What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2021-03-31 compared with 2020-03-30 · 34 added, 72 removed, 76 unchanged (58% of the section changed)

7 unchanged sentences

Pursuant to the DRIP Offerings, we issue shares of our common stock at the most recently disclosed estimated per share NAV as determined by our Board.

As of December 31, 2019 , the most recent estimated per share NAV was $8.65 per share, which was established on March 20, 2019 using a valuation date of December 31, 2018 .

To assist fiduciaries of tax-qualified pension, stock bonus or profit-sharing plans, employee benefit plans and annuities described in Section 403(a) or (b) of the Internal Revenue Code or an individual retirement account or annuity described in Section 408 of the Internal Revenue Code subject to the annual reporting requirements of ERISA and IRA trustees or custodians in preparation of reports relating to an investment in the shares, we will publicly disclose and provide reports, as requested, of the per share estimated value of our common stock to those fiduciaries who request such reports.

As of December 31, 2020, the most recent estimated per share NAV was $7.31 per share, which was established on August 14, 2020 using a valuation date of June 30, 2020.

To assist fiduciaries of tax-qualified pension, stock bonus or profit-sharing plans, employee benefit plans and annuities described in Section 403(a) or (b) of the Code or an individual retirement account or annuity described in Section 408 of the Code subject to the annual reporting requirements of ERISA and IRA trustees or custodians in preparation of reports relating to an investment in the shares, we will publicly disclose and provide reports, as requested, of the per share estimated value of our common stock to those fiduciaries who request such reports.

Furthermore, in order for FINRA members and their associated persons to participate in the Offering, we are required pursuant to FINRA Rule 5110 to disclose in each annual report distributed to stockholders a per share estimated value of the shares, the method by which it was developed and the date of the data used to develop the estimated value.

2 unchanged sentences

provided, however, that the determination of the estimated per share NAV must be conducted by, or with the material assistance or confirmation of, a third-party valuation expert and must be derived from a methodology that conforms to standard industry practice.

The Board established an updated estimated per share NAV on March 25, 2020 of $7.77 per share using a valuation date of December 31, 2019 , using a methodology that conformed to standard industry practice.

The Board established an updated estimated per share NAV on August 14, 2020 of $7.31 per share using a valuation date of June 30, 2020, using a methodology that conformed to standard industry practice.

However, as set forth above, there is no public trading market for the shares at this time and stockholders may not receive $7.31 per share if a market did exist.

In determining the estimated per share NAVs as of December 31, 2018 and December 31, 2019 , our Board considered information and analysis, including valuation materials that were provided by Duff & Phelps, LLC (“Duff & Phelps”), information provided by CMFT Management, and the estimated per share NAV recommendation made by the valuation, compensation and affiliate transactions committee of our Board, which committee is comprised of all of our independent directors.

See our Current Reports on Form 8-K, filed with the SEC on March 26, 2019 and March 30, 2020, for additional information regarding Duff & Phelps and its valuation materials.

We have not made any adjustments to the valuation of our estimated per share NAV for the impact of other transactions occurring subsequent to August 14, 2020, including, but not limited to, our entry into the Merger Agreements on August 30, 2020 or the consummation of the Mergers on December 21, 2020.

In determining the estimated per share NAVs as of June 30, 2020, our Board considered information and analysis, including valuation materials that were provided by Duff & Phelps, LLC (“Duff & Phelps”), information provided by CMFT Management, and the estimated per share NAV recommendation made by the valuation, compensation and affiliate transactions committee of our Board, which committee is comprised of all of our independent directors.

See our Current Reports on Form 8-K, filed with the SEC on and August 14, 2020, for additional information regarding Duff & Phelps and its valuation materials.

Share Redemption Program

4 unchanged sentences

At that time, we may, subject to the conditions and limitations described below, redeem the shares presented for redemption for cash to the extent that we have sufficient funds available to us to fund such redemption.

We will not pay to our sponsor, our Board, or advisor or its affiliates any fees to complete any transactions under our share redemption program.

We will not pay to our sponsor, our Board, or manager or its affiliates any fees to complete any transactions under our share redemption program.

The per share redemption price (other than for shares purchased pursuant to our DRIP and as provided below for redemptions due to a stockholder’s death) depends on the length of time the stockholder has held such shares as follows:

1 unchanged sentence

and after three years from the purchase date, 100% of the most recently determined estimated per share NAV.

