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, 2022, 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: 26 • 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, 2022, 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, 2022 were effective. 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 On August 22, 2022, the Company completed the Cedar Acquisition and accordingly the Company’s management has integrated Cedar’s operations into its internal control over financial reporting, as necessary, to accommodate modifications to its business processes related to the Cedar Acquisition. None of these integration activities had a material impact on our system of internal control over financial reporting for the year ended December 31, 2022 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 2023 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. 27 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, 2022 regarding our equity compensation plans and the Common Stock we may issue under the plans. 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 ) 30 Consolidated Balance Sheets 33 Consolidated Statements of Operations 34 Consolidated Statements of Equity 35 Consolidated Statements of Cash Flows 36 Notes to Consolidated Financial Statements 37 (a)(2). Financial Statement Schedules . 28 • 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. 29 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, 2022 and 2021, and the related consolidated statements of operations, equity, and cash flows for each of the years in the two-year period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, 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, 2022, the Company’s investment properties totaled $561.0 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. 30 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, 2022, the Company had convertible notes with an outstanding principal balance of $33.0 million and 1.6 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. Valuation of Purchase Price Allocation for Acquisition Description of Matter As more fully described in Note 3 to the consolidated financial statements, on August 22, 2022 the Company acquired Cedar Realty Trust, a 2.9 million square foot shopping center portfolio consisting of 19 properties for an aggregate of $135.5 million of cash merger consideration and acquisition costs. The acquisition was accounted for as an asset acquisition which required the Company to assess the acquisition-date fair value of all tangible assets, identifiable intangible assets, and assumed liabilities. 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 properties. Auditing management’s estimated fair value of all acquired tangible assets, identifiable intangible assets, and assumed liabilities required the assistance of our valuation professionals with specialized skills and knowledge as the fair value estimates required subjective auditor judgment to evaluate the audit evidence obtained. 31 How We Addressed the Matter in Our Audit To test the accounting for the purchase price allocation, our audit procedures included, among others, inspection of the purchase and sale agreements, and testing the completeness and accuracy of the data used in the fair value determination. We evaluated management’s application of the relevant accounting guidance and involved our valuation specialists to evaluate the Company’s determination of fair value of the purchase price allocations, 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 March 2, 2023 32 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except par value and share data) December 31, 2022 2021 ASSETS: Investment properties, net $ 560,980 $ 386,730 Cash and cash equivalents 28,491 22,898 Restricted cash 27,374 17,521 Rents and other tenant receivables, net 13,544 9,233 Assets held for sale — 2,047 Above market lease intangibles, net 3,134 2,424 Operating lease right-of-use assets 15,133 12,455 Deferred costs and other assets, net 35,880 11,973 Total Assets $ 684,536 $ 465,281 LIABILITIES: Loans payable, net $ 466,029 $ 333,283 Liabilities associated with assets held for sale — 3,381 Below market lease intangibles, net 23,968 3,397 Derivative liabilities 7,111 4,776 Operating lease liabilities 16,478 13,040 Accounts payable, accrued expenses and other liabilities 18,398 11,054 Total Liabilities 531,984 368,931 Series D Cumulative Convertible Preferred Stock (no par value, 6,000,000 shares authorized, 3,152,392 shares issued and outstanding, respectively; $ 113.44 million and $ 104.97 million aggregate liquidation value, respectively) 101,518 92,548 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, 3,379,142 and 1,872,448 shares issued and outstanding, respectively; $ 84.48 million and $ 46.81 million aggregate liquidation preference, respectively) 44,911 41,189 Common Stock ($ 0.01 par value, 200,000,000 shares authorized, 9,793,957 and 9,720,532 shares issued and outstanding, respectively) 98 97 Additional paid-in capital 234,993 234,229 Accumulated deficit ( 295,617 ) ( 274,107 ) Total Stockholders’ (Deficit) Equity ( 15,162 ) 1,861 Noncontrolling interests 66,196 1,941 Total Equity 51,034 3,802 Total Liabilities and Equity $ 684,536 $ 465,281 See accompanying notes to consolidated financial statements. 33 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except share and per share data) Years Ended December 31, 2022 2021 REVENUE: Rental revenues $ 75,195 $ 60,368 Other revenues 1,450 942 Total Revenue 76,645 61,310 OPERATING EXPENSES: Property operations 25,731 19,618 Depreciation and amortization 19,540 14,797 Impairment of assets held for sale 760 2,300 Corporate general & administrative 8,620 7,140 Total Operating Expenses 54,651 43,855 Gain on disposal of properties 2,604 2,055 Operating Income 24,598 19,510 Interest income 65 34 Interest expense ( 30,107 ) ( 33,028 ) Net changes in fair value of derivative liabilities ( 2,335 ) 3,768 Other income — 552 Other expense ( 691 ) ( 185 ) Net Loss Before Income Taxes ( 8,470 ) ( 9,349 ) Income tax expense — ( 2 ) Net Loss ( 8,470 ) ( 9,351 ) Less: Net income attributable to noncontrolling interests 3,984 92 Net Loss Attributable to Wheeler REIT ( 12,454 ) ( 9,443 ) Preferred Stock dividends - undeclared ( 9,056 ) ( 8,837 ) Deemed contribution related to preferred stock redemption — 5,040 Net Loss Attributable to Wheeler REIT Common Stockholders $ ( 21,510 ) $ ( 13,240 ) Loss per share: Basic and Diluted $ ( 2.20 ) $ ( 1.36 ) Weighted-average number of shares: Basic and Diluted 9,760,704 9,711,944 See accompanying notes to consolidated financial statements. 34 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, 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 Accretion of Series B Preferred Stock discount — — — 87 — — — — 87 — — 87 Conversion of Series B Preferred Stock to Common Stock — — ( 4,847 ) ( 104 ) 3,024 — 104 — — — — — Adjustment for noncontrolling interest in operating partnership — — — — — — 500 — 500 — ( 500 ) — Conversion of Operating Partnership units to Common Stock — — — — 70,401 1 160 — 161 ( 70,401 ) ( 161 ) — Paid-in-kind interest, Issuance of Series B Preferred Stock — — 1,511,541 3,739 — — — — 3,739 — — 3,739 Noncontrolling interests assumed from the acquisition (1) — — — — — — — — — — 64,845 64,845 Dividends and distributions — — — — — — — ( 9,056 ) ( 9,056 ) — ( 3,913 ) ( 12,969 ) Net (Loss) Income — — — — — — — ( 12,454 ) ( 12,454 ) — 3,984 ( 8,470 ) Balance, December 31, 2022 562 $ 453 3,379,142 $ 44,911 9,793,957 $ 98 $ 234,993 $ ( 295,617 ) $ ( 15,162 ) 144,942 $ 66,196 $ 51,034 (1) See Notes 1, 2 and 3 of the Notes to the Condensed Consolidated Financial Statements for further details. See accompanying notes to consolidated financial statements. 