ended June 30, 2019, consisting of $18.4 million for the golf properties sold during the three months ended June 30, 2019, less $3.5 million that was remitted to buyers for golf properties that were sold in 2018 and the first quarter of 2019.
|
|
|
|
|
|
Year Ended December 31, 2019
|
||
Finance lease cost
|
|
|
||
Amortization of right-of-use assets
|
|
$
|
6,305
|
|
Interest on lease liabilities
|
|
1,313
|
|
|
Total finance lease cost
|
|
7,618
|
|
|
|
|
|
||
Operating lease cost
|
|
|
||
Operating lease cost
|
|
36,236
|
|
|
Short-term lease cost
|
|
2,288
|
|
|
Variable lease cost
|
|
16,667
|
|
|
Total operating lease cost
|
|
55,191
|
|
|
Total lease cost
|
|
$
|
62,809
|
|
|
|
Operating Leases
|
|
Financing Leases
|
||||
Right-of-use assets
|
|
$
|
215,308
|
|
|
$
|
20,119
|
|
Lease liabilities
|
|
$
|
204,597
|
|
|
$
|
19,079
|
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
||||
Operating cash flows
|
|
$
|
30,309
|
|
|
$
|
1,313
|
|
Financing cash flows
|
|
N/A
|
|
|
$
|
7,440
|
|
|
Right-of-use assets obtained in exchange for lease liabilities
|
|
$
|
10,813
|
|
|
$
|
12,776
|
|
Weighted average remaining lease term
|
|
12.7 years
|
|
|
3.5 years
|
|
||
Weighted average discount rate
|
|
8.8
|
%
|
|
7.3
|
%
|
|
|
Operating Leases
|
|
Financing Leases
|
||||
2020
|
|
$
|
33,151
|
|
|
$
|
7,222
|
|
2021
|
|
32,515
|
|
|
5,881
|
|
||
2022
|
|
31,133
|
|
|
4,290
|
|
||
2023
|
|
30,962
|
|
|
3,263
|
|
||
2024
|
|
24,864
|
|
|
1,039
|
|
||
Thereafter
|
|
205,108
|
|
|
33
|
|
||
Total minimum lease payments
|
|
357,733
|
|
|
21,728
|
|
||
Less: imputed interest
|
|
153,136
|
|
|
2,649
|
|
||
Total lease liabilities
|
|
$
|
204,597
|
|
|
$
|
19,079
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||||||||
Trade name
|
$
|
700
|
|
|
$
|
(140
|
)
|
|
$
|
560
|
|
|
$
|
700
|
|
|
$
|
(117
|
)
|
|
$
|
583
|
|
Leasehold intangibles (A) (B)
|
—
|
|
|
—
|
|
|
—
|
|
|
46,581
|
|
|
(20,270
|
)
|
|
26,311
|
|
||||||
Management contracts
|
32,331
|
|
|
(17,342
|
)
|
|
14,989
|
|
|
32,932
|
|
|
(15,174
|
)
|
|
17,758
|
|
||||||
Internally-developed software
|
252
|
|
|
(27
|
)
|
|
225
|
|
|
2,314
|
|
|
(967
|
)
|
|
1,347
|
|
||||||
Membership base
|
5,236
|
|
|
(4,488
|
)
|
|
748
|
|
|
5,236
|
|
|
(3,740
|
)
|
|
1,496
|
|
||||||
Nonamortizable liquor licenses
|
1,043
|
|
|
—
|
|
|
1,043
|
|
|
893
|
|
|
—
|
|
|
893
|
|
||||||
Total intangibles
|
$
|
39,562
|
|
|
$
|
(21,997
|
)
|
|
$
|
17,565
|
|
|
$
|
88,656
|
|
|
$
|
(40,268
|
)
|
|
$
|
48,388
|
|
(A)
|
The amortization expense for leasehold intangibles is reported in operating expenses in the Consolidated Statements of Operations.
|
(B)
|
As of January 1, 2019, leasehold intangibles were reclassified from "Intangibles, net of accumulated amortization" to "Operating lease right-of-use assets" in the Consolidated Balance Sheet as part of the adoption of ASU 2016-02.
