Amended Current Report Filing (8-k/a)

Date : 04/15/2019 @ 9:19PM
Source : Edgar (US Regulatory)
Stock : NexPoint Residential Trust Inc (NXRT)
Quote : 41.19  0.0 (0.00%) @ 1:00AM

Amended Current Report Filing (8-k/a)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K/A

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 28, 2019

 

 

NEXPOINT RESIDENTIAL TRUST, INC.

(Exact Name Of Registrant As Specified In Charter)

 

 

 

Maryland   001-36663   47-1881359

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

300 Crescent Court, Suite 700

Dallas, Texas 75201

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (972) 628-4100

 

 

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 ( see General Instruction A.2. below):

 

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

 

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

 

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

 

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

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

Emerging growth company  ☒

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

In its Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 31, 2019 (the “Initial Report”), NexPoint Residential Trust, Inc. reported that it, through its operating partnership, NexPoint Residential Trust Operating Partnership, L.P., acquired a three-property portfolio in Phoenix, Arizona from an unaffiliated third party for approximately $132 million. This Current Report on Form 8-K/A amends and supplements the Initial Report to provide 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 Initial Report.

 

Item 9.01.

Financial Statements and Exhibits.

(a) Financial Statement .

 

Report of Independent Auditors

     3  

Historical Statement of Revenues and Certain Direct Operating Expenses for the year ended December 31, 2018

     4  

Notes to Historical Statement of Revenues and Certain Direct Operating Expenses

     5  

(b) Pro Forma Financial Information.

 

Unaudited Pro Forma Consolidated Financial Information

     7  

Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2018

     8  

Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2018

     9  

Notes to Unaudited Pro Forma Consolidated Financial Statements

     10  

(d) Exhibits .

 

Exhibit
Number
  

Exhibit Description

23.1    Consent of Frazier & Deeter, LLC, dated April 15, 2019

 

2


INDEPENDENT AUDITORS’ REPORT

To the Stockholders and Board of Directors

NexPoint Residential Trust, Inc.

We have audited the accompanying historical statement of revenues and certain direct operating expenses of The Phoenix Portfolio (the “Properties”) for the year ended December 31, 2018, and the related notes to the financial statement.

Management’s Responsibility for the Financial Statement

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain direct operating expenses of the Properties for the year ended December 31, 2018, in accordance with accounting principles generally accepted in the United States of America and in accordance with applicable rules and regulations of the Securities and Exchange Commission for real estate properties acquired.

Emphasis of Matter

We draw attention to Note 2 to the accompanying financial statement, which describes that the statement of revenues and certain direct operating expenses of the Properties were prepared for the purpose of complying with the rules of the Securities and Exchange Commission (for the inclusion on Form 8-K/A of NexPoint Residential Trust, Inc.) and is not intended to be a complete presentation of the Properties’ revenues and expenses. Our opinion has not been modified with respect to this matter.

/s/ Frazier & Deeter, LLC

Atlanta, Georgia

April 15, 2019

 

LOGO

 

3


THE PHOENIX PORTFOLIO

HISTORICAL STATEMENT OF REVENUES AND CERTAIN DIRECT

OPERATING EXPENSES

 

     For the Year Ended
December 31, 2018
 

Revenues

  

Rental income

   $ 9,043  

Other income

     1,108  
  

 

 

 

Total revenues

     10,151  
  

 

 

 

Certain direct operating expenses

  

Property operating expenses

     2,079  

Real estate taxes and insurance

     706  

Property management fees

     288  

Property general and administrative expenses

     256  
  

 

 

 

Total certain direct operating expenses

     3,329  
  

 

 

 

Revenues in excess of certain direct operating expenses

   $ 6,822  
  

 

 

 

See accompanying notes to the historical financial statement

 

4


THE PHOENIX PORTFOLIO

NOTES TO HISTORICAL STATEMENT OF REVENUES AND CERTAIN

DIRECT OPERATING EXPENSES

Note 1. Business

On January 28, 2019, NexPoint Residential Trust, Inc. (the “Company”), through its operating partnership, NexPoint Residential Trust Operating Partnership, L.P., acquired a three-property portfolio in Arizona for approximately $132.1 million (the “Portfolio”). See the table below for further detail of each property in the Portfolio. The accompanying historical statement of revenues and certain direct operating expenses (“Historical Summary”) includes the revenues and certain expenses of the Portfolio.

 

Property Name

  

Location

   Purchase Price      # Units  

Bella Vista Apartment Homes

   Phoenix, Arizona    $ 48,400        248  

The Enclave Apartment Homes

   Tempe, Arizona      41,800        204  

The Heritage Apartment Homes

   Phoenix, Arizona      41,900        204  
     

 

 

    

 

 

 
      $ 132,100        656  
     

 

 

    

 

 

 

Note 2. Basis of Presentation

The accompanying Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (the “SEC”), and is not intended to be a complete presentation of the Portfolio’s revenues and expenses.

The accompanying statements of revenues and certain operating expenses are presented in conformity with accounting principles generally accepted in the United States of America and in accordance with the provisions of Rule 3-14 of Regulation S-X promulgated by the SEC, which requires certain information with respect to real estate operations be included with certain filings with the SEC. Accordingly, the statements exclude certain historical income and expenses that are not comparable to the proposed future operations of the Portfolio such as certain ancillary income, amortization, depreciation, interest and corporate expenses. Therefore, the statements will not be comparable to the statements of operations of the Portfolio after their acquisition by the Company and are not intended to be a complete representation of the Portfolio’s revenues and expenses.

Note 3. Significant Accounting Policies

Revenues

The Portfolio contains apartment units occupied under various lease agreements with residents, typically with terms of 12 months or less. All leases are accounted for as operating leases. Rental income is recognized as earned over the life of the lease agreements on a straight-line basis. Some of the leases include provisions under which the Portfolio is reimbursed for certain operating costs. Revenue related to these reimbursed costs is recognized in the period the applicable costs are incurred and billed to residents pursuant to the lease agreements. Other rental income consists of charges billed to residents for utilities reimbursements, administrative, application, and other fees and is recognized when earned.

Certain Direct Operating Expenses

Certain direct operating expenses include only those costs expected to be comparable to the proposed future operations of the Portfolio. Portfolio operating costs includes property staff salaries, marketing, utilities, landscaping, repairs and maintenance, and other general costs associated with operating the Portfolio. Costs such as depreciation, amortization, interest, and professional fees are excluded from the Historical Summary.

Use of Estimates

The preparation of financial statements, as described in Note 2 and in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

 

5


THE PHOENIX PORTFOLIO

NOTES TO HISTORICAL STATEMENT OF REVENUES AND CERTAIN

DIRECT OPERATING EXPENSES

Note 4. Commitments and Contingencies

Litigation

The Portfolio may become party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition.

Other Matters

The Company is not aware of any material environmental liabilities relating to the Portfolio that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environment laws and regulations or other environmental conditions with respect to the Portfolio could result in future environmental liabilities.

Note 5. Subsequent Events

In preparation of the accompanying Historical Summary, subsequent events were evaluated for recognition or disclosure through April 15, 2019, which is the date the Historical Summary was issued.

 

6


NEXPOINT RESIDENTIAL TRUST, INC.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma information should be read in conjunction with the Company’s historical consolidated financial statements and the notes thereto as filed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 19, 2019. In addition, this unaudited pro forma information should be read in conjunction with the historical statements of revenues and certain direct operating expenses and the notes thereto of the Portfolio, which are included herein.

The following unaudited pro forma consolidated balance sheet as of December 31, 2018 has been prepared to give effect to the acquisition of the Portfolio, which occurred on January 28, 2019, as if the acquisition occurred on December 31, 2018.

The following unaudited pro forma consolidated statement of operations for the year ended December 31, 2018 has been prepared to give effect to the acquisition of the Portfolio as if the acquisition occurred on January 1, 2018.

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 Portfolio been consummated on January 1, 2018 or December 31, 2018.

In the opinion of the Company’s management, all adjustments necessary to reflect the effect of the transaction described above have been included in the pro forma consolidated financial statements.

 

7


NEXPOINT RESIDENTIAL TRUST, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

As of December 31, 2018

(in thousands, except share and per share amounts)

 

     NXRT, Inc.
(Historical)
(a)
    Purchase of
PHX
Portfolio (b)
    Pro Forma
Total
 
ASSETS       

Operating Real Estate Investments

      

Land

   $ 202,347     $ 28,823     $ 231,170  

Buildings and improvements

     935,604       99,735       1,035,339  

Intangible lease assets

     3,049       2,438       5,487  

Construction in progress

     1,881       —         1,881  

Furniture, fixtures, and equipment

     61,456       1,659       63,115  
  

 

 

   

 

 

   

 

 

 

Total Gross Operating Real Estate Investments

     1,204,337       132,655       1,336,992  

Accumulated depreciation and amortization

     (134,124     —         (134,124
  

 

 

   

 

 

   

 

 

 

Total Net Operating Real Estate Investments

     1,070,213       132,655       1,202,868  

Real estate held for sale, net of accumulated depreciation of $897

     17,329       —         17,329  
  

 

 

   

 

 

   

 

 

 

Total Net Real Estate Investments

     1,087,542       132,655       1,220,197  

Cash and cash equivalents

     19,864       (7,994     11,870  

Restricted cash

     23,265       5,662       28,927  

Accounts receivable

     3,340       50       3,390  

Prepaid and other assets

     9,058       37       9,095  

Fair market value of interest rate swaps

     18,141       —         18,141  
  

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

   $ 1,161,210     $ 130,410     $ 1,291,620  
  

 

 

   

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY       

Liabilities:

      

Mortgages payable, net

   $ 824,702     $ 78,266     $ 902,968  

Mortgages payable held for sale, net

     13,318       —         13,318  

Credit facilities, net

     —         51,857       51,857  

Accounts payable and other accrued liabilities

     5,765       126       5,891  

Accrued real estate taxes payable

     12,607       41       12,648  

Accrued interest payable

     2,852       —         2,852  

Security deposit liability

     1,889       104       1,993  

Prepaid rents

     1,482       16       1,498  
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     862,615       130,410       993,025  
  

 

 

   

 

 

   

 

 

 

Redeemable noncontrolling interests in the Operating Partnership

     2,567       —         2,567  

Stockholders’ Equity:

      

Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued

     —         —         —    

Common stock, $0.01 par value: 500,000,000 shares authorized; 23,499,635 shares issued and outstanding

     234       —         234  

Additional paid-in capital

     285,511       —         285,511  

Accumulated earnings less dividends

     (6,764     —         (6,764

Accumulated other comprehensive income

     17,047       —         17,047  
  

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity

     296,028       —         296,028  
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 1,161,210     $ 130,410     $ 1,291,620  
  

 

 

   

 

 

   

 

 

 

See accompanying notes to the unaudited pro forma consolidated financial statements

 

8


NEXPOINT RESIDENTIAL TRUST, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2018

(in thousands, except share and per share amounts)

 

     NXRT, Inc.
(Historical)
(a)
    Purchase of
PHX
Portfolio
(b)
    Pro Forma
Total
 

Revenues

      

Rental income

   $ 127,964     $ 9,043     $ 137,007  

Other income

     18,633       1,108       19,741  
  

 

 

   

 

 

   

 

 

 

Total revenues

     146,597       10,151       156,748  
  

 

 

   

 

 

   

 

 

 

Expenses

      

Property operating expenses

     35,824       2,079       37,903  

Real estate taxes and insurance

     20,713       706       21,419  

Property management fees (related party)

     4,382       288       4,670  

Advisory and administrative fees (related party)

     7,474       —   (c)      7,474  

Corporate general and administrative expenses

     7,808       —         7,808  

Property general and administrative expenses

     6,134       256       6,390  

Depreciation and amortization

     47,470       5,714 (d)      53,184  
  

 

 

   

 

 

   

 

 

 

Total expenses

     129,805       9,043       138,848  
  

 

 

   

 

 

   

 

 

 

Operating income

     16,792       1,108       17,900  

Interest expense

     (28,572     (5,940 )(e)      (34,512

Loss on extinguishment of debt and modification costs

     (3,576     —         (3,576

Gain on sales of real estate

     13,742       —         13,742  
  

 

 

   

 

 

   

 

 

 

Net loss

     (1,614     (4,832     (6,446

Net income attributable to noncontrolling interests

     —         —         —    

Net loss attributable to redeemable noncontrolling interests in the Operating Partnership

     (5     —         (5
  

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (1,609   $ (4,832   $ (6,441
  

 

 

   

 

 

   

 

 

 

Other comprehensive income

      

Unrealized gains on interest rate derivatives

     1,931       —         1,931  
  

 

 

   

 

 

   

 

 

 

Total comprehensive income (loss)

     317       (4,832     (4,515

Comprehensive income attributable to noncontrolling interests

     —         —         —    

Comprehensive income attributable to redeemable noncontrolling interests in the Operating Partnership

     1       —         1  
  

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to common stockholders

   $ 316     $ (4,832   $ (4,516
  

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding - basic

     21,189         21,189  
  

 

 

     

 

 

 

Weighted average common shares outstanding - diluted

     21,667         21,667  
  

 

 

     

 

 

 

Basic loss per share (see Note 2)

   $ (0.08     $ (0.30
  

 

 

     

 

 

 

Diluted loss per share (see Note 2)

   $ (0.08     $ (0.30
  

 

 

     

 

 

 

Dividends declared per common share

   $ 1.025       $ 1.025  
  

 

 

     

 

 

 

See accompanying notes to the unaudited pro forma consolidated financial statements

 

9


NEXPOINT RESIDENTIAL TRUST, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINACIAL STATEMENTS

Balance sheet adjustments

 

  a)

Represents the audited historical consolidated balance sheet of NexPoint Residential Trust, Inc. and subsidiaries (the “Company”) as of December 31, 2018. See the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

  b)

Reflects the acquisition of the Portfolio as if it occurred on December 31, 2018.

Income statement adjustments

 

  a)

Represents the audited historical consolidated operations of the Company for the year ended December 31, 2018. See the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

  b)

Represents the historical operations of the Portfolio acquired by the Company. See the historical statements of revenues and certain direct operating expenses and the notes thereto of the Portfolio, which are included herein.

 

  c)

Advisory and administrative fees related to the Portfolio that may have been payable to the Company’s advisor in connection with the acquisition were assumed to be waived, as these fees were actually waived during the first quarter of 2019.

 

  d)

Represents depreciation and amortization expense (not reflected in the historical consolidated statements of operations of the Company) as if the Portfolio was acquired on January 1, 2018. Real estate-related depreciation and amortization are computed on a straight-line basis over the respective estimated useful lives of the assets.

 

  e)

Represents interest expense (not reflected in the historical consolidated statements of operations of the Company) as if the borrowings attributable to the Portfolio were borrowed on January 1, 2018. In connection with the acquisition of the Portfolio, the Company:

 

   

Originated $78.3 million in first mortgages, which all currently have an annual interest rate of one-month LIBOR plus 1.32% and 84-month terms; and

 

   

Drew $52.5 million on its $70 Million Facility, which currently has an annual interest rate of one-month LIBOR plus 2.25%.

Additionally, the adjustment reflects the amortization of deferred financing costs incurred in connection with the aforementioned loans.

 

10


SIGNATURES

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

 

NEXPOINT RESIDENTIAL TRUST, INC.
By:  

/s/ Brian Mitts

Name:   Brian Mitts
Title:   Chief Financial Officer, Executive
  VP-Finance, Secretary and Treasurer

Date: April 15, 2019

 

11

NexPoint Residential (NYSE:NXRT)
Historical Stock Chart

1 Year : From Jul 2018 to Jul 2019

Click Here for more NexPoint Residential Charts.

NexPoint Residential (NYSE:NXRT)
Intraday Stock Chart

Today : Wednesday 24 July 2019

Click Here for more NexPoint Residential Charts.

Latest NXRT Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.