American Strategic Investment (US:NYC)2022-05-13 11:59PART I - FINANCIAL INFORMATION Financial Statements The unaudited consolidated financial statements for Q1 2022 report a net loss of $11.1 million, an improvement from the prior year, with total assets at $810.2 million Consolidated Balance Sheet Highlights (Unaudited) | | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | Total real estate investments, net | $689,004 | $694,774 | | Cash and cash equivalents | $10,342 | $11,674 | | Total assets | $810,182 | $823,051 | | Mortgage notes payable, net | $393,002 | $398,117 | | Total liabilities | $466,583 | $471,915 | | Total equity | $343,599 | $351,136 | Consolidated Statements of Operations Highlights (Unaudited) | | Three Months Ended March 31, 2022 (in thousands, except per share data) | Three Months Ended March 31, 2021 (in thousands, except per share data) | | :--- | :--- | :--- | | Revenue from tenants | $15,646 | $15,186 | | Operating loss | $(6,353) | $(8,830) | | Net loss attributable to common stockholders | $(11,105) | $(13,535) | | Net loss per share — Basic and Diluted | $(0.84) | $(1.06) | Consolidated Statements of Cash Flows Highlights (Unaudited) | | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,178 | $2,145 | | Net cash used in investing activities | $(406) | $(43) | | Net cash used in financing activities | $(6,869) | $(1,503) | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the ongoing COVID-19 impacts, reporting a 98% cash rent collection rate for Q1 2022 and a $0.5 million increase in tenant revenue, while addressing liquidity and significant debt covenant breaches on four properties - The company collected 98% of original cash rent due across its portfolio for Q1 2022, consistent with Q4 2021, with no new rent deferral or abatement agreements entered into during the quarter198 - Due to the financial impact of COVID-19, the company experienced cash trap events on four mortgages (9 Times Square, 1140 Avenue of the Americas, Laurel/Riverside, and 8713 Fifth Avenue) due to breaches of debt covenants, restricting cash from these properties for other corporate purposes as of March 31, 2022195228229 - On March 2, 2022, the company entered into a waiver and amendment for the 9 Times Square mortgage, paying down $5.5 million in principal to waive a potential default, though the property remains in a cash trap with a potential default if covenants are not met by Q3 2022236238 Non-GAAP Financial Measures (Q1 2022 vs Q1 2021) | (In thousands) | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net loss attributable to common stockholders | $(11,105) | $(13,535) | | FFO (deficit) attributable to common stockholders | $(4,124) | $(5,009) | | Core FFO (deficit) attributable to common stockholders | $(2,004) | $(2,894) | | Cash NOI | $5,741 | $5,639 | - The company declared and paid a dividend of $0.10 per share, totaling $1.3 million in Q1 2022, which management states was 100% covered by cash flows from operations266269 Quantitative and Qualitative Disclosures About Market Risk The company reports no material change in its market risk exposure during Q1 2022, referring to the detailed discussion in its 2021 Annual Report on Form 10-K - There has been no material change in the company's market risk exposure during the three months ended March 31, 2022275 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of Q1 2022, with no material changes to internal control over financial reporting during the period - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective as of March 31, 2022276 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls277 PART II - OTHER INFORMATION Legal Proceedings The company reports no material pending legal proceedings as of the end of the quarter - The company is not currently a party to any material pending legal proceedings279 Risk Factors This section highlights specific risks including vulnerability to terrorist attacks due to the New York City portfolio and economic risks from the war in Ukraine, such as exacerbated inflation and potential recession - All company properties are located in New York City, making them susceptible to terrorist attacks or other acts of violence which could negatively impact business and profitability280 - The military conflict in Ukraine is identified as a risk that has exacerbated inflation, supply chain disruptions, and volatility in commodity, credit, and capital markets281 - Sanctions against Russia could lead to significant increases in energy prices, potentially triggering a recession and making it more difficult for the company to access debt or equity financing282283 Unregistered Sales of Equity Securities and Use of Proceeds The company discloses a side letter agreement with its Advisor for reinvestment of up to $3.0 million in management fees into Class A common stock, with $1.0 million reinvested in Q1 2022 - The company entered into a side letter agreement with its Advisor, requiring the Advisor to invest up to $3.0 million of its management fees into the company's Class A common stock between February 4, 2022, and August 4, 2022286 - During Q1 2022, the Advisor reinvested $1.0 million in fees, receiving 88,880 shares of Class A Common Stock in an unregistered sale287 Defaults Upon Senior Securities The company reports no defaults upon its senior securities during the period - None290 Mine Safety Disclosures This item is not applicable to the company - Not applicable291 Other Information The company reports no other information for this item - None292 Exhibits This section lists exhibits included with or incorporated by reference into the Quarterly Report on Form 10-Q, in accordance with Item 601 of Regulation S-K