During this time period, the redemption price for shares purchased pursuant to our DRIP will be 100% of the most recently determined estimated per share NAV.

each case, the redemption price will be adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock.

The estimated per share NAV for purposes of our share redemption program as of December 31, 2019 was $8.65 per share, which estimated per share NAV was determined by our Board on March 20, 2019 using a valuation date of December 31, 2018 .

As a result of our Board’s determination of an updated estimated per share NAV of our shares of common stock on March 25, 2020 , the estimated per share NAV of $7.77 as of December 31, 2019 will serve as the most recent estimated per share NAV for purposes of the share redemption program, effective March 30, 2020 until such time as the Board determines a new estimated per share NAV.

The redemption price for shares purchased

pursuant to our DRIP will be 100% of the most recently determined estimated per share NAV.

In each case, the redemption price will be adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock.

The estimated per share NAV for purposes of our share redemption program as of December 31, 2020 was $7.31 per share, which estimated per share NAV was determined by our Board on August 14, 2020 using a valuation date of June 30, 2020.

As a result of our Board’s determination of an updated estimated per share NAV of our shares of common stock on August 14, 2020, the estimated per share NAV of $7.31 as of June 30, 2020 will serve as the most recent estimated per share NAV for purposes of the share redemption program, effective August 14, 2020 until such time as the Board determines a new estimated per share NAV.

In determining the redemption price, we consider shares to have been redeemed from a stockholder’s account on a first-in, first-out basis.

23 unchanged sentences

While deceased stockholders’ shares will be included in calculating the maximum number of shares that may be redeemed in any annual or quarterly period, they will not be subject to the annual or quarterly percentage caps;

therefore, if the volume of requests to redeem deceased stockholders’ shares in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders’ shares would be completed in full, assuming sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were available.

sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were not available to pay all such redemptions in full, the requests to redeem deceased stockholders’ shares would be honored on a pro rata basis.

therefore, if the volume of requests to redeem deceased

stockholders’ shares in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders’ shares would be completed in full, assuming sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were available.

If sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were not available to pay all such redemptions in full, the requests to redeem deceased stockholders’ shares would be honored on a pro rata basis.

We next will give priority to requests for full redemption of accounts with a balance of 250 shares or less at the time we receive the request, in order to reduce the expense of maintaining small accounts.

2 unchanged sentences

Unfulfilled requests for redemption will not be carried over automatically to subsequent redemption periods.

The Board may choose to amend, suspend or terminate our share redemption program at any time upon 30 days’ notice to our stockholders.

Additionally, we will be required to discontinue sales of shares under our Secondary DRIP Offering on the date we sell all of the shares registered for sale under the Secondary DRIP Offering, unless we register additional DRIP shares to be offered pursuant to an effective registration statement with the SEC and applicable states.

Because the redemption of shares will be funded with the net proceeds we receive from the sale of shares under our Secondary DRIP Offering, net of shares redeemed to date, the discontinuance or termination of our Secondary DRIP Offering will adversely affect our ability to redeem shares under the share redemption program.

We will notify our stockholders of such developments (1) in our next annual or quarterly report or (2) by means of a separate mailing, accompanied by disclosure in a current or periodic report under the Exchange Act.

alternative strategy that will result in a significant increase in opportunities for stockholders to redeem their shares or the listing of the shares of our common stock for trading on a national securities exchange.

Our share redemption program is only intended to provide interim liquidity for stockholders until a liquidity event occurs, which may include the sale of the Company, the sale of all or substantially all of our assets, a merger or similar transaction, an alternative strategy that will result in a significant increase in opportunities for stockholders to redeem their shares or the listing of the shares of our common stock for trading on a national securities exchange.

We cannot guarantee that a liquidity event will occur.

1 unchanged sentence

We do not intend to resell such shares to the public unless they are first registered with the SEC under the Securities Act and under appropriate state securities laws or otherwise sold in compliance with such laws.

We received redemption requests for approximately 20.6 million shares (or $178.5 million ) in excess of the net proceeds we received from issuance of shares under the DRIP Offerings during the three months ended December 31, 2019 .

Management, in its discretion, limited the amount of shares redeemed for the three months ended December 31, 2019 to an amount equal to net proceeds we received from the sale of shares pursuant to the DRIP Offerings during the period.

