1 unchanged sentence
Evaluation of Disclosure Controls and Procedures
−Removed: As of December 31, 2020, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, regarding the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered by this report.
−Removed: Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and include controls and procedures designed to ensure the information required to be disclosed by us in such reports is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
+Added: As of December 31, 2021, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, regarding the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15(e) under the Exchange Act) at the end of the period covered by this report.
+Added: Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and include controls and procedures designed to ensure the information required to be disclosed by us in such reports is accumulated and communicated to
+Added: management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
7 unchanged sentences
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the shareholders and the Board of Directors of CIM Commercial Trust Corporation
+Added: To the shareholders and the Board of Directors of Creative Media & Community Trust Corporation
Opinion on Internal Control over Financial Reporting
−Removed: We have audited the internal control over financial reporting of CIM Commercial Trust Corporation (the “Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+Added: We have audited the internal control over financial reporting of Creative Media & Community Trust Corporation (formerly, CIM Commercial Trust Corporation) (the “Company”) as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
1 unchanged sentence
Basis for Opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A.
+Added: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.
Management's Report on Internal Control over Financial Reporting.
29 unchanged sentences
Other Information
+Added: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
+Added: Not applicable.
Directors, Executive Officers and Corporate Governance
29 unchanged sentences
3.1(e) Articles of Amendment (Par Value Decrease) (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 6, 2019).
+Added: 3.1(f) Articles of Amendment (Name Change) (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 10, 2022).
3.2 Articles Supplementary to the Articles of Amendment and Restatement of CIM Commercial Trust Corporation, designating the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the SEC on October 27, 2016).
4 unchanged sentences
4 to the Form S-11 Registration Statement (333-218019) filed with the SEC on November 15, 2017).
−Removed: 3.6 Bylaws of CIM Commercial Trust Corporation (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed with the SEC on May 2, 2014).
+Added: *3.6 Bylaws of CIM Commercial Trust Corporation
*4.1 Description of Securities of CIM Commercial Trust Corporation.
24 unchanged sentences
333-232232) filed with the SEC on October 2, 2019).
−Removed: 10.13 Modification Agreement, dated as of September 2, 2020, among certain subsidiary borrowers of CIM Commercial Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent ( inco r porated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on September 3, 2020).
+Added: 10.13 Modification Agreement, dated as of September 2, 2020, among certain subsidiary borrowers of CIM Commercial Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on September 3, 2020).
10.14 Lease Agreement, dated as of June 29, 2009, by and among CIM/Oakland 1 Kaiser Plaza, LP and Kaiser Foundation Health Plan, Inc, as amended by the First Amendment to Lease, dated as of June 15, 2012, as further amended by the Second Amendment to Lease, dated as of December 16, 2013, as further amended by the Third Amendment to Lease, dated as of July 8, 2015, and as further amended by the Fourth Amendment to Lease, dated as of November 18, 2015 (incorporated by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 16, 2020).
1 unchanged sentence
(incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on March 16, 2020).
+Added: 10.16 Amendment No.
+Added: 2, dated as of September 22, 2021, to Second Amended and Restated Dealer Manager Agreement, dated as of January 28, 2020, by and among CIM Commercial Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.1 to the Registrant's Current Report on 8-K filed with the SEC on September 24, 2021)
+Added: 10.17 Fee Waiver, dated January 5, 2022, by and among CIM Commercial Trust Corporation, CIM Service Provider, LLC, CIM Capital, LLC, CIM Capital Securities Management, LLC, CIM Capital Controlled Company Management, LLC, CIM Capital RE Debt Management, LLC, CIM Capital Real Property Management, LLC, CIM Urban Partners, L.P., PMC Funding Corp.
+Added: and PMC Properties, Inc.
16.1 Letter from BDO USA, LLP dated November 9, 2020 (incorporated by reference to Exhibit 16.1 to the Registrant's Current Report on Form 8-K filed with the SEC on November 9, 2020).
1 unchanged sentence
*23.1 Consent of Deloitte & Touche, LLP.
−Removed: *23.2 Consent of BDO USA, LLP.
*24.1 Powers of Attorney (included on signature page).
9 unchanged sentences
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
−Removed: CIM Commercial Trust Corporation
+Added: Creative Media & Community Trust Corporation
March 16, 2022 By:
26 unchanged sentences
Avraham Shemesh
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Financial Statements Page
−Removed: Report of Independent Registered Public Accounting Firm
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID No.
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Operations for the Years Ended December 31, 202 1 and 20 20
−Removed: Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Equity for the Years Ended December 31, 2021 and 2020
4 unchanged sentences
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the shareholders and the Board of Directors of CIM Commercial Trust Corporation
+Added: To the shareholders and the Board of Directors of Creative Media & Community Trust Corporation
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of CIM Commercial Trust Corporation (the "Company") as of December 31, 2020 , the related consolidated statements of operations and comprehensive (loss) income, equity and cash flows for the year ended December 31, 2020, and the related notes and schedules (collectively referred to as the "financial statements").
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have audited the accompanying consolidated balance sheets of Creative Media & Community Trust Corporation (formerly, CIM Commercial Trust Corporation) (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive (loss) income, equity and cash flows, for each of the two years in the period ended December 31, 2021, and the related notes and schedules (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2022, expressed an unqualified opinion on the Company’s internal control over financial reporting.
16 unchanged sentences
The Company’s evaluation of investments in real estate for impairment involves an initial assessment of each real estate asset to determine whether events or changes in circumstances exist that may indicate that the carrying amounts of each investment in real estate is no longer recoverable.
−Removed: Possible indications of impairment may include changes in real estate market conditions, property performance, occupancy, RevPAR, ADR and additional property valuation assumptions including discount and terminal capitalization rates.
+Added: Possible indications of impairment may include changes in real estate market conditions, property performance, and additional property valuation assumptions including discount and terminal capitalization rates.
When events or changes in circumstances exist, the Company evaluates its investment in real estate for impairment by comparing undiscounted future cash flows expected to be generated over the life of each asset to the respective carrying amount.
3 unchanged sentences
For those investments in real estate where indications of impairment have been identified, the Company makes significant estimates and assumptions to determine whether the undiscounted future cash flows expected to be generated over the life of the asset exceed the carrying amount of the investment in real estate.
−Removed: Management concluded that the carrying value of the assets were
−Removed: recoverable and therefore were not subjected to a discounted cash flow analysis.
+Added: Management concluded that the carrying value of the assets were recoverable and therefore were not subjected to a discounted cash flow analysis.
Estimates and assumptions used for the undiscounted future cash flows of the office property include rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates.
−Removed: Estimates and assumptions used for the undiscounted future cash flows of the hotel property include occupancy, RevPAR, ADR, growth rates, hold period and terminal capitalization rates.
−Removed: We identified the determination of impairment indicators for investments in real estate and certain assumptions used for the undiscounted future cash flows of the properties as a critical audit matter because of (1) the significant assumptions management makes when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of investments in real estate assets may not be recoverable and (2) for those investments in real estate where indications of impairment have been identified, the significant estimates and assumptions management makes to evaluate whether the undiscounted future cash flows expected to be generated over the life of the asset exceed the carrying amount of the property, including those related to rental rates, lease-up period, growth rates, hold period, occupancy, RevPAR, ADR, and terminal capitalization rates.
−Removed: This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate (1) whether management appropriately identified impairment indicators and (2) the reasonableness of management’s assumptions related to rental rates, lease-up period, growth rates, hold period, occupancy, RevPAR, ADR, and terminal capitalization rates for the undiscounted future cash flows analysis.
+Added: We identified the determination of impairment indicators for investments in real estate and certain assumptions used for the undiscounted future cash flows of the properties as a critical audit matter because of (1) the significant assumptions management makes when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of investments in real estate assets may not be recoverable and (2) for those investments in real estate where indications of impairment have been identified, the significant estimates and assumptions management makes to evaluate whether the undiscounted future cash flows expected to be generated over the life of the asset exceed the carrying amount of the property, including those related to rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates.
+Added: This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate (1) whether management appropriately identified impairment indicators and (2) the reasonableness of management’s assumptions related to rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates for the undiscounted future cash flows analysis.
How the Critical Audit Matter Was Addressed in the Audit
2 unchanged sentences
• We performed corroborating inquiries with management, including property accounting, leasing and portfolio oversight to determine whether factors were identified in the current period that may be an impairment indicator or whether factors were identified in the current period that may result in a change to assumptions used in the undiscounted cash flow models.
−Removed: • We evaluated whether the assumptions used in the Company’s undiscounted model relating to rental rates, lease-up period, growth rates, hold period, occupancy, RevPAR, ADR, and terminal capitalization rates were consistent with evidence obtained in other areas of the audit.
−Removed: • With the assistance of our fair value specialists, we evaluated the undiscounted cash flow analysis, including the hotel asset estimates of occupancy, RevPAR, ADR, and terminal capitalization rates by (1) evaluating the source of information and assumptions used by management and (2) testing the mathematical accuracy of the undiscounted cash flow analysis.
+Added: • We evaluated whether the assumptions used in the Company’s undiscounted model relating to rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates were consistent with evidence obtained in other areas of the audit.
+Added: • With the assistance of our fair value specialists, we evaluated the undiscounted cash flow analysis, including office asset estimates of rental rates, lease-up periods, growth rates, hold period and terminal capitalization rates by (1) evaluating the source of information and assumptions used by management and (2) testing the mathematical accuracy of the undiscounted cash flow analysis.
• We evaluated the reasonableness of management’s undiscounted cash flow analysis by comparing management’s projections to the Company’s historical results and external market sources.
2 unchanged sentences
March 16, 2022
−Removed: Report of Independent Registered Public Accounting Firm
−Removed: Shareholders and Board of Directors
−Removed: CIM Commercial Trust Corporation
−Removed: Dallas, Texas
−Removed: Opinion on the Consolidated Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of CIM Commercial Trust Corporation and subsidiaries (the “Company”) as of December 31, 2019, the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the two years in the period ended December 31, 2019, and the related notes and schedules (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019 , in conformity with accounting principles generally accepted in the United States of America.
−Removed: Basis for Opinion
−Removed: These consolidated financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
−Removed: We believe that our audits provide a reasonable basis for our opinion.
−Removed: /s/ BDO USA, LLP
−Removed: We served as the Company’s auditor from 2014 to 2020.
−Removed: Los Angeles, California
−Removed: March 16, 2021
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: We have served as the Company’s auditor since 2020.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
7 unchanged sentences
Other intangible assets, net 5,251 6,313
−Removed: Loan servicing asset, net and other assets 8,787 9,222
+Added: Other assets 10,946 8,787
TOTAL ASSETS $ 660,866 $ 685,617
20 unchanged sentences
32,000,000 shares authorized;
−Removed: 19,145 shares issued and outstanding as of December 31, 2020 and no shares issued and outstanding as of December 31, 2019;
+Added: 56,857 shares issued and outstanding as of December 31, 2021 and 19,145 shares issued and outstanding as of December 31, 2020;
liquidation preference of $ 25.00 per share, subject to adjustment
14 unchanged sentences
The accompanying notes are an integral part of these consolidated financial statements.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
1 unchanged sentence
Year Ended December 31,
−Removed: 2020 2019 2018
Rental and other property income $ 52,838 $ 54,823
12 unchanged sentences
Impairment of real estate (Note 3) — —
−Removed: 92,945 226,690 195,403
+Added: Total Expenses 88,785 92,945
Gain on sale of real estate (Note 3) — —
−Removed: (LOSS) INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES ( 15,737 ) 346,403 2,067
−Removed: (Benefit) provision for income taxes ( 722 ) 882 925
+Added: INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 2,141 ( 15,737 )
+Added: Provision (benefit) for income taxes 2,992 ( 722 )
NET (LOSS) INCOME ( 851 ) ( 15,015 )
−Removed: Net (income) loss attributable to noncontrolling interests ( 1 ) 152 ( 21 )
+Added: Net loss (income) attributable to noncontrolling interests 1 ( 1 )
NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY ( 850 ) ( 15,016 )
9 unchanged sentences
Diluted 19,187 14,748
−Removed: (1) All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.
The accompanying notes are an integral part of these consolidated financial statements.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Consolidated Statements of Comprehensive (Loss) Income
−Removed: (In thousands)
−Removed: Year Ended December 31,
−Removed: 2020 2019 2018
−Removed: NET (LOSS) INCOME $ ( 15,015 ) $ 345,521 $ 1,142
−Removed: Other comprehensive (loss) income:
−Removed: cash flow hedges — ( 1,806 ) 175
−Removed: COMPREHENSIVE (LOSS) INCOME ( 15,015 ) 343,715 1,317
−Removed: Comprehensive (income) loss attributable to noncontrolling interests ( 1 ) 152 ( 21 )
−Removed: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY $ ( 15,016 ) $ 343,867 $ 1,296
−Removed: The accompanying notes are an integral part of these consolidated financial statements.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Equity
2 unchanged sentences
Common Stock (1)
−Removed: Preferred Stock Accumulated
−Removed: Additional Other Distributions Total Non-
−Removed: Par Par Paid - in Comprehensive in Excess Stockholders’ controlling Total
−Removed: Shares Value Shares Value Capital Income of Earnings Equity Interests Equity
+Added: Preferred Stock
+Added: Additional Distributions Total Non-
+Added: Par Par Paid - in in Excess Stockholders’ controlling Total
+Added: Shares Value Shares Value Capital of Earnings Equity Interests Equity
Balances, December 31, 2019 14,602,149 $ 15 8,224,254 $ 223,467 $ 794,825 $ ( 740,617 ) $ 277,690 $ 505 $ 278,195
1 unchanged sentence
Stock-based compensation expense 21,912 — — — 222 — 222 — 222
−Removed: Common dividends ($ 1.500 per share) (1)
−Removed: — — — — — — ( 21,895 ) ( 21,895 ) — ( 21,895 )
+Added: Issuance of shares of Common Stock in exchange for asset management fees 203,349 — — — 2,359 — 2,359 — 2,359
Issuance of Series A Preferred Warrants — — — — 28 — 28 — 28
−Removed: Dividends to holders of Series A Preferred Stock ($ 1.375 per share)
−Removed: — — — — — — ( 2,814 ) ( 2,814 ) — ( 2,814 )
−Removed: Dividends to holders of Series L Preferred Stock ($ 1.738 per share)
−Removed: — — — — — — ( 14,045 ) ( 14,045 ) — ( 14,045 )
−Removed: Reclassification of Series A Preferred Stock to permanent equity — — 1,223,032 30,403 ( 2,516 ) — — 27,887 — 27,887
−Removed: Redemption of Series A Preferred Stock — — ( 1,820 ) ( 45 ) 4 — — ( 41 ) — ( 41 )
−Removed: Other comprehensive income — — — — — 175 — 175 — 175
−Removed: Net income — — — — — — 1,121 1,121 21 1,142
−Removed: Balances, December 31, 2018 14,598,357 $ 44 9,362,544 $ 261,117 $ 790,354 $ 1,806 $ ( 436,883 ) $ 616,438 $ 837 $ 617,275
−Removed: (1) All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Consolidated Statements of Equity (Continued)
−Removed: (In thousands, except share and per share amounts)
−Removed: Years Ended December 31, 2020, 2019 and 2018
−Removed: Common Stock (1)
−Removed: Preferred Stock Accumulated
−Removed: Additional Other Distributions Total Non-
−Removed: Par Par Paid - in Comprehensive in Excess Stockholders’ controlling Total
−Removed: Shares Value Shares Value Capital Income (Loss) of Earnings Equity Interests Equity
−Removed: Balances, December 31, 2018 14,598,357 $ 44 9,362,544 $ 261,117 $ 790,354 $ 1,806 $ ( 436,883 ) $ 616,438 $ 837 $ 617,275
−Removed: Contributions to noncontrolling interests — — — — — — — — 455 455
−Removed: Distributions to noncontrolling interests — — — — — — — — ( 522 ) ( 522 )
−Removed: Extinguishment of noncontrolling interests — — — — — — — — ( 113 ) ( 113 )
−Removed: Stock-based compensation expense 3,880 — — — 194 — — 194 — 194
−Removed: Retirement of fractional shares ( 88 ) — — — ( 1 ) — — ( 1 ) — ( 1 )
−Removed: Change in par value — ( 29 ) — — 29 — — — — —
−Removed: Special cash dividends ($ 42.000 per share) (Note 10)
−Removed: — — — — — — ( 613,294 ) ( 613,294 ) — ( 613,294 )
Common dividends ($ 0.300 per share)
— — — — — ( 4,431 ) ( 4,431 ) — ( 4,431 )
−Removed: Issuance of Series A Preferred Warrants — — — — 382 — — 382 — 382
Dividends to holders of Series A Preferred Stock ($ 1.719 per share)
— — — — — ( 9,579 ) ( 9,579 ) — ( 9,579 )
+Added: Issuance of Series D Preferred Stock — — 19,145 473 ( 17 ) — 456 — 456
+Added: Dividends to holders of Series D Preferred Stock ($ 1.648 per share)
+Added: — — — — — ( 21 ) ( 21 ) — ( 21 )
Dividends to holders of Series L Preferred Stock ($ 1.560 per share)
— — — — — ( 8,406 ) ( 8,406 ) — ( 8,406 )
−Removed: Repurchase of Series L Preferred Stock — — ( 2,693,580 ) ( 76,417 ) 7,135 — ( 5,873 ) ( 75,155 ) — ( 75,155 )
Reclassification of Series A Preferred Stock to permanent equity — — 1,570,421 38,837 ( 3,354 ) — 35,483 — 35,483
+Added: Redeemable Preferred Stock deemed dividends — — — — — ( 377 ) ( 377 ) — ( 377 )
Redemption of Series A Preferred Stock — — ( 29,753 ) ( 741 ) 64 ( 72 ) ( 749 ) — ( 749 )
−Removed: Other comprehensive (loss) income — — — — — ( 1,806 ) — ( 1,806 ) — ( 1,806 )
−Removed: Net income (loss) — — — — — — 345,673 345,673 ( 152 ) 345,521
+Added: Net (loss) income — — — — — ( 15,016 ) ( 15,016 ) 1 ( 15,015 )
Balances, December 31, 2020 14,827,410 $ 15 9,784,067 $ 262,036 $ 794,127 $ ( 778,519 ) $ 277,659 $ 455 $ 278,114
−Removed: (1) All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Equity (Continued)
11 unchanged sentences
Stock-based compensation expense 20,332 — — — 220 — 220 — 220
−Removed: Issuance of shares of Common Stock in exchange for asset management fees 203,349 — — — 2,359 — 2,359 — 2,359
−Removed: Issuance of Series A Preferred Warrants — — — — 28 — 28 — 28
Common dividends ($ 0.300 per share)
10 unchanged sentences
Redemption of Series A Preferred Stock — — ( 112,881 ) ( 2,806 ) 219 ( 113 ) ( 2,700 ) — ( 2,700 )
−Removed: Net (loss) income — — — — — ( 15,016 ) ( 15,016 ) 1 ( 15,015 )
+Added: Issuance of Common Stock 8,521,589 9 — — 76,912 — 76,921 — 76,921
+Added: Net loss — — — — — ( 850 ) ( 850 ) ( 1 ) ( 851 )
Balances, December 31, 2021 23,369,331 $ 24 11,715,354 $ 310,661 $ 866,746 $ ( 804,227 ) $ 373,204 $ 345 $ 373,549
−Removed: (1) All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.
The accompanying notes are an integral part of these consolidated financial statements.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
1 unchanged sentence
Year Ended December 31,
−Removed: 2020 2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
2 unchanged sentences
Depreciation and amortization, net 20,188 21,085
−Removed: Reclassification from AOCI to interest expense — ( 1,806 ) ( 1,552 )
−Removed: Reclassification from other assets to interest expense for swap termination — 1,421 —
−Removed: Change in fair value of swaps — 209 1,728
−Removed: Gain on sale of real estate — ( 433,104 ) —
−Removed: Impairment of real estate — 69,000 —
Loss on early extinguishment of debt — 281
3 unchanged sentences
Amortization of deferred costs and accretion of fees on loans receivable, net ( 622 ) ( 410 )
−Removed: Write-offs of uncollectible receivables 2,622 40 494
+Added: (Recoveries) write-offs of uncollectible receivables ( 82 ) 2,622
Deferred income taxes 72 ( 995 )
3 unchanged sentences
Principal collected on loans subject to secured borrowings 1,786 3,695
−Removed: Other operating activity ( 935 ) ( 822 ) ( 1,587 )
+Added: Commitment fees remitted and other operating activity ( 2,559 ) ( 935 )
Changes in operating assets and liabilities:
9 unchanged sentences
Acquisition of real estate ( 2,933 ) ( 6,131 )
−Removed: Proceeds from sale of real estate, net — 941,032 —
Loans funded ( 36,299 ) ( 25,393 )
5 unchanged sentences
Proceeds from unsecured revolving lines of credit, revolving credit facilities and term notes 35,396 77,516
−Removed: Investments in marketable securities in connection with the legal defeasance of mortgages payable — ( 268,194 ) —
−Removed: Prepayment penalties and other payments for early extinguishment of debt — ( 5,660 ) —
Payment of principal on secured borrowings ( 1,786 ) ( 3,695 )
−Removed: Proceeds from secured borrowings — — 772
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Consolidated Statements of Cash Flows (Continued)
−Removed: (In thousands)
−Removed: Year Ended December 31,
−Removed: 2020 2019 2018
Payment of deferred preferred stock offering costs ( 1,149 ) ( 943 )
1 unchanged sentence
Payment of common dividends ( 3,979 ) ( 4,431 )
−Removed: Payment of special cash dividends — ( 613,294 ) ( 1,575 )
+Added: Proceeds from issuance of Common Stock 78,825 —
+Added: Payment of Common Stock offering costs ( 1,900 ) —
Net proceeds from issuance of Series A Preferred Warrants — 28
Net proceeds from issuance of Preferred Stock 29,829 41,958
−Removed: Repurchase of Preferred Stock — ( 75,155 ) —
Payment of preferred stock dividends ( 18,045 ) ( 16,536 )
Redemption of Preferred Stock ( 2,755 ) ( 2,084 )
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Consolidated Statements of Cash Flows (Continued)
+Added: (In thousands)
+Added: Year Ended December 31,
Noncontrolling interests’ distributions ( 118 ) ( 51 )
Noncontrolling interests’ contributions 9 —
−Removed: Net cash provided by (used in) financing activities 33,195 ( 1,000,157 ) ( 6,535 )
−Removed: Change in cash balances included in assets held for sale — 755 ( 755 )
−Removed: NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH 7,702 ( 41,224 ) ( 77,568 )
+Added: Net cash (used in) provided by financing activities ( 43,584 ) 33,195
+Added: NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH ( 9,998 ) 7,702
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:
10 unchanged sentences
Accrued capital expenditures, tenant improvements and real estate developments $ 2,127 $ 267
−Removed: Net increase in fair value of derivatives applied to other comprehensive income $ — $ — $ 1,727
Accrued deferred costs $ — $ 125
1 unchanged sentence
Accrual of dividends payable to preferred stockholders $ 12,051 $ 11,343
+Added: Accrual of dividends payable to common stockholders $ 1,753 $ —
Preferred stock offering costs offset against redeemable preferred stock $ 400 $ 583
2 unchanged sentences
Reclassification of Series A Preferred Stock from permanent equity to accounts payable and accrued expenses $ 48 $ 25
−Removed: Establishment of right-of-use asset and lease liability $ — $ 362 $ —
−Removed: Marketable securities transferred in connection with the legal defeasance of mortgages payable $ — $ 268,194 $ —
−Removed: Mortgage notes payable legally defeased $ — $ 245,000 $ —
−Removed: Mortgage note assumed in connection with our sale of real estate $ — $ 28,200 $ —
Redeemable preferred stock deemed dividends $ 253 $ 377
Accrued Redeemable Preferred Stock fees $ 638 $ 493
−Removed: Equity-based payment for management fees and base service fee $ 7,400 $ — $ —
+Added: Equity-based payment for management fees $ 9,174 $ 7,400
The accompanying notes are an integral part of these consolidated financial statements.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
1 unchanged sentence
ORGANIZATION AND OPERATIONS
−Removed: CIM Commercial Trust Corporation (“CIM Commercial” or the “Company”), a Maryland corporation and real estate investment trust (“REIT”), together with its wholly-owned subsidiaries (“we,” “us” or “our”) primarily acquires, owns, and operates Class A and creative office assets in vibrant and improving metropolitan communities throughout the United States (including improving and developing such assets).
