What changed in this filing

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Item 1. Financial Statements

2021-05-07 compared with 2020-11-06 · 150 added, 240 removed, 321 unchanged (55% of the section changed)

4 unchanged sentences

(Amounts in thousands, except per share data)

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

(unaudited) (audited)

1 unchanged sentence

Investments in unconsolidated joint ventures 164,248 169,474

Real estate loan — 4,150

Cash and cash equivalents 19,406 19,885

1 unchanged sentence

Other assets 6,910 7,390

Real estate property held for sale 16,800 —

Total Assets $ 357,953 $ 365,741

24 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Rental revenue $ 7,020 $ 6,261 $ 20,422 $ 20,244

Rental and other revenue from real estate properties $ 7,095 $ 6,745

Other income 4 179

Total revenues 7,099 6,924

Real estate operating expenses - including $8 and $13 to related parties for the three months ended and $24 and $93 for the nine months ended 3,289 2,741 9,351 9,242

Real estate operating expenses - including $7 and $8 to related parties 3,117 3,058

Interest expense 1,660 1,860

General and administrative - including $167 and $105 to related parties for the three months ended and $631 and $403 for the nine months ended 2,730 2,430 9,054 7,455

Impairment charge 3,642 — 3,642 —

General and administrative - including $172 and $226 to related parties 3,114 3,367

Depreciation 1,537 1,561

2 unchanged sentences

Equity in loss of unconsolidated joint ventures ( 1,345 ) ( 1,815 )

Gain on sale of real estate — 9,938 — 9,938

Loss on extinguishment of debt — ( 1,387 ) — ( 1,387 )

(Loss) income from continuing operations ( 7,385 ) 4,169 ( 16,272 ) ( 4,196 )

Loss from continuing operations ( 3,674 ) ( 4,737 )

Income tax provision 57 62

Net (loss) income from continuing operations, net of taxes ( 7,450 ) 4,071 ( 16,464 ) ( 4,415 )

Net loss from continuing operations, net of taxes ( 3,731 ) ( 4,799 )

Net income attributable to non-controlling interests ( 34 ) ( 32 )

Net (loss) income attributable to common stockholders $ ( 7,484 ) $ 3,272 $ ( 16,561 ) $ ( 5,292 )

Net loss attributable to common stockholders $ ( 3,765 ) $ ( 4,831 )

Weighted average number of shares of common stock outstanding:

7 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Dollars in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Net (loss) income $ ( 7,450 ) $ 4,071 $ ( 16,464 ) $ ( 4,415 )

Other comprehensive income (loss):

Unrealized gain (loss) on derivative instruments 5 ( 3 ) ( 17 ) ( 27 )

Net (loss) $ ( 3,731 ) $ ( 4,799 )

Other comprehensive loss:

Unrealized income (loss) on derivative instruments 5 ( 23 )

Other comprehensive income (loss) 5 ( 23 )

Comprehensive (loss) income ( 7,445 ) 4,068 ( 16,481 ) ( 4,442 )

Comprehensive income attributable to non-controlling interests ( 36 ) ( 799 ) ( 95 ) ( 873 )

Comprehensive (loss) income attributable to common stockholders $ ( 7,481 ) $ 3,269 $ ( 16,576 ) $ ( 5,315 )

Comprehensive loss ( 3,726 ) ( 4,822 )

Comprehensive (income)loss attributable to non-controlling interests ( 35 ) ( 29 )

Comprehensive loss attributable to common stockholders $ ( 3,761 ) $ ( 4,851 )

See accompanying notes to consolidated financial statements.

8 unchanged sentences

Distributions - common stock - $0.22 per share — — — ( 4,011 ) — ( 4,011 )

Restricted stock vesting 1 ( 1 ) — — — —

Compensation expense - restricted stock and restricted stock units — 438 — — — 438

Distributions to non-controlling interests — — — — ( 89 ) ( 89 )

Shares issued through equity offering program, net 7 12,070 12,077

Shares repurchased — ( 616 ) ( 616 )

Net (loss) income — — — ( 4,831 ) 32 ( 4,799 )

Other comprehensive loss — — ( 20 ) — ( 3 ) ( 23 )

Comprehensive loss ( 4,822 )

Balances, March 31, 2020 $ 164 $ 244,222 $ ( 30 ) $ ( 41,477 ) $ ( 153 ) $ 202,726

Distributions - common stock - $0.22 per share — — — ( 3,822 ) — ( 3,822 )

Compensation expense - restricted stock and restricted stock units — 461 — — — 461

Net (loss) income — — — ( 4,246 ) 31 ( 4,215 )

Other comprehensive income (loss) — — 2 — ( 1 ) 1

Comprehensive loss ( 4,214 )

Balances, June 30, 2020 $ 164 $ 244,683 $ ( 28 ) $ ( 49,545 ) $ ( 123 ) $ 195,151

Distributions - common stock - $0.22 per share — — — ( 3,824 ) — ( 3,824 )

Restricted stock and restricted stock units vesting 4 ( 4 ) — — — —

Compensation expense - restricted stock and restricted stock units — 538 — — — 538

2 unchanged sentences

Comprehensive loss ( 3,726 )

Balances, September 30, 2020 $ 164 $ 245,144 $ ( 24 ) $ ( 60,853 ) $ ( 88 ) $ 184,343

See accompanying notes to consolidated financial statements.

