WHLR 10-Q Quarterly Report Sept. 30, 2015 | Alphaminr
Wheeler Real Estate Investment Trust, Inc.
ALPHAMINR

WHLR 10-Q Quarter ended Sept. 30, 2015

Balance Sheet
Cash Flow
Income Statement
Debt
WHEELER REAL ESTATE INVESTMENT TRUST, INC.
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10-Q 1 a9302015whlr10-q.htm 10-Q 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-35713
WHEELER REAL ESTATE INVESTMENT TRUST, INC.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
45-2681082
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
2529 Virginia Beach Blvd., Suite 200
Virginia Beach. Virginia
23452
(Address of Principal Executive Offices)
(Zip Code)
(757) 627-9088
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
¨ (do not check if a smaller reporting company)
Smaller reporting company
ý
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨ No ý
As of November 9, 2015 , there were 66,160,617 common shares, $0.01 par value per share, outstanding.

1

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Page
PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

September 30, 2015
December 31, 2014
(unaudited)
ASSETS:
Investment properties, net
$
238,211,766

$
127,140,394

Cash and cash equivalents
7,993,293

9,969,748

Rents and other tenant receivables, net
2,143,239

1,874,084

Goodwill
5,485,823

7,004,072

Assets held for sale
28,783,341

29,093,364

Above market lease intangible, net
7,087,784

4,488,900

Deferred costs and other assets, net
49,331,780

25,400,706

Total Assets
$
339,037,026

$
204,971,268

LIABILITIES:
Loans payable
$
186,283,498

$
120,865,586

Liabilities associated with assets held for sale
21,943,128

20,722,981

Below market lease intangible, net
8,237,912

5,182,437

Accounts payable, accrued expenses and other liabilities
9,189,347

5,076,837

Total Liabilities
225,653,885

151,847,841

Commitments and contingencies
—

—

EQUITY:
Series A preferred stock (no par value, 4,500 shares authorized, 562 and 1,809 shares issued and outstanding, respectively)
452,971

1,458,050

Series B convertible preferred stock (no par value, 3,000,000 shares authorized,
729,119 and 1,648,900 shares issued and outstanding, respectively)
16,996,622

37,620,254

Common stock ($0.01 par value, 150,000,000 and 75,000,000 shares authorized, 66,146,331 and 7,512,979 shares issued and outstanding, respectively)
661,463

75,129

Additional paid-in capital
219,921,401

31,077,060

Accumulated deficit
(134,145,251
)
(27,660,234
)
Total Shareholders’ Equity
103,887,206

42,570,259

Noncontrolling interests
9,495,935

10,553,168

Total Equity
113,383,141

53,123,427

Total Liabilities and Equity
$
339,037,026

$
204,971,268

See accompanying notes to condensed consolidated financial statements.


3

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2015
2014
2015
2014
REVENUE:
Rental revenues
$
5,552,882

$
2,815,486

$
13,479,755

$
7,462,653

Asset management fees
132,335

—

465,817

—

Commissions
86,682

—

307,292

—

Tenant reimbursements and other revenues
1,395,314

690,928

3,961,021

2,016,689

Total Revenue
7,167,213

3,506,414

18,213,885

9,479,342

OPERATING EXPENSES:
Property operations
2,094,054

1,101,006

5,474,129

2,819,618

Non-REIT management and leasing services
299,566

—

901,118

—

Depreciation and amortization
4,824,448

1,961,041

11,672,780

4,996,141

Provision for credit losses
112,580

46,774

214,316

18,742

Corporate general & administrative
4,895,567

3,024,675

10,710,262

5,203,728

Total Operating Expenses
12,226,215

6,133,496

28,972,605

13,038,229

Operating Loss
(5,059,002
)
(2,627,082
)
(10,758,720
)
(3,558,887
)
Interest expense
(2,306,017
)
(1,491,749
)
(6,406,466
)
(3,945,332
)
Net Loss from Continuing Operations
(7,365,019
)
(4,118,831
)
(17,165,186
)
(7,504,219
)
Net Income from Discontinued Operations
206,603

117,078

488,343

351,137

Net Loss
(7,158,416
)
(4,001,753
)
(16,676,843
)
(7,153,082
)
Less: Net loss attributable to noncontrolling interests
(428,702
)
(487,284
)
(1,331,294
)
(655,987
)
Net Loss Attributable to Wheeler REIT
(6,729,714
)
(3,514,469
)
(15,345,549
)
(6,497,095
)
Preferred stock dividends
(2,279,907
)
(1,088,062
)
(13,116,232
)
(1,552,320
)
Deemed dividend related to beneficial conversion feature of preferred stock
(13,124,506
)
—

(72,644,506
)
—

Net Loss Attributable to Wheeler REIT Common
Shareholders
$
(22,134,127
)
$
(4,602,531
)
$
(101,106,287
)
$
(8,049,415
)
Loss per share from continuing operations (basic and diluted):
$
(0.35
)
$
(0.64
)
$
(3.41
)
$
(1.15
)
Income per share from discontinued operations:
0.00

0.02

0.01

0.05

$
(0.35
)
$
(0.62
)
$
(3.40
)
$
(1.10
)
Weighted-average number of shares:
Basic and Diluted
63,262,408

7,430,413

29,757,718

7,316,147

See accompanying notes to condensed consolidated financial statements.


4

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Equity
(Unaudited)
Series A
Series B
Series C
Common
Noncontrolling
Preferred Stock
Preferred Stock
Preferred Stock
Stock
Additional
Paid-in Capital
Accumulated Deficit
Total
Shareholders’ Equity
Interests
Total
Shares
Value
Shares
Value
Shares
Value
Shares
Value
Units
Value
Equity
Balance,
December
31, 2014
1,809

$
1,458,050

1,648,900

$
37,620,254

—

$
—

7,512,979

$
75,129

$
31,077,060

$
(27,660,234
)
$
42,570,259

3,567,623

$
10,553,168

$
53,123,427

Accretion of
Series B preferred stock discount
—

—

—

2,252,589

—

—

—

—

—

—

2,252,589

—

—

2,252,589

Conversion
of Series B
preferred stock to common stock
—

—

(54,300
)
(1,239,196
)
—

—

271,500

2,715

1,236,481

—

—

—

—

—

Reclass of Series C preferred stock to equity
—

—

—

—

93,000

86,415,894

—

—

—

—

86,415,894

—

—

86,415,894

Accretion of Series C preferred stock
—

—

—

—

—

6,584,106

—

—

—

—

6,584,106

—

—

6,584,106

Conversion of Series C preferred stock to common stock
—

—

—

—

(93,000
)
(93,000,000
)
46,500,000

465,000

92,535,000

—

—

—

—

—

Conversion
of Operating
Partnership units to common stock
—

—

—

—

—

—

198,754

1,988

452,113

—

454,101

(198,754
)
(454,101
)
—

Conversion of preferred stock to common stock through tender offer
(1,247
)
(1,005,079
)
(865,481
)
(21,637,025
)
—

—

11,442,002

114,420

22,527,659

—

(25
)
—

—

(25
)
Issuance of
common stock under Share Incentive Plan
—

—

—

—

—

—

221,096

2,211

503,789

—

506,000

—

—

506,000

Noncontrolling
interest
investments
—

—

—

—

—

—

—

—

—

—

—

700,709

1,574,551

1,574,551

Fair value discount on
common units issued for acquisitions
—

—

—

—

—

—

—

—

—

—

—

—

(1,181,250
)
(1,181,250
)
Adjustment for
noncontrolling interest in operating partnership
—

—

—

—

—

—

—

—

(1,055,207
)
—

(1,055,207
)
—

1,055,207

—

Dividends and
distributions
—

—

—

—

—

—

—

—

—

(18,494,962
)
(18,494,962
)
—

(720,346
)
(19,215,308
)
Deemed distribution
—

—

—

—

—

—

—

—

72,644,506

(72,644,506
)
—

—

—

—

Net loss
—

—

—

—

—

—

—

—

—

(15,345,549
)
(15,345,549
)
—

(1,331,294
)
(16,676,843
)
Balance,
September 30, 2015 (Unaudited)
562

$
452,971

729,119

$
16,996,622

—

$
—

66,146,331

$
661,463

$
219,921,401

$
(134,145,251
)
$
103,887,206

4,069,578

$
9,495,935

$
113,383,141

See accompanying notes to condensed consolidated financial statements.

5

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended
September 30,
2015
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(16,676,843
)
$
(7,153,082
)
Adjustments to reconcile consolidated net loss to net cash from operating activities
Depreciation
3,556,869

1,769,684

Amortization
8,115,911

3,226,457

Loan cost amortization
936,516

327,319

Above (below) market lease amortization
566,646

(2,990
)
Share-based compensation
506,000

190,000

Provision for credit losses
214,316

18,742

Changes in assets and liabilities, net of acquisitions
Rent and other tenant receivables, net
(748,159
)
(353,830
)
Unbilled rent
190,082

163,963

Deferred costs and other assets, net
(6,193,177
)
(3,728,645
)
Accounts payable, accrued expenses and other liabilities
1,989,304

164,046

Net operating cash flows provided by discontinued operations
834,091

654,299

Net cash used in operating activities
(6,708,444
)
(4,724,037
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment property acquisitions
(62,027,081
)
(11,416,213
)
Capital expenditures
(263,242
)
(195,529
)
Net investing cash flows from discontinued operations
914,388

—

Net cash used in investing activities
(61,375,935
)
(11,611,742
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends and distributions paid
(10,083,178
)
(3,360,817
)
Proceeds from sales of preferred stock, net of expenses
83,415,894

37,449,628

Conversion of preferred stock
(25
)
—

Net proceeds (payments) to related parties
85,583

(403,395
)
Loan proceeds
—

8,384,435

Loan principal payments
(7,189,600
)
(6,945,596
)
Net financing cash flows from discontinued operations
(120,750
)
(80,345
)
Net cash from financing activities
66,107,924

35,043,910

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(1,976,455
)
18,708,131

CASH AND CASH EQUIVALENTS, beginning of period
9,969,748

1,155,083

CASH AND CASH EQUIVALENTS, end of period
$
7,993,293

$
19,863,214

Supplemental Disclosures:
Non-Cash Transactions:
Debt incurred for acquisitions
$
75,652,464

$
33,921,261

Noncontrolling interests resulting from the issuance of common units
$
1,574,551

$
1,240,234

Conversion of senior convertible debt into Series C preferred stock
$
3,000,000

$
—

Accretion of preferred stock discounts
$
8,836,695

$
—

Deemed dividend for beneficial conversion feature
$
72,644,506

$
—

Other Cash Transactions:
Cash paid for interest
$
5,979,476

$
4,431,852

See accompanying notes to condensed consolidated financial statements.

6

Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Organization and Basis of Presentation and Consolidation
Wheeler Real Estate Investment Trust, Inc. (the “Trust” or “REIT”) is a Maryland corporation formed on June 23, 2011. The Trust serves as the general partner of Wheeler REIT, L.P. (the “Operating Partnership”), which was formed as a Virginia limited partnership on April 5, 2012. As of September 30, 2015 , the Trust, through the Operating Partnership, owned and operated forty-five centers, ten undeveloped properties and one office building in Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Oklahoma, Tennessee, Kentucky, New Jersey and West Virginia. Accordingly, the use of the word “Company” refers to the Trust and its consolidated subsidiaries, except where the context otherwise requires.
The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (the “Form 10-Q”) are unaudited and the results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for future periods or the year. However, amounts presented in the condensed consolidated balance sheet as of December 31, 2014 are derived from the Company’s audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The Company prepared the accompanying condensed consolidated financial statements in accordance with GAAP for interim financial statements. All material balances and transactions between the consolidated entities of the Company have been eliminated. You should read these condensed consolidated financial statements in conjunction with our 2014 Annual Report filed on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”).
2. Summary of Significant Accounting Policies
Rents and Other Tenant Receivables, net
Tenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of September 30, 2015 and December 31, 2014 , the Company’s allowance for uncollectible accounts totaled $382,681 and $186,517 , respectively. During the three and nine months ended September 30, 2015 , the Company recorded bad debt expenses in the amounts of $112,580 and $214,316 , respectively, related to tenant receivables that were specifically identified as potentially uncollectible based on an assessment of the tenant’s credit-worthiness. During the three and nine months ended September 30, 2014 , the Company recorded bad debt expenses in the amounts of $46,774 and $18,742 , respectively.  During the three and nine months ended September 30, 2015 and 2014 , the Company did not realize any recoveries related to tenant receivables previously written off.

Above and Below Market Lease Intangibles, net

The Company determines the above and below market lease intangibles upon acquiring a property. Above and below market lease intangibles are amortized over the life of the respective leases. Amortization of above and below market lease intangibles is recorded as a component of rental revenues.
Deferred Costs and Other Assets, net
The Company’s deferred costs and other assets consist primarily of leasing commissions, fees incurred in order to obtain long-term financing, leases in place intangible assets, legal and marketing costs, tenant relationship intangible assets and deposits associated with acquisitions, and various property escrow accounts for real estate taxes, insurance, tenant improvements and replacements. The Company records amortization of financing costs using the straight-line method over the terms of the respective loans or agreements. The Company’s lease origination costs consist primarily of commissions paid in connection with lease originations and renewals. The Company records amortization of lease origination costs on a straight-line basis over the terms of the related leases. The Company’s leases in place intangible asset relates to values assigned leases associated with acquired properties. Leases in place are amortized over the term of the respective leases, while legal and marketing and tenant relationship intangible assets are amortized over their estimated useful lives. Acquisition deposits and escrows relate to advance funding of acquisitions to be completed.

7
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
2. Summary of Significant Accounting Policies (continued)

Details of these deferred costs, net of amortization, and other assets are as follows:
September 30, 2015
December 31, 2014
(unaudited)
Lease origination costs, net
$
1,418,570

$
1,742,333

Leases in place, net
20,888,176

10,522,597

Financing costs, net
4,752,392

3,193,442

Property reserves
7,389,534

4,242,499

Acquisition deposits and escrows
746,400

623,350

Legal and marketing costs, net
137,950

198,169

Tenant relationships, net
13,532,740

4,485,699

Other
466,018

392,617

Total Deferred Costs and Other Assets, net
$
49,331,780

$
25,400,706

Amortization of lease origination costs, leases in place and legal and marketing costs represents a component of depreciation and amortization expense. The Company reports amortization of financing costs, amortization of premiums, and accretion of discounts as part of interest expense. Future amortization of lease origination costs, leases in place, financing costs, legal and marketing costs and tenant relationships is as follows:
For the Periods Ending September 30,
Lease
Origination
Costs
Leases In
Place
Financing
Costs
Legal &
Marketing
Costs
Tenant
Relationships
2016
$
323,320

$
6,292,291

$
914,521

$
22,962

$
4,853,942

2017
296,085

4,764,415

711,934

27,433

3,258,110

2018
226,273

3,397,349

555,923

21,281

2,189,374

2019
152,053

2,327,671

440,322

17,215

1,445,695

2020
102,758

1,480,526

433,922

13,214

851,383

Thereafter
318,081

2,625,924

1,695,770

35,845

934,236

$
1,418,570

$
20,888,176

$
4,752,392

$
137,950

$
13,532,740

Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90% of its taxable income to shareholders and meet certain other asset and income tests, as well as other requirements. Thus, the Company made no provision for federal income taxes for the REIT in the accompanying condensed consolidated financial statements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it failed to qualify. If the Company loses its REIT status, it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to a reasonable cause and certain other conditions were satisfied.
Use of Estimates
The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported periods. The Company’s actual results could differ from these estimates.
Noncontrolling Interests
Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. Accordingly, the Company has reported noncontrolling interests in equity on the September 30, 2015 unaudited condensed consolidated balance sheet but separate from the Company’s shareholders’ equity. On the September 30, 2015 and 2014 unaudited condensed consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The unaudited condensed consolidated statement of equity includes

8
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
2. Summary of Significant Accounting Policies (continued)

beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.
The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s consolidated net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are redeemed for either cash or, if preferred by the Company, common stock. In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital.

Assets Held For Sale

The Company records assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year.

Corporate General and Administrative Expense
A detail for the "corporate general & administrative" line item from the Statements of Operations is presented below:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2015
2014
2015
2014
(unaudited)
Acquisition costs
$
1,733,639

$
1,728,907

$
3,167,378

$
1,823,587

Professional fees
274,006

704,100

1,166,279

1,843,730

Compensation and benefits
620,463

34,314

2,413,895

134,314

Corporate administration
291,590

347,999

850,137

900,366

Equity, debt and refinancing costs
1,826,240

—

2,447,890

—

Travel
61,993

146,088

363,803

269,110

Advertising
44,280

44,526

151,526

104,247

Taxes and licenses
43,356

18,741

149,354

128,374

Total
$
4,895,567

$
3,024,675

$
10,710,262

$
5,203,728

Recent Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08"). This ASU changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under this ASU, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have major effect on the Company's operations and financial results. Examples include a disposal of a major geographical area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 is effective prospectively for reporting periods beginning on or after December 15, 2014. The Company adopted ASU 2014-08 on January 1, 2015 and used its guidance in determining the effect of discontinued operations as disclosed in Note 5.

In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to

9
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
2. Summary of Significant Accounting Policies (continued)

be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new standard will be effective for the Company in the first quarter of the year ended December 31, 2018 and can be applied either retrospectively to all periods presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently evaluating the impact of adoption of the new standard on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40)." This ASU defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and provides guidance on required financial statement footnote disclosures. This ASU is effective for annual periods ending after December 15, 2016. The Company will adopt the ASU in 2016.
In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." This new guidance requires the presentation of unamortized debt issuance costs to be shown in the liabilities section of the consolidated balance sheets as a reduction of the principal amount of the associated debt, rather than as an asset. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a retrospective approach by restating prior period comparative consolidated balance sheets. The Company does not expect the adoption of ASU 2015-03 to materially impact its financial position or results of operations.

In September 2015, the FASB issued ASU 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments". This new guidance requires that the acquirer recognizes adjustments to preliminary acquisition values and account for the cumulative effect of any required adjustments in the period in which they are determined. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a prospective approach for adjustments that occur after the effective date. The Company does not expect the adoption of ASU 2015-16 to materially impact its financial position or results of operations.

Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows.

Reclassifications
Certain reclassifications have been made to prior period amounts to make their presentation comparable with the current period. These reclassifications had no impact on net income.

3. Investment Properties
Investment properties consist of the following:
September 30, 2015
December 31, 2014
(unaudited)
Land
$
52,835,489

$
31,674,506

Land held for improvement
9,780,355

6,846,918

Buildings and improvements
185,361,332

94,944,020

Investment properties at cost
247,977,176

133,465,444

Less accumulated depreciation and amortization
(9,765,410
)
(6,325,050
)
Investment properties, net
$
238,211,766

$
127,140,394

A significant portion of the Company’s land, buildings and improvements serves as collateral for its mortgage loans payable portfolio. Accordingly, restrictions exist as to the encumbered property’s transferability, use and other common rights typically associated with property ownership.

10
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

Acquisitions
Laskin Road Land
On January 9, 2015 , the Company completed its acquisition of 1.50 acres of undeveloped land located on Laskin Road in Virginia Beach, Virginia ("Laskin Road") for a contract price of $1.6 million . The Company acquired Laskin Road for future development opportunities. The Company paid cash of $150,000 with the balance of the contract price to be paid in common units on the earlier of the one year anniversary of the acquisition or the completion of any development activities. The number of units issued will be determined using the Company's common stock price on the day prior to issuance.
Pierpont Centre
On January 14, 2015 , the Company completed its acquisition of Pierpont Centre, a 122,259 square foot shopping center located in Morgantown, West Virginia ("Pierpont Centre") for a contract price of $13.9 million , paid through a combination of cash and debt. Pierpont Centre was 100% leased as of the acquisition date and its major tenants include GNC, Hallmark, Michael's, Ruby Tuesday and Outback Steakhouse.
Brook Run Properties
On March 27, 2015 , the Company completed its acquisition of Brook Run Properties, LLC ("Brook Run Properties"), consisting of a 2.0 acre parcel of undeveloped real estate located adjacent to the Brook Run Shopping Center in Richmond, Virginia, for a contract price of $300,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center.
Alex City Marketplace
On April 1, 2015 , the Company completed its acquisition of Alex City Marketplace, a 147,791 square foot shopping center located in Alexander City, Alabama ("Alex City Marketplace") for a contract price of $10.3 million , paid through a combination of cash and debt. Alex City Marketplace was 86% leased as of the the acquisition date and its major tenants include Winn Dixie and Goody's.

Butler Square

On April 15, 2015 , the Company completed its acquisition of Butler Square, a 82,400 square foot shopping center located in Mauldin, South Carolina ("Butler Square") for a contract price of $9.4 million , paid through a combination of cash and debt. Butler Square was 100% leased as of the acquisition date and its major tenants include Bi-Lo and Dollar Tree.

Brook Run Shopping Center

On June 2, 2015 , the Company completed its acquisition of Brook Run Shopping Center, a 147,738 square foot shopping center located in Richmond, Virginia ("Brook Run") for a contract price of $18.5 million . Brook Run was 92% leased as of the acquisition date and its major tenants include Martin's Food Store and CVS. The Company acquired Brook Run from a related party through a combination of cash, the issuance of 574,743 common units in the Operating Partnership and debt.

Beaver Ruin Village

On July 1, 2015 , the Company completed its acquisition of Beaver Ruin Village, a 74,048 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village") for a contract price of $12.4 million , paid through a combination of cash and debt. Beaver Ruin Village was 91% leased as of the acquisition date and its major tenants include Chase Bank, Firehouse Subs and State Farm Insurance.

Beaver Ruin Village II

On July 1, 2015 , the Company completed its acquisition of Beaver Ruin Village II, a 34,925 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village II") for a contract price of $4.4 million , paid through a combination of

11
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

cash and debt. Beaver Ruin Village II was 100% leased as of the acquisition date and its major tenants include AutoZone and Metro PCS.

Columbia Fire Station

On July 1, 2015 , the Company completed its acquisition of Columbia Fire Station, consisting of two vacant buildings on a 1.0 acre land parcel located in Columbia, South Carolina ("Columbia Fire Station") for a contract price of $2.4 million , paid through a combination of cash and debt. The Company plans to redevelop this property for retail use.
Chesapeake Square

On July 10, 2015 , the Company completed its acquisition of Chesapeake Square, a 99,848 square foot shopping center located in Onley, Virginia ("Chesapeake Square") for a contract price of $6.3 million . Chesapeake Square was 76% leased as of the acquisition date and is anchored by a Food Lion grocery store. The Company acquired Chesapeake Square from a related party through a combination of cash and the issuance of 125,966 common units in the Operating Partnership.
Sunshine Plaza

On July 21, 2015 , the Company completed its acquisition of Sunshine Plaza, a 111,189 square foot shopping center located in Lehigh Acres, Florida ("Sunshine Plaza") for a contract price of $10.4 million . Sunshine Plaza was 96% leased as of the acquisition date and is anchored by a Winn-Dixie grocery store. The Company acquired Sunshine Plaza through a combination of cash and debt.

Carolina Place

On July 24, 2015 , the Company completed its acquisition of Carolina Place consisting of a 2.14 acre parcel of land adjacent to Chesapeake Square for a contract price of $250,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center.

Hilton Head Land

On August 14, 2015 , the Company completed its acquisition of 10.39 acres located in Hilton Head, South Carolina ("Hilton Head Land") for a contract price of $1.0 million paid in cash. The Company acquired the property for potential development and to compliment an adjacent redevelopment project.
Barnett Portfolio

On August 21, 2015 , the Company completed its acquisition of Cardinal Plaza, located in Henderson, North Carolina, Franklinton Square, located in Franklinton, North Carolina and Nashville Commons, located in Nashville, North Carolina (collectively known as the "Barnett Portfolio") for a contract price of $15.3 million . The Barnett Porfolio properties total 171,466 square feet, were 91% leased as of the acquisition date and all are anchored by Food Lion grocery stores. The Company acquired the Barnett Portfolio through a combination of cash and debt.

Grove Park

On September 9, 2015 , the Company completed its acquisition of Grove Park Shopping Center, a 106,557 square foot shopping center located in Orangeburg, South Carolina ("Grove Park") for a contract price of $6.6 million . Grove Park was 90% leased as of the acquisition date and is anchored by a Bi-Lo grocery store. The Company acquired Grove Park through a combination of cash and debt.

Parkway Plaza

On September 15, 2015 , the Company completed its acquisition of Parkway Plaza Shopping Center, a 52,365 square foot shopping center and 2.1 acres of adjacent undeveloped land located in Brunswick, Georgia ("Parkway Plaza") for a

12
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

contract price of $6.1 million . Parkway Plaza was 97% leased as of the acquisition date and is anchored by a Winn Dixie grocery store. The Company acquired Parkway Plaza through a combination of cash and debt.

Fort Howard Square

On September 30, 2015 , the Company completed its acquisition of Fort Howard Square Shopping Center, a 113,652 square foot shopping center located in Rincon, Georgia ("Fort Howard Square") for a contract price of $11.5 million . Fort Howard Square was 95% leased as of the acquisition date and is anchored by nationally recognized tenants Goodwill and Dollar Tree. The Company acquired Fort Howard Square through a combination of cash and debt.

Conyers Crossing

On September 30, 2015 , the Company completed its acquisition of Conyers Crossing Shopping Center, a 170,475 square foot shopping center located in Conyers, Georgia ("Conyers Crossing") for a contract price of $10.8 million . Conyers Crossing was 99% leased as of the acquisition date and is anchored by nationally recognized tenants Hobby Lobby and Burlington Coat Factory. The Company acquired Conyers Crossing through a combination of cash and debt.
The following summarizes the consideration paid and the preliminary estimated fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties. The valuations and purchase price allocations for these acquisitions remain preliminary but are expected to be finalized prior to December 31, 2015 .
Total
Preliminary estimated fair value of assets acquired and liabilities assumed:
Investment property (a)
$
114,211,725

Lease intangibles and other assets (b)
26,827,214

Above market leases (b)
4,166,440

Below market leases (b)
(4,021,671
)
Preliminary fair value of net assets acquired
$
141,183,708

Purchase consideration:
Consideration paid with cash and debt
$
138,115,158

Consideration paid with common units
3,068,550

Total consideration (c)
$
141,183,708

a.
Represents the preliminary estimated fair value of the investment property acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using the following approaches:
i. the market approach valuation methodology for land by considering similar transactions in the markets;
ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, "go dark" analyses and residual calculations incorporating the land values; and
iii.
the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates.
b.
Represents the preliminary estimated fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, leases in place, above/below market leases and legal and marketing fees associated with replacing

13
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
3. Investment Properties (continued)

existing leases. The income approach was used to determine the fair value of these intangible assets which included estimated market rates and expenses. It was determined that carrying value approximated fair value for other asset amounts.
c.
Represents the components of purchase consideration paid. Consideration paid with common units includes units issued for acquisitions and those amounts currently due for acquisitions that, per the original contract, are to be settled by issuing common units subsequent to September 30, 2015 .
The Company incurred $3,167,378 in acquisition expenses for the nine months ended September 30, 2015 . These costs are included on the unaudited condensed consolidated statement of operations under the caption "Corporate general & administrative." Please see the corporate general & administrative table in Note 2 for acquisition expenses for all periods presented
Unaudited pro forma financial information in the aggregate is presented below for certain acquisitions. The unaudited pro forma information presented below includes the effects of the acquisitions as if they had been consummated as of the beginning of the prior fiscal year. The pro forma results include adjustments for depreciation and amortization associated with acquired tangible and intangible assets, straight-line rent adjustments and interest expense related to debt incurred. Unaudited pro forma financial information has not been presented for Laskin Road, Brook Run Properties, Columbia Fire Station, Carolina Place and the Hilton Head Land as the Company's management has determined that their inclusion would not be meaningful due to the lack of operating history.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2015
2014
2015
2014
Rental revenue
$
6,685,630

$
5,910,333

$
19,119,095

$
16,747,195

Net loss
$
(7,582,514
)
$
(5,212,040
)
$
(18,153,485
)
$
(10,766,008
)
Net loss attributable to Wheeler REIT
$
(6,913,737
)
$
(4,405,216
)
$
(16,175,631
)
$
(9,140,123
)
Net loss attributable to Wheeler REIT common shareholders
$
(22,318,150
)
$
(5,493,278
)
$
(101,936,369
)
$
(10,692,443
)
Basic loss per share
$
(0.35
)
$
(0.74
)
$
(3.43
)
$
(1.46
)
Diluted loss per share
$
(0.35
)
$
(0.74
)
$
(3.43
)
$
(1.46
)
4. Goodwill
As part of the acquisition of Wheeler Interests, LLC, Wheeler Real Estate, LLC and WHLR Management, LLC (the "Operating Companies") on October 24, 2014, the Company recorded preliminary goodwill of $7,004,072 . In June 2015, the Company finalized its valuation of the Operating Companies. In accordance with the valuation, the Company has recorded a fair value discount to the $6,750,000 in common units issued for the acquisition of the Operating Companies due to the one year restriction on their conversion into shares of common stock, and reallocated a portion of goodwill to finite-lived intangibles as follows:
Beginning balance, January 1, 2015
$
7,004,072

Fair value discount on common units issued for acquisition
(1,181,250
)
Allocation to finite-lived intangibles
(336,999
)
Ending balance, September 30, 2015
$
5,485,823

5. Assets Held for Sale and Discontinued Operations
In August 2015, the Company’s management and Board of Directors committed to a plan to sell Amscot, Monarch Bank, Bixby Commons, Jenks Reasors, Harps at Harbor Point, Starbucks/Verizon and the ground leases for Ruby Tuesday’s and Outback Steakhouse at Pierpont Centre (the “Freestanding Properties”) as part of the Company’s continuous evaluation of strategic alternatives. Accordingly, the Freestanding Properties have been classified as held for sale and the results of their

14
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
5. Assets Held for Sale and Discontinued Operations (continued)

operations have been classified as discontinued operations for all periods presented. Management expects that the sale of the Freestanding Properties will occur within one year and the Company will receive no residual cash flows once the Freestanding Properties are disposed.
As of September 30, 2015 and December 31, 2014 , assets held for sale consisted of the following:
September 30, 2015
December 31, 2014
(unaudited)
Investment properties, net
$
24,902,125

$
25,110,592

Rents and other tenant receivables, net
120,250

111,382

Deferred costs and other assets, net
3,760,966

3,871,390

Total assets held for sale
$
28,783,341

$
29,093,364

As of September 30, 2015 and December 31, 2014 , liabilities associated with assets held for sale consisted of the following:
September 30, 2015
December 31, 2014
(unaudited)
Loans payable
$
21,813,806

$
20,584,557

Below market lease intangible, net
80,976

84,636

Accounts payable, accrued expenses and other liabilities
48,346

53,788

Total liabilities associated with assets held for sale
$
21,943,128

$
20,722,981


The condensed consolidated statements of operations reflect reclassifications of rental revenue, property operating expenses, corporate general and administrative expenses and interest expense from continuing operations to income from discontinued operations for all periods presented. All interest expense disclosed below is directly related to the debt incurred to acquire the Freestanding Properties.
The following is a summary of the income from discontinued operations for the three and nine months ended September 30, 2015 and 2014 :

Three Months Ended
September 30,
Nine Months Ended
September 30,
2015
2014
2015
2014
(unaudited)
Revenues
$
700,119

$
661,416

$
2,108,949

$
1,986,334

Expenses
255,131

315,252

886,613

954,119

Operating income
444,988

346,164

1,222,336

1,032,215

Interest expense
238,385

229,086

733,993

681,078

Income from discontinued operations
$
206,603

$
117,078

$
488,343

$
351,137




15
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)


6. Loans Payable
The Company’s loans payable consist of the following:
Property/Description
Monthly Payment
Interest
Rate
Maturity
September 30, 2015
December 31, 2014
(unaudited)
Shoppes at Eagle Harbor
$
25,100