35 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) For the Years Ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ ( 8,470 ) $ ( 9,351 ) Adjustments to reconcile consolidated net loss to net cash provided by operating activities: Depreciation 13,489 11,072 Amortization 6,051 3,725 Loan cost amortization 6,098 12,710 Changes in fair value of derivative liabilities 2,335 ( 3,768 ) Above (below) market lease amortization, net ( 2,079 ) 13 Paid-in-kind interest 3,739 1,610 Straight-line expense 32 35 Share-based compensation — 14 Gain on disposal of properties ( 2,604 ) ( 2,055 ) Credit losses on operating lease receivables 361 239 Impairment of assets held for sale 760 2,300 Net changes in assets and liabilities: Rent and other tenant receivables, net ( 1,221 ) 1,001 Unbilled rent ( 740 ) ( 1,220 ) Deferred costs and other assets, net 4,381 ( 427 ) Accounts payable, accrued expenses and other liabilities 8,626 1,143 Net cash provided by operating activities 30,758 17,041 CASH FLOWS FROM INVESTING ACTIVITIES: Investment property acquisitions, net of cash acquired ( 135,510 ) — Capital expenditures ( 8,511 ) ( 6,412 ) Cash received from disposal of properties 10,509 11,513 Net cash (used in) provided by investing activities ( 133,512 ) 5,101 CASH FLOWS FROM FINANCING ACTIVITIES: Payments for deferred financing costs ( 12,683 ) ( 7,813 ) Dividends and distributions paid on noncontrolling interests ( 2,688 ) — Loan proceeds 400,000 97,650 Loan principal payments ( 263,815 ) ( 105,305 ) Preferred stock redemption — ( 8,336 ) Loan prepayment penalty ( 2,614 ) ( 687 ) Net cash provided by (used in) financing activities 118,200 ( 24,491 ) INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 15,446 ( 2,349 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year 40,419 42,768 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year $ 55,865 $ 40,419 Supplemental Disclosures: Non-cash Transactions: Paycheck Protection Program forgiveness $ — $ 552 Initial fair value of warrants $ — $ 2,018 Initial fair value of derivative liability at issuance of convertible notes $ — $ 5,932 Conversion of common units to common stock $ 160 $ 33 Conversion of Series B Preferred Stock to common stock $ 104 $ 72 Accretion of Preferred Stock discounts $ 584 $ 600 Deemed contribution related to Preferred Stock discount $ — $ 5,040 Other Cash Transactions: Cash paid for taxes $ — $ 2 Cash paid for interest $ 19,957 $ 18,973 The following table provides a reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 28,491 $ 22,898 Restricted cash 27,374 17,521 Cash, cash equivalents, and restricted cash $ 55,865 $ 40,419 See accompanying notes to consolidated financial statements. 36 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. 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, 2022, the Company owned 99.05 % of the Operating Partnership. As of December 31, 2022, the Trust, through the Operating Partnership, owned and operated seventy-five centers and four undeveloped properties. Twenty-one of these properties are located in South Carolina, twelve in Georgia, ten in Virginia, eight in Pennsylvania, six in North Carolina, four in Massachusetts, four in New Jersey, three in Florida, three in Connecticut, two in Kentucky, two in Tennessee, one in Alabama, one in Maryland, one in West Virginia, and one in Oklahoma. The Company’s portfolio had total gross rentable space of approximately 8,173,000 square feet and a leased level of approximately 92.9 % at December 31, 2022. 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 targets properties in communities that have stable demographics. The Company considers properties that are generally 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. Acquisition of Cedar Realty Trust On March 2, 2022, the Company entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Cedar Realty Trust, Inc. (“Cedar”), Cedar Realty Trust Partnership, L.P., (“Cedar OP”), WHLR Merger Sub Inc., a wholly owned subsidiary of the Company, and WHLR OP Merger Sub LLC, a wholly owned subsidiary of Merger Sub I (“Merger Sub II”), pursuant to which the Company agreed to acquire Cedar, including 19 of its shopping center assets, in an all-cash merger transaction consisting, in accordance with the terms of the Merger Agreement, of a payment to Cedar common shareholders of merger consideration of $ 9.48 per common share (the “Cedar Acquisition”). On August 22, 2022, the Company completed the merger transaction with Cedar. As a result of the merger, the Company acquired all of the outstanding shares of the Cedar's common stock, which ceased to be publicly traded on the NYSE. Cedar’s outstanding 7.25 % Series B Preferred Stock and 6.50 % Series C Preferred Stock remain outstanding and continue to trade on the NYSE. Each outstanding share of common stock of Cedar and outstanding common unit of the Cedar OP held by persons other than Cedar immediately prior to the merger were cancelled and converted into the right to receive a cash payment of $ 9.48 per share or unit. As a result Cedar became a subsidiary of the REIT. During the year ended December 31, 2022 the Company incurred acquisition related costs of $ 5.51 million for the merger. These costs were capitalized as part of the acquisition and are primarily comprised of professional fees and legal fees, see Note 3 included in this Form 10-K for further details. The consolidated financial statements included in this Form 10-K include Cedar starting from the date of acquisition. We have determined that this acquisition is not a variable interest entity, as defined under the consolidation topic of the Financial Accounting Standards Board (the "FASB"), Accounting Standards Codification, or ASC, and we evaluated such entity under the voting model and concluded we should consolidate the entity. Under the voting model, we consolidate the 37 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated and Combined Financial Statements 1. Organization and Basis of Presentation and Consolidation (continued) entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. 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 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) 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 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, 2022 and 2021. 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, 2022 and 2021. 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 and tenant security deposits. 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, 2022 and 2021, the Company’s allowance for uncollectible tenant receivables totaled $ 3.15 million and $ 633 thousand, respectively. 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) Above and Below Market Lease Intangibles, net 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. 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. 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, 2022 and 2021, there were $ 6.52 million and $ 5.77 million, respectively, in unbilled rent which is included in "rents and other tenant receivables, net." 40 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) 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. The below table disaggregates the Company’s revenue by type of service for the years ended December 31, 2022 and 2021 (in thousands): Years Ended December 31, 2022 2021 Minimum rent $ 57,533 $ 45,896 Tenant reimbursements - variable lease revenue 16,665 13,120 Straight-line rents 800 1,060 Percentage rent - variable lease revenue 558 531 Lease termination fees 134 139 Other 1,316 803 Total 77,006 61,549 Credit losses on operating lease receivables ( 361 ) ( 239 ) Total $ 76,645 $ 61,310 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 41 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 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, 2022 2021 Professional fees $ 3,810 $ 3,116 Compensation and benefits 2,276 1,465 Corporate administration 1,901 1,771 Advertising costs for leasing activities 319 119 Other 314 669 Total $ 8,620 $ 7,140 Other Expense Other expense represents costs which are non-operating in nature. Other expenses were $ 691 thousand and $ 185 thousand for the year ended December 31, 2022 and 2021 respectively, and consist of legal settlement costs. 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 and noncontrolling interest attributable to the acquisition of Cedar. 