BRT APARTMENTS CORP.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands, except per share data)

Balances, March 31, 2021 $ 168 $ 246,139 $ ( 15 ) $ ( 75,754 ) $ ( 49 ) $ 170,489

Common Stock Additional

6 unchanged sentences

Distributions to non-controlling interests — — — — ( 89 ) ( 89 )

Net (loss) income — — — ( 4,247 ) 34 ( 4,213 )

Other comprehensive loss — — ( 7 ) — ( 2 ) ( 9 )

Comprehensive loss ( 4,222 )

Balances, March 31, 2019 $ 152 $ 223,736 $ 2 $ ( 27,512 ) $ 317 $ 196,695

Distributions - common stock - $0.20 per share — — — ( 3,220 ) — ( 3,220 )

Compensation expense - restricted stock and restricted stock units — 373 — — — 373

Distributions to non-controlling interests — — — — ( 39 ) ( 39 )

Shares issued through equity offering program, net 7 12,070 — — — 12,077

Shares repurchased — ( 616 ) ( 616 )

2 unchanged sentences

Comprehensive loss ( 4,822 )

Balances, June 30, 2019 $ 152 $ 224,063 $ ( 11 ) $ ( 35,049 ) $ 320 $ 189,475

Distributions - common stock - $0.20 per share — — — ( 3,554 ) — ( 3,554 )

Compensation expense - restricted stock and restricted stock units — 372 — — — 372

Distributions to non-controlling interests — — — — ( 1,134 ) ( 1,134 )

Shares issued through equity offering program, net — 774 — — — 774

Net income — — — 3,272 799 4,071

Other comprehensive loss — — ( 3 ) — — ( 3 )

Comprehensive income 4,068

Balances, September 30, 2019 $ 152 $ 225,209 $ ( 14 ) $ ( 35,331 ) $ ( 15 ) $ 190,001

Balances, March 31, 2020 $ 164 $ 244,222 $ ( 30 ) $ ( 41,477 ) $ ( 153 ) $ 202,726

See accompanying notes to consolidated financial statements

3 unchanged sentences

(Dollars in Thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net loss $ ( 3,731 ) $ ( 4,799 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation 1,537 1,561

2 unchanged sentences

Equity in loss of unconsolidated joint ventures 1,345 1,815

Impairment charge 3,642 —

Gain on sale of real estate — ( 9,938 )

Loss on extinguishment of debt — 1,387

Increases and decreases from changes in other assets and liabilities:

1 unchanged sentence

Increase in accounts payable and accrued liabilities ( 87 ) 1,803

Net cash (used in) provided by operating activities ( 1,725 ) 3,064

Net cash provided by operating activities 152 557

Cash flows from investing activities:

2 unchanged sentences

Distributions from unconsolidated joint ventures 3,881 3,010

Proceeds from the sale of real estate owned — 32,801

Contributions to unconsolidated joint ventures — ( 13,700 )

Net cash (used in) provided by investing activities ( 3,688 ) 15,047

Net cash provided by (used in) investing activities 3,658 ( 10,863 )

Cash flows from financing activities:

Mortgage payoffs — ( 20,635 )

Mortgage principal payments ( 801 ) ( 756 )

Proceeds from credit facility 5,000 13,500

Repayment of credit facility ( 5,000 ) ( 9,900 )

Increase in deferred financing costs — ( 83 )

Dividends paid ( 3,777 ) ( 3,778 )

2 unchanged sentences

Repurchase of shares of common stock — ( 616 )

Net cash used in financing activities ( 2,226 ) ( 29,670 )

Net cash (used in) provided by financing activities ( 4,578 ) 6,838

Net decrease in cash, cash equivalents and restricted cash ( 768 ) ( 3,468 )

4 unchanged sentences

Cash paid for income taxes $ 6 $ 10

Reclassification of property to held for sale $ 16,800 $ —

See accompanying notes to consolidated financial statements

4 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

Nine Months Ended September 30,

Cash and cash equivalents 19,406 18,707

4 unchanged sentences

Notes to Consolidated Financial Statements

September 30, 2020

March 31, 2021

Note 1 – Organization and Background

BRT Apartments Corp.

(the "Company"), a Maryland corporation, owns and operates multi-family properties.

(the "Company" or "BRT"), a Maryland corporation, owns and operates multi-family properties.

The Company conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

Generally, the multi-family properties are acquired with joint venture partners in transactions in which the Company contributes a significant portion of the equity.

At September 30, 2020, the Company:

(a) wholly owns eight multi-family properties located in six states with an aggregate of 1,880 units, and a carrying value of $ 154,987,000 ;

and (b) has interests, through unconsolidated entities, in 31 multi-family properties located in nine states with an aggregate of 9,162 units (including 741 units at two properties currently in lease-up) and the carrying value of this net equity investment is $ 175,409,000 .

At March 31, 2021, the Company:

(a) wholly owns eight multi-family properties located in six states with an aggregate of 1,880 units, and a carrying value of $ 152,317,000 (including $ 16,800,000 classified as held for sale);

and (b) has interests, through unconsolidated entities, in 31 multi-family properties located in nine states with an aggregate of 9,162 units and the carrying value of this net equity investment is $ 164,248,000 .

BRT's equity interests in these unconsolidated entities range from 32 % to 90 %.

1 unchanged sentence

The Company also owns and operates various other real estate assets.

At September 30, 2020, the carrying value of the other real estate assets was $ 6,682,000 .

At March 31, 2021, the carrying value of the other real estate assets was $ 6,617,000 .

Note 2 – Basis of Preparation

The accompanying interim unaudited consolidated financial statements as of September 30, 2020, and for the three and nine months ended September 30, 2020 and 2019, reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for such interim periods.

The results of operations for the three and nine months ended September 30, 2020 and 2019, are not necessarily indicative of the results for the full year.

The accompanying interim unaudited consolidated financial statements as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for such interim periods.

The results of operations for the three months ended March 31, 2021 and 2020, are not necessarily indicative of the results for the full year.

