Exhibit 99.1
SB PARTNERS
(a New York limited partnership)
PRO FORMA BALANCE SHEET
As of June 30, 2015
(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 | | | 4,973,553 | | | | - | | | | 4,973,553 | |
Less - accumulated depreciation | | | (1,694,420 | ) | | | - | | | | (1,694,420 | ) |
| | | | 3,749,133 | | | | - | | | | 3,749,133 | |
| | | | | | | | | | | | | |
Real estate held for sale | | | 12,026,246 | | | | (12,026,246 | ) | | | - | |
Investment in Sentinel Omaha, LLC net of reserve for fair value of $9,032,963 | | | - | | | | - | | | | - | |
| | | | 15,775,379 | | | | (12,026,246 | ) | | | 3,749,133 | |
Other Assets - | | | | | | | | | | | | |
Cash and cash equivalents | | | 905,988 | | | | 200,000 | | | | 1,105,988 | |
Cash in escrow | | | 500,218 | | | | - | | | | 500,218 | |
Other | | | 63,928 | | | | - | | | | 63,928 | |
Other asset in discontinued operations | | | 3,400 | | | | (3,400 | ) | | | - | |
| | | | | | | | | | | | | |
Total assets | | $ | 17,248,913 | | | $ | (11,829,646 | ) | | $ | 5,419,267 | |
| | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | |
Unsecured loan payable | | $ | 9,828,751 | | | $ | (3,841,862 | ) | | $ | 5,986,889 | |
Mortgage note in discontinued operations | | | 10,000,000 | | | | (10,000,000 | ) | | | - | |
Accounts payable | | | 282,657 | | | | 23,296 | | | | 305,953 | |
Tenant security deposits | | | 94,419 | | | | - | | | | 94,419 | |
Accrued expenses | | | 3,062,499 | | | | (1,327,361 | ) | | | 1,735,138 | |
Other liabilities in discontinued operations | | | 25,000 | | | | (25,000 | ) | | | - | |
| | | | | | | | | | | | | |
Total liabilities | | | 23,293,326 | | | | (15,170,927 | ) | | | 8,122,399 | |
| | | | | | | | | | | | | |
Partners' Capital: | | | | | | | | | | | | |
Limited partner - 7,753 units | | | (6,025,197 | ) | | | 3,340,850 | | | | (2,684,347 | ) |
General partner - 1 unit | | | (19,216 | ) | | | 431 | | | | (18,785 | ) |
| | | | | | | | | | | | | |
Total partners' capital | | | (6,044,413 | ) | | | 3,341,281 | | | | (2,703,132 | ) |
| | | | | | | | | | | | | |
Total liabilities and partners' capital | | $ | 17,248,913 | | | $ | (11,829,646 | ) | | $ | 5,419,267 | |
See notes to pro forma consolidated financial statements
SB PARTNERS
(a New York limited partnership)
PRO FORMA STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2015
(Unaudited)
| | | As | | | Pro Forma | | | Pro Forma | |
| | | originally | | | Adjustments | | | Income | |
| | | reported | | | (See Note 2) | | | Statement | |
Revenues: | | | | | | | | | | | | |
Rental income | | $ | 320,432 | | | $ | - | | | $ | 320,432 | |
Other rental income | | | 175,872 | | | | - | | | | 175,872 | |
Interest on short-term investments and other | | | 670 | | | | - | | | | 670 | |
| | | | | | | | | | | | | |
Total revenues | | | 496,974 | | | | - | | | | 496,974 | |
| | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | |
Real estate operating expenses | | | 156,895 | | | | - | | | | 156,895 | |
Interest on unsecured loan payable | | | 250,404 | | | | (150,833 | ) | | | 99,571 | |
Depreciation and amortization | | | 74,282 | | | | - | | | | 74,282 | |
Real estate taxes | | | 62,724 | | | | - | | | | 62,724 | |
Management fees | | | 441,761 | | | | - | | | | 441,761 | |
Other | | | 73,923 | | | | - | | | | 73,923 | |
| | | | | | | | | | | | | |
Total expenses | | | 1,059,989 | | | | (150,833 | ) | | | 909,156 | |
| | | | | | | | | | | | | |
Loss from operations | | | (563,015 | ) | | | 150,833 | | | | (412,182 | ) |
| | | | | | | | | | | | | |
Equity in net income of investment | | | 2,283,409 | | | | - | | | | 2,283,409 | |
Reserve for value of investment | | | (2,283,409 | ) | | | - | | | | (2,283,409 | ) |
| | | | | | | | | | | | | |
Loss from continuing operations | | | (563,015 | ) | | | 150,833 | | | | (412,182 | ) |
Income from discontinued operations | | | 293,895 | | | | (293,895 | ) | | | - | |
| | | | | | | | | | | | | |
Net loss | | | (269,120 | ) | | | (143,062 | ) | | | (412,182 | ) |
| | | | | | | | | | | | | |
Loss allocated to general partner | | | (35 | ) | | | (18 | ) | | | (53 | ) |
Loss allocated to limited partners | | $ | (269,085 | ) | | $ | (143,044 | ) | | $ | (412,129 | ) |
| | | | | | | | | | | | | |
Earnings per unit of limited partnership interest (basic and diluted): | | | | | | | | | | | | |
Continuing operations | | $ | (72.62 | ) | | $ | 19.45 | | | $ | (53.16 | ) |
Discontinued operations | | $ | 37.91 | | | $ | (37.91 | ) | | $ | - | |
Net Loss per unit of Limited Partnership Interest | | $ | (34.71 | ) | | $ | (18.45 | ) | | $ | (53.16 | ) |
| | | | | | | | | | | | | |
Weighted Average Number of Units of Limited | | | | | | | | | | | | |
Partnership Interest Outstanding | | | 7,753 | | | | 7,753 | | | | 7,753 | |
See notes to pro forma consolidated financial statements
SB PARTNERS
(a New York limited partnership)
PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 2014
(Unaudited)
| | | As | | | Pro Forma | | | Pro Forma | |
| | | originally | | | Adjustments | | | Income | |
| | | reported | | | (See Note 2) | | | Statement | |
Revenues: | | | | | | | | | | | | |
Rental income | | $ | 629,951 | | | $ | - | | | $ | 629,951 | |
Other rental income | | | 456,391 | | | | - | | | | 456,391 | |
Interest on short-term investments and other | | | 961 | | | | - | | | | 961 | |
| | | | | | | | | | | | | |
Total revenues | | | 1,087,303 | | | | - | | | | 1,087,303 | |
| | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | |
Real estate operating expenses | | | 334,195 | | | | - | | | | 334,195 | |
Interest on mortgage note and unsecured loan payable | | | 508,197 | | | | (304,167 | ) | | | 204,030 | |
Depreciation and amortization | | | 167,120 | | | | - | | | | 167,120 | |
Real estate taxes | | | 130,661 | | | | - | | | | 130,661 | |
Management fees | | | 869,228 | | | | - | | | | 869,228 | |
Other | | | 160,464 | | | | - | | | | 160,464 | |
| | | | | | | | | | | | | |
Total expenses | | | 2,169,865 | | | | (304,167 | ) | | | 1,865,698 | |
| | | | | | | | | | | | | |
Loss from operations | | | (1,082,562 | ) | | | 304,167 | | | | (778,395 | ) |
Equity in net income of investment | | | 5,080,602 | | | | - | | | | 5,080,602 | |
Reserve for value of investment | | | (5,080,602 | ) | | | - | | | | (5,080,602 | ) |
| | | | | | | | | | | | | |
Loss from continuing operations | | | (1,082,562 | ) | | | 304,167 | | | | (778,395 | ) |
Income from discontinued operations | | | 207,283 | | | | (207,283 | ) | | | 0 | |
| | | | | | | | | | | | | |
Net (loss) income | | | (875,279 | ) | | | 96,884 | | | | (778,395 | ) |
| | | | | | | | | | | | | |
(Loss) income allocated to general partner | | | (113 | ) | | | 12 | | | | (101 | ) |
(Loss) income allocated to limited partners | | $ | (875,166 | ) | | $ | 96,872 | | | $ | (778,294 | ) |
| | | | | | | | | | | | | |
Earnings per unit of limited partnership interest (basic and diluted): | | | | | | | | | | | | |
Continuing operations | | $ | (139.63 | ) | | $ | 39.23 | | | $ | (100.40 | ) |
Discontinued operations | | $ | 26.74 | | | $ | (26.74 | ) | | $ | - | |
Net (loss) per unit of Limited Partnership Interest | | $ | (112.90 | ) | | $ | 12.50 | | | $ | (100.40 | ) |
| | | | | | | | | | | | | |
Weighted Average Number of Units of Limited Partnership Interest Outstanding | | | 7,753 | | | | 7,753 | | | | 7,753 | |
See notes to pro forma consolidated financial statements
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 April 24, 2015 and Form 10-Q filed August 14, 2015.
(2) Pro Forma Adjustments
The consolidated balance sheet as of the last filing date, June 30, 2015, has been restated to reflect the sale of Lino Lakes and the satisfaction of the secured mortgage note payable, as if the transaction had occurred on such date. Accordingly, the assets and liabilities of Lino Lakes have been removed from the historical balance sheet to reflect the sale of the property. Assets removed included real estate held for sale of $12,026,246 and other assets in discontinued operations totaling $3,400. Liabilities removed include mortgage note in discontinued operations totaling $10,000,000 and the security deposit held for the sole tenant of $25,000. In addition, that portion of the unsecured loan payable and accrued expenses has been removed reflecting the partial pay down of the unsecured loan payable and the satisfaction of the accrued interest related to the unsecured loan payable. In addition, the balance of cash has been increased by $200,000 to reflect the proceeds from the sale of Lino Lakes retained.
The accompanying pro forma consolidated statement of operations for the six months ended June 30, 2015 has been adjusted to reflect the results of operations of the Registrant as if the sale of Lino Lakes and satisfaction of the secured mortgage note of Lino Lakes as well as the partial pay down of the unsecured loan payable had been consummated at the beginning of the period.
The income from discontinuing operations of Lino Lakes has been removed from the consolidated statement of operations for the six months ended June 30, 2015. In accordance with the rules and regulations regarding the filing of Form 8-K, no gain from the sale of the investment in real estate property is reflected in the pro forma statement of operations.
The accompanying pro forma consolidated statement of operations for the year ended December 31, 2014 has been adjusted to reflect the results of operations of the Registrant as if the sale of Lino Lakes and satisfaction of the secured mortgage note of Lino Lakes as well as the partial pay down of the unsecured loan payable had been consummated at the beginning of the period.
The income from discontinuing operations of Lino Lakes has been removed from the consolidated statement of operations for the year ended December 31, 2014. In accordance with the rules and regulations regarding the filing of Form 8-K, no gain from the sale of the investment in real estate property is reflected in the pro forma statement of operations.
