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| ITEM 2.01 | COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS |
On January 24, 2025, MDR Bowling Green, LLC (“MDR Bowling Green”), a wholly owned subsidiary of Medalist Diversified Holdings, LP, a Maryland limited partnership and the operating partnership (the “Operating Partnership”) of Medalist Diversified REIT, Inc. (the “Company”), closed on the acquisition of that certain tract of real property containing a building with a physical address of 2545 Scottsville Road, Bowling Green, KY 42104 (the “Scottsville Road Property”), pursuant to that certain Contribution Agreement, dated as of December 14, 2024, by and between the Operating Partnership and CWS BET Seattle L.P., a California limited partnership (“Seller”), as assigned by that certain Assignment and Assumption of Contribution Agreement, dated as of January 24, 2025, by and between the Operating Partnership and MDR Bowling Green, and as amended by that certain First Amendment to Contribution Agreement (the “First Amendment to Contribution Agreement”), dated as of January 24, 2025, by and between Seller and MDR Bowling Green (as amended by the First Amendment to Contribution Agreement, the “Contribution Agreement”), for a purchase price of $2,620,000, exclusive of closing costs, paid in a combination of (i) 209,600 operating partnership units in the Operating Partnership (the “OP Units”), valued at approximately $12.50 per OP Unit; and (ii) $[15,000] in cash on hand to cover Seller’s transaction costs (such as prorated rent, commissions, title/escrow fees, transfer taxes, legals fees, etc.). The Purchase Price was determined based on the appraised value of the Scottsville Road Property, as determined by an independent appraiser hired by the Company, and the number of OP Units issued as part of the purchase price was determined by dividing $2,620,000 by $12.50, which represents the closing price of the Company’s common stock on the Nasdaq Capital Market on December 13, 2024. Also on January 24, 2025, pursuant to that certain Assignment of Right to Issuance of Operating Partnership Units, dated as of January 24, 2025, by and between Seller and BET Trust Dated March 11, 1999 (“BET Trust”), Seller assigned all of its rights, title and interest to the OP Units to BET Trust.
Pursuant to the Agreement of Limited Partnership of the Operating Partnership, as amended, the OP Units are redeemable for cash or, at the Operating Partnership’s option, shares of the Company’s common stock on a one-for-one basis; however, pursuant to the Contribution Agreement, BET Trust may not redeem the OP Units for shares of the Company’s common stock unless such redemption is approved by a majority of the votes cast on the matter at a meeting of the stockholders of the Company or by written consent of the stockholders of the Company in lieu of a special meeting to the extent permitted by applicable state and federal law. The general partner of Seller is Fort Ashford Funds, LLC, a California limited liability company whose manager is Frank Kavanaugh, the Company’s Chief Executive Officer and a member of the Company’s Board of Directors. Mr. Kavanaugh is also a trustee of BET Trust.
The foregoing description of the First Amendment to Contribution Agreement is qualified in its entirety by reference to the First Amendment to Contribution Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.01.
Item 3.02 | Unregistered Sales of Equity Securities. |
The information disclosed under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
The OP Units to be issued pursuant to the Contribution Agreement are being issued in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act.
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| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(a) Financial statements of businesses or funds acquired.
To the extent required by this item, historical financial statements for the Scottsville Road Property will be filed in an amendment to this Current Report on Form 8-K on or before April 5, 2025, which date is within the period allowed to file such an amendment.