The consolidated audited balance sheet as of December 31, 2020, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States ("GAAP").

Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission ("SEC") on May 15, 2020, for complete financial statements.

Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020, as amended, filed with the Securities and Exchange Commission ("SEC").

The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries.

The joint venture that owns a property in Yonkers New York, was determined not to be a variable interest entity ("VIE") but is consolidated because the Company has controlling rights in such entity.

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting.

For each venture, the Company evaluated the rights provided to each party in the venture to assess the consolidation of the venture.

All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures.

As a result, none of these joint ventures are VIEs.

As a result, none of these joint ventures are variable interest entities ("VIEs").

Additionally, the Company does not exercise substantial operating control over these entities, and therefore the entities are not consolidated.

1 unchanged sentence

The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the percentage equity interest each partner has in the applicable venture.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements.

The joint venture that owns a property in Yonkers, New York, was determined not to be a VIE but is consolidated because the Company has controlling rights in such entity.

The preparation of the financial statements in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements.

Actual results could differ from those estimates.

3 unchanged sentences

Equity Distribution Agreements

In November 2019, the Company entered into equity distribution agreements with three sales agents to sell up to an aggregate of $ 30,000,000 of its common stock from time-to-time in an at-the-market offering.

During the nine months ended September 30, 2020, the Company sold 694,298 shares for an aggregate sales price of $ 12,293,000 (all of which shares were sold during the three months ended March 31, 2020), before commissions and fees of $ 185,000 and offering related expenses of $ 31,000 .

From the commencement of this program through September 30, 2020, the Company sold 806,261 shares for an aggregate sales price of $ 14,316,000 before commissions and fees of $ 314,000 and offering related expenses of $ 56,000 .

In November 2019, the Company entered into equity distribution agreements, as amended March 31, 2021, with three sales agents to sell up to an aggregate of $ 30,000,000 of its common stock from time-to-time in an at-the-market offering.

During the three months ended March 31, 2020, the Company sold 694,298 shares for an aggregate sales price of $ 12,293,000 , before commissions and fees of $ 185,000 and offering related expenses of $ 31,000 .

From the commencement of this program through March 31, 2021, the Company has sold 806,261 shares for an aggregate sales price of $ 14,316,000 before commissions and fees of $ 314,000 and offering related expenses of $ 56,000 .

There were no shares sold subsequent to March 31, 2020.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $ 0.22 per share, payable on October 12, 2020 to stockholders of record on September 25, 2020.

The Company declared a quarterly cash distribution of $ 0.22 per share, payable on April 7, 2021 to stockholders of record on March 24, 2021.

Stock Based Compensation

During the nine months ended September 30, 2020, the Company's board of directors adopted and the stockholders' approved the 2020 Incentive Plan.

This plan permits the Company to grant:

(i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, up to a maximum of 1,000,000 shares;

The Company's 2020 Incentive Plan permits the Company to grant:

(i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares;

and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards.

1 unchanged sentence

In June 2016, the Company issued restricted stock units (the "Units") to acquire up to 450,000 shares of common stock pursuant to the 2016 Amended and Restated Incentive Plan (the "2016 Incentive Plan").

The Units entitle the recipients, subject to continued service through the March 31, 2021 vesting date, to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends paid from the grant date through the vesting date with respect to the shares of common stock underlying the Units if, when, and to the extent, the related Units vest.

For financial statement purposes, because the Units are not participating securities, the shares underlying the Units are excluded in the outstanding shares reflected on the consolidated balance sheet and from the calculation of basic earnings per share.

The Units entitled the recipients, subject to continued service through the March 31, 2021 vesting date, to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends (the "RSU Dividend Equivalents") paid from the grant date through the vesting date with respect to the shares of common stock underlying the Units if, when, and to the extent, the related Units vest .

For financial statement purposes, because the Units were not participating securities, the shares underlying the Units are excluded in the outstanding shares reflected on the consolidated balance sheet and from the calculation of basic earnings per share.

The shares underlying the Units are contingently issuable shares.

Expense is recognized over the five-year vesting period on the Units which the Company expects to vest.

For the three months ended September 30, 2020 and 2019, the Company recorded $ 35,000 and $ 35,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the Units.

For the nine months ended September 30, 2020 and 2019, the Company recorded $ 105,000 and $ 106,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the Units.

At September 30, 2020 and December 31, 2019, $ 72,000 and $ 177,000 of compensation expense, respectively, had been deferred and will be charged to expense over the remaining vesting period.

For each of the three months ended March 31, 2021 and 2020, respectively, the Company recorded $ 37,000 and $ 35,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the Units.

Subsequent to March 31, 2021, it was determined that the market conditions with respect to 250,000 shares underlying Units had been satisfied;

such shares, with an aggregate market value of $ 4.2 million as of the vesting date, were issued and an aggregate of $ 775,000 of RSU Dividend Equivalents was paid.

It was also determined that the performance conditions with respect to 200,000 shares underlying Units had not been satisfied;

the 200,000 Units were forfeited.

Restricted Stock

In January 2021, the Company granted 156,774 shares of restricted stock pursuant to the 2020 Incentive Plan.

As of September 30, 2020 , an aggregate of 744,145 shares of unvested restricted stock are outstanding pursuant to the 2018 Incentive Plan, the 2016 Incentive Plan and the 2012 Incentive Plan (collectively, the "Prior Plans").

As of March 31, 2021 , an aggregate of 763,369 shares of unvested restricted stock are outstanding pursuant to the 2020 Incentive Plan, the 2018 Incentive Plan (the "2018 Plan") and the 2016 Incentive Plan (the "2016 Plan";

and together with the 2018 Plan, the "Prior Plans").

No additional awards may be granted under the Prior Plans.