During the year ended December 31, 2019 , we received valid redemption requests under our share redemption program totaling approximately 88.6 million shares, of which we redeemed approximately 7.2 million shares as of December 31, 2019 for $62.4 million (at an average redemption price of $8.65 per share) and approximately 2.3 million shares subsequent to December 31, 2019 for $19.5 million (at an average redemption price of $8.65 per share).

In order to manage the financial health of the Company, the Board approved and adopted an amended and restated share redemption program (the “Amended Share Redemption Program”) that, among other changes, provides that the Amended Share Redemption Program may be amended, suspended or terminated at any time by majority vote of the Board without prior notice if the Board believes such action is in the best interest of the Company and its stockholders.

In connection with our entry into the Merger Agreements, on August 30, 2020, the Board approved the suspension of the Amended Share Redemption Program.

On March 25, 2021, the Board approved the reinstatement of the share redemption program effective April 1, 2021.

No shares were redeemed from our stockholders during the period in which the Amended Share Redemption Program was suspended.

During the year ended December 31, 2020, we received valid redemption requests under our Amended Share Redemption Program totaling approximately 48.3 million shares, of which we redeemed approximately 3.8 million shares as of December 31, 2020 for $28.5 million (at an average redemption price of $7.60 per share).

The remaining redemption requests relating to approximately 44.5 million shares went unfulfilled.

1 unchanged sentence

The remaining redemption requests relating to approximately 79.1 million shares went unfulfilled.

A valid redemption request is one that complies with the applicable requirements and guidelines of our current share redemption program set forth above.

A valid redemption request is one that complies with the applicable requirements and guidelines of our current Amended Share Redemption Program set forth above.

We funded such redemptions with proceeds from our DRIP Offerings.

During the years ended December 31, 2019 and 2018 , we issued approximately 9.3 million and 9.6 million shares of common stock, respectively, under the DRIP Offerings, for proceeds of $82.4 million and $91.8 million , respectively, which were recorded as redeemable common stock on the consolidated balance sheets, net of any redemptions paid.

During the years ended December 31, 2020 and 2019, we issued approximately 4.2 million and 9.3 million shares of common stock, respectively, under the DRIP Offerings, for proceeds of $34.2 million and $82.4 million, respectively, which were recorded as redeemable common stock on the consolidated balance sheets, net of any redemptions paid, prior to the suspension of the Amended Share Redemption Program on August 30, 2020.

In general, we redeem shares on a quarterly basis.

During the three-month period ended December 31, 2019 , we redeemed shares, including those redeemable due to death, as follows:

Average Price

Paid per Share

Total Number of Shares

Purchased as Part of

Publicly Announced

Plans or Programs

Maximum Number of

Shares that May Yet Be

Purchased Under the

Plans or Programs

October 1, 2019 - October 31, 2019

November 1, 2019 - November 30, 2019

December 1, 2019 - December 31, 2019

____________________________________

A description of the maximum number of shares that may be purchased under our share redemption program is included in the narrative preceding this table.

However, as a result of the Board’s decision to suspend the Amended Share Redemption Program on August 30, 2020, we did not redeem any shares during the three-month period ended December 31, 2020.

See Part II, Item 7.

13 unchanged sentences

The following table shows the distributions declared on a per share basis during the years ended December 31, 2020, 2019 and 2018 (in thousands, except per share data):

Year Ending December 31,

Total Distributions

Distributions Declared

Year Ending December 31, Total Distributions

Declared Distributions Declared

per Common Share

2020 $ 119,305 $ 0.38

2019 $ 194,463 $ 0.625

2018 $ 194,573 $ 0.625

SELECTED FINANCIAL DATA

The following data should be read in conjunction with our consolidated financial statements and the notes thereto and Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K.

Certain amounts presented below have been reclassified to conform to the current period presentation.

See Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion of the various reclassifications.

The selected financial data (in thousands, except share and per share amounts) presented below was derived from our consolidated financial statements.

Year Ended December 31,

Balance Sheet Data:

Total real estate assets, net

Loans held-for-investment and related receivables, net

Cash and cash equivalents

Assets held for sale

Credit facility and notes payable, net

Intangible lease liabilities, net

Total liabilities

Redeemable common stock and noncontrolling interest

Total stockholders’ equity

Operating Data:

Total revenues

Total operating expenses

Gain (loss) on disposition of real estate, net

Operating income

Net income attributable to the Company

Cash Flow Data:

Net cash provided by operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

Per Share Data:

Net income - basic and diluted

Distributions declared per common share

Weighted average shares outstanding - basic and diluted

Not applicable.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity