Wheeler Real Estate Investment Trust, Inc. 10-K

Item 9A. Controls and Procedures. Disclosure Controls and Procedures Our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of December 31, 2021, such disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in rules promulgated under the Exchange Act, is a process designed by, or under the supervision of, our CEO and CFO and effected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Our internal control over financial reporting is evaluated on a regular basis by personnel in our organization. The overall goals of these various evaluation activities are to monitor our internal control over financial reporting and to make modifications as necessary, as disclosure and internal controls are intended to be dynamic systems that change (including improvements and corrections) as conditions warrant. Management conducted an assessment of the effectiveness of our company’s internal control over financial reporting as of December 31, 2021, utilizing the framework established in “INTERNAL CONTROL-INTEGRATED FRAMEWORK” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this assessment, management has determined that our internal controls over financial reporting as of December 31, 2021 were effective. 24 All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management's report in this Annual Report. Changes in Internal Control Over Financial Reporting There were no changes in the Company's internal control over financial reporting for the year ended December 31, 2021 that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance. Except as set forth below, the information required by this Item 10 of Part III will be contained in the Company’s definitive proxy statement for the 2022 Annual Meeting (our “Proxy Statement”) and is incorporated herein by reference. The Company has adopted a Code of Business Conduct and Ethics applicable to the directors, officers and employees. A copy of that code is available on the Company’s corporate website at www.whlr.us, which does not form a part of this Annual Report on Form 10-K. We intend to post any amendments to such code, or any waivers of its requirements, on our website. Item 11. Executive Compensation. The information required by this Item 11 of Part III will be contained in our Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Except as set forth below, the information required by this Item 12 of Part III will be contained in the Company’s Proxy Statement and is incorporated herein by reference. Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth information as of December 31, 2021 regarding our compensation plans and the Common Stock we may issue under the plan. 25 Equity Compensation Plan Information Table Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by stockholders (1) 15,000 (2) — 153,811 Equity compensation plans not approved by stockholders — — — Total 15,000 — 153,811 (1) Includes our 2015 and 2016 Long-Term Incentive Plans, which authorized a maximum of 125,000 and 625,000 shares, respectively, of our Common Stock for issue. Awards are granted by the Compensation Committee. (2) Includes 15,000 performance awards assuming maximum payout (as a result, this aggregate reported number may overstate actual dilution). Performance awards are not taken into account in the weighted-average exercise price as such awards have no exercise price. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item 13 of Part III will be contained in the Company’s Proxy Statement and incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information by this Item 14 of Part III will be contained in the Company’s Proxy Statement and is incorporated herein by reference. PART IV Item 15. Exhibits and Financial Statement Schedules. (a)(1). Financial Statements . The financial statements filed as a part of this Annual Report on Form 10-K are as follows: Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 677 ) 27 Consolidated Balance Sheets 29 Consolidated Statements of Operations 30 Consolidated Statements of Equity 31 Consolidated Statements of Cash Flows 32 Notes to Consolidated Financial Statements 33 (a)(2). Financial Statement Schedules . • Schedule II- Valuation and Qualifying Accounts • Schedule III- Real Estate and Accumulated Depreciation All other financial statement schedules have been omitted because the required information of such schedules is not present, is not present in amounts sufficient to require a schedule or is included in the consolidated financial statements. (a)(3). Exhibits . See the Exhibit Index at the end of this Annual Report on Form 10-K, which is incorporated by reference. 26 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Virginia Beach, Virginia Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Wheeler Real Estate Investment Trust, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes and schedules (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated 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 years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. 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. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates. Evaluation of Investment Properties for Impairment Description of Matter At December 31, 2021, the Company’s investment properties totaled $386.7 million. As more fully described in Note 2 to the consolidated financial statements, the Company evaluates its investment properties for impairment whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable. Management evaluates various qualitative factors in determining whether or not events or changes in circumstances indicate that the carrying amount of an investment property may not be recoverable. 27 Auditing the Company’s impairment assessment involved subjectivity due to the estimation required to assess significant assumptions utilized in estimating the recoverability of the investment properties based on undiscounted operating income and residual values, such as assumptions related to renewal and renegotiations of current leases, estimates of new leases on vacant spaces, and estimates of operating costs. How We Addressed the Matter in Our Audit To test the Company’s evaluation of investment properties for impairment, we performed audit procedures that included, among others, assessing the methodologies applied, evaluating the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used in the analysis. We compared the recoverability calculated to the remaining net book value of the assets to ensure recoverability for the properties’ remaining useful lives. We compared the significant assumptions used by management to relevant market information and other applicable sources. As part of our evaluation, we performed sensitivity analyses of significant assumptions to evaluate the changes in the undiscounted cash flows of the related investment property that would result from changes in the assumptions. Derivative Liabilities Description of Matter At December 31, 2021, the Company had convertible notes with an outstanding principal balance of $33.0 million and 1.5 million common stock warrants. Calculations and accounting for the notes payable and embedded conversion features as well as the warrants require management’s judgments related to initial and subsequent recognition, use of a valuation model, and determination of the appropriate inputs used in the selected valuation model. As more fully described in Note 6 to the consolidated financial statements, the Company utilizes a multinomial lattice model valuation technique in measuring the fair value of the notes’ conversion features and a Monte Carlo simulation technique in measuring the fair value of the warrants Auditing management’s valuations of the derivative liabilities was challenging due to the complexity of valuation model and the inputs that are highly sensitive to changes such as the common stock market price, volatility, risk free rates, and yields. How We Addressed the Matter in Our Audit To test the accounting for the derivative liabilities resulting from the issuance of warrants and convertible notes, our audit procedures included, among others, inspection of the contracts, and testing completeness and accuracy of the data used as well as management’s application of the relevant accounting guidance. We also involved our valuation specialists to evaluate the Company’s determination of the fair value of the convertible notes inclusive of the embedded features and warrants, including testing the appropriateness of the methodology and underlying inputs used and assessing the reasonableness of those inputs. /s/ Cherry Bekaert LLP We have served as the Company’s auditor since 2012. Virginia Beach, Virginia February 28, 2022 28 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except par value and share data) December 31, 2021 2020 ASSETS: Investment properties, net $ 386,730 $ 392,664 Cash and cash equivalents 22,898 7,660 Restricted cash 17,521 35,108 Rents and other tenant receivables, net 9,233 9,153 Assets held for sale 2,047 13,072 Above market lease intangibles, net 2,424 3,547 Operating lease right-of-use assets 12,455 12,745 Deferred costs and other assets, net 11,973 15,430 Total Assets $ 465,281 $ 489,379 LIABILITIES: Loans payable, net $ 333,283 $ 334,266 Liabilities associated with assets held for sale 3,381 13,124 Below market lease intangibles, net 3,397 4,554 Derivative liabilities 4,776 594 Operating lease liabilities 13,040 13,200 Accounts payable, accrued expenses and other liabilities 11,054 11,229 Total Liabilities 368,931 376,967 Series D Cumulative Convertible Preferred Stock ( no par value, 6,000,000 and 4,000,000 shares authorized, respectively, 3,152,392 and 3,529,293 shares issued and outstanding, respectively; $ 104.97 million and $ 109.13 million aggregate liquidation value, respectively) 92,548 95,563 EQUITY: Series A Preferred Stock ( no par value, 4,500 shares authorized, 562 shares issued and outstanding) 453 453 Series B Convertible Preferred Stock no par value, 5,000,000 authorized, 1,872,448 and 1,875,748 shares issued and outstanding, respectively; $ 46.81 million and $ 46.90 million aggregate liquidation preference, respectively) 41,189 41,174 Common Stock ($ 0.01 par value, 200,000,000 and 18,750,000 shares authorized, respectively, 9,720,532 and 9,703,874 shares issued and outstanding, respectively) 97 97 Additional paid-in capital 234,229 234,061 Accumulated deficit ( 274,107 ) ( 260,867 ) Total Stockholders’ Equity 1,861 14,918 Noncontrolling interests 1,941 1,931 Total Equity 3,802 16,849 Total Liabilities and Equity $ 465,281 $ 489,379 See accompanying notes to consolidated financial statements. 29 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except share and per share data) Years Ended December 31, 2021 2020 REVENUE: Rental revenues $ 60,368 $ 60,039 Other revenues 942 964 Total Revenue 61,310 61,003 OPERATING EXPENSES: Property operations 19,618 18,886 Depreciation and amortization 14,797 17,291 Impairment of assets held for sale 2,300 600 Corporate general & administrative 7,140 5,831 Total Operating Expenses 43,855 42,608 Gain on disposal of properties 2,055 23 Operating Income 19,510 18,418 Interest income 34 1 Interest expense ( 33,028 ) ( 17,093 ) Net changes in fair value of derivative liabilities 3,768 — Other income 552 — Other expense ( 185 ) ( 1,039 ) Net (Loss) Income Before Income Taxes ( 9,349 ) 287 Income tax expense ( 2 ) — Net (Loss) Income ( 9,351 ) 287 Less: Net income attributable to noncontrolling interests 92 42 Net (Loss) Income Attributable to Wheeler REIT ( 9,443 ) 245 Preferred Stock dividends - undeclared ( 8,837 ) ( 10,258 ) Deemed contribution related to preferred stock redemption 5,040 726 Net Loss Attributable to Wheeler REIT Common Stockholders $ ( 13,240 ) $ ( 9,287 ) Loss per share: Basic and Diluted $ ( 1.36 ) $ ( 0.96 ) Weighted-average number of shares: Basic and Diluted 9,711,944 9,698,274 See accompanying notes to consolidated financial statements. 30 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Equity (in thousands, except share data) Series A Series B Noncontrolling Preferred Stock Preferred Stock Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Interests Total Shares Value Shares Value Shares Value Units Value Equity Balance, December 31, 2019 562 $ 453 1,875,748 $ 41,087 9,694,284 $ 97 $ 233,870 $ ( 251,580 ) $ 23,927 234,019 $ 2,080 $ 26,007 Accretion of Series B Preferred Stock discount — — — 87 — — — — 87 — — 87 Conversion of operating partnership units to Common Stock — — — — 9,590 — 21 — 21 ( 9,590 ) ( 21 ) — Adjustment for noncontrolling interest in operating partnership — — — — — — 170 — 170 — ( 170 ) — Deemed contribution related to preferred stock redemption — — — — — — — 726 726 — — 726 Dividends and distributions — — — — — — — ( 10,258 ) ( 10,258 ) — — ( 10,258 ) Net Income — — — — — — — 245 245 — 42 287 Balance, December 31, 2020 562 453 1,875,748 41,174 9,703,874 97 234,061 ( 260,867 ) 14,918 224,429 1,931 16,849 Accretion of Series B Preferred Stock discount — — — 87 — — — — 87 — — 87 Conversion of operating partnership units to Common Stock — — — — 9,086 — 33 — 33 ( 9,086 ) ( 33 ) — Issuance of Common Stock under Share Incentive Plan — — — — 5,000 — 14 — 14 — — 14 Adjustment for noncontrolling interest in operating partnership — — — — — — 49 — 49 — ( 49 ) — Conversion of Series B Preferred Stock to Common Stock — — ( 3,300 ) ( 72 ) 2,572 — 72 — — — — — Deemed contribution related to preferred stock redemption — — — — — — — 5,040 5,040 — — 5,040 Dividends and distributions — — — — — — — ( 8,837 ) ( 8,837 ) — — ( 8,837 ) Net (Loss) Income — — — — — — — ( 9,443 ) ( 9,443 ) — 92 ( 9,351 ) Balance, December 31, 2021 562 $ 453 1,872,448 $ 41,189 9,720,532 $ 97 $ 234,229 $ ( 274,107 ) $ 1,861 215,343 $ 1,941 $ 3,802 See accompanying notes to consolidated financial statements. 31 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) For the Years Ended December 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net (Loss) Income $ ( 9,351 ) $ 287 Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: Depreciation 11,072 11,317 Amortization 3,725 5,974 Loan cost amortization 12,710 1,097 Changes in fair value of derivative liabilities ( 3,768 ) — Above (below) market lease amortization, net 13 ( 461 ) Paid-in-kind interest 1,610 — Straight-line expense 35 184 Share-based compensation 14 — Gain on disposal of properties ( 2,055 ) ( 23 ) Credit losses on operating lease receivables 239 1,131 Impairment of assets held for sale 2,300 600 Net changes in assets and liabilities: Rent and other tenant receivables, net 1,001 ( 2,402 ) Unbilled rent ( 1,220 ) ( 1,076 ) Deferred costs and other assets, net ( 427 ) ( 661 ) Accounts payable, accrued expenses and other liabilities 1,143 ( 187 ) Net cash provided by operating activities 17,041 15,780 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 6,412 ) ( 2,271 ) Cash received from disposal of properties 11,513 4,508 Net cash provided by investing activities 5,101 2,237 CASH FLOWS FROM FINANCING ACTIVITIES: Payments for deferred financing costs ( 7,813 ) ( 3,143 ) Loan proceeds 97,650 38,350 Loan principal payments ( 105,305 ) ( 31,493 ) Paycheck Protection Program proceeds — 552 Preferred stock redemption ( 8,336 ) ( 1,106 ) Loan prepayment penalty ( 687 ) — Net cash (used in) provided by financing activities ( 24,491 ) 3,160 (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 2,349 ) 21,177 CASH, CASH EQUIVALENTS AND RESTRICTED CASH , beginning of year 42,768 21,591 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year $ 40,419 $ 42,768 Supplemental Disclosures: Non-cash Transactions: Paycheck Protection Program forgiveness $ 552 $ — Initial fair value of warrants $ 2,018 $ 594 Initial fair value of derivative liability at issuance of convertible notes $ 5,932 $ — Conversion of common units to common stock $ 33 $ 21 Conversion of Series B Preferred Stock to common stock $ 72 $ — Accretion of Preferred Stock discounts $ 600 $ 677 Deemed contribution related to Preferred Stock discount $ 5,040 $ 726 Other Cash Transactions: Cash paid for taxes $ 2 $ 15 Cash paid for interest $ 18,973 $ 15,889 The following table provides a reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 22,898 $ 7,660 Restricted cash 17,521 35,108 Cash, cash equivalents, and restricted cash $ 40,419 $ 42,768 See accompanying notes to consolidated financial statements. 32 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Organization and Basis of Presentation and Consolidation Wheeler Real Estate Investment Trust, Inc. (the “Trust,” the “REIT”, the “Company”, "we", "our" or "us") is a Maryland corporation formed on June 23, 2011. The Trust serves as the general partner of Wheeler REIT, L.P. (the “Operating Partnership”), which was formed as a Virginia limited partnership on April 5, 2012. At December 31, 2021, the Company owned 98.59 % of the Operating Partnership. As of December 31, 2021, the Trust, through the Operating Partnership, owned and operated fifty-eight centers and four undeveloped properties. Ten of these properties are located in Virginia, three are located in Florida, six are located in North Carolina, twenty-two are located in South Carolina, twelve are located in Georgia, two are located in Kentucky, two are located in Tennessee, one is located in New Jersey, one is located in Alabama, one is located in West Virginia, one is located in Oklahoma and one is located in Pennsylvania. The Company’s portfolio had total gross rentable space of approximately 5,478,855 square feet and a leased level of approximately 94.2 % at December 31, 2021. Accordingly, the use of the word “Company”, "we", "our" or "us" refers to the Trust and its consolidated subsidiaries, except where the context otherwise requires. The Company includes the Trust, the Operating Partnership, the entities included in the REIT formation and the entities acquired since November 2012. The Company prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. All material balances and transactions between the consolidated entities of the Company have been eliminated. The Company owns, leases and operates income producing grocery-anchored centers, neighborhood centers, community centers and free-standing retail properties with a strategy to acquire high quality retail properties that generate attractive risk-adjusted returns. The Company targeted competitively protected properties in communities that have stable demographics and have historically exhibited pro-business jurisdictions. The Company considers competitively protected properties to be located in the most prominent shopping districts in their respective markets, ideally situated at major “Main and Main” intersections. The Company generally leases its properties to national and regional supermarket chains and selects retailers that offer necessity and value oriented services and items and generate regular consumer traffic. The Company’s tenants carry goods and offer services that are less impacted by fluctuations in the broader U.S. economy and consumers’ disposable income, which it believes generates more predictable property-level cash flows. The Trust through the Operating Partnership owns Wheeler Interests, LLC (“WI”) and Wheeler Real Estate, LLC (“WRE”) (collectively the “Operating Companies”). The Operating Companies are Taxable REIT Subsidiaries (“TRS”) to accommodate serving the Non-REIT Properties since applicable REIT regulations consider the income derived from these services to be “bad” income subject to taxation. The regulations allow for costs incurred by the Company commensurate with the services performed for the Non-REIT Properties to be allocated to a TRS. 33 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies Investment Properties The Company records investment properties and related intangibles at fair value upon acquisition. Investment properties include both acquired and constructed assets. Improvements and major repairs and maintenance are capitalized when the repair and maintenance substantially extends the useful life, increases capacity or improves the efficiency of the asset. All other repair and maintenance costs are expensed as incurred. The Company allocates the purchase price of acquisitions to the various components of the asset based upon the fair value of each component which may be derived from various observable or unobservable inputs and assumptions. Also, the Company may utilize third party valuation specialists. These components typically include buildings, land and any intangible assets related to out-of-market leases, tenant relationships and in-place leases the Company determines to exist. The Company determines fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in the analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases, tenant relationships and in-place lease value are recorded at fair value as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 5 to 40 years. The Company reviews depreciable lives of investment properties periodically and makes adjustments to reflect a shorter economic life, when necessary. Tenant allowances, tenant inducements and tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Amounts allocated to buildings are depreciated over the estimated remaining life of the acquired building or related improvements. The Company amortizes amounts allocated to tenant improvements, in-place lease assets and other lease-related intangibles over the remaining life of the underlying leases. The Company also estimates the value of other acquired intangible assets, if any, and amortizes them over the remaining life of the underlying related intangibles. The Company reviews investment properties for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. The Company measures any impairment of investment property when the estimated undiscounted future operating income before depreciation and amortization, plus its residual value, is less than the carrying value of the property. Estimated undiscounted operating income before depreciation and amortization include renewal and renegotiations of current leases, estimates of new leases on vacant spaces, estimates of operating costs and fluctuating market conditions. The renewal and renegotiations of leases in some cases must be approved by additional third parties outside the control of the Company and the tenant. If such renewed or renegotiated leases are approved at amounts below current estimates, then impairment adjustments may be necessary in the future. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as operating income, estimated capitalization rates, or multiples, leasing prospects for vacant spaces and local market information. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets Held For Sale and Discontinued Operations The Company may decide to sell properties that are held for use. The Company records these properties as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. Properties classified as held for sale are reported at the lower of 34 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) their carrying value or their fair value, less estimated costs to sell. When the carrying value exceeds the fair value, less estimated costs to sell an impairment expense is recognized. The Company estimates fair value, less estimated closing costs based on similar real estate sales transactions. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 and 3 inputs. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. See Note 3 for additional details on impairment of assets held for sale for the years ended December 31, 2021 and 2020. Assets held for sale are presented as discontinued operations in all periods presented if the disposition represents a strategic shift that has, or will have, a major effect on the Company's financial position or results of operations. This includes the net gain (or loss) upon disposal of property held for sale, the property's operating results, depreciation and interest expense. Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be within the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did no t record any conditional asset retirement obligation liabilities as of December 31, 2021 and 2020. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents consist primarily of bank operating accounts and money markets. Financial instruments that potentially subject the Company to concentrations of credit risk include its cash and cash equivalents and its trade accounts receivable. The Company places its cash and cash equivalents with institutions of high credit quality. Restricted cash represents amounts held by lenders for real estate taxes, insurance, reserves for capital improvements, leasing costs, tenant security deposits and funds restricted by lender for redemption of Series D Preferred. The Company places its cash and cash equivalents and restricted cash on deposit with financial institutions in the United States, which are insured by the Federal Deposit Insurance Company ("FDIC") up to $ 250 thousand. The Company's loss in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk. Tenant Receivables Tenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2021 and 2020, the Company’s allowance for uncollectible tenant receivables totaled $ 633 thousand and $ 994 thousand, respectively. Above and Below Market Lease Intangibles, net 35 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) The Company determines the above and below market lease intangibles upon acquiring a property. Above and below market lease intangibles are amortized over the life of the respective leases. Amortization of above and below market lease intangibles is recorded as a component of rental revenues. Deferred Costs and Other Assets, net The Company’s deferred costs and other assets consist primarily of leasing commissions, leases in place, capitalized legal and marketing costs, tenant relationships and ground lease sandwich interest intangibles associated with acquisitions. The Company’s lease origination costs consist primarily of the portion of property acquisitions allocated to lease originations and commissions paid to third parties in connection with lease originations. The Company generally records amortization of lease origination costs on a straight-line basis over the terms of the related leases. Amortization of deferred costs and other assets represents a component of depreciation and amortization expense. Paycheck Protection Program The Company received proceeds of $ 552 thousand (the "PPP funds") pursuant to the Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP funds were received in the form of a promissory note, dated April 24, 2020 (the “Promissory Note”), between the Company and KeyBank as the lender. Under the terms of the CARES Act, the Promissory Note was forgiven during the year ended December 31, 2021 and the corresponding forgiveness of the liability was recorded as "other income" on the consolidated statements of operations. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants and convertible notes, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The assumptions used in these fair value estimates are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Debt Issuance Costs The Company may incur debt issuance costs in connection with raising funds through debt. These costs may be paid in the form of cash, or equity (such as warrants and convertible notes). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Debt issuance costs are presented as a direct deduction from the carrying value of the associated debt liability in the consolidated balance sheets. Operating Partnership Purchase of Stock The Operating Partnership purchased 71,343 shares of the Series D Preferred on September 22, 2020 from an unaffiliated investor at $ 15.50 per share. The Company considers the purchase of the REIT's equity securities to be retired in the consolidated financial statements. See Note 8 for additional details. Revenue Recognition Lease Contract Revenue The Company has two classes of underlying assets relating to rental revenue activity, retail and office space. The Company retains substantially all of the risks and benefits of ownership of these underlying assets and accounts for these leases as operating leases. The Company combines lease and nonlease components in lease contracts, which includes combining base rent and tenant reimbursement revenue. 36 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) The Company accrues minimum rents on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. At December 31, 2021 and 2020, there were $ 5.77 million and $ 4.48 million, respectively, in unbilled rent which is included in "rents and other tenant receivables, net." Additionally, certain lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements as variable lease income. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. These reimbursements are considered nonlease components which the Company combines with the lease component. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by the tenant's pro-rata percentage of square footage to total square footage of the property. The Company also receives monthly payments for these reimbursements from substantially all its tenants throughout the year. The Company recognizes tenant reimbursements as variable lease income. Additionally, the Company has tenants who pay real estate taxes directly to the taxing authority. The Company excludes these Company costs paid directly by the tenant to third parties on the Company’s behalf from both variable revenue payments recognized and the associated property operating expenses. The Company does not evaluate whether certain sales taxes and other similar taxes are the Company’s costs or tenants' costs. Instead, the Company accounts for these costs as tenant costs. The Company recognizes lease termination fees, which are included in "other revenues" on the consolidated statements of operations, in the year that the lease is terminated and collection of the fee is reasonably assured. Upon early lease termination, the Company records losses related to unrecovered intangibles and other assets. Beginning in April 2020, the Company received certain rent relief requests, most often in the form of rent deferral requests, as a result of COVID-19. The Company evaluated each tenant rent relief request on an individual basis, considering a number of factors. Not all tenant requests ultimately result in concessions or modification of agreements, nor is the Company forgoing its contractual rights under its lease agreements. The Financial Accounting Standards Board (the "FASB") issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19. The Lease Modification Q&A clarifies that entities may elect to treat qualifying lease concessions as if they were based on enforceable rights and obligations, and may choose to apply or not to apply modification accounting to those qualifying concessions. Qualifying concessions must be in response to COVID-19 and not have a substantial increase in the lessee’s obligation or the lessor’s rights under the contract. The Company has elected not to apply ASC 842 modification guidance for concessions that did not increase the lease term, generally these concessions do not impact the overall economics of the lease. Concessions that extend the lease term are accounted for under ASC 842, lease modification guidance. The below table disaggregates the Company’s revenue by type of service for the years ended December 31, 2021 and 2020 (in thousands): 37 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) Years Ended December 31, 2021 2020 Minimum rent $ 45,896 $ 46,349 Tenant reimbursements - variable lease revenue 13,120 13,273 Straight-line rents 1,060 1,155 Percentage rent - variable lease revenue 531 393 Lease termination fees 139 178 Other 803 786 Total 61,549 62,134 Credit losses on operating lease receivables ( 239 ) ( 1,131 ) Total $ 61,310 $ 61,003 Income Taxes The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90 % of its taxable income to stockholders and meet certain other asset and income tests, as well as other requirements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify. If the Company loses its REIT status it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to reasonable cause and certain other conditions were satisfied. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes and has determined that the Company had no uncertain income tax positions . Financial Instruments The carrying amount of financial instruments included in assets and liabilities approximates fair market value due to their immediate or short-term maturity. Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported periods. The Company’s actual results could differ from these estimates. Corporate General and Administrative Expense Corporate general & administrative expenses consist of the following (in thousands): Years Ended December 31, 2021 2020 Professional fees $ 3,116 $ 2,466 Corporate administration (1) 1,771 1,240 Compensation and benefits 1,465 1,589 Capital and debt financing costs 438 291 Advertising costs for leasing activities 119 117 Other 231 128 Total $ 7,140 $ 5,831 (1) Includes $ 169 thousand in annual rental payments for the year ended December 31, 2021 for the Company's office space headquarters that had a sale leaseback in December 2020. 38 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) Other Expense Other expense represents costs which are non-operating in nature. Other expenses were $ 185 thousand for the year ended December 31, 2021, and consist of legal settlement costs. Other expenses were $ 1.04 million for the year ended December 31, 2020, and include legal settlement costs and reimbursement of 2019 proxy costs, see Note 11 for additional details. Lease Commitments The Company determines if an arrangement is a lease at inception. Operating leases, in which the Company is the lessee, are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on our consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and the lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU assets include any lease payments made and excludes lease incentives. The Company's lease terms may include options to extend the lease when it is reasonably certain that the company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elects the practical expedient to combine lease and associated nonlease components. The lease components are the majority of its leasing arrangements and the Company accounts for the combined component as an operating lease. In the event the Company modifies existing ground leases or enters into new ground leases, such leases may be classified as finance leases. Noncontrolling Interests Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. Consolidated statements of equity include beginning balances, activity for the period and ending balances for stockholders’ equity, noncontrolling interests and total equity. The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are exchanged for the Company’s $ 0.01 par value per share common stock ("Common Stock"). In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital. Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entities Own Equity (Subtopic 815-40).” This ASU simplifies accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separating embedded conversion features from convertible instruments. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The guidance is effective for fiscal years beginning after December 15, 2021. We adopted this guidance effective January 1, 2021 under the modified retrospective adoption approach. There was no effect to the opening balance of retained earnings at the date of adoption. The comparative information has not been restated and continues to be presented according to accounting standards in effect for those periods. 39 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)". This update modifies the disclosure requirements on fair value measurements in Topic 820 with several removals, modifications and additions for disclosures, which includes both prospective and retrospective disclosures. The guidance adds prospective disclosures related to the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements including measurement uncertainty disclosures to communicate the uncertainty in the measurement as of the reporting date. The Company adopted this ASU as of January 1, 2020. The adoption did not have material impact on its consolidated financial statements upon adoption of the guidance and there were no retrospective disclosures necessary. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This update enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better calculate credit loss estimates. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, such as accounts receivable and loans. The guidance will require that the Company estimate the lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. The Company will also be required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes. The guidance would be effective for interim and annual reporting periods beginning after December 15, 2022, per FASB's issuance of ASU 2019-10, "Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates." The Company is currently in the process of evaluating the impact the adoption of the guidance will have on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows. Reclassifications The Company has reclassified certain prior period amounts in the accompanying consolidated financial statements in order to be consistent with the current period presentation. The consolidated statements of operations reported within prior year's Form 10-K, fiscal year ended December 31, 2020, presented net loss attributable to Wheeler REIT Common Stockholders and basic and diluted loss per share amounts of $ 13.56 million and $ 1.40 per share, respectively. On November 3, 2021, common stockholders of the Company voted to amend the Company’s Charter to remove the cumulative dividend rights of the Series A Preferred and Series B Preferred. As a result, the net loss attributable to Wheeler REIT Common Stockholders and basic and diluted loss per share amounts have been restated to conform with this amendment, resulting in net loss attributable to Wheeler REIT Common Stockholders and basic and diluted loss per share amounts of $ 9.29 million and $ 0.96 per share, respectively, for the year ended December 31, 2020. No other reclassifications had an effect on net income, total assets, total liabilities or equity. The revenue from interest income was reclassified from interest expense on the consolidated statements of operations for consistency with current period presentation. 3. Real Estate Investment properties consist of the following (in thousands): December 31, 2021 2020 Land and land improvements $ 96,752 $ 97,117 Buildings and improvements 357,606 354,738 Investment properties at cost 454,358 451,855 Less accumulated depreciation ( 67,628 ) ( 59,191 ) Investment properties, net $ 386,730 $ 392,664 40 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 3. Real Estate (continued) The Company’s depreciation expense on investment properties was $ 11.07 million and $ 11.32 million for the years ended December 31, 2021 and 2020, respectively. A significant portion of the Company’s land, buildings and improvements serve as collateral for its mortgage loans. Accordingly, restrictions exist as to the encumbered property's transferability, use and other common rights typically associated with property ownership. Assets Held for Sale and Dispositions At December 31, 2021, assets held for sale included Walnut Hill Plaza, as the Company has committed to a plan to sell the property. At December 31, 2020, assets held for sale included Columbia Fire Station, Berkley Shopping Center, a 0.75 acre land parcel at Berkley (the "Berkley Land Parcel") and two outparcels at Rivergate Shopping Center. Impairment expenses on assets held for sale are a result of reducing the carrying value for the amount that exceeded the property's fair value less estimated selling costs. The valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 inputs. Impairment expenses for the years ended December 31, 2021 and 2020 are as follows (in thousands): Years Ended December 31, 2021 2020 Walnut Hill Plaza $ 100 $ — Columbia Fire Station 2,200 600 Total $ 2,300 $ 600 As of December 31, 2021 and 2020, assets held for sale and associated liabilities consist of the following (in thousands): December 31, 2021 2020 Investment properties, net $ 1,824 $ 12,593 Rents and other tenant receivables, net 18 132 Above market leases, net — 153 Deferred costs and other assets, net 205 194 Total assets held for sale $ 2,047 $ 13,072 December 31, 2021 2020 Loans payable $ 3,145 $ 12,838 Below market leases, net — 25 Accounts payable, accrued expenses and other liabilities 236 261 Total liabilities associated with assets held for sale $ 3,381 $ 13,124 The following properties were sold during the years ended December 31, 2021 and 2020 (in thousands): 41 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 3. Real Estate (continued) Disposal Property Contract Price Gain (Loss) Net Proceeds November 17, 2021 Columbia Fire Station $ 4,250 $ ( 88 ) $ 3,903 August 31, 2021 Rivergate Shopping Center Out Parcel 3,700 1,915 3,451 July 9, 2021 Tulls Creek Land Parcel ( 1.28 acres) 250 52 222 March 25, 2021 Berkley Shopping Center and Berkley Land Parcel ( 0.75 acres) 4,150 176 3,937 December 31, 2020 Riversedge North 3,000 49 2,843 January 21, 2020 St. Matthews 1,775 ( 26 ) 1,665 4. Deferred Costs Deferred costs and other assets, net of accumulated amortization are as follows (in thousands): December 31, 2021 2020 Leases in place, net $ 7,519 $ 10,233 Ground lease sandwich interest, net 1,667 1,941 Lease origination costs, net 1,474 1,334 Tenant relationships, net 853 1,308 Legal and marketing costs, net 14 22 Other 446 592 Total deferred costs and other assets, net $ 11,973 $ 15,430 As of December 31, 2021 and 2020, the Company’s intangible accumulated amortization totaled $ 62.94 million and $ 60.33 million, respectively. During the years ended December 31, 2021 and 2020, the Company’s intangible amortization expense totaled $ 3.73 million and $ 5.97 million, respectively. Future amortization of leases in place, ground lease sandwich interest, lease origination costs, tenant relationships, and legal and marketing costs is as follows (in thousands): For the Years Ended December 31, Leases in place, net Ground lease sandwich interest, net Lease origination costs, net Tenant relationships, net Legal & marketing costs, net Total 2022 $ 2,092 $ 274 $ 230 $ 349 $ 6 $ 2,951 2023 1,612 274 213 222 5 2,326 2024 1,111 274 194 126 3 1,708 2025 794 274 160 62 — 1,290 2026 422 274 136 11 — 843 Thereafter 1,488 297 541 83 — 2,409 $ 7,519 $ 1,667 $ 1,474 $ 853 $ 14 $ 11,527 42 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable The Company’s loans payable consist of the following (in thousands, except monthly payment): Property/Description Monthly Payment Interest Rate Maturity December 31, 2021 December 31, 2020 Litchfield Market Village $ 46,057 5.50 % November 2022 $ 7,312 $ 7,418 Twin City Commons $ 17,827 4.86 % January 2023 2,843 2,915 Walnut Hill Plaza $ 26,850 5.50 % March 2023 3,145 3,287 New Market $ 48,747 5.65 % June 2023 6,291 6,508 Benefit Street Note (3) $ 53,185 5.71 % June 2023 6,914 7,145 Deutsche Bank Note (2) $ 33,340 5.71 % July 2023 5,488 5,567 JANAF $ 333,159 4.49 % July 2023 47,065 48,875 First National Bank (6) (7) $ 24,656 LIBOR + 350 basis points August 2023 789 1,045 Lumber River (7) $ 10,723 LIBOR + 350 basis points September 2023 1,296 1,367 Tampa Festival $ 50,797 5.56 % September 2023 7,753 7,920 Forrest Gallery $ 50,973 5.40 % September 2023 8,060 8,226 South Carolina Food Lions Note (5) $ 68,320 5.25 % January 2024 11,259 11,473 JANAF Bravo $ 35,076 5.00 % May 2024 5,936 6,263 Cypress Shopping Center $ 34,360 4.70 % July 2024 6,031 6,163 Port Crossing $ 34,788 4.84 % August 2024 5,778 5,909 Freeway Junction $ 41,798 4.60 % September 2024 7,431 7,582 Harrodsburg Marketplace $ 19,112 4.55 % September 2024 3,267 3,343 Bryan Station $ 23,489 4.52 % November 2024 4,226 4,312 Crockett Square Interest only 4.47 % December 2024 6,338 6,338 Pierpont Centre $ 39,435 4.15 % February 2025 7,861 8,001 Shoppes at Myrtle Park $ 33,180 4.45 % February 2025 5,757 5,892 Folly Road $ 41,482 4.65 % March 2025 7,063 7,223 Alex City Marketplace Interest only 3.95 % April 2025 5,750 5,750 Butler Square Interest only 3.90 % May 2025 5,640 5,640 Brook Run Shopping Center Interest only 4.08 % June 2025 10,950 10,950 Beaver Ruin Village I and II Interest only 4.73 % July 2025 9,400 9,400 Sunshine Shopping Plaza Interest only 4.57 % August 2025 5,900 5,900 Barnett Portfolio (4) Interest only 4.30 % September 2025 8,770 8,770 Fort Howard Shopping Center Interest only 4.57 % October 2025 7,100 7,100 Conyers Crossing Interest only 4.67 % October 2025 5,960 5,960 Grove Park Shopping Center Interest only 4.52 % October 2025 3,800 3,800 Parkway Plaza Interest only 4.57 % October 2025 3,500 3,500 Winslow Plaza $ 24,295 4.82 % December 2025 4,483 4,553 JANAF BJ's $ 29,964 4.95 % January 2026 4,725 4,844 Tuckernuck $ 32,202 5.00 % March 2026 5,052 5,193 Chesapeake Square $ 23,857 4.70 % August 2026 4,192 4,279 Berkley/Sangaree/Tri-County Interest only 4.78 % December 2026 6,176 9,400 Riverbridge Interest only 4.48 % December 2026 4,000 4,000 Franklin Village $ 45,336 4.93 % January 2027 8,277 8,404 Village of Martinsville $ 89,664 4.28 % July 2029 15,589 15,979 Laburnum Square Interest only 4.28 % September 2029 7,665 7,665 Rivergate $ 100,222 4.25 % September 2031 18,430 21,164 Convertible Notes Interest only 7.00 % December 2031 33,000 — Columbia Fire Station Interest only 14.00 % July 2021 — 3,893 Powerscourt Financing Agreement Interest only 13.50 % March 2023 — 25,000 Total Principal Balance (1) 346,262 353,916 Unamortized debt issuance cost (1) ( 9,834 ) ( 6,812 ) Total Loans Payable, including assets held for sale 336,428 347,104 Less loans payable on assets held for sale, net loan amortization costs 3,145 12,838 Total Loans Payable, net $ 333,283 $ 334,266 (1) Includes loans payable on assets held for sale, see Note 3. (2) Collateralized by LaGrange Marketplace, Ridgeland and Georgetown. (3) Collateralized by Ladson Crossing, Lake Greenwood Crossing and South Park. (4) Collateralized by Cardinal Plaza, Franklinton Square, and Nashville Commons. (5) Collateralized by Clover Plaza, South Square, St. George, Waterway Plaza and Westland Square. (6) Collateralized by Surrey Plaza and Amscot Building. (7) Certain loans bear interest at a variable interest rate equal to LIBOR or another index rate, subject to a floor, in each case plus or minus a specified margin. 43 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) Rights Offering and Convertible Notes On July 22, 2021, the Company commenced the rights offering (the “Rights Offering”) for the purchase of up to $ 30.00 million in aggregate principal amount of the Company’s 7.00 % senior subordinated convertible notes due 2031 (the “Convertible Notes”). On August 13, 2021, the Rights Offering expired. Pursuant to the Rights Offering, the Company distributed to holders of its Common Stock, as of 5:00 p.m. New York City time on June 1, 2021 (the “Record Date”), non-transferable subscription rights to purchase Convertible Notes. Each holder of the Company’s Common Stock as of the Record Date received one right for each eight shares of the Company’s Common Stock owned, and each right entitled a holder to purchase $ 25.00 principal amount of Convertible Notes. The Rights Offering was made pursuant to an effective registration statement filed with the U.S. Securities and Exchange Commission. The aggregate principal amount of Convertible Notes issued in the Rights Offering was $ 30.00 million. The Rights Offering was backstopped by Magnetar Structured Credit Fund, LP, Magnetar Longhorn Fund LP, Magnetar Lake Credit Fund LLC, Purpose Alternative Credit Fund – F LLC, Purpose Alternative Credit Fund – T LLC, and AY2 Capital LLC (each individually, a “Backstop Party” and, collectively, the “Backstop Parties”) in the amount of $ 2.19 million in aggregate principal. On October 12, 2021, the Backstop Parties and their assignee elected to exercise their “accordion right” in full and purchased from the Company an additional $ 3.00 million in aggregate principal amount of the Company’s Convertible Notes. The Convertible Notes contain debt issuance costs aggregating $ 7.10 million which is being amortized over the life of the Convertible Notes. On August 13, 2021, the Company, as Issuer, and Wilmington Savings Fund Society, FSB., as Trustee, entered into an Indenture governing the terms of the Convertible Notes (the "Indenture"). The Convertible Notes bear interest at a rate of 7.00 % per annum. Interest on the Convertible Notes is payable semi-annually in arrears on June 30 and December 31 of each year, commencing on December 31, 2021. The Convertible Notes are subordinate and junior in right of payment to the Company's obligations to the holders of senior indebtedness, and that in the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Company as a whole, whether voluntary or involuntary, all obligations to holders of senior indebtedness shall be entitled to be paid in full before any payment shall be made on account of the principal or interest on the Convertible Notes. Interest on the Convertible Notes is payable, at the Company's election: (a) in cash; (b) in shares of Series B Preferred; (c) in shares of Series D Preferred; or (d) in any combination of (a), (b), and/or (c). For purposes of determining the value of Series B Preferred and Series D Preferred paid as interest on the Convertible Notes, each share of Series B Preferred and Series D Preferred shall be deemed to have a value equal to the product of (x) the average of the VWAPs (as defined in the Indenture) for the Series B Preferred or the Series D Preferred, as the case may be, for the 15 consecutive trading days ending on the third business day immediately preceding the relevant interest payment date, and (y) 0.55 . During the year ended December 31, 2021, interest related to the Convertible Notes was $ 886 thousand and paid with 113,709 shares of Series D Preferred, which when adjusted for the VWAP discount represents interest expense of $ 1.61 million. The Convertible Notes are convertible, in whole or in part, at any time, at the option of the holders of the Convertible Notes, into shares of the Company’s Common Stock at a conversion price of $ 6.25 per share of the Company’s Common Stock (the “Conversion Price”); provided, however, that if at any time after September 21, 2023, holders of the Series D Preferred have required the Company to redeem (payable in cash or stock) in the aggregate at least 100,000 shares of Series D Preferred, then the Conversion Price will be adjusted to the lower of (i) 55 % of the Conversion Price or (ii) a 45 % discount to the lowest price at which any Series D Preferred was converted into the Common Stock. Upon a change of control, each Convertible Note will mandatorily convert into shares of the Company’s Common Stock equal to: (i) the principal amount of each Convertible Note divided by (ii) the product of (x) the average of the per share volume-weighted average prices for the Common Stock for the 15 consecutive trading days ending on the third business day immediately preceding the date of such change of control, and (y) 0.55 . After January 1, 2024, the Company may redeem the Convertible Notes at any time (in whole or in part) at the Company's option at a redemption price equal to 100 % of the principal amount thereof plus accrued and unpaid interest as of the redemption date (the "Redemption Price"). The Redemption Price may be paid: (a) in cash; (b) in shares of Common Stock; or (c) in any combination of (a) and (b). Powerscourt Financing Agreement 44 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) On December 22, 2020, the Company entered into a financing agreement (the "Powerscourt Financing Agreement") with Powerscourt Investments XXII, LP, as administrative agent and collateral agent. The Powerscourt Financing Agreement provides for a term loan in the aggregate principal of $ 25.00 million. The proceeds of the Powerscourt Financing Agreement are intended for the following: (i) to paydown the Company’s indebtedness on the KeyBank Credit Agreement, (ii) to redeem certain shares of the Company’s Series D Preferred, and (iii) to pay fees and expenses in connection with the transactions contemplated by the Powerscourt Financing Agreement. The Powerscourt Financing Agreement is at a rate of 13.50 % and matures on March 31, 2023 with quarterly interest only payments beginning on January 15, 2021. In conjunction with the Powerscourt Financing Agreement, the Company issued to Powerscourt XXII, LP a warrant (the "Powerscourt Warrant") to purchase 496,415 shares of Common Stock for $ 3.12 per share (the "Powerscourt Warrant Agreement"). The Powerscourt Warrant is exercisable at the option of its holder in whole or in part into shares of Common Stock from time to time on or after December 22, 2020 (the "Effective Date") and before the date that is the 36-month anniversary of the Effective Date. Additionally, the Company entered into a registration rights agreement with the holders from time to time of the Powerscourt Warrant, dated as of December 22, 2020 (the “Powerscourt Registration Rights Agreement”), accordingly, the Company registered the resale of the common stock underlying the Powerscourt Warrant on a Form S-11 Registration Statement which became effective on May 25, 2021. On March 12, 2021, the Company paid in full the $ 25.00 million Powerscourt Financing Agreement. The Powerscourt Warrant Agreement and the Powerscourt Registration Rights Agreement remain as of December 31, 2021. Wilmington Financing Agreement On March 12, 2021, the Company entered into a financing agreement (the "Wilmington Financing Agreement") as borrower, certain subsidiaries of the Company from time to time party thereto, as guarantors (together with the Company, the "Loan Parties"), the lenders from time to time party thereto, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent. The Wilmington Financing Agreement provided for a term loan in the aggregate principal amount of $ 35.00 million. The proceeds of the Wilmington Financing Agreement were intended for the following: (i) to payoff the Company's indebtedness on the Powerscourt Financing Agreement, (ii) to fund the redemption of certain shares of the Company's 8.75 % Series D Preferred and (iii) to pay fees and expenses in connection with the transactions contemplated by the Wilmington Financing Agreement. The Wilmington Financing Agreement is at a rate of 8.00 % and matures in March 2026 with quarterly interest only payments beginning on April 15, 2021. Any payment or repayment of principal will be made with a premium equal to 5 % of the amount repaid or prepaid, a total of $ 1.75 million. The obligations of the Company under the Wilmington Financing Agreement were secured by liens on certain assets of the Company and certain of the Company's subsidiaries, including mortgages on the properties within the Company's portfolio. The Wilmington Financing Agreement also contains covenants that restrict, among other things the ability of the Company and its subsidiaries to create liens, incur indebtedness, make certain investments, merge or consolidate, dispose of assets, pay certain dividends and make certain other restricted payments or certain equity issuances, change the nature of their businesses, enter into certain transactions with affiliates and change their governing documents. Pursuant to the Wilmington Financing Agreement, the Company issued to the holders from time to time party thereto a warrant (the "Wilmington Warrant") to purchase in the aggregate, 1,061,719 shares of Common Stock in three tranches: warrants to purchase an aggregate of 510,204 shares at an exercise price of $ 3.430 per share ("Tranche A"); warrants to purchase an aggregate of 424,242 shares at an exercise price of $ 4.125 per share ("Tranche B"); and warrants to purchase an aggregate of 127,273 shares at an exercise price of $ 6.875 per share ("Tranche C") (the "Wilmington Warrant Agreement"). The Wilmington Warrant is exercisable at the option of its holder in whole or in part into shares of Common Stock from time to time on or after March 12, 2021 (the "Effective Date") and before the maturity date of the Wilmington Financing Agreement. In connection with the Wilmington Financing Agreement, the Company entered into a registration rights agreement with the holders from time to time of the Wilmington Warrants, dated as of March 12, 2021 (the "Wilmington Registration Rights Agreement"), accordingly, the Company registered the resale of the common stock underlying the Wilmington Warrant on a Form S-11 Registration Statement which became effective on May 25, 2021. 45 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) On December 21, 2021, the principal balance on the Wilmington Financing Agreement was paid in full. The Wilmington Warrant Agreement and the Wilmington Registration Rights Agreement remain as of December 31, 2021. KeyBank Credit Agreement The KeyBank Credit Agreement was paid in full as of December 22, 2020. The KeyBank Credit Agreement had the following activity during the year ended December 31, 2020: • Entered into the Second Amendment to the KeyBank Credit Agreement (the "Second Amendment") on January 24, 2020, effective December 21, 2019, and the Company began making monthly principal payments of $ 350 thousand on November 1, 2019. The Second Amendment, among other provisions, requires a pledge of additional collateral of $ 15.00 million in residual equity interests and staggered maturity dates with an ultimate maturity of June 30, 2020; • Entered into a Third Amendment to the KeyBank Credit Agreement (the "Third Amendment") on July 21, 2020. The Third Amendment, among other provisions, reduces the pledge of additional collateral by two properties and extends the maturity to December 31, 2020; • The KeyBank Credit Agreement had principal paydowns as noted below: ◦ $ 1.78 million paydown from St. Matthews sale proceeds on January 21, 2020; ◦ $ 5.75 million paydown from Shoppes at Myrtle Park refinancing proceeds on January 23, 2020; and ◦ $ 2.50 million paydown from cash released to the Company from restricted cash accounts on May 20, 2020; ◦ $ 1.00 million paydown on November 12, 2020; ◦ $ 3.00 million final paydown from Powerscourt Financing Agreement proceeds on December 22, 2020. Shoppes at Myrtle Park Refinance On January 23, 2020, the Company refinanced the Shoppes at Myrtle Park collateralized portion of the KeyBank Credit Agreement for $ 6.00 million at a fixed interest rate of 4.45 %. The loan matures in February 2025 with monthly principal and interest payments of $ 33 thousand. Folly Road Refinance On March 23, 2020, the Company executed a promissory note for $ 7.35 million for the refinancing of Folly Road at a rate of 4.65 %. The loan matures in March 2025 with monthly principal and interest payments of $ 41 thousand. First National Bank Amendment On October 14, 2020, the Company entered into the Second Amendment to extend the $ 1.13 million First National Bank Loan to March 15, 2021 with monthly principal and interest payments of $ 25 thousand. The First National Bank Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25 %. On September 22, 2021, the Company entered into the Fourth Amendment to extend the $ 875 thousand First National Bank Loan to August 15, 2023 with monthly principal and interest payments of $ 25 thousand. The First National Bank Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25 %. Lumber River Extensions On October 14, 2020, the Company entered into the Third Amendment to extend the $ 1.39 million Lumber River Loan to April 10, 2021 with monthly principal and interest payments of $ 11 thousand. The Lumber River Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25 %. On September 22, 2021, the Company entered into the Fifth Amendment to extend the $ 1.31 million Lumber River Loan to September 10, 2023 with monthly principal and interest payments of $ 11 thousand. The Lumber River Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25 %. 46 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) Walnut Hill Plaza Amendment On July 15, 2020, the Company entered into the Third Amendment to reduce the Walnut Hill Plaza loan by $ 443 thousand to $ 3.30 million using proceeds from restricted cash reserves and received three months of forbearance on principal payments. On October 16, 2020, the Company entered into the Fourth Amendment to receive forbearance on principal payments through December 29, 2020 and extend the maturity date to March 2023. Tuckernuck Extension and Refinance On November 1, 2020, the Company entered into a Second Amended Forbearance Agreement to extend the Tuckernuck Loan to February 1, 2021 with monthly principal and interest payments of $ 34 thousand. On February 2, 2021, the Company refinanced the Tuckernuck Loan for $ 5.15 million at a rate of 5.00 %. The loan matures on March 1, 2026 with monthly principal and interest payments of $ 32 thousand. Rivergate Extensions and Refinance On November 19, 2020, the Company entered into an agreement to extend the maturity date from October 20, 2020 to April 20, 2021 with monthly principal payments of $ 48 thousand plus accrued and unpaid interest. On May 28, 2021, the Company entered into an agreement with Synovus Bank to extend the maturity date from April 21, 2021 to October 20, 2021 with monthly principal payments of $ 60 thousand plus accrued and unpaid interest. The Rivergate Loan will bear interest at the Synovus Bank's prime rate less 0.25 % with a floor of 3.00 %. On August 31, 2021 a $ 3.54 million principal payment was made in conjunction with the outparcel sale. On September 30, 2021, the Company refinanced the Rivergate Loan for $ 18.50 million at a rate of 4.25 %. The loan matures on September 30, 2031 with monthly principal and interest payments of $ 100 thousand through September 2026 at which time monthly principal and interest payments begin based on a 20-year amortization and an interest rate change to 5 year U.S. Treasury Rate plus 2.70 % with a floor of 4.25 %. Riversedge North Payoff On December 31, 2020, the principal balance on the Riversedge North loan was paid in full with the sale of the property, as detailed in Note 3. Columbia Fire Station Extension and Payoff Effective September 3, 2020, the Company extended the Columbia Fire Station promissory note ("Columbia Fire Station Loan") to December 3, 2020, with the monthly principal payment increasing $ 20 thousand for a total monthly principal and interest payment of $ 46 thousand beginning on October 3, 2020. On December 7, 2020, the Company received a letter demanding payment in full from Pinnacle Bank for all amounts due under Columbia Fire Station Loan and the interest rate increased to 14 %, the default rate. On December 29, 2020, Pinnacle Bank filed a suit against the Company, guarantor. On January 21, 2021, the Company entered into a Forbearance Agreement (the "Forbearance Agreement") with Pinnacle Bank at an interest rate of 14 % and made a $ 500 thousand principal payment. The Forbearance Agreement, among other provisions, extends the maturity date of the Columbia Fire Station Loan to July 21, 2021 and waives all defaults and late fees existing prior to the Forbearance Agreement. On July 21, 2021, the principal balance on the Columbia Fire Station Loan was paid in full. Berkley/Sangaree/Tri-County Paydown 47 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) On March 25, 2021, the Company made a $ 3.22 million principal payment on the Berkley/Sangaree/Tri-County loan with the sale of the Berkley Shopping Center, as detailed in Note 3, and paid $ 687 thousand in defeasance. JANAF Bravo Refinance On May 5, 2021, the Company refinanced the JANAF Bravo Loan for $ 6.00 million at a rate of 5.00 %. The loan matures on May 5, 2024 with monthly principal and interest payments of $ 35 thousand. Debt Maturities The Company’s scheduled principal repayments on indebtedness as of December 31, 2021, including assets held for sale, are as follows (in thousands): For the years ended December 31, 2022 $ 13,567 2023 89,288 2024 50,490 2025 92,016 2026 23,531 Thereafter 77,370 Total principal repayments and debt maturities $ 346,262 48 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Derivative Liabilities Fair Value of Warrants The Company utilized the Monte Carlo simulation model to calculate the fair value of the Powerscourt Warrant and Wilmington Warrant (collectively, the "Warrant Agreements"). Significant observable and unobservable inputs include stock price, conversion price, risk-free rate, term, likelihood of an event of contractual conversion and expected volatility. The Monte Carlo simulation is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. The Warrant Agreements contain terms and features that give rise to derivative liability classification. In determining the initial fair value of the Powerscourt Warrant, the Company used the following inputs in its Monte Carlo model; exercise price of $ 3.12 per share , Common Stock price $ 2.75 , contractual term to maturity 3.0 years, expected Common Stock volatility 72.00 % and risk-free interest rate 0.17 %. In determining the initial fair value of the Wilmington Warrant, the Company used the following inputs in its Monte Carlo model; exercise price of each of the three tranches within the Wilmington Warrant Agreement as described in Note 5, Common Stock price $ 3.75 , contractual term to maturity 5.0 years, expected Common Stock volatility 54.72 % and risk-free interest rate 0.91 %. In measuring the warrant liability at December 31, 2021 and 2020, the Company used the following inputs in its Monte Carlo Model: For the Years Ended December 31, 2021 2020 Range of exercise prices $ 3.120 - $ 6.875 $ 3.12 Common Stock price $ 1.94 $ 2.75 Weighted average contractual term to maturity 3.5 years 3.0 years Range of expected market volatility % 70.12 % - 81.00 % 72.00 % Range of risk-free interest rate 0.72 % - 1.16 % 0.17 % Fair Value of Conversion Features Related to Convertible Notes The Company identified certain embedded derivatives related to the conversion features of the Convertible Notes. In accordance with ASC 815-40, Derivatives and Hedging Activities , the embedded conversion options contained within the Convertible Notes were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through each reporting date. The Company utilized a multinomial lattice model to calculate the fair value of the embedded derivatives. Significant observable and unobservable inputs include, conversion price, stock price, dividend rate, expected volatility, risk-free rate and term. The multinomial lattice model is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. In determining the initial fair value of the embedded derivatives, the Company used the following inputs in its multinomial lattice model; initial conversion price within the Convertible Notes was $ 6.25 , Common Stock price of $ 2.94 , dividend rate of 0 %, expected Common Stock volatility 50.00 %, risk-free interest rate 1.53 % and contractual term to maturity was 10.3 years. In measuring the embedded derivative liability at December 31, 2021, the Company used the following inputs in its multinomial lattice model: Conversion price $ 6.25 Common Stock price $ 1.94 Contractual term to maturity 10.1 years Expected market volatility % 80.00 % Risk-free interest rate 1.51 % 49 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Derivative Liabilities (continued) The following table sets forth a summary of the changes in fair value of the Company's derivative liabilities, which include both the warrant liabilities and embedded derivative liability (in thousands): Balance December 31, 2019 $ — Issuance of Powerscourt Warrant 594 Balance December 31, 2020 594 Issuance of Wilmington Warrant 2,018 Issuance of embedded derivative 5,932 Changes in fair value ( 3,768 ) Balance December 31, 2021 $ 4,776 7. Rentals under Operating Leases Future minimum rents to be received under noncancelable tenant operating leases, excluding rents on assets held for sale, for each of the next five years and thereafter, excluding tenant reimbursements and percentage rent based on tenant sales volume, as of December 31, 2021 are as follows (in thousands): For the years ended December 31, 2022 $ 47,232 2023 43,305 2024 35,993 2025 28,701 2026 20,382 Thereafter 51,921 Total minimum rents $ 227,534 8. Equity and Mezzanine Equity The Company has authority to issue 215,000,000 shares of stock, consisting of 200,000,000 shares of $ 0.01 par value Common Stock (“Common Stock”) and 15,000,000 shares of preferred stock of which 5,000,000 shares have been classified as no par value Series B Preferred Stock (“Series B Preferred”), 6,000,000 shares as Series D Cumulative Convertible Preferred Stock ("Series D Preferred") and 4,500 shares of Series A Preferred Stock ("Series A Preferred"). Substantially all of our business is conducted through the Company’s Operating Partnership. The Trust is the sole general partner of the Operating Partnership and owned a 98.59 % and 98.53 % interest in the Operating Partnership as of December 31, 2021 and 2020, respectively. Limited partners in the Operating Partnership have the right to redeem their common units for cash or, at our option, common shares at a ratio of one common unit for one common share. Distributions to common unit holders are paid at the same rate per unit as dividends per share to the Trust’s common stockholders. As of December 31, 2021 and 2020, there were 15,227,758 of common units outstanding with the Trust owning 15,012,415 and 15,003,329 , respectively, of these common units. Series A Preferred Stock At December 31, 2021 and 2020, the Company had 562 shares without par value Series A Preferred issued and outstanding and a $ 1,000 liquidation preference per share, or $ 562 thousand in aggregate. The Company has the right to redeem the 562 shares of Series A Preferred, on a pro rata basis, at any time at a price equal to 103 % of the purchase price for the Series A Preferred. Series B Preferred Stock 50 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) At December 31, 2021 and 2020, the Company had 1,872,448 and 1,875,748 shares, issued and outstanding, respectively, without par value Series B Preferred with a $ 25.00 liquidation preference per share, or $ 46.81 million and $ 46.90 million, respectively. Holders of Series B Preferred shares have the right to receive, only when and as authorized by the Board of Directors and declared by the Company, out of funds legally available for the payment of dividends, cash dividends, at a rate of 9 % per annum of the $ 25 liquidation preference per share. The Series B Preferred has no redemption rights. However, the Series B Preferred is subject to a mandatory conversion once the 20 -trading day volume-weighted average closing price of our Common Stock, exceeds $ 58 per share; once this weighted average closing price is met, each share of our Series B Preferred will automatically convert into shares of our Common Stock at a conversion price equal to $ 40.00 per share of Common Stock. In addition, holders of our Series B Preferred also have the option, at any time, to convert shares of our Series B Preferred into shares of our Common Stock at a conversion price of $ 40.00 per share of Common Stock. Upon any voluntary or involuntary liquidation, dissolution or winding up of our company, the holders of shares of our Series B Preferred shall be entitled to be paid out of our assets a liquidation preference of $ 25.00 per share. The Series B Preferred has no maturity date and will remain outstanding indefinitely unless subject to a mandatory or voluntary conversion as described above. Series D Preferred Stock - Redeemable Preferred Stock and Tender Offers At December 31, 2021 and 2020, the Company had 3,152,392 and 3,529,293 issued and outstanding, respectively, of Series D Preferred, without par value with a $ 25.00 liquidation preference per share, and a liquidation value of $ 104.97 million and $ 109.13 million in aggregate, respectively. Until September 21, 2023, the holders of the Series D Preferred are entitled to receive cumulative cash dividends at a rate of 8.75 % per annum of the $ 25.00 liquidation preference per share (equivalent to the fixed annual amount of $ 2.1875 per share) (the “Initial Rate”). Commencing September 21, 2023, the holder’s will be entitled to cumulative cash dividends at an annual dividend rate of the Initial Rate increased by 2 % of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 14 %. Dividends are payable quarterly in arrears on or before January 15 th , April 15 th , July 15 th and October 15 th of each year. On or after September 21, 2021, the Company may, at its option, redeem the Series D Preferred, for cash at a redemption price of $ 25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date. The holder of the Series D Preferred may convert shares at any time into shares of the Company’s Common Stock at an initial conversion rate of $ 16.96 per share of Common Stock. On September 21, 2023, the holders of the Series D Preferred may, at their option, elect to cause the Company to redeem any or all of their shares at a redemption price of $ 25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date, payable in cash or in shares of Common Stock, or any combination thereof, at the Company's option. The Series D Preferred requires the Company maintain asset coverage of at least 200 %. If we fail to maintain asset coverage of at least 200 % calculated by determining the percentage value of (i) our total assets plus accumulated depreciation and accumulated amortization minus our total liabilities and indebtedness as reported in our financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) (exclusive of the book value of any Redeemable and Term Preferred Stock (defined below)) over (ii) the aggregate liquidation preference, plus an amount equal to all accrued and unpaid dividends, of outstanding shares of our Series D Preferred and any outstanding shares of term preferred stock or preferred stock providing for a fixed mandatory redemption date or maturity date (collectively referred to as “Redeemable and Term Preferred Stock”) on the last business day of any calendar quarter (“Asset Coverage Ratio”), and such failure is not cured by the close of business on the date that is 30 calendar days following the filing date of our Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, for that quarter, or the “Asset Coverage Cure Date,” then we will be required to redeem, within 90 calendar days of the Asset Coverage Cure Date, shares of Redeemable and Term Preferred Stock, which may include Series D Preferred, at least equal to the lesser of (i) the minimum number of shares of Redeemable and Term Preferred Stock that will result in us having a coverage ratio of at least 200 % and (ii) the maximum number of shares of Redeemable and Term Preferred Stock that can be redeemed solely out of funds legally available for such redemption. In connection with any redemption for failure to maintain the Asset Coverage Ratio, we may, in our sole option, redeem any shares of Redeemable and Term Preferred Stock we select, including on a non-pro rata basis. We may elect not to redeem any Series D Preferred to cure such failure as long as we cure our failure to meet the Asset Coverage Ratio by or on the Asset Coverage Cure Date. If shares of Series D Preferred are to be redeemed for failure to maintain the Asset Coverage Ratio, such shares will be redeemed solely in cash at a redemption price equal to $ 25.00 per share plus an amount equal to all accrued but unpaid dividends, if any, on such shares (whether or not declared) to and including the redemption date. Dividends on the Series D Preferred cumulate from the end of the most recent dividend period for which dividends have been paid. Dividends on the Series D Preferred cumulate whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends and (iii) such dividends are authorized by our Board of Directors or declared by us. 51 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) Dividends on the Series D Preferred do not bear interest. If the Company, fails to pay any dividend within three (3) business days after the payment date for such dividend, the then-current dividend rate increases following the payment date by an additional 2.0 % of the $ 25.00 stated liquidation preference per share, or $ 0.50 per annum, until we pay the dividend, subject to our ability to cure the failure. On December 20, 2018, the Company suspended the Series D Preferred dividend. As such, the Series D Preferred shares began accumulating dividends at 10.75 % beginning January 1, 2019 and will continue to accumulate dividends at this rate until all accumulated dividends have been paid. Holders of shares of the Series D Preferred have no voting rights. Pursuant to the Company's Articles Supplementary, if dividends on the Series D Preferred are in arrears for six or more consecutive quarterly periods (a "Preferred Dividend Default"), the number of directors on our Board of Directors will automatically be increased by two , and holders of shares of the Series D Preferred and the holders of Series A Preferred and Series B Preferred (the Series A Preferred and Series B Preferred together, being the "Parity Preferred Stock"), shall be entitled to vote for the election of two additional directors ("Series D Preferred Directors"). A Preferred Dividend Default occurred on April 15, 2020. The election of such directors will take place upon the written request of the holders of record of at least 20 % of the Series D Preferred and Parity Preferred Stock. The Board of Directors is not permitted to fill the vacancies on the Board of Directors as a result of the failure of the holders of 20 % of the Series D Preferred and Parity Preferred Stock to deliver such written request for the election of the Series D Preferred Directors. The Series D Preferred Directors may serve on our Board of Directors, until all unpaid dividends on such Series D Preferred and Parity Preferred Stock, if any, have been paid or declared a sum sufficient for the payment thereof set apart for payment. On September 22, 2020, the Operating Partnership purchased 71,343 shares of Series D Preferred at $ 15.50 per share. These shares are deemed to be retired on the consolidated financial statements. The book value of the shares purchased included both accreted and unaccreted issuance costs and dividends in arrears totaling $ 1.83 million. The Company through “modified Dutch auction” tender offers on the Series D Preferred accepted for purchase 387,097 shares at a purchase price of $ 15.50 per share, for an aggregate cost of $ 6.00 million on March 12, 2021 and 103,513 shares of Series D Preferred at a purchase price of $ 18.00 per share, for an aggregate cost of $ 1.86 million on May 15, 2021, both excluding fees and expenses. The changes in the carrying value of the Series D Preferred for the years ended December 31, 2021 and 2020 is as follows (in thousands): Series D Preferred Balance December 31, 2019 $ 87,225 Accretion of Preferred Stock discount 590 Undeclared dividends 9,581 Redemption of Preferred Stock ( 1,833 ) Balance December 31, 2020 95,563 Accretion of Preferred Stock discount 513 Undeclared dividends 8,237 Paid-in-kind interest, issuance of Preferred Stock 1,610 Redemption of Preferred Stock ( 13,375 ) Balance December 31, 2021 $ 92,548 Earnings per share Basic earnings per share for the Company’s common stockholder is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the Company’s weighted-average shares of Common Stock outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) attributable to common stockholders, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the weighted-average number of common shares including any dilutive shares. 52 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) As of December 31, 2021 and 2020, the below shares are able to be converted to Common Stock. The common units, Series B Preferred, Series D Preferred, warrants and Convertible Notes have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive. December 31, 2021 December 31, 2020 Outstanding shares Potential Dilutive Shares Outstanding shares Potential Dilutive Shares Common units 215,343 215,343 224,429 224,429 Series B Preferred Stock 1,872,448 1,170,280 1,875,748 1,172,343 Series D Preferred Stock 3,152,392 6,189,366 3,529,293 5,202,378 Warrants to purchase Common Stock — 1,558,134 — 496,415 Convertible Notes — 31,801,297 — — Dividends On November 3, 2021, common stockholders of the Company voted to amend the Company’s Charter to remove the cumulative dividend rights of the Series A Preferred and Series B Preferred. The following table summarizes the Series D Preferred dividends (in thousands except for per share amounts): Series D Preferred Record Date/Arrears Date Arrears Per Share For the year ended December 31, 2021 $ 8,167 $ 2.59 For the year ended December 31, 2020 $ 9,488 $ 2.69 There were no dividends declared to holders of Common Stock for the years ended December 31, 2021 and 2020. The total cumulative dividends in arrears for Series D Preferred (per share $ 8.30 ) as of December 31, 2021 is $ 26.16 million. 2015 Long-Term Incentive Plan On June 4, 2015, the Company's stockholders approved the 2015 Long-Term Incentive Plan (the "2015 Incentive Plan"). The 2015 Incentive Plan allows for issuance of up to 125,000 shares of the Company's Common Stock to employees, directors, officers and consultants for services rendered to the Company. The 2015 Incentive Plan replaced the 2012 Stock Incentive Plan. As of December 31, 2021, there are 41,104 shares available for issuance under the Company’s 2015 Incentive Plan and there were no shares issued in 2021 or 2020. 2016 Long-Term Incentive Plan On June 15, 2016, the Company's stockholders approved the 2016 Long-Term Incentive Plan (the "2016 Incentive Plan"). The 2016 Incentive Plan allows for issuance of up to 625,000 shares of the Company's Common Stock to employees, directors, officers and consultants for services rendered to the Company. For the Years Ended December 31, Shares Issued Market Value (in thousands) 2021 5,000 $ 14 2020 — — 53 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) As of December 31, 2021, there are 127,707 shares available for issuance under the Company’s 2016 Incentive Plan. Cancellation of Stock Appreciation Rights Agreement Effective July 5, 2021, Daniel Khoshaba resigned as the President and Chief Executive Officer of the Company and as a member of the Board of Directors and as a member of the Executive Committee of our Board of Directors. Upon Mr. Khoshaba’s cessation of employment with the Company, all of his rights under that certain Stock Appreciation Rights Agreement, dated August 4, 2020, by and between Mr. Khoshaba and the Company (the “SAR Agreement”), were forfeited for no consideration. 9. Lease Commitments The Company has ground leases and leases its corporate headquarters; both are accounted for as operating leases. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 5 to 50 years. As of December 31, 2021 and 2020, the weighted average remaining lease term of our leases is 31 and 32 years, respectively. The following properties are subject to leases which require the Company to make the following fixed annual rental payments and variable lease payments and include escalation clauses and renewal options as follows (in thousands): For the Years Ended December 31, 2021 2020 Expiration Year Amscot $ 26 $ 25 2045 Beaver Ruin Village 54 54 2054 Beaver Ruin Village II 22 22 2056 Moncks Corner 121 121 2040 Devine Street (1) 396 396 2051 JANAF (2) 268 282 2069 Riversedge corporate headquarters office space, Virginia Beach, VA 169 — 2030 Total rent expense $ 1,056 $ 900 (1) Lease options are exercised through 2035 with options which are reasonably certain to be exercised through 2051. (2) Includes $ 118 thousand and $ 131 thousand in variable percentage rent, during the years ended December 31, 2021 and 2020, respectively. Supplemental information related to leases is as follows (in thousands): For the Years Ended December 31, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 902 $ 583 Leased assets obtained in exchange for new operating lease liabilities $ — $ 1,285 Undiscounted cash flows of our scheduled obligations for future minimum lease payments due under the operating leases, including applicable automatic extension options and options reasonably certain of being exercised, as of December 31, 2021 and a reconciliation of those cash flows to the operating lease liabilities at December 31, 2021 are as follows (in thousands): 54 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 9. Lease Commitments (continued) For the years ended December 31, 2022 $ 905 2023 907 2024 909 2025 913 2026 943 Thereafter 22,843 Total minimum lease payments (1) 27,420 Discount ( 14,380 ) Operating lease liabilities $ 13,040 (1) Operating lease payments include $ 7.54 million related to options to extend lease terms that are reasonably certain of being exercised. On December 31, 2020, the Company sold its corporate headquarters in Virginia Beach to an unrelated party for approximately $ 2.84 million, net of costs to sell, and simultaneously leased the building for 10 years at an annual base rent of $ 265 thousand, plus taxes and other operating and maintenance expenses. The transaction qualified for sale leaseback accounting in accordance with ASC 842 and the Company used the incremental borrowing rate associated with the previous loan on the office building of 5.77 % for purposes of calculating the lease liability. The lease agreement includes an option for five years and the Company recognized only the initial term of the lease as part of its ROU asset and lease liability. As a result of this transaction, a gain of $ 49 thousand was recognized, which is included in "gain on disposal of properties" on the consolidated statements of operations with the remaining gain of $ 725 thousand deferred over the life of the lease. 10. Commitments and Contingencies Insurance The Company carries comprehensive liability, fire, extended coverage, business interruption and rental loss insurance covering all of the properties in its portfolio under an insurance policy, in addition to other coverages, such as trademark and pollution coverage that may be appropriate for certain of its properties. Additionally, the Company carries a directors’, officers’, entity and employment practices liability insurance policy that covers such claims made against the Company and its directors and officers. The Company believes the policy specifications and insured limits are appropriate and adequate for its properties given the relative risk of loss, the cost of the coverage and industry practice; however, its insurance coverage may not be sufficient to fully cover its losses. Concentration of Credit Risk The Company is subject to risks incidental to the ownership and operation of commercial real estate. These risks include, among others, the risks normally associated with changes in the general economic climate, trends in the retail industry, creditworthiness of tenants, competition for tenants and customers, changes in tax laws, interest rates, the availability of financing and potential liability under environmental and other laws. The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically located in the Southeast, Mid-Atlantic and Northeast, which markets represented approximately 62 %, 34 % and 4 %, respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2021. The Company’s geographic concentration may cause it to be more susceptible to adverse developments in those markets than if it owned a more geographically diverse portfolio. Additionally, the Company’s retail shopping center properties depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants. Regulatory and Environmental As the owner of the buildings on our properties, the Company could face liability for the presence of hazardous materials (e.g., asbestos or lead) or other adverse conditions (e.g., poor indoor air quality) in its buildings. Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if the Company does not comply with such laws, it could face fines for such noncompliance. Also, the Company could be liable to third parties (e.g., occupants of the 55 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 10. Commitments and Contingencies (continued) buildings) for damages related to exposure to hazardous materials or adverse conditions in its buildings, and the Company could incur material expenses with respect to abatement or remediation of hazardous materials or other adverse conditions in its buildings. In addition, some of the Company’s tenants routinely handle and use hazardous or regulated substances and wastes as part of their operations at our properties, which are subject to regulation. Such environmental and health and safety laws and regulations could subject the Company or its tenants to liability resulting from these activities. Environmental liabilities could affect a tenant’s ability to make rental payments to the Company, and changes in laws could increase the potential liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise materially and adversely affect the Company’s operations. The Company is not aware of any material contingent liabilities, regulatory matters or environmental matters that may exist. Litigation The Company is involved in various legal proceedings arising in the ordinary course of its business, including, but not limited to commercial disputes. The Company believes that such litigation, claims and administrative proceedings will not have a material adverse impact on its financial position or its results of operations. The Company records a liability when it considers the loss probable and the amount can be reasonably estimated. In addition, the below legal proceedings are in process. Jon Wheeler v. Wheeler Real Estate Investment Trust, Inc., Circuit Court for the City of Virginia Beach, Virginia. Former CEO, Jon Wheeler, alleged that his employment was improperly terminated and that he was owed severance and bonus payments pursuant to his Employment Agreement. In 2020, The Court found in favor of Jon Wheeler on his claim that his employment was terminated without cause. The Court denied Mr. Wheeler’s claims for a bonus and that his termination of employment was wrongful as a violation of public policy. The Court awarded the Company $ 5 thousand on its counterclaim. At a hearing on September 4, 2020 on Jon Wheeler’s motion for the award of attorneys’ fees, costs, and pre-judgment interest, the Court awarded Mr. Wheeler the requested costs, but awarded no attorneys’ fees and no pre-judgment interest. In total, Mr. Wheeler was awarded $ 520 thousand. In October 2020, the Company settled with Mr. Wheeler for $ 500 thousand. Mr. Wheeler preserved his right to appeal the Court’s denial of an award of attorneys’ fees of $ 375 thousand and pre-judgment interest of $ 63 thousand. On June 16, 2021, the Supreme Court granted Mr. Wheeler an appeal on his first assignment of error (i.e., the Circuit Court’s refusal to award Mr. Wheeler any attorneys’ fees) but denied the appeal as to Mr. Wheeler’s claim for prejudgment interest. The parties settled in the amount of $ 185 thousand on July 28, 2021. David Kelly v. Wheeler Real Estate Investment Trust, Inc., Circuit Court for the City of Virginia Beach, Virginia. Former CEO David Kelly filed suit on May 28, 2020, alleging breach of his employment contract. Mr. Kelly claims that his employment was improperly terminated, that he is owed severance pay and related benefits pursuant to his employment agreement, and seeks damages of $ 400 thousand, plus unpaid bonuses and benefits, pre- and post-judgment interest, attorneys’ fees, and costs. The Company is defending the action on the grounds that Mr. Kelly’s employment was properly terminated for cause and no severance is owed to him. Trial is set for March 2022. At this juncture, the outcome of the matter cannot be predicted. JCP Investment Partnership LP, et al v. Wheeler Real Estate Investment Trust, Inc., United States District Court for the District of Maryland. On March 22, 2021, JCP Investment Partnership, LP, a Texas limited partnership and stockholder of the Company, JCP Investment Partners, LP, a Texas limited partnership and stockholder of the Company, JCP Investment Holdings, LLC, a Texas limited liability company and stockholder of the Company, and JCP Investment Management, LLC, a Texas limited liability company and stockholder of the Company (collectively, the “JCP Plaintiffs”), filed suit against the Company and certain current and former directors and former officers of the Company (the “Individual Defendants”), in the United States District Court for the District of Maryland. The complaint alleges that the Company amended provisions of its Articles Supplementary in 2018 governing the issuance of the Company’s Series D Preferred in violation of Maryland corporate law and without obtaining the consent of preferred stockholders and, therefore, the court should declare the Company’s said amendment invalid, enjoin further purportedly unauthorized amendments, and either compel the Company to redeem the JCP Plaintiffs' stock or enter judgment for monetary damages the JCP Plaintiffs purportedly sustained based on the Company’s alleged breach of its contractual duties to redeem the JCP Plaintiffs’ Series D Preferred. The complaint also alleges certain violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, and alleges that the Individual Defendants violated Section 20(a) of the Exchange Act. The JCP Plaintiffs are each purportedly a holder of the Company’s Series D Preferred. The complaint seeks damages, interest, attorneys’ fees, other costs and expenses, and such other relief as the court may deem just and equitable. The Company has filed 56 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 10. Commitments and Contingencies (continued) an answer to the complaint denying any liability. The Individual Defendants filed a motion to dismiss the complaint, which was denied. The JCP Plaintiffs have filed a Motion For Partial Summary Judgment, as to which the Company and the Individual Defendants filed oppositions. The Court has not yet ruled on the Motion. At this early juncture, the outcome of the litigation is uncertain. Steamboat Capital Partners Master Fund, LP and Steamboat Capital Partners II, LP v. Wheeler Real Estate Investment Trust, Inc., Steamboat Capital Partners Master Fund, LP and Steamboat Capital Partners II, LP v. Wheeler Real Estate Investment Trust, Inc., Circuit Court for Baltimore County, Maryland. On October 25, 2021, Steamboat Capital Partners Master Fund, LP, a Cayman Islands exempted limited partnership and stockholder of the Company, and Steamboat Capital Partners II, LP, a Delaware limited partnership and stockholder of the Company, filed suit against the Company in the Circuit Court for Baltimore County, Maryland. The complaint alleges that the Company's rights offering of convertible debt to the Company's common stockholders, and the notes issued pursuant to the rights offering, breached the provisions of the Company's governing documents and violated the rights of the holders of the Series B Preferred and Series D Preferred. Plaintiffs seek relief as follows: require the Company to pay all dividends accrued, as of the date of the rights offering, on the Series B Preferred and Series D Preferred, and prohibit the Company from paying interest on the notes held by the Company's common stockholders (upon exercise of the rights) until all accrued dividends on the Series B Preferred and Series D Preferred are paid. Plaintiffs also seek a declaration that the rights offering by the Company to its common stockholders, which resulted in the issuance of notes, when accrued Series B Preferred dividends and Series D Preferred dividends had not been fully paid, breached the provisions of the Company's governing documents. In addition, the complaint contends that the Company's amendment of its charter to remove the cumulative nature of dividends from the Series B Preferred cannot be applied retroactively. A trial date is set for May 2023. At this juncture, the outcome of the matter cannot be predicted. Harbor Pointe Tax Increment Financing On September 1, 2011, the Grove Economic Development Authority issued the Grove Economic Development Authority Tax Increment Revenue Note, Taxable Series 2011 in the amount of $ 2.42 million, bearing a variable interest rate of 2.29 %, not to exceed 14 % and payable in 50 semi-annual installments. The proceeds of the bonds were to provide funding for the construction of public infrastructure and other site improvements and to be repaid by incremental additional property taxes generated by development. Harbor Pointe Associates, LLC, then owned by an affiliate of former CEO, Jon Wheeler, entered into an Economic Development Agreement with the Grove Economic Development Authority for this infrastructure development and in the event the ad valorem taxes were insufficient to cover annual debt service, Harbor Pointe Associates, LLC would reimburse the Grove Economic Development Authority (the “Harbor Pointe Agreement”). In 2014, Harbor Pointe Associates, LLC was acquired by the Company. The total debt service shortfall over the life of the bond is uncertain as it is based on ad valorem taxes, assessed property values, property tax rates, LIBOR and future potential development ranging until 2036. The Company’s future total principal obligation under the Harbor Pointe Agreement will be no more than $ 2.11 million, the principal amount of the bonds, as of December 31, 2021. In addition, the Company may have an interest obligation on the note based on the principal balance and LIBOR rates in effect at future payment dates. The Company funded approximately $ 87 thousand and $ 0 thousand , during the years ended December 31, 2021 and 2020, respectively, in debt service shortfalls. No amounts have been accrued for this as of December 31, 2021 as a reasonable estimate of future debt service shortfalls cannot be determined based on variables noted above. Tax Protection Agreement In 2016, in connection with the acquisition of Berkley and Sangaree/Tri-County, the Operating Partnership entered into a tax protection agreement that obligates the Operating Partnership to reimburse Jon Wheeler, the Company's former CEO, for his tax liabilities resulting from the recognition of certain taxable income or gain in the event the Operating Partnership takes certain action prior to November 10, 2023 with respect to Sangaree Plaza, Tri-County Plaza and Berkley. No liability was recorded as of December 31, 2021. 11. Related Party Transactions 57 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) The related party amounts below reflect the activity between the Company and its affiliates for the years ended December 31, 2021 and 2020 (in thousands): 2021 2020 Amounts paid to affiliates $ 402 $ 106 Reimbursement of Proxy Solicitation Expenses The Company agreed to reimburse the Stilwell Value Partners VII, L.P., Stilwell Activist Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Value LLC and Joseph Stilwell (collectively, the “Stilwell Group”), for expenses it incurred in connection with the 2019 Stilwell Solicitation. At the 2019 annual meeting, our stockholders elected three nominees designated by the Stilwell Group to the Board of Directors. The Stilwell Group disclosed in the Stilwell Solicitation that it intended to seek reimbursement of the expenses it incurred in connection with such solicitation. This reimbursement was recorded on the consolidated statements of operations as "other expense". During the years ended December 31, 2021 and 2020, the Company reimbursed the Stilwell Group $ 369 thousand and $ 70 thousand, respectively, for these costs. As of December 31, 2021, the Company had reimbursed the Stilwell Group in full for these expenses. 