1 unchanged sentence

For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the earnings per share computation.

For the three months ended September 30, 2020 and 2019, the Company recorded $ 426,000 and $ 337,000 , respectively, and for the nine months ended September 30, 2020 and 2019, the Company recorded $ 1,255,000 and $ 1,004,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At September 30, 2020 and December 31, 2019 , $ 4,837,000 and $ 3,328,000 has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards.

For the three months ended March 31, 2021 and 2020, the Company recorded $ 501,000 and $ 403,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At March 31, 2021 and December 31, 2020 , $ 6,304,000 and $ 4,411,000 has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards.

The weighted average remaining vesting period of these shares of restricted stock is 2.9 years.

1 unchanged sentence

On September 12, 2019, the Board of Directors approved a repurchase plan authorizing the Company, effective as of October 1, 2019, to repurchase up to $ 5,000,000 of shares of common stock through September 30, 2021.

During the nine months ended September 30, 2020 , the Company repurchased 39,093 shares of common stock (all of which were repurchased during the three months ended March 31, 2020), at an average market price of $ 15.76 for an aggregate cost of $ 616,000 .

During the three and nine months ended September 30, 2019, the Company repurchased 3,590 shares of common stock at an average market price of $ 12.80 at an aggregate cost of $ 46,000 .

During the three months ended March 31, 2021, the Company did no t repurchase any shares.

During the three months ended March 31, 2020, the Company repurchased 39,093 shares of common stock at an average market price of $ 15.76 for an aggregate cost of $ 616,000 .

Per Share Data

3 unchanged sentences

Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.

In calculating diluted earnings per share for the three months ended September 30, 2020 and the nine months ended September 30, 2020 and 2019, the Company did no t include any shares underlying the Units as their effect would have been anti-dilutive.

In calculating diluted earnings per share for the three months ended March 31, 2021 and 2020, the Company did no t include any shares underlying the Units as their effect would have been anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands, except share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Numerator for basic and diluted earnings (loss) per share attributable to common stockholders:

Net (loss) income attributable to common stockholders $ ( 7,484 ) $ 3,272 $ ( 16,561 ) $ ( 5,292 )

Denominator for basic earnings per share—weighted average number of shares 17,176,401 15,913,975 17,095,315 15,900,362

Effect of diluted securities — 200,000 — —

Denominator for diluted earnings per share—adjusted weighted average number of shares and assumed conversions 17,176,401 16,113,975 17,095,315 15,900,362

Basic (loss) income per share $ ( 0.44 ) $ 0.21 $ ( 0.97 ) $ ( 0.33 )

Diluted (loss) income per share $ ( 0.44 ) $ 0.20 $ ( 0.97 ) $ ( 0.33 )

Net loss attributable to common stockholders $ ( 3,765 ) $ ( 4,831 )

Denominator for basic and diluted earnings per share—weighted average number of shares 17,319,222 16,932,252

Basic loss per share $ ( 0.22 ) $ ( 0.29 )

Diluted loss per share $ ( 0.22 ) $ ( 0.29 )

Note 4 - Leases

Lessor Accounting

The Company owns one commercial rental property which is leased to two tenants under operating leases with current expirations ranging from 2024 to 2028, with options to extend or terminate the leases.

The Company owns one commercial rental property which is leased to two tenants under operating leases with current expirations ranging from 2024 to 2028, with tenant options to extend or terminate the leases.

Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components which includes reimbursements of property level operating expenses.

The Company does not separate non-lease components from the related lease components, as the timing and pattern of transfer are the same, and account for the combined component in accordance with ASC 842.

Due to the impact of the COVID-19 pandemic, concession agreements have been executed with the Company’s two tenants.

In accordance with the FASB Staff Q&A, Topic 842 and 840 - Accounting for Lease Concessions Related to the Effects of COVID-19 Pandemic, a lessor may make an accounting policy election to (i) not evaluate whether such COVID-19 pandemic related rent-relief is a lease modification under ASC 842 and (ii) treat each tenant rent deferral or forgiveness as if it were contemplated as part of the existing lease contract.

The Company elected to apply this accounting policy to the two lease agreements, based on the type of concession provided to the tenant, where the revised cash flows are substantially the same or

less than the original lease agreement.

As a result, during the nine months ended September 30, 2020, the Company issued total abatements of $ 75,000 for the two tenants.

The Company does not separate non-lease components from the related lease components, as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.

Due to the impact of the COVID-19 pandemic, in 2020, concession agreements were entered into with the Company’s two commercial tenants.

In accordance with the FASB Staff Q&A, Topics 842 and 840 - Accounting for Lease Concessions Related to the Effects of COVID-19 Pandemic, a lessor may make an accounting policy election to (i) not evaluate whether such COVID-19 pandemic related rent-relief is a lease modification under ASC 842 and (ii) treat each tenant rent deferral or forgiveness as if it were contemplated as part of the existing lease contract.

The Company elected to apply this accounting policy to the two lease agreements, based on the type of concession provided to the tenant, where the revised cash flows are substantially the same or less than the original lease agreement.

As a result, during the three months ended June 30, 2020, the Company issued total abatements of $ 75,000 for the two tenants.

Lessee Accounting

1 unchanged sentence

The ground lease expires September 30, 2024 and provides for one 21 -year renewal option.

As of September 30, 2020, the remaining lease term, including the renewal option, is 25.0 years.

The Company is also a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease.

As of March 31, 2021, the remaining lease term, including the renewal option, is 24.5 years.

The Company is a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease.

The lease expires on December 31, 2031 and provides a 5 -year renewal option.

As of September 30, 2020 , the remaining lease term, including renewal options deemed exercised, is 16.3 years.

In the quarter ended March 31, 2019, the Company recorded $ 2,900,000 of right of use assets ("ROU") and lease liabilities related to these operating leases.

As of September 30, 2020, the Company's ROU assets and lease liabilities were $ 2,701,000 and $ 2,720,000 , respectively.

As of March 31, 2021 , the remaining lease term, including renewal options deemed exercised, is 15.8 years.

As of March 31, 2021, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,719,000 and $ 2,767,000 , respectively.

As of December 31, 2020, the Company's ROU assets and lease liabilities were $ 2,652,000 and $ 2,674,000 , respectively.

5 unchanged sentences

Note 5 ‑ Real Estate Properties

Real estate properties consist of the following (dollars in thousands):

September 30, 2020 December 31, 2019

Real estate properties, excluding a property held for sale, consist of the following (dollars in thousands):

March 31, 2021 December 31, 2020

Land $ 23,317 $ 25,585

4 unchanged sentences

Total real estate properties, net $ 142,078 $ 160,192

A summary of real estate properties owned is as follows (dollars in thousands):

A summary of real estate property owned, excluding a property held for sale, is as follows (dollars in thousands):

December 31, 2020

Balance Additions Depreciation Impairment Charge September 30, 2020

Balance Capitalized Costs and Improvements Depreciation Reclassified to Held for Sale March 31, 2021

Multi-family $ 153,604 $ 223 $ ( 1,509 ) $ ( 16,800 ) $ 135,518

2 unchanged sentences

Total real estate properties $ 160,192 $ 223 $ ( 1,537 ) $ ( 16,800 ) $ 142,078

Note 6 - Acquisitions and Dispositions

Property Acquisitions

The table below provides information regarding the Company's acquisition of a multi-family property, through an unconsolidated joint venture, during the nine months ended September 30, 2020 (dollars in thousands):

Location Purchase Date No.

of Units Purchase Price Acquisition Mortgage Debt Initial BRT Equity Ownership Percentage Capitalized Acquisition Costs

Wilmington, North Carolina 2/20/2020 264 $ 38,000 $ 23,160 $ 13,700 80 % $ 459

The table below provides information regarding the Company's acquisition of multi-family properties, through unconsolidated joint ventures, during the nine months ended September 30, 2019 (dollars in thousands):

Location Purchase Date No.

of Units Purchase Price Acquisition Mortgage Debt Initial BRT Equity Ownership Percentage Capitalized Acquisition Costs

Kannapolis, North Carolina 3/12/2019 312 $ 48,065 $ 33,347 $ 11,231 65 % $ 559

Birmingham, Alabama 5/7/2019 328 43,000 32,250 11,625 80 % 546

Auburn, AL 8/8/2019 200 18,400 14,500 4,320 80 % 140

840 $ 109,465 $ 80,097 $ 27,176 $ 1,245

Property Dispositions

The Company did not dispose of any real estate properties during the nine months ended September 30, 2020.

The following table is a summary of the real estate properties disposed of by the Company during the nine months ended September 30, 2019 (dollars in thousands):

Location Sale

Units Sales Price Gain on Sale Non-controlling partner's portion of the gain

Houston, TX (two properties) 7/11/2019 384 $ 33,200 $ 9,938 $ 894

Impairment Charges

Note 6 - Impairment Charges

The Company reviews each real estate asset owned, including those held through investments in unconsolidated joint ventures, for impairment when there is an event or a change in circumstances indicating that the carrying amount may not be recoverable.

2 unchanged sentences

In cases where the Company does not expect to recover its carrying value on properties held for use, the Company reduces its carrying value to fair value, and for properties held for sale, the Company reduces its carrying value to the fair value less costs to sell.

In the quarter ended September 30, 2020, indicators of impairment were present on its 8.7 acre vacant land parcel located in South Daytona Beach, Florida.

The Company has entered into a contract to sell this property below its carrying value and accordingly the Company took an impairment charge related to this asset of $ 3,642,000 representing the excess of the carrying value over the fair value.

During the three and nine months ended September 30, 2019, no impairment charges were recorded.

Note 7 - Real Estate Loan

The Company had a loan receivable secured by several properties in Newark, NJ.

At June 30, 2020 the principal balance of this loan was $ 4,000,000 .

This loan was sold on September 30, 2020, to an unrelated third party at its book value plus interest and fees of $ 325,000 .

Accordingly, no gain or loss was recognized on the sale.

Funds were received on October 1, 2020 and the amounts receivable are included in other assets.

During the three months ended March 31, 2021 and 2020, no impairment charges were recorded.

Note 7 – Real Estate Property Held For Sale

In March 2021, the Company entered into a contract to sell Kendall Manor, a property located in Houston, TX, for $ 24,500,000 with a net book value of $ 16,800,000 .

The buyer's right to terminate the contract expired on March 17, 2021.

At March 31, 2021, the Company reclassified the net book value of the property's land, building and building improvements as Property held-for-sale in the accompanying balance sheet.

It is anticipated that the sale of this property will be completed in May 2021.

Note 8 - Restricted Cash

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Note 9 – Investment in Unconsolidated Ventures

At September 30, 2020 and December 31, 2019, the Company held interests in unconsolidated joint ventures (the "Unconsolidated Properties") that own 31 and 30 multi-family properties, respectively.

At March 31, 2021 and December 31, 2020, the Company held interests in unconsolidated joint ventures (the "Unconsolidated Properties"), that own 31 multi-family properties.