−Removed: These communities are located in areas that include traditional downtown areas and suburban main streets, which have high barriers to entry, high population density, positive population trends and a propensity for growth.
−Removed: We were originally organized in 1993 as PMC Commercial Trust (“PMC Commercial”), a Texas real estate investment trust.
−Removed: On July 8, 2013, PMC Commercial entered into a merger agreement with CIM Urban REIT, LLC (“CIM REIT”), an affiliate of CIM Group, L.P.
−Removed: (“CIM Group” or “CIM”), and subsidiaries of the respective parties.
−Removed: CIM REIT was a private commercial REIT and was the owner of CIM Urban Partners, L.P.
−Removed: (“CIM Urban”).
−Removed: The merger was completed on March 11, 2014 (the “Acquisition Date”).
−Removed: The Company’s common stock, $ 0.001 par value per share (“Common Stock”), is currently traded on the Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CMCT”, and on the Tel Aviv Stock Exchange (the “TASE”) under the ticker symbol “CMCT-L.” The Company’s Series L preferred stock, $ 0.001 par value per share (“Series L Preferred Stock”), is currently traded on Nasdaq and on the TASE, in each case under the ticker symbol “CMCTP.” We have authorized for issuance 900,000,000 shares of common stock and 100,000,000 shares of preferred stock (“Preferred Stock”).
−Removed: The Company filed Articles of Amendment (the “Reverse Stock Split Amendment”) to effectuate a one-for-three reverse stock split of our Common Stock, effective on September 3, 2019 (the “Reverse Stock Split”).
+Added: Creative Media & Community Trust Corporation (formerly known as CIM Commercial Trust Corporation) (the “Company”), is a Maryland corporation and real estate investment trust (“REIT”).
+Added: The Company’s portfolio of investments currently consists of Class A and creative office real assets in vibrant and improving metropolitan communities throughout the United States.
+Added: The Company seeks to acquire, operate and develop premier multifamily and creative office assets that cater to rapidly growing industries such as technology, media and entertainment in vibrant and emerging communities throughout the United States.
+Added: The Company seeks to apply the expertise of CIM Group, L.P.
+Added: (“CIM Group”) to the acquisition, development and operation of top-tier multifamily properties situated in dynamic markets with similar business and employment characteristics to its creative office investments.
+Added: The Company was originally organized in 1993 as PMC Commercial Trust (“PMC Commercial”), a Texas real estate investment trust.
+Added: The Company’s common stock, $ 0.001 par value per share (“Common Stock”), is currently traded on the Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CMCT”, and on the Tel Aviv Stock Exchange (the “TASE”) under the ticker symbol “CMCT-L.” The Company’s Series L preferred stock, $ 0.001 par value per share (“Series L Preferred Stock”), is currently traded on Nasdaq and on the TASE, in each case under the ticker symbol “CMCTP.” The Company has authorized for issuance 900,000,000 shares of common stock and 100,000,000 shares of preferred stock (“Preferred Stock”).
+Added: The Company filed Articles of Amendment (the “Reverse Stock Split Amendment”) to effectuate a one-for-three reverse stock split of the Company’s Common Stock, effective on September 3, 2019 (the “Reverse Stock Split”).
Pursuant to the Reverse Stock Split Amendment, every three shares of Common Stock issued and outstanding immediately prior to the effective time of the Reverse Stock Split were converted into one share of Common Stock, par value $ 0.003 per share.
1 unchanged sentence
All Common Stock and per share of Common Stock amounts set forth in this Annual Report on Form 10-K have been adjusted to give retroactive effect to the Reverse Stock Split, unless otherwise stated.
−Removed: The Company conducted a continuous public offering of Series A Preferred Units from October 2016 through January 2020, where each Series A Preferred Unit consisted of one share of Series A Preferred Stock, par value $ 0.001 per share, of the Company (collectively, the “Series A Preferred Stock”) with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A Preferred Stock Stated Value”), and one warrant (collectively, the “Series A Preferred Warrants”) to purchase 0.25 of a share of Common Stock depending on when such Series A Preferred Warrant was issued (Note 10).
+Added: The Company conducted a continuous public offering of Series A Preferred Units from October 2016 through January 2020, where each Series A Preferred Unit consisted of one share of Series A Preferred Stock, par value $ 0.001 per share, of the Company (collectively, the “Series A Preferred Stock”) with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A Preferred Stock Stated Value”), and one warrant (collectively, the “Series A Preferred Warrants”) to purchase 0.25 of a share of Common Stock, subject to adjustment (Note 10).
Proceeds and expenses from the sale of the Series A Preferred Units were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.
−Removed: Since February 2020, we conducted a continuous public offering of our Series A Preferred Stock and Series D preferred stock, par value $ 0.001 per share (the “Series D Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series D Preferred Stock Stated Value”).
+Added: Since February 2020, the Company has been conducting a continuous public offering of Series A Preferred Stock and Series D preferred stock, par value $ 0.001 per share (the “Series D Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series D Preferred Stock Stated Value”).
The selling price of the Series A Preferred Stock in the offering has been, and is expected to continue to be, $ 25.00 per share and the selling price of the Series D Preferred Stock was $ 25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and is expected to be, and since June 29, 2020, has been, $ 24.50 per share through the end of the life of the offering.
−Removed: CIM Commercial has qualified and intends to continue to qualify as a REIT, as defined in the Internal Revenue Code of 1986, as amended (the “Code”).
+Added: During the year ended December 31, 2021, the Company conducted a rights offering (the “Rights Offering”) pursuant to which the Company issued an aggregate of 8,521,589 shares of Common Stock at a subscription price of $ 9.25 per share for aggregate gross proceeds of $ 78.8 million before issuance costs of $ 1.9 million.
+Added: The Company has qualified and intends to continue to qualify as a REIT, as defined in the Internal Revenue Code of 1986, as amended.
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
−Removed: Principles of Consolidation —The consolidated financial statements include the accounts of CIM Commercial and its subsidiaries.
−Removed: All intercompany transactions and balances have been eliminated in consolidation.
−Removed: In determining whether the
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: Company has controlling interests in an entity and the requirement to consolidate the accounts in that entity, we analyze our investments in real estate in accordance with this accounting standard to determine whether they are variable interest entities (“VIEs”), and if so, whether we are the primary beneficiary.
−Removed: Our judgment with respect to our level of influence or control over an entity and whether we are the primary beneficiary of a VIE involves consideration of various factors, including the form of our ownership interest, our voting interest, the size of our investment (including loans), and our ability to participate in major policy-making decisions.
−Removed: Our ability to correctly assess our influence or control over an entity affects the presentation of these investments in real estate on our consolidated financial statements.
−Removed: As of December 31, 2020, the Company determined that the trust formed for the benefit of the note holders (the “Trust”) for the securitization of the unguaranteed portion of certain of our SBA 7(a) loans receivable is considered a VIE.
−Removed: Applying the consolidation requirements for VIEs under the accounting rules in ASC Topic 810, Consolidation , the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits.
+Added: Principles of Consolidation —The consolidated financial statements include the accounts of the Company and its subsidiaries.
+Added: All intercompany transactions and balances have been eliminated in consolidation.
+Added: In determining whether the Company has controlling interests in an entity and the requirement to consolidate the accounts in that entity, the Company analyzes its investments in real estate in accordance with standards set forth in GAAP to determine whether they are variable interest entities (“VIEs”), and if so, whether the Company is the primary beneficiary.
+Added: The Company’s judgment with respect to its level of influence or control over an entity and whether the Company is the primary beneficiary of a VIE involves consideration of various factors, including the form of the Company’s ownership interest, the Company’s voting interest, the size of the Company’s investment (including loans), and the Company’s ability to participate in major policy-making decisions.
+Added: The Company’s ability to correctly assess its influence or control over an entity affects the presentation of these investments in real estate on the Company’s consolidated financial statements.
+Added: As of December 31, 2021, the Company has determined that the trust formed for the benefit of the note holders (the “Trust”) for the securitization of the unguaranteed portion of certain of the Company’s SBA 7(a) loans receivable is considered a VIE.
+Added: Applying the consolidation requirements for VIEs, the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits.
Investments in Real Estate —Investments in real estate are stated at depreciated cost.
3 unchanged sentences
Tenant improvements Lesser of useful life or lease term
−Removed: We capitalize project costs, including pre-construction costs, interest expense, property taxes, insurance, and other costs directly related and essential to the development, redevelopment, or construction of a project, while activities are ongoing to prepare an asset for its intended use.
+Added: The fair value of real estate acquired is recorded to acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, if any, based in each case on their respective fair values.
+Added: Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market rate loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate.
+Added: Capitalized Project Costs
+Added: The Company capitalizes project costs, including pre-construction costs, interest expense, property taxes, insurance, and other costs directly related and essential to the development, redevelopment, or construction of a project, while activities are ongoing to prepare an asset for its intended use.
Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred.
1 unchanged sentence
Ordinary repairs and maintenance are expensed as incurred.
−Removed: Recoverability of Investments in Real Estate —Investments in real estate are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
−Removed: If, and when, such events or changes in circumstances are present, the recoverability of assets to be held and used requires significant judgment and estimates and is measured by a comparison of the carrying amount to the future undiscounted cash flows expected to be generated by the assets and its eventual disposition.
+Added: Recoverability of Investments in Real Estate —The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable.
+Added: Investments in real estate are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
+Added: If, and when, such events or changes in circumstances are present, the recoverability of assets to be held and used requires significant judgment and estimates and is measured by a comparison of the carrying amount to the future undiscounted cash flows expected to be generated by the assets and their eventual disposition.
If the undiscounted cash flows are less than the carrying amount of the assets, an impairment is recognized to the extent the carrying amount of the assets exceeds the estimated fair value of the assets.
The process for evaluating real estate impairment requires management to make significant assumptions related to certain inputs, including rental rates, lease-up period, occupancy, estimated holding periods, capital expenditures, growth rates, market discount rates and terminal capitalization rates.
−Removed: For the Company’s hotel property, additional inputs considered include revenue per available room and average daily rate.
These inputs require a subjective evaluation based on the specific property and market.
Changes in the assumptions could have a significant impact on either the fair value, the amount of impairment charge, if any, or both.
−Removed: Assets held for sale are reported at the lower of the asset’s carrying amount or fair value, less costs to sell.
−Removed: When an asset is identified by the Company as held for sale, we will cease recording depreciation and amortization of the asset.
−Removed: We recognized impairment of long-lived assets of $ 0 , $ 69.0 million and $ 0 during the years ended December 31, 2020, 2019 and 2018, respectively (Note 3).
+Added: Any asset held for sale is reported at the lower of the asset’s carrying amount or fair value, less costs to sell.
+Added: When an asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the asset.
+Added: The Company did no t recognize any impairment of long-lived assets during the years ended December 31, 2021 and 2020 (Note 3).
Cash and Cash Equivalents —Cash and cash equivalents include short-term liquid investments with initial maturities of three months or less.
−Removed: Restricted Cash —Our mortgage loan and hotel management agreements provide for depositing cash into restricted accounts reserved for capital expenditures, free rent, tenant improvement and leasing commission obligations.
−Removed: Restricted cash also includes cash required to be segregated in connection with certain of our loans receivable.
−Removed: Loans Receivable —Our loans receivable are carried at their unamortized principal balance less unamortized acquisition discounts and premiums, deferred origination fees, retained loan discounts and loan loss reserves.
−Removed: Acquisition discounts or premiums, origination fees and retained loan discounts are amortized as a component of interest and other income using the effective interest method over the life of the respective loans, or on a straight-line basis when it approximates the effective interest method.
−Removed: All loans were originated pursuant to programs sponsored by the Small Business Administration (the “SBA”).
−Removed: The programs consist of loans originated under the SBA 7(a) Small Business Loan Program and, commencing with the quarter ended June 30, 2020, the Paycheck Protection Program (the “PPP”).
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: Pursuant to the SBA 7(a) Small Business Loan Program, we sell the portion of the loan that is guaranteed by the SBA.
−Removed: Upon sale of the SBA guaranteed portion of the loans, which are accounted for as sales, the unguaranteed portion of the loan retained by us is fair valued and a discount (the “Retained Loan Discount”) is recorded as a reduction in basis of the retained portion of the loan.
+Added: Restricted Cash —The Company’s mortgage loan and hotel management agreements provide for depositing cash into restricted accounts reserved for capital expenditures, free rent, tenant improvement and leasing commission obligations.
+Added: Restricted cash also includes cash required to be segregated in connection with certain of the Company’s loans receivable.
+Added: Loans Receivable —The Company’s loans receivable are carried at their unamortized principal balance less unamortized acquisition discounts and premiums, deferred origination fees, retained loan discounts and loan loss reserves.
+Added: Acquisition discounts or premiums, origination fees and retained loan discounts are amortized as a component of interest and other income using the effective interest method over the life of the respective loans, or on a straight-line basis when it approximates the effective interest method.
+Added: All loans were originated pursuant to programs sponsored by the Small Business Administration (the “SBA”).
+Added: The programs consist of loans originated under the SBA 7(a) Small Business Loan Program (the “SBA 7(a) Program”) and, commencing with the quarter ended June 30, 2020, the Paycheck Protection Program (the “PPP”).
+Added: Pursuant to the SBA 7(a) Program, the Company sells the portion of the loan that is guaranteed by the SBA.
+Added: Upon sale of the SBA guaranteed portion of the loans, which are accounted for as sales, the unguaranteed portion of the loan retained by the Company is recorded at fair value and a discount is recorded as a reduction in basis of the retained portion of the loan.
Unamortized retained loan discounts were $ 9.6 million and $ 7.8 million as of December 31, 2021 and 2020, respectively.
−Removed: At the Acquisition Date, the carrying value of our loans was adjusted to estimated fair market value and acquisition discounts were recorded, which are being accreted to interest and other income using the effective interest method.
+Added: At the closing of the merger between CIM Urban REIT, LLC (“CIM REIT”), an affiliate of CIM Group, and certain of its subsidiaries and PMC Commercial Trust, the predecessor to the Company, the carrying value of the Company’s loans was adjusted to estimated fair market value and acquisition discounts of $ 33.9 million were recorded, which are being accreted to interest and other income using the effective interest method.
Acquisition discounts of $ 381,000 and $ 492,000 remained as of December 31, 2021 and 2020, respectively.
A loan receivable is generally classified as non-accrual (a “Non-Accrual Loan”) if (i) it is past due as to payment of principal or interest for a period of 60 days or more, (ii) any portion of the loan is classified as doubtful or is charged-off or (iii) the repayment in full of the principal and or interest is in doubt.
−Removed: Generally, loans are charged-off when management determines that we will be unable to collect any remaining amounts due under the loan agreement, either through liquidation of collateral or other means.
+Added: Generally, loans are charged-off when management determines that the Company will be unable to collect any remaining amounts due under the loan agreement, either through liquidation of collateral or other means.
Interest income, included in interest and other income, on a Non-Accrual Loan is recognized on the cost recovery basis.
−Removed: Loan Loss Reserves —On a quarterly basis, and more frequently if indicators exist, we evaluate the collectability of our loans receivable.
−Removed: Our evaluation of collectability involves significant judgment, estimates, and a review of the ability of the borrower to make principal and interest payments, the underlying collateral and the borrowers’ business models and future operations.
−Removed: For the years ended December 31, 2020, 2019 and 2018, we recorded a net recovery of $ 16,000 , and net impairment losses of $ 66,000 and $ 147,000 , respectively, on our loans receivable.
+Added: Loan Loss Reserves —On a quarterly basis, and more frequently if indicators exist, the Company evaluates the collectability of its loans receivable.
+Added: The Company’s evaluation of collectability involves significant judgment, estimates, and a review of the ability of the borrower to make principal and interest payments, the underlying collateral and the borrowers’ business models and future operations.
+Added: For the years ended December 31, 2021 and 2020, the Company recorded net impairment losses of $ 19,000 and a net recovery of $ 16,000 , respectively, on its loans receivable.
There were no material loans receivable subject to credit risk which were considered to be impaired as of December 31, 2021 or 2020.
The Company considers a loan to be impaired when the Company does not expect to collect all of the contractual interest and principal payments as scheduled in the loan agreements.
−Removed: We also establish a general loan loss reserve when available information indicates that it is probable a loss has occurred based on the carrying value of the portfolio and the amount of the loss can be reasonably estimated.
+Added: The Company also establishes a general loan loss reserve when available information indicates that it is probable a loss has occurred based on the carrying value of the portfolio and the amount of the loss can be reasonably estimated.
Significant judgment is required in determining the general loan loss reserve, including estimates of the likelihood of default and the estimated fair value of the collateral.
−Removed: The general loan loss reserve includes those loans, which may have negative characteristics which have not yet become known to us.
−Removed: In addition to the reserves established on loans not considered impaired that have been evaluated under a specific evaluation, we establish the general loan loss reserve using a consistent methodology to determine a loss percentage to be applied to loan balances.
+Added: The general loan loss reserve includes those loans, which may have negative characteristics which have not yet become known to the Company.
+Added: In addition to the reserves established on loans not considered impaired that have been evaluated under a specific evaluation, the Company establishes the general loan loss reserve using a consistent methodology to determine a loss percentage to be applied to loan balances.
These loss percentages are based on many factors, primarily cumulative and recent loss history and general economic conditions.
−Removed: For the years ended December 31, 2020 and 2019, we have loan loss reserves of $ 885,000 and $ 598,000 , respectively.
+Added: For the years ended December 31, 2021 and 2020, the Company has loan loss reserves of $ 943,000 and $ 885,000 , respectively.
Deferred Rent Receivable and Charges —Deferred rent receivable and charges consist of deferred rent, deferred leasing costs, deferred offering costs (Note 9) and other deferred costs.
Deferred leasing costs, which represent lease commissions and other direct costs associated with the acquisition of tenants, are capitalized and amortized on a straight-line basis over the terms of the related leases.
−Removed: Deferred offering costs represent direct costs incurred in connection with our offerings of Series A Preferred Units and, after January 2020, Series A Preferred Stock and Series D Preferred Stock, excluding costs specifically identifiable to a closing, such as commissions, dealer-manager fees, and other offering fees and expenses.
+Added: Deferred offering costs represent direct costs incurred in connection with the Company’s offerings of Series A Preferred Units, and, after January 2020, Series A Preferred Stock and Series D Preferred Stock, excluding costs specifically identifiable to a closing, such as commissions, dealer-manager fees, and other offering fees and expenses.
Generally, for a specific issuance of securities, issuance-specific offering costs are recorded as a reduction of proceeds raised on the issuance date and offering costs incurred but not directly related to a specifically identifiable closing of a security are deferred.
−Removed: Deferred offering costs are first allocated to each issuance of a security on a pro-rata basis equal to the ratio of the number of units or securities issued in a given issuance to the maximum number of units or securities that are expected to be issued in the related offering.
−Removed: In the case of the Series A Preferred Units, which were issued prior to February 2020, the issuance-specific offering costs and the deferred offering costs allocated to such issuance are further allocated to the Series A Preferred Stock and Series A Preferred Warrants issued in such issuance based on the relative fair value of the instruments on the date of issuance.
−Removed: The deferred offering costs allocated to the Series A Preferred Stock and Series A Preferred Warrants are reductions to temporary equity and permanent equity, respectively.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: Deferred offering costs are first allocated to each issuance of a security on a pro-rata basis equal to the
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: ratio of the number of securities issued in a given issuance to the maximum number of securities that are expected to be issued in the related offering.
+Added: In the case of the Series A Preferred Units, which were issued prior to February 2020, the issuance-specific offering costs and the deferred offering costs allocated to such issuance were further allocated to the Series A Preferred Stock and Series A Preferred Warrants issued in such issuance based on the relative fair value of the instruments on the date of issuance.
+Added: The deferred offering costs allocated to the Series A Preferred Stock and Series A Preferred Warrants are reductions to temporary equity and permanent equity, respectively.
As of December 31, 2021 and 2020, deferred rent receivable and charges, net consist of the following:
8 unchanged sentences
Redeemable Preferred Stock —Beginning on the date of original issuance of any given shares of Series A Preferred Stock or Series D Preferred Stock, and from and after the fifth anniversary date of the original issuance of the Series L Preferred Stock, the holder of such shares has the right to require the Company to redeem such shares, subject to certain limitations as discussed in Note 9.
−Removed: We record the activity related to our Series A Preferred Warrants, Series D Preferred Stock and Series L Preferred Stock in permanent equity.
+Added: The Company records the activity related to the Series A Preferred Warrants, Series D Preferred Stock and Series L Preferred Stock in permanent equity.
In the event a holder of Series A Preferred Stock requests redemption of such shares and such redemption takes place prior to the first anniversary of the date of original issuance, the Company is required to pay such redemption in cash.
−Removed: As a result, we record issuances of our Series A Preferred Stock in temporary equity.
−Removed: On the first anniversary of the date of original issuance of a particular share of Series A Preferred Stock, we reclassify such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.
−Removed: Purchase Accounting for Acquisition of Investments in Real Estate —We apply the acquisition method to all acquired real estate assets.
+Added: As a result, the Company records issuances of Series A Preferred Stock in temporary equity.
+Added: On the first anniversary of the date of original issuance of a particular share of Series A Preferred Stock, the Company reclassifies such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.
+Added: Purchase Accounting for Acquisition of Investments in Real Estate —The Company applies the acquisition method to all acquired real estate assets.
The purchase consideration of the real estate, which includes the transaction costs incurred in connection with such acquisitions, is recorded at fair value to the acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, and furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, if any, based in each case on their relative fair values.
5 unchanged sentences
Management also estimates costs to execute similar leases, including leasing commissions, legal, and other related costs.
−Removed: In allocating the purchase consideration of the identified intangible assets and liabilities of an acquired property, above-market, below-market, and in-place lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the remaining non-cancelable term of the lease, and for below-market leases, over a period equal to the initial term plus any below-market fixed-rate renewal periods.
−Removed: Acquired above-market and below-market leases are amortized and recorded to rental and other property income over the initial terms of the respective leases.
−Removed: The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationships, is measured by the estimated cost of operations during a theoretical lease-up period to replace in-place leases, including lost revenues and any unreimbursed operating expenses, plus an estimate of deferred leasing commissions for in-place leases.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: In allocating the purchase consideration of the identified intangible assets and liabilities of an acquired property, above-market, below-market, and in-place lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: value of in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases.
+Added: to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the remaining non-cancelable term of the lease, and for below-market leases, over a period equal to the initial term plus any below-market fixed-rate renewal periods.
+Added: Acquired above-market and below-market leases are amortized and recorded to rental and other property income over the initial terms of the respective leases.
+Added: The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationships, is measured by the estimated cost of operations during a theoretical lease-up period to replace in-place leases, including lost revenues and any unreimbursed operating expenses, plus an estimate of deferred leasing commissions for in-place leases.
+Added: The value of in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases.
If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are written-off.
−Removed: Revenue Recognition —We use a five-step model to recognize revenue for contracts with customers.
−Removed: The five-step model requires that we (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligation.
+Added: Revenue Recognition —At the inception of a revenue-producing contract, the Company determines if a contract qualifies as a lease and if not, then as a customer contract.
+Added: Based on this determination, the appropriate treatment in accordance with GAAP is applied to the contract, including its revenue recognition.
Revenue from leasing activities
−Removed: We operate as a lessor of real estate assets, primarily in Class A and creative office assets.
−Removed: In determining whether our contracts with our tenants constitute leases, we determined that our contracts explicitly identify the premises and that any substitution rights to relocate the tenant to other premises within the same building stated in the contract are not substantive.
−Removed: Additionally, so long as payments are made timely under these contracts, our tenants have the right to obtain substantially all the economic benefits from the use of this identified asset and can direct how and for what purpose the premises are used to conduct their operations.
−Removed: Therefore, our contracts with our tenants constitute leases.
+Added: The Company operates as a lessor of real estate assets.
+Added: When the Company enters into a contract or amends an existing contract, the Company evaluates if the contracts meet the definition of a lease using the following criteria:
+Added: • One party (lessor) must hold an identified asset;
+Added: • The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of the contract;
+Added: • The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract.
+Added: The Company determined that the Company’s contracts with its tenants explicitly identify the premises and that any substitution rights to relocate tenants to other premises within the same building stated in the contract are not substantive.
+Added: Additionally, so long as payments are made timely under such contracts, the Company’s tenants have the right to obtain substantially all the economic benefits from the use of the identified asset and can direct how and for what purpose the premises are used to conduct their operations.
+Added: Therefore, the contracts with the Company’s tenants constitute leases.
All leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases when collectability is probable and the tenant has taken possession or controls the physical use of the leased asset.
The excess of rents recognized over amounts contractually due pursuant to the underlying leases is recorded as deferred rent.
−Removed: If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, are owned by the tenant or us.
−Removed: When we are the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed.
+Added: If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company.
+Added: When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed.
When the tenant is considered the owner of the improvements, any tenant improvement allowance that is funded is treated as an incentive.
2 unchanged sentences
Reimbursements from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes, insurance, and other recoverable costs, are recognized as revenue and are included in rental and other property income in the period the expenses are incurred, with the corresponding expenses included in rental and other property operating expense.
−Removed: Tenant reimbursements are recognized and presented on a gross basis when we are primarily responsible for fulfilling the promise to provide the specified good or service and control that specified good or service before it is transferred to the tenant.
−Removed: We have elected not to separate lease and non-lease components as the pattern of revenue recognition does not differ for the two components, and the non-lease component is not the primary component in our leases.
−Removed: In addition to minimum rents, certain leases provide for additional rents based upon varying percentages of tenants’ sales in excess of annual minimums.
+Added: Tenant reimbursements are recognized and presented on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the specified good or service and control that specified good or service before it is transferred to the tenant.
+Added: The Company has elected not to separate lease and non-lease components as the pattern of revenue recognition does not differ for the two components, and the non-lease component is not the primary component in the Company’s leases.
+Added: In addition to minimum rents, certain leases, including the Company’s parking leases with third-party operators, provide for additional rents based upon varying percentages of tenants’ sales in excess of annual minimums.
Percentage rent is recognized once lessees’ specified sales targets have been met.
−Removed: We derive parking revenues from leases with third-party operators.
−Removed: Our parking leases provide for additional rents based upon varying percentages of tenants’ sales in excess of annual minimums.
−Removed: Parking percentage rent is recognized once lessees’ specific sales targets have been met.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: For the years ended December 31, 2020, 2019 and 2018, we recognized rental income as follows:
+Added: For the years ended December 31, 2021 and 2020, the Company recognized rental income as follows:
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
1 unchanged sentence
Fixed lease payments (1)
+Added: $ 45,773 $ 50,245
Variable lease payments (2)
1 unchanged sentence
(1) Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above-market leases, below-market leases and lease incentives.
−Removed: (2) Variable lease payments include expense reimbursements billed to tenants and percentage rent, net of bad debt expense from our operating leases.
−Removed: The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants are probable.
+Added: (2) Variable lease payments include expense reimbursements billed to tenants and percentage rent, net of bad debt expense from the Company’s operating leases plus cash payments from tenants deemed not probable of collections.
+Added: Collectability of Lease-Related Receivables
+Added: The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants is probable.
The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.
−Removed: Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income for amounts previously recorded and a decrease in the outstanding receivable.
+Added: Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income and a decrease in the outstanding receivable.
Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable.
Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate.
−Removed: The Company does not use a general reserve approach and lease-related receivables are adjusted and taken against rental and other property income only when collectability becomes not probable.
−Removed: As of December 31, 2020 and 2019, the Company identified certain tenants where collection was no longer considered probable and decreased outstanding receivables of $ 1.9 million and $ 45,000 , respectively.
+Added: The Company does not use a general reserve approach.
+Added: As of December 31, 2021 and 2020, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 579,000 and $ 1.9 million, respectively, across all operating leases.
Revenue from lending activities
−Removed: Interest income included in interest and other income is comprised of interest earned on loans and our short-term investments and the accretion of net loan origination fees and discounts.
−Removed: Interest income on loans is accrued as earned with the accrual of interest suspended when the related loan becomes a Non-Accrual Loan.
+Added: Interest income included in interest and other income is comprised of interest earned on loans and the Company’s short-term investments and the accretion of loan discounts.
+Added: Interest income on loans is accrued as earned with the accrual of interest suspended when the related loan becomes a Non-Accrual Loan (as defined below).
Revenue from hotel activities
−Removed: Hotel revenue is recognized upon establishment of a contract with a customer.
+Added: The Company recognizes revenue from hotel activities separate from its leasing activities.
At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct.
6 unchanged sentences
The Company satisfies its performance obligation and recognizes revenues associated with noncancelable reservations at the earlier of (i) the date on which the customer cancels the reservation or (ii) over time as services are rendered to the customer.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
1 unchanged sentence
Ancillary services include facilities usage and providing food and beverage.
−Removed: The Company satisfies its performance obligation and recognizes revenues associated with these services at a point in time as the good or service is delivered to the customer.
−Removed: At inception of these contracts with customers for hotel revenues, the contractual price is equivalent to the transaction price as there are no elements of variable consideration to estimate.
+Added: The Company satisfies its performance obligation and recognizes revenues associated with these services at a point in time when the good or service is delivered to the customer.
+Added: At inception of a contract with a customer for hotel goods and services, the contractual price is equivalent to the transaction price as there are no elements of variable consideration to estimate.
+Added: The Company presents hotel revenues net of sales, occupancy, and other taxes.
Below is a reconciliation of the hotel revenue from contracts with customers to the total hotel segment revenue disclosed in Note 16:
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
5 unchanged sentences
Tenant recoveries outside of the lease agreements
−Removed: Tenant recoveries outside of the lease agreements are related to construction projects in which our tenants have agreed to fully reimburse us for all costs related to construction.
+Added: Tenant recoveries outside of the lease agreements are related to construction projects in which the Company’s tenants have agreed to fully reimburse the Company for all costs related to construction.
These services include architectural, permit expediter and construction services.
2 unchanged sentences
The Company satisfies its performance obligation and recognizes revenues associated with these services over time as the construction is completed.
−Removed: Amounts recognized for tenant recoveries outside of the lease agreements were $ 0 , $ 205,000 and $ 399,000 for the years ended December 31, 2020, 2019 and 2018, respectively, which amounts are included in interest and other income on the consolidated statements of operations.
+Added: No amounts were recognized for tenant recoveries outside of the lease agreements for the years ended December 31, 2021 and 2020.
As of December 31, 2021, there were no remaining performance obligations associated with tenant recoveries outside of the lease agreements.
Premiums and Discounts on Debt — Premiums and discounts on debt are accreted or amortized to interest expense using the effective interest method or on a straight-line basis over the respective term of the debt, which approximates the effective interest method.
−Removed: Stock-Based Compensation Plans —We have issued and continue to issue restricted shares under stock-based compensation plans described more fully in Note 8.
−Removed: We use fair value recognition provisions to account for all awards granted, modified or settled.
+Added: Stock-Based Compensation Plans —The Company has issued and continue to issue restricted shares under stock-based compensation plans described more fully in Note 8.
+Added: The Company uses fair value recognition provisions to account for all awards granted, modified or settled.
Earnings per Share (“EPS”) —Basic EPS is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding for the period.
3 unchanged sentences
The dilutive effect of preferred stock, including the Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, whose redemption is payable in shares of Common Stock or cash, at the discretion of the Company, is reflected in the weighted average diluted shares calculation by application of the if-converted method.
−Removed: Distributions —Distributions on our Series A Preferred Stock, Series D Preferred Stock, Series L Preferred Stock and Common Stock are recorded when they are authorized by our Board of Directors and declared by the Company.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: Assets Held for Sale and Discontinued Operations —In the ordinary course of business, we may periodically enter into agreements to dispose of our assets.
+Added: Distributions —Distributions on the Company’s Series A Preferred Stock, Series D Preferred Stock, Series L Preferred Stock and Common Stock are recorded when they are authorized by its Board of Directors and declared by the Company.
+Added: Assets Held for Sale and Discontinued Operations —In the ordinary course of business, the Company may periodically enter into agreements to dispose of its assets.
Some of these agreements are non-binding because either they do not obligate either party to pursue any transactions until the execution of a definitive agreement or they provide the potential buyer with the ability to terminate without penalty or forfeiture of any material deposit, subject to certain specified contingencies, such as completion of due diligence at the discretion of such buyer.
−Removed: We do not classify assets that are subject to such non-binding agreements as held for sale.
−Removed: We classify assets as held for sale, if material, when they meet the necessary criteria, which include:
+Added: The Company does not classify assets that are subject to such non-binding agreements as held for sale.
+Added: The Company classifies assets as held for sale, if material, when they meet the necessary criteria, which include:
a) management commits to and actively embarks upon a plan to sell the assets, b) the assets to be sold are available for immediate sale in their present condition, c) the sale is expected to be completed within one year under terms usual and customary for such sales and d) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
−Removed: We generally believe that we meet these criteria when the plan for sale has been approved by our management, having the authority to approve the sale, there are no known significant contingencies related to the sale and management believes it is probable that the sale will be completed within one year.
+Added: The Company generally believes that it meets these criteria when the plan for sale has been approved by its management, having the authority to approve the sale, there are no known significant contingencies related to the sale and management believes it is probable that the sale will be completed within one year.
Assets held for sale are recorded at the lower of cost or estimated fair value less cost to sell.
−Removed: In addition, if we were to determine that the asset disposal associated with assets held for sale or disposed of represents a strategic shift, the revenues, expenses and net gain (loss) on dispositions would be recorded in discontinued operations for all periods presented through the date of the applicable disposition.
−Removed: Derivative Financial Instruments —As part of risk management and operational strategies, from time to time, we may enter into derivative contracts with various counterparties.
+Added: In addition, if the Company were to determine that the asset disposal associated with assets held for sale or disposed of represents a strategic shift, the revenues, expenses and net gain (loss) on dispositions would be recorded in discontinued operations for all periods presented through the date of the applicable disposition.
+Added: Derivative Financial Instruments —As part of risk management and operational strategies, from time to time, the Company may enter into derivative contracts with various counterparties.
All derivatives are recognized on the balance sheet at their estimated fair value.
2 unchanged sentences
The changes in fair value for derivative instruments that are not designated as hedges or that do not meet the hedge accounting criteria are recorded as a gain or loss to operations.
−Removed: Income Taxes —We have elected to be taxed as a REIT under the provisions of the Code.
−Removed: To the extent we qualify for taxation as a REIT, we generally will not be subject to a federal corporate income tax on our taxable income that is distributed to our stockholders.
−Removed: We may, however, be subject to certain federal excise taxes and state and local taxes on our income and property.
−Removed: If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at regular corporate rates and will not be able to qualify as a REIT for four subsequent taxable years.
−Removed: In order to remain qualified as a REIT under the Code, we must satisfy various requirements in each taxable year, including, among others, limitations on share ownership, asset diversification, sources of income, and the distribution of at least 90% of our taxable income within the specified time in accordance with the Code.
−Removed: We have wholly-owned taxable REIT subsidiaries (“TRS’s”) which are subject to federal income taxes.
+Added: Income Taxes —The Company has elected to be taxed as a REIT under the provisions of the Code.
+Added: To the extent the Company qualifies for taxation as a REIT, it generally will not be subject to a federal corporate income tax on its taxable income that is distributed to its stockholders.
+Added: The Company may, however, be subject to certain federal excise taxes and state and local taxes on its income and property.
+Added: If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates and will not be able to qualify as a REIT for four subsequent taxable years.
+Added: In order to remain qualified as a REIT under the Code, the Company must satisfy various requirements in each taxable year, including, among others, limitations on share ownership, asset diversification, sources of income, and the distribution of at least 90% of its taxable income within the specified time in accordance with the Code.
+Added: The Company has wholly-owned taxable REIT subsidiaries (“TRS’s”) which are subject to federal income taxes.
The income generated from the taxable REIT subsidiaries is taxed at normal corporate rates.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases.
−Removed: We have established a policy on classification of penalties and interest related to audits of our federal and state income tax returns.
−Removed: If incurred, our policy for recording interest and penalties associated with audits will be to record such items as a component of general and administrative expense.
−Removed: Penalties, if incurred, will be recorded in general and administrative expense and interest paid or received will be recorded in interest expense or interest income, respectively, in our consolidated statements of operations.
+Added: The Company has established a policy on classification of penalties and interest related to audits of its federal and state income tax returns.
+Added: If incurred, the Company’s policy for recording interest and penalties associated with audits will be to record such items as a component of general and administrative expense.
+Added: Penalties, if incurred, will be recorded in general and administrative expense and interest paid or received will be recorded in interest expense or interest income, respectively, in the Company’s consolidated statements of operations.
ASC 740, Income Taxes , provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements.
−Removed: ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more likely than not” of being sustained by the applicable tax authority.
+Added: ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more likely than not” of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current period.
−Removed: We have reviewed all open tax years and concluded that the application of ASC 740 resulted in no material effect to our consolidated financial position or results of operations.
−Removed: Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: The Company has reviewed all open tax years and concluded that the application of ASC 740 resulted in no material effect to its consolidated financial position or results of operations.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
+Added: Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
+Added: The Company bases such estimates on historical experience, information available at the time, and assumptions the Company believes to be reasonable under the circumstances and at such time, including the impact of extraordinary events such as COVID-19.
Actual results could differ from those estimates.
−Removed: Reclassifications —Certain prior period amounts have been reclassified to conform with the current period presentation.
−Removed: These reclassifications had no effect on previously reported totals or subtotals.
−Removed: The reclassifications have been made to the consolidated statements of operations and the consolidated statements of cash flows for the years ended December 31, 2019 and 2018 as follows:
−Removed: Year ended December 31, 2019 Year ended December 31, 2018
−Removed: As previously reported Reclassification As Revised As previously reported Reclassification As Revised
−Removed: Consolidated Statements of Operations
−Removed: Asset management and other fees to related parties $ 18,303 $ ( 5,182 ) $ 13,121 $ 24,451 $ ( 5,492 ) $ 18,959
−Removed: Expense reimbursements to related parties—corporate $ — $ 2,800 $ 2,800 $ — $ 3,047 $ 3,047
−Removed: Expense reimbursements to related parties—lending segment $ — $ 2,382 $ 2,382 $ — $ 2,445 $ 2,445
−Removed: Consolidated Statements of Cash Flows
−Removed: Depreciation and amortization, net $ 27,374 $ ( 766 ) $ 26,608 $ 53,228 $ ( 998 ) $ 52,230
−Removed: Straight-line rent, below-market ground lease and amortization of intangible assets $ — $ — $ — $ ( 18 ) $ 18 $ —
−Removed: Deferred rent and amortization of intangible assets, liabilities and lease inducements $ ( 2,727 ) $ 2,727 $ — $ ( 3,636 ) $ 3,636 $ —
−Removed: Other assets $ 2,980 $ ( 1,961 ) $ 1,019 $ ( 1,421 ) $ ( 2,656 ) $ ( 4,077 )
−Removed: Payment of unsecured revolving lines of credit, revolving credit facilities, mortgages payable, term notes and principal on SBA 7(a) loan-backed notes $ ( 135,500 ) $ ( 57,487 ) $ ( 192,987 ) $ ( 220,000 ) $ 33,769 $ ( 186,231 )
−Removed: Payment of mortgages payable $ ( 46,000 ) $ 46,000 $ — $ — $ — $ —
−Removed: Proceeds from SBA 7(a) loan-backed notes $ — $ — $ — $ 38,200 $ ( 38,200 ) $ —
−Removed: Payment of principal on SBA 7(a) loan-backed notes $ ( 11,487 ) $ 11,487 $ — $ ( 4,431 ) $ 4,431 $ —
−Removed: Payment of deferred costs $ ( 389 ) $ ( 34 ) $ ( 423 ) $ ( 235 ) $ ( 4,234 ) $ ( 4,469 )
−Removed: Payment of deferred loan costs $ ( 34 ) $ 34 $ — $ ( 4,234 ) $ 4,234 $ —
−Removed: Payment of common dividends $ ( 13,140 ) $ ( 1 ) $ ( 13,141 ) $ ( 21,895 ) $ — $ ( 21,895 )
−Removed: Retirement of fractional shares of Common Stock $ ( 1 ) $ 1 $ — $ — $ — $ —
−Removed: Additions to deferred loan costs included in accounts payable and accrued expenses $ — $ — $ — $ 32 $ ( 32 ) $ —
−Removed: Accrued deferred costs $ 35 $ — $ 35 $ 174 $ 32 $ 206
−Removed: Preferred stock offering costs offset against redeemable preferred stock $ 347 $ 3 $ 350 $ 229 $ — $ 229
−Removed: Preferred stock offering costs offset against redeemable preferred stock in permanent equity $ 3 $ ( 3 ) $ — $ — $ — $ —
Concentration of Credit Risk —Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents and interest rate swap agreements.
−Removed: We have our cash and cash equivalents on deposit with what we believe to be high-quality financial institutions.
+Added: The Company has its cash and cash equivalents on deposit with what it believes to be high-quality financial institutions.
Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000.
Management routinely assesses the financial strength of its tenants and, as a consequence, believes that its accounts receivable credit risk exposure is limited.
−Removed: The majority of our revenues are earned from properties located in California.
−Removed: We are subject to risks incidental to the ownership and operation of commercial real estate.
−Removed: These include, among others, the risks normally associated with changes in the general economic climate in the communities in which we operate, trends in the real estate industry, changes in tax laws, interest rate levels, availability of financing, and the potential liability under environmental and other laws.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
−Removed: Segment Information —Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.
−Removed: Our reportable segments for the years ended December 31, 2020 and 2019 consist of two types of commercial real estate properties, namely office and hotel, as well as a segment for our lending business.
−Removed: The products for our office segment primarily include rental of office space and other tenant services, including tenant reimbursements, parking, and storage space rental.
−Removed: The products for our hotel segment include revenues generated from the operations of hotel properties and rental income generated from a garage located directly across the street from one of the hotels.
−Removed: The income from our lending segment includes income from the yield and other related fee income earned on our loans receivable.
−Removed: Recently Issued Accounting Pronouncements— In June 2016, the FASB issued ASU No.
+Added: The majority of the Company’s revenues are earned from properties located in California.
+Added: The Company is subject to risks incidental to the ownership and operation of commercial real estate.
+Added: These include, among others, the risks normally associated with changes in the general economic climate in the communities in which the Company operates, trends in the real estate industry, changes in tax laws, interest rate levels, availability of financing, and the potential liability under environmental and other laws.
+Added: Segment Information —Segment information is prepared on the same basis that the Company’s management reviews information for operational decision-making purposes.
+Added: The Company reportable segments for the years ended December 31, 2021 and 2020 consist of two types of commercial real estate properties, namely office and hotel, as well as a segment for its lending business.
+Added: The products for the Company’s office segment primarily include rental of office space and other tenant services, including tenant reimbursements, parking, and storage space rental.
+Added: The products for the Company’s hotel segment include revenues generated from the operations of hotel properties and rental income generated from a garage located directly across the street from the hotel.
+Added: The income from the Company’s lending segment includes premium income recognized from the sale of the government guaranteed portion of loans receivable, income from the yield on its loans receivable and other related fee income earned on its loans receivable.
+Added: Recently Issued Accounting Pronouncements— In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
2016-13, Financial Instruments-Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments , (ASU 2016-13), which was subsequently amended by ASU No.
+Added: Measurement of Credit Losses on Financial Instruments , which was subsequently amended by ASU No.
2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses (“ASU 2018-19”) in November 2018.
10 unchanged sentences
Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASU No.
−Removed: 2016-02, Leases (Topic 842) (“ASC 842”).
+Added: 2016-02, Leases (Topic 842).
For smaller reporting companies, public entities that are not SEC filers, and entities that are not public business entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2022.
Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018.
−Removed: The Company has not yet adopted ASU 2016-13 and the related updates and remains in the process of evaluating the impact of adoption of this new accounting guidance on our consolidated financial statements.
−Removed: In August 2018, the FASB issued ASU No.
−Removed: 2018-13, Fair Value Measurement (Topic 820):
−Removed: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, adds and modifies certain disclosure requirements for fair value measurements.
−Removed: Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public entities will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.
−Removed: For public entities, the ASU is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2019.
−Removed: Early adoption is permitted in any interim period after issuance of the ASU.
−Removed: We adopted ASU No.
−Removed: 2018-13 beginning January 1, 2020 and the adoption of such ASU did not have a material impact on our consolidated financial statements.
−Removed: In October 2018, the FASB issued ASU No.
−Removed: 2018-16, Derivatives and Hedging (Topic 815):
−Removed: Inclusion of the Secured Overnight Financing Rate (the “SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes .
−Removed: The guidance permits the use of the OIS rate based on the SOFR as a U.S.
−Removed: benchmark rate for purposes of applying hedge accounting.
−Removed: The SOFR is a volume-weighted median interest rate that is calculated daily based on overnight transactions from the prior day’s activity in specified segments of the U.S.
−Removed: Treasury repo market.
−Removed: It has been selected as the preferred replacement for the U.S.
−Removed: dollar London Interbank Offered Rate (“LIBOR”), which will be phased out by the end of 2021.