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 42 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) 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. The noncontrolling interest attributable to the acquisition of Cedar represents the fair value of Cedar's outstanding 7.25 % Series B Preferred Stock ("Cedar Series B Preferred") and 6.50 % Series C Preferred Stock ("Cedar Series C Preferred") as of August 22, 2022, the date of acquisition. The valuation assumption was based on the three-level valuation hierarchy for fair value measurements and represents Level 1 inputs. Level 1 inputs represent observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. The total cumulative dividends for the Cedar Series B Preferred and Cedar Series C Preferred were $ 3.91 million as of December 31, 2022 and are included as a reduction to net loss attributable to Wheeler REIT Common Stockholders on the consolidated statements of operations during the year ended December 31, 2022. Recently Adopted Accounting Standards In August 2020, the FASB issued Accounting Standards Update ("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. 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. This guidance is effective for fiscal years, and for interim reporting periods within those fiscal years, beginning after December 15, 2022, however the Company is early adopting as of January 1, 2022. In November 2018, the FASB issued ASU 2018-19 to clarify that operating lease receivables, including straight-line rent receivables, recorded by lessors are explicitly excluded from the scope of Topic 326. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements 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. 43 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 3. Real Estate Investment properties consist of the following (in thousands): December 31, 2022 2021 Land and land improvements $ 144,537 $ 96,752 Buildings and improvements 494,668 357,606 Investment properties at cost 639,205 454,358 Less accumulated depreciation ( 78,225 ) ( 67,628 ) Investment properties, net $ 560,980 $ 386,730 The Company’s depreciation expense on investment properties was $ 13.49 million and $ 11.07 million for the years ended December 31, 2022 and 2021, 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, 2022, there were no assets held for sale. At December 31, 2021, assets held for sale included Walnut Hill Plaza, which was sold in 2022. 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, 2022 and 2021 are as follows (in thousands): Years Ended December 31, 2022 2021 Harbor Pointe Land Parcel $ 760 $ — Walnut Hill Plaza — 100 Columbia Fire Station — 2,200 Total $ 760 $ 2,300 As of December 31, 2022 and 2021, assets held for sale and associated liabilities consist of the following (in thousands): December 31, 2022 2021 Investment properties, net $ — $ 1,824 Rents and other tenant receivables, net — 18 Deferred costs and other assets, net — 205 Total assets held for sale $ — $ 2,047 December 31, 2022 2021 Loans payable $ — $ 3,145 Accounts payable, accrued expenses and other liabilities — 236 Total liabilities associated with assets held for sale $ — $ 3,381 44 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 3. Real Estate (continued) The following properties were sold during the years ended December 31, 2022 and 2021 (in thousands): Disposal Property Contract Price Gain (Loss) Net Proceeds December 9, 2022 Butler Square $ 9,250 $ 2,619 $ 8,723 January 11, 2022 Walnut Hill Plaza 1,986 ( 15 ) 1,786 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 Cedar Acquisition On August 22, 2022, the Company acquired Cedar, a 2.9 million square foot shopping center portfolio consisting of 19 properties located primarily in the Northeast from Virginia to Massachusetts (the "Cedar Portfolio"). The Cedar Portfolio was acquired through the purchase of the issued and outstanding shares of Cedar’s common stock, par value $ 0.06 per share (“Cedar Common Stock”), and the issued and outstanding common units of Cedar OP held by persons other than Cedar for an aggregate of $ 135.51 million of cash merger consideration and acquisition costs. The following summarizes the consideration paid and the purchase allocation of assets acquired and liabilities assumed in conjunction with the acquisition described above in accordance with ASU 2017-01, along with a description of the methods used to determine the purchase price allocation (in thousands, unaudited). In determining the purchase price allocation, the Company considered many factors including, but not limited to, cash flows, market capitalization rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties. The following table summarizes the purchase price allocation based on the Company's initial valuation, including estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed (in thousands): 45 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 3. Real Estate (continued) Building and building improvements (a) $ 137,120 Land and land improvements (a) 47,899 Lease intangibles (b) 28,215 Above market lease (c) 1,718 Right of use asset adjustment, ground lease (d) 2,913 Cash, accounts receivable and other assets 14,242 Total assets acquired 232,107 Below market lease (c) ( 23,622 ) Lease Liabilities, ground lease (d) ( 3,552 ) Accounts payable and other liabilities ( 4,578 ) Total liabilities acquired ( 31,752 ) Noncontrolling interest (e) ( 64,845 ) Purchase price allocation of net assets acquired, excluding noncontrolling interests $ 135,510 Purchase consideration: (f) Cash merger consideration $ 130,000 Capitalized acquisition costs 5,510 $ 135,510 a. Represents the purchase price allocation of the net investment properties acquired which includes land, buildings, site improvements and tenant improvements. The purchase price allocation was determined using following approaches: i. the market approach valuation methodology for land by considering similar transactions in the markets; ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, “go dark” analyses and residual calculations incorporating the land values; and iii. the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates. b. Represents the purchase price allocation of lease intangibles and other assets. Lease intangibles include in place leases. The income approach was used to determine the allocation of these intangible assets which included estimated market rates and expenses. c. Represents the purchase price allocation of above and below market leases. The income approach was used to determine the allocation of above/below market leases using market rental rates for similar properties. d. Represents the purchase price allocation of the lease liability and corresponding right of use asset associated with a ground lease. The Company used an incremental borrowing rate of 5.25 % for the purpose of calculating the lease liability. e. Represents the fair market value of Cedar's outstanding 7.25 % Series B Preferred Stock and 6.50 % Series C Preferred Stock. f. Represents merger consideration and capitalized transaction costs. 46 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 3. Real Estate (continued) Unaudited pro forma financial information in the aggregate is presented below for the acquisition of the Cedar properties. The unaudited pro forma information presented below includes the effects of the Cedar Acquisition as if it had been consummated as of January 1, 2021. The pro forma results include adjustments for depreciation and amortization associated with acquired tangible and intangible assets, straight-line rent adjustments and interest expense related to debt incurred. The unaudited pro forma financial information is presented for informational purposes only and may not be indicative of the results of operations that would have been achieved if this acquisition had taken place on January 1, 2021 or 2022. (Amounts presented in thousands, except per share figures). Year Ended December 31, 2022 2021 Rental revenues $ 100,315 $ 98,802 Net loss from continuing operations $ ( 6,950 ) $ ( 9,252 ) Net loss attributable to Wheeler REIT $ ( 7,022 ) $ ( 20,096 ) Net loss attributable to Wheeler REIT common shareholders $ ( 26,830 ) $ ( 23,893 ) Basic loss per share $ ( 2.75 ) $ ( 2.46 ) Diluted loss per share $ ( 2.75 ) $ ( 2.46 ) 4. Deferred Costs and Other Assets Deferred costs and other assets, net of accumulated amortization are as follows (in thousands): December 31, 2022 2021 Leases in place, net $ 24,956 $ 7,519 Lease origination costs, net 7,165 1,474 Ground lease sandwich interest, net 1,393 1,667 Tenant relationships, net 500 853 Legal and marketing costs, net 389 14 Prepaid expenses 1,456 413 Other 21 33 Total deferred costs and other assets, net $ 35,880 $ 11,973 As of December 31, 2022 and 2021, the Company’s intangible accumulated amortization totaled $ 62.35 million and $ 62.94 million, respectively. During the years ended December 31, 2022 and 2021, the Company’s intangible amortization expense totaled $ 6.05 million and $ 3.73 million, respectively. Future amortization of leases in place, lease origination costs, ground lease sandwich interest, tenant relationships, and legal and marketing costs is as follows (in thousands): For the Years Ended December 31, Leases in place, net Lease origination costs, net Ground lease sandwich interest, net Tenant relationships, net Legal & marketing costs, net Total 2023 $ 7,702 $ 1,264 $ 274 $ 221 $ 101 $ 9,562 2024 5,178 1,120 274 124 84 6,780 2025 3,637 957 274 62 61 4,991 2026 2,394 830 274 11 48 3,557 2027 1,886 719 274 11 33 2,923 Thereafter 4,159 2,275 23 71 62 6,590 $ 24,956 $ 7,165 $ 1,393 $ 500 $ 389 $ 34,403 47 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, 2022 December 31, 2021 Cypress Shopping Center $ 34,360 4.70 % July 2024 $ 5,903 $ 6,031 Port Crossing $ 34,788 4.84 % August 2024 5,641 5,778 Freeway Junction $ 41,798 4.60 % September 2024 7,273 7,431 Harrodsburg Marketplace $ 19,112 4.55 % September 2024 3,186 3,267 Bryan Station $ 23,489 4.52 % November 2024 4,136 4,226 Crockett Square Interest only 4.47 % December 2024 6,338 6,338 Pierpont Centre $ 39,435 4.15 % February 2025 7,716 7,861 Shoppes at Myrtle Park $ 33,180 4.45 % February 2025 5,615 5,757 Alex City Marketplace Interest only 3.95 % April 2025 5,750 5,750 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 (2) 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 4,409 4,483 Tuckernuck $ 32,202 5.00 % March 2026 4,915 5,052 Chesapeake Square $ 23,857 4.70 % August 2026 4,106 4,192 Sangaree/Tri-County $ 32,329 4.78 % December 2026 6,086 6,176 Riverbridge Interest only 4.48 % December 2026 4,000 4,000 Franklin Village $ 45,336 4.93 % January 2027 8,144 8,277 Village of Martinsville $ 89,664 4.28 % July 2029 15,181 15,589 Laburnum Square Interest only 4.28 % September 2029 7,665 7,665 Rivergate (3) $ 100,222 4.25 % September 2031 18,003 18,430 Convertible Notes Interest only 7.00 % December 2031 33,000 33,000 Guggenheim Loan Agreement (4) Interest only 4.25 % July 2032 75,000 — JANAF Loan Agreement (5) Interest only 5.31 % July 2032 60,000 — Guggenheim-Cedar Loan Agreement (6) Interest only 5.25 % November 2032 110,000 — Patuxent Crossing/Coliseum Marketplace Loan Agreement Interest only 6.35 % January 2033 25,000 — Walnut Hill Plaza $ 26,850 5.50 % March 2023 — 3,145 Litchfield Market Village $ 46,057 5.50 % November 2022 — 7,312 Twin City Commons $ 17,827 4.86 % January 2023 — 2,843 New Market $ 48,747 5.65 % June 2023 — 6,291 Benefit Street Note $ 53,185 5.71 % June 2023 — 6,914 Deutsche Bank Note $ 33,340 5.71 % July 2023 — 5,488 First National Bank $ 24,656 LIBOR + 350 basis points August 2023 — 789 Lumber River $ 10,723 LIBOR + 350 basis points September 2023 — 1,296 Tampa Festival $ 50,797 5.56 % September 2023 — 7,753 Forrest Gallery $ 50,973 5.40 % September 2023 — 8,060 South Carolina Food Lions Note $ 68,320 5.25 % January 2024 — 11,259 Folly Road $ 41,482 4.65 % March 2025 — 7,063 JANAF $ 333,159 4.49 % July 2023 — 47,065 JANAF Bravo $ 35,076 5.00 % May 2024 — 5,936 JANAF BJ's $ 29,964 4.95 % January 2026 — 4,725 Butler Square Interest only 3.90 % May 2025 — 5,640 Total Principal Balance (1) 482,447 346,262 Unamortized debt issuance cost (1) ( 16,418 ) ( 9,834 ) Total Loans Payable, including assets held for sale 466,029 336,428 Less loans payable on assets held for sale, net loan amortization costs — 3,145 Total Loans Payable, net $ 466,029 $ 333,283 (1) Includes loans payable on assets held for sale, see Note 3. The loan agreements include customary prepayment penalties or defeasance costs, which can be incurred by the company when prepaying or defeasing loans. (2) Collateralized by Cardinal Plaza, Franklinton Square, and Nashville Commons. (3) October 2026 the interest rate changes to variable interest rate equal to the 5 years U.S. Treasury Rate plus 2.70 %, with a floor of 4.25 %. (4) Collateralized by 22 properties. (5) Collateralized by JANAF properties. (6) Collateralized by 10 Cedar properties. 48 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 a 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 . Interest payments on the Convertible Notes were made as follows (in thousands, except for shares ) For the years ended December 31, Series B Preferred number of shares Series D Preferred number of shares Convertible Note Interest at 7 % Fair value adjustment Paid-in-kind Interest Expense 2021 — 113,709 $ 885 $ 725 $ 1,610 2022 1,511,541 — $ 2,310 $ 1,429 $ 3,739 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 49 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) 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 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. 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, 2022, see Note 6. 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 (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. 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, 2022. First National Bank Amendment 50 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) 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 %. In conjunction with Guggenheim Loan Agreement on June 17, 2022, the principal balance on the First National Bank Loan was paid in full. Lumber River Extensions 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 %. In conjunction with Guggenheim Loan Agreement on June 17, 2022, the principal balance on the Lumber River Loan was paid in full. Tuckernuck Extension and Refinance 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 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 %. Columbia Fire Station Extension and Payoff 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 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. In conjunction with JANAF Loan Agreement on July 6, 2022, the principal balance on the JANAF Bravo Loan was paid in full. 51 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) Walnut Hill Plaza Payoff In conjunction with the Walnut Hill Plaza sale, as detailed in Note 3, the Company made a $ 1.79 million principal paydown on the Walnut Hill Plaza loan. On February 17, 2022 the Company paid the remaining loan balance of $ 1.34 million in full. Guggenheim Loan Agreement On June 17, 2022, the Company entered into a term loan agreement (the “Guggenheim Loan Agreement”) with Guggenheim Real Estate, LLC, for $ 75.00 million at a fixed rate of 4.25 % with interest-only payments due monthly. Commencing on August 10, 2027, until the maturity date of July 10, 2032, monthly principal and interest payments will be made based on a 30-year amortization schedule calculated based on the principal amount as of that time . The Guggenheim Loan Agreement proceeds were used to refinance eleven loans including paying $ 1.46 million in defeasance. JANAF Loan Agreement On July 6, 2022, the Company entered into a loan agreement (the “JANAF Loan Agreement”) with CITI Real Estate Funding Inc. for $ 60.00 million at a fixed interest rate of 5.31 % with interest-only payments due monthly through maturity, July 6, 2032. The JANAF Loan Agreement proceeds were used to refinance three loans including paying $ 1.16 million in defeasance. KeyBank-Cedar Loan Agreement On August 22, 2022, Cedar entered into a loan agreement (the “KeyBank-Cedar Loan Agreement”) with KeyBank National Association for $ 130.00 million with interest-only payments due monthly through maturity, August 22, 2023. The interest rate on this term loan consisted of the Secured Overnight Financing Rate plus 0.10 % plus an applicable margin of 2.5 % through February 2023, at which time increases to 4.0 % and was collateralized by 19 properties. The obligations under the KeyBank-Cedar Loan Agreement were satisfied in full with the proceeds of the loans under the Guggenheim-Cedar Loan Agreement entered into on October 28, 2022 and the Patuxent Crossing/Coliseum Marketplace Loan Agreement entered into on December 21, 2022. Guggenheim-Cedar Loan Agreement On October 28, 2022, Cedar entered into a loan agreement (the “Guggenheim-Cedar Loan Agreement”) with Guggenheim Real Estate, LLC, for $ 110.00 million at a fixed rate of 5.25 % with interest-only payments due monthly through November 2027. Wheeler REIT, L.P. provided a guarantee in connection with such loan. Commencing on December 10, 2027, until the maturity date of November 10, 2032, monthly principal and interest payments will be made based on a 30-year amortization schedule calculated based on the principal amount as of that time. The Guggenheim-Cedar Loan Agreement proceeds were used to refinance a portion of Cedar’s property portfolio that were previously collateralized by the KeyBank-Cedar Loan Agreement. Butler Square Payoff On December 9, 2022, the Company made a $ 5.64 million principal payment on the Butler Square loan in conjunction with the sale of the Butler Square property, as detailed in Note 3. Patuxent Crossing/Coliseum Marketplace Loan Agreement On December 21, 2022, Cedar entered into a loan agreement (the "Patuxent Crossing/Coliseum Marketplace Loan Agreement”) with CITI Real Estate Funding, Inc. for $ 25.00 million at a fixed rate of 6.35 % with interest-only payments due monthly through maturity, January 6, 2033. The Patuxent Crossing/Coliseum Marketplace Loan Agreement proceeds were used to satisfy the remaining obligations of the KeyBank-Cedar Loan Agreement and, accordingly, the remaining collateral was released. 52 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Loans Payable (continued) Debt Maturities The Company’s scheduled principal repayments on indebtedness as of December 31, 2022, are as follows (in thousands): For the years ended December 31, 2023 $ 2,343 2024 33,690 2025 79,697 2026 19,347 2027 9,440 Thereafter 337,930 Total principal repayments and debt maturities $ 482,447 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 Wilmington Warrant, the Company used the following inputs in its Monte Carlo model; exercise price of each of the three tranches described in the table below, 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 %. Warrants to purchase shares of common stock outstanding at December 31, 2022 and 2021 are as follows: Warrant Name Warrants Exercise Price Expiration Date Powerscort Warrant 496,415 $ 3.120 12/22/2023 Wilmington Warrant Tranche A 510,204 $ 3.430 3/12/2026 Wilmington Warrant Tranche B 424,242 $ 4.125 3/12/2026 Wilmington Warrant Tranche C 127,273 $ 6.875 3/12/2026 In measuring the warrant liability, the Company used the following inputs in its Monte Carlo Model: For the Years Ended December 31, 2022 2021 Common Stock price $ 1.40 $ 1.94 Weighted average contractual term to maturity 2.5 years 3.5 years Range of expected market volatility % 66.00 % - 72.88 % 70.12 % - 81.00 % Range of risk-free interest rate 4.14 % - 4.68 % 0.72 % - 1.16 % 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- 53 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Derivative Liabilities (continued) 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, the Company used the following inputs in its multinomial lattice model: December 31, 2022 December 31, 2021 Conversion price $ 6.25 $ 6.25 Common Stock price $ 1.40 $ 1.94 Contractual term to maturity 9.0 years 10.1 years Expected market volatility % 205.00 % 80.00 % Risk-free interest rate 3.87 % 1.51 % Traded WHLRL price % of par 120.50 % 113.96 % 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): Year Ended December 31, 2022 Year Ended December 31, 2021 Balance at the beginning of period $ 4,776 $ 594 Issuance of Wilmington Warrant — 2,018 Issuance of embedded derivative — 5,932 Changes in fair value 2,335 ( 3,768 ) Balance at ending of period $ 7,111 $ 4,776 54 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 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, 2022 are as follows (in thousands): For the years ended December 31, 2023 $ 71,562 2024 66,076 2025 56,970 2026 46,507 2027 37,195 Thereafter 104,546 Total minimum rents $ 382,856 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 99.05 % and 98.59 % interest in the Operating Partnership as of December 31, 2022 and 2021, 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, 2022 and 2021, there were 15,227,758 of common units outstanding with the Trust owning 15,082,816 and 15,012,415 , respectively, of these common units. Series A Preferred Stock At December 31, 2022 and 2021, 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 At December 31, 2022 and 2021, the Company had 3,379,142 and 1,872,448 shares, issued and outstanding, respectively, without par value Series B Preferred with a $ 25.00 liquidation preference per share, or $ 84.48 million and $ 46.81 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. 55 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) Series D Preferred Stock - Redeemable Preferred Stock and Tender Offers At December 31, 2022 and 2021, the Company had 3,152,392 issued and outstanding, of Series D Preferred, without par value with a $ 25.00 liquidation preference per share, and a liquidation value of $ 113.44 million and $ 104.97 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 holders 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. After 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. 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") holders of shares of the Series D Preferred and the holders of Series A Preferred and Series B Preferred upon which, like voting rights have been conferred and are exercisable (such 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 to serve on the Board of Directors (the "Series D Preferred Directors"). A Preferred Dividend Default occurred on April 15, 2020. The election of the Series D Preferred Directors will take place upon the written request of the holders of record of at least 20 % of the Series D 56 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) 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 and a sum sufficient for the payment thereof is set apart for payment. 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, 2022 and 2021 is as follows (in thousands): Series D Preferred 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 Accretion of Preferred Stock discount 498 Undeclared dividends 8,472 Balance December 31, 2022 $ 101,518 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. The following table summarizes the potential dilution of conversion of common units, Series B Preferred, Series D Preferred, warrants and Convertible Notes into the Company's Common Stock. These have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive. December 31, 2022 December 31, 2021 Outstanding shares Potential Dilutive Shares Outstanding shares Potential Dilutive Shares Common units 144,942 144,942 215,343 215,343 Series B Preferred Stock 3,379,142 2,111,964 1,872,448 1,170,280 Series D Preferred Stock 3,152,392 6,688,898 3,152,392 6,189,366 Warrants to purchase Common Stock — 1,558,134 — 1,558,134 Convertible Notes — 38,562,586 — 31,801,297 Dividends 57 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) 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, 2022 $ 8,472 $ 2.69 For the year ended December 31, 2021 $ 8,167 $ 2.59 The total cumulative dividends in arrears for Series D Preferred (per share $ 10.99 ) as of December 31, 2022 is $ 34.63 million. There were no dividends declared to holders of Common Stock, Series A Preferred, Series B Preferred or Series D Preferred during years ended December 31, 2022 or 2021. 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, 2022, there are 41,104 shares available for issuance under the Company’s 2015 Incentive Plan and there were no shares issued in 2022 or 2021. 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) 2022 — $ — 2021 5,000 14 As of December 31, 2022, 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, 2022 and 2021, the weighted average remaining lease term of our leases is 34 and 31 years, respectively. Rent expense under the operating lease agreements were $ 1.15 million and $ 1.06 million for the years ended December 31, 2022 and 2021, respectively. 58 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 9. Lease Commitments (continued) The Cedar Portfolio has a ground lease which is accounted for as an operating lease expiring in 2071 and is included in the purchase price allocation discussed in Note 3 of this Form 10-K. Supplemental information related to leases is as follows (in thousands): For the Years Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 956 $ 902 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, 2022 and a reconciliation of those cash flows to the operating lease liabilities at December 31, 2022 are as follows (in thousands): For the years ended December 31, 2023 $ 1,113 2024 1,115 2025 1,119 2026 1,148 2027 1,152 Thereafter 30,829 Total minimum lease payments (1) 36,476 Discount ( 19,998 ) Operating lease liabilities $ 16,478 (1) Operating lease payments include $ 7.54 million related to options to extend lease terms that are reasonably certain of being exercised. 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 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 Mid-Atlantic, Southeast, and Northeast, which markets represented approximately 44 %, 41 % and 15 %, respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2022. 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. 59 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 10. Commitments and Contingencies (continued) 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 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. 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. On March 15, 2022, the Court granted Mr. Kelly $ 340 thousand with interest thereon at a rate of 6 % per annum from the date of termination, April 13, 2020, until paid, plus attorneys' fees and costs in the amount of $ 311 thousand. On March 31, 2022, $ 691 thousand was paid to Mr. Kelly. The Company has now fulfilled its obligations pursuant to the Court’s Order in this case. 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”). The complaint alleged that the Company amended provisions of its charter (as set forth in the 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 sought damages, interest, attorneys’ fees, other costs and expenses, and such other relief as the court may deem just and equitable. The Company filed an answer to the complaint denying any liability. The Individual Defendants filed a motion to dismiss the complaint, which was denied. The JCP Plaintiffs filed a Motion For Partial Summary Judgment, as to which the Company and the Individual Defendants filed oppositions. The Judge denied the JCP Plaintiffs' Motion and ordered the parties to prepare a joint discovery schedule. The Judge also ordered the parties to engage in mediation with a Magistrate Judge. During the mediation process, the Company made no offers of settlement. On or about November 2, 2022, the JCP Plaintiffs entered into a Settlement Agreement resolving all their claims against the Individual Defendants, but to which the Company did not join. Thereafter, the JCP Plaintiffs advised the Company that they had decided to dismiss their claims against the Company, and the JCP Plaintiffs requested pursuant to applicable rule that the Company consent to the filing of a Stipulation of 60 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 10. Commitments and Contingencies (continued) Dismissal. The Company consented, and on November 3, 2022, the Stipulation of Dismissal was filed dismissing with prejudice all of the JCP Plaintiffs’ claims against the Company. 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 September 20, 2022, summary judgment concluded in the Company's favor and the plaintiffs did not file an appeal. In Re: Cedar Realty Trust, Inc. Preferred Shareholder Litigation , Case No.: 1:22-cv-1103, in the United States District Court for the District of Maryland. On April 8, 2022, several purported holders of preferred stock of Cedar Realty Trust, Inc. (“Cedar”) filed a putative class action in the Circuit Court for Montgomery County, Maryland against Cedar, Cedar’s former Board of Directors, and the Company arising out of transactions that included the then pending acquisition of Cedar by the Company. The defendants removed the case to federal court. David Sydney, et. al. v. Cedar Realty Trust, Inc., Wheeler Real Estate Investment Trust, Inc. et al. in the United States District Court for the District of Maryland, Case No. 8:22-cv-01142. On May 6, 2022, a purported holder of preferred stock of Cedar filed a separate putative class action on the United States District Court for the District of Maryland, Case No. 1:22-cv-01103 against Cedar and Cedar’s former Board of Directors arising out of those same transactions. Following the denial of motions seeking to enjoin the acquisition of Cedar by the Company and other preliminary relief, the cases were consolidated under Case No.: 1-22-cv-1103. A consolidated amended complaint was filed on August 24, 2022 (the “Operative Complaint”). The Operative Complaint includes allegations of breach of contract against Cedar with respect to the Articles Supplementary governing the terms of Cedar’s preferred stock and breach of fiduciary duty against the members of Cedar’s former Board of Directors. The plaintiffs allege that Cedar breached their liquidation and conversion rights as set forth in Cedar’s Articles Supplementary, and that the members of Cedar’s former Board of Directors breached their fiduciary duty in structuring the transactions that include the merger. The Complaint further alleges that the Company tortiously interfered with Cedar’s contract with the owners of Cedar’s preferred stock and aided and abetted the alleged breach of fiduciary duty by Cedar’s former Board of Directors. The Operative Complaint seeks damages in an unspecified amount. The Company and Cedar have filed a motion to dismiss the Operative Complaint in its entirety which is fully briefed. The plaintiffs have recently filed a motion to certify an issue of law addressed in the motion to dismiss to Maryland’s Supreme Court. That motion is not yet fully briefed. At this juncture, the outcome of the litigation is uncertain. Krasner v. Cedar Realty Trust, Inc., et. al ., in the United States District Court for the Eastern District of New York, Case No. 2:22-cv-06945. On October 14, 2022, a purported holder of preferred stock of Cedar filed a putative class action in the Supreme Court of the State of New York County of Nassau, Index Number 613985/2022, against Cedar, Cedar’s former Board of Directors, and the Company alleging the same claims asserted in the In Re: Cedar Realty Trust, Inc. Preferred Shareholder Litigation discussed above. The defendants removed the case to federal court. The plaintiff filed a motion to remand the case to state court which is fully briefed. The Company and Cedar intend to seek procedural relief precluding this case from proceeding in tandem with the Maryland action. At this juncture, the outcome of the litigation is uncertain. High Income Securities Fund v. Cedar Realty Trust, Inc., et al. , No. 2:22-cv-4031, in the United States District Court for the Eastern District of New York. On July 11, 2022, a purported holder of the Company's outstanding preferred stock filed a complaint against Cedar and Cedar's former Board of Directors alleging that the Defendants violated Section 10(b) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions, and that the former Cedar Board are control persons under Section 20(a) of the Exchange Act. On August 12, 2022, Defendants requested permission to file a motion to dismiss, and Plaintiff responded to Defendants’ request on September 7, 2022. The court granted Defendants’ request to file a motion to dismiss on October 25, 2022. Defendants served their motion to dismiss on December 23, 2022, which Plaintiff opposed on January 27, 2023. Defendants filed a reply brief on the motion to dismiss on February 17, 2023. At this juncture, the outcome of the litigation is uncertain. 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 61 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 10. Commitments and Contingencies (continued) 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 $ 2.04 million, the principal amount of the bonds, as of December 31, 2022. 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 $ 42 thousand and $ 87 thousand, during the years ended December 31, 2022 and 2021, respectively, in debt service shortfalls. No amounts have been accrued for this as of December 31, 2022 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, Sangaree and 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, 2022. 