|
2020
|
$
|
2,941
|
|
2021
|
1,827
|
|
|
2022
|
1,571
|
|
|
2023
|
1,566
|
|
|
2024
|
1,090
|
|
|
Thereafter
|
7,527
|
|
|
Total amortizable intangible assets
|
16,522
|
|
|
Nonamortizable liquor licenses
|
1,043
|
|
|
Total intangible assets
|
$
|
17,565
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Debt Obligation/Collateral
|
|
Month Issued
|
|
Outstanding Face Amount
|
|
Carrying Value
|
|
Final Stated Maturity
|
|
Weighted Average Coupon
|
|
Weighted Average Funding Cost (A)
|
|
Weighted Average Life (Years)
|
|
Face Amount of Floating Rate Debt
|
|
Outstanding Face Amount
|
|
Carrying Value
|
|||||||||||
Credit Facilities and Finance Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Vineyard II
|
|
Dec 1993
|
|
200
|
|
|
200
|
|
|
Dec 2043
|
|
2.80%
|
|
2.80
|
%
|
|
24.0
|
|
200
|
|
|
200
|
|
|
200
|
|
|||||
Finance Leases (Equipment)
|
|
June 2014 - Dec 2019
|
|
19,079
|
|
|
19,079
|
|
|
Jan 2020 - Jul 2025
|
|
3.00% to 15.00%
|
|
7.27
|
%
|
|
3.5
|
|
—
|
|
|
15,778
|
|
|
15,778
|
|
|||||
|
|
|
|
19,279
|
|
|
19,279
|
|
|
|
|
|
|
7.22
|
%
|
|
3.7
|
|
200
|
|
|
15,978
|
|
|
15,978
|
|
|||||
Less current portion of obligations under finance leases
|
|
|
|
6,154
|
|
|
6,154
|
|
|
|
|
|
|
|
|
|
|
|
|
5,489
|
|
|
5,489
|
|
|||||||
Credit facilities and obligations under finance leases - noncurrent
|
|
|
|
13,125
|
|
|
13,125
|
|
|
|
|
|
|
|
|
|
|
|
|
10,489
|
|
|
10,489
|
|
|||||||
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Junior subordinated notes payable (B)
|
|
Mar 2006
|
|
51,004
|
|
|
51,192
|
|
|
Apr 2035
|
|
3-mon LIBOR+2.25%
|
|
4.15
|
%
|
|
15.3
|
|
51,004
|
|
|
51,004
|
|
|
51,200
|
|
|||||
Total debt obligations
|
|
|
|
$
|
70,283
|
|
|
$
|
70,471
|
|
|
|
|
|
|
4.99
|
%
|
|
12.1
|
|
$
|
51,204
|
|
|
$
|
66,982
|
|
|
$
|
67,178
|
|
(A)
|
Including the effect of deferred financing cost.
|
(B)
|
Collateral for this obligation is the Company's general credit.
|
|
|
|
|
Nonrecourse
|
|
Recourse
|
|
Total
|
||||||
2020
|
$
|
6,063
|
|
|
$
|
—
|
|
|
$
|
6,063
|
|
2021
|
5,088
|
|
|
—
|
|
|
5,088
|
|
|||
2022
|
3,829
|
|
|
—
|
|
|
3,829
|
|
|||
2023
|
3,060
|
|
|
—
|
|
|
3,060
|
|
|||
2024
|
1,006
|
|
|
—
|
|
|
1,006
|
|
|||
Thereafter
|
233
|
|
|
51,004
|
|
|
51,237
|
|
|||
Total
|
$
|
19,279
|
|
|
$
|
51,004
|
|
|
$
|
70,283
|
|
|
|
|
|
Amortized Cost Basis
|
|
Gross Unrealized
|
|
|
|
|
|
Weighted Average
|
|||||||||||||||||||||||||||||||
Asset Type
|
|
Outstanding
Face Amount |
|
Before
Impairment |
|
Other-Than-
Temporary- Impairment |
|
After
Impairment |
|
Gains
|
|
Losses
|
|
Carrying Value
(A) |
|
Number of
Securities |
|
Rating
(B) |
|
Coupon
|
|
Yield
|
|
Life
(Years) (C) |
|
Principal
Subordination (D) |
|||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ABS - Non-Agency RMBS (E)
|
|
$
|
4,000
|
|
|
$
|
2,863
|
|
|
$
|
(1,521
|
)
|
|
$
|
1,342
|
|
|
$
|
1,710
|
|
|
$
|
—
|
|
|
$
|
3,052
|
|
|
1
|
|
CCC
|
|
2.18
|
%
|
|
29.70
|
%
|
|
4.0
|
|
44.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
ABS - Non-Agency RMBS (E)
|
|
$
|
4,000
|
|
|
$
|
2,596
|
|
|
$
|
(1,521
|
)
|
|
$
|
1,075
|
|
|
$
|
1,878
|
|
|
$
|
—
|
|
|
$
|
2,953
|
|
|
1
|
|
CCC
|
|
2.90
|
%
|
|
26.65
|
%
|
|
4.9
|
|
38.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
See Note 10 regarding the estimation of fair value, which is equal to carrying value for all securities.
|
(B)
|
Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple rating agencies, the lowest rating is used. Ratings provided were determined by third party rating agencies, represent the most recent credit ratings available as of the reporting date and may not be current.
|
(C)
|
The weighted average life is based on the timing of expected cash flows on the assets.
|
(D)
|
Percentage of the outstanding face amount of the security and residual interest that is subordinate to the Company’s investment.
|
(E)
|
The ABS - Non-Agency RMBS is a floating rate security and the collateral securing it is located in various geographic regions in the U.S. The Company does not have significant investments in any one geographic region.
|
|
|
|
|
December 31, 2019
|
December 31, 2018
|
|||||||||||||||
|
Carrying
Value |
|
Estimated
Fair Value |
|
Fair Value Method (A)
|
|
Carrying
Value |
|
Estimated
Fair Value |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Real estate securities, available-for-sale
|
$
|
3,052
|
|
|
$
|
3,052
|
|
|
Pricing models - Level 3
|
|
$
|
2,953
|
|
|
$
|
2,953
|
|
Cash and cash equivalents
|
28,423
|
|
|
28,423
|
|
|
|
|
79,235
|
|
|
79,235
|
|
||||
Restricted cash - current and noncurrent
|
3,541
|
|
|
3,541
|
|
|
|
|
3,584
|
|
|
3,584
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Junior subordinated notes payable
|
51,192
|
|
|
24,382
|
|
|
Pricing models - Level 3
|
|
51,200
|
|
|
28,396
|
|
(A)
|
Pricing models are used for (i) real estate securities that are not traded in an active market, and, therefore, have little or no price transparency, and for which significant unobservable inputs must be used in estimating fair value, or (ii) debt obligations which are private and untraded.
|
•
|
inputs other than quoted prices that are observable for the asset or liability (such as interest rates and yield curves observable at commonly quoted intervals, implied volatilities and credit spreads), and
|
|
|
|
|
|
|
|
|
|
Weighted Average Significant Input
|
||||||||||||||
Asset Type
|
|
Amortized
Cost Basis |
|
Fair
Value |
|
Discount Rate
|
|
Prepayment Speed
|
|
Cumulative Default Rate
|
|
Loss Severity
|
||||||||
ABS - Non-Agency RMBS
|
|
$
|
1,342
|
|
|
$
|
3,052
|
|
|
10.0
|
%
|
|
8.0
|
%
|
|
2.6
|
%
|
|
70.0
|
%
|
Total
|
|
$
|
1,342
|
|
|
$
|
3,052
|
|
|
|
|
|
|
|
|
|
|
|
ABS - Non-Agency RMBS
|
||
|
|
|
||
Balance at December 31, 2017
|
|
$
|
2,294
|
|
Total gains (losses) (A)
|
|
|
||
Included in other comprehensive income (loss)
|
|
508
|
|
|
Amortization included in interest income
|
|
246
|
|
|
Purchases, sales and repayments (A)
|
|
|
||
Proceeds
|
|
(95
|
)
|
|
Balance at December 31, 2018
|
|
$
|
2,953
|
|
Total gains (losses) (A)
|
|
|
||
Included in other comprehensive income (loss)
|
|
(168
|
)
|
|
Amortization included in interest income
|
|
375
|
|
|
Purchases, sales and repayments (A)
|
|
|
||
Proceeds
|
|
(108
|
)
|
|
Balance at December 31, 2019
|
|
$
|
3,052
|
|
(A)
|
None of the gains (losses) recorded in earnings during the periods is attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates. There were no purchases or sales during the years ended December 31, 2019 and 2018. There were no transfers into or out of Level 3 during the years ended December 31, 2019 and 2018.
|
|
|
|
|
|
For Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
|
||||||
Loss from continuing operations after preferred dividends
|
|
$
|
(60,434
|
)
|
|
$
|
(44,263
|
)
|
|
$
|
(47,781
|
)
|
Loss Applicable to Common Stockholders
|
|
$
|
(60,434
|
)
|
|
$
|
(44,263
|
)
|
|
$
|
(47,781
|
)
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share - weighted average shares
|
|
67,039,556
|
|
|
66,993,543
|
|
|
66,903,457
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
|
||||||
Options
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
RSUs
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Denominator for diluted earnings per share - adjusted weighted average shares
|
|
67,039,556
|
|
|
66,993,543
|
|
|
66,903,457
|
|
|||
|
|
|
|
|
|
|
||||||
Basic earnings per share:
|
|
|
|
|
|
|
||||||
Loss from continuing operations per share of common stock after preferred dividends
|
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
Loss Applicable to Common Stock, per share
|
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share:
|
|
|
|
|
|
|
||||||
Loss from continuing operations per share of common stock after preferred dividends
|
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
Loss Applicable to Common Stock, per share
|
|
$
|
(0.90
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.71
|
)
|
|
|
|
|
|
Number of Options
|
|
Weighted Average Strike Price
|
|
Weighted Average Life Remaining (in years)
|
|||
Balance at December 31, 2018
|
|
8,436,931
|
|
|
$
|
3.72
|
|
|
|
Granted
|
|
695,652
|
|
|
4.66
|
|
|
|
|
Forfeited (A)
|
|
(2,234,237
|
)
|
|
5.44
|
|
|
|
|
Balance at December 31, 2019
|
|
6,898,346
|
|
|
$
|
3.26
|
|
|
3.4 years
|
|
|
|
|
|
|
|
|||
Exercisable at December 31, 2019
|
|
4,744,696
|
|
|
$
|
3.26
|
|
|
2.5 years
|
|
|
Year Ended December 31,
|
||||
|
|
2019
|
|
2018
|
||
Held by the former Manager
|
|
3,627,245
|
|
|
2,705,253
|
|
Granted to the former Manager and subsequently transferred to certain Manager’s employees (B)
|
|
1,382,998
|
|
|
2,304,990
|
|
Granted to the independent directors
|
|
333
|
|
|
333
|
|
Granted to Drive Shack employees (A)(C)
|
|
1,887,770
|
|
|
3,426,355
|
|
Total
|
|
6,898,346
|
|
|
8,436,931
|
|
(A)
|
In 2019, in connection with the former CEO's retirement, the related option awards were modified to accelerate the vesting of 1,117,118 options, subject to a 90-day exercise period which expired on February 9, 2020. The former CEO forfeited
|
|
|
|
(B)
|
The Company and the former Manager agreed that options held by certain employees formerly employed by the Manager will not terminate or be forfeited as a result of the Termination and Cooperation Agreement, and the vesting of such options will relate to the relevant holder’s employment with the Company and its affiliates following January 1, 2018. In both February 2017 and April 2018, the former Manager issued 1,152,495 options to certain employees formerly employed by the Manager as part of their compensation. The options fully vest and are exercisable one year prior to the option expiration date, beginning March 2020 through January 2024. In 2019, a certain employee was terminated by the Company and 921,992 options reverted back to the former Manager. The Company reversed $1.2 million in stock compensation expense related to these options.
