SB Partners 8-K Entry into a Material Definitive Agreement

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.