4.34
%
March 2018
$
3,670,562

$
3,773,319

Lumber River Plaza
$
18,414

5.65
%
May 2015
—

2,894,862

Perimeter Square
$
28,089

6.38
%
June 2016
4,198,947

4,294,216

Riversedge North
$
8,802

6.00
%
January 2019
973,975

1,007,856

Walnut Hill Plaza
$
24,273

5.50
%
July 2017
3,559,055

3,626,945

Twin City Commons
$
17,827

4.86
%
January 2023
3,239,229

3,279,076

Shoppes at TJ Maxx
$
33,880

3.88
%
May 2020
6,123,650

6,248,349

Bank Line of Credit
Interest only

4.25
%
September 2015
—

2,074,432

Forrest Gallery
$
50,973

5.40
%
September 2023
8,957,445

9,045,880

Tampa Festival
$
50,797

5.56
%
September 2023
8,658,145

8,746,860

Winslow Plaza
Interest only

5.22
%
December 2015
5,000,000

5,000,000

Cypress Shopping Center
Interest only

4.70
%
July 2024
6,625,000

6,625,000

Harrodsburg Marketplace
$
19,112

4.55
%
September 2024
3,692,427

3,735,739

Port Crossing
$
34,788

4.84
%
August 2024
6,496,619

6,568,918

LaGrange Marketplace
$
13,813

5.50
%
March 2020
2,430,046

2,463,909

Freeway Junction
Interest only

4.60
%
September 2024
8,150,000

8,150,000

DF I-Courtland
$
1,411

6.50
%
January 2019
—

115,728

DF I-Edenton
$
250,000

1
3.75
%
September 2016
1,150,000

1,650,000

DF I-Moyock
$
10,665

5.00
%
July 2019
445,021

522,430

Graystone Crossing
$
20,386

4.55
%
October 2024
4,000,000

4,000,000

Bryan Station
Interest only

4.52
%
November 2024
4,625,000

4,625,000

Crockett Square
Interest only

4.47
%
December 2024
6,337,500

6,337,500

Harbor Point
$
11,024

5.85
%
December 2016
754,706

1,544,567

Pierpont Centre
Interest only

3.95
%
February 2025
8,450,000

—

Alex City Marketplace
Interest only

3.90
%
April 2025
5,750,000

—

Butler Square
Interest only

4.08
%
April 2025
5,640,000

—

Brook Run Shopping Center
Interest only

3.90
%
June 2025
10,950,000

—

Beaver Ruin Village I and II
Interest only

4.73
%
July 2025
9,400,000

—

Columbia Fire Station
Interest only

8.00
%
December 2017
441,171

—

Sunshine Shopping Plaza
Interest only

4.57
%
August 2025
5,900,000

—

Barnett Portfolio
Interest only

4.30
%
September 2025
8,770,000

—

Grove Park Shopping Center
Interest only

4.52
%
October 2025
3,800,000

—

Parkway Plaza
Interest only

4.57
%
October 2025
3,500,000

—

Conyers Crossing
Interest only

4.67
%
October 2025
5,960,000

—

Fort Howard Shopping Center
Interest only

4.57
%
October 2025
7,100,000

—

Senior convertible notes
Interest only

9.00
%
December 2018
3,000,000

6,000,000

Senior non-convertible notes
Interest only

9.00
%
December 2015
4,000,000

4,000,000

Senior non-convertible notes
Interest only

9.00
%
January 2016
2,160,000

2,160,000

South Carolina Food Lions note
Interest only

5.25
%
January 2024
12,375,000

12,375,000

Total Loans Payable
$
186,283,498

$
120,865,586

(1) $250,000 plus accrued interest paid quarterly until maturity.


16
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
6. Loans Payable (continued)


On May 1, 2015, the Lumber River Plaza note was paid in full from cash on hand.

On May 29, 2015, the Operating Partnership entered into a credit agreement (the "Credit Agreeement") with KeyBank National Association ("KeyBank") for a $45,000,000 revolving credit facility. The facility has a three year term and the interest rate will be based on LIBOR. As of September 30, 2015 , the Operating Partnership has not drawn on the revolving credit facility.
Debt Maturity
The Company’s scheduled principal repayments on indebtedness as of September 30, 2015 are as follows:
For the Periods Ending September 30,
(unaudited)
2016
$
17,701,213

2017
5,864,764

2018
5,592,500

2019
5,530,929

2020
9,179,177

Thereafter
142,414,915

Total principal maturities
$
186,283,498

7. Rentals under Operating Leases

Future minimum rentals to be received under noncancelable tenant operating leases for each of the next five years and thereafter, excluding Common Area Maintenance and percentage rent based on tenant sales volume, as of September 30, 2015 are as follows:
For the Periods Ending September 30,
(unaudited)
2016
$
26,026,215

2017
23,175,191

2018
18,503,066

2019
13,963,958

2020
9,952,436

Thereafter
16,213,972

Total minimum rentals
$
107,834,838

8. Equity
Earnings per share
Basic earnings per share for the Company’s common shareholders is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net loss attributable to noncontrolling interests, by the Company’s weighted-average shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) attributable to common shareholders, excluding amounts attributable to preferred shareholders and the net loss attributable to noncontrolling interests, by the weighted-average number of common shares including any dilutive shares.
As of September 30, 2015 , 1,852,316 of the Operating Partnership’s common units outstanding to noncontrolling interests are eligible to be converted into shares of common stock on a one-to-one basis. Additionally, 729,119 shares of Series B convertible preferred stock ("Series B Preferred Stock") and $3,000,000 of senior convertible debt are eligible to be

17
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
8. Equity (continued)


converted into 5,062,674 shares of the Company's common stock and warrants to purchase 2,635,025 shares of the Company's common stock were outstanding at September 30, 2015 . The common units, convertible preferred stock, senior convertible debt and warrants have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive.
Dividends
Dividends were made to holders of common units, common shares and preferred shares as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2015
2014
2015
2014
Common unit and common shareholders
$
3,683,804

$
996,657

$
6,099,075

$
2,930,094

Preferred shareholders
2,279,907

1,088,062

13,116,233

1,552,320

Total
$
5,963,711

$
2,084,719

$19,215,308
$4,482,414

On September 17, 2015, the Company declared a $0.0175 per share dividend payable on or about October 31, 2015 to shareholders and unitholders of record as of September 30, 2015 . Accordingly, the Company has accrued $1,228,779 as of September 30, 2015 for this dividend.
During the three months ended September 30, 2015 , the Company declared quarterly dividends of $422,774 to preferred shareholders of record as of September 30, 2015 to be paid on October 15, 2015 . Accordingly, the Company has accrued $422,774 as of September 30, 2015 for this dividend.

Series C Preferred Stock Offering

On March 19, 2015 , the Company entered into securities purchase agreements dated as of March 19, 2015 (the “Securities Purchase Agreements”), with certain accredited investors (the “Investors”), pursuant to which, among other things, the Company sold an aggregate of 93,000 shares of Series C Mandatorily Convertible Cumulative Perpetual Preferred Stock, liquidation value $1,000 per share (the “Series C Preferred Stock”), in a private placement (the “Private Placement”) to the Investors in exchange for aggregate consideration of $93,000,000 , consisting of $90,000,000 in cash and the exchange of $3,000,000 in senior convertible debt. Each share of Series C Preferred Stock was sold to the Investors at an offering price of $1,000 per share. Net proceeds from the Private Placement totaled $83,415,894 , which includes the impact of the underwriters' selling commissions and legal, accounting and other professional fees. The Company is using the net offering proceeds to acquire properties and for general working capital.

From March 19, 2015 until June 11, 2015 , the holders of Series C Preferred Stock were entitled to receive, when, and if authorized by the Company’s Board of Directors and declared by the Company out of legally available funds, a dividend, on an as converted basis, that mirrors any dividend payable on shares of common stock and also were entitled to share in any other distribution made on the common stock on an as converted basis (other than dividends or other distributions payable in common stock). Any dividends or other distributions on the Series C Preferred Stock during this time period were to be paid, on an as converted basis, pro rata from the date of issuance.
The Series C Preferred Stock was automatically converted into shares of common stock on June 11, 2015 , which was the fifth business day following the June 4, 2015 approval by the requisite holders of the common stock of the conversion of the Series C Preferred Stock into Common Stock and the issuance of Common Stock upon such conversion. Each share of Series C Preferred Stock converted into 500 shares of common stock at the conversion price of $2.00 per share. The conversion of the Series C Preferred stock into Common Stock at this rate was considered to be a beneficial conversion feature, which resulted in a deemed distribution of $59,520,000 , which is included in the condensed consolidated statement of equity and also in the condensed consolidated statements of cash flows as a non-cash transaction.

18
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
8. Equity (continued)


Series A and Series B Preferred Stock Exchange Offer

On June 15, 2015 , the Company entered into an exchange offer (the “Exchange Offer”) to holders of its Series A Preferred Stock, no par value per share, $1,000 liquidation preference per share (the “Series A Preferred Stock”) and Series B Preferred Stock. The Exchange Offer permitted tendering shareholders to exchange their shares of Series A Preferred Stock or Series B Preferred Stock for an aggregate of up to 20,853,250 of newly issued shares of the Company’s common stock, $0.01 par value per share.

Each share of Series A Preferred Stock was exchangeable for 500 shares of common stock, and each share of the Series B Preferred Stock was exchangeable for 12.5 shares of common stock. On July 20, 2015 , the Company completed the Exchange Offer, under which 1,247 shares of Series A Preferred Stock and 865,481 shares of Series B Preferred Stock were tendered for 11,442,002 newly issued shares of the Company's common stock. The Company paid cash in lieu of any fractional shares of common stock upon the exchange of the Series A Preferred Stock and Series B Preferred Stock. The Exchange Offer was considered to be a beneficial conversion feature, which resulted in a deemed distribution of $13,124,506 , which is included in the condensed consolidated statement of equity and also in the condensed consolidated statements of cash flows as a non-cash transaction.

On June 1, 2015, in conjunction with the Exchange Offer, the Company increased the number of common stock shares authorized from 75,000,000 to 150,000,000 shares.
2015 Long-Term Incentive Plan

On June 4, 2015 , the Company's shareholders approved the 2015 Long-Term Incentive Plan (the "2015 Incentive Plan"). The 2015 Incentive Plan allows for issuance of up to 1,000,000 shares of the Company's common stock to employees, directors, officers and consultants for services rendered to the Company.

