Medalist Diversified REIT, Inc. (Form: 8-K/A, Received: 02/25/2025 16:36:11)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 25, 2025 (January 24, 2025)

Medalist Diversified REIT, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Maryland	001-38719	47-5201540
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

P.O. Box 8436

Richmond, VA 23226

(Address of principal executive offices)

(804) 338-7708

(Registrant’s telephone number, including area code)

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Name of each Exchange on Which Registered	Trading Symbol(s)
Common Stock, $0.01 par value	Nasdaq Capital Market	MDRR

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Explanatory Note

This Form 8-K/A amends and supplements the Form 8-K filed by Medalist Diversified REIT, Inc. (the “Company”) on January 29, 2025 (the “Original Filing”) reporting the acquisition of the property known as the Scottsville Road Property or the Buffalo Wild Wings Property, a certain tract of real property containing a building with a physical address of 2545 Scottsville Road, Bowling Green, KY 42104, to include the historical financial statements and unaudited pro forma information required by Item 9.01(a) and (b) of Form 8-K. This Form 8-K/A should be read in conjunction with the Original Filing.

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements of Property Acquired

The following Statements of Revenues and Certain Expenses for the Buffalo Wild Wings Property is set forth in Exhibit 99.1, which is incorporated herein by reference.

Report of Independent Auditor.

Statements of Revenues and Certain Operating Expenses for the nine months ended September 30, 2024 and the year ended December 31, 2023.

Notes to Statements of Revenues and Certain Operating Expenses for the nine months ended September 30, 2024 and year ended December 31, 2023.

(b) Unaudited Pro Forma Financial Information

The following unaudited pro forma financial statements for the Company are set forth in Exhibit 99.2, which is incorporated herein by reference.

Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2024.

Notes to Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2024.

Unaudited Pro Forma Consolidated Statements of Operations for the nine months ended September 30, 2024.

Notes to Unaudited Pro Forma Consolidated Statements of Operations for the nine months ended September 30, 2024.

Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2023.

Notes to Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2023.

(d) Exhibits


Exhibit No.		Description
23.1		Consent of Cherry Bekaert LLP
99.1		Statements of Revenues and Certain Expenses for the Buffalo Wild Wings Property for the nine months ended September 30, 2024 and the year ended December 31, 2023
99.2		Unaudited Pro Forma Financial Information for the Company
104		Cover Page Interactive Data File (embedded within the Inline XBRL Document)

SIGNATURE

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


	MEDALIST DIVERSIFIED REIT, INC.

Dated: February 25, 2025	By:	/s/ C. Brent Winn, Jr.
		C. Brent Winn, Jr.
		Chief Financial Officer

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Medalist Diversified REIT, Inc. and Subsidiaries

Richmond, Virginia

We hereby consent to the incorporation by reference in the Registration Statement of Medalist Diversified REIT, Inc. on Form S-8 (No. 333-228674 and 333-238483) of our report dated February 25, 2025, with respect to the statement of revenues and certain operating expenses of the Buffalo Wild Wings Property for the nine months ended September 30, 2024 and the year ended December 31, 2023, which appears in Form 8-K/A of Medalist Diversified REIT, Inc., dated February 25, 2025.

/s/ Cherry Bekaert LLP

Richmond, Virginia

February 25, 2025

BUFFALO WILD WINGS PROPERTY

FINANCIAL STATEMENT

Nine Months Ended September 30, 2024 and

Year Ended December 31, 2023

Table of Contents


Table of Contents	1

Report of Independent Auditor	2

Statement of Revenues and Certain Operating Expenses	4

Notes to Statement of Revenues and Certain Operating Expenses	5

Report of Independent Auditor

To the Board of Directors
Medalist Diversified REIT, Inc.

Richmond, Virginia

Opinion

We have audited the accompanying statement of revenues and certain operating expenses and the related notes to the statement of revenues and certain operating expenses (the “Statement”) of Buffalo Wild Wings Property
(the “Property”), as defined in Note 1 of the Statement, for the year ended December 31, 2023.

In our opinion, the Statement referred to above present fairly, in all material respects, the revenues and certain operating expenses of the Property as of December 31, 2023, in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying Statement was prepared as described in Note 1, for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the Property’s revenues and expenses. Our opinion is not modified with respect to this matter.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Statement section of our report. We are required to be independent of the Property and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Statement

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

In preparing the Statement, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Property’s ability to continue as a going concern within one year after the date that the Statements is available to be issued.

Auditor’s Responsibilities for the Audit of the Statement

Our objectives are to obtain reasonable assurance about whether the Statement as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the Statement.

In performing an audit in accordance with generally accepted auditing standards, we:

●

Exercise professional judgment and maintain professional skepticism throughout the audit.

●

Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the Statement.

●

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control. Accordingly, no such opinion is expressed.

●

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the Statement.

●

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Property’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ Cherry Bekaert LLP

Richmond, Virginia

February 25, 2025

BUFFALO WILD WINGS PROPERTY

STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES

Nine Months Ended September 30, 2024 (unaudited) and

Year Ended December 31, 2023


	Nine Months Ended		Year ended
	September 30, 2024		December 31, 2023
REVENUE
Single tenant net lease property revenues	$	118,125	$	157,500
Total revenues		118,125		157,500

CERTAIN OPERATING EXPENSES
Total certain operating expenses		-		-

Revenues in excess of certain operating expenses	$	118,125	$	157,500

See accompanying notes to statement of revenues and certain operating expenses.

Notes to Statement of Revenues and Certain Operating Expenses

Note 1. Basis of Presentation

The accompanying statements of revenues and certain operating expenses (the “Statements”) include the operations of the single tenant net leased real property asset located at 2545 Scottsville Rd, Bowling Green, KY, 42105 (the “Property”).

The Statements have been prepared for the purpose of complying with Rule 8-06 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the Statements are not representative of the actual operations for the period presented, as revenues and certain operating expenses, which may not be directly attributable to the revenues and expenses expected to be incurred in the future operations of the Property, have been excluded. Such excluded items include certain legal, accounting, and interest expenses, non-cash expenses such as depreciation, amortization, and amortization of above-market and below-market leases, and interest income. Management is not aware of any material factors during the year ended December 31, 2023 or the nine months ended September 30, 2024 (unaudited) that would cause the reported financial information not to be indicative of future operating results.

Note 2. Nature of Business and Summary of Significant Accounting Policies

Basis of accounting:

The Statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”) as determined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

Revenue recognition:

The Property’s single source of revenue is from a lease agreement (the “Lease”) with Buffalo Wild Wings, LLC (the “Tenant”), an American casual dining restaurant and sports bar franchise in the United States, India, Mexico, Panama, Philippines, Saudi Arabia, Bahrain, Oman, and United Arab Emirates which specializes in Buffalo wings and sauces. Under the terms of the Lease, the Tenant is responsible for the direct payment of all utilities, real estate taxes and repairs and maintenance costs. In addition, the Tenant is responsible for maintaining insurance on the Property.

The Property recognizes rental revenue from the Tenant on a straight-line basis over the lease term when collectability is reasonably assured, and the Tenant has taken possession or controls the physical use of the leased asset. Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses would be recognized as revenue in the period the applicable expenses are incurred. However, under the absolute net structure of the Lease, the Tenant is responsible for the direct payment of such expenses. Accordingly, no such tenant recovery revenues are recorded on the Statements in connection with the lease on the Property.

Recognition of revenues from leases is covered under Accounting Standard Update 2016-02, Leases (Topic 842) (“ASC No. 842”). The Property adopted ASC No. 842 on January 1, 2023. Upon the adoption of ASC No. 842, the Property elected the practical expedient that permits lessors to elect to not separate non-lease components from associated lease components if certain criteria are met. Management assessed these criteria with respect to the operating leases related to the Property and determined they qualify for this non-separation practical expedient. However, since there are no non-lease components under the Lease, base rent revenues are the only component of rent revenues recorded under single tenant net lease property revenues on the Statements for the nine months ended September 30, 2024 (unaudited) and for the year ended December 31, 2023.

Income taxes:

As a limited liability company, the Property’s taxable income or loss is allocated to its members. Therefore, no provision or liability for income taxes has been included in the financial statements.

Use of estimates:

Management has made a number of estimates and assumptions relating to the reporting and disclosure of revenues and certain operating expenses during the reporting period to present the Statements in conformity with GAAP. Actual results could differ from those estimates.

Note 3. Minimum Future Lease Rentals

There are various lease agreements in place with tenants to lease space in the Property. As of September 30, 2024 the minimum future cash rents receivable under noncancelable operating leases in each of the next five years and thereafter are as follows:


	(Unaudited)
2024	$	41,250
2025		127,500
2026		155,833
2027		155,833
2028		155,833
Thereafter		1,488,681
Total future rents	$	2,124,930

Note 4. Tenant Concentrations

As of September 30, 2024, and December 31, 2023, the Tenant represented 100 percent of the Property’s rental revenues.

Note 5. Commitments and Contingencies

The Property may be subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. Management believes that if any such actions arise, the ultimate settlement of these actions will not have a material adverse effect on the Property’s results of operations.

Note 6. Subsequent Events

As of February 25, 2025, the following event has occurred subsequent to the December 31, 2023 effective date of the accompanying Statements:

On January 24, 2025, the Property was acquired by MDR Bowling Green, LLC, a wholly-owned subsidiary of Medalist Diversified REIT, Inc. (the “Purchaser”) from CWS BET Seattle, L.P. (the “Seller”). The general partner of the Seller is BET Trust, the trustee of which is Frank Kavanaugh, the Purchaser’s President and Chief Executive Officer and the Chairman of the Purchaser’s Board of Directors.

Exhibit 99.2

MEDALIST DIVERSIFIED REIT, INC.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2024

and

Unaudited Pro Forma Consolidated Statements of Operations for the

nine months ended September 30, 2024 and the year ended December 31, 2023

Summary of Unaudited Pro Forma Consolidated Financial Statements

On March 13, 2024, Medalist Diversified REIT, Inc. (the “Company”) announced that Medalist Diversified Holdings, LP (the “Operating Partnership”), through a wholly owned subsidiary, completed the sale of Hanover Square North located at 7230 Bell Creek Road, Mechanicsville, Virginia 23111 (the “Hanover Square Shopping Center”). The Company’s tenant-in-common partner, PMI Hanover Square, LLC, (“PMI”) also sold its 16% tenant-in-common interest. The Company and PMI retained ownership of the 0.864 acre parcel of land (the “Hanover Square Outparcel”) adjacent to the Hanover Square Shopping Center Property. On March 25, 2024, the Company completed the acquisition of PMI’s 16% tenant-in-common interest in the Hanover Square Outparcel.

On March 28, 2024, the Company completed the acquisition of that certain tract of real property containing a building at 3535 North Central Avenue, Chicago, IL 60634 (the “Citibank Property”) from RMP 3535 N. Central Ave., LLC, a Delaware limited liability company (“RMP”). The sole manager and member of RMP is CWS BET Seattle, LP, a Delaware limited partnership, a company controlled and owned by the Company’s President and Chief Executive Officer and the Chairman of the Company’s Board of Directors.

On October 11, 2024, the Operating Partnership entered into a subscription agreement with the Company’s Chief Executive Officer and a member of its Board of Directors, for the sale by the Operating Partnership in a private placement of 160,000 units of partnership interest in the Operating Partnership (the “Operating Partnership Units”) at a purchase price of $12.50 per Operating Partnership Unit. On December 13, 2024, the Company entered into a series of subscription agreements with certain investors, including the Company’s Chief Financial Officer, for the issuance and sale of 230,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Shares”), in a private placement, at a purchase price of $12.50 per share. (Collectively, the issuance of the Operating Partnership Units and Common Shares are referred to as the “Private Placements”.)

On November 25, 2024, the Company completed a partial redemption of 140,000 shares of its 8.0% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”). On January 10, 2025, the Company completed the final redemption of the remaining 60,000 outstanding shares of the Series A Preferred Stock. (Collectively, the two redemptions of Series A Preferred Stock are referred to as the “Series A Preferred Stock Redemptions”.)

On January 24, 2025 the Company completed the acquisition of that certain tract of real property containing a building at 2545 Scottsville Road, Bowling Green, KY 42104 (the “Buffalo Wild Wings Property”) from CWS BET Seattle, L.P., a Delaware limited partnership (“CWS”). The general partner of CWS is Fort Ashford Funds, LLC, a California limited liability company whose manager is the Company’s President and Chief Executive Officer and the Chairman of the Company’s Board of Directors.

On February 21, 2025 the Company completed the acquisition of that certain tract of real property containing a building at 376 Dan Tibbs Road NW Huntsville, Madison County, Alabama 35806 (the “United Rentals Property”) from Dionysus Investments, LLC, a California limited liability company (“Dionysus”). The manager of Dionysus the Company’s President and Chief Executive Officer and the Chairman of the Company’s Board of Directors.

The following unaudited pro forma consolidated financial statements and accompanying notes should be read in conjunction with the unaudited condensed consolidated balance sheet of Medalist Diversified REIT, Inc. and Subsidiaries as of September 30, 2024, the unaudited condensed consolidated statement of operations of Medalist Diversified REIT, Inc. and Subsidiaries for the nine months ended September 30, 2024, and the audited consolidated statement of operations of Medalist Diversified REIT, Inc. and Subsidiaries for the year ended December 31, 2023.

The following unaudited pro forma consolidated balance sheet as of September 30, 2024 has been prepared to give effect to the (i) the Private Placements, (ii) the Series A Preferred Stock Redemptions, (iii) the acquisition of the Buffalo Wild Wings Property, and (iv) the acquisition of the United Rentals Property, as if these transactions had occurred on September 30, 2024.

The following unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2024 and the year ended December 31, 2023 have been prepared to give effect to the (i) the acquisition of the Citibank Property, (ii) the disposition of the Hanover Square Shopping Center Property, (iii) the Series A Preferred Stock Redemptions, (iv) the acquisition of the Buffalo Wild Wings Property, (v) the acquisition of the United Rentals Property and (vi) the Private Placements, as if these transactions had occurred on January 1, 2024 and January 1, 2023, respectively.

These unaudited pro forma consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisition of the Citibank Property, the disposition of the Hanover Square Shopping Center Property, the Series A Preferred Stock Redemptions, the acquisition of the Buffalo Wild Wings Property, the acquisition of the United Rentals Property, or the Private Placements, had these transactions been consummated as of the date indicated.

Medalist Diversified REIT, Inc.

Unaudited Pro Forma Consolidated Balance Sheet

As of September 30, 2024


						Pro Forma			Pro Forma			Pro Forma
			Pro Forma			Adjustments			Adjustments			Adjustments
	Historical		Adjustments			Preferred Stock			Buffalo Wild Wings			United Rentals			Pro Forma
	September 30, 2024 (a)		Private Placements (b)			Redemption (c)			Acquisition (d)			Acquisition (e)			September 30, 2024
	(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Investment properties, net	$	65,155,785	$	—		$	—		$	2,501,345	(i)	$	2,914,369	(i)	$	70,571,499
Cash		3,121,333		4,819,891	(i)		(5,000,000)	(i)		(47,429)	(ii)		(42,446)	(ii)		2,851,349
Restricted cash		1,847,326		—			—			—			—			1,847,326
Rent and other receivables, net of allowance		215,532		—			—			—			—			215,532
Unbilled rent		1,077,746		—			—			—			—			1,077,746
Intangible assets, net		2,448,365		—			—			222,139	(iii)		273,077	(iii)		2,943,581
Other assets		741,398		—			—			—			—			741,398
Total Assets	$	74,607,485	$	4,819,891		$	(5,000,000)		$	2,676,055		$	3,145,000		$	80,248,431

LIABILITIES
Accounts payable and accrued liabilities	$	1,291,987	$	—		$	—		$	—		$	—		$	1,291,987
Intangible liabilities, net		1,736,263		—			—			56,055	(iii)		—			1,792,318
Mortgages payable, net		50,219,369		—			—			—			—			50,219,369
Mandatorily redeemable preferred stock, net		4,890,196		—			(4,890,196)	(ii)		—			—			—
Total Liabilities	$	58,137,815	$	—		$	(4,890,196)		$	56,055		$	—		$	53,303,674

EQUITY
Common stock	$	11,153	$	2,300	(ii)	$	—		$	—		$	—		$	13,453
Additional paid-in capital		51,577,572		2,872,700	(iii)		—			—			—			54,450,272
Offering costs		(3,350,946)		(55,109)	(iv)		—			—			—			(3,406,055)
Accumulated deficit		(35,678,971)		—			(109,804)	(iii)		—			—			(35,788,775)
Total Shareholders' Equity		12,558,808		2,819,891			(109,804)			—			—			15,268,895
Noncontrolling interests - Parkway Property		419,725		—			—			—			—			419,725
Noncontrolling interests - Operating Partnership		3,491,137		2,000,000	(v)		—			2,620,000	(iv)		3,145,000	(iv)		11,256,137
Total Equity	$	16,469,670	$	4,819,891		$	(109,804)		$	2,620,000		$	3,145,000		$	26,944,757
Total Liabilities and Equity	$	74,607,485	$	4,819,891		$	(5,000,000)		$	2,676,055		$	3,145,000		$	80,248,431

See notes to unaudited pro forma consolidated balance sheet

MEDALIST DIVERSIFIED REIT, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2024

Notes to unaudited pro forma consolidated balance sheet as of September 30, 2024

(a)

Historical financial information was derived from the unaudited condensed consolidated balance sheet of the Company as of September 30, 2024.

(b)

Represents the impact of the Private Placements as if these transactions had closed on September 30, 2024.

(i)

Represents $2,000,000 from the private placement of 160,000 Operating Partnership Units at $12.50 per Operating Partnership Unit and $2,875,000 from the private placement of 230,000 Common Shares at $12.50 per Common Share, less $55,110 in offering costs paid related to the Private Placements.

(ii)

Represents the par value recorded from the 230,000 Common Shares issued in the Private Placements.

(iii)

Represents the additional paid-in capital recorded from the 230,000 Common Shares issued in the Private Placements.

(iv)

Represents $55,110 in offering costs related to the Private Placements.

(v)

Represents the non-controlling interest recorded from the issuance of 160,000 Operating Partnership Units in the Private Placements.

(c)

Represents the redemption of all outstanding shares of the Series A Preferred Stock as if the Series A Preferred Stock had been redeemed on September 30, 2024.

(i)

Represents amount paid to redeem the 200,000 shares of Series A Preferred Stock at its $25.00 per share redemption price.

(ii)

Represents the book value of the Series A Preferred Stock, net of $109,804 of unamortized discounts and issuance costs as of September 30, 2024.

(iii)

Represents the loss on the redemption of the Series A Preferred Stock as if the redemption had occurred on September 30, 2024.

(d)

Represents the impact of the acquisition of the Buffalo Wild Wings Property as if it had occurred on September 30, 2024. The Buffalo Wild Wings Property was acquired by MDR Bowling Green, LLC, a wholly owned subsidiary of the Operating Partnership on January 24, 2025. The net purchase price of the property was $2,620,000 plus capitalized due diligence and closing costs of $47,429. The purchase price was paid through the issuance of 209,600 Operating Partnership Units. The closing costs were paid from cash on hand.

(i)

Amounts recorded to investment properties include tangible assets acquired at closing, including land, site improvements, building and tenant improvements and are recorded at fair value in accordance with Accounting Standards Codification (“ASC”) 805.

(ii)

The acquisition cost was funded with 209,600 Operating Partnership Units issued by the Operating Partnership. Cash from the Company on the unaudited pro forma consolidated balance sheet as of September 30, 2024 represents closing costs paid in cash of $47,429.

(iii)

Represents the fair value of lease intangibles, including leasing commissions, leases in place, below market leases and legal and marketing costs associated with replacing existing leases, recorded at fair value in accordance with ASC 805.

(iv)

Represents 209,600 Operating Partnership Units issued by the Operating Partnership at a price of $12.50 per Operating Partnership Unit.

Notes to unaudited pro forma consolidated balance sheet as of September 30, 2024, continued

(e)

Represents the impact of the acquisition of the United Rentals Property as if it had occurred on September 30, 2024. The United Rentals Property was acquired by MDR Dan Tibbs Road, LLC, a wholly owned subsidiary of the Operating Partnership on February 21, 2025. The net purchase price of the property was $3,145,000 plus capitalized due diligence and closing costs of $42,446. The purchase price was paid through the issuance of 251,600 Operating Partnership Units. The closing costs were paid from cash on hand.

(i)

(ii)

The acquisition cost was funded with 251,600 Operating Partnership Units issued by the Operating Partnership. Cash from the Company on the unaudited pro forma consolidated balance sheet as of September 30, 2024 represents closing costs paid in cash of $42,446.

(iii)

Represents the fair value of lease intangibles, including leasing commissions, leases in place, above market leases, and legal and marketing costs associated with replacing existing leases, recorded at fair value in accordance with ASC 805.