|
(C)
|
In 2018, the Company granted 75,000 options to an employee as provided in their employment agreement. The options fully vest on the third anniversary of the grant date. In 2019, the Company granted 695,652 options to an employee that vest and become exercisable in equal annual installment on each of the first three anniversaries of the grant date.
|
Option Valuation Date
|
|
January 2018
|
|
April 2018
|
|
November 2018
|
|
April 2019
|
|
November 2019
|
||||||||||
Expected Volatility
|
|
39.73
|
%
|
|
35.66
|
%
|
|
35.4 - 35.8%
|
|
|
36.80
|
%
|
|
44.73
|
%
|
|||||
Expected Dividend Yield
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.00
|
%
|
|||||
Expected Remaining Term
|
|
3.0 - 6.6 years
|
|
|
2.7 - 6.3 years
|
|
|
6.0 - 6.5 years
|
|
|
6.0 years
|
|
|
0.3 years
|
|
|||||
Risk-Free Rate
|
|
2.16 - 2.29%
|
|
|
2.68 - 2.82%
|
|
|
3.09 - 3.11%
|
|
|
2.34
|
%
|
|
1.57
|
%
|
|||||
Fair Value at Valuation Date
|
|
$
|
4,272
|
|
|
$
|
3,558
|
|
|
$
|
7,478
|
|
|
$
|
1,280
|
|
|
$
|
67
|
|
|
|
Number of RSUs
|
|
Weighted Average Grant Date Fair Value (per unit)
|
|||
Balance at December 31, 2018
|
|
54,641
|
|
|
$
|
5.02
|
|
Granted (A)
|
|
635,819
|
|
|
$
|
4.66
|
|
Vested/Released
|
|
(35,647
|
)
|
|
$
|
5.17
|
|
Forfeited (B)
|
|
(134,195
|
)
|
|
$
|
4.68
|
|
Balance at December 31, 2019
|
|
520,618
|
|
|
$
|
4.66
|
|
(A)
|
The Company's non-employee directors were granted 56,076 RSUs during 2019 as part of the annual compensation. The RSUs are subject to a one year vesting period. The Company granted 579,743 RSUs to employees as part of their annual compensation. The RSUs vest in equal annual installments on each of the first three anniversaries of the grant date.
|
(B)
|
Unvested RSUs are forfeited by non-employee directors upon their departure from the board of directors and forfeited by employees upon their termination.
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
532
|
|
|
$
|
211
|
|
|
$
|
710
|
|
State and Local
|
109
|
|
|
73
|
|
|
255
|
|
|||
Total Current Provision
|
$
|
641
|
|
|
$
|
284
|
|
|
$
|
965
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and Local
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Deferred Provision
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Provision for Income Taxes
|
$
|
641
|
|
|
$
|
284
|
|
|
$
|
965
|
|
Balance as of December 31, 2018
|
$
|
721
|
|
Increase due to tax positions of current year
|
471
|
|
|
Balance as of December 31, 2019
|
$
|
1,192
|
|
|
|
|
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Provision at the statutory rate
|
21.00
|
%
|
|
21.00
|
%
|
|
35.00
|
%
|
Permanent items
|
(0.62
|
)%
|
|
(1.12
|
)%
|
|
(0.36
|
)%
|
State and local taxes
|
(0.16
|
)%
|
|
(0.15
|
)%
|
|
(0.42
|
)%
|
Valuation allowance
|
(21.11
|
)%
|
|
(19.97
|
)%
|
|
64.46
|
%
|
Effects of change in tax rate
|
—
|
%
|
|
—
|
%
|
|
(101.31
|
)%
|
Unrecognized tax benefits
|
(0.86
|
)%
|
|
(1.84
|
)%
|
|
—
|
%
|
Tax credits
|
—
|
%
|
|
1.36
|
%
|
|
—
|
%
|
Other
|
0.57
|
%
|
|
—
|
%
|
|
0.31
|
%
|
Total benefit
|
(1.18
|
)%
|
|
(0.72
|
)%
|
|
(2.32
|
)%
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Allowance for loan losses
|
$
|
308
|
|
|
$
|
292
|
|
Depreciation and amortization
|
3,939
|
|
|
8,964
|
|
||
Accrued expenses
|
2,488
|
|
|
2,701
|
|
||
Interest
|
3,661
|
|
|
3,445
|
|
||
Operating lease liabilities
|
56,803
|
|
|
—
|
|
||
Net operating losses
|
107,415
|
|
|
89,903
|
|
||
Capital losses
|
7,437
|
|
|
7,352
|
|
||
Deferred revenue
|
2,124
|
|
|
1,960
|
|
||
Other
|
5,618
|
|
|
5,306
|
|
||
Total deferred tax assets
|
189,793
|
|
|
119,923
|
|
||
Less valuation allowance
|
(123,434
|
)
|
|
(104,705
|
)
|
||
Net deferred tax assets
|
$
|
66,359
|
|
|
$
|
15,218
|
|
Deferred tax liabilities:
|
|
|
|
||||
Leaseholds
|
—
|
|
|
7,025
|
|
||
Operating lease right-of-use assets
|
59,716
|
|
|
—
|
|
||
Membership deposit liabilities
|
6,643
|
|
|
8,193
|
|
||
Total deferred tax liabilities
|
$
|
66,359
|
|
|
$
|
15,218
|
|
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Valuation allowance at December 31, 2018
|
$
|
104,705
|
|
Increase due to current year operations
|
18,729
|
|
|
Valuation allowance at December 31, 2019
|
$
|
123,434
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Traditional golf properties (held-for-sale)
|
|
$
|
1,227
|
|
|
$
|
7,002
|
|
|
$
|
—
|
|
Traditional golf properties (held-for-use)
|
|
3,805
|
|
|
1,091
|
|
|
—
|
|
|||
Valuation allowance on loans
|
|
—
|
|
|
147
|
|
|
60
|
|
|||
Other losses
|
|
10,381
|
|
|
—
|
|
|
—
|
|
|||
Total impairment
|
|
$
|
15,413
|
|
|
$
|
8,240
|
|
|
$
|
60
|
|
|
|
|
2019
|
Quarter Ended
|
|
Year Ended
|
||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
December 31
|
||||||||||
Total revenues
|
$
|
53,952
|
|
|
$
|
71,615
|
|
|
$
|
74,682
|
|
|
$
|
71,815
|
|
|
$
|
272,064
|
|
Total operating costs
|
72,231
|
|
|
83,171
|
|
|
92,010
|
|
|
91,936
|
|
|
339,348
|
|
|||||
Operating loss (income)
|
(18,279
|
)
|
|
(11,556
|
)
|
|
(17,328
|
)
|
|
(20,121
|
)
|
|
(67,284
|
)
|
|||||
Total other income (expenses)
|
3,679
|
|
|
(1,403
|
)
|
|
5,471
|
|
|
5,324
|
|
|
13,071
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
162
|
|
|
479
|
|
|
641
|
|
|||||
Net loss
|
(14,600
|
)
|
|
(12,959
|
)
|
|
(12,019
|
)
|
|
(15,276
|
)
|
|
(54,854
|
)
|
|||||
Preferred dividends
|
(1,395
|
)
|
|
(1,395
|
)
|
|
(1,395
|
)
|
|
(1,395
|
)
|
|
(5,580
|
)
|
|||||
Loss applicable to common stockholders
|
$
|
(15,995
|
)
|
|
$
|
(14,354
|
)
|
|
$
|
(13,414
|
)
|
|
$
|
(16,671
|
)
|
|
$
|
(60,434
|
)
|
Loss applicable to common stock, per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.24
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.90
|
)
|
Diluted
|
$
|
(0.24
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.90
|
)
|
Weighted average number of shares of common stock outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
67,027,104
|
|
|
67,029,610
|
|
|
67,040,692
|
|
|
67,060,440
|
|
|
67,039,556
|
|
|||||
Diluted
|
67,027,104
|
|
|
67,029,610
|
|
|
67,040,692
|
|
|
67,060,440
|
|
|
67,039,556
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
Quarter Ended
|
|
Year Ended
|
||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
December 31
|
||||||||||
Total revenues
|
$
|
66,660
|
|
|
$
|
91,004
|
|
|
$
|
87,419
|
|
|
$
|
69,286
|
|
|
$
|
314,369
|
|
Total operating costs
|
78,946
|
|
|
87,976
|
|
|
94,619
|
|
|
79,262
|
|
|
340,803
|
|
|||||
Operating loss (income)
|
(12,286
|
)
|
|
3,028
|
|
|
(7,200
|
)
|
|
(9,976
|
)
|
|
(26,434
|
)
|
|||||
Total other income (expenses)
|
(4,009
|
)
|
|
(7,831
|
)
|
|
(6,875
|
)
|
|
6,750
|
|
|
(11,965
|
)
|
|||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
284
|
|
|
284
|
|
|||||
Net loss
|
(16,295
|
)
|
|
(4,803
|
)
|
|
(14,075
|
)
|
|
(3,510
|
)
|
|
(38,683
|
)
|
|||||
Preferred dividends
|
(1,395
|
)
|
|
(1,395
|
)
|
|
(1,395
|
)
|
|
(1,395
|
)
|
|
(5,580
|
)
|
|||||
Loss applicable to common stockholders
|
$
|
(17,690
|
)
|
|
$
|
(6,198
|
)
|
|
$
|
(15,470
|
)
|
|
$
|
(4,905
|
)
|
|
$
|
(44,263
|
)
|
Loss applicable to common stock, per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.26
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.66
|
)
|
Diluted
|
$
|
(0.26
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.66
|
)
|
Weighted average number of shares of common stock outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
66,977,104
|
|
|
66,977,104
|
|
|
66,992,322
|
|
|
67,027,104
|
|
|
66,993,543
|
|
|||||
Diluted
|
66,977,104
|
|
|
66,977,104
|
|
|
66,992,322
|
|
|
67,027,104
|
|
|
66,993,543
|
|
a)
|
Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information is recorded, processed, summarized and reported accurately and completely. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective.
|
b)
|
Changes in Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company's last fiscal quarter October 2019 to December 2019, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
|
▪
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
▪
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
▪
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
|
|
|
|
Description of the Company's Securities Registered under Section 12 of the Exchange Act.
|
|
|
|
|
|
Termination and Cooperation Agreement, dated December 21, 2017, by and between Drive Shack Inc. and FIG LLC (incorporated by reference to the Registrant’s Current Report on Form 8-K, Exhibit 10.1, filed on December 21, 2017).
|
|
|
|
|
|
Transition Services Agreement, dated December 21, 2017, by and between Drive Shack Inc. and FIG LLC (incorporated by reference to the Registrant’s Current Report on Form 8-K, Exhibit 10.2, filed on December 21, 2017).
|
|
|
|
|
|
Letter Agreement, dated December 21, 2017, by and between Drive Shack Inc. and Sarah L. Watterson (incorporated by reference to the Registrant’s Current Report on Form 8-K, Exhibit 10.3, filed on December 21, 2017).
|
|
|
|
|
|
10.4*
|
Amendment to the Letter Agreement, dated December 21, 2017, by and between Drive Shack Inc. and Sarah L. Watterson (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q, Exhibit 10.4, filed on May 10, 2019).
|
|
|
|
|
10.5*
|
Letter Agreement, dated December 21, 2017, by and between Drive Shack Inc. and Lawrence A. Goodfield, Jr. (incorporated by reference to the Registrant’s Current Report on Form 8-K, Exhibit 10.4, filed on December 21, 2017).
|
|
|
|
|
10.6*
|
Letter Agreement, dated December 21, 2017, by and between Drive Shack Inc. and Sara A. Yakin (incorporated by reference to the Registrant’s Current Report on Form 8-K, Exhibit 10.5, filed on December 21, 2017).
|
|
|
|
|
10.7*
|
Letter Agreement, dated November 7, 2018, by and between Drive Shack Inc. and Kenneth A. May (incorporated by reference to the Registrant's Annual Report on Form 10-K, Exhibit 10.6, filed on March 15, 2019).
|
|
|
|
|
10.8*
|
Letter Agreement, dated November 7, 2018, by and between Drive Shack Inc. and David M. Hammarley (incorporated by reference to the Registrant's Annual Report on Form 10-K, Exhibit 10.7, filed on March 15, 2019).
|
|
|
|
|
10.9*
|
2012 Newcastle Investment Corp. Nonqualified Stock Option and Incentive Award Plan, adopted as of May 7, 2012 (incorporated by reference to the Registrant’s Annual Report on Form 10-K, Exhibit 10.3, filed on February 28, 2013).
|
|
|
|
|
Amended and Restated 2014 Newcastle Investment Corp. Nonqualified Stock Option and Incentive Award Plan, adopted as of November 3, 2014 (incorporated by reference to the Registrant's Annual Report on Form 10-K, Exhibit 10.5, filed on March 2, 2015).
|
|
|
|
|
|
2015 Newcastle Investment Corp. Nonqualified Option and Incentive Award Plan, adopted as of April 16, 2015 (incorporated by reference to Annex A of the Registrant's definitive proxy statement for the 2015 annual meeting of stockholders filed on April 17, 2015).
|
|
|
|
|
|
2016 Newcastle Investment Corp. Nonqualified Option and Incentive Award Plan, adopted as of April 7, 2016 (incorporated by reference to the Registrant's Current Report on Form 8-K, Exhibit 10.1 filed on May 19, 2016).
|
|
|
|
|
|
2017 Drive Shack Inc. Nonqualified Option and Incentive Award Plan, adopted as of April 11, 2017 (incorporated by reference to Annex A of the Registrant's definitive proxy statement for the 2017 annual meeting of stockholders, filed on April 13, 2017).
|
|
|
|
|
|
Drive Shack Inc. 2018 Omnibus Incentive Plan (incorporated by reference to Annex A of the Registrant's definitive proxy statement for the 2018 annual meeting of stockholders filed on April 13, 2018).
|
|
|
|
|
|
Exchange Agreement between Newcastle Investment Corp. and Taberna Preferred Funding IV, Ltd., Taberna Preferred Funding V, Ltd., Taberna Preferred Funding VI, Ltd. And Taberna Preferred Funding VII, Ltd., dated April 30, 2009 (incorporated by reference to the Registrant’s Current Report on Form 8-K, Exhibit 10.1, filed on May 4, 2009).
|
|
|
|
|
|
Exchange Agreement, dated as of January 29, 2010, by and among Newcastle Investment Corp., Taberna Capital Management, LLC, Taberna Preferred Funding IV, Ltd., Taberna Preferred Funding V, Ltd., Taberna Preferred Funding VI, Ltd. And Taberna Preferred Funding VII, Ltd. (incorporated by reference to the Registrant’s Current Report on Form 8-K, Exhibit 10.1, filed on February 1, 2010).
|
|
|
|
|
Form of Indemnification Agreement (incorporated by reference to the Registrant's Quarterly Report on Form 10-Q, Exhibit 10.19, filed on August 8, 2014).
|
|
|
|
|
|
Form of Drive Shack Inc. 2018 Omnibus Incentive Plan Director Restricted Stock Unit Award Agreement (incorporated by reference to the Registrant's Quarterly Report on Form 10-Q, Exhibit 10.15, filed on November 9, 2018).
|
|
|
|
|
|
Non-Qualified Stock Option Award Agreement dated November 12, 2018, by and between Drive Shack Inc. and Kenneth A. May (incorporated by reference to the Registrant's Annual Report on Form 10-K, Exhibit 10.18, filed on March 15, 2019).
|
|
|
|
|
|
Incentive Stock Option Award Agreement dated November 12, 2018, by and between Drive Shack Inc. and Kenneth A. May (incorporated by reference to the Registrant's Annual Report on Form 10-K, Exhibit 10.19, filed on March 15, 2019).
|
|
|
|
|
|
Non-Qualified Stock Option Award Agreement dated November 12, 2018, by and between Drive Shack Inc. and David M. Hammarley (incorporated by reference to the Registrant's Annual Report on Form 10-K, Exhibit 10.20, filed on March 15, 2019).
|
|
|
|
|
|
Form of Drive Shack Inc. 2018 Omnibus Incentive Plan Executive Non-Qualified Stock Option Award Agreement (incorporated by reference to the Registrant's Quarterly Report on Form 10-Q, Exhibit 10.22, filed on May 10, 2019).
|
|
|
|
|
|
Form of Drive Shack Inc. 2018 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to the Registrant's Quarterly Report on Form 10-Q, Exhibit 10.23, filed on August 6, 2019).
|
|
|
|
|
|
Subsidiaries of the Registrant.
|
|
|
|
|
|
Consent of Ernst & Young LLP, independent registered public accounting firm.
|
|
|
|
|
|
Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
•
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
|
DRIVE SHACK INC.
|
||
|
|
|
|
|
By:
|
/s/ Wesley R. Edens
|
|
|
Wesley R. Edens
|
||
|
Chairman of the Board
|
||
|
|
|
|
|
March 6, 2020
|
By:
|
/s/ Wesley R. Edens
|
By:
|
/s/ Stuart A. McFarland
|
Wesley R. Edens
|
|
Stuart A. McFarland
|
|
Chairman of the Board
|
|
Director
|
|
|
|
|
|
March 6, 2020
|
|
March 6, 2020
|
|
|
|
|
|
By:
|
/s/ Hana Khouri
|
By:
|
/s/ Clifford Press
|
Hana Khouri
|
|
Clifford Press
|
|
Chief Executive Officer and President
|
|
Director
|
|
|
|
|
|
March 6, 2020
|
|
March 6, 2020
|
|
|
|
|
|
By:
|
/s/ Lawrence A. Goodfield, Jr.
|
|
|
Lawrence A. Goodfield, Jr.
|
|
|
|
Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
|
|
|
|
|
|
|
|
March 6, 2020
|
|
|
|
|
|
|
|
By:
|
/s/ William J. Clifford
|
|
|
William J. Clifford
|
|
|
|
Director
|
|
|
|
|
|
|
|
March 6, 2020
|
|
|
|
|
|
|
|
By:
|
/s/ Virgis W. Colbert
|
|
|
Virgis W. Colbert
|
|
|
|
Director
|
|
|
|
|
|
|
|
March 6, 2020
|
|
|
|
|
|
|
|
By:
|
/s/ Benjamin M. Crane
|
|
|
Benjamin M. Crane
|
|
|
|
Director
|
|
|
|
|
|
|
|
March 6, 2020
|
|
|
|
Subsidiary
|
|
Jurisdiction of Incorporation/Organization
|
|
1
|
|
NCT Holdings LLC
|
|
Delaware
|
2
|
|
Newcastle CDO VIII 1, Limited
|
|
Cayman Islands
|
3
|
|
Newcastle CDO VIII 2, Limited
|
|
Cayman Islands
|
4
|
|
Newcastle CDO VIII Holdings LLC
|
|
Delaware
|
5
|
|
Newcastle CDO VIII LLC
|
|
Delaware
|
6
|
|
Newcastle CDO IX 1, Limited
|
|
Cayman Islands
|
7
|
|
Newcastle CDO IX Holdings LLC
|
|
Delaware
|
8
|
|
Newcastle CDO IX LLC
|
|
Delaware
|
9
|
|
Newcastle Mortgage Securities Trust 2006-1
|
|
Delaware
|
10
|
|
Newcastle Mortgage Securities Trust 2007-1
|
|
Delaware
|
11
|
|
NIC CRA LLC
|
|
Delaware
|
12
|
|
NIC OTC LLC
|
|
Delaware
|
13
|
|
NIC SF LLC
|
|
Delaware
|
14
|
|
NIC Management LLC
|
|
Delaware
|
15
|
|
Xanadu Asset Holdings LLC
|
|
Delaware
|
16
|
|
American Golf Group Holdings LLC
|
|
Delaware
|
17
|
|
Tower A LLC
|
|
Delaware
|
18
|
|
Tower C LLC
|
|
Delaware
|
19
|
|
Vineyards Holdings LLC
|
|
Delaware
|
20
|
|
American Golf Partners LLC
|
|
Delaware
|
21
|
|
NGP Realty Sub GP, LLC
|
|
Delaware
|
22
|
|
NGP Realty Sub, L.P.
|
|
Delaware
|
23
|
|
AGC Mezzanine Pledge LLC
|
|
Delaware
|
24
|
|
New AGC LLC
|
|
Delaware
|
25
|
|
American Golf Corporation
|
|
California
|
26
|
|
American Golf of Atlanta
|
|
Georgia
|
27
|
|
CW Golf Partners LP
|
|
California
|
28
|
|
Golf Enterprises Inc.
|
|
Kansas
|
29
|
|
Persimmon Golf Club LLC
|
|
Delaware
|
30
|
|
Drive Shack Holdings LLC
|
|
Delaware
|
31
|
|
NIC Taberna LLC
|
|
Delaware
|
32
|
|
AG Los Coyotes LLC
|
|
California
|
33
|
|
AGC Field Operations LLC
|
|
Delaware
|
34
|
|
AGC Realty LLC
|
|
Delaware
|
35
|
|
Myeshan Inc.
|
|
Ohio
|
36
|
|
AGC Management LLC
|
|
Delaware
|
37
|
|
Drive Shack Orlando LLC
|
|
Delaware
|
38
|
|
Drive Shack Richmond LLC
|
|
Delaware
|
39
|
|
American Golf of Glendale Inc.
|
|
California
|
40
|
|
Drive Shack Raleigh LLC
|
|
Delaware
|
41
|
|
Drive Shack Palm Beach LLC
|
|
Delaware
|
|
Subsidiary
|
|
Jurisdiction of Incorporation/Organization
|
|
42
|
|
Drive Shack Randall's Island LLC
|
|
Delaware
|
43
|
|
Drive Shack New Orleans LLC
|
|
Delaware
|
44
|
|
Drive Shack Chicago LLC
|
|
Delaware
|
45
|
|
Drive Shack Newport Beach LLC
|
|
Delaware
|
46
|
|
Drive Shack Detroit LLC
|
|
Delaware
|
47
|
|
Drive Shack Business Services LLC
|
|
Delaware
|
48
|
|
Drive Shack Urban Box Holdings LLC
|
|
Delaware
|
49
|
|
Things Change Fast LLC
|
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 333-226012), and
|
(2)
|
Registration Statement (Form S-3 No. 333-222312) and in the related Prospectus;
|
I, Hana Khouri, certify that:
|
||
|
||
1.
|
I have reviewed this annual report on Form 10-K of Drive Shack Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d – 15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 6, 2020
|
/s/ Hana Khouri
|
|
(Date)
|
Hana Khouri
|
|
|
Chief Executive Officer and President
|
I, Lawrence A. Goodfield, Jr., certify that:
|
||
|
||
1.
|
I have reviewed this annual report on Form 10-K of Drive Shack Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d – 15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 6, 2020
|
/s/ Lawrence A. Goodfield, Jr.
|
|
(Date)
|
Lawrence A. Goodfield, Jr.
|
|
|
Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Hana Khouri
|
|
Hana Khouri
|
|
Chief Executive Officer and President
|
|
March 6, 2020
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Lawrence A. Goodfield, Jr.
|
|
Lawrence A. Goodfield, Jr.
|
|
Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
|
|
March 6, 2020
|