Equity Issuances under Share Incentive Plan

During the nine months ended September 30, 2015 , the Company issued 221,096 shares to consultants for services rendered to the Company. The market value of these shares at the time of issuance was approximately $506,000 . As of September 30, 2015 , there are 856,164 shares available for issuance under the Company’s 2015 Stock Incentive Plan.
9. Commitments and Contingencies
The Company is involved in various legal proceedings arising in the ordinary course of its business, including, but not limited to commercial disputes. The Company believes that such litigation, claims and administrative proceedings will not have a material adverse impact on its financial position or its results of operations. The Company records a liability when it considers the loss probable and the amount can be reasonably estimated.
On July 10, 2008, one of the Company’s subsidiaries, Perimeter Associates, LLC (“Perimeter”), sued a tenant for breach of contract, guaranty of the contract and fraud related to an executed lease. In response, on August 22, 2008, the defendant filed a counterclaim against Perimeter for breach of contract, unjust enrichment and fraud. On April 8, 2013, the court found in favor of the defendant and assessed damages against Perimeter in the amount of $13,300 . On or about May 8, 2013, Perimeter appealed the judgment of the lower court to the Oklahoma Supreme Court. Subsequent to the initial judgment, the defendant’s attorney applied to the court to be reimbursed for approximately $368,000 in legal fees incurred by the defendant during litigation. On July 9, 2013, the lower court awarded the defendant approximately $267,000 of the defendant’s legal fees. On July 24, 2015, the Oklahoma Court of Civil Appeals affirmed the judgment against Perimeter, resulting in a total award of approximately $352,000 which includes interest and other fees. The Company will appeal the judgment to the Oklahoma Supreme Court. The Company has posted bonds for both judgments and has accrued for the judgments in its financial statements. The Company will continue to vigorously litigate the issues raised upon appeal.
10. Related Party Transactions
Prior to being acquired by the Company in October 2014, Wheeler Interests, LLC (“Wheeler Interests”), which was controlled by Jon S. Wheeler (“Mr. Wheeler”), the Company’s Chairman and Chief Executive Officer, leased the Company’s Riversedge property under a 10 year operating lease expiring in November 2017, with four five year renewal options available. The lease required monthly base rent payments of $24,000 and provided for annual increases throughout the term of the lease

19
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
10. Related Party Transactions (continued)


and subsequent option periods. Additionally, Wheeler Interests reimbursed the Company for a portion of the property’s operating expenses and real estate taxes.
The following summarizes related party activity as of and for the nine months ended September 30, 2015 and 2014 (unaudited):
September 30,
2015
2014
Amounts paid to affiliates
$
247,863

$
2,798,847

Amounts due from (to) affiliates
$
388,675

$
(193,532
)
Rent and reimbursement income received from Wheeler Interests
$
—

$
296,403

Rent and other tenant receivables due from Wheeler Interests
$
—

$
509,331

11. Subsequent Events
Sale of Jenks Reasors
On October 19, 2015 , the Company completed its sale of Jenks Reasors for a contract price of approximately $12.2 million . As of September 30, 2015 , the carrying of this property was approximately $10.9 million .
Sale of Harps at Harbor Point
On October 20, 2015 , the Company completed its sale of Harps at Harbor Point for a contract price of approximately $5.0 million . As of September 30, 2015 , the carrying value of this property was approximately $4.3 million .
Sale of Bixby Commons
On October 27, 2015 , the Company completed its sale of Bixby Commons for a contract price of approximately
$11.0 million . As of September 30, 2015 , the carrying value of this property was approximately $10.0 million .





20

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this Form 10-Q, along with the consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2014 Form 10-K for the year ended December 31, 2014 . For more detailed information regarding the basis of presentation for the following information, you should read the notes to the unaudited condensed consolidated financial statements included in this Form 10-Q.
This Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, including discussion and analysis of our financial condition, anticipated capital expenditures required to complete projects, amounts of anticipated cash distributions to our shareholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “potential,” “predicts,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or the negative of such terms and variations of these words and similar expressions, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. You are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this Form 10-Q. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
The forward-looking statements should be read in light of these factors and the factors identified in the “Risk Factors” sections of our Registration Statement on Form S-11 (as amended) filed with the Securities and Exchange Commission (“SEC”) on September 9, 2014.
Executive Overview
The September 30, 2015 three and nine month periods includes the combined operations of all properties owned at December 31, 2014 as described in our 2014 Form 10-K, approximately nine months of operations for Pierpont Centre, six months of Alex City Marketplace, a full quarter of operations for Butler Square and Brook Run and a partial quarter of operations for Beaver Ruin Village I and II, Chesapeake Square, Sunshine Plaza, Barnett Portfolio, Grove Park, Parkway Plaza, Fort Howard Square and Conyers Crossing. Conversely, the September 30, 2014 three and nine month periods only include a full period of combined operations for all properties owned at December 31, 2013 as described in our 2013 Annual Report on Form 10-K for the year ended December 31, 2013 ("2013 Form 10-K"), and partial periods of operations for Cypress Shopping Center, Harrodsburg Marketplace, Port Crossing, LaGrange Marketplace, Freeway Junction and Graystone Crossing. The September 30, 2015 three and nine month period results also include the full impact from internalizing the Operating Companies. In providing the following discussion and analysis of our results of operations, we have separately identified the activities of properties owned for the entire 2014 annual and 2015 nine month periods (collectively referred to as “same stores”) and of those properties acquired during 2014 and 2015 (collectively referred to as “new stores”). This illustrates the significant impact the properties acquired during 2014 and 2015 had on our results of operations.
Leasing Activity
Renewals during the three months ended September 30, 2015 consisted of sixteen deals totaling 76,980 square feet with a weighted-average increase of $1.15 per square foot, representing an increase of 12.60% over prior rates. The rates on negotiated renewals resulted in a weighted-average increase of $1.55 per square foot on nine renewals, a $0.21 decrease on two renewal and no change per square foot on five renewals. Three renewals represented options being exercised. Additionally, we signed ten new leases totaling 19,258 square feet during the three months ended September 30, 2015 with weighted-average rents of $14.55 .
Renewals during the first nine months of 2015 were comprised of forty-two deals totaling 232,943 square feet with a weighted-average increase of $0.82 per square foot, representing an increase of 9.01% over prior rates. The rates on negotiated renewals resulted in a weighted-average increase of $1.15 per square foot on twenty-seven renewals, a $1.60 weighted-average decrease on four renewals and no changes per square foot on eleven renewals. Ten renewals represented options being exercised. Additionally, we signed sixteen new leases totaling 28,720 square feet during the nine months ended September 30, 2015 , with weighted-average rents of $14.04 .

21

Approximately 5.30% of our gross leasable area is subject to leases that expire during the twelve months ending September 30, 2016 that have not already been renewed. Based on recent market trends, we believe that these leases will be renewed at amounts and terms comparable to existing lease agreements.
Acquisitions
On January 9, 2015 , the Company completed its acquisition of 1.50 acres of undeveloped land located on Laskin Road in Virginia Beach, Virginia ("Laskin Road") for a contract price of $1.6 million . The Company acquired Laskin Road for future development opportunities. The Company paid cash of $150,000 with the balance of the contract price to be paid in common units on the earlier of the one year anniversary of the acquisition or the completion of any development activities. The number of units issued will be determined using the Company's Common Stock price on the day prior to issuance.

On January 14, 2015 , the Company completed its acquisition of Pierpont Centre, a 122,259 square foot shopping center located in Morgantown, West Virginia ("Pierpont Centre") for a contract price of $13.9 million , paid through a combination of cash and debt. Pierpont Centre was 100% leased as of the acquisition date and its major tenants include GNC, Hallmark, Michael's, Ruby Tuesday and Outback Steakhouse.

On March 27, 2015 , the Company completed its acquisition of Brook Run Properties, LLC ("Brook Run Properties"), consisting of a 2.0 acre parcel of undeveloped real estate located adjacent to the Brook Run Shopping Center in Richmond, Virginia, for a contract price of $300,000 , paid in cash. The Company acquired the property for potential development and to complement the adjacent shopping center.

On April 1, 2015 , the Company completed its acquisition of Alex City Marketplace, a 147,791 square foot shopping center located in Alexander City, Alabama ("Alex City Marketplace") for a contract price of $10.3 million , paid through a combination of cash and debt. Alex City Marketplace was 86% leased as of the acquisition date and its major tenants include Winn Dixie and Goody's.

On April 15, 2015 , the Company completed its acquisition of Butler Square, a 82,400 square foot shopping center located in Mauldin, South Carolina ("Butler Square") for a contract price of $9.4 million , paid through a combination of cash and debt. Butler Square was 100% leased as of the acquisition date and its major tenants include Bi-Lo and Dollar Tree.

On June 2, 2015 , the Company completed its acquisition of Brook Run Shopping Center, a 147,738 square foot shopping center located in Richmond, Virginia ("Brook Run") for a contract price of $18.5 million , paid through a combination of cash and debt. Brook Run was 92% leased as of the acquisition date and its major tenants include Martin's Food Store and CVS.

On July 1, 2015 , the Company completed its acquisition of Beaver Ruin Village, a 74,048 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village") for a contract price of $12.4 million , paid through a combination of cash and debt. Beaver Ruin Village was 91% leased as of the acquisition date and its major tenants include Chase Bank, Firehouse Subs and State Farm Insurance.

On July 1, 2015 , the Company completed its acquisition of Beaver Ruin Village II, a 34,925 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village II") for a contract price of $4.4 million , paid through a combination of cash and debt. Beaver Ruin Village II was 100% leased as of the acquisition date and its major tenants include AutoZone and Metro PCS.

On July 1, 2015 , the Company completed its acquisition of Columbia Fire Station, consisting of two vacant buildings on a 1.0 acre land parcel located in Columbia, South Carolina ("Columbia Fire Station") for a contract price of $2.4 million , paid through a combination of cash and debt. The Company plans to redevelop this property for retail use.

On July 10, 2015 , the Company completed its acquisition of Chesapeake Square, a 99,848 square foot shopping center located in Onley, Virginia ("Chesapeake Square") for a contract price of $6.3 million . Chesapeake Square was 76% leased as of the acquisition date and is anchored by a Food Lion grocery store. The Company acquired Chesapeake Square from a related party through a combination of cash and the issuance of 125,966 common units in the Operating Partnership.

On July 21, 2015 , the Company completed its acquisition of Sunshine Plaza, a 111,189 square foot shopping center located in Lehigh Acres, Florida ("Sunshine Plaza") for a contract price of $10.4 million . Sunshine Plaza was 96% leased as of the acquisition date and is anchored by a Winn-Dixie grocery store. The Company acquired Sunshine Plaza through a combination of cash and debt.


22

On July 24, 2015 , the Company completed its acquisition of Carolina Place consisting of a 2.14 acre parcel of land adjacent to Chesapeake Square for a contract price of $250,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center.

On August 14, 2015 , the Company completed its acquisition of 10.39 acres located in Hilton Head, South Carolina ("Hilton Head Land") for a contract price of $1.0 million paid in cash. The Company acquired the property for potential development and to compliment an adjacent redevelopment project.

On August 21, 2015 , the Company completed its acquisition of Cardinal Plaza, located in Henderson, North Carolina, Franklinton Square, located in Franklinton, North Carolina and Nashville Commons, located in Nashville, North Carolina (collectively known as the "Barnett Portfolio") for a contract price of $15.3 million . The Barnett Porfolio totals 171,466 square feet, was 91% leased as of the acquisition date and all anchored by Food Lion grocery stores. The Company acquired the Barnett Portfolio through a combination of cash and debt.

On September 9, 2015 , the Company completed its acquisition of Grove Park Shopping Center, a 106,557 square foot shopping center located in Orangeburg, South Carolina ("Grove Park") for a contract price of $6.6 million . Grove Park was 90% leased as of the acquisition date and is anchored by a Bi-Lo grocery store. The Company acquired Grove Park through a combination of cash and debt.

On September 15, 2015 , the Company completed its acquisition of Parkway Plaza Shopping Center, a 52,365 square foot shopping center and 2.1 acres of adjacent undeveloped land located in Brunswick, Georgia ("Parkway Plaza") for a contract price of $6,075,000 . Parkway Plaza was 97% leased as of the acquisition date and is anchored by a Winn Dixie grocery store. The Company acquired Parkway Plaza through a combination of cash and debt.

On September 30, 2015 , the Company completed its acquisition of Ft. Howard Square Shopping Center, a 113,652 square foot shopping center located in Rincon, Georgia ("Ft. Howard Square") for a contract price of $11.5 million . Ft. Howard Square was 95% leased as of the acquisition date and is leased by nationally recognized tenants Goodwill and Dollar Tree. The Company acquired Ft. Howard Square through a combination of cash and debt.

On September 30, 2015 , the Company completed its acquisition of Conyers Crossing Shopping Center, a 170,475 square foot shopping center located in Conyers, Georgia ("Conyers Crossing") for a contract price of $10.8 million . Conyers Crossing was 99% leased as of the acquisition date and is leased by nationally recognized tenants Hobby Lobby and Burlington Coat Factory. The Company acquired Conyers Crossing through a combination of cash and debt.

Critical Accounting Policies

In preparing the condensed consolidated financial statements, we have made estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results may differ from these estimates. A summary of our critical accounting policies is included in our 2014 Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no significant changes to these policies during the nine months ended September 30, 2015 . For disclosure regarding recent accounting pronouncements and the anticipated impact they will have on our operations, please refer to Note 2 of the condensed consolidated financial statements included in this Form 10-Q.

23

Three and Nine Months Ended September 30, 2015 Compared to the Three and Nine Months Ended September 30, 2014
Results of Operations
The following table presents a comparison of the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 , respectively.
Three Months Ending
September 30,
Nine Months Ending
September 30,
Three Months Ended Changes
Nine Months Ended Changes
2015
2014
2015
2014
Change
% Change
Change
% Change
PROPERTY DATA:
Number of properties owned and operated at period end(1)
45

28

45

28

17

60.71
%
17

60.71
%
Aggregate gross leasable area at period end(1)
3,338,858

1,755,845

3,338,858

1,755,845

1,583,013

90.16
%
1,583,013

90.16
%
Ending occupancy rate at period end (1)
94.25
%
95.20
%
94.25
%
95.20
%
(0.95
)%
(1.00
)%
(0.95
)%
(1.00
)%
FINANCIAL DATA:
Rental revenues
$
5,552,882

$
2,815,486

$
13,479,755

$
7,462,653

$
2,737,396

97.23
%
$
6,017,102

80.63
%
Asset management fees
132,335

—

465,817

—

132,335

—
%
465,817

—
%
Commissions
86,682

—

307,292

—

86,682

—
%
307,292

—
%
Tenant reimbursements and other revenues
1,395,314

690,928

3,961,021

2,016,689

704,386

101.95
%
1,944,332

96.41
%
Total Revenue
7,167,213

3,506,414

18,213,885

9,479,342

3,660,799

104.40
%
8,734,543

92.14
%
EXPENSES:
Property operations
2,094,054

1,101,006

5,474,129

2,819,618

993,048

90.19
%
2,654,511

94.14
%
Non-REIT management and leasing services
299,566

—

901,118

—

299,566

—
%
901,118

—
%
Depreciation and amortization
4,824,448

1,961,041

11,672,780

4,996,141

2,863,407

146.01
%
6,676,639

133.64
%
Provision for credit losses
112,580

46,774

214,316

18,742

65,806

140.69
%
195,574

1,043.51
%
Corporate general & administrative
4,895,567

3,024,675

10,710,262

5,203,728

1,870,892

61.85
%
5,506,534

105.82
%
Total Operating Expenses
12,226,215

6,133,496

28,972,605

13,038,229

6,092,719

99.34
%
15,934,376

122.21
%
Operating Loss
(5,059,002
)
(2,627,082
)
(10,758,720
)
(3,558,887
)
(2,431,920
)
92.57
%
(7,199,833
)
202.31
%
Interest expense
(2,306,017
)
(1,491,749
)
(6,406,466
)
(3,945,332
)
(814,268
)
54.58
%
(2,461,134
)
62.38
%
Net Loss from Continuing Operations
(7,365,019
)
(4,118,831
)
(17,165,186
)
(7,504,219
)
(3,246,188
)
78.81
%
(9,660,967
)
128.74
%
Net Income from Discontinued Operations
206,603

117,078

488,343

351,137

89,525

(76.47
)%
137,206

(39.07
)%
Net Loss
(7,158,416
)
(4,001,753
)
(16,676,843
)
(7,153,082
)
(3,156,663
)
(78.88
)%
(9,523,761
)
(133.14
)%
Net loss attributable to noncontrolling interests
(428,702
)
(487,284
)
(1,331,294
)
(655,987
)
58,582

(12.02
)%
(675,307
)
102.95
%
Net Loss Attributable to Wheeler REIT
$
(6,729,714
)
$
(3,514,469
)
$
(15,345,549
)
$
(6,497,095
)
$
(3,215,245
)
91.49
%
$(8,848,454)
136.19
%
(1)    Excludes the undeveloped land parcels and Riversedge North that ceased paying rent upon acquiring the Operating Companies. Includes assets held for sale.

24

Same Store and New Store Operating Income
The following table provides same store and new store financial information. The discussion below primarily focuses on same store results of operations since our seventeen 2015 acquisitions and all of our 2014 acquisitions occurred in the quarter ended September 30, 2014 .
Three Months Ended September 30,
Same Store
New Store
Total
2015
2014
2015
2014
2015
2014
Property revenues
$
2,972,993

$
2,863,091

$
3,975,203

$
643,323

$
6,948,196

$
3,506,414

Property expenses
898,673

850,751

1,195,381

250,255

2,094,054

1,101,006

Property Net Operating Income
2,074,320

2,012,340

2,779,822

393,068

4,854,142

2,405,408

Asset Management and Commission Revenue
—

—

219,017

—

219,017

—

Non-REIT management and leasing services
—

—

299,566

—

299,566

—

Depreciation and amortization
1,363,476

1,468,381

3,460,972

492,660

4,824,448

1,961,041

Provision for credit losses
42,965

46,774

69,615

—

112,580

46,774

Corporate general & administrative
4,326,882

1,161,581

568,685

1,863,094

4,895,567

3,024,675

Total Other Operating Expenses
5,733,323

2,676,736

4,398,838

2,355,754

10,132,161

5,032,490

Interest expense
1,171,320

1,228,307

1,134,697

263,442

2,306,017

1,491,749

Net Loss from Continuing Operations
(4,830,323
)
(1,892,703
)
(2,534,696
)
(2,226,128
)
(7,365,019
)
(4,118,831
)
Net Income (Loss) from Discontinued Operations
272,394

117,078

(65,791
)
—

206,603

117,078

Net Loss
$
(4,557,929
)
$
(1,775,625
)
$
(2,600,487
)
$
(2,226,128
)
$
(7,158,416
)
$
(4,001,753
)
Nine Months Ended September 30,
Same Store
New Store
Total
2015
2014
2015
2014
2015
2014
Property revenues
$
9,140,912

$
8,836,019

$
8,299,864

$
643,323

$
17,440,776

$
9,479,342

Property expenses
2,897,680

2,569,363

2,576,449

250,255

5,474,129

2,819,618

Property Net Operating Income
6,243,232

6,266,656

5,723,415

393,068

11,966,647

6,659,724

Asset Management and Commission Revenue
—

—

773,109

—

773,109

—

Non-REIT management and leasing services
—

—

901,118

—

901,118

—

Depreciation and amortization
4,232,313

4,503,481

7,440,467

492,660

11,672,780

4,996,141

Provision for credit losses
132,535

18,742

81,781

—

214,316

18,742

Corporate general & administrative
9,006,350

3,340,634

1,703,912

1,863,094

10,710,262

5,203,728

Total Other Operating Expenses
13,371,198

7,862,857

10,127,278

2,355,754

23,498,476

10,218,611

Interest expense
3,802,719

3,681,890

2,603,747

263,442

6,406,466

3,945,332

Net Loss from Continuing Operations
(10,930,685
)
(5,278,091
)
(6,234,501
)
(2,226,128
)
(17,165,186
)
(7,504,219
)
Net Income (Loss) from Discontinued Operations
512,153

351,137

(23,810
)
—

488,343

351,137

Net Loss
$
(10,418,532
)
$
(4,926,954
)
$
(6,258,311
)
$
(2,226,128
)
$
(16,676,843
)
$
(7,153,082
)
Property Revenues
Total same store property revenues for the three and nine month periods ended September 30, 2015 were $2.97 million and $9.14 million , respectively, compared to $2.86 million and $8.84 million , respectively, for the three and nine month periods ended September 30, 2014 . Same store revenues fluctuated primarily due to Riversedge North ceasing to pay rent due to management internalization, increases in tenant reimbursements, contractual rent adjustments, positive rent spreads on renewals and increases in occupancy. Riversedge North contributed $99,000 and $297,000, respectively, to property revenues for the three and nine month periods ended September 30, 2014 . Excluding the impact of Riversedge North on the 2014 property revenues, same store property revenues increased approximately $209,000 and $602,000, respectively, for the three and nine month periods ended September 30, 2015 as compared to the prior periods.

25

The three and nine month periods ended September 30, 2015 represent full periods of operations reported for the thirteen acquisitions made in 2014 (all subsequent to June 30, 2014), and partial periods of operations for the twenty acquisitions made in the nine month period ended September 30, 2015 . These properties (new stores) contributed $3.98 million and $8.30 million , respectively, in revenues for the three and nine month periods ended September 30, 2015 , respectively, compared to no contributions to revenue for the three and nine month periods ended September 30, 2014 . Going forward we believe these properties will generate a significant amount of revenue for us and we will benefit from future contractual rent increases and expansion opportunities.
Property Expenses
Total same store property expenses for the three and nine month periods ended September 30, 2015 were $898,673 and $2.90 million , respectively, compared to $850,751 and $2.57 million , respectively, for the three and nine month periods ended September 30, 2014 . The increase was primarily due to the nature and timing of repairs and maintenance, increases in real estate taxes due to property reassessments of prior acquisitions, and increases in cost allocations associated with managing the properties for the three and nine months ended September 30, 2015 as compared to the 2014 three and nine month periods.
There were no significant unusual or non-recurring items included in new store property expenses for the three and nine month periods ended September 30, 2015 .
Property Net Operating Income

Total property net operating income was $4.85 million and $11.97 million for the three and nine month periods ended September 30, 2015 , respectively, compared to $2.41 million and $6.66 million for the three and nine month periods ended September 30, 2014 , respectively. The September 2015 three and nine month periods results represent increases of $2.44 million and $5.31 million , respectively, over the comparable September 2014 periods, primarily due to the increases in property revenues discussed above. New stores accounted for the majority of these increases by generating $2.78 million and $5.72 million , respectively, in property net operating income for the three and nine month periods ended September 30, 2015 , compared to $393,068 for the three and nine month periods ended September 30, 2014 . The increase in new store property net operating income primarily resulted from the fact that all 2014 acquisitions occurred subsequent to June 30, 2014 with twenty-four acquisitions occurring since September 30, 2014.

Other Operating Expenses
Same store other operating expenses for the three and nine month periods ended September 30, 2015 period were $5.73 million and $13.37 million , respectively, representing an increase of $3.06 million and $5.51 million , respectively, over the three and nine month periods ended September 30, 2014 , respectively. This increase in same store operating expenses resulted from increases of $3.17 million and $5.67 million for the three and nine month periods, respectively, in general and administrative expenses offset by decreases of $104,905 and $271,168 in depreciation and amortization expenses. The decreases in same store depreciation and amortization expense for the three and nine month periods ended September 30, 2015 , resulted from more assets becoming fully depreciated and amortized since the September 2014 periods.

26

Total general and administrative expenses for the three and nine month periods ended September 30, 2015 increased by $1.87 million and $5.51 million , respectively, as compared to the 2014 periods. General and administrative expenses during the September 2015 three and nine month periods included approximately $3.71 million and $6.31 million , respectively, of non-recurring expenses related to acquisitions, capital events, legal expenses, commissions, marketing, Sarbanes-Oxley compliance, employee recruitment and other miscellaneous items which are detailed below.
Three Months Ended
September 30, 2015
Nine Months Ended
September 30, 2015
(unaudited)
Acquisition costs
$
1,733,639

$
3,167,378

Capital related costs
1,826,240

2,447,890

Perimeter legal accrual
3,504

127,804

Commission expenses
—

115,287

Marketing/promotional
7,358

140,836

Sarbanes-Oxley
102,475

154,563

Employee recruitment
—

49,000

Other
40,000

107,127

$
3,713,216

$
6,309,885

Acquisition expenses were primarily related to financial statement audits, appraisals and legal matters for the acquisitions completed in the nine months ended September 30, 2015 and sourcing and due diligence of potential acquisitions currently in our pipeline. Capital related costs resulted from the March 2015 Series C Preferred Stock offering and subsequent conversion, and the Series A Preferred Stock and Series B Preferred Stock Exchange Offer completed in July 2015. General and administrative expenses for the three and nine months ended September 30, 2015 reflect the internalization of the Operating Companies, including approximately $620,463 and $2.41 million, respectively, of compensation and benefits expenses that were not incurred during the 2014 periods and other operating costs resulting from internalizing the Operating Companies.
Interest Expense
Same store interest expense was $1.17 million and $3.80 million , respectively, for the three and nine month periods ended September 30, 2015 , which represents a decrease of $56,987 and an increase of $120,829 , respectively, as compared to $1.23 million and $3.68 million for the three and nine month periods ended September 30, 2014 . The quarterly decrease primarily resulted from the $3.00 million reduction in senior convertible debt, the repayment of the Lumber River loan and a decline in outstanding debt for same stores. The six month increase primarily resulted from the acceleration of amortization expense on loan costs related to the $3,000,000 of senior convertible debt that was converted in Series C Preferred Stock in March 2015. Total interest expense for the three and nine months ended September 30, 2015 increased $814,268 and $2.46 million , respectively. In addition to the impact of the senior debt, total interest expense was affected by the issuance of $89.7 million of acquisition-related debt since September 2014.
Funds from Operations
We use Funds from Operations ("FFO"), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002). As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.

27

Below is a comparison of same and new store FFO for the three and nine month periods ended September 30, 2015 and 2014 :
Three Months Ended September 30,
Same Stores
New Stores
Total
Period Over Period Changes
2015
2014
2015
2014
2015
2014
$
%
Net loss
$
(4,557,929
)
$
(1,775,625
)
$
(2,600,487
)
$
(2,226,128
)
$
(7,158,416
)
$
(4,001,753
)
$
(3,156,663
)
78.88
%
Depreciation of real estate
assets from continuing operations
1,363,476

1,468,381

3,460,972

492,660

4,824,448

1,961,041

2,863,407

146.01
%
Depreciation of real estate
assets from discontinued operations
105,187

244,203

61,188

—

166,375

244,203

(77,828
)
(31.87
)%
Depreciation of real estate
assets
1,468,663

1,712,584

3,522,160

492,660

4,990,823

2,205,244

2,785,579

126.32
%
FFO
$
(3,089,266
)
$
(63,041
)
$
921,673

$
(1,733,468
)
$
(2,167,593
)
$
(1,796,509
)
$
(371,084
)
20.66
%
Nine Months Ended September 30,
Same Stores
New Stores
Total
Period Over Period Changes
2015
2014
2015
2014
2015
2014
$
%
Net loss
$
(10,418,532
)
$
(4,926,954
)
$
(6,258,311
)
$
(2,226,128
)
$
(16,676,843
)
$
(7,153,082
)
$
(9,523,761
)
133.14
%
Depreciation of real estate
assets from continuing operations
4,232,313

4,503,481

7,440,467

492,660

11,672,780

4,996,141

6,676,639

133.64
%
Depreciation of real estate
assets from discontinued operations
560,203

730,649

69,073

—

629,276

730,649

(101,373
)
(13.87
)%
Depreciation of real estate
assets
4,792,516

5,234,130

7,509,540

492,660

12,302,056

5,726,790

6,575,266

114.82
%
FFO
$
(5,626,016
)
$
307,176

$
1,251,229

$
(1,733,468
)
$
(4,374,787
)
$
(1,426,292
)
$
(2,948,495
)
206.72
%
During the three and nine month periods ended September 30, 2015 , same store FFO decreased $3.03 million and $5.93 million , respectively, primarily due to increases of $3.17 million and $5.67 million , respectively, in corporate general and administrative expenses for the three and nine month period ended September 30, 2015 . Total FFO decreased $0.37 million and $2.95 million , respectively, for the three and nine month periods ended September 30, 2015 , primarily for the same reasons. The increases in interest expense and corporate general and administrative expenses are discussed in the “Other Operating Expenses” section above.
We believe the computation of FFO in accordance with NAREIT's definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance. These items include, but are not limited to, legal settlements, non-cash share-based compensation expense, non-cash amortization on loans and acquisition costs. Therefore, in addition to FFO, management uses Adjusted FFO ("AFFO"), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as they are not indicative of the operating performance of our assets. In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.

28

Total AFFO for the three and nine month periods ended September 30, 2015 , respectively, is shown in the table below:
Three Months Ended September 30,
Nine Months Ended September 30,
2015
2014
2015
2014
FFO
$
(2,167,593
)
$
(1,796,509
)
$
(4,374,787
)
$
(1,426,292
)
Preferred stock dividends
(2,279,907
)
(1,088,062
)
(13,116,232
)
(1,552,320
)
Preferred stock accretion adjustments
1,857,133

114,719

8,836,696

181,856

FFO available to common shareholders and common
unitholders
(2,590,367
)
(2,769,852
)
(8,654,323
)
(2,796,756
)
Acquisition costs
1,733,639

1,505,000

3,167,378

1,905,000

Capital related costs
1,826,240

—

2,447,890

—

Other non-recurring expenses
149,833

—

566,813

—

Share-based compensation
54,700

45,000

356,000

190,000

Straight-line rent
(108,595
)
41,844

(202,030
)
179,953

Loan cost amortization
303,463

140,068

1,048,711

414,668

Above/below market lease amortization
153,512

44,288

562,987

(1,468
)
Perimeter legal accrual
3,504

—

127,804

—

Tenant improvement reserves
(76,500
)
—

(199,400
)
—

Recurring capital expenditures
(90,200
)
—

(237,700
)
—

AFFO
$
1,359,229

$
(993,652
)
$
(1,015,870
)
$
(108,603
)
Preferred stock dividends for the nine month period ended September 30, 2015 include approximately $1.98 million of dividends (excluding the impact of accretion adjustments) related to the Series C Preferred Stock.
The preferred stock accretion adjustments represent the amortization of offering costs associated with raising the Series B and Series C Preferred Stock. The Series C Preferred Stock adjustment represents the majority of the total since the related offering costs were amortized until June 11, 2015, when we closed on the Series C Preferred Stock conversion.
Liquidity and Capital Resources
At September 30, 2015 , our consolidated cash and cash equivalents totaled $7.99 million compared to consolidated cash and cash equivalents of $9.97 million at December 31, 2014 . Cash flows from operating activities, investing activities and financing activities for the nine month periods ended September 30, 2015 and 2014 were as follows:
Nine Months Ended September 30,
Period Over Period Change
2015
2014
$
%
Operating activities
$
(6,708,444
)
$
(4,724,037
)
$
(1,984,407
)
42.01
%
Investing activities
$
(61,375,935
)
$
(11,611,742
)
$
(49,764,193
)
428.57
%
Financing activities
$
66,107,924

$
35,043,910

$
31,064,014

88.64
%
Operating Activities
During the nine months ended September 30, 2015 , our cash flows used in operating activities were $6.71 million , compared to cash flows used in operating activities of $4.72 million during the nine months ended September 30, 2014 . Operating cash flows were primarily impacted by the $9.52 million increase in our consolidated net loss due to the factors discussed in the Results of Operations section above, specifically the $5.51 million increase in total general and administrative expenses associated with operating the REIT and the addition of twenty-four properties since September 2014. Also impacting operating cash flows was a $3.1 million increase in escrows and required reserves primarily related to the 2015 property acquisitions.
Investing Activities
During the nine months ended September 30, 2015 , our cash flows used in investing activities were $61.38 million , compared to cash flows used in investing activities of $11.61 million during the nine months ended September 30, 2014 . The 2015 amount reflects the cash used to acquire the twenty properties in the nine months ended September 30, 2015 , while the 2014 amount reflects the cash used to acquire the nine properties during the nine months ended September 30, 2014 . Investing cash flows include the impact of approximately $0.9 million related to the acquisition of the Ruby Tuesday and Outback Steakhouse ground leases at Pierpont Centre, which are now assets held for sale.

29

Financing Activities
During the nine months ended September 30, 2015 , our cash flows from financing activities were $66.11 million , compared to $35.04 million of cash flows from financing activities during the nine months ended September 30, 2014 . During the nine months ended September 30, 2015 , we received $83.42 million from the completion of our Series C Preferred Stock offering in March 2015. These proceeds were partially offset by dividends and distributions, which increased to $10.08 million in the nine months ended September 30, 2015 from $ 3.36 million during the nine months ended September 30, 2014 period as a result of the additional common shares, common units and preferred shares issued during the period from September 2014 to September 2015. These increases were offset by principal payments of approximately $7.2 million, which includes the payoffs of the Lumber River note and the VantageSouth line of credit, which totaled $4.9 million. Financing cash flows also include approximately $121,000 related to the principal payments on assets held for sale.
There was no refinancing activity during the nine month periods ended September 30, 2015 and 2014 .
As of September 30, 2015 and December 31, 2014 , our debt balances consisted of the following:
September 30, 2015
December 31, 2014
Fixed-rate notes
$
186,283,498

$
120,865,586

Fixed-rate notes, assets held for sale
$
21,813,806

$
20,584,557

Total debt
$
208,097,304

$
141,450,143


The weighted-average interest rate and term of our fixed-rate debt are 4.79% and 7.13 years, respectively, at September 30, 2015 . We have $17.70 million of debt maturing during the twelve months ending September 30, 2016 . While we anticipate being able to refinance our maturing loans at reasonable market terms upon maturity, our inability to do so may materially impact our financial position and results of operations. See the financial statements included elsewhere in this Form 10-Q for additional mortgage indebtedness details.
Future Liquidity Needs

The $17.70 million in debt maturities, ongoing debt service, preferred stock dividends and the $0.21 per share targeted annual common stock dividend we are currently paying represent the most significant factors outside of normal operating activities impacting cash flow over the next year. Our success in refinancing the debt and executing on our growth strategy will dictate our liquidity needs going forward. If we are unable to execute in these areas, our ability to grow and pay future dividends may be limited without additional capital.
In addition to liquidity required to fund debt payments, distributions and acquisitions, we may incur some level of capital expenditures during the year for our existing properties that cannot be passed on to our tenants. The majority of these expenditures occur subsequent to acquiring a new property that requires significant improvements to maximize occupancy and lease rates, with an existing property that needs a facelift to improve its marketability or when tenant improvements are required to make a space fit a particular tenant’s needs. Significant capital expenditures could also impact our ability to grow and pay future dividends.
Off-Balance Sheet Arrangements
As of September 30, 2015 , the KeyBank and VantageSouth lines of credit represent the only significant off-balance sheet arrangements that are likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures.
New Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08"). This ASU changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under this ASU, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have major effect on the Company's operations and financial results. Examples include a disposal of a major geographical area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 is effective prospectively for reporting periods beginning on or after December 15, 2014. We adopted ASU 2014-08 on January 1, 2015 and used its guidance in determining the effect of discontinued operations as disclosed in Note 5.

30

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of ASC Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new standard will be effective for us in the first quarter of the year ended December 31, 2018 and can be applied either retrospectively to all periods presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. We are currently evaluating the impact of adoption of the new standard on its consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40)." This ASU defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and provides guidance on required financial statement footnote disclosures. This ASU will be effective for annual periods ending after December 15, 2016. We will adopt the ASU in 2016.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This new guidance requires the presentation of unamortized debt issuance costs to be shown in the liabilities section of the consolidated balance sheets as a reduction of the principal amount of the associated debt, rather than as an asset. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a retrospective approach by restating prior period comparative consolidated balance sheets. We do not expect the adoption of ASU 2015-03 to materially impact its financial position or results of operations.

In September 2015, the FASB issued ASU 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments". This new guidance requires that the acquirer recognizes adjustments to preliminary acquisition values and account for the cumulative effect of any required adjustments in the period in which they are determined. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a prospective approach for adjustments that occur after the effective date. We do not expect the adoption of ASU 2015-16 to materially impact its financial position or results of operations.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4.    Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The management of the Trust, under the supervision and with the participation of our principal executive and financial officers, has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to the Trust’s management, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officers have concluded that such disclosure controls and procedures were effective as of September 30, 2015 (the end of the period covered by this Form 10-Q).
Changes in Internal Control Over Financial Reporting
None.

31

PART II. OTHER INFORMATION


Item 1.    Legal Proceedings.

We are subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, management believes the final outcome of such matters will not have a material adverse effect on our financial position, results of operation or liquidity.
On July 10, 2008, one of our subsidiaries, Perimeter Associates, LLC (“Perimeter”), sued a tenant for breach of contract, guaranty of the contract and fraud related to an executed lease. In response, on August 22, 2008, the defendant filed a counterclaim against Perimeter for breach of contract, unjust enrichment and fraud. On April 8, 2013, the court found in favor of the defendant and assessed damages against Perimeter in the amount of $13,300. On or about May 8, 2013, Perimeter appealed the judgment of the lower court to the Oklahoma Supreme Court. Subsequent to the initial judgment, the defendant’s attorney applied to the court to be reimbursed for approximately $368,000 in legal fees incurred by the defendant during litigation. On July 9, 2013, the lower court awarded the defendant approximately $267,000 of the defendant’s legal fees. On July 24, 2015, the Oklahoma Court of Civil Appeals affirmed the judgment against Perimeter, resulting in a total award of approximately $352,000 . The Company will appeal the judgment to the Oklahoma Supreme Court. The Company has posted bonds for both judgments and has accrued for the judgments in its financial statements. The Company will continue to vigorously litigate the issues raised upon appeal.
Item 1A. Risk Factors.
Not applicable.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.
(a)    On July 10, 2015 , in connection with the acquisition of Chesapeake Square Shopping Center and pursuant to the terms of the Contribution and Subscription Agreement between the Operating Partnership and 18 accredited investors (the "Chesapeake Square Contributors"), the Operating Partnership exchanged an aggregate of 125,966 of its Common Units worth $246,894 for the Chesapeake Square Contributors’ membership interests in Chesapeake Square Associates, LLC, a Virginia limited liability company. The Common Units issued to the Chesapeake Square Contributors represents, in the aggregate, 3.00% of the Common Units in the Operating Partnership.

The Common Units are redeemable for cash equal to the then-current market value of one share of the Trust’s common stock or, at the Trust’s option, one share of the Trust’s common stock, commencing 12 months following the completion of this exchange. The Operating Partnership did not receive any proceeds from the exchange. The Operating Partnership only received membership interests in Chesapeake Square Associates, LLC. The issuance of the Common Units was exempt from registration pursuant to the exemption provided by Rule 506 of Regulation D under the Securities Act of 1933, as amended.

No underwriter was used in connection with the issuance of these Common Units.

(b)    Not applicable.

(c)    Not applicable.
Item 3.    Defaults Upon Senior Securities.
Not applicable.
Item 4.    Mine Safety Disclosures.
Not applicable.
Item 5.    Other Information.
None.

32

Item 6.    Exhibits.
Exhibit
3.1
Articles of Amendment and Restatement of the Registrant. (1)
3.2
Amended and Restated Bylaws of the Registrant. (2)
4.1
Form of Certificate of Common Stock of Registrant. (2)
4.2
Form of Certificate of Series B Convertible Preferred Stock of Registrant. (4)
4.3
Form of Warrant Certificate of Registrant. (4)
4.4
Form of Warrant Agreement for December 2013/January 2014 Private Placement Offering. (5)
4.5
Form of Promissory Note for December 2013/January 2014 Private Placement Offering. (5)
4.6
Form of Convertible Note for December 2013/January 2014 Private Placement Offering. (5)
10.1
Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. (7)
10.2
Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P., Designation of Series C Mandatorily Convertible Preferred Units, as amended. (9)
10.3
Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series B Mandatorily Convertible Preferred Units. (10)
10.4
Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series A Mandatorily Convertible Preferred Units. (10)
10.5
Wheeler Real Estate Investment Trust, Inc. 2015 Long-Term Incentive Plan. (11)
10.6
Employment Agreement with Jon S. Wheeler (6)
10.7
Employment Agreement with Steven M. Belote (6)
10.8
Employment Agreement with Robin A. Hanisch (6)
10.9
Subordination Agreement (7)
10.10
Warrant Agreement by and among the Registrant, Computershare, Inc. and Computershare Trust Company, N.A. (3)
10.11
Membership Interest Contribution Agreement dated October 24, 2014, by and among Jon S. Wheeler and Wheeler REIT, L.P. (6)
10.12
Tax Protection Agreement dated October 24, 2014, by and among Jon S. Wheeler, Wheeler REIT, L.P., and Wheeler Real Estate Investment Trust, Inc. (6)
10.13
Termination Agreement dated October 24, 2014, by and among Wheeler Real Estate Investment Trust, Inc., Wheeler REIT, L.P., and WHLR Management, LLC. (6)
10.14
Form of Securities Purchase Agreement, dated March 19, 2015, between Wheeler Real Estate Investment Trust, Inc. and each of the Investors. (9)
10.15
Form of Registration Rights Agreement, dated March 19, 2015, between Wheeler Real Estate Investment Trust, Inc. and each of the Investors. (9)
10.16
Shareholder Rights Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and Westport Capital Partners LLC as agent on behalf of certain investor. (9)
10.17
Board Observer Rights Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and MFP Investors LLC. (9)
10.18
Letter Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and Jon S. Wheeler. (9)

33

10.19
Placement Agency Agreement by Compass Point Research & Trading, LLC, the Company and the Operating Partnership. (12)
10.20
First Amendment to Placement Agency Agreement, dated March 18, 2015, by and among Wheeler Real Estate Investment Trust, Inc., Wheeler REIT, L.P. and Compass Point Research & Trading, LLC, as representative of the several placement agents. (9)
10.21
Dealer Manager Agreement, by and among Compass Point Research & Trading, LLC, Maxim Group LLC the Registrant and the Operating Partnership. (13)
10.22
Credit Agreement, dated May 29, 2015, between Wheeler REIT, L.P. and KeyBank. (14)
10.23
Contribution and Subscription Agreement, dated June 1, 2015, by and among Wheeler REIT, L.P. and certain members of Brook Run Associates, LLC. (15)
10.24
Contribution and Subscription Agreement, dated July 10, 2015, by and among Wheeler REIT, L.P. and certain members of Chesapeake Square Associates, LLC. (16)
31.1
Certification of the Chief Executive Officer of Wheeler Real Estate Investment Trust, Inc. pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (17)
31.2
Certification of the Chief Financial Officer of Wheeler Real Estate Investment Trust, Inc. pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (17)
32.1
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (17)
101.INS
XBRL Instance Document (17)
101.SCH
XBRL Taxonomy Extension Schema Document (17)
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document (17)
101.LAB
XBRL Taxonomy Extension Label Linkbase Document (17)
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document (17)
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document (17)
(1)
Filed as an exhibit to the Registrant’s report on Form 8-K, filed on June 5, 2015.
(2)
Filed as an exhibit to the Registrant's Registration Statement on Form S-11 (Registration No. 333-177262) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference.
(3)
Incorporated by reference to the Registrant's report on Form 8-K, filed on April 29, 2014.
(4)
Filed as an exhibit to the Registrant's Registration Statement on Form S-11 (Registration No. 333-194831) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference.
(5)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on December 18, 2013 and hereby incorporated by reference.
(6)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on October 30, 2014, and hereby incorporated by reference.
(7)
Filed as an exhibit to the Registrant's Registration Statement on Form S-11 (Registration No. 333-198245) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference.
(8)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on November 7, 2014.
(9)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on March 19, 2015.
(10)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on April 15, 2015.
(11)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on June 8, 2015.
(12)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on March 18, 2015.
(13)
Filed an an exhibit to the Registrant's Registration Statement on Form S-4, (Registration No. 333-204957), filed on June 15, 2015.
(14)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on June 2, 2015.
(15)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on June 5, 2015.
(16)
Filed as an exhibit to the Registrant's report on Form 8-K, filed on July 13, 2015.
(17)
Filed herewith.

34

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 thereunto duly authorized.
WHEELER REAL ESTATE INVESTMENT TRUST, INC.
By:
/s/ STEVEN M. BELOTE
Steven M. Belote
Chief Financial Officer
Date:
November 10, 2015


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TABLE OF CONTENTS