−Removed: For public entities, the ASU is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2019.
−Removed: Early adoption is permitted in any interim period after issuance of the ASU.
−Removed: We adopted ASU No.
−Removed: 2018-16 beginning on January 1, 2020 and the adoption of such ASU did not have a material impact on our consolidated financial statements.
−Removed: In December 2019, the FASB issued ASU No.
−Removed: 2019-12, Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes , which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes.
−Removed: For public entities, the ASU is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2020.
−Removed: Early adoption is permitted in any interim period after the issuance of the ASU.
−Removed: We adopted ASU No.
−Removed: 2019-12 beginning on January 1, 2020 and the adoption of such ASU did not have a material impact on our consolidated financial statements.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
−Removed: In March 2020, the FASB issued ASU No.
−Removed: 2020-04, Reference Rate Reform (Topic 848):
−Removed: Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients for various agreements and contracts that utilize the London Interbank Offered Rate (“LIBOR”) as the benchmark reference rate.
−Removed: To be eligible for the optional expedients under this guidance, modifications of contractual terms that change, or have the potential to change, the amount or timing of contractual cash flows must be related to replacement of a reference rate.
−Removed: As it relates to the Company, the relevant optional expedient for contract modifications provides that entities can account for these modifications as a continuation of the existing contract without additional analysis.
−Removed: The ASU is effective for all business entities for interim and annual periods beginning on March 12, 2020 and provides for temporary relief through December 31, 2022.
−Removed: We adopted ASU No.
−Removed: 2020-04 beginning on January 1, 2020 and the adoption of such ASU did not have a material impact on our consolidated financial statements, and have not yet adopted the optional relief.
+Added: The Company has not yet adopted ASU 2016-13 and the related updates and remains in the process of evaluating the impact of adoption of this new accounting guidance on its consolidated financial statements.
On April 10, 2020, the FASB issued a question-and-answer document (the “Q&A”) to address stakeholder questions on the application of the lease accounting guidance for lease concessions related to the effects of COVID-19.
The lease modification guidance in Topic 842, Leases , (or Topic 840, Leases ) would require the Company to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was made pursuant to the enforceable rights and obligations of the existing lease agreement (precluded from applying the lease modification accounting framework).
−Removed: However, the Q&A provides that the Company may bypass the lease by lease analysis if certain criteria are met, and instead elect to either consistently apply, or consistently not apply, the lease modification framework to groups of leases with similar characteristics and similar circumstances.
−Removed: As described below, the Company has elected not to apply the lease modification guidance to concessions related to the effects of COVID-19 that do not result in a substantial increase in our rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than the total payments required by the original lease.
−Removed: During the year ended December 31, 2020, the Company provided rental concessions to certain tenants in response to the impact of COVID-19.
−Removed: The Company’s rental concessions during the year ended December 31, 2020 primarily provided for a deferral of rental payments or the application of security deposits to rental payments and replenishment of such security deposits with no substantive changes to the consideration provided for in the original lease.
−Removed: Such changes affected the timing, but not the amount, of the rental payments.
−Removed: In accordance with the above, the Company is accounting for these deferrals as if no changes were made to the leases.
−Removed: The Q&A had no material impact on the Company’s consolidated financial statements as of and for the year ended December 31, 2020;
−Removed: however, its future impact on the Company is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such concessions.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: However, the Q&A provides
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: that the Company may bypass the lease by lease analysis if certain criteria are met, and instead elect to either consistently apply, or consistently not apply, the lease modification framework to groups of leases with similar characteristics and similar circumstances.
+Added: As described below, the Company has elected not to apply the lease modification guidance to concessions related to the effects of COVID-19 that do not result in a substantial increase in the Company’s rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than the total payments required by the original lease.
INVESTMENTS IN REAL ESTATE
10 unchanged sentences
Net investments in real estate $ 497,984 $ 506,040
−Removed: For the years ended December 31, 2020, 2019, and 2018, we recorded depreciation expense of $ 17.7 million, $ 22.2 million, and $ 43.5 million, respectively.
−Removed: 2020 Transactions — During the year ended December 31, 2020, we acquired a 100 % fee-simple interest in the following property from an unrelated third-party.
+Added: For the years ended December 31, 2021 and 2020, the Company recorded depreciation expense of $ 16.9 million and $ 17.7 million, respectively.
+Added: 2021 Transactions — During the year ended December 31, 2021, the Company acquired a 100 % fee-simple interest in the following property from an unrelated third-party.
+Added: The purchase was accounted for as an asset acquisition.
Asset Date of Purchase
1 unchanged sentence
(in thousands)
−Removed: 1021 East 7th Street, Austin, TX Office November 30, 2020 11,180 $ 6,079
−Removed: (1) Transaction costs that were capitalized in connection with the acquisition of this property totaled $ 51,000 , which are not included in the purchase price above.
+Added: 1037 North Sycamore, Los Angeles, CA Office July 13, 2021 4,900 $ 2,900
+Added: (1) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 33,000 , which are not included in the purchase price above.
There were no dispositions during the year ended December 31, 2021.
−Removed: 2019 Transactions —There were no acquisitions during the year ended December 31, 2019.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: We sold 100 % fee-simple interests in the following properties to unrelated third-parties during the year ended December 31, 2019.
−Removed: Transaction costs related to these sales were expensed as incurred.
−Removed: The results of operations of the properties we sold have been included in the consolidated statements of operations through each properties' respective disposition date.
−Removed: Property Asset Type Date of Sale Square Feet Sales Price Transaction Costs Gain on Sale
−Removed: (in thousands)
−Removed: March Oakland Properties,
−Removed: Oakland, CA (1)
−Removed: Office / Parking Garage March 1, 2019 975,596 $ 512,016 $ 8,971 $ 289,779
−Removed: 830 1st Street,
−Removed: Washington, D.C.
−Removed: Office March 1, 2019 247,337 116,550 2,438 45,710
−Removed: 260 Townsend Street,
−Removed: San Francisco, CA Office March 14, 2019 66,682 66,000 2,539 42,092
−Removed: 1333 Broadway,
−Removed: Oakland, CA Office May 16, 2019 254,523 115,430 658 55,221
−Removed: Union Square Properties,
−Removed: Washington, D.C.
−Removed: Office / Land July 30, 2019 630,650 181,000 3,744 302
−Removed: $ 990,996 $ 18,350 $ 433,104
−Removed: (1) The “March Oakland Properties” consist of 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, and 2353 Webster Street Parking Garage.
−Removed: (2) The “Union Square Properties” consist of 899 North Capitol Street, 901 North Capitol Street and 999 North Capitol Street.
−Removed: Prior to the sale, we determined that the book values of such properties exceeded their estimated fair values and recognized an impairment charge of $ 69.0 million for the year ended December 31, 2019 (Note 2).
−Removed: Our determination of the fair values of these properties was based on negotiations with the third-party buyer and the contract sales price.
−Removed: The gain on sale includes $ 113,000 of extinguishment of noncontrolling interests as a result of the sale.
−Removed: 2018 Transactions —During the year ended December 31, 2018, we acquired a 100 % fee-simple interest in an office property known as 9460 Wilshire Boulevard from an unrelated third-party.
−Removed: The property has approximately 68,866 square feet of office space and 22,884 square feet of retail space and is located in Beverly Hills, California.
−Removed: The acquisition was funded with proceeds from our Series L Preferred Stock offering, and the acquired property is reported as part of the office segment (Note 17).
+Added: 2020 Transactions — During the year ended December 31, 2020, the Company acquired a 100 % fee-simple interest in the following property from an unrelated third-party.
+Added: The purchase was accounted for as an asset acquisition.
Asset Date of Purchase
1 unchanged sentence
(in thousands)
−Removed: 9460 Wilshire Boulevard, Beverly Hills, CA Office January 18, 2018 91,750 $ 132,000
−Removed: (1) In December 2017, at the time we entered into the purchase and sale agreement, we made a $ 20.0 million non-refundable deposit to an escrow account that was included in other assets on our consolidated balance sheet as of December 31, 2017.
−Removed: Transaction costs that were capitalized in connection with the acquisition of this property totaled $ 48,000 , which are not included in the purchase price above.
+Added: 1021 East 7th Street, Austin, TX Office November 30, 2020 11,180 $ 6,079
+Added: (1) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 51,000 , which are not included in the purchase price above.
There were no dispositions during the year ended December 31, 2020.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
−Removed: The results of operations of the properties we acquired have been included in the consolidated statements of operations from the date of acquisition.
−Removed: The purchase price of the acquisitions completed during the years ended December 31, 2020 and 2018 were less than 10% of our total assets as of the respective most recent annual consolidated financial statements filed at or prior to the date of acquisition.
+Added: The results of operations of the properties the Company acquired have been included in the consolidated statements of operations from the date of acquisition.
+Added: The purchase price of the acquisitions completed during the years ended December 31, 2021 and 2020 were less than 10% of the Company’s total assets as of the respective most recent annual consolidated financial statements filed at or prior to the date of acquisition.
The following table summarizes the purchase price allocation of the aforementioned acquisitions during the years ended December 31, 2021 and 2020.
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
7 unchanged sentences
Net assets acquired $ 2,933 $ 6,130
−Removed: (1) Acquired in-place leases have a weighted average amortization period of 3 years for both the 2020 and 2018 acquisitions.
−Removed: (2) Acquired above-market leases have a weighted average amortization period of 3 years and 2 years for the 2020 and 2018 acquisitions, respectively.
−Removed: (3) Acquired below-market leases have a weighted average amortization period of 3 years for both the 2020 and 2018 acquisitions.
−Removed: Property Concentrations —Kaiser Foundation Health Plan, Incorporated (“Kaiser”), which occupied space in one of our Oakland, California properties accounted for 30.0 % of our annualized rental income for the year ended December 31, 2020.
+Added: (1) Acquired in-place leases have a weighted average amortization period of 3 years for the 2020 acquisition.
+Added: (2) Acquired above-market leases have a weighted average amortization period of 3 years for the 2020 acquisition.
+Added: (3) Acquired below-market leases have a weighted average amortization period of 3 years for the 2020 acquisition.
+Added: Property Concentrations —Kaiser Foundation Health Plan, Incorporated (“Kaiser”), which occupied space in one of the Company’s Oakland, California properties accounted for 30.9 % of its annualized rental income for the year ended December 31, 2021.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
+Added: and for the Years Ended December 31, 2021 and 2020 (Continued)
LOANS RECEIVABLE
10 unchanged sentences
Loans receivable, net $ 73,543 $ 83,135
−Removed: SBA 7(a) Loans Receivable, Subject to Credit Risk —Represents the unguaranteed portions of loans originated under the SBA 7(a) Small Business Loan Program which were retained by the Company.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
−Removed: SBA 7(a) Loans Receivable, Subject to Loan-Backed Notes —Represents the unguaranteed portions of loans originated under the SBA 7(a) Small Business Loan Program which were transferred to a trust and are held as collateral in connection with a securitization transaction.
+Added: SBA 7(a) Loans Receivable, Subject to Credit Risk —Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were retained by the Company.
+Added: SBA 7(a) Loans Receivable, Subject to Loan-Backed Notes —Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were transferred to a trust and are held as collateral in connection with a securitization transaction.
The proceeds received from the transfer are reflected as loan-backed notes payable (Note 6).
These loans are subject to credit risk.
−Removed: SBA 7(a) Loans Receivable, Paycheck Protection Program —Enacted in March 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) implemented the PPP, a SBA 7(a) loan program that provides small businesses with uncollateralized and unguaranteed loans at an interest rate of 1.00%.
−Removed: The loans will be fully forgiven, subject to certain limitations, when used by the borrower for payroll costs, interest on mortgages, rent, and utilities.
−Removed: For those loans that are forgiven, the SBA will remit 100% of the remaining outstanding principal plus accrued interest to us.
−Removed: For those loans whose borrowers do not meet the criteria required for forgiveness, repayment obligations commence after the applicable deferment period in equal installments over the remaining term to maturity.
−Removed: A substantial portion of the loans that we originated under the PPP have a two-year term and originally had a deferment period of six months;
−Removed: however, as a result of amendments to the PPP, these loans now are deferred for up to 16 months.
−Removed: All loans approved by the SBA after June 5, 2020 have a five-year term and deferment period of 16 months.
−Removed: Loans originated under the PPP are fully guaranteed by the SBA provided that originating lenders follow the requirements set forth therein.
−Removed: Accordingly, there is no credit risk associated with these loans since the SBA has guaranteed payment of the principal and interest.
−Removed: Neither the government nor lenders charged borrowers any fees in connection with the PPP loans;
−Removed: however, the SBA paid lenders a fee upon funding loans under the PPP.
−Removed: As a SBA 7(a) licensee, we are an authorized lender under the PPP and have originated $ 16.0 million loans under the program with $ 14.5 million outstanding as of December 31, 2020.
−Removed: We expect a significant portion of these loans will be forgiven and repaid, either in part or in full, by the SBA, including both principal and accrued interest.
−Removed: SBA 7(a) Loans Receivable, Subject to Secured Borrowings —Represents the government guaranteed portions of loans originated under the SBA 7(a) Small Business Loan Program which were sold with the proceeds received from the sale reflected as secured borrowings—government guaranteed loans.
+Added: SBA 7(a) Loans Receivable, Paycheck Protection Program —As an SBA 7(a) licensee, the Company originated loans under the PPP.
+Added: As of December 31, 2021, a significant portion of these loans have been either forgiven or repaid, and the Company expects that all of the outstanding PPP loans will be forgiven, either in part or in full, by the SBA or be repaid by the borrower, including both principal and accrued interest.
+Added: SBA 7(a) Loans Receivable, Subject to Secured Borrowings —Represents the government guaranteed portions of loans originated under the SBA 7(a) Program which were sold with the proceeds received from the sale reflected as secured borrowings—government guaranteed loans.
There is no credit risk associated with these loans since the SBA has guaranteed payment of the principal.
SBA 7(a) Loans Receivable, Held for Sale — Represents the government guaranteed portion of loans held for sale at the end of the period or that had been sold but in respect of which proceeds had not been received as of the end of the period.
−Removed: As of December 31, 2020 and 2019, our loans subject to credit risk were 99.1 % and 98.7 %, respectively, concentrated in the hospitality industry.
−Removed: As of December 31, 2020 and 2019, 98.8 % and 99.6 %, respectively, of our loans subject to credit risk were current.
−Removed: We classify loans with negative characteristics in substandard categories ranging from special mention to doubtful.
+Added: As of December 31, 2021 and 2020, the Company’s loans subject to credit risk were 99.8 % and 99.1 %, respectively, concentrated in the hospitality industry.
+Added: As of December 31, 2021 and 2020, 100.0 % and 98.8 %, respectively, of the Company’s loans subject to credit risk were current.
+Added: The Company classifies loans with negative characteristics in substandard categories ranging from special mention to doubtful.
As of December 31, 2021 and 2020, $ 1.1 million and $ 1.4 million, respectively, of loans subject to credit risk were classified in substandard categories.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
4 unchanged sentences
(in thousands)
−Removed: Intangible lease assets:
−Removed: Acquired in-place leases, net of accumulated amortization of $ 9,228 and $ 9,382 , respectively, both with an average useful life of 8 years
+Added: Intangible assets:
+Added: Acquired in-place leases, net of accumulated amortization of $ 9,030 and $ 9,228 , respectively, with an average useful life of 9 and 8 years, respectively
$ 2,266 $ 3,316
−Removed: Acquired above-market leases, net of accumulated amortization of $ 15 and $ 42 , respectively, with an average useful life of 6 and 5 years, respectively
+Added: Acquired above-market leases, net of accumulated amortization of $ 27 and $ 15 , respectively, both with an average useful life of 6 years
Trade name and license 2,957 2,957
1 unchanged sentence
Intangible lease liabilities:
−Removed: Acquired below-market leases, net of accumulated amortization of $ 1,786 and $ 2,239 , respectively, both with an average useful life of 4 years
−Removed: $ 587 $ 1,282
+Added: Acquired below-market leases, net of accumulated amortization of $ 1,134 and $ 1,786 , respectively, with an average useful life of 5 and 4 years, respectively
Amortization of the acquired above-market leases is recorded as a reduction to rental and other property income, and amortization of the acquired in-place leases is included in depreciation and amortization in the accompanying consolidated statements of operations.
Amortization of the acquired below-market leases is recorded as an increase to rental and other property income in the accompanying consolidated statements of operations.
−Removed: During the years ended December 31, 2020, 2019 and 2018, we recognized amortization related to our intangible assets and liabilities as follows:
+Added: During the years ended December 31, 2021 and 2020, the Company recognized amortization related to its intangible assets and liabilities as follows:
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
2 unchanged sentences
Acquired below-market lease amortization $ 350 $ 700
−Removed: A schedule of future amortization and accretion of acquisition-related intangible assets and liabilities as of December 31, 2020, is as follows:
+Added: A schedule of future amortization and accretion of acquired intangible assets and liabilities as of December 31, 2021, is as follows:
Assets Liabilities
5 unchanged sentences
2023 10 470 ( 1 )
−Removed: 2023 10 470 ( 2 )
Thereafter — 315 —
$ 28 $ 2,266 $ ( 237 )
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
2 unchanged sentences
During the Year Ended December 31, 2021
−Removed: Balances as of December 31, 2019 Debt Issuances & Assumptions Repayments & Modifications Accretion & (Amortization) Balances as of December 31, 2020
+Added: Balances as of December 31, 2020 Debt Issuances & Assumptions Repayments Accretion & (Amortization) Balances as of December 31, 2021
Mortgage Payable:
Outstanding Balance $ 97,100 $ — $ — $ — $ 97,100
−Removed: Deferred loan costs — Mortgage Payable ( 174 ) — — 27 ( 147 )
+Added: Deferred debt issuance costs — Mortgage Payable ( 147 ) — — 27 ( 120 )
Total Mortgage Payable 96,953 — — 27 96,980
8 unchanged sentences
Borrowed funds from the Federal Reserve through the Paycheck Protection Program Liquidity Facility 14,484 10,396 ( 19,850 ) — 5,030
−Removed: Deferred loan costs — other debt (1) ( 2,867 ) ( 734 ) 281 1,165 ( 2,155 )
+Added: Deferred debt issuance costs — other ( 2,155 ) — — 1,166 ( 989 )
Discount on junior subordinated notes ( 1,683 ) — — 91 ( 1,592 )
1 unchanged sentence
Total Debt, Net $ 324,313 $ 35,396 $ ( 159,696 ) $ 1,132 $ 201,145
−Removed: (1) In connection with unamortized loan costs related to a debt modification, the Company recognized a loss on extinguishment of debt of $ 281,000 during the year ended December 31, 2020.
−Removed: Mortgages Payable —The mortgages payable are secured by deeds of trust on certain of the properties and assignments of rents.
−Removed: As of December 31, 2020, the Company’s mortgages payable had a fixed interest rate of 4.14 % per annum, with monthly payments of interest only, due on July 1, 2026.
+Added: Mortgage Payable —The mortgage payable is secured by a deed of trust on a property and assignments of rents receivable.
+Added: As of December 31, 2021, the Company’s mortgage payable had a fixed interest rate of 4.14 % per annum, with monthly payments of interest only, due on July 1, 2026.
The loan is nonrecourse.
1 unchanged sentence
These loans included cash premiums that are amortized as a reduction to interest expense over the life of the loan using the effective interest method and are fully amortized when the underlying loan is repaid in full.
−Removed: As of December 31, 2020, the Company had secured borrowing principal on SBA 7(a) loans sold for a premium and excess spread of $ 5.7 million, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 3.87 %, and secured borrowing principal on SBA 7(a) loans sold for excess spread of $ 2.7 million, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 1.56 %.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: As of December 31, 2021, the Company’s secured borrowings-government guaranteed loans included $ 4.0 million of loans sold for a premium and excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 3.89 %, and $ 2.6 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 1.56 %.
+Added: 2018 Revolving Credit Facility —In October 2018, the Company entered into a secured revolving credit facility with a bank syndicate that, as amended, allows the Company to borrow up to $ 209.5 million, subject to a borrowing base calculation (the “2018 revolving credit facility”).
+Added: In September 2020, the 2018 revolving credit facility was amended (the “2018 Credit Facility Modification”) to remedy the effect that COVID-19 had on the Company’s ability to borrow under the 2018 revolving
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: 2018 Revolving Credit Facility —In October 2018, CIM Commercial entered into a secured revolving credit facility with a bank syndicate that, as amended, allows CIM Commercial to borrow up to $ 209.5 million, subject to a borrowing base calculation (the “2018 revolving credit facility”).
−Removed: In September 2020, the 2018 revolving credit facility was amended (the “2018 Credit Facility Modification”) to remedy the effect that COVID-19 had on CIM Commercial’s ability to borrow under the 2018 revolving credit facility during the period from September 2, 2020 through June 30, 2021 (the “Deferral Period”).
−Removed: The 2018 revolving credit facility bears interest (i) during the Deferral Period at (A) the base rate plus 1.05 % or (B) LIBOR plus 2.05 % and (ii) after the Deferral Period, at (A) the base rate plus 0.55 % or (B) LIBOR plus 1.55 %.
+Added: credit facility during the period from September 2, 2020 through August 14, 2021 (the “Deferral Period”).
+Added: The 2018 revolving credit facility bore interest during the Deferral Period at (A) the base rate plus 1.05 % or (B) LIBOR plus 2.05 % and (ii) bears interest after the Deferral Period, at (A) the base rate plus 0.55 % or (B) LIBOR plus 1.55 %.
As of December 31, 2021 and 2020, the variable interest rate was 2.15 % and 2.20 %, respectively.
The 2018 revolving credit facility is also subject to an unused commitment fee of 0.15 % or 0.25 % depending on the amount of aggregate unused commitments.
−Removed: The 2018 revolving credit facility is secured by deeds of trust on certain of our properties.
−Removed: During the Deferral Period, our borrowing capacity is subject to a $ 15.0 million reserve, which may be reduced by certain capital expenditures made in respect of our properties securing the 2018 revolving credit facility, and the requirement that we maintain a minimum balance of “liquid assets” of $ 15.0 million, which are defined as (1) unencumbered cash and cash equivalents and (2) up to $ 5.0 million unfunded availability under the 2018 revolving credit facility.
−Removed: Other than as described in the preceding sentence, the 2018 revolving credit facility contains customary covenants and is not subject to any financial covenants (though the amount we may borrow under the 2018 revolving credit facility is determined by a borrowing base calculation).
−Removed: The 2018 revolving credit facility matures in October 2022 and provides for one one-year extension option under certain conditions.
+Added: The 2018 revolving credit facility is secured by deeds of trust on certain of the Company’s properties.
+Added: The 2018 revolving credit facility contains customary covenants and is not subject to any financial covenants (though the amount the Company may borrow under the 2018 revolving credit facility is determined by a borrowing base calculation).
+Added: The 2018 revolving credit facility matures in October 2022 and provides for one one-year extension option under certain conditions, including providing notice of the election and paying an extension fee of 0.15 % of each lender’s commitment being extended on the effective date of such extension.
As of December 31, 2021 and 2020, $ 60.0 million and $ 166.5 million, respectively, was outstanding under the 2018 revolving credit facility, and approximately $ 117.6 million and $ 28.0 million, respectively, was available for future borrowings.
