Supplemental Financial Statement Information

12 Months Ended

Dec. 31, 2021

Supplemental Financial Statement Information

Supplemental Financial Statement Information

10. Supplemental Financial Statement Information

Other Assets

INDUS’ other assets are comprised of the following:

	December 31, 2021		December 31, 2020
Deposits on building and land acquisitions	$	9,800	$	365
Deferred leasing costs, net		6,866		5,352
Straight-line rents		6,334		6,700
Intangible assets, net		5,495		2,126
Prepaid expenses		3,412		2,618
Deferred financing costs related to revolving lines of credit		917		162
Accounts receivable (primarily leases)		713		254
Right-of-use assets		593		707
Furniture, fixtures and equipment, net		369		181
Registration statement costs		341		—
Interest rate swap asset		188		—
Prepaid development costs		143		798
Other		402		323
Total other assets	$	35,573	$	19,586

INDUS’ intangible assets relate to the acquisition of several industrial/logistics buildings and consist of the values of in-place leases and the associated relationships with tenants (see Note 4). The values of in-place leases and tenant relationships are amortized to depreciation and amortization expense over the remaining non-cancelable term of their respective leases.

INDUS’ intangible liabilities relate to the acquisition of several industrial/logistics buildings and consist of the values of below-market leases (see Note 4). The values of the below-market leases are amortized as an increase to rental revenue over the remaining non-cancelable term of their respective leases.

Intangible assets and liabilities consist of the following:

	Year Ended December 31,
	2021		2020
Intangible assets:
In-place leases, net of accumulated amortization of $2,476 and $1,596, respectively	$	5,036	$	1,318
Tenant relationships, net of accumulated amortization of $953 and $604, respectively		459		808
Total intangible assets	$	5,495	$	2,126
Intangible liabilities:
Below market leases, net of accumulated amortization of $367 and $95, respectively	$	3,000	$	695
Total intangible liabilities	$	3,000	$	695

INDUS recorded amortization expense of intangible assets of $1,229, $588 and $45 in 2021, 2020 and the Transition Period, respectively. INDUS recorded an increase to rental revenue from the amortization of intangible liabilities of $272, $95 and $10 in 2021, 2020 and the Transition Period, respectively.

Estimated amortization expense of intangible assets and liabilities over each of the next five years is:

		2022		2023		2024		2025		2026
In-place leases	$	1,312	$	805	$	603	$	484	$	476
Tenant relationships		141		91		55		55		28
Total to be included in depreciation and amortization expense	$	1,453	$	896	$	658	$	539	$	504
Below market lease liabilities	$	(409)	$	(405)	$	(329)	$	(318)	$	(318)
Total to be included in rental revenue	$	(409)	$	(405)	$	(329)	$	(318)	$	(318)

Deferred leasing costs, net, reflected accumulated amortization of $6,673 and $7,439 as of December 31, 2021 and 2020, respectively. Amortization expense related to deferred leasing costs in 2021, 2020 and the Transition Period was $1,091, $1,086 and $94, respectively. Furniture, fixtures and equipment, net, reflected accumulated depreciation of $1,051 and $1,072 as of December 31, 2021 and 2020, respectively. Total depreciation expense related to furniture, fixtures and equipment in 2021, 2020 and the Transition Period was $88, $83 and $7, respectively.

Accounts Payable and Accrued Liabilities

INDUS’ accounts payable and accrued liabilities are comprised of the following:

	December 31, 2021		December 31, 2020
Accrued construction costs and retainage	$	5,813	$	94
Accrued salaries, wages and other compensation		1,796		1,027
Accrued interest payable		556		580
Trade payables		503		1,093
Accrued lease commissions		468		233
Other		602		642
Total accounts payable and accrued liabilities	$	9,738	$	3,669

Other Liabilities

INDUS’ other liabilities are comprised of the following:

	December 31, 2021		December 31, 2020
Deferred compensation plan	$	5,097	$	4,335
Interest rate swap liabilities		3,995		8,766
Intangible liability, net		3,000		695
Prepaid rent from tenants		1,555		1,345
Security deposits of tenants		973		710
Lease liabilities		626		739
Contingent value rights liability		—		656
Other		153		321
Total other liabilities	$	15,399	$	17,567

Supplemental Cash Flow Information

In 2020, INDUS received 24,893 shares of its Common Stock in connection with the exercise of stock options as consideration for the exercise price and for reimbursement of income tax withholdings related to those stock option exercises. The shares received were recorded as treasury stock, which resulted in an increase in treasury stock of $1,358 in 2020, and did not affect the Company’s cash. Upon INDUS’ reincorporation into Maryland on December 30, 2020, all treasury stock was retired (see Note 8).

Accounts payable and accrued liabilities related to additions to real estate assets increased by $5,719 in 2021 and decreased by $789 in 2020.

INDUS received a tax refund in 2020 of $202 related to alternative minimum taxes paid in prior years. The Company did not receive any income tax refunds in 2021 or the Transition Period. Interest payments in 2021, 2020 and the Transition Period were $7,018, $6,932 and $576, respectively, including capitalized interest of $1,164, $126 and $12 in 2021, 2020 and the Transition Period, respectively.

Savings Plan

INDUS maintains the INDUS Realty Trust, Inc. 401(k) Savings Plan (the “INDUS Savings Plan”) for its employees, a defined contribution plan whereby INDUS matches 60% of each employee’s contribution, up to a maximum of 5% of base salary. The Company’s contributions to the INDUS Savings Plan in 2021, 2020 and the Transition Period were $89, $72 and $9, respectively.

Deferred Compensation Plan

INDUS maintains a non-qualified deferred compensation plan (the “Deferred Compensation Plan”) for certain of its employees who, due to IRC regulations, cannot take full advantage of the INDUS Savings Plan. The Company’s liability under its Deferred Compensation Plan at December 31, 2021 and 2020 was $5,097 and $4,335, respectively. Noncash expense related to the Deferred Compensation Plan in 2021, 2020 and the Transition Period was $677, $544 and $155, respectively.

These amounts are included in other liabilities on INDUS’ consolidated balance sheets. The expense for the Company’s matching benefit to the Deferred Compensation Plan in 2021, 2020 and the Transition Period was $9, $12 and $1, respectively.

The Deferred Compensation Plan is unfunded, with benefits to be paid from INDUS’ assets. The liability for the Deferred Compensation Plan reflects the amounts withheld from employees, the Company’s matching benefit and any gains or losses on participant account balances based on the assumed investment of amounts credited to participants’ accounts in certain mutual funds. Participant balances are tracked and any gain or loss is determined based on the performance of the mutual funds as selected by the participants and included in general and administrative expenses on INDUS’ consolidated statements of operations. Effective January 1, 2022, INDUS closed the Deferred Compensation Plan to any further contributions.

Transition Period Financial Information

On November 17, 2020, in connection with the anticipated election to become a REIT, the Company’s Board of Directors approved a change in the Company’s fiscal year from November 30 to December 31, effective beginning with the Company’s next fiscal year, which began on January 1, 2021 and ended on December 31, 2021. As a result of this change, INDUS had a one-month transition period (the “Transition Period”) that began on December 1, 2020 and ended on December 31, 2020 (see Note 1). The consolidated statement of operations, consolidated statement of comprehensive income and consolidated statement of cash flows for the year ended December 31, 2020 have been recast to disclose the comparable twelve month activity and, therefore, include the results of the Transition Period. The following table presents certain unaudited comparative financial information of the same period of the prior year:

			Month Ended
	Month Ended		December 31,
	December 31,		2019
(amounts in thousands, except per share data)	2020		(unaudited)
Consolidated statement of operations data:
Rental revenue	$	3,345	$	3,083
Expenses		(1,364)		(3,414)
Pretax income (loss)		1,981		(331)
Income tax benefit		—		76
Net income (loss)		1,981		(255)
Per share data:
Basic net income (loss) per common share	$	0.35	$	(0.05)
Diluted net income (loss) per common share	$	0.34	$	(0.05)
Weighted average shares outstanding - basic		5,663		5,075
Weighted average shares outstanding - diluted		5,844		5,075