(iv)

Represents 251,600 Operating Partnership Units issued by the Operating Partnership at a price of $12.50 per Operating Partnership Unit.

Medalist Diversified REIT, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the nine months ended September 30, 2024


						Pro Forma
						Adjustments
			Pro Forma			Hanover			Pro Forma			Pro Forma			Pro Forma
			Adjustments			Square			Adjustments			Adjustments			Adjustments
	Historical		Citibank			Shopping			Preferred			Buffalo			United
	Nine Months Ended		Property			Center			Stock			Wild Wings			Rentals			Pro Forma
	September 30, 2024		Acquisition			Disposition			Redemption			Acquisition			Acquisition			Nine Months Ended
	(a)		(b)			(c)			(d)			(e)			(f)			September 30, 2024
	(unaudited)		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
REVENUE
Retail center property revenues	$	4,955,305	$	-		$	(307,325)	(i)	$	-		$	-		$	-		$	4,647,980
Flex center property revenues		2,008,056		-			-			-			-			-			2,008,056
Single tenant net lease property revenues		246,359		30,819	(i)		-			-			114,714	(i)		157,520	(i)		549,412
Total Revenue	$	7,209,720	$	30,819		$	(307,325)		$	-		$	114,714		$	157,520		$	7,205,448

OPERATING EXPENSES
Retail center property operating expenses	$	1,193,838	$	-	(ii)	$	(89,729)	(ii)	$	-		$	-	(ii)	$	-	(ii)	$	1,104,109
Flex center property operating expenses		491,586		-			-			-			-			-			491,586
Single tenant net lease property expenses		23,697		-			-			-			-			-			23,697
Bad debt expense		37,643		-			(16,136)	(iii)		-			-			-			21,507
Share based compensation expenses		277,500		-			-			-			-			-			277,500
Legal, accounting and other professional fees		941,244		-			-			-			-			-			941,244
Corporate general and administrative expenses		748,928		-			-			-			-			-			748,928
Depreciation and amortization		2,979,142		20,178	(iii)		-			-			71,919	(iii)		113,661	(iii)		3,184,900
Total Operating Expenses		6,693,578		20,178			(105,865)			-			71,919			113,661			6,793,471
Gain on disposal of investment property		2,819,502		-			(2,819,502)	(iv)		-			-			-			—
Loss on extinguishment of debt		(51,837)		-			51,837	(v)		-			-			-			—
Operating Income		3,283,807		10,641			(2,969,125)			-			42,795			43,859			411,977
Interest expense		2,331,030		-			(129,248)	(vi)		(496,621)	(i)		-			-			1,705,161
Net Income (Loss) from Operations		952,777		10,641			(2,839,877)			496,621			42,795			43,859			(1,293,184)
Other income		40,486		-			-			-			-			-			40,486
Other expense		(76,985)		-			-			-			-			-			(76,985)
Net Income (Loss)		916,278		10,641			(2,839,877)			496,621			42,795			43,859			(1,252,698)
Less: Net income attributable to Hanover Square Property noncontrolling interests		453,928		-			(453,928)	(vii)		-			-			-			—
Less: Net loss attributable to Parkway Property noncontrolling interests		(9,178)		-			-			-			-			-			(9,178)
Less: Net income attributable to Operating Partnership noncontrolling interests		162,828		4,130	(iv)		(137,029)	(viii)		-			16,609	(iv)		17,022	(iv)		63,559
Net Income (Loss) Attributable to Medalist Common Shareholders	$	308,700	$	6,511		$	(2,248,920)		$	496,621		$	26,186		$	26,837		$	(1,307,080)

Income (Loss) per share from operations - basic	$	0.28																$	(0.97)
Weighted-average number of shares - basic		1,117,099																	1,346,448	(g)

Income (Loss) per share from operations - diluted	$	0.28																	(0.97)
Weighted-average number of shares - diluted		1,123,249																	1,352,598

Dividends paid per common share	$	0.11																$	0.11

See notes to unaudited pro forma consolidated statement of operations

MEDALIST DIVERSIFIED REIT, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Notes to unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2024

(a)

Historical financial information was derived from the unaudited condensed consolidated statement of operations of the Company for the nine months ended September 30, 2024.

(b)

Adjustments to give effect to the acquisition of the Citibank Property as if the acquisition had occurred on January 1, 2024.

(i)

Represents rental revenues for the Citibank Property that would have been recognized for the nine months ended September 30, 2024, prior to acquisition, based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis and include an adjustment of ($3,441) in amortization of the below market lease.

(ii)

Under the net-lease structure of the lease with Citibank, all operating expenses, including maintenance, real estate taxes and insurance, are the responsibility of the tenant. Accordingly, no operating expenses are projected to be incurred.

(iii)

Represents depreciation and amortization expense for the Citibank Property for the nine months ended September 30, 2024, prior to acquisition, as if the Company had acquired the Citibank Property on January 1, 2024. Depreciation expense is calculated using the straight-line method over the estimated remaining useful life of 35 years for the building and 10 years for land improvements. Tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Intangible assets such as in-place lease value and other lease-related intangibles are recorded at fair value and are amortized over the remaining terms of the underlying leases.

(iv)

Represents the Operating Partnership’s 38.81% weighted average noncontrolling ownership interest’s share of the Citibank Property net income that would have been recorded for the nine months ended September 30, 2024. The Operating Partnership’s 38.81% weighted average reflects the issuance of 160,000 Operating Partnership Units from the Private Placement, 208,696 Operating Partnership Units for the Citibank Property acquisition, 209,600 Operating Partnership Units for the Buffalo Wild Wings acquisition, 251,600 Operating Partnership Units for the United Rentals acquisition (see (f), below), 19,349 Operating Partnership Units to the Company’s President and Chief Executive Officer as a portion of his 2024 compensation, and the redemptions of 8,525 Operating Partnership Units, as if the issuances and redemptions had occurred on January 1, 2024.

(c)

Adjustments to give effect to the sale of the Hanover Square Shopping Center Property on March 13, 2024 as if the disposition had occurred on January 1, 2024. Actual operating results recorded for the Hanover Square Shopping Center prior to its sale for the nine months ended September 30, 2024 have been removed from the pro forma statement of operations to reflect the pro forma results of the Company’s remaining portfolio for nine months ended September 30, 2024.

(i)

Represents rental revenues for the Hanover Square Shopping Center that were recognized during the nine months ended September 30, 2024.

(ii)

Represents operating expenses for the Hanover Square Shopping Center that were incurred during the nine months ended September 30, 2024, net of the real estate tax expense for the nine months ended September 30, 2024 recorded for the Hanover Square Outparcel that was retained by the Company.

(iii)

Represents bed debt expense for the Hanover Square Shopping Center that were recorded during the nine months ended September 30, 2024.

(iv)

Represents the gain on the sale of the Hanover Square Shopping Center that was recognized during the nine months ended September 30, 2024.

(v)

Represents the loss on extinguishment of debt that was recognized during the nine months ended September 30, 2024 related to the repayment of the mortgage due to the sale of the Hanover Square Shopping Center.

(vi)

Represents the interest expense, including amortization of loan issuance costs, that was recorded for the Hanover Square Shopping Center during the nine months ended September 30, 2024.

Notes to unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2024, continued

(vii)Represents the noncontrolling ownership’s 16% share of the net loss from the Hanover Square Shopping Center that was recorded during the nine months ended September 30, 2024.

(viii)

Represents the noncontrolling ownership’s actual 5.75% share of the net loss from the Hanover Square Shopping Center that was recorded during the nine months ended September 30, 2024.

(d)

Adjustments to give effect to the redemption of the Series A Preferred Stock as if the redemption had occurred on January 1, 2024.

(i)

Represents the actual preferred dividends and the amortization of issuance costs and discounts that were recorded as interest expense during the nine months ended September 30, 2024.

(e)

Adjustments to give effect to the acquisition of the Buffalo Wild Wings Property as if the acquisition had occurred on January 1, 2024.

(i)

Represents rental revenues for the Buffalo Wild Wings Property that would have been recognized for the nine months ended September 30, 2024 based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis and include an adjustment of ($3,411) in estimated net amortization of the below market lease.

(ii)

Under the net-lease structure of the lease, all operating expenses, including maintenance, real estate taxes and insurance, are the responsibility of the tenant. Accordingly, no operating expenses are projected to be incurred.

(iii)

Represents depreciation and amortization expense for the Buffalo Wild Wings Property for the nine months ended September 30, 2024 as if the Company had acquired the Buffalo Wild Wings Property on January 1, 2024. Depreciation expense is calculated using the straight-line method over the estimated remaining useful life of 30 years for the building and 13 years for land improvements. Tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Intangible assets such as in-place lease value and other lease-related intangibles are recorded at fair value and are amortized over the remaining terms of the underlying leases.

(iv)

Represents the Operating Partnership’s pro forma 38.81% weighted average noncontrolling ownership interest’s share of the Buffalo Wild Wings Property net income that would have been recorded for the nine months ended September 30, 2024. The Operating Partnership’s pro forma 38.81% weighted average reflects the issuance of 160,000 Operating Partnership Units from the Private Placement, 208,696 Operating Partnership Units for the Citibank Property acquisition, 209,600 Operating Partnership Units for the Buffalo Wild Wings acquisition, 251,600 Operating Partnership Units for the United Rentals acquisition (see (f), below), 19,349 Operating Partnership Units to the Company’s President and Chief Executive Officer as a portion of his 2024 compensation, and the redemptions of 8,525 Operating Partnership Units, as if the issuances and redemptions had occurred on January 1, 2024.

(f)

Adjustments to give effect to the acquisition of the United Rentals Property as if the acquisition had occurred on January 1, 2024.

(i)

Represents rental revenues for the United Rentals Property that would have been recognized for the nine months ended September 30, 2024 based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis and include an adjustment of $3,159 in estimated net amortization of the above market lease.

(ii)

Notes to unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2024, continued

(iii)

Represents depreciation and amortization expense for the United Rentals Property for the nine months ended September 30, 2024 as if the Company had acquired the United Rentals Property on January 1, 2024. Depreciation expense is calculated using the straight-line method over the estimated remaining useful life of 30 years for the building and 11 years for land improvements. Tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Intangible assets such as in-place lease value and other lease-related intangibles are recorded at fair value and are amortized over the remaining terms of the underlying leases.

(iv)

Represents the Operating Partnership’s pro forma 38.81% weighted average noncontrolling ownership interest’s share of the United Rentals Property net income that would have been recorded for the nine months ended September 30, 2024. The Operating Partnership’s pro forma 38.81% weighted average reflects the issuance of 160,000 Operating Partnership Units from the Private Placement, 208,696 Operating Partnership Units for the Citibank Property acquisition, 209,600 Operating Partnership Units for the Buffalo Wild Wings acquisition, 251,600 Operating Partnership Units for the United Rentals acquisition, 19,349 Operating Partnership Units to the Company’s President and Chief Executive Officer as a portion of his 2024 compensation, and the redemptions of 8,525 Operating Partnership Units, as if the issuances and redemptions had occurred on January 1, 2024.

Medalist Diversified REIT, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the year ended December 31, 2023


						Pro Forma
						Adjustments
			Pro Forma			Hanover			Pro Forma			Pro Forma			Pro Forma
			Adjustments			Square			Adjustments			Adjustments			Adjustments
	Historical		Citibank			Shopping			Preferred			Buffalo			United
	Year Ended		Property			Center			Stock			Wild Wings			Rentals			Pro Forma
	December 31, 2023		Acquisition			Disposition			Redemption			Acquisition			Acquisition			Year Ended
	(a)		(b)			(c)			(d)			(e)			(f)			December 31, 2023
			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
REVENUE
Retail center property revenues	$	7,768,174	$	—		$	(1,354,804)	(i)	$	—		$	—		$	—		$	6,413,370
Flex center property revenues		2,504,652		—			—			—			—			—			2,504,652
Single tenant net lease property revenues		-		123,276	(i)		-			-			152,952	(i)		198,869	(i)		475,097
Total Revenue	$	10,272,826	$	123,276		$	(1,354,804)		$	-		$	152,952		$	198,869		$	9,393,119

OPERATING EXPENSES
Retail center property operating expenses	$	1,913,699	$	—	(ii)	$	(315,076)	(ii)	$	—		$	—	(ii)	$	—	(ii)	$	1,598,623
Flex center property operating expenses		686,818		—			—			—			—			—			686,818
Single tenant net lease property expenses		—		—			—			—			—			—			-
Bad debt expense		63,282		—			—			—			—			—			63,282
Legal, accounting and other professional fees		1,390,941		—			—			—			—			—			1,390,941
Corporate general and administrative expenses		484,345		—			—			—			—			—			484,345
Management restructuring expenses		2,066,521		—			—			—			—			—			2,066,521
Loss on impairment		90,221		—			—			—			—			—			90,221
Depreciation and amortization		4,574,163		80,712	(iii)		(280,141)	(iii)		-			95,892	(iii)		151,548	(iii)		4,622,174
Total Operating Expenses		11,269,990		80,712			(595,217)			-			95,892			151,548			11,002,925
Operating (Loss) Income		(997,164)		42,564			(759,587)			-			57,060			47,321			(1,609,806)
Interest expense		3,540,900		—			(707,604)	(iv)		(643,054)	(i)		—			—			2,190,242
Net (Loss) Income from Operations		(4,538,064)		42,564			(51,983)			643,054			57,060			47,321			(3,800,048)
Other income		49,274		—			—			—			—			—			49,274
Other expense		(84,564)		—			—			—			—			—			(84,564)
Net (Loss) Income		(4,573,354)		42,564			(51,983)			643,054			57,060			47,321			(3,750,774)
Less: Net income attributable to Hanover Square Property noncontrolling interests		7,714		—			(7,714)	(v)		—			—			—			—
Less: Net loss attributable to Parkway Property noncontrolling interests		(8,482)		—			—			—			—			—			(8,482)
Less: Net loss (income) attributable to Operating Partnership noncontrolling interests		(1,307)		16,570	(iv)		(482)	(vi)		-			22,213	(iv)		18,422	(iv)		55,417
Net (Loss) Income Attributable to Medalist Common Shareholders	$	(4,571,279)	$	25,994		$	(43,787)		$	643,054		$	34,847		$	28,899		$	(3,797,709)

Loss per share from operations - basic and diluted	$	(4.12)																$	(2.84)

Weighted-average number of shares - basic and diluted		1,109,574																	1,339,574

Dividends paid per common share

0.32

See notes to unaudited pro forma consolidated statement of operations

MEDALIST DIVERSIFIED REIT, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2023

Notes to unaudited pro forma consolidated statement of operations for the year ended December 31, 2023

(a)

Historical financial information was derived from the audited consolidated financial statements of the Company for the year ended December 31, 2023.

(b)

Adjustments to give effect to the acquisition of the Citibank Property as if the acquisition had occurred on January 1, 2023.

(i)

Represents rental revenues for the Citibank Property that would have been recognized for the year ended December 31, 2023 based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis and include an adjustment of ($13,764) in amortization of the below market lease.

(ii)

(iii)

Represents depreciation and amortization expense for the Citibank Property for the year ended December 31, 2023 as if the Company had acquired the Citibank Property on January 1, 2023. Depreciation expense is calculated using the straight-line method over the estimated remaining useful life of 35 years for the building and 10 years for land improvements. Tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Intangible assets such as in-place lease value and other lease-related intangibles are recorded at fair value and are amortized over the remaining terms of the underlying leases.

(iv)

Represents the Operating Partnership’s 38.93% weighted average noncontrolling ownership interest’s share of the Citibank Property net income that would have been recorded for the year ended December 31, 2023. The Operating Partnership’s 38.93% weighted average reflects the issuance of 160,000 Operating Partnership Units from the Private Placement, 208,696 Operating Partnership Units for the Citibank Property acquisition, 209,600 Operating Partnership Units for the Buffalo Wild Wings acquisition, 251,600 Operating Partnership Units for the United Rentals acquisition (see (f), below), 19,349 Operating Partnership Units to the Company’s President and Chief Executive Officer as a portion of his 2024 compensation, and the redemptions of 8,525 Operating Partnership Units, as if the issuances and redemptions had occurred on January 1, 2024.

(c)

Adjustments to give effect to the sale of the Hanover Square Shopping Center Property on March 13, 2024 as if the disposition had occurred on January 1, 2023. Actual operating results for the Hanover Square Shopping Center for the year ended December 31, 2023 have been removed from the pro forma statement of operations to reflect the pro forma results of the Company’s remaining portfolio for the full year ending December 31, 2023.

(i)

Represents total rental revenues for the Hanover Square Shopping Center that were recognized during the year ended December 31, 2023.

(ii)

Represents operating expenses for the Hanover Square Shopping Center that were incurred during the year ended December 31, 2023, net of the real estate tax expense for the year ended December 31, 2023 for the Hanover Square Outparcel that was retained by the Company.

(iii)

Represents depreciation and amortization expense for the Hanover Square Shopping Center that were recorded during the year ended December 31, 2023.

(iv)

Represents the interest expense, including amortization of loan issuance costs, that was recorded for the Hanover Square Shopping Center during the year ended December 31, 2023.

(v)

Represents the noncontrolling ownership’s 16% share of the net loss from the Hanover Square Shopping Center that was recorded during the 12 months ended December 31, 2023.

(vi)

Represents the noncontrolling ownership’s actual 1.19% share of the net loss from the Hanover Square Shopping Center that was recorded during the 12 months ended December 31, 2023.

Notes to unaudited pro forma consolidated statement of operations for the year ended December 31, 2023, continued

(d)

Adjustments to give effect to the redemption of the Series A Preferred Stock as if the redemption had occurred on January 1, 2023.

(i)

Represents the actual preferred dividends and the amortization of issuance costs and discounts that were recorded as interest expense during the 12 months ended December 31, 2023.

(e)

Adjustments to give effect to the acquisition of the Buffalo Wild Wings Property as if the acquisition had occurred on January 1, 2023.

(i)

Represents rental revenues for the Buffalo Wild Wings Property that would have been recognized for the year ended December 31, 2023 based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis and include an adjustment of ($4,548) in estimated net amortization of the below market lease.

(ii)

(iii)

Represents depreciation and amortization expense for the Buffalo Wild Wings Property for the year ended December 31, 2023 as if the Company had acquired the Buffalo Wild Wings Property on January 1, 2023. Depreciation expense is calculated using the straight-line method over the estimated remaining useful life of 30 years for the building and 13 years for land improvements. Tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Intangible assets such as in-place lease value and other lease-related intangibles are recorded at fair value and are amortized over the remaining terms of the underlying leases.

(iv)

Represents the Operating Partnership’s pro forma 38.93% weighted average noncontrolling ownership interest’s share of the Buffalo Wild Wings Property net income that would have been recorded for the year ended December 31, 2023. The Operating Partnership’s pro forma 38.93% weighted average reflects the issuance of 160,000 Operating Partnership Units from the Private Placement, 208,696 Operating Partnership Units for the Citibank Property acquisition, 209,600 Operating Partnership Units for the Buffalo Wild Wings acquisition, 251,600 Operating Partnership Units for the United Rentals acquisition (see (f), below), 19,349 Operating Partnership Units to the Company’s President and Chief Executive Officer as a portion of his 2024 compensation, and the redemptions of 8,525 Operating Partnership Units, as if the issuances and redemptions had occurred on January 1, 2024.

(f)

Adjustments to give effect to the acquisition of the United Rentals Property as if the acquisition had occurred on January 1, 2023.

(i)

Represents rental revenues for the United Rentals Property that would have been recognized for the year ended December 31, 2023 based on the terms of the lease with the tenant that is currently in place. Rental revenues are presented on a straight-line basis and include an adjustment of $4,212 in estimated net amortization of the above market lease.

(ii)

(iii)

Represents depreciation and amortization expense for the United Rentals Property for the year ended December 31, 2023 as if the Company had acquired the United Rentals Property on January 1, 2023. Depreciation expense is calculated using the straight-line method over the estimated remaining useful life of 30 years for the building and 11 years for land improvements. Tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Intangible assets such as in-place lease value and other lease-related intangibles are recorded at fair value and are amortized over the remaining terms of the underlying leases.

(iv)

Represents the Operating Partnership’s pro forma 38.93% weighted average noncontrolling ownership interest’s share of the United Rentals Property net income that would have been recorded for the year ended December 31, 2023. The Operating Partnership’s pro forma 38.93% weighted average reflects the issuance of 160,000 Operating Partnership Units from the Private Placement, 208,696 Operating Partnership Units for the Citibank Property acquisition, 209,600 Operating Partnership Units for the Buffalo Wild Wings acquisition, 251,600 Operating Partnership Units for the United Rentals acquisition, 19,349 Operating Partnership Units to the Company’s President and Chief Executive

Officer as a portion of his 2024 compensation, and the redemptions of 8,525 Operating Partnership Units, as if the issuances and redemptions had occurred on January 1, 2024.