| Item 2.01 | Completion of Acquisition or Disposition of Assets |
On July 2, 2020, BSV LSP East Investors LLC (“LSP East”) merged with and into a wholly owned subsidiary (“LSP East Merger Sub”) of Broad Street Realty, Inc. (the “Company”) with LSP East surviving as a subsidiary of the Company (the “LSP East Merger”). The LSP East Merger was completed pursuant to the previously announced merger agreement, dated as of May 28, 2019 (as amended, the “LSP East Merger Agreement”), by and among the Company, Broad Street Operating Partnership, LP (the “Operating Partnership”), LSP East Merger Sub and LSP East. Pursuant to the LSP East Merger Agreement, the Company issued an aggregate of 884,144 shares of its common stock and paid an aggregate of $175,000 in cash to the prior investors in LSP East as consideration in the LSP East Merger.
As a result of the LSP East Merger, the Company acquired Lamar Station Plaza East, a retail shopping center located in Lakewood, Colorado with approximately 42,886 square feet of gross leasable area. Following the LSP East Merger, the Company contributed its interests in LSP East to the Operating Partnership in exchange for units of limited partnership interest in the Operating Partnership.
As consideration in the LSP East Merger as a result of their interests in LSP East, (i) Michael Z. Jacoby, the Company’s chief executive officer and chairman of its board of directors, received 86,451 shares of the Company’s common stock, (ii) Thomas M. Yockey, a director of the Company, received 86,451 shares of the Company’s common stock, (iii) Daniel J.W. Neal, a director of the Company, received, directly or indirectly, 59,885 shares of the Company’s common stock and (iv) Alexander Topchy, the Company’s chief financial officer, received 9,822 shares of the Company’s common stock. The consideration in the LSP East Merger was negotiated between LSP East and the prior management team and board of directors of the Company prior to entering into the LSP East Merger Agreement on May 28, 2019.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The information under Item 1.01 above regarding the issuance of shares of the Company’s common stock in the LSP East Merger is incorporated into this Item 3.02 by reference. The shares of common stock were issued pursuant to exemptions from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506 of Regulation D thereunder. Issuances of common stock were only made to prior investors in LSP East who qualify as “accredited investors” as defined under the Securities Act.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the U.S. federal securities laws. These statements are based on current expectations of the Company’s management with respect to the transactions and other matters described in this Current Report on Form 8-K. While the Company’s management believes the assumptions underlying its forward-looking statements and information are reasonable, such information is necessarily subject to uncertainties and may involve certain risks, many of which are difficult to predict and are beyond the control of the Company’s management. These risks include, but are not limited to: uncertainties related to the COVID-19 pandemic, including the unknown duration and economic, operational and financial impacts of the COVID-19 pandemic and the actions taken or contemplated by U.S. and local governmental authorities or others in response to the pandemic on the Company’s business, employees and tenants, including, among others, (i) changes in tenant demand for the Company’s properties, (ii) financial challenges confronting tenants, including as a result of decreased customers’ willingness to frequent, and mandated stay in place orders that have prevented customers from frequenting, some of the Company’s tenants’ businesses and the impact of these issues on the Company’s ability to collect rent from its tenants; (iii) operational changes implemented by the Company, including remote working arrangements, which may put increased strain on the Company’s IT systems and create increased vulnerability to cybersecurity incidents, (iv) adverse impacts on the Company’s liquidity and access to financing on attractive terms, or at all, and (v) prolonged measures to contain the spread of COVID-19 or the premature easing of government-imposed restrictions implemented to contain the spread of COVID-19; the inability to complete the six pending mergers with Broad Street entities due to the failure to satisfy other conditions to completion of the remaining mergers, including the financing condition and obtaining consent from the requisite
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