−Removed: 2020 Revolving Credit Facility —In May 2020, to further enhance its liquidity position and maintain financial flexibility, CIM Commercial entered into an unsecured revolving credit facility with a bank (the “2020 unsecured revolving credit facility”) pursuant to which CIM Commercial can borrow up to a maximum of $ 10.0 million.
+Added: 2020 Unsecured Revolving Credit Facility —In May 2020, the Company entered into an unsecured revolving credit facility with a bank (the “2020 unsecured revolving credit facility”) pursuant to which the Company can borrow up to a maximum of $ 10.0 million.
Outstanding advances under the 2020 unsecured revolving credit facility bear interest at the rate of 1.00 %.
−Removed: CIM Commercial also pays a revolving credit facility fee of 1.12 % with each advance under the 2020 unsecured revolving credit facility, which fee is subject to a cap of $ 112,000 in the aggregate.
+Added: The Company also pays a revolving credit facility fee of 1.12 % with each advance under the 2020 unsecured revolving credit facility, which fee is subject to a cap of $ 112,000 in the aggregate.
The 2020 unsecured revolving credit facility contains certain customary covenants including a maximum leverage ratio and a minimum fixed charge coverage ratio, as well as certain other conditions.
The 2020 unsecured revolving credit facility matures in May 2022.
−Removed: As of December 31, 2020, $ 0 was outstanding under the 2020 unsecured revolving credit facility and $ 10.0 million was available for future borrowings.
+Added: As of December 31, 2021, no amounts were outstanding under the 2020 unsecured revolving credit facility and $ 10.0 million was available for future borrowings.
Junior Subordinated Notes —The Company has junior subordinated notes with a variable interest rate which resets quarterly based on the three-month LIBOR plus 3.25 %, with quarterly interest only payments.
The junior subordinated balance is due at maturity on March 30, 2035.
−Removed: The junior subordinated notes may be redeemed at par at our option.
−Removed: SBA 7(a) Loan-Backed Notes —SBA 7(a) loan-backed notes are secured by deeds of trust or mortgages.
−Removed: On May 30, 2018, we completed a securitization of the unguaranteed portion of certain of our SBA 7(a) loans receivable with the issuance of $ 38.2 million of unguaranteed SBA 7(a) loan-backed notes.
−Removed: The SBA 7(a) loan-backed notes are collateralized solely by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable.
+Added: The junior subordinated notes may be redeemed at par at the Company’s option.
+Added: SBA 7(a) Loan-Backed Notes —On May 30, 2018, the Company completed a securitization of the unguaranteed portion of certain of its SBA 7(a) loans receivable with the issuance of $ 38.2 million of unguaranteed SBA 7(a) loan-backed notes.
+Added: The SBA 7(a) loan-backed notes are secured by deeds of trust or mortgages and are collateralized solely by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of the Company’s SBA 7(a) loans receivable.
The SBA 7(a) loan-backed notes mature on March 20, 2043, with monthly payments due as payments on the collateralized loans are received.
−Removed: Based on the anticipated repayments of our collateralized SBA 7(a) loans, at issuance, we estimated the weighted average life of the SBA 7(a) loan-backed notes to be approximately two years .
+Added: Based on the anticipated repayments of the Company’s collateralized SBA 7(a) loans, at issuance, the Company estimated the weighted average remaining life of the SBA 7(a) loan-backed notes to be approximately two years .
The SBA 7(a) loan-backed notes bear interest at the lower of the one-month LIBOR plus 1.40 % or the prime rate less 1.08 %.
−Removed: We reflect the SBA 7(a) loans receivable as assets on our consolidated balance sheets and the SBA 7(a) loan-backed notes as debt on our consolidated balance sheets.
−Removed: The restricted cash on our consolidated balance sheets as of December 31, 2020 and 2019 included $ 1.2 million and $ 3.3 million, respectively, of funds related to our SBA 7(a) loan-backed notes.
−Removed: Paycheck Protection Program Liquidity Facility —In June 2020, we borrowed funds from the Federal Reserve through the PPP Liquidity Facility (the “PPPLF”).
−Removed: Advances under the PPPLF carry an interest rate of 0.35%, are made on a dollar-for-dollar basis based on the amount of loans originated under the PPP and are secured by loans made by us under the PPP.
+Added: As of December 31, 2021 and 2020, the variable interest rate was 1.49 % and 1.55 %, respectively.
+Added: The Company reflects the SBA 7(a) loans receivable as assets on its consolidated balance sheets and the SBA 7(a) loan-backed notes as debt on its consolidated balance sheets.
+Added: The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes of $ 1.9 million and $ 1.2 million, as of December 31, 2021 and 2020, respectively.
+Added: Paycheck Protection Program Liquidity Facility —In June 2020, the Company commenced borrowing funds from the Federal Reserve through the PPP Liquidity Facility (the “PPPLF”) to finance all the loans the Company originated under the PPP.
+Added: Advances under the PPPLF carry an interest rate of 0.35 %, are made on a dollar-for-dollar basis based on the amount of loans originated under the PPP and are secured by loans made by the Company under the PPP.
The PPPLF contains customary covenants but is not subject to any financial covenants.
1 unchanged sentence
At maturity, both principal and accrued interest are due.
−Removed: The maturity date of a PPPLF borrowing will be accelerated if, among other things, we have been reimbursed by the SBA for a loan forgiveness (to the extent of the forgiveness), we have received payment from the SBA representing exercise of the loan guarantee or we have received payment from the underlying borrower (to the extent of the payment received).
−Removed: No new extensions of credit will be made under the PPPLF after June 30, 2021 unless the Federal Reserve Board and the United States Department of the Treasury decide to extend the PPPLF.
−Removed: We borrowed money
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: The maturity date of a PPPLF borrowing will be accelerated if, among other things, the Company has been reimbursed by the SBA for a loan forgiveness (to the extent of the forgiveness), the Company has received payment from the SBA representing exercise of the loan guarantee or the Company has received payment from the underlying borrower (to the extent of the payment received).
+Added: As of December 31, 2021 and 2020, $ 5.0 million and $ 14.5 million, respectively, was outstanding under the PPPLF.
+Added: As the PPP has ended, no new extensions of credit may be made under the PPPLF.
+Added: Deferred debt issuance costs, which represent legal and third-party fees incurred in connection with the Company’s borrowing activities, are capitalized and amortized to interest expense on a straight-line basis over the life of the related loan, approximating the effective interest method.
+Added: Deferred debt issuance costs are presented net of accumulated amortization and are a reduction to total debt.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: under the PPPLF to finance all the loans we originated under the PPP.
−Removed: As of December 31, 2020, $ 14.5 million was outstanding under the PPPLF.
−Removed: Deferred loan costs, which represent legal and third-party fees incurred in connection with our borrowing activities, are capitalized and amortized to interest expense on a straight-line basis over the life of the related loan, approximating the effective interest method.
−Removed: Deferred loan costs are presented in the above table net of accumulated amortization and are a reduction to total debt.
As of December 31, 2021 and 2020, accrued interest and unused commitment fees payable of $ 467,000 and $ 564,000 , respectively, are included in accounts payable and accrued expenses.
−Removed: Future principal payments on our debt (face value) as of December 31, 2020 are as follows:
−Removed: Years Ending December 31, Mortgages Payable Secured Borrowings Principal (1)
+Added: Future principal payments on the Company’s debt (face value) as of December 31, 2021 are as follows:
+Added: Years Ending December 31, Mortgage Payable Secured Borrowings Principal (1)
2018 Revolving Credit Facility Other (1) (2)
8 unchanged sentences
(1) Principal payments on secured borrowings and SBA 7(a) loan-backed notes, which are included in Other, are generally dependent upon cash flows received from the underlying loans.
−Removed: Our estimate of their repayment is based on scheduled payments on the underlying loans.
−Removed: Our estimate will differ from actual amounts to the extent we experience prepayments and or loan liquidations or charge-offs.
+Added: The Company’s estimate of their repayment is based on scheduled payments on the underlying loans.
+Added: The Company’s estimate will differ from actual amounts to the extent the Company experiences prepayments and or loan liquidations or charge-offs.
No payment is due unless payments are received from the borrowers on the underlying loans.
(2) Represents the junior subordinated notes, SBA 7(a) loan-backed notes, and borrowed funds from the Federal Reserve through the PPPLF.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
STOCK-BASED COMPENSATION PLANS
−Removed: On April 3, 2015, the Company’s board of directors (the “Board of Directors”) unanimously approved the CIM Commercial Trust Corporation 2015 Equity Incentive Plan (the “2015 Equity Incentive Plan”), which was approved by the Company’s stockholders.
+Added: On April 3, 2015, the Company’s board of directors (the “Board of Directors”) unanimously approved the Company’s 2015 Equity Incentive Plan (the “2015 Equity Incentive Plan”), which was approved by the Company’s stockholders.
Under the 2015 Equity Incentive Plan, the Company granted awards of restricted shares of Common Stock to each of the independent members of the Board of Directors.
3 unchanged sentences
Per Share (1)
−Removed: Balance, January 1, 2018 3,195 $ 46.95
−Removed: Granted 3,378 $ 44.40
−Removed: Vested ( 3,195 ) $ 46.95
Balance, December 31, 2019 3,880 $ 56.66
7 unchanged sentences
Compensation expense related to these restricted shares of Common Stock is recognized over the vesting period, and generally vests based on one year of continuous service.
−Removed: The Company recorded compensation expense related to these restricted shares of Common Stoc k in the amount of $ 222,000 , $ 194,000 and $ 162,000 , for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: As of December 31, 2020, there was $ 73,000 of total unrecognized compensation expense related to shares of Common Stock which will be recognized ratably over the remaining vesting period.
−Removed: The estimated fair value of restricted shares vested during 2020, 2019 and 2018 was $ 220,000 , $ 150,000 and $ 150,000 , respectively.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: The Company recorded compensation expense related to these
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: restricted shares of Common Stoc k in the amount of $ 220,000 and $ 222,000 for the years ended December 31, 2021 and 2020, respectively.
+Added: As of December 31, 2021, there was $ 73,000 of total unrecognized compensation expense related to shares of Common Stock which will be recognized ratably over the remaining vesting period.
+Added: The estimated fair value of restricted shares vested during 2021 and 2020 was $ 220,000 and $ 220,000 , respectively.
EARNINGS PER SHARE (“EPS”)
−Removed: The following table reconciles the numerator and denominator used in computing our basic and diluted per-share amounts for net (loss) income attributable to common stockholders for the years ended December 31, 2020, 2019 and 2018:
+Added: The computations of basic EPS are based on the Company’s weighted average shares outstanding.
+Added: Outstanding Series A Preferred Warrants were not included in the computation of diluted EPS for the years ended December 31, 2021 and 2020 because their impact was either anti-dilutive or such warrants were not exercisable during such periods (Note 10).
+Added: No shares of Series D Preferred Stock outstanding as of December 31, 2021 and December 31, 2020 had a dilutive effect.
+Added: Outstanding shares of Series L Preferred Stock were not included in the computation of diluted EPS for the years ended December 31, 2021 and 2020 because such shares were not redeemable during such periods.
+Added: EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods.
+Added: In addition, EPS is calculated independently for each component and may not be additive due to rounding.
+Added: The following table reconciles the numerator and denominator used in computing the Company’s basic and diluted per-share amounts for net (loss) income attributable to common stockholders for the years ended December 31, 2021 and 2020:
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands, except per share amounts)
1 unchanged sentence
Redeemable preferred stock dividends declared on dilutive shares
−Removed: ( 1 ) 2,804 —
Diluted net (loss) income attributable to common stockholders $ ( 19,979 ) $ ( 33,468 )
6 unchanged sentences
$ ( 1.04 ) $ ( 2.27 )
−Removed: The computations of basic EPS are based on our weighted average shares outstanding.
−Removed: The computation of diluted EPS does not include outstanding shares of Series A Preferred Stock for the year ended December 31, 2018 because their impact was deemed to be anti-dilutive.
−Removed: Outstanding Series A Preferred Warrants were not included in the computation of diluted EPS for the years ended December 31, 2020, 2019 and 2018 because their impact was either anti-dilutive or such warrants were not exercisable during such periods (Note 10).
−Removed: No shares of Series D Preferred Stock outstanding as of December 31, 2020 had a dilutive effect and no shares of Series D Preferred Stock were outstanding as of December 31, 2019 and 2018.
−Removed: Outstanding shares of Series L Preferred Stock were not included in the computation of diluted EPS for the years ended December 31, 2020, 2019 and 2018 because such shares were not redeemable during such periods.
−Removed: EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods.
−Removed: In addition, EPS is calculated independently for each component and may not be additive due to rounding.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
6 unchanged sentences
Balances, December 31, 2019 2,837,094 $ 70,633 — $ — 5,387,160 $ 152,834 8,224,254 $ 223,467
−Removed: Reclassification of Series A Preferred Stock to permanent equity 1,223,032 30,403 — — — — 1,223,032 30,403
−Removed: Redemption of Series A Preferred Stock ( 1,820 ) ( 45 ) — — — — ( 1,820 ) ( 45 )
−Removed: Balances, December 31, 2018 1,281,804 $ 31,866 — $ — 8,080,740 $ 229,251 9,362,544 $ 261,117
−Removed: Repurchase of Series L Preferred Stock — — — — ( 2,693,580 ) ( 76,417 ) ( 2,693,580 ) ( 76,417 )
+Added: Issuance of Series D Preferred Stock — — 19,145 473 — — 19,145 473
Reclassification of Series A Preferred Stock to permanent equity 1,570,421 38,837 — — — — 1,570,421 38,837
5 unchanged sentences
Balances, December 31, 2021 6,271,337 $ 156,431 56,857 $ 1,396 5,387,160 $ 152,834 11,715,354 $ 310,661
−Removed: As of December 31, 2020, we had issued in registered public offerings 6,290,900 shares of Series A Preferred Stock, 4,603,287 Series A Preferred Warrants and 19,145 shares of Series D Preferred Stock and received gross proceeds of $ 157.7 million ($ 156.5 million of which was allocated to the Series A Preferred Stock, $ 761,000 of which was allocated to the Series A Preferred Warrants, and $ 473,000 of which was allocated to the Series D Preferred Stock) and, additionally, had issued 201,732 shares of Series A Preferred Stock as payment for services to the Administrator, for which no cash proceeds were received.
+Added: As of December 31, 2021, the Company had issued in registered public offerings 7,557,916 shares of Series A Preferred Stock, 4,603,287 Series A Preferred Warrants and 56,857 shares of Series D Preferred Stock and received gross proceeds of $ 190.3 million ($ 188.2 million of which was allocated to the Series A Preferred Stock, $ 761,000 of which was allocated to the Series A Preferred Warrants, and $ 1.4 million of which was allocated to the Series D Preferred Stock) and, additionally, had issued 568,681 shares of Series A Preferred Stock as payment for services to the Administrator, for which no cash proceeds were received.
In connection with such issuance, costs specifically identifiable to the offering of Series A Preferred Stock, Series A Preferred Warrants and Series D Preferred Stock, such as commissions, dealer manager fees and other offering fees and expenses, totaled $ 15.9 million ($ 15.7 million of which was allocated to the Series A Preferred Stock, $ 142,000 of which was allocated to the Series A Preferred Warrants, and $ 35,000 of which was allocated to the Series D Preferred Stock).
In addition, as of December 31, 2021, non-issuance-specific costs related to this offering totaled $ 8.0 million.
−Removed: As of December 31, 2020, we have reclassified and allocated $ 1.3 million, $ 5,000 and $ 4,000 from deferred charges to Series A Preferred Stock, Series A Preferred Warrants and Series D Preferred Stock, respectively, as a reduction to the gross proceeds received.
+Added: As of December 31, 2021, the Company has reclassified and allocated $ 1.7 million, $ 5,000 and $ 13,000 from deferred charges to Series A Preferred Stock, Series A Preferred Warrants and Series D Preferred Stock, respectively, as a reduction to the gross proceeds received.
Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering.
1 unchanged sentence
As of December 31, 2021, 223,295 shares of Series A Preferred Stock and no shares of Series D Preferred Stock have been redeemed.
−Removed: Series A Preferred Stock —We conducted a continuous public offering of Series A Preferred Units from October 2016 through January 2020, where each Series A Preferred Unit consisted of one share of Series A Preferred Stock, par value $ 0.001 per share, of the Company with an initial stated value of $ 25.00 per share, subject to adjustment, and one warrant to
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: Series A Preferred Stock —The Company conducted a continuous public offering of Series A Preferred Units from October 2016 through January 2020, where each Series A Preferred Unit consisted of one share of Series A Preferred Stock, par value $ 0.001 per share, of the Company with an initial stated value of $ 25.00 per share, subject to adjustment, and one warrant to purchase 0.25 of a share of Common Stock.
+Added: Proceeds and expenses from the sale of the Series A Preferred Units were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.
+Added: Since February 2020, the Company has been conducting a continuous public offering with respect to shares of the Company’s Series A Preferred Stock, which, since such time, is no longer being issued as a unit with an accompanying Series A Preferred Warrant.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: purchase 0.25 of a share of Common Stock.
−Removed: Proceeds and expenses from the sale of the Series A Preferred Units were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.
−Removed: Since February 2020, we have been conducting a continuous public offering with respect to shares of our Series A Preferred Stock, which, since such time, is no longer being issued as a unit with an accompanying Series A Preferred Warrant.
Net proceeds from the issuance of shares of Series A Preferred Stock are initially recorded in temporary equity at an amount equal to the gross proceeds allocated to such shares of Series A Preferred Stock minus the costs specifically identifiable to the issuance of such shares and the non-issuance specific offering costs allocated to such shares.
1 unchanged sentence
Such adjustment is considered a deemed dividend for purposes of calculating basic and diluted EPS.
−Removed: During the year ended December 31, 2020, we recorded redeemable preferred stock deemed dividends of $ 377,000 related to such adjustments.
−Removed: No such adjustments were recorded during the years ended December 31, 2019 and 2018.
−Removed: On the first anniversary of the issuance of a particular share of Series A Preferred Stock, we reclassify such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.
−Removed: As of December 31, 2020, we have reclassified an aggregate of $ 100.4 million in net proceeds from temporary equity to permanent equity.
−Removed: Series D Preferred Stock —Since February 2020, we h ave been conducting a continuous public offering with respect to shares of our Series D Preferred Stock, par value $ 0.001 per share, subject to adjustment.
+Added: During the years ended December 31, 2021 and December 31, 2020, the Company recorded redeemable preferred stock deemed dividends of $ 253,000 and $ 377,000 , respectively, related to such adjustments.
+Added: On the first anniversary of the issuance of a particular share of Series A Preferred Stock, the Company reclassifies such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.
+Added: As of December 31, 2021, the Company had reclassified an aggregate of $ 146.2 million in net proceeds from temporary equity to permanent equity.
+Added: Series D Preferred Stock —Since February 2020, the Company has been conducting a continuous public offering with respect to shares of its Series D Preferred Stock, par value $ 0.001 per share, subject to adjustment.
The selling price of the Series D Preferred Stock was $ 25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and is expected to be, and since June 29, 2020, has been, $ 24.50 per share through the end of the life of the offering.
Shares of Series D Preferred Stock are recorded in permanent equity at the time of their issuance.
−Removed: Series L Preferred Stock —On November 21, 2017, we issued 8,080,740 shares of Series L Preferred Stock having an initial stated value of $ 28.37 per share (“Series L Preferred Stock Stated Value”), subject to adjustment.
−Removed: We received gross proceeds of $ 229.3 million from the sale of the Series L Preferred Stock, which was reduced by issuance-specific offering costs, such as commissions, dealer manager fees, and other offering fees and expenses, totaling $ 15.9 million, a discount of $ 2.9 million, and non-issuance-specific costs of $ 2.5 million.
+Added: Series L Preferred Stock —On November 21, 2017, the Company issued 8,080,740 shares of Series L Preferred Stock having an initial stated value of $ 28.37 per share (“Series L Preferred Stock Stated Value”), subject to adjustment.
+Added: The Company received gross proceeds of $ 229.3 million from the sale of the Series L Preferred Stock, which was reduced by issuance-specific offering costs, such as commissions, dealer manager fees, and other offering fees and expenses, totaling $ 15.9 million, a discount of $ 2.9 million, and non-issuance-specific costs of $ 2.5 million.
These fees have been recorded as a reduction to the gross proceeds in permanent equity.
1 unchanged sentence
The Tender Offer was oversubscribed, and pursuant to the terms of the Tender Offer, shares of Series L Preferred Stock were accepted for purchase on a pro rata basis.
−Removed: We repurchased 2,693,580 shares of Series L Preferred Stock at a purchase price of $ 29.12 per share (of which $ 1.39 , or $ 3.7 million in the aggregate, reflects the amount of accrued and unpaid dividends on the Series L Preferred Stock as of November 20, 2019), as converted to and paid in ILS.
−Removed: The total cost to repurchase the tendered shares, including professional fees to complete the Tender Offer of $ 462,000 but excluding the dividends accrued in respect of such shares, was $ 75.2 million, which was primarily funded from borrowings under the 2018 revolving credit facility (Note 6).
−Removed: We recognized $ 5.9 million of redeemable preferred stock redemptions in our consolidated statement of operations for the year ended December 31, 2019 in connection with the Tender Offer.
+Added: The Company repurchased 2,693,580 shares of Series L Preferred Stock at a purchase price of $ 29.12 per share, as converted to and paid in ILS.
The shares of Series L Preferred Stock accepted for payment by the Company were restored to the status of authorized but unissued shares of preferred stock without designation as to class or series.
−Removed: Until the fifth anniversary of the date of original issuance of our Series L Preferred Stock, we are prohibited from issuing any shares of preferred stock ranking senior to or on parity with the Series L Preferred Stock with respect to the payment of dividends, other distributions, liquidation, and or dissolution or winding up of the Company unless the Minimum Fixed Charge Coverage Ratio, calculated in accordance with the Articles Supplementary describing the Series L Preferred Stock, is equal to or greater than 1.25 :1.00.
−Removed: As of December 31, 2020 and 2019, we were in compliance with the Series L Preferred Stock Minimum Fixed Charge Coverage Ratio.
+Added: Until the fifth anniversary of the date of original issuance of the Series L Preferred Stock, the Company is prohibited from issuing any shares of preferred stock ranking senior to or on parity with the Series L Preferred Stock with respect to the payment of dividends, other distributions, liquidation, and or dissolution or winding up of the Company unless the Minimum Fixed Charge Coverage Ratio, calculated in accordance with the Articles Supplementary describing the Series L Preferred Stock, is equal to or greater than 1.25 :1.00.
+Added: As of December 31, 2021 and 2020, the Company was in compliance with the Series L Preferred Stock Minimum Fixed Charge Coverage Ratio.
Refer to Note 12 for a discussion of certain payments the Company has made in shares of Common Stock and in shares of Preferred Stock and may make in shares of Preferred Stock in lieu of cash payments in order to remain in compliance with the Series L Preferred Stock Minimum Fixed Charge Coverage Ratio.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: Dividends —With respect to the payment of dividends, the Series A Preferred Stock ranks senior to the Series L Preferred Stock and the Common Stock, and on parity with the Series D Preferred Stock.
+Added: The Series L Preferred Stock ranks senior to the Common Stock (except with respect to and only to the extent of the Initial Dividend) and junior to the Series A Preferred Stock, Series D Preferred Stock and Common Stock (with respect to and only to the extent of the Initial Dividend).
+Added: With respect to the distribution of amounts upon liquidation, dissolution or winding-up, the Series A Preferred Stock ranks on parity with the Series D Preferred Stock and Series L Preferred Stock, to the extent of the Series L Preferred Stock Stated Value, and otherwise ranks senior to the Series L Preferred Stock and the Common Stock.
+Added: With respect to the distribution of amounts upon liquidation, dissolution or winding-up, the Series L Preferred Stock ranks senior to the Common Stock, both (i) to the extent of the Series L Preferred Stock Stated Value and (ii) following payment to holders of the Common Stock of an
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: Dividends —With respect to the payment of dividends, the Series A Preferred Stock ranks senior to our Series L Preferred Stock and our Common Stock, and on parity with our Series D Preferred Stock.
−Removed: The Series L Preferred Stock ranks senior to our Common Stock (except with respect to and only to the extent of the Initial Dividend) and junior to our Series A Preferred Stock, Series D Preferred Stock and Common Stock (with respect to and only to the extent of the Initial Dividend).
−Removed: With respect to the distribution of amounts upon liquidation, dissolution or winding-up, the Series A Preferred Stock ranks on parity with our Series D Preferred Stock and Series L Preferred Stock, to the extent of the Series L Preferred Stock Stated Value, and otherwise ranks senior to our Series L Preferred Stock and our Common Stock.
−Removed: With respect to the distribution of amounts upon liquidation, dissolution or winding-up, the Series L Preferred Stock ranks senior to our Common Stock, both (i) to the extent of the Series L Preferred Stock Stated Value and (ii) following payment to holders of our Common Stock of an amount equal to any unpaid Initial Dividend, to the extent of any accrued and unpaid dividends on the Series L Preferred Stock, on parity with our Series A Preferred Stock and Series D Preferred Stock, to the extent of the Series L Preferred Stock Stated Value and junior to our Series A Preferred Stock, Series D Preferred Stock and Common Stock (to the extent of the Initial Dividend), in all instances with respect to any accrued and unpaid dividends on the Series L Preferred Stock.
−Removed: Holders of Series A Preferred Stock are entitled to receive, if, as and when authorized by our Board of Directors, and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of 5.50 % of the Series A Preferred Stock Stated Value (i.e., the equivalent of $ 0.34375 per share per quarter) (the “Series A Dividend”).
−Removed: Holders of Series D Preferred Stock are entitled to receive, if, as and when authorized by our Board of Directors, and declared by us out of legally available funds, cumulative cash dividends on each share of Series D Preferred Stock at an annual rate of 5.65 % of the Series D Preferred Stock Stated Value (i.e., the equivalent of $ 0.35313 per share per quarter) (the “Series D Dividend”).
+Added: amount equal to any unpaid Initial Dividend, to the extent of any accrued and unpaid dividends on the Series L Preferred Stock, on parity with the Series A Preferred Stock and Series D Preferred Stock, to the extent of the Series L Preferred Stock Stated Value and junior to the Series A Preferred Stock, Series D Preferred Stock and Common Stock (to the extent of the Initial Dividend), in all instances with respect to any accrued and unpaid dividends on the Series L Preferred Stock.
+Added: Holders of Series A Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of 5.50 % of the Series A Preferred Stock Stated Value (i.e., the equivalent of $ 0.34375 per share per quarter) (the “Series A Dividend”).
+Added: Holders of Series D Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series D Preferred Stock at an annual rate of 5.65 % of the Series D Preferred Stock Stated Value (i.e., the equivalent of $ 0.35313 per share per quarter) (the “Series D Dividend”).
Dividends on each share of Series A Preferred Stock and Series D Preferred Stock begin accruing on, and are cumulative from, the date of issuance.
−Removed: We expect to pay the Series A Dividend and Series D Dividend in arrears on a monthly basis in accordance with the foregoing provisions, unless our results of operations, our general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so.
−Removed: The timing and amount of the Series A Dividend and the Series D Dividend will be determined by our Board of Directors, in its sole discretion, and may vary from time to time.
−Removed: Holders of Series L Preferred Stock are entitled to receive, if, as and when authorized by our Board of Directors, and declared by us out of legally available funds, cumulative cash dividends on each share of Series L Preferred Stock at an annual rate of 5.50 % of the Series L Preferred Stock Stated Value (i.e., the equivalent of $ 1.56035 per share per year).
+Added: The Company expects to pay the Series A Dividend and Series D Dividend in arrears on a monthly basis in accordance with the foregoing provisions, unless the Company’s results of operations, general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so.
+Added: The timing and amount of the Series A Dividend and the Series D Dividend will be determined by the Company’s Board of Directors, in its sole discretion, and may vary from time to time.
+Added: Holders of Series L Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series L Preferred Stock at an annual rate of 5.50 % of the Series L Preferred Stock Stated Value (i.e., the equivalent of $ 1.56035 per share per year).
Dividends on each share of Series L Preferred Stock began accruing on, and are cumulative from, the date of issuance.
−Removed: We expect to pay dividends on the Series L Preferred Stock in arrears on an annual basis in accordance with the foregoing provisions, unless our results of operations, our general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so.
+Added: The Company expects to pay dividends on the Series L Preferred Stock in arrears on an annual basis in accordance with the foregoing provisions, unless the Company’s results of operations, general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so.
If the Company fails to timely declare distributions or fails to timely pay distributions on the Series L Preferred Stock, the annual dividend rate of the Series L Preferred Stock will temporarily increase by 1.00 % per year, up to a maximum rate of 8.50 % per annum.
−Removed: However, prior to the payment of any distributions on Series L Preferred Stock in respect of a given year, the Company must first declare and pay dividends on the Common Stock in respect of such year in an aggregate amount equal to the Initial Dividend announced by our Board of Directors at the end of the prior fiscal year.
−Removed: On December 22, 2020, the Company announced an Initial Dividend on shares of our Common Stock for fiscal year 2021 in the aggregate amount of $ 4,448,223 .
−Removed: During the year ended December 31, 2020, the Company paid $ 8.1 million, $ 12,000 and $ 8.4 million of cash dividends on our Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.
−Removed: During the year ended December 31, 2019, the Company paid $ 4.4 million, $ 0 and $ 17.8 million of cash dividends on our Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.
−Removed: Redemptions —Our Series A Preferred Stock and Series D Preferred Stock are redeemable at the option of the holder or CIM Commercial.
+Added: However, prior to the payment of any distributions on Series L Preferred Stock in respect of a given year, the Company must first declare and pay dividends on the Common Stock in respect of such year in an aggregate amount equal to the Initial Dividend announced by the Company’s Board of Directors at the end of the prior fiscal year.
+Added: On December 29, 2021, the Company announced an Initial Dividend on shares of its Common Stock for fiscal year 2021 in the aggregate amount of $ 7,010,799 .
+Added: During the year ended December 31, 2021, the Company paid $ 9.6 million, $ 50,000 and $ 8.4 million of cash dividends on its Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.
+Added: During the year ended December 31, 2020, the Company paid $ 8.1 million, $ 12,000 and $ 8.4 million of cash dividends on its Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.
+Added: Redemptions —The Company’s Series A Preferred Stock and Series D Preferred Stock are redeemable at the option of the holder or the Company.
The redemption schedule of the Series A Preferred Stock and Series D Preferred Stock allows redemptions at the option of the holder of Series A Preferred Stock or Series D Preferred Stock from the date of original issuance of any such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, less a redemption fee applicable prior to the fifth anniversary of the issuance of such shares, plus accrued and unpaid dividends.
−Removed: CIM Commercial has the right to redeem the Series A Preferred Stock or Series D Preferred Stock after the fifth anniversary of the date of original issuance of such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, plus accrued and unpaid dividends.
−Removed: At the Company's discretion, the redemption price will be paid in cash or in Common Stock based on the volume weighted average price of our Common Stock for the 20 trading days prior to the
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
+Added: The Company has the right to redeem the Series A Preferred Stock or Series D Preferred Stock after the fifth anniversary of the date of original issuance of such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, plus accrued and unpaid dividends.
+Added: At the Company’s discretion, the redemption price will be paid in cash or in Common Stock based on the volume weighted average price of the Company’s Common Stock for the 20 trading days prior to the redemption;
provided that the redemption price of any shares of Series A Preferred Stock redeemed prior to the first anniversary of the date of original issuance of such shares must be paid in cash.
From and after the fifth anniversary of the date of original issuance of the Series L Preferred Stock, each holder will have the right to require the Company to redeem, and the Company will also have the option to redeem (subject to certain conditions), such shares of Series L Preferred Stock at a redemption price equal to the Series L Preferred Stock Stated Value, plus, provided certain conditions are met, all accrued and unpaid distributions.
−Removed: Notwithstanding the foregoing, a holder of shares of our Series L Preferred Stock may require us to redeem such shares at any time prior to the fifth anniversary of the date of original issuance of the Series L Preferred Stock if (1) we do not declare and pay in full the distribution on the Series L Preferred Stock for any annual period prior to such fifth anniversary or (2) we do not declare and pay all accrued and unpaid distributions on the Series L Preferred Stock for all past dividend periods prior to the applicable holder redemption date.
−Removed: The applicable redemption price payable upon redemption of any Series L Preferred Stock will be made, in the Company’s sole discretion, in the form of (A) cash in ILS at the then-current currency exchange rate determined in accordance with the Articles Supplementary defining the terms of the Series L Preferred Stock, (B) in equal value through the issuance of shares of Common Stock, with the value of such Common Stock to be deemed the lower of (i) the NAV per share of our Common Stock as most recently published by the Company as of the effective date of redemption and (ii) the volume-weighted average price of our Common Stock, determined in accordance with the Articles Supplementary defining the terms of the Series L Preferred Stock, or (C) in a combination of cash in ILS and our Common Stock, based on the conversion mechanisms set forth in (A) and (B), respectively.
+Added: Notwithstanding the foregoing, a holder of
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
+Added: and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: shares of the Company’s Series L Preferred Stock may require the Company to redeem such shares at any time prior to the fifth anniversary of the date of original issuance of the Series L Preferred Stock if (1) the Company does not declare and pay in full the distribution on the Series L Preferred Stock for any annual period prior to such fifth anniversary or (2) the Company does not declare and pay all accrued and unpaid distributions on the Series L Preferred Stock for all past dividend periods prior to the applicable holder redemption date.
+Added: The applicable redemption price payable upon redemption of any Series L Preferred Stock will be made, in the Company’s sole discretion, in the form of (A) cash in ILS at the then-current currency exchange rate determined in accordance with the Articles Supplementary defining the terms of the Series L Preferred Stock, (B) in equal value through the issuance of shares of Common Stock, with the value of such Common Stock to be deemed the lower of (i) the NAV per share of the Company’s Common Stock as most recently published by the Company as of the effective date of redemption and (ii) the volume-weighted average price of the Company’s Common Stock, determined in accordance with the Articles Supplementary defining the terms of the Series L Preferred Stock, or (C) in a combination of cash in ILS and the Company’s Common Stock, based on the conversion mechanisms set forth in (A) and (B), respectively.
STOCKHOLDERS’ EQUITY
−Removed: Holders of our Common Stock are entitled to receive dividends, if, as and when authorized by the Board of Directors and declared by us out of legally available funds.
−Removed: In determining our dividend policy, the Board of Directors considers many factors including the amount of cash resources available for dividend distributions, capital spending plans, cash flow, our financial position, applicable requirements of the MGCL, any applicable contractual restrictions, and future growth in NAV and cash flow per share prospects.
+Added: Holders of the Company’s Common Stock are entitled to receive dividends, if, as and when authorized by the Board of Directors and declared by the Company out of legally available funds.
+Added: In determining the Company’s dividend policy, the Board of Directors considers many factors including the amount of cash resources available for dividend distributions, capital spending plans, cash flow, the Company’s financial position, applicable requirements of the MGCL, any applicable contractual restrictions, and future growth in NAV and cash flow per share prospects.
Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor.
2 unchanged sentences
Share of Common Stock
−Removed: December 2, 2020 December 29, 2020 Regular Quarterly $ 0.075
September 7, 2021 September 29, 2021 Regular Quarterly $ 0.075
2 unchanged sentences
December 2, 2020 December 29, 2020 Regular Quarterly $ 0.075
−Removed: August 8, 2019 September 18, 2019 Regular Quarterly $ 0.075
−Removed: August 8, 2019 August 30, 2019 Special Cash $ 42.000
+Added: September 2, 2020 September 29, 2020 Regular Quarterly $ 0.075
June 3, 2020 June 29, 2020 Regular Quarterly $ 0.075
−Removed: February 20, 2019 March 25, 2019 Regular Quarterly $ 0.375
−Removed: On March 5, 2021, we declared a cash dividend of $ 0.075 per share of our Common Stock, to be paid on March 30, 2021 to stockholders of record at the close of business on March 15, 2021.
+Added: March 2, 2020 March 25, 2020 Regular Quarterly $ 0.075
+Added: On December 9, 2021, the Company declared a cash dividend of $ 0.075 per share of its Common Stock, which was paid on January 5, 2022 to stockholders of record at the close of business on December 20, 2021.
+Added: On March 8, 2022, the Company declared a cash dividend of $ 0.085 per share of its Common Stock, to be paid on April 1, 2022 to stockholders of record at the close of business on March 19, 2022.
+Added: Rights Offering
+Added: During the year ended December 31, 2021 , the Company conducted the Rights Offering pursuant to which the Company issued an aggregate of 8,521,589 shares of Common Stock at a subscription price of $ 9.25 per share for aggregate gross proceeds of $ 78.8 million.
+Added: Offering costs of $ 1.9 million were incurred in connection with the Rights Offering and recorded as a reduction to additional paid-in capital.
Series A Preferred Warrants
1 unchanged sentence
The Series A Preferred Warrants are exercisable beginning on the first anniversary of the date of their original issuance until and including the fifth anniversary of the date of such issuance.
−Removed: At the time of issuance, the exercise price of each Series A Preferred Warrant was at a 15.0 % premium to the per share estimated NAV of our Common Stock then most recently published and designated as
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: At the time of issuance, the exercise price of each Series A Preferred Warrant was at a 15.0 % premium to the per share estimated NAV of the Company’s Common Stock then most recently published and designated as the applicable NAV.
+Added: However, in accordance with the terms of the Series A Preferred Warrants, the exercise
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: the Applicable NAV.
−Removed: However, in accordance with the terms of the Series A Preferred Warrants, the exercise price of each Series A Preferred Warrant issued prior to the Reverse Stock Split was automatically adjusted to reflect the effect of the Reverse Stock Split and, in the discretion of our Board of Directors, the exercise price and the number of shares issuable upon exercise of each Series A Preferred Warrant issued prior to the Special Dividend was adjusted to reflect the effect of the Special Dividend.
+Added: price of each Series A Preferred Warrant issued prior to the Reverse Stock Split was automatically adjusted to reflect the effect of the Reverse Stock Split and, in the discretion of the Company’s Board of Directors, the exercise price and the number of shares issuable upon exercise of each Series A Preferred Warrant issued prior to the Special Dividend was adjusted to reflect the effect of the Special Dividend.
Proceeds and expenses from the sale of the Series A Preferred Units were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.
−Removed: As of December 31, 2020, we had issued 4,603,287 Series A Preferred Warrants to purchase 1,194,159 shares of Common Stock in connection with our offering of Series A Preferred Units and allocated net proceeds of $ 614,000 , after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.
−Removed: DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
−Removed: Hedges of Interest Rate Risk
−Removed: In order to manage financing costs and interest rate exposure related to the one-month LIBOR indexed variable rate borrowings, on August 13, 2015, we entered into ten interest rate swap agreements with multiple counterparties totaling $ 385.0 million of notional value.
−Removed: These swap agreements became effective on November 2, 2015.
−Removed: During the year ended December 31, 2019, we terminated our two remaining interest rate swaps with an aggregate notional value of $ 120.0 million, for which we received aggregate termination payments, net of fees, of $ 1.3 million.
−Removed: The fair value of our two remaining swaps at the time of termination was $ 1.4 million resulting in a net loss of $ 119,000 , which was recorded as a net increase to interest expense on our consolidated statement of operations for the year ended December 31, 2019.
−Removed: Each of our interest rate swap agreements initially met the criteria for cash flow hedge accounting treatment and we had designated the interest rate swap agreements as cash flow hedges of the risk of variability attributable to changes in the one-month LIBOR.
−Removed: Accordingly, the interest rate swaps were recorded on our consolidated balance sheets at fair value, and prior to August 1, 2018, the changes in the fair value of the swaps were recorded in OCI and reclassified to earnings as an adjustment to interest expense as interest became receivable or payable (Note 2).
−Removed: Beginning on August 1, 2018, changes in the fair value of the swaps were recorded in interest expense on our consolidated statements of operations.
−Removed: For the years ended December 31, 2019 and 2018, $ 1.8 million and $ 1.6 million, respectively, was reclassified from AOCI and decreased interest expense on our consolidated statements of operations, which, during the year ended December 31, 2019, included a write off of $ 1.6 million at the time our two remaining interest rate swaps were terminated.
−Removed: For the years ended December 31, 2019 and 2018, $ 209,000 and $ 1.7 million, respectively, was included as an increase in interest expense on our consolidated statements of operations related to the change in the fair value of our interest rate swaps.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
−Removed: Impact of Hedges on AOCI and Consolidated Statements of Operations
−Removed: The changes in the balance of each component of AOCI related to our interest rate swaps designated as cash flow hedges are as follows:
−Removed: Year Ended December 31,
−Removed: 2020 2019 2018
−Removed: (in thousands)
−Removed: Accumulated other comprehensive income (loss), at beginning of period $ — $ 1,806 $ 1,631
−Removed: Other comprehensive income before reclassifications — — 1,973
−Removed: Amounts reclassified (to) from accumulated other comprehensive income (loss) (1) — ( 1,806 ) ( 1,798 )
−Removed: Net current period other comprehensive income (loss) — ( 1,806 ) 175
−Removed: Accumulated other comprehensive income, at end of period $ — $ — $ 1,806
−Removed: (1) The amounts from AOCI were reclassified as a (decrease) increase to interest expense in our consolidated statements of operations.
+Added: As of December 31, 2021, there were 4,541,852 Series A Preferred Warrants outstanding to purchase 1,178,125 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 610,000 to the warrants outstanding as of December 31, 2021 , after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.
FAIR VALUE OF FINANCIAL INSTRUMENTS
10 unchanged sentences
Level 2 inputs include quoted prices for similar financial instruments in active markets for identical or similar financial instruments in markets that are not active (i.e., markets in which there are few transactions for the financial instruments, the prices are not current, price quotations vary substantially, or in which little information is released publicly).
−Removed: There is limited reliable market information for our financial instruments and we utilize other methodologies based on unobservable inputs for valuation purposes since there are no Level 1 or Level 2 inputs available.
+Added: There is limited reliable market information for the Company’s financial instruments and the Company utilizes other methodologies based on unobservable inputs for valuation purposes since there are no Level 1 or Level 2 inputs available.
Accordingly, Level 3 inputs are used to measure fair value.
1 unchanged sentence
Considerable judgment is required to interpret market data and develop estimates of fair value.
−Removed: Accordingly, the estimates presented are made at a point in time and may not be indicative of the amounts we could realize in a current market exchange.
+Added: Accordingly, the estimates presented are made at a point in time and may not be indicative of the amounts the Company could realize in a current market exchange.
The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities.
−Removed: Debt —The carrying amounts of our secured borrowings—government guaranteed loans, SBA 7(a) loan-backed notes, 2018 revolving credit facility and borrowed funds from the Federal Reserve through the PPPLF approximate their fair values,
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: Debt —The carrying amounts of the Company’s secured borrowings—government guaranteed loans, SBA 7(a) loan-backed notes, 2018 revolving credit facility and borrowed funds from the Federal Reserve through the PPPLF approximate their fair values, as the interest rates on these securities are variable and approximate current market interest rates.
+Added: The Company determines the fair value of mortgage notes payable and junior subordinated notes by performing discounted cash flow analyses using an appropriate market discount rate.
+Added: The Company calculates the market discount rate for its mortgage notes payable by obtaining period-end treasury or swap rates, as applicable, for maturities that correspond to the maturities of the Company’s debt and then adding an appropriate credit spread.
+Added: These credit spreads take into account factors such as the Company’s credit standing, the maturity of the debt, whether the debt is secured or unsecured, and the loan-to-value ratios of the debt.
+Added: When estimating the fair value of the Company’s mortgages payable as of December 31, 2021 and 2020, the Company used a rate of 3.22 % and 3.38 %, respectively.
+Added: The rate used to estimate the fair value of the Company’s junior subordinated notes was 4.46 % and 4.49 % as of December 31, 2021 and 2020, respectively.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: as the interest rates on these securities are variable and approximate current market interest rates.
−Removed: We determine the fair value of mortgage notes payable and junior subordinated notes by performing discounted cash flow analyses using an appropriate market discount rate.
−Removed: We calculate the market discount rate for our mortgage notes payable by obtaining period-end treasury or swap rates, as applicable, for maturities that correspond to the maturities of our debt and then adding an appropriate credit spread.
−Removed: These credit spreads take into account factors such as our credit standing, the maturity of the debt, whether the debt is secured or unsecured, and the loan-to-value ratios of the debt.
−Removed: When estimating the fair value of our mortgages payable as of December 31, 2020 and 2019, we used a rate of 3.38 % and 3.67 %, respectively.
−Removed: The rate used to estimate the fair value of our junior subordinated notes was 4.49 % and 6.16 % as of December 31, 2020 and 2019, respectively.
−Removed: Loans Receivable —We determine the fair value of loans receivable by performing a present value analysis for the anticipated future cash flows using an appropriate market discount rate taking into consideration the credit risk and using an anticipated prepayment rate.
+Added: Loans Receivable —The Company determines the fair value of loans receivable by performing a present value analysis for the anticipated future cash flows using an appropriate market discount rate taking into consideration the credit risk and using an anticipated prepayment rate.
The value of the government guaranteed portions of loans held for sale is based primarily on the anticipated proceeds to be received upon sale.
15 unchanged sentences
SBA 7(a) loans receivable, paycheck protection program 1.00 %
−Removed: Other Financial Instruments —The carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities at December 31, 2020 and 2019.
−Removed: The estimated fair values of those financial instruments which are not recorded at fair value on a recurring basis on our consolidated balance sheets are as follows:
+Added: Other Financial Instruments —The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities at December 31, 2021 and 2020.
+Added: Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments.
+Added: The estimated fair values of those financial instruments which are not recorded at fair value on a recurring basis on the Company’s consolidated balance sheets are as follows:
December 31, 2021 December 31, 2020
8 unchanged sentences
Mortgage payable (1)
+Added: $ 97,100 $ 100,838 $ 97,100 $ 100,799 2, 3
Junior subordinated notes (1)
−Removed: (1) The carrying amounts for the mortgage payable and junior subordinated notes represents the principal outstanding amounts, excluding deferred loan costs and discounts.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
+Added: $ 27,070 $ 24,378 $ 27,070 $ 24,236 3
+Added: (1) The carrying amounts for the mortgage payable and junior subordinated notes represents the principal outstanding amounts, excluding deferred debt issuance costs and discounts.
RELATED-PARTY TRANSACTIONS
Asset Management and Other Fees to Related Parties
−Removed: Asset Management Fees —In December 2015, CIM Urban and CIM Capital, LLC (formerly CIM Investment Advisors, LLC), an affiliate of CIM REIT and CIM Group (“CIM Capital”), entered into an investment management agreement, pursuant to which CIM Urban engaged CIM Capital to provide certain services to CIM Urban (the “Investment Management Agreement”).
−Removed: On January 1, 2019, CIM Capital assigned its duties under the Investment Management Agreement to its four wholly-owned subsidiaries:
−Removed: CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager.
−Removed: The “Operator” refers to CIM Investment Advisors, LLC from December 10, 2015 to December 31, 2018 and to CIM Capital and its four wholly-owned subsidiaries on and after January 1, 2019.
+Added: Asset Management Fees —CIM Urban and CIM Capital, LLC, an affiliate of CIM REIT and CIM Group (“CIM Capital”), have an investment management agreement, pursuant to which CIM Urban engaged CIM Capital to provide certain services to CIM Urban (the “Investment Management Agreement”).
+Added: CIM Capital has assigned its duties under the Investment Management Agreement to its four wholly-owned subsidiaries:
+Added: CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
+Added: and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager.
+Added: The “Operator” refers to CIM Capital and its four wholly-owned subsidiaries.
CIM Urban pays asset management fees to the Operator on a quarterly basis in arrears.
10 unchanged sentences
Asset management fees are included in asset management and other fees to related parties in the accompanying consolidated statements of operations.
−Removed: In lieu of cash payment of the asset management fee during the year ended December 31, 2020, the Company issued to the Operator shares of our Common Stock and shares of our Series A Preferred Stock.
−Removed: Subject to applicable laws and regulations under Nasdaq and the TASE and the agreement of the Operator, it is likely that we will seek to pay some or part of the asset management fees for part of 2021 in shares of Series A Preferred Stock.
+Added: In lieu of cash payment of the asset management fee, the Company has issued to the Operator shares of its Common Stock and shares of its Series A Preferred Stock.
+Added: The Company has issued shares of its Series A Preferred Stock to the Operator as payment for the quarterly asset management fee for the year ended December 31, 2021 .
+Added: Subject to applicable laws and regulations under Nasdaq and the TASE and the agreement of the Operator, it is likely that the Company will seek to pay some or part of the asset management fees for part of 2022 in shares of Series A Preferred Stock.
Property Management Fees and Reimbursements — CIM Management, Inc.
3 unchanged sentences
Construction management fees are capitalized to investments in real estate on the accompanying consolidated balance sheets.
−Removed: Administrative Fees and Expenses — On March 11, 2014, CIM Commercial and its subsidiaries entered into a master services agreement (the “Master Services Agreement”) with CIM Service Provider, LLC (the “Administrator”), an affiliate of CIM Group, pursuant to which the Administrator provides, or arranges for other service providers to provide, management and administration services to CIM Commercial and its subsidiaries.
−Removed: Pursuant to the Master Services Agreement, we appointed an affiliate of CIM Group as the administrator of Urban Partners GP, LLC.
−Removed: Under the Master Services Agreement, CIM Commercial paid a base service fee (the “Base Service Fee”) to the Administrator initially set at $ 1.0 million per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears.
−Removed: On May 11, 2020, the Master Services Agreement was amended to replace the Base Service Fee with an incentive fee (the “Incentive Fee”) pursuant to which the Administrator receives, on a quarterly basis, 15.00 % of CIM Commercial’s quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of CIM Commercial’s average adjusted common stockholders’ equity (i.e., common stockholders’ equity plus accumulated depreciation and amortization) for such quarter.
−Removed: The amendment is effective as of April 1, 2020.
+Added: Administrative Fees and Expenses — The Company and its subsidiaries have a master services agreement (the “Master Services Agreement”) with CIM Service Provider, LLC (the “Administrator”), an affiliate of CIM Group, pursuant to which the Administrator provides, or arranges for other service providers to provide, management and administration services to the Company and its subsidiaries.
+Added: Pursuant to the Master Services Agreement, the Company appointed an affiliate of CIM Group as the administrator of Urban Partners GP, LLC.
+Added: Under the Master Services Agreement, for fiscal quarters prior to April 1,2020, the Company paid a base service fee (the “Base Service Fee”) to the Administrator initially set at $ 1.0 million per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears.
+Added: On May 11, 2020, the Master Services Agreement was amended to replace the Base Service Fee with an incentive fee (the “Prior Incentive Fee”) pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00 % of the Company’s quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of the Company’s average adjusted common stockholders’ equity (i.e., common stockholders’ equity plus accumulated depreciation and amortization) for such quarter.
+Added: The amendment was effective as of April 1, 2020.
+Added: Please see “—Fee Waiver” below for how the fees paid to the Administrator has been calculated since the beginning of 2022.
The Base Service Fee is included in asset management and other fees to related parties in the accompanying consolidated statements of operations.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: In addition, pursuant to the terms of the Master Services Agreement, the Administrator may receive compensation and or reimbursement for performing certain services for the Company and its subsidiaries that are not covered by the Base Service Fee or the Prior Incentive Fee, as the case may be.
+Added: During the years ended December 31, 2021 and 2020, such services performed by the Administrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and on-going support in connection with the Company’s offering of Preferred Stock.
+Added: The Administrator’s compensation is based on the salaries and benefits of the employees of the Administrator and or its affiliates who performed these services (allocated based on the percentage of time
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: In addition, pursuant to the terms of the Master Services Agreement, the Administrator may receive compensation and or reimbursement for performing certain services for CIM Commercial and its subsidiaries that are not covered by the Base Service Fee or the Incentive Fee, as the case may be.
−Removed: During the years ended December 31, 2020, 2019 and 2018, such services performed by the Administrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, and from and after September 2018, operational and on-going support in connection with the Company’s offering of Preferred Stock.
−Removed: The Administrator’s compensation is based on the salaries and benefits of the employees of the Administrator and or its affiliates who performed these services (allocated based on the percentage of time spent on the affairs of CIM Commercial and its subsidiaries).
+Added: spent on the affairs of the Company and its subsidiaries).
The expense for such services is included in expense reimbursements to related parties—corporate in the accompanying consolidated statements of operations.
−Removed: Lending Segment Expenses — On January 1, 2015, the Company entered into a Staffing and Reimbursement Agreement with CIM SBA Staffing, LLC (“CIM SBA”), an affiliate of CIM Group, and our subsidiary, PMC Commercial Lending, LLC.
−Removed: The agreement provides that CIM SBA will provide personnel and resources to us and that we will reimburse CIM SBA for the costs and expenses of providing such personnel and resources.
+Added: Lending Segment Expenses — The Company has a Staffing and Reimbursement Agreement with CIM SBA Staffing, LLC (“CIM SBA”), an affiliate of CIM Group, and the Company’s subsidiary, PMC Commercial Lending, LLC.
+Added: The agreement provides that CIM SBA will provide personnel and resources to the Company and that the Company will reimburse CIM SBA for the costs and expenses of providing such personnel and resources.
The expense for such services is included in expense reimbursements to related parties—lending segment in the accompanying consolidated statements of operations.
−Removed: Offering-Related Fees — On May 10, 2018, the Company entered into the wholesaling agreement (the “Wholesaling Agreement”) with International Assets Advisors, LLC (“IAA”) and CCO Capital, LLC (“CCO Capital”).
+Added: Offering-Related Fees — CCO Capital, LLC (“CCO Capital”) became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Units effective as of May 31, 2019.
CCO Capital is a registered broker dealer and is under common control with the Operator and the Administrator.
−Removed: IAA was the exclusive dealer manager for the Company’s public offering of Series A Preferred Units until May 31, 2019.
−Removed: Under the Wholesaling Agreement, among other things, CCO Capital, in its capacity as the wholesaler for the offering, assisted IAA with the sale of Series A Preferred Units.
−Removed: In exchange for such services, IAA paid CCO Capital a fee equal to 2.75 % of the selling price of each Series A Preferred Unit for which a sale was completed, reduced by any applicable fee reallowances payable to soliciting dealers pursuant to separate soliciting dealer agreements between IAA and soliciting dealers.
−Removed: The foregoing fee was reduced, and may have been exceeded, by a fixed monthly payment by CCO Capital to IAA for IAA’s services in connection with periodic closings and settlements for the offering.
−Removed: On May 31, 2019, the Company, IAA and CCO Capital entered into an Amendment, Assignment and Assumption Agreement (the “Assignment Agreement”), pursuant to which CCO Capital assumed all of the rights and obligations of IAA under the dealer manager agreement, dated as of June 28, 2016, as amended, by and between the Company and IAA.
−Removed: As a result of the Assignment Agreement, CCO Capital became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Units effective as of May 31, 2019.
−Removed: In connection with the execution of the Assignment Agreement, the Company terminated the Wholesaling Agreement effective as of May 31, 2019.
The Company’s offering of the Series A Preferred Units ended at the end of January 2020.
On January 28, 2020, the Company entered into the Second Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital acts as the exclusive dealer manager for the Company’s public offering of its Series A Preferred Stock and Series D Preferred Stock.
−Removed: Thereunder, the Company agreed to pay CCO Capital, as the dealer manager for the offering, (1) an upfront dealer manager fee of up to 1.25 % of the selling price of each share of Preferred Stock sold, (2) selling commissions of up to 5.50 % of the selling price of each share of Series A Preferred Stock sold (with no selling commissions payable in respect of shares of Series D Preferred Stock sold) and (3) a trailing dealer manager fee that accrues daily in an amount equal to 1/365 th of 0.25 % per annum of the selling price of each share of Preferred Stock sold.
+Added: Thereunder, the Company agreed to compensate CCO Capital, as the dealer manager for the offering, as follows:
+Added: (1) an upfront dealer manager fee of up to 1.25 % of the selling price of each share of Preferred Stock sold, (2) selling commissions of up to 5.50 % of the selling price of each share of Series A Preferred Stock sold (with no selling commissions payable in respect of shares of Series D Preferred Stock sold) and (3) a trailing dealer manager fee that accrues daily in an amount equal to 1/365 th of 0.25 % per annum of the selling price of each share of Preferred Stock sold.
CCO Capital, in its sole discretion, may reallow to another broker-dealer authorized by it to sell shares in the offering a portion of the upfront dealer manager fee earned by it in respect of shares sold by such broker-dealer.
2 unchanged sentences
The Company has been informed that CCO Capital generally reallows 100 % of the selling commissions on sales of Series A Preferred Stock and generally reallows substantially all of the upfront dealer manager fee on sales of Series A Preferred Stock and Series D Preferred Stock, to participating broker-dealers.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: On September 22, 2021, the Company entered into Amendment No.
+Added: 2 to the Second Amended and Restated Dealer Manager Agreement, pursuant to which the upfront dealer manager fee payable to the Dealer Manager was changed to up to 3.00 % and the trailing dealer manager fee with respect to the sale of shares of Series A Preferred Stock sold in the Offering on or after September 9, 2021 was eliminated.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
2 unchanged sentences
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
9 unchanged sentences
Base service fee (2)
−Removed: $ 282 $ 1,102 $ 1,079
Expense reimbursements to related parties - corporate $ 2,050 $ 2,243
4 unchanged sentences
Upfront dealer manager and trailing dealer manager fees (4)
+Added: $ 690 $ 1,149
Non-issuance specific offering costs (5)
−Removed: (1) For the year ended December 31, 2020, we issued to the Operator 203,349 shares of our Common Stock, in lieu of cash payment of the asset management fee for the first quarter of 2020, and 190,459 shares of our Series A Preferred Stock, in lieu of cash payment of the asset management fee for the second and third quarters of 2020.
−Removed: (2) For the year ended December 31, 2020, we issued to the Administrator 11,273 shares of our Series A Preferred Stock, in lieu of cash as payment of the Base Service Fee for the first quarter of 2020.
−Removed: (3) In addition, for the years ended December 31, 2020, 2019 and 2018, we deferred personnel costs of $ 136,000 , $ 112,000 and $ 330,000 , respectively, associated with services provided for originating loans.
−Removed: (4) As of December 31, 2020, 2019 and 2018, $ 1.5 million, $ 621,000 and $ 200,000 , respectively, was included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with CCO Capital.
+Added: (1) The Company issued to the Operator an aggregate of 270,209 shares of its Series A Preferred Stock , in lieu of cash payment of the asset management fees incurred during the year ended December 31, 2021.
+Added: The Company issued to the Operator 203,349 shares of its Common Stock and 287,199 s hares of Series A Preferred Stock in lieu of cash payment of the asset management fees incurred during the year ended December 31, 2020.
+Added: (2) For the year ended December 31, 2020, the Company issued to the Administrator 11,273 shares of our Series A Preferred Stock, in lieu of cash as payment of the Base Service Fee for the first quarter of 2020.
+Added: (3) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 347,000 and $ 136,000 for the years ended December 31, 2021 and 2020, respectively.
+Added: (4) Represents fees earned by CCO Capital and allocated to Series A Preferred Stock and Series D Preferred Stock.
+Added: (5) As of December 31, 2021 and 2020, $ 2.0 million and $ 1.5 million, respectively, was included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with CCO Capital.
These non-issuance specific costs are allocated against the gross proceeds from the sale of the Series A Preferred Stock and the Series D Preferred Stock on a pro rata basis for each issuance as a percentage of the total offering.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
+Added: and for the Years Ended December 31, 2021 and 2020 (Continued)
As of December 31, 2021 and 2020, due to related parties consisted of the following:
8 unchanged sentences
Total due to related parties $ 4,541 $ 6,706
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: On January 5, 2022, the Company and certain of its subsidiaries entered into a Fee Waiver (the “Fee Waiver”) with the Operator and the Administrator with respect to fees that are payable to them.
+Added: The Fee Waiver is effective retroactively to January 1, 2022 (the “Effective Date”).
+Added: Pursuant to the Fee Waiver, the Administrator agrees to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Master Service Agreement, and the Operator agrees to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Investment Management Agreement (the “Existing Methodology).
+Added: A base asset management fee (the “Base Fee”) is payable quarterly in arrears to the Operator in an amount equal to an annual rate of 1 % (or 0.25 % per quarter) of the average of the “Net Asset Value Attributable to Common Stockholders” as of the first and last day of the applicable quarter.
+Added: Net Asset Value Attributable to Common stockholders is defined as (a) the sum of the Company’s (1) investments in real estate at fair value, (2) cash, (3) loans receivable at fair value and (4) the book value of the other assets of the Company, excluding deferred costs and net of other liabilities at book value, less (b) the Company’s (i) debt at face value, (ii) outstanding preferred stock at stated value, and (iii) non-controlling interests at book value;
+Added: provided, that, non-controlling interests in any UPREIT operating partnership relating to the Company shall not be excluded.
+Added: Incentive Fee:
+Added: An incentive fee (the “Revised Incentive Fee”) is payable quarterly in arrears to the Administrator with respect to the quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of the Company’s “Adjusted Common Equity” (as defined below) for such quarter (“Excess Core FFO”) as follows:
+Added: (i) no Incentive Fee in any quarter in which the Excess Core FFO is $ 0 ;
+Added: (ii) 100 % of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375 %;
+Added: and (iii) 20 % of any Excess Core FFO thereafter.
+Added: Revised Incentive Fees payable for any partial quarter will be appropriately prorated.
+Added: “Adjusted Common Equity” means Common Equity plus Excluded Depreciation and Amortization.
+Added: “Common Equity” means Total Stockholders’ Equity minus Excluded Equity.
+Added: “Total Stockholders’ Equity” means the amount reflected as total stockholders’ equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter.
+Added: “Excluded Equity” means the sum of all preferred securities of the Company and its subsidiaries classified as permanent equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter.
+Added: “Excluded Depreciation and Amortization” means, for a given quarter, the amount of all accumulated depreciation and amortization of (i) the Company and its subsidiaries and (ii) to the extent allocable to the Company and its subsidiaries, the unconsolidated affiliates, in each case as of the last day of such quarter that corresponds to the periodic depreciation and amortization expense calculated in each case in accordance with GAAP that is a permitted add back to net income calculated in accordance with GAAP when calculating funds from operations.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: Our President, Jan F.
+Added: Capital Gains Fee:
+Added: A capital gains fee (the “Capital Gains Fee”) is payable quarterly in arrears to the Administrator in an amount equal to (i) 15 % of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses (in each case since the Effective Date), minus (ii) the aggregate capital gains fees paid since the Effective Date.
+Added: Realized capital gains and realized capital losses are calculated by subtracting from the sales price of a property:
+Added: (a) any costs incurred to sell such property, and (b) the current gross value of the property (meaning the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements thereon paid for by the Company).
+Added: Following the end of each quarter, the Administrator will deliver to the Company (i) a calculation of the cumulative fees earned by the Operator and the Administrator under the methodology prescribed by the Fee Waiver (the “Fee Waiver Methodology”) from the Effective Date through the end of such quarter and (ii) a calculation of the cumulative fees that would have been earned, in the absence of the Fee Waiver, by the Operator and the Administrator during such period under the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver (the “Pre-Fee Waiver Methodology”).
+Added: If, in respect of any quarter, the aggregate fees that are payable under the Fee Waiver Methodology exceed the aggregate fees that would have been payable under the Pre-Fee Waiver Methodology for the equivalent period, such quarter is deemed an “Excess Quarter”.
+Added: For any quarter following an Excess Quarter, the Company (upon the direction of the independent members of the Board) may, at its option and upon written notice to Administrator, elect to calculate all fees due to the Administrator and the Operator in accordance with the Pre-Fee Waiver Methodology from and after such Excess Quarter.
+Added: Any election by the Company to adopt the Pre-Fee Waiver Methodology is irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Pre-Fee Waiver Methodology .
+Added: During the year ended December 31, 2020, the Company’s President, Jan F.
Salit, retired effective as of September 16, 2020.
−Removed: We had an employment agreement with Mr.
−Removed: Salit which, under certain circumstances, provided for severance payment equal to the annual base salary paid to Mr Salit.
−Removed: In connection with his retirement, the Company entered into an agreement with Mr.
−Removed: Salit pursuant to which, among other things, Mr.
Salit received a $ 450,000 payment, representing one year of his base salary, upon the satisfaction of certain conditions specified therein, including the execution of an agreement with the Company that contains, among other things, mutual release and non-disparagement provisions.
1 unchanged sentence
Salit devoted to the Company relative to other matters relating to CIM Group.
−Removed: As of December 31, 2020, $ 287,000 was due to CIM Group for the Company’s portion of the payment.
−Removed: On October 1, 2015, an affiliate of CIM Group entered into a five-year lease renewal with respect to a property owned by the Company, which lease was amended to a month-to-month term in February 2019 and was terminated in October 2020.
−Removed: For the years ended December 31, 2020, 2019 and 2018, we recorded rental and other property income related to this tenant of $ 87,000 , $ 112,000 and $ 108,000 , respectively.
+Added: On October 1, 2015, an affiliate of CIM Group entered into a five-year lease renewal with respect to a property owned by the Company, which was terminated in October 2020.
+Added: For the years ended December 31, 2021 and 2020, the Company recorded rental and other property income related to this tenant of $ 0 and $ 87,000 , respectively.
On May 15, 2019, CIM Group entered into an approximately 11-year lease for approximately 32,000 rentable square feet with respect to a property owned by the Company.
The lease was amended on August 7, 2019 to reduce the rentable square feet to approximately 30,000 rentable square feet.
−Removed: For the years ended December 31, 2020, 2019 and 2018, we recorded rental and other property income related to this tenant of $ 1.5 million, $ 932,000 and $ 0 , respectively.
−Removed: In October 2019, our Administrator acquired 2,468,390 shares of our Common Stock, representing approximately 16.9 % of the outstanding shares of our Common Stock at such time, for $ 19.1685 per share from an affiliate of CIM Group in a private transaction.
+Added: For the years ended December 31, 2021 and 2020, the Company recorded rental and other property income related to this tenant of $ 1.5 million.
COMMITMENTS AND CONTINGENCIES
−Removed: Loan Commitments —Commitments to extend credit are agreements to lend to a customer provided the terms established in the contract are met.
−Removed: Our outstanding commitments to fund loans were $ 34.1 million as of December 31, 2020, the majority of which are for prime-based loans to be originated by our subsidiary engaged in SBA 7(a) Small Business Loan Program lending, the government guaranteed portion of which is intended to be sold.
+Added: Loan Commitments —Commitments to extend credit are agreements to lend to a customer when the terms established in the contract are met.
+Added: The Company’s outstanding commitments to fund loans were $ 32.6 million as of December 31, 2021, the majority of which are for prime-based loans to be originated by the Company’s subsidiary engaged in SBA 7(a) Small Business Loan Program lending, the government guaranteed portion of which is intended to be sold.
Commitments generally have fixed expiration dates.
Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements.
−Removed: General —In connection with the ownership and operation of real estate properties, we have certain obligations for the payment of tenant improvement allowances and lease commissions in connection with new leases and renewals.
−Removed: CIM Commercial had a total of $ 7.6 million in future obligations under leases to fund tenant improvements and other future construction obligations as of December 31, 2020.
−Removed: As of December 31, 2020, $ 2.8 million was funded to reserve accounts included in restricted cash on our consolidated balance sheet for these tenant improvement obligations in connection with the mortg age loan agreement entered into in June 2016.
−Removed: Employment Agreements —We have an employment agreement with one of our officers.
−Removed: Under certain circumstances, this employment agreement provides for (1) severance payment equal to the annual base salary paid to the officer and (2) death and disability payments in an amount equal to two times and one time, respectively, the annual base salary paid to the officer.
−Removed: Litigation —We are not currently involved in any material pending or threatened legal proceedings nor, to our knowledge, are any material legal proceedings currently threatened against us, other than routine litigation arising in the ordinary course of business.
−Removed: In the normal course of business, we are periodically party to certain legal actions and proceedings involving matters that are generally incidental to our business.
−Removed: While the outcome of these legal actions and proceedings cannot be predicted with certainty, in management’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
−Removed: In September 2018, we filed a lawsuit against the City and County of San Francisco seeking a refund of the $ 11.8 million in penalties, interest and legal fees paid by us for real property transfer tax allegedly due for a transaction in a prior year.
−Removed: We disputed that such penalties, interest and legal fees were payable but, in order to contest the asserted tax obligations, we had
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: General —In connection with the ownership and operation of real estate properties, the Company has certain obligations for the payment of tenant improvement allowances and lease commissions in connection with new leases and renewals.
+Added: the Company had a total of $ 8.1 million in future obligations under leases to fund tenant improvements and other future construction obligations as of December 31, 2021.
+Added: As of December 31, 2021, $ 2.5 million was funded to reserve accounts included in restricted cash on the Company’s consolidated balance sheet for these tenant improvement obligations in connection with the mortg age loan agreement entered into in June 2016.
+Added: Employment Agreements —The Company has an employment agreement with one of its officers.
+Added: Under certain circumstances, this employment agreement provides for (1) severance payment equal to the annual base salary paid to the
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: to pay such amounts to the City and County of San Francisco in August 2017.
−Removed: We have been vigorously pursuing this litigation and intend to continue to do so.
+Added: officer and (2) death and disability payments in an amount equal to two times and one time, respectively, the annual base salary paid to the officer.
+Added: Litigation —The Company is not currently involved in any material pending or threatened legal proceedings nor, to the Company’s knowledge, are any material legal proceedings currently threatened against the Company, other than routine litigation arising in the ordinary course of business.
+Added: In the normal course of business, the Company is periodically party to certain legal actions and proceedings involving matters that are generally incidental to the Company’s business.
+Added: While the outcome of these legal actions and proceedings cannot be predicted with certainty, in management’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company’s ability to satisfy its debt service obligations or to maintain its level of distributions on Common Stock or Preferred Stock.
+Added: In September 2018, the Company filed a lawsuit against the City and County of San Francisco seeking a refund of the $ 11.8 million in penalties, interest and legal fees paid by the Company for real property transfer tax allegedly due for a transaction in a prior year.
+Added: The Company disputed that such penalties, interest and legal fees were payable but, in order to contest the asserted tax obligations, the Company had to pay such amounts to the City and County of San Francisco in August 2017.
+Added: The Company has been vigorously pursuing this litigation and intends to continue to do so.
A subsidiary of the Company is a defendant in a lawsuit in connection with injuries sustained by a third-party contractor at a property previously owned by such subsidiary.
−Removed: While it is possible that a loss may be incurred, we are unable to estimate a range of potential losses due to the complexity and current status of the lawsuit.
−Removed: However, we maintain insurance coverage to mitigate the impact of adverse exposures in lawsuits of this nature and do not expect this lawsuit to have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
−Removed: SBA Related —If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced under the PPP or the SBA 7(a) Small Business Loan Program, the SBA may seek recovery of the principal loss related to the deficiency from us.
−Removed: With respect to the guaranteed portion of SBA loans that have been sold, the SBA will first honor its guarantee and then seek compensation from us in the event that a loss is deemed to be attributable to technical deficiencies.
−Removed: Based on historical experience, we do not expect that this contingency is probable to be asserted.
−Removed: However, if asserted, it could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
−Removed: Environmental Matters —In connection with the ownership and operation of real estate properties, we may be potentially liable for costs and damages related to environmental matters, including asbestos-containing materials.
−Removed: We have not been notified by any governmental authority of any noncompliance, liability, or other claim in connection with any of the properties, and we are not aware of any other environmental condition with respect to any of the properties that management believes will have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
−Removed: Future minimum rental revenue under long-term operating leases as of December 31, 2020, excluding tenant reimbursements of certain costs, are as follows:
+Added: While it is possible that a loss may be incurred, the Company is unable to estimate a range of potential losses due to the complexity and current status of the lawsuit.
+Added: However, the Company maintains insurance coverage to mitigate the impact of adverse exposures in lawsuits of this nature and do not expect this lawsuit to have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company ability to satisfy its debt service obligations or to maintain the level of distributions on the Company’s Common Stock or Preferred Stock.
+Added: SBA Related —If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced under the PPP or the SBA 7(a) Small Business Loan Program, the SBA may seek recovery of the principal loss related to the deficiency from the Company.
+Added: As of December 31, 2021, the Company serviced an aggregate of $ 262.4 million of the guaranteed portion of SBA 7(a) loans .
+Added: With respect to the guaranteed portion of SBA loans that have been sold, the SBA will first honor its guarantee and then seek compensation from the Company in the event that a loss is deemed to be attributable to technical deficiencies.
+Added: Based on historical experience, the Company does not expect that this contingency is probable to be asserted.
+Added: However, if asserted, it could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company’s ability to satisfy its debt service obligations or to maintain its level of distributions on Common Stock or Preferred Stock.
+Added: Environmental Matters —In connection with the ownership and operation of real estate properties, the Company may be potentially liable for costs and damages related to environmental matters, including asbestos-containing materials.
+Added: The Company has not been notified by any governmental authority of any noncompliance, liability, or other claim in connection with any of the properties, and the Company is not aware of any other environmental condition with respect to any of the properties that management believes will have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company’s ability to satisfy its debt service obligations or to maintain its level of distributions on Common Stock or Preferred Stock.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
+Added: and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: Future minimum rental revenue under long-term operating leases as of December 31, 2021, excluding tenant reimbursements of certain costs, are as follows (in thousands):
Years Ending December 31, Total
−Removed: (in thousands)
2022 $ 44,521
Thereafter 32,937
−Removed: The Company determined that there was one office lease for our lending segment where the Company was the lessee that was material to the consolidated balance sheet.
−Removed: Based on our assessment, the lease was classified as an operating lease and the Company recorded approximately $ 362,000 as a right-of-use asset in loan servicing asset, net and other assets and lease liability in other liabilities on the consolidated balance sheet on the effective date of January 1, 2019, which matured as of June 30, 2020.
−Removed: As of December 31, 2020 and 2019, the right-of-use asset and lease liability balance were approximately $ 0 and $ 106,000 , respectively.
−Removed: We have elected to be taxed as a REIT under the Code.
−Removed: To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our taxable income to
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
−Removed: our stockholders.
−Removed: As a REIT, we generally will not be subject to corporate level federal income tax on net income that is currently distributed to stockholders.
−Removed: We have wholly-owned TRS’s which are subject to federal and state income taxes.
+Added: The Company has elected to be taxed as a REIT under the Code.
+Added: To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes at least 90% of its taxable income to its stockholders.
+Added: As a REIT, the Company generally will not be subject to corporate level federal income tax on net income that is currently distributed to stockholders.
+Added: The Company has wholly-owned TRS’s which are subject to federal and state income taxes.
The income generated from the TRS’s is taxed at normal corporate rates.
2 unchanged sentences
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
5 unchanged sentences
Income tax (benefit) provision $ 2,992 $ ( 722 )
−Removed: The components of our net deferred tax asset, which are included in other assets, are as follows:
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
+Added: and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: The components of the Company’s net deferred tax asset, which are included in other assets, are as follows:
(in thousands)
10 unchanged sentences
The net operating loss carryforwards as of December 31, 2021 and 2020 were generated by TRSs and are available to offset future taxable income of these TRSs.
−Removed: The increase in the valuation allowance recorded in 2020 was $ 2.6 million.
−Removed: The periods subject to examination for our federal and state income tax returns are 2017 through 2020.
−Removed: As of December 31, 2020 and 2019, no reserves for uncertain tax positions have been established and we do not anticipate any material changes in the amount of unrecognized tax benefits recorded to occur within the next 12 months.
+Added: The decrease in the valuation allowance recorded in 2021 was $ 273,000 .
+Added: The periods subject to examination for the Company’s federal and state income tax returns are 2018 through 2021.
+Added: As of December 31, 2021 and 2020, no reserves for uncertain tax positions have been established and the Company does not anticipate any material changes in the amount of unrecognized tax benefits recorded to occur within the next 12 months.
The Tax Cuts and Jobs Act of 2017, signed into law in late December 2017, made sweeping changes to provisions of the Code applicable to businesses.
The CARES Act, signed into law in March 2020, made additional changes to provisions on the Code applicable to the businesses.
−Removed: Management has reviewed these statutory changes and determined that the impact to our consolidated financial statements is not material.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
+Added: Management has reviewed these statutory changes and determined that the impact to the Company’s consolidated financial statements is not material.
SEGMENT DISCLOSURE
−Removed: In accordance with ASC Topic 280, Segment Reporting , our reportable segments during the years ended December 31, 2020, 2019 and 2018 consist of two types of commercial real estate properties, namely, office and hotel, as well as a segment for our lending business.
+Added: The Company’s reportable segments during the years ended December 31, 2021 and 2020 consist of two types of commercial real estate properties, namely, office and hotel, as well as a segment for the Company’s lending business.
Management internally evaluates the operating performance and financial results of the segments based on net operating income.
−Removed: We also have certain general and administrative level activities, including public company expenses, legal, accounting, and tax preparation that are not considered separate operating segments.
+Added: The Company also has certain general and administrative level activities, including public company expenses, legal, accounting, and tax preparation that are not considered separate operating segments.
The reportable segments are accounted for on the same basis of accounting as described in Note 2.
−Removed: For our real estate segments, we define net operating income as rental and other property income and expense reimbursements less property related expenses, and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and provision (benefit) for income taxes.
−Removed: For our lending segment, we define net operating income as interest income net of interest expense and general overhead expenses.
−Removed: The net operating income of our segments for the years ended December 31, 2020, 2019 and 2018 is as follows:
+Added: For the Company’s real estate segments, the Company defines net operating income (loss) as rental and other property income and expense reimbursements less property related expenses, and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and provision (benefit) for income taxes.
+Added: For the Company’s lending segment, the Company defines net operating income as interest income net of interest expense and general overhead expenses.
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
+Added: Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
+Added: and for the Years Ended December 31, 2021 and 2020 (Continued)
+Added: The net operating income (loss) of the Company’s segments for the years ended December 31, 2021 and 2020 is as follows:
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
10 unchanged sentences
Total property expenses 15,969 14,123
−Removed: Segment net operating (loss) income—hotel ( 809 ) 12,324 13,494
+Added: Segment net operating income (loss)—hotel 1,880 ( 809 )
Revenues 19,787 8,322
6 unchanged sentences
Total segment net operating income $ 47,061 $ 32,641
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
and for the Years Ended December 31, 2021 and 2020 (Continued)
−Removed: A reconciliation of our segment net operating income to net income attributable to the Company for the years ended December 31, 2020, 2019 and 2018 is as follows:
+Added: A reconciliation of the Company’s segment net operating income to net income attributable to the Company for the years ended December 31, 2021 and 2020 is as follows:
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
10 unchanged sentences
Gain on sale of real estate — —
−Removed: (Loss) Income before provision for income taxes ( 15,737 ) 346,403 2,067
−Removed: Benefit (provision) for income taxes 722 ( 882 ) ( 925 )
+Added: Income before provision for income taxes 2,141 ( 15,737 )
+Added: (Provision) benefit for income taxes ( 2,992 ) 722
Net (loss) income ( 851 ) ( 15,015 )
−Removed: Net (income) loss attributable to noncontrolling interests ( 1 ) 152 ( 21 )
+Added: Net loss (income) attributable to noncontrolling interests 1 ( 1 )
Net (loss) income attributable to the Company $ ( 850 ) $ ( 15,016 )
7 unchanged sentences
Total assets $ 660,866 $ 685,617
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
+Added: CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of December 31, 2021 and 2020
1 unchanged sentence
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
−Removed: Capital expenditures (2):
+Added: Capital expenditures (1) and loan originations:
Office $ 5,714 $ 8,514
3 unchanged sentences
Total capital expenditures and loan originations $ 139,197 $ 62,859
−Removed: (1) The December 31, 2018 balances include the assets of 260 Townsend Street, which was classified as held for sale on our consolidated balance sheet as of December 31, 2018 and sold in March 2019 (Note 3).
(1) Represents additions and improvements to real estate investments, excluding acquisitions.
Includes the activity for dispositions through their respective disposition dates.
−Removed: QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
−Removed: The following is a summary of quarterly financial information for the year ended December 31, 2020:
−Removed: Three Months Ended
−Removed: March 31, June 30, September 30, December 31,
−Removed: (in thousands, except per share amounts)
−Removed: Revenues $ 25,535 $ 16,510 $ 17,334 $ 17,829
−Removed: Net loss $ ( 1,256 ) $ ( 4,041 ) $ ( 5,330 ) $ ( 4,388 )
−Removed: Net loss attributable to the Company $ ( 1,260 ) $ ( 4,043 ) $ ( 5,323 ) $ ( 4,390 )
−Removed: Net loss attributable to common stockholders $ ( 6,787 ) $ ( 8,141 ) $ ( 9,678 ) $ ( 8,861 )
−Removed: NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE (1)
−Removed: Basic $ ( 0.46 ) $ ( 0.55 ) $ ( 0.65 ) $ ( 0.60 )
−Removed: Diluted $ ( 0.46 ) $ ( 0.55 ) $ ( 0.65 ) $ ( 0.60 )
−Removed: (1) EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods.
−Removed: In addition, EPS is calculated independently for each component and may not be additive due to rounding.
−Removed: CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
−Removed: Notes to Consolidated Financial Statements as of December 31, 2020 and 2019
−Removed: and for the Years Ended December 31, 2020, 2019 and 2018 (Continued)
−Removed: The following is a summary of quarterly financial information for the year ended December 31, 2019:
−Removed: Three Months Ended
−Removed: March 31, June 30, September 30, December 31,
−Removed: (in thousands except per share amounts)
−Removed: Revenues $ 47,277 $ 36,856 $ 29,215 $ 26,641
−Removed: Net income (loss) $ 291,623 $ 52,567 $ 2,856 $ ( 1,525 )
−Removed: Net income (loss) attributable to the Company $ 291,797 $ 52,566 $ 2,848 $ ( 1,538 )
−Removed: Net income (loss) attributable to common stockholders $ 287,631 $ 48,260 $ ( 1,622 ) $ ( 11,573 )
−Removed: NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE (1) (2):
−Removed: Basic $ 19.70 $ 3.31 $ ( 0.11 ) $ ( 0.79 )
−Removed: Diluted $ 18.90 $ 3.20 $ ( 0.11 ) $ ( 0.79 )
−Removed: (1) EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods.
−Removed: In addition, EPS is calculated independently for each component and may not be additive due to rounding.
−Removed: (2) Amounts have been adjusted to give retroactive effect to the Reverse Stock Split.
SUBSEQUENT EVENTS
−Removed: On January 21, 2021, we issued to the Operator an aggregate of 96,740 shares of our Series A Preferred Stock as payment, in lieu of cash, for $ 2.4 million of asset management fees owed to the Operator under the Investment Management Agreement in respect of the fourth fiscal quarter of the year ended December 31, 2020.
−Removed: Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
−Removed: It is likely that we will seek to pay some or part of the asset management fees for part of the year ending December 31, 2021 in shares of Series A Preferred Stock .
−Removed: On March 5, 2021, we declared a cash dividend of $ 0.075 per share of our Common Stock, to be paid on March 30, 2021 to stockholders of record at the close of business on March 15, 2021.
−Removed: On March 5, 2021, we declared a quarterly cash dividend of $ 0.34375 per share of CMCT's Series A Preferred Stock for the second quarter of 2021.
+Added: Property Acquisitions
+Added: In February 2022, the Company and a co-investor acquired from an unrelated third-party a 100 % fee-simple interest in an office property located in the Echo Park neighborhood of Los Angeles, California for a purchase price of $ 51.0 million, which excludes transaction costs of $ 51,000 that were incurred in connection with this acquisition.
+Added: The property has approximately 97,564 square feet of office space and 2,760 square feet of retail space.
+Added: The Company owns approximately 44 % of this property.
+Added: The Company plans to undertake a capital improvement program to renovate and modernize the building into creative office space as well as a limited number of multifamily units.
+Added: In February 2022, the Company acquired from an unrelated third-party a 100 % fee-simple interest in a 11,318 square feet land site with a 3,752 square feet building located in Los Angeles, California for a purchase price of $ 2.3 million, which excludes transaction costs of $ 8,000 that were incurred in connection with this acquisition.
+Added: The Company intends to pursue entitlements for residential use and develop into multifamily units.
+Added: Dividend Declaration
+Added: On March 8, 2022, the Company declared a cash dividend of $ 0.085 per share of its Common Stock, to be paid on April 1, 2022 to stockholders of record at the close of business on March 19, 2022.
+Added: On March 8, 2022, the Company declared a quarterly cash dividend of $ 0.34375 per share of the Series A Preferred Stock for the second quarter of 2022.
The dividend will be payable as follows:
3 unchanged sentences
For shares of Series A Preferred Stock issued during the second quarter of 2021, the dividend will be prorated from the date of issuance, and the monthly dividend payments will reflect such proration, as applicable.
−Removed: On March 5, 2021, we declared a quarterly cash dividend of $ 0.353125 per share of CMCT’s Series D Preferred Stock for the second quarter of 2021.
+Added: On March 8, 2022, the Company declared a quarterly cash dividend of $ 0.353125 per share of the Series D Preferred Stock for the second quarter of 2022.
The dividend will be payable as follows:
3 unchanged sentences
For shares of Series D Preferred Stock issued during the second quarter of 2021, the dividend will be prorated from the date of issuance, and the monthly dividend payments will reflect such proration, as applicable.
+Added: On January 5, 2022, the Company and certain of its subsidiaries entered into the Fee Waiver with the Operator and the Administrator with respect to fees that are payable to them.
+Added: The Fee Waiver is effective retroactively to January 1, 2022.
+Added: See Note 12 “Related-Party Transactions— Fee Waiver.”
Schedule III—Real Estate and Accumulated Depreciation
22 unchanged sentences
Los Angeles, CA (1) 6,342 11,568 ( 101 ) 6,342 11,467 17,809 2,198 1930 & 1957 / 2010 2014
+Added: 1037 N Sycamore
+Added: Los Angeles, CA — 1,839 1,094 48 1,839 1,142 2,981 14 2000 / 2021 2021
1130 Howard Street
11 unchanged sentences
(2) The aggregate gross cost of property included above for federal income tax purposes approximates $ 695.1 million (unaudited) as of December 31, 2021.
−Removed: The following table reconciles our investments in real estate from January 1, 2018 to December 31, 2020:
+Added: Schedule III—Real Estate and Accumulated Depreciation (Continued)
+Added: December 31, 2021
+Added: (in thousands)
+Added: The following table reconciles the Company’s investments in real estate from January 1, 2020 to December 31, 2021:
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
10 unchanged sentences
Year Ended December 31,
−Removed: 2020 2019 2018
(in thousands)
12 unchanged sentences
Dispersion of of Size of Loans Maturity Amount of Principal or
−Removed: Collateral Loans From To Interest Rate Date Range Mortgages (1) “Interest”
+Added: Collateral Loans From To Interest Rate Date Range Mortgages (1)
SBA 7(a) Loans - States 2% or greater (2) (3) :
−Removed: Indiana 16 $ 100 $ 990 4.75 % to 6.00 % 05/14/36 — 12/22/45 $ 8,368 $ —
Texas 21 $ 10 $ 980 4.75 % to 6.00 % 05/22/23 — 08/20/46 $ 7,861 $ —
Ohio 23 $ 70 $ 890 4.75 % to 6.00 % 03/26/37 — 12/07/46 7,672 —
+Added: Indiana 16 $ 100 $ 970 4.75 % to 6.00 % 05/14/36 — 08/26/46 6,873 —
Michigan 20 $ 10 $ 970 4.75 % to 6.00 % 10/10/33 — 10/27/46 5,859 —
Florida 12 $ 90 $ 1,070 5.00 % to 6.00 % 06/29/32 — 08/19/46 5,173 —
−Removed: Pennsylvania 4 $ 310 $ 740 5.00 % to 6.00 % 03/05/40 — 11/29/43 2,174 —
Illinois 11 $ 50 $ 530 5.00 % to 6.00 % 09/08/39 — 10/15/46 2,278 —
−Removed: North Carolina 5 $ 70 $ 620 5.25 % to 6.00 % 09/08/32 — 08/28/45 1,651 —
−Removed: Colorado 5 $ 60 $ 540 4.75 % to 6.00 % 01/21/36 — 09/15/45 1,629 —
+Added: West Virginia 6 $ 20 $ 870 4.75 % to 6.00 % 09/25/31 — 09/20/46 2,107 —
+Added: Pennsylvania 4 $ 310 $ 690 5.00 % to 6.00 % 03/05/40 — 11/29/43 2,077 —
Louisiana 6 $ 90 $ 590 5.00 % to 6.00 % 11/22/31 — 02/22/46 1,801 —
+Added: New Mexico 5 $ 100 $ 770 4.75 % to 6.00 % 11/17/34 — 08/09/46 1,720 —
+Added: Virginia 5 $ 110 $ 650 5.00 % to 5.75 % 02/27/43 — 09/08/46 1,640 —
+Added: Colorado 4 $ 320 $ 520 4.75 % to 5.50 % 11/16/39 — 09/15/45 1,515 —
Kentucky 6 $ 130 $ 420 5.00 % to 6.00 % 01/04/41 — 10/29/46 1,498 —
Alabama 7 $ 30 $ 480 5.00 % to 5.75 % 07/27/25 — 09/10/46 1,473 —
+Added: North Carolina 7 $ 60 $ 350 5.25 % to 6.00 % 09/08/32 — 09/30/46 1,358 —
South Carolina 4 $ 270 $ 390 5.00 % to 6.00 % 11/06/40 — 07/30/44 1,308 —
−Removed: Georgia 5 $ 120 $ 360 5.25 % to 6.00 % 12/28/34 — 09/22/45 1,226 —
−Removed: Virginia 4 $ 200 $ 470 5.25 % to 6.00 % 07/20/37 — 12/27/44 1,202 —
−Removed: Mississippi 4 $ 140 $ 510 5.25 % to 6.00 % 08/31/29 — 08/31/43 1,175 —
−Removed: Other (4) 34 $ 10 $ 890 4.75 % to 6.00 % 03/29/22 — 09/25/45 8,315 152
+Added: 42 $ 1 $ 510 4.75 % to 6.00 % 03/29/22 — 12/14/46 9,415 85
Government guaranteed portions (5)
4 unchanged sentences
(1) Excludes general reserves of $ 858,000 since not specifically identified.
−Removed: (2) Includes $ 1.1 million of loans with subordinate lien positions.
+Added: (2) Includes $ 359,000 of loans with subordinate lien positions.
(3) Interest rates are variable at spreads over the prime rate unless otherwise noted.
(4) Includes a loan with a retained face value of $ 85,000 , a valuation reserve of $ 85,000 and a fixed interest rate of 6.00 %.
−Removed: (5) Represents the government guaranteed portions of our SBA 7(a) loans detailed above retained by us.
+Added: (5) Represents the government guaranteed portions of the Company’s SBA 7(a) loans detailed above retained by us.
As there is no risk of loss to us related to these portions of the guaranteed loans, the geographic information is not presented as it is not meaningful.
4 unchanged sentences
Face value of these loans is $ 5.1 million.
−Removed: (8) For Federal income tax purposes, the aggregate cost basis of our loans was approximately $ 74.4 million (unaudited).
+Added: (8) For Federal income tax purposes, the aggregate cost basis of the Company’s loans was approximately $ 66.4 million (unaudited).
Schedule IV—Mortgage Loans on Real Estate (Continued)
2 unchanged sentences
Year Ended December 31,
−Removed: 2020 2019 2018
Balance, beginning of period $ 83,135 $ 68,079
1 unchanged sentence
New loans 133,290 53,524
−Removed: Other - deferral for collection of commitment fees, net of costs 382 802 1,587
−Removed: Other - accretion of loan fees and discounts 933 1,303 1,026
+Added: Other - deferral of loan origination costs 2,559 382
+Added: Other - accretion of loan discounts, net of amortization of deferred origination costs 1,424 933
Deductions during period:
2 unchanged sentences
Cost of mortgages sold, net ( 114,437 ) ( 27,609 )
−Removed: Other - reclassification from secured borrowings — — —
Other - bad debt expense ( 58 ) ( 420 )
1 unchanged sentence
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.