12. Subsequent Events Walnut Hill Plaza On January 11, 2022, the Company sold Walnut Hill Plaza for a contract price of $ 1.99 million, resulting in a paydown of $ 1.79 million on the Walnut Hill Plaza Loan. On February 17, 2022, the Company paid the remaining loan balance of $ 1.34 million in full. 58 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule II-Valuation and Qualifying Accounts December 31, 2021 Description Balance at Beginning of Year Charged to Costs and Expense Deductions from Reserves Balance at End of Year (in thousands) Allowance for doubtful accounts: Year Ended December 31, 2021 $ 994 $ 239 $ ( 600 ) $ 633 Year Ended December 31, 2020 $ 3,293 $ 1,131 $ ( 3,430 ) $ 994 59 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule III-Real Estate and Accumulated Depreciation December 31, 2021 Initial Cost Costs Capitalized Subsequent to Acquisition Gross Amount at which Carried at End of Period Property Name Land Building and Improvements Improvements (net) Carrying Costs Land Building and Improvements Total (in thousands) Amscot Building $ — $ 462 $ 31 $ — $ — $ 493 $ 493 Lumber River Village 800 4,487 158 — 942 4,503 5,445 Surrey Plaza 381 1,857 196 — 381 2,052 2,433 Tuckernuck 2,115 6,719 1,261 — 2,171 7,925 10,096 Twin City Commons 800 3,041 134 — 800 3,175 3,975 Walnut Hill Plaza (1) 634 2,414 1,353 — 634 3,767 4,401 Tampa Festival 4,653 6,691 905 — 4,695 7,554 12,249 Forrest Gallery 3,015 7,455 1,054 — 3,015 8,509 11,524 Winslow Plaza 1,325 3,684 228 — 1,370 3,867 5,237 Clover Plaza 356 1,197 29 — 356 1,226 1,582 St. George Plaza 706 1,264 90 — 752 1,308 2,060 South Square 353 1,911 328 — 479 2,112 2,591 Westland Square 887 1,710 150 — 901 1,846 2,747 Waterway Plaza 1,280 1,248 214 — 1,299 1,443 2,742 Cypress Shopping Center 2,064 4,579 301 — 2,064 4,880 6,944 Harrodsburg Marketplace 1,431 2,485 85 — 1,515 2,486 4,001 Port Crossing Shopping Center 792 6,921 224 — 792 7,145 7,937 LaGrange Marketplace 390 2,648 306 — 430 2,914 3,344 DF I-Courtland (1) 196 — — — 196 — 196 DF I-Edenton (1) 746 — — — 746 — 746 Freeway Junction 1,521 6,755 89 — 1,521 6,844 8,365 Bryan Station 1,658 2,756 338 — 1,808 2,945 4,753 Crockett Square 1,546 6,834 183 — 1,565 6,998 8,563 Harbor Point (1) 1,538 — ( 359 ) — 1,179 — 1,179 Pierpont Centre 484 9,221 192 — 686 9,210 9,896 Brook Run Properties 300 — 8 — 300 8 308 Alex City Marketplace 454 7,837 1,820 — 716 9,395 10,111 Butler Square 1,024 6,401 314 — 1,024 6,714 7,738 Brook Run Shopping Center 2,209 12,919 695 — 2,377 13,446 15,823 Beaver Ruin Village 2,604 8,284 117 — 2,619 8,386 11,005 Beaver Ruin Village II 1,153 2,809 5 — 1,153 2,814 3,967 Chesapeake Square 895 4,112 1,045 — 1,269 4,783 6,052 Sunshine Plaza 1,183 6,368 539 — 1,268 6,822 8,090 Barnett Portfolio 3,107 8,912 422 — 3,243 9,198 12,441 Grove Park 722 4,590 121 — 790 4,642 5,432 Parkway Plaza 772 4,230 32 — 778 4,256 5,034 Fort Howard Square 1,890 7,350 314 — 1,952 7,602 9,554 Conyers Crossing 2,034 6,820 239 — 2,034 7,059 9,093 Darien Shopping Center 188 1,054 ( 17 ) — 188 1,037 1,225 Devine Street 365 1,941 ( 4 ) — 365 1,937 2,302 Folly Road 5,992 4,527 24 — 5,992 4,551 10,543 Georgetown 742 1,917 126 — 753 2,031 2,784 60 Initial Cost Costs Capitalized Subsequent to Acquisition Gross Amount at which Carried at End of Period Property Name Land Building and Improvements Improvements (net) Carrying Costs Land Building and Improvements Total Ladson Crossing $ 2,981 $ 3,920 $ 83 — $ 3,052 $ 3,933 $ 6,985 Lake Greenwood Crossing 550 2,499 41 — 550 2,540 3,090 Lake Murray 447 1,537 36 — 447 1,573 2,020 Litchfield I 568 929 76 — 572 1,001 1,573 Litchfield II 568 936 31 — 572 963 1,535 Litchfield Market Village 2,970 4,716 217 — 3,046 4,857 7,903 Moncks Corner — 1,109 9 — — 1,118 1,118 Ridgeland 203 376 — — 203 376 579 Shoppes at Myrtle Park 3,182 5,360 824 — 3,182 6,184 9,366 South Lake 804 2,025 952 — 804 2,977 3,781 South Park 943 2,967 114 — 1,005 3,019 4,024 Sangaree 2,302 2,922 668 — 2,503 3,389 5,892 Tri-County 411 3,421 376 — 635 3,573 4,208 Riverbridge 774 5,384 — — 774 5,384 6,158 Laburnum Square 3,735 5,929 232 — 3,826 6,069 9,895 Franklin Village 2,608 9,426 134 — 2,674 9,494 12,168 Village at Martinsville 5,208 12,879 692 — 5,228 13,552 18,780 New Market Crossing 993 5,216 363 — 1,042 5,530 6,572 Rivergate Shopping Center 1,537 29,177 1,168 — 1,688 30,195 31,883 JANAF 8,267 66,549 867 — 8,467 67,216 75,683 Totals $ 94,356 $ 343,687 $ 20,173 $ — $ 97,388 $ 360,826 $ 458,214 (1) Net of impairment expenses. 61 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule III-Real Estate and Accumulated Depreciation Property Name Encumbrances Accumulated Depreciation Date of Construction Date Acquired Depreciation Life (in thousands) Amscot Building (2) $ 253 5/15/2004 5-40 years Lumber River Village $ 1,296 1,276 11/16/2012 5-40 years Surrey Plaza (2) 586 12/21/2012 5-40 years Tuckernuck 5,052 2,237 11/16/2012 5-40 years Twin City Commons 2,843 899 12/18/2012 5-40 years Walnut Hill Plaza 3,145 2,576 12/14/2007 5-15 years Tampa Festival 7,753 2,149 8/26/2013 5-40 years Forrest Gallery 8,060 2,526 8/29/2013 5-40 years Winslow Plaza 4,483 1,091 12/19/2013 5-40 years Clover Plaza 1,915 277 12/23/2013 5-40 years St. George Plaza 2,414 301 12/23/2013 5-40 years South Square 1,966 413 12/23/2013 5-40 years Westland Square 2,508 385 12/23/2013 5-40 years Waterway Plaza 2,456 315 12/23/2013 5-40 years Cypress Shopping Center 6,031 1,037 7/1/2014 5-40 years Harrodsburg Marketplace 3,267 560 7/1/2014 5-40 years Port Crossing Shopping Center 5,778 2,070 7/3/2014 5-40 years LaGrange Marketplace (6) 673 7/25/2014 5-40 years DF I-Courtland (undeveloped land) — 8/15/2014 N/A Edenton Commons (undeveloped land) — 8/15/2014 N/A Freeway Junction 7,431 1,492 9/4/2014 5-40 years Bryan Station 4,226 669 10/2/2014 5-40 years Crockett Square 6,338 1,592 11/5/2014 5-40 years Harbor Point (undeveloped land) — 11/21/2014 N/A Pierpont Centre 7,861 1,916 1/14/2015 5-40 years Brook Run Properties (undeveloped land) — 3/27/2015 N/A Alex City Marketplace 5,750 2,015 4/1/2015 5-40 years Butler Square 5,640 1,226 4/15/2015 5-40 years Brook Run Shopping Center 10,950 4,116 6/2/2015 5-40 years Beaver Ruin Village (3) 1,518 7/1/2015 5-40 years Beaver Ruin Village II (3) 511 7/1/2015 5-40 years Chesapeake Square 4,192 1,182 7/10/2015 5-40 years Sunshine Plaza 5,900 1,300 7/21/2015 5-40 years Barnett Portfolio 8,770 1,818 8/21/2015 5-40 years Grove Park 3,800 972 9/9/2015 5-40 years Parkway Plaza 3,500 807 9/15/2015 5-40 years Fort Howard Square 7,100 1,364 9/30/2015 5-40 years Conyers Crossing 5,960 1,485 9/30/2015 5-40 years Darien Shopping Center 153 4/12/2016 5-40 years Devine Street 300 4/12/2016 5-40 years 62 Property Name Encumbrances Accumulated Depreciation Date of Construction Date Acquired Depreciation Life (in thousands) Folly Road $ 7,063 $ 734 4/12/2016 5-40 years Georgetown (6) 328 4/12/2016 5-40 years Ladson Crossing (5) 660 4/12/2016 5-40 years Lake Greenwood Crossing (5) 417 4/12/2016 5-40 years Lake Murray 275 4/12/2016 5-40 years Litchfield I (4) 186 4/12/2016 5-40 years Litchfield II (4) 157 4/12/2016 5-40 years Litchfield Market Village (4) 820 4/12/2016 5-40 years Moncks Corner 196 4/12/2016 5-40 years Ridgeland (6) 78 4/12/2016 5-40 years Shoppes at Myrtle Park 5,757 1,147 4/12/2016 5-40 years South Lake 404 4/12/2016 5-40 years South Park (5) 480 4/12/2016 5-40 years Sangaree (1) 802 11/10/2016 5-40 years Tri-County (1) 662 11/10/2016 5-40 years Riverbridge 4,000 875 11/15/2016 5-40 years Laburnum Square 7,665 983 12/7/2016 5-40 years Franklin Village 8,277 1,338 12/12/2016 5-40 years Village at Martinsville 15,589 2,255 12/16/2016 5-40 years New Market Crossing 6,291 855 12/20/2016 5-40 years Rivergate Shopping Center 18,430 4,261 12/21/2016 5-40 years JANAF Shopping Center 57,726 7,785 1/18/2018 5-40 years Totals $ 69,758 (1) Properties secure a $ 6.2 million mortgage note. (2) Properties secure a $ 789 thousand mortgage note. (3) Properties secure a $ 9.4 million mortgage note. (4) Properties secure a $ 7.3 million mortgage note. (5) Properties secure a $ 6.9 million mortgage note. (6) Properties secure a $ 5.5 million mortgage note. 63 Schedule III-Real Estate and Accumulated Depreciation (Continued) 2021 2020 (in thousands) Balance at beginning of period $ 464,814 $ 468,499 Additions during the period: Acquisitions — — Improvements 4,997 3,066 Impairments ( 2,300 ) ( 600 ) Disposals ( 9,297 ) ( 6,151 ) Balance at end of period $ 458,214 $ 464,814 64 Exhibit 3.1 Articles of Amendment and Restatement of the Registrant (Filed as exhibit to Form 8-K, filed on August 8, 2016). 3.2 Articles of Supplementary of the Registrant dated September 16, 2016 (Filed as exhibit to Form 8-K, filed on September 20, 2016). 3.3 Articles of Supplementary of the Registrant dated December 1, 2016 (Filed as exhibit to Form 8-K, filed on December 5, 2016). 3.4 Articles of Amendment and Restatement, effective March 31, 2017 (Filed as exhibit to Form 8-K, filed on April 3, 2017). 3.5 Articles of Amendment and Restatement, effective March 31, 2017 (Filed as exhibit to Form 8-K, filed on April 3, 2017). 3.6 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc. (Filed as exhibit to Form 8-K, filed on May 29, 2020). 3.7 Amended and Restated Bylaws of Registrant (Filed as exhibit to Form S-11/A (Registration No. 333-177262) previously filed on February 14, 2012 pursuant to the Securities Act of 1933). 3.8 Bylaws of Wheeler Real Estate Investment Trust, Inc., as amended (Filed as exhibit to Form 8-K, filed on May 29, 2020). 3.9 Certificate of Correction of Articles Supplementary (Filed as exhibit to Form 8-K, filed on May 4, 2018). 3.10 Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. (Filed as exhibit to Form S-11 (Registration No. 333-198245) previously filed on August 20, 2014 pursuant to the Securities Act of 1933). 3.11 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series A Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on April 15, 2015). 3.12 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Amended Designation of Series B Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on July 15, 2016). 3.13 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series D Cumulative Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on September 20, 2016). 3.14 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Amended Designation of Additional Series D Cumulative Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on December 5, 2016). 3.15 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. (Filed as exhibit to Form 8-K, filed on September 5, 2019). 3.16 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P., dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020). 3.17 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P, dated March 12, 2021 (Filed as an exhibit to Form 8-K, filed on March 12, 2021). 3.18 Articles of Supplementary of the Registrant dated July 6, 2021 (Filed as an exhibit to Form 8-K, filed on July 8, 2021). 3.19 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc. (Filed as an exhibit to Form 8-K, filed on November 5, 2021). 3.20 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc. (Filed as an exhibit to Form 8-K, filed on November 29 , 2021). 4.1 Form of Certificate of Common Stock of Registrant (Filed as exhibit to Form 8-K, filed on April 3, 2017). 4.2 Form of Certificate of Series B Preferred Stock of Registrant (Filed as exhibit to Form S-11/A (Registration No. 333-194831) previously filed on April 23, 2014 pursuant to the Securities Act of 1933). 65 4.3 Form of Certificate of Series D Preferred Stock of the Registrant (Filed as exhibit to Form 8-K, filed on September 20, 2016). 4.4 Description of Securities (Filed herewith). 4.5 Common Stock Purchase Warrant, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020). 4.6 Form of Common Stock Purchase Warrant, dated March 12, 2021 (Filed as an exhibit to Form 8-K, filed on March 12, 2021). 4.7 Indenture, dated as of August 13, 2021 between Wheeler Real Estate Investment Trust Inc. and Wilmington Savings Fund Society, FSB., as trustee (including form of Note). (Filed as an exhibit to Form 8-K, filed on August 16, 2021). 10.1 Wheeler Real Estate Investment Trust, Inc. 2015 Long-Term Incentive Plan (Filed as exhibit to Form 8-K, filed on June 8, 2015). 10.2 Wheeler Real Estate Investment Trust, Inc. 2016 Long-Term Incentive Plan (Filed as exhibit to Form 8-K, filed on June 16, 2016). 10.3 Employment Agreement with M. Andrew Franklin (Filed as exhibit to Form 8-K, filed on February 20, 2018). 10.4 Employment Agreement with Crystal Plum (Filed as exhibit to Form 8-K, filed on February 20, 2020). 10.5 Shareholders Rights Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and Westport Capital Partners LLC as agent on behalf of certain investor (Filed as exhibit to Form 8-K, filed on March 19, 2015). 10.6 Tax Protection Agreement dated February 8, 2017 (Filed as exhibit to Form 8-K, filed on February 10, 2017). 10.7 Registration Rights Agreement, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020). 10.8 Registration Rights Agreement dated March 12, 2021, (Filed as an exhibit to Form 8-K, filed on March 12, 2021). 10.9 Amended and Restated Employment Agreement, by and between Wheeler Real Estate Investment Trust, Inc. and Crystal Plum, dated as of August 13, 2021 (Filed as an exhibit to Form 8-K on August 17, 2021 ). 21.1 Subsidiaries of Registrant (Filed herewith). 23.1 Consent of Cherry Bekaert LLP (Filed herewith). 31.1 Certification of the Chief Executive Officer of Wheeler Real Estate Investment Trust, Inc. pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith). 31.2 Certification of the Chief Financial Officer of Wheeler Real Estate Investment Trust, Inc. pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith). 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith). 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith). 101.INS XBRL Instance Document (Filed herewith). 101.SCH XBRL Taxonomy Extension Schema Document (Filed herewith). 101.CAL XBRL Taxonomy Extension Calculation Linkbase (Filed herewith). 101.DEF XBRL Taxonomy Extension Definition Linkbase (Filed herewith). 101.LAB XBRL Taxonomy Extension Labels Linkbase (Filed herewith). 101.PRE XBRL Taxonomy Extension Presentation Linkbase (Filed herewith). 66 Item 16. Form 10-K Summary Not applicable. 67 SIGNATURES Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WHEELER REAL ESTATE INVESTMENT TRUST, INC. By: /s/ M. Andrew Franklin M. Andrew Franklin Chief Executive Officer (Principal Executive Officer) By: /s/ Crystal Plum Crystal Plum Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: February 28, 2022 POWER OF ATTORNEY Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Each person whose signature appears below hereby constitutes and appoints each of M. Andrew Franklin and Crystal Plum as his or her attorney-in-fact and agent, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his or her substitutes may do or cause to be done by virtue hereof. Signature Title Date /S/ M. ANDREW FRANKLIN CEO and President February 28, 2022 M. Andrew Franklin (Principal Executive Officer) /S/ CRYSTAL PLUM Chief Financial Officer February 28, 2022 Crystal Plum (Principal Financial Officer and Principal Accounting Officer) /S/ STEFANI D. CARTER Chair of Board February 28, 2022 Stefani D. Carter /S/ SAVERIO M FLEMMA Director February 28, 2022 Saverio M Flemma /S/ MICHELLE D. BERGMAN Director February 28, 2022 Michelle D. Bergman /S/ JOSEPH D. STILWELL Director February 28, 2022 Joseph D. Stilwell /S/ PAULA J. POSKON Director February 28, 2022 Paula J. Poskon 68 /S/ KERRY G. CAMPBELL Director February 28, 2022 Kerry G. Campbell /S/ E.J. BORRACK Director February 28, 2022 E.J. Borrack 69