The condensed balance sheets below present information regarding such properties (dollars in thousands):

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Real estate properties, net of accumulated depreciation of $155,455 and $145,600 $ 1,064,820 $ 1,075,178

Cash and cash equivalents 14,900 16,939

Deposits and escrows 26,368 23,912

Other assets 27,667 29,392

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Total Liabilities and Equity $ 1,107,387 $ 1,121,509

BRT interest in joint venture equity $ 175,484 $ 177,071

Real estate properties of our unconsolidated joint ventures consist of the following (dollars in thousands):

September 30, 2020 December 31, 2019

BRT's interest in joint venture equity $ 164,248 $ 169,474

A s of the indicated dates, real estate properties of our unconsolidated joint ventures consist of the following (dollars in thousands):

March 31, 2021 December 31, 2020

Land $ 148,341 $ 148,341

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Total real estate properties, net $ 1,064,820 $ 1,075,178

At September 30, 2020, the weighted average interest rate on the mortgages payable is 3.95 % and the weighted average remaining term to maturity is 7.41 years.

At March 31, 2021 and December 31, 2020, the weighted average interest rate on the mortgages payable is 3.96 % and 3.96 %, respectively, and the weighted average remaining term to maturity is 7.42 years and 7.67 years, respectively.

The condensed income statement below presents information regarding the Unconsolidated Properties (dollars in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Rental and other revenue $ 32,672 $ 30,843

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Total revenues less total expenses ( 1,938 ) ( 2,803 )

Loss on extinguishment of debt — ( 379 ) — ( 379 )

Gain on insurance recoveries 427 — 765 517

Net income from joint ventures $ ( 2,398 ) $ ( 3,421 ) $ ( 7,177 ) $ ( 10,546 )

BRT equity in loss from joint ventures $ ( 1,529 ) $ ( 2,390 ) $ ( 4,731 ) $ ( 6,676 )

Other equity earnings 9 8

Impairment charges ( 2,323 ) —

Insurance recoveries 2,323 —

Net loss from joint ventures $ ( 1,929 ) $ ( 2,795 )

BRT's equity in loss from joint ventures $ ( 1,345 ) $ ( 1,815 )

During the three months ended March 31, 2021, we recognized $ 2,300,000 of impairment charges at three of our equity investments located in Texas due to storm damage and also recognized $ 2,300,000 of insurance recoveries related to the impairment charges resulting from the Texas ice storm damage.

There were no comparable charges in the corresponding period of the prior year.

On April 20, 2021, the Company sold its joint venture interest in Anatole Apartments, a property located in Daytona Beach, FL.

The Company will recognize a gain of approximately $ 2,200,000 on the sale in the quarter ending June 30, 2021.

On May 4, 2021, the Company purchased an additional 14.69 % interest in Civic Center I and Civic Center II - Southaven, MS, from its existing joint venture partner for $ 6,031,000 .

After giving effect to this purchase, the Company owns 74.69 % of the equity interest in these properties.

On May 7, 2021, the Company entered into an agreement to acquire the 41.9 % interest owned by its joint venture partners in the entity that owns Bells Bluff, a 402 -unit multi-family property located in West Nashville, TN.

The purchase price for the interest, after giving effect to the joint venture partners' carried interest, is approximately $ 28,000,000 , subject to working capital and certain other adjustments.

After giving effect to this purchase, Bells Bluff will be wholly-owned by the Company.

The completion of this purchase is subject to customary closing conditions, including the refinancing of the $ 47,200,000 floating rate ( i.e.

, 2.975 % at March 31, 2021) mortgage debt on the property.

Note 10 – Debt Obligations

Debt obligations consist of the following (dollars in thousands):

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Mortgages payable $ 130,196 $ 130,997

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Mortgages Payable

The weighted average interest rate on the Company's mortgages payable at September 30, 2020 was 4.15 %.

For the three months ended September 30, 2020 and 2019 interest expense, which includes amortization of deferred financing costs, was $ 1,475,000 and $ 1,373,000 , respectively.

For the nine months ended September 30, 2020 and 2019 interest expense, which includes amortization of deferred financing costs, was $ 4,418,000 and $ 4,385,000 , respectively.

The weighted average interest rate on the Company's mortgages payable at March 31, 2021 was 4.15 % and the weighted average remaining term to maturity is 4.13 years.

For the three months ended March 31, 2021 and 2020 interest expense, which includes amortization of deferred financing costs, was $ 1,429,000 and $ 1,475,000 , respectively.

Credit Facility

The Company entered into a credit facility dated April 18, 2019, as amended from time-to-time, with an affiliate of Valley National Bank.

The facility allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $ 10,000,000 to facilitate the acquisition of multi-family properties and for working capital (including dividend payments) and operating expenses.

The Company's credit facility with an affiliate of Valley National Bank, as amended and modified from time-to-time, allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $ 15,000,000 to facilitate the acquisition of multi-family properties and for working capital (including dividend payments) and operating expenses.

The facility is secured by the cash available in certain cash accounts maintained by the Company at Valley National Bank, matures April 2023 and bears an adjustable interest rate of 50 basis points over the prime rate, with a floor of 4.25 %.

The interest rate in effect as of September 30, 2020 is 5 %.

For the three months ended September 30, 2020 and 2019, interest expense, which includes amortization of deferred financing costs and unused fees, was $ 17,000 and $ 57,000 .

For the nine months ended September 30, 2020 and 2019, interest expense, which includes amortization of deferred financing costs and unused fees, was $ 79,000 and $ 153,000 , respectively.

Deferred financing costs of $ 22,000 and $ 53,000 , are recorded in other assets on the Consolidated balance sheets at September 30, 2020 and December 31, 2019, respectively.

The interest rate in effect as of March 31, 2021 is 4.25 %.

For the three months ended March 31, 2021 and 2020, interest expense, which includes amortization of deferred financing costs and unused fees, was $ 17,000 and $ 15,000 .

Deferred financing costs of $ 2,000 and $ 12,000 , are recorded in other assets on the Consolidated balance sheets at March 31, 2021 and December 31, 2020, respectively.

There is an unused facility fee of 0.25 % per annum on the difference between the outstanding loan balance and maximum amount then available under the facility.

At September 30, 2020, the Company is in compliance in all material respects with its obligation under the facility.

At September 30, 2020 and November 1, 2020, there was no outstanding balance on the facility.

At March 31, 2021, the Company is in compliance in all material respects with its obligation under the facility.

At March 31, 2021 and April 30, 2021, there was no outstanding balance on the facility.

Junior Subordinated Notes

At September 30, 2020 and December 31, 2019, the Company's junior subordinated notes had an outstanding principal balance of $ 37,400,000 , before deferred financing costs of $ 322,000 and $ 337,000 , respectively.

At September 30, 2020, the interest rate on the outstanding balance is three month LIBOR + 2.00 % or 2.27 %.

At March 31, 2021 and December 31, 2020, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 312,000 and $ 317,000 , respectively.

The interest rate on the outstanding balance resets quarterly and is based on three months LIBOR + 2.00 %.

The rate in effect at March 31, 2021 and 2020 was or 2.21 % and 3.77 %, respectively.

The notes mature April 30, 2036.

The junior subordinated notes require interest only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due.

Interest expense for the three months ended September 30, 2020 and 2019, which includes amortization of deferred financing costs, was $ 240,000 and $ 438,000 , respectively, and for the nine months ended September 30, 2020 and 2019, which includes amortization of deferred financing costs, wa s $ 903,000 and $ 1,326,000 , respectively.

Interest expense for the three months ended March 31, 2021 and 2020, which includes amortization of deferred financing costs, was $ 214,000 and $ 370,000 , respectively.

Note 11 – Related Party Transactions

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and provide long-term planning and consulting with executives and employees with respect to other business matters, as required.

The aggregate fees incurred and paid for these services in the three months ended September 30, 2020 and 2019 were $ 350,000 and $ 332,000 , respectively, and for the nine months ended September 30, 2020 and 2019 wer e $ 1,049,000 and $ 998,000 , respectively.

The aggregate fees incurred and paid for these services in each of the three months ended March 31, 2021 and 2020 were $ 350,000 .

Management of certain properties owned by the Company and certain joint venture properties is provided by Majestic Property Management Corp.

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Certain of the Company's officers and directors are also officers and directors of Majestic Property.

Majestic Property may also provide real estate brokerage and construction supervision services to these properties.

These fees amounted to $ 8,000 and $ 9,000 for the three months ended September 30, 2020 and 2019, respectively, and $ 24,000 and $ 25,000 for the nine months ended September 30, 2020 and 2019, respectively.

The Company shares facilities, personnel and other resources with One Liberty Properties, Inc.

("One Liberty"), Majestic Property, and Gould Investors L.P.

("Gould Investors").

Certain of the Company's executive officers and/or directors also serve in management positions, and have ownership interests, in One Liberty, Majestic Property and/or Georgetown Partners Inc., the managing general partner of Gould Investors.

The allocation of expenses for the facilities, personnel and other resources shared by the Company, One Liberty, Majestic Property and Gould Investors is computed in accordance with a shared services

agreement by and among the Company and these entities and is included in general and administrative expense on the consolidated statements of operations.

For the three months ended September 30, 2020 and 2019, net allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 167,000 and $ 105,000 , and $ 631,000 and $ 403,000 for the nine months ended September 30, 2020 and 2019, respectively.

Management of two of the Company's multi-family properties, which were sold in July 2019, were performed by its joint venture partners or their affiliates, none of which are otherwise related to the Company.

These management fees amounted to $ 4,000 and $ 68,000 , in the three and nine months ended September 30, 2019, respectively.

Majestic Property may also provide real estate

brokerage and construction supervision services to these properties.

These fees amounted to $ 7,000 and $ 8,000 for the three months ended March 31, 2021 and 2020, respectively.

Pursuant to a shared services agreement between the Company and several affiliated entities, including Gould Investors

L.P., the owner and operator of a diversified portfolio of real estate and other assets, and One Liberty Properties, Inc., a NYSE

listed equity REIT, the (i) services of the part time personnel that perform certain executive, administrative, legal, accounting

and clerical functions and (ii) certain facilities and other resources, are provided to the Company.

The allocation of expenses

for the facilities, personnel and other resources shared by, among others, the Company and Gould Investors, is computed in

accordance with such agreement and is included in general and administrative expense on the consolidated statements of

During the three months ended March 31, 2021 and 2020, respectively, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 172,000 and $ 226,000 , respectively.

Gould is executive officer and sole stockholder of Georgetown Partners, Inc., the managing general partner of Gould Investors L.P.("Gould Investors").

Mr Gould is also the vice chairman of the board of directors of One Liberty Properties and certain of the Company's officers and directors are also officers or directors of One Liberty Properties and Georgetown Partners.

Note 12 – Fair Value Measurements

4 unchanged sentences

Junior subordinated notes:

At September 30, 2020 and December 31, 2019, the estimated fair value of the notes is lower than their carrying value by approximately $ 10,542,000 and $ 9,589,000 , respectively, based on a market interest rate of 4.74 % and 6.41 %, respectively.

At March 31, 2021 and December 31, 2020, the estimated fair value of the notes is lower than their carrying value by approximately $ 8,596,000 and $ 8,670,000 , respectively, based on a market interest rate of 4.19 % and 4.22 %, respectively.

Mortgages payable:

At September 30, 2020, the estimated fair value of the Company’s mortgages payable is greater than their carrying value by approximately $ 5,258,000 , assuming market interest rates between 2.69 % and 3.04 % and at December 31, 2019, the estimated fair value of the Company's mortgages payable was lower than their carrying value by approximately $ 321,000 , assuming market interest rates between 3.89 % and 4.33 %.

At March 31, 2021, the estimated fair value of the Company’s mortgages payable is greater than their carrying value by approximately $ 265,000 , assuming market interest rates between 3.43 % and 4.09 %.

At December 31, 2020, the estimated fair value of the Company's mortgages payable was greater than their carrying value by approximately $ 3,831,000 , assuming market interest rates between 2.87 % and 3.28 %.

Market interest rates were determined using rates which the Company believes reflects institutional lender yield requirements at the balance sheet dates.

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The Company does not currently own any financial instruments that are classified as Level 3.

Set forth below is information regarding the Company’s financial assets and liabilities measured at fair value as of September 30, 2020 (dollars in thousands):

Set forth below is information regarding the Company’s financial assets and liabilities measured at fair value as of March 31, 2021 (dollars in thousands):

Carrying and Fair Value Fair Value Measurements Using Fair Value Hierarchy

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This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities.

At September 30, 2020 and December 31, 2019, these derivatives are included in other liabilities on the consolidated balance sheet.

At March 31, 2021 and December 31, 2020, this derivative is included in other liabilities on the consolidated balance sheet.

Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.

As of September 30, 2020 and December 31, 2019, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and determined that the credit valuation adjustments are not significant to the overall valuation of its derivative.

As of March 31, 2021 and December 31, 2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and determined that the credit valuation adjustments are not significant to the overall valuation of its derivative.

As a result, the Company determined that its derivative valuation is classified in Level 2 of the fair value hierarchy.

Long-lived assets

The Company measures its real estate investments at fair value on a nonrecurring basis.

The fair value of the real estate investment was determined using the following input levels as of September 30, 2020 (dollars in thousands):

Carrying and Fair Value Fair Value Measurements Using Fair Value Hierarchy

Level 1 Level 2 Level 3

Non-Financial Assets:

Long-lived assets $ 4,379 $ — $ — $ 4,379

The Company reviews its investments in real estate when events or circumstances change indicating the carry value of the investment may not be recoverable.

In the evaluation of an investment for impairment, many factors are considered, including estimated current and expected cash flows from the asset during the projected hold period, costs necessary to extend the life of the asset, expected capitalization rates, and projected stabilized net operating income and the ability to hold or dispose of the asset in the ordinary course of business.

Quantitative information about Level 3 measurements at September 30, 2020 is as follows:

Fair Value Valuation Technique Significant Unobservable Inputs

Financial Liabilities:

Long-lived asset:

Vacant land - South Daytona Beach, FL $ 4,379 Discounted cash flow Non-binding sales contract /Discount rate 12.5%

Note 13 – Derivative Financial Instruments

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The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive (Loss) income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

As of September 30, 2020, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):

As of March 31, 2021, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Interest Rate Derivative Current Notional Amount Fixed Rate Maturity

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Derivatives as of:

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Other Assets $ — Other Assets $ —

Accounts payable and accrued liabilities $ 18 Accounts payable and accrued liabilities $ 23

The following table presents the effect of the Company’s interest rate swaps on the consolidated statements of comprehensive income (loss) for the dates indicated (dollars in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Amount of (loss) gain recognized on derivative in Other Comprehensive Income $ — $ ( 24 )

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The agreement between the Company and its derivative counterparties provides that if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Company could be declared in default on its derivative obligations.

As of September 30, 2020 and December 31, 2019, the fair value of derivatives in a net liability position including interest but excluding any adjustment for nonperformance risk related to these agreements was $ 30,000 and $ 13,000 , respectively.

As of September 30, 2020 and December 31, 2019, the Company has not posted any collateral related to this agreement and was not in breach of any agreement provisions.

If the Company had breached any of these provisions, it could have been required to

settle it obligations under the agreement termination value of $ 30,000 and $ 13,000 , at September 30, 2020 and December 31, 2019 respectively.

As of March 31, 2021 and December 31, 2020, the fair value of derivatives in a net liability position including interest but excluding any adjustment for nonperformance risk related to these agreements was $ 20,000 and $ 25,000 , respectively.

As of March 31, 2021 and December 31, 2020, the Company has not posted any collateral related to this agreement and was not in breach of any agreement provisions.

If the Company had breached any of these provisions, it could have been required to settle it obligations under the agreement termination value of $ 20,000 and $ 25,000 , at March 31, 2021 and December 31, 2020 respectively.

Note 14 – New Accounting Pronouncements

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The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In October 2018, the FASB issued ASU 2018-16, (Topic 815):

Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) as a Benchmark Interest Rate for Hedging Purposes .

The amendments in this update permit the OIS rate based on SOFR as an eligible benchmark interest rate.

The amendments in this update are effective for fiscal years beginning after December 15, 2018.

The Company adopted this guidance on January 1, 2019.

The Company does not believe this guidance will have a material effect on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement , which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC Topic 820.

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The guidance replaces the current “incurred loss” model with an “expected loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the financial asset.

ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2022.

ASU 2016-13 is effective for interim and annual reporting periods in fiscal years

beginning after December 15, 2022.

We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

Note 15 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of September 30, 2020, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

The Company is presented with the continued risks presented by the novel coronavirus or COVID-19, which is increasing across most areas of the country and may continue to increase in the markets in which it operates.

The ultimate extent of the impact of the pandemic on the Company’s business, financial condition, liquidity, results of operations and prospects will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, the severity of, and the actions taken to control, the pandemic, and the short-term and long-term economic impact thereof.

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of March 31, 2021, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements