EX-99.1 3 ex_125197.htm EXHIBIT 99.1 ex_125197.htm

Exhibit 99.1

 

SB PARTNERS

(a New York limited partnership)

PRO FORMA BALANCE SHEET

As of June 30, 2018

(Unaudited)

 

   

As

    

Pro Forma

    

Pro Forma

  
   

originally

    

Adjustments

    

Balance

  
   

reported

    

(See Note 2)

    

Sheet

  

Assets:

                        

Investments -

                        

Real estate, at cost

                        

Land

   $ 470,000             $ 470,000  

Buildings, furnishings and improvements

     5,081,365               5,081,365  

Less - accumulated depreciation

     (2,164,376 )             (2,164,376 )
      3,386,989       -       3,386,989  
                         

Investment in Sentinel Omaha, LLC net of reserve for fair value of $10,466,844 as originally reported and $9,986,844 pro forma balance sheet

     41,867,378       (1,920,000 )     39,947,378  
      45,254,367       (1,920,000 )     43,334,367  

Other Assets -

                        

Cash and cash equivalents

     1,466,693       (1,091,860 )     374,833  

Cash in escrow

     508,140       (508,140 )     0  

Other

     1,072               1,072  
                         

Total assets

   $ 47,230,272     $ (3,520,000 )   $ 43,710,272  
                         

Liabilities:

                        

Unsecured loan payable

   $ 5,693,876     $ (5,693,876 )   $ -  

Accounts payable

     486,496               486,496  

Tenant security deposits

     102,813               102,813  

Accrued expenses

     3,164,890               3,164,890  
                         

Total liabilities

     9,448,075       (5,693,876 )     3,754,199  
                         

Partners' Capital:

                        

Limited partner - 7,753 units

     37,795,760       2,173,596       39,969,356  

General partner - 1 unit

     (13,563 )     280       (13,283 )
                         

Total partners' capital

     37,782,197       2,173,876       39,956,073  
                         

Total liabilities and partners' capital

   $ 47,230,272     $ (3,520,000 )   $ 43,710,272  

 

 

See notes to pro forma consolidated financial statements

 

 
2

 

SB PARTNERS

(a New York limited partnership)

PRO FORMA STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2018

(Unaudited)

 

   

As

    

Pro Forma

    

Pro Forma

  
   

originally

    

Adjustments

    

Income

  
   

reported

    

(See Note 2)

    

Statement

  

Revenues:

                        

Rental income

   $ 368,406             $ 368,406  

Other rental income

     174,082               174,082  

Interest on short-term investments and other

     8,362               8,362  
                         

Total revenues

     550,850       -       550,850  
                         

Expenses:

                        

Real estate operating expenses

     139,794               139,794  

Interest on unsecured loan payable

     7,279               7,279  

Depreciation and amortization

     79,530               79,530  

Real estate taxes

     60,934               60,934  

Management fees

     455,067               455,067  

Other

     61,209               61,209  
                         

Total expenses

     803,813       -       803,813  
                         

Loss from operations

     (252,963 )     -       (252,963 )
                         

Equity in net income of investment

     2,227,790               2,227,790  

Reserve for value of investment

     2,059,764       480,000       2,539,764  

Income from forgiveness of debt

     0       1,693,876       1,693,876  
                         

Net income

     4,034,591       2,173,876       6,208,467  
                         

Income allocated to general partner

     520       280       800  

Income allocated to limited partners

   $ 4,034,071     $ 2,173,596     $ 6,207,667  
                         

Earnings per unit of limited partnership interest (basic and diluted):

                  
                         

Net Loss per unit of Limited Partnership Interest (basic and diluted)

   $ 520.39     $ 280.39     $ 800.78  

Weighted Average Number of Units of Limited

                        

Partnership Interest Outstanding

     7,753       7,753       7,753  

 

 

See notes to pro forma consolidated financial statements

 

 
3

 

SB PARTNERS

(a New York limited partnership)

PRO FORMA STATEMENT OF OPERATIONS

For the Year Ended December 31, 2017

(Unaudited)

 

   

As

    

Pro Forma

    

Pro Forma

  
   

originally

    

Adjustments

    

Income

  
   

reported

    

(See Note 2)

    

Statement

  

Revenues:

                        

Rental income

   $ 724,140             $ 724,140  

Other rental income

     349,818               349,818  

Interest on short-term investments and other

     7,177               7,177  
                         

Total revenues

     1,081,135       -       1,081,135  
                         

Expenses:

                        

Real estate operating expenses

     281,796               281,796  

Amortization of deferred financing costs

     21,839               21,839  

Depreciation

     157,520               157,520  

Real estate taxes

     123,525               123,525  

Management fees

     888,325               888,325  

Other

     124,329               124,329  
                         

Total expenses

     1,597,334       -       1,597,334  
                         

Loss from operations

     (516,199 )     -       (516,199 )

Equity in net income of investment

     11,320,037               11,320,037  

Reserve for value of investment

     1,048,630       480,000       1,528,630  

Income from forgiveness of debt

     0       1,693,876       1,693,876  
                         

Net income

     11,852,468       2,173,876       14,026,344  
                         

Income allocated to general partner

     1,529       280       1,809  

Income allocated to limited partners

   $ 11,850,939     $ 2,173,596     $ 14,024,535  
                         

Earnings per unit of limited partnership interest (basic and diluted):

                  

Net income per unit of Limited Partnership Interest

   $ 1,528.76     $ 280.39     $ 1,809.15  
                         

Weighted Average Number of Units of Limited

                        

Partnership Interest Outstanding

     7,753       7,753       7,753  

 

 

See notes to pro forma consolidated financial statements

 

 
4

 

SB PARTNERS

(a New York limited partnership)

 

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

(1)           Accounting and Financial Reporting

 

The consolidated financial statements included herein are unaudited; however, the information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary to a fair presentation of the financial position and results of operations for the year presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Registrant's latest annual report on Form 10-K, filed March 28, 2018 and Form 10-Q filed August 10, 2018.

 

(2)           Pro Forma Adjustments

 

The consolidated balance sheet as of the last filing date, June 30, 2018, has been restated to reflect the cash distribution from Sentinel Omaha, LLC and the satisfaction of the Loan, as if the transaction had occurred on such date. Accordingly, the asset Investment in Sentinel Omaha, LLC has been adjusted to reflect the distribution received of $2,400,000 and a related adjustment to the reserve in investment equal to $480,000 which is 20% of the distribution received. The asset Cash and cash equivalents has been adjusted to reflect the cash distribution received and the cash paid out to satisfy the Loan. The asset Cash in escrow has been removed from the historical balance sheet to reflect the escrow funds used to satisfy the Loan. The liability Unsecured loan payable has been removed to reflect the satisfaction of the Loan.

 

The accompanying pro forma consolidated statement of operations for the six months ended June 30, 2018 has been adjusted to reflect the results of operations of the Registrant as if the distribution from Investment in Sentinel Omaha, LLC had occurred at the beginning of the period and the reserve for investment has been adjusted based on the distribution received. In addition, the Agreement for Discounted Payoff requires a cash payment of $4,000,000 which is less than the amount Registrant is owed on the Loan of $5,693,876. The difference of $1,693,876 is added to the consolidated statement of operations as Income from Forgiveness of Debt.

 

The accompanying pro forma consolidated statement of operations for the year ended December 31, 2017 has been adjusted to reflect the results of operations of the Registrant as if the distribution from Investment in Sentinel Omaha, LLC had occurred at the beginning of the period and the reserve for investment has been adjusted based on the distribution received. In addition, the Agreement for Discounted Payoff requires a cash payment of $4,000,000 which is less than the amount Registrant is owed on the Loan of $5,693,876. The difference of $1,693,876 is added to the consolidated statement of operations as Income from Forgiveness of Debt.