Exhibit 99.2
PACIFIC OAK SOR (BVI) HOLDNGS, LTD
(Formerly known as KBS SOR (BVI) HOLDINGS, LTD.)
Presentation of separate financial data annexed
to the consolidated financial statements related to the Company
AS OF SEPTEMBER 30, 2019
(UNAUDITED)
U.S. DOLLARS IN THOUSANDS
INDEX
- - - - - - - - - - -
Special Report in accordance with Regulation 38d
Financial Information and Financial Data from the
Consolidated Financial Statements Attributable to the Company
Below is separate financial information and financial data attributable to the Company from the Company's consolidated financial statements as of September 30, 2019, published as part of the periodic reports ("consolidated financial statements"), presented in accordance with Regulation 38d to the Israeli Securities Regulations (Periodic and Immediate Reports), 1970.
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
(Formerly known as KBS SOR (BVI) HOLDINGS, LTD.)
STATEMENTS OF FINANCIAL POSITION
USD in thousands
|
| | | | | | | | | | | | |
| | | September 30, | | December 31, |
| | | 2019 | | 2018 | | 2018 |
| | | Unaudited | | Audited |
| ASSETS | | | | | | |
| Non-current assets | | | | | | |
| Investments in investees | | $ | 881,273 |
| | $ | 930,562 |
| | $ | 852,101 |
|
| Restricted cash | | 6,265 |
| | 5,987 |
| | 5,823 |
|
| | | 887,538 |
| | 936,549 |
| | 857,924 |
|
| | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | 325 |
| | 59,557 |
| | 57,843 |
|
| Derivative asset | | 250 |
| | — |
| | — |
|
| Due from Owner | | — |
| | 171 |
| | 4,500 |
|
| | | 575 |
| | 59,728 |
| | 62,343 |
|
| Total assets | | $ | 888,113 |
| | $ | 996,277 |
| | $ | 920,267 |
|
| | | | | | | |
| EQUITY | | $ | 667,074 |
| | $ | 733,256 |
| | $ | 657,049 |
|
| | | | | | | |
| Non-current liabilities | | | | | | |
| Debentures, net | | 164,217 |
| | 208,462 |
| | 203,099 |
|
| | | | | | | |
| Current liabilities | | | | | | |
| Accounts payable and accrued liabilities | | 1,002 |
| | 1,188 |
| | 3,823 |
|
| Debentures, net | | 55,820 |
| | 53,371 |
| | 51,903 |
|
| Derivative liability | | — |
| | — |
| | 4,393 |
|
| | | 56,822 |
| | 54,559 |
| | 60,119 |
|
| Total liabilities | | 221,039 |
| | 263,021 |
| | 263,218 |
|
| | | | | | | |
| Total equity and liabilities | | $ | 888,113 |
| | $ | 996,277 |
| | $ | 920,267 |
|
The accompanying notes and additional information are an integral part of the condensed financial data.
|
| | | | | | |
| November 8, 2019 | | /s/ Jeffrey Waldvogel | | /s/ Peter McMillan III | | /s/ Keith David Hall |
| Date of approval of | | Waldvogel, Jeffrey | | McMillan III, Peter | | Hall, Keith David |
| financial statements | | Chief Financial Officer | | Chairman of Board | | Chief Executive Officer |
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
(Formerly known as KBS SOR (BVI) HOLDINGS, LTD.)
STATEMENTS OF OPERATIONS
USD in thousands
|
| | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | Three months ended September 30, | | Year ended December 31, |
| | 2019 | | 2018 | | 2019 | | 2018 | | 2018 |
| | Unaudited | | Audited |
| Share of profit from investees, net | $ | 36,079 |
| | $ | 72,014 |
| | $ | 13,700 |
| | $ | 62,821 |
| | $ | 54,435 |
|
| Asset management fees to affiliate | (5,954 | ) | | (6,342 | ) | | (2,093 | ) | | (2,299 | ) | | (8,525 | ) |
| General and administrative expenses | (945 | ) | | (884 | ) | | (356 | ) | | (286 | ) | | (1,276 | ) |
| Operating income | 29,180 |
| | 64,788 |
| | 11,251 |
| | 60,236 |
| | 44,634 |
|
| | | | | | | | | | |
| Finance expense | (8,553 | ) | | (10,167 | ) | | (2,753 | ) | | (3,339 | ) | | (13,455 | ) |
| Finance income | 32 |
| | — |
| | 1 |
| | — |
| | — |
|
Foreign currency transaction adjustments, net | (10,634 | ) | | 9,106 |
| | (5,344 | ) | | (8 | ) | | 10,141 |
|
| Net income | $ | 10,025 |
| | $ | 63,727 |
| | $ | 3,155 |
| | $ | 56,889 |
| | $ | 41,320 |
|
The accompanying notes and additional information are an integral part of the condensed financial data.
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
(Formerly known as KBS SOR (BVI) HOLDINGS, LTD.)
STATEMENTS OF COMPREHENSIVE INCOME
USD in thousands
|
| | | | | | | | | | | | | | | | | | | |
| | Nine months ended
September 30, | | Three months ended
September 30, | | Year ended December 31, |
| | 2019 | | 2018 | | 2019 | | 2018 | | 2018 |
| | Unaudited | | Audited |
| Net income | $ | 10,025 |
| | $ | 63,727 |
| | $ | 3,155 |
| | $ | 56,889 |
| | $ | 41,320 |
|
| | | | | | | | | | |
| Total comprehensive income | $ | 10,025 |
| | $ | 63,727 |
| | $ | 3,155 |
| | $ | 56,889 |
| | $ | 41,320 |
|
The accompanying notes and additional information are an integral part of the condensed financial data.
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
(Formerly known as KBS SOR (BVI) HOLDINGS, LTD.)
STATEMENTS OF CASH FLOW
USD in thousands
|
| | | | | | | | | | | | | | | | | | | |
| | Nine months ended
September 30, | | Three months ended
September 30, | | Year ended December 31, |
| | 2019 | | 2018 | | 2019 | | 2018 | | 2018 |
| | Unaudited | | Audited |
| Cash flows from operating activities | | | | | | | | | |
| Net income for the period | $ | 10,025 |
| | $ | 63,727 |
| | $ | 3,155 |
| | $ | 56,889 |
| | $ | 41,320 |
|
| | | | | | | | | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| Share of profit from investees | (36,079 | ) | | (72,014 | ) | | (13,700 | ) | | (62,821 | ) | | (54,435 | ) |
| Finance expense | 8,553 |
| | 10,167 |
| | 2,753 |
| | 3,339 |
| | 13,455 |
|
| Distribution from investees, net | 28,249 |
| | 34,534 |
| | 10,175 |
| | 15,971 |
| | 41,847 |
|
Foreign currency transaction adjustments, net | 10,634 |
| | (9,106 | ) | | 5,344 |
| | 8 |
| | (10,141 | ) |
Changes in operating assets and liabilities: | | | | | | | | | |
| Accounts payable and accrued liabilities | 63 |
| | 35 |
| | (28 | ) | | 73 |
| | (62 | ) |
| | | | | | | | | | |
Net cash provided by operating activities | 21,445 |
| | 27,343 |
| | 7,699 |
| | 13,459 |
| | 31,984 |
|
| | | | | | | | | | |
| Cash flows used in investing activities | | | | | | | | | |
| Investments in investees | (36,603 | ) | | (178,206 | ) | | (5,050 | ) | | — |
| | (178,281 | ) |
| Distribution from investees, net | 15,261 |
| | 337,803 |
| | 1,190 |
| | 53,189 |
| | 391,447 |
|
| Due from Owner | 4,500 |
| | — |
| | — |
| | — |
| | (4,500 | ) |
| Net cash (used in) provided by investing activities | (16,842 | ) | | 159,597 |
| | (3,860 | ) | | 53,189 |
| | 208,666 |
|
| | | | | | | | | | |
| Cash flows from financing activities | | | | | | | | | |
| Principal payments on debentures | (53,645 | ) | | — |
| | — |
| | — |
| | — |
|
| Interest paid | (10,403 | ) | | (11,604 | ) | | (4,700 | ) | | (5,692 | ) | | (11,604 | ) |
Release of restricted cash for debt service obligations | 276 |
| | — |
| | — |
| | — |
| | — |
|
| Dividend to Owner | — |
| | (118,000 | ) | | — |
| | (3,500 | ) | | (171,800 | ) |
| Net cash used in financing activities | (63,772 | ) | | (129,604 | ) | | (4,700 | ) | | (9,192 | ) | | (183,404 | ) |
| | | | | | | | | | |
Effect of exchange rate changes on cash and cash equivalents | 1,651 |
| | 1,395 |
| | — |
| | 1,395 |
| | (229 | ) |
| | | | | | | | | | |
| (Decrease) increase in cash | (57,518 | ) | | 58,731 |
| | (861 | ) | | 58,851 |
| | 57,017 |
|
| Cash, beginning of the period | 57,843 |
| | 826 |
| | 1,186 |
| | 706 |
| | 826 |
|
| Cash, end of the period | $ | 325 |
| | $ | 59,557 |
| | $ | 325 |
| | $ | 59,557 |
| | $ | 57,843 |
|
The accompanying notes and additional information are an integral part of the condensed financial data.
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
(Formerly known as KBS SOR (BVI) HOLDINGS, LTD.)
ADDITIONAL INFORMAITON
USD in thousands
| |
| NOTE 1: | BASIS OF PREPARATION |
Separate financial information is prepared in a condensed format as of September 30, 2019 and for the nine and three months periods then ended, in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970.
Please refer to the separate financial information in this regard to the financial information on the annual financial statements of the Company as of December 31, 2018 and for the year then ended, and the information accompanying notes (hereinafter - the annual consolidated financial statements).
On November 1, 2019, the Company completed the procedure of renaming and amending its incorporation documents in the British Virgin Islands (the country of the incorporation thereof) such that the name of the Company was changed from KBS SOR (BVI) Holdings, LTD to Pacific Oak SOR (BVI) Holdings, Ltd as of November 1, 2019.
On November 1, 2019, the Controlling Shareholder of the Company, Pacific Oak Strategic Opportunity REIT, Inc. (formerly known as KBS Strategic Opportunity REIT, Inc.), notified the Company that it's terminating the agreement with the advisory company, KBS Capital Advisors LLC, and established a new management agreement between Pacific Oak Strategic Opportunity REIT, Inc. and Pacific Oak Capital Advisors, LLC on the same date. Pacific Oak Capital Advisors, LLC belongs to a group of companies, which were established and are held and managed by Messrs. Keith Hall and Peter McMillan III, the Company's CEO and Director and the Company's Chairman of the Board of Directors and President, respectively.
As of September 30, 2019, the Company had a working capital shortfall amounting to $56.2 million, primarily attributed to the debentures principal payment maturing in the year following the date of the statement of financial position. The Company intends to make the debentures principal payment from distribution from investees. Accordingly, the Company does not view the working capital shortfall as a liquidity problem.
| |
| NOTE 2: | SIGNIFICANT EVENTS DURING THE REPORTING PERIOD |
Due from Owner:
As of December 31, 2018, the Company had a $4.5 million due from Owner. In February 2019, the Owner repaid the $4.5 million plus interest of approximately $30 thousand based on a fixed annual interest rate of 4.25%
Debentures:
On March 1, 2019, the Company paid the first principal installment payment of 194.0 million Israeli new Shekels (approximately $53.6 million as of March 1, 2019).
PACIFIC OAK SOR (BVI) HOLDINGS, LTD.
(Formerly known as KBS SOR (BVI) HOLDINGS, LTD.)
ADDITIONAL INFORMAITON (CONT.)
USD in thousands
Resignation of Chief Financial Officer:
On October 31, 2019, Jeffrey K. Waldvogel notified the Company of his resignation as Chief Financial Officer and Company Secretary of the Company effective immediately following the filing of the financial statements as of September 30, 2019.
Appointment of New Chief Financial Officer:
On October 31, 2019, the Company appointed Michael A. Bender to serve as Chief Financial Officer and Company Secretary effective immediately following the filing of the financial statements as of September 30, 2019.