11. Related Party Transactions The Company performs property management and leasing services for Cedar, a subsidiary of the Company. During the year ended December 31, 2022, Cedar paid the Company $ 1.05 million for these services. Related party amounts due to the Company as of December 31, 2022 were $ 7.33 million, which consists primarily of financing costs, real estate taxes and costs paid on Cedar's behalf at the closing of the KeyBank-Cedar Loan Agreement. These related party amounts have been eliminated for consolidation purposes. 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 year ended December 31, 2021, the Company reimbursed the Stilwell Group $ 369 thousand for these costs. As of December 31, 2021, the Company had reimbursed the Stilwell Group in full for these expenses. 12. Subsequent Events On February 21, 2023 the Company purchased a 2.5 acre land parcel adjacent to St. George Plaza, located in St. George, SC, for $ 160 thousand. 62 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule II-Valuation and Qualifying Accounts December 31, 2022 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, 2022 $ 4,262 (1) $ 361 $ ( 1,477 ) $ 3,146 Year Ended December 31, 2021 $ 994 $ 239 $ ( 600 ) $ 633 (1) The Cedar Acquisition purchase price allocation related to allowance for doubtful accounts of $ 3.63 million is included within the beginning year ended December 31, 2022 column. 63 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule III-Real Estate and Accumulated Depreciation December 31, 2022 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 WHLR (in thousands) Amscot Building $ — $ 462 $ 31 $ — $ — $ 493 $ 493 Lumber River Village 800 4,487 221 — 1,005 4,503 5,508 Surrey Plaza 381 1,857 516 — 701 2,053 2,754 Tuckernuck 2,115 6,719 1,316 — 2,171 7,979 10,150 Twin City Commons 800 3,041 151 — 809 3,183 3,992 Tampa Festival 4,653 6,691 1,144 — 4,695 7,793 12,488 Forrest Gallery 3,015 7,455 2,645 — 3,192 9,923 13,115 Winslow Plaza 1,325 3,684 462 — 1,582 3,889 5,471 Clover Plaza 356 1,197 29 — 356 1,226 1,582 St. George Plaza 706 1,264 235 — 776 1,429 2,205 South Square 353 1,911 328 — 480 2,112 2,592 Westland Square 887 1,710 216 — 901 1,912 2,813 Waterway Plaza 1,280 1,248 430 — 1,474 1,484 2,958 Cypress Shopping Center 2,064 4,579 367 — 2,064 4,946 7,010 Harrodsburg Marketplace 1,431 2,485 80 — 1,515 2,481 3,996 Port Crossing Shopping Center 792 6,921 212 — 792 7,133 7,925 LaGrange Marketplace 390 2,648 429 — 430 3,037 3,467 DF I-Courtland (1) 196 — — — 196 — 196 DF I-Edenton (1) 746 — — — 746 — 746 Freeway Junction 1,521 6,755 213 — 1,521 6,968 8,489 Bryan Station 1,658 2,756 338 — 1,807 2,945 4,752 Crockett Square 1,546 6,834 233 — 1,565 7,048 8,613 Harbor Pointe (1) 778 — ( 359 ) — 419 — 419 Pierpont Centre 484 9,221 494 — 881 9,318 10,199 Brook Run Properties 300 — 8 — 300 8 308 Alex City Marketplace 454 7,837 1,879 — 716 9,454 10,170 Brook Run Shopping Center 2,209 12,919 326 — 2,377 13,077 15,454 Beaver Ruin Village 2,604 8,284 114 — 2,619 8,383 11,002 Beaver Ruin Village II 1,153 2,809 5 — 1,153 2,814 3,967 Chesapeake Square 895 4,112 1,088 — 1,269 4,826 6,095 Sunshine Plaza 1,183 6,368 584 — 1,268 6,867 8,135 Barnett Portfolio 3,107 8,912 497 — 3,293 9,223 12,516 Grove Park 722 4,590 69 — 790 4,591 5,381 Parkway Plaza 772 4,230 72 — 778 4,296 5,074 Fort Howard Square 1,890 7,350 343 — 1,952 7,631 9,583 Conyers Crossing 2,034 6,820 351 — 2,138 7,067 9,205 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 43 — 6,020 4,542 10,562 Georgetown 742 1,917 126 — 753 2,032 2,785 64 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 $ 206 — $ 3,146 $ 3,961 $ 7,107 Lake Greenwood Crossing 550 2,499 17 — 550 2,516 3,066 Lake Murray 447 1,537 42 — 470 1,556 2,026 Litchfield I 568 929 84 — 572 1,009 1,581 Litchfield II 568 936 146 — 572 1,078 1,650 Litchfield Market Village 2,970 4,716 590 — 3,125 5,151 8,276 Moncks Corner — 1,109 9 — — 1,118 1,118 Ridgeland 203 376 — — 203 376 579 Shoppes at Myrtle Park 3,182 5,360 1,103 — 3,182 6,463 9,645 South Lake 804 2,025 931 — 804 2,956 3,760 South Park 943 2,967 114 — 1,005 3,019 4,024 Sangaree 2,302 2,922 762 — 2,503 3,483 5,986 Tri-County 411 3,421 379 — 635 3,576 4,211 Riverbridge 774 5,384 69 — 815 5,412 6,227 Laburnum Square 3,735 5,929 278 — 3,827 6,115 9,942 Franklin Village 2,608 9,426 433 — 2,685 9,782 12,467 Village at Martinsville 5,208 12,879 997 — 5,228 13,856 19,084 New Market Crossing 993 5,216 782 — 1,060 5,931 6,991 Rivergate Shopping Center 1,537 29,177 1,189 — 1,687 30,216 31,903 JANAF 8,267 66,549 1,548 — 8,514 67,850 76,364 Totals $ 91,938 $ 334,872 $ 24,894 $ — $ 96,640 $ 355,064 $ 451,704 CDR Brickyard Plaza $ 1,989 $ 13,119 $ — $ — $ 1,989 $ 13,119 $ 15,108 Carll's Corner 2,193 3,011 — — 2,193 3,011 5,204 Coliseum Marketplace 1,226 3,172 27 — 1,226 3,199 4,425 Fairview Commons 948 2,083 — — 948 2,083 3,031 Fieldstone Marketplace 2,359 2,279 126 — 2,359 2,405 4,764 Gold Star Plaza 1,403 3,223 — — 1,403 3,223 4,626 Golden Triangle 3,322 13,388 ( 49 ) — 3,322 13,339 16,661 Hamburg Square 933 4,967 — — 933 4,967 5,900 Kings Plaza 2,192 3,961 — — 2,192 3,961 6,153 Oakland Commons 824 3,080 — — 824 3,080 3,904 Oregon Avenue 3,158 — 277 3,158 277 3,435 Patuxent Crossing 2,999 15,145 450 — 2,999 15,595 18,594 Pine Grove Plaza 1,292 3,832 ( 3 ) — 1,292 3,829 5,121 South Philadelphia 11,996 11,137 — — 11,996 11,137 23,133 Southington Center 358 8,429 — — 358 8,429 8,787 Timpany Plaza 1,778 5,754 1 — 1,778 5,755 7,533 Trexler Mall 3,746 22,979 — — 3,746 22,979 26,725 Washington Center Shoppes 3,618 11,354 206 — 3,618 11,560 15,178 Webster Commons 1,565 6,207 113 — 1,565 6,320 7,885 CDR Total $ 47,899 $ 137,120 $ 1,148 $ — $ 47,899 $ 138,268 $ 186,167 Combined Total $ 139,837 $ 471,992 $ 26,042 $ — $ 144,539 $ 493,332 $ 637,871 (1) Net of impairment expenses. As of December 31, 2022, the aggregate cost for federal income tax purposes was approximately $ 866 million. 65 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 WHLR (in thousands) Amscot Building $ 264 5/15/2004 5 - 40 years Lumber River Village (3) 1,415 11/16/2012 5 - 40 years Surrey Plaza (3) 652 12/21/2012 5 - 40 years Tuckernuck $ 4,915 2,598 11/16/2012 5 - 40 years Twin City Commons (3) 988 12/18/2012 5 - 40 years Tampa Festival (3) 2,405 8/26/2013 5 - 40 years Forrest Gallery (3) 2,847 8/29/2013 5 - 40 years Winslow Plaza 4,409 1,198 12/19/2013 5 - 40 years Clover Plaza (3) 311 12/23/2013 5 - 40 years St. George Plaza (3) 342 12/23/2013 5 - 40 years South Square (3) 478 12/23/2013 5 - 40 years Westland Square (3) 449 12/23/2013 5 - 40 years Waterway Plaza (3) 361 12/23/2013 5 - 40 years Cypress Shopping Center 5,903 1,163 7/1/2014 5 - 40 years Harrodsburg Marketplace 3,186 629 7/1/2014 5 - 40 years Port Crossing Shopping Center 5,641 2,249 7/3/2014 5 - 40 years LaGrange Marketplace (3) 735 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 7,273 1,652 9/4/2014 5 - 40 years Bryan Station 4,136 818 10/2/2014 5 - 40 years Crockett Square 6,338 1,787 11/5/2014 5 - 40 years Harbor Pointe (undeveloped land) — 11/21/2014 N/A Pierpont Centre 7,716 2,167 1/14/2015 5 - 40 years Brook Run Properties (undeveloped land) — 3/27/2015 N/A Alex City Marketplace 5,750 2,378 4/1/2015 5 - 40 years Brook Run Shopping Center 10,950 3,404 6/2/2015 5 - 40 years Beaver Ruin Village (2) 1,737 7/1/2015 5 - 40 years Beaver Ruin Village II (2) 587 7/1/2015 5 - 40 years Chesapeake Square 4,106 1,344 7/10/2015 5 - 40 years Sunshine Plaza 5,900 1,539 7/21/2015 5 - 40 years Barnett Portfolio 8,770 2,076 8/21/2015 5 - 40 years Grove Park 3,800 1,040 9/9/2015 5 - 40 years Parkway Plaza 3,500 933 9/15/2015 5 - 40 years Fort Howard Square 7,100 1,591 9/30/2015 5 - 40 years Conyers Crossing 5,960 1,669 9/30/2015 5 - 40 years Darien Shopping Center (3) 179 4/12/2016 5 - 40 years Devine Street 352 4/12/2016 5 - 40 years 66 Property Name Encumbrances Accumulated Depreciation Date of Construction Date Acquired Depreciation Life (in thousands) Folly Road (3) $ 851 4/12/2016 5 - 40 years Georgetown (3) 385 4/12/2016 5 - 40 years Ladson Crossing (3) 775 4/12/2016 5 - 40 years Lake Greenwood Crossing (3) 489 4/12/2016 5 - 40 years Lake Murray (3) 299 4/12/2016 5 - 40 years Litchfield I (3) 213 4/12/2016 5 - 40 years Litchfield II (3) 186 4/12/2016 5 - 40 years Litchfield Market Village (3) 962 4/12/2016 5 - 40 years Moncks Corner 225 4/12/2016 5 - 40 years Ridgeland (3) 92 4/12/2016 5 - 40 years Shoppes at Myrtle Park 5,615 1,358 4/12/2016 5 - 40 years South Lake (3) 634 4/12/2016 5 - 40 years South Park (3) 567 4/12/2016 5 - 40 years Sangaree (1) 989 11/10/2016 5 - 40 years Tri-County (1) 761 11/10/2016 5 - 40 years Riverbridge 4,000 1,021 11/15/2016 5 - 40 years Laburnum Square 7,665 1,153 12/7/2016 5 - 40 years Franklin Village 8,144 1,620 12/12/2016 5 - 40 years Village at Martinsville 15,181 2,733 12/16/2016 5 - 40 years New Market Crossing (3) 1,036 12/20/2016 5 - 40 years Rivergate Shopping Center 18,003 5,121 12/21/2016 5 - 40 years JANAF Shopping Center 60,000 9,685 1/18/2018 5 - 40 years WHLR Totals $ 75,492 CDR Brickyard Plaza (4) $ 189 8/22/2022 5 - 40 years Carll's Corner 51 8/22/2022 5 - 40 years Coliseum Marketplace (5) 72 8/22/2022 5 - 40 years Fairview Commons (4) 43 8/22/2022 5 - 40 years Fieldstone Marketplace 69 8/22/2022 5 - 40 years Gold Star Plaza (4) 71 8/22/2022 5 - 40 years Golden Triangle (4) 209 8/22/2022 5 - 40 years Hamburg Square (4) 84 8/22/2022 5 - 40 years Kings Plaza 81 8/22/2022 5 - 40 years Oakland Commons 55 8/22/2022 5 - 40 years Oregon Avenue — 8/22/2022 N/A Patuxent Crossing (5) 250 8/22/2022 5 - 40 years Pine Grove Plaza (4) 68 8/22/2022 5 - 40 years South Philadelphia 183 8/22/2022 5 - 40 years Southington Center (4) 130 8/22/2022 5 - 40 years Timpany Plaza 105 8/22/2022 5 - 40 years Trexler Mall (4) 324 8/22/2022 5 - 40 years Washington Center Shoppes (4) 167 8/22/2022 5 - 40 years Webster Commons (4) 101 8/22/2022 5 - 40 years 67 CDR Totals $ 2,252 Combined Totals 77,744 (1) Properties secure a $ 6.1 million mortgage note. (2) Properties secure a $ 9.4 million mortgage note. (3) Properties secure a $ 75.0 million mortgage note. (4) Properties secure a $ 110.0 million mortgage note. (5) Properties secure a $ 25.0 million mortgage note. The changes in total real estate assets for the years ended December 31, 2022 and 2021 are as follows: 2022 2021 (in thousands) Balance at beginning of period $ 458,214 $ 464,814 Additions during the period: Acquisitions 185,019 — Improvements 6,777 4,997 Impairments ( 760 ) ( 2,300 ) Disposals ( 11,379 ) ( 9,297 ) Balance at end of period $ 637,871 $ 458,214 68 Exhibit 2.1 Agreement and Plan of Merger, dated as of March 2, 2022, by and among Wheeler Real Estate Investment Trust, Inc., WHLR Merger Sub Inc., WHLR OP Merger Sub LLC, Cedar Realty Trust, Inc., and Cedar Realty Trust Partnership, L.P.(Filed as an exhibit to Form 8-K, filed on March 7, 2022). 2.2 First Amendment to Merger Agreement, dated as of April 19, 2022, by and among Wheeler Real Estate Investment Trust, Inc., WHLR Merger Sub Inc., WHLR OP Merger Sub LLC, Cedar Realty Trust, Inc., and Cedar Realty Trust Partnership, L.P. (Filed as an exhibit to Form 10-Q, filed on May 11, 2022). 2.3 Second Amendment to Merger Agreement, entered into as of August 9, 2022 by and among Wheeler Real Estate Investment Trust, Inc., WHLR Merger Sub Inc., WHLR OP Merger Sub LLC, Cedar Realty Trust, Inc. and Cedar Realty Trust Partnership, L.P. (Filed as an exhibit to Form 8-K, filed on August 25, 2022) . 3.1 Articles of Amendment and Restatement of Wheeler Real Estate Investment Trust, Inc. filed with SDAT on August 5, 2016 (Filed as exhibit to Form 8-K, filed on August 8, 2016). 3.2 Articles Supplementary of Wheeler Real Estate Investment Trust, Inc. filed with SDAT on September 16, 2016 (Filed as exhibit to Form 8-K, filed on September 20, 2016). 3.3 Articles Supplementary of Wheeler Real Estate Investment Trust, Inc. filed with SDAT on December 1, 2016 (Filed as exhibit to Form 8-K, filed on December 5, 2016). 3.4 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc., filed with SDAT on March 31 , 2017 (Filed as exhibit to Form 8-K, filed on April 3, 2017). 3.5 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc., filed with SDAT on 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 with SDAT on May 29, 2016 (Filed as exhibit to Form 8-K, filed on May 29, 2020). 3.7 Certificate of Correction of Articles Supplementary of Wheeler Real Estate Investment Trust, Inc. filed with SDAT on May 3, 2018 (Filed as exhibit to Form 8-K, filed on May 4, 2018). 3.8 Articles Supplementary of Wheeler Real Estate Investment Trust, Inc. filed with SDAT on July 8, 2021 (Filed as an exhibit to Form 8-K, filed on July 8, 2021). 3.9 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc. filed with SDAT on November 5, 2021 (Filed as an exhibit to Form 8-K, filed on November 5, 2021) . 3.10 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc. filed with SDAT on November 29, 2021 (Filed as an exhibit to Form 8-K, filed on November 29, 2021). 3.11 Bylaws of Wheeler Real Estate Investment Trust, Inc., as amended (Filed as exhibit to Form 8-K, filed on May 29, 2020). 3.12 Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. (Filed as exhibit to Form S-11 (Registration No. 333-198245) filed on August 20, 2014 pursuant to the Securities Act of 1933). 3.13 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). 3.14 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). 3.15 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). 3.16 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). 3.17 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). 3.18 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). 69 3.19 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). 4.1 Form of Certificate of Common Stock of Wheeler Real Estate Investment Trust, Inc. (Filed as exhibit to Form 8-K, filed on April 3, 2017) . 4.2 Form of Certificate of Series B Preferred Stock of Wheeler Real Estate Investment Trust, Inc. (Filed as exhibit to Form S-11/A (Registration No. 333-194831), filed on April 23, 2014 pursuant to the Securities Act of 1933) . 4.3 Form of Certificate of Series D Preferred Stock of Wheeler Real Estate Investment Trust, Inc. (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 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 ). 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 Term Loan Agreement dated June 17, 2022, between Guggenheim Real Estate, LLC and the Borrowers party thereto. (Filed as an exhibit to Form 8-K, filed on June 21, 2022). 10.10 Loan Agreement dated July 6, 2022 between CITI REAL ESTATE FUNDING INC and the Borrowers party thereto. (Filed as an exhibit to Form 8-K, filed on July 8 , 2022) . 10.11 Loan Agreement dated August 22, 2022, between KEYBANK NATIONAL ASSOCIATION and the Borrowers party thereto. (Filed as an exhibit to Form 8-K, filed on August 25, 2022). 10.12 Guaranty, dated August 22,2022, made by Wheeler Real Estate Investment Trust, Inc. (Filed as an exhibit to Form 8-K, filed on August 25, 2022) . 10.13 Environmental Compliance and Indemnity Agreement, dated as of August 22, 2022, made by Wheeler Real Estate Investment Trust, Inc., Cedar Realty Trust, Inc., Cedar Realty Trust Partnership, L.P., and certain subsidiaries of Cedar Realty Trust Partnership, L.P. (Filed as an exhibit to Form 8-K, filed on August 25, 2022) . 10.14 Limited Recourse Indemnity Agreement made by Wheeler REIT, L.P. in favor of Guggenheim Real Estate, LLC as of October 28, 2022 (Filed as an exhibit to Form 8-K, filed on October 31, 2022). 10.15 Term Loan Agreement, dated as of October 28, 2022, between Guggenheim Real Estate, LLC and the Borrowers party thereto (Filed as an exhibit to Form 8-K, filed on October 31, 2022). 21.1 Subsidiaries of Registrant (Filed herewith). 70 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). Item 16. Form 10-K Summary Not applicable. 71 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 and President (Principal Executive Officer) By: /s/ Crystal Plum Crystal Plum Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: March 2, 2023 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 March 2, 2023 M. Andrew Franklin (Principal Executive Officer) /S/ CRYSTAL PLUM Chief Financial Officer March 2, 2023 Crystal Plum (Principal Financial Officer and Principal Accounting Officer) /S/ STEFANI D. CARTER Chair of Board March 2, 2023 Stefani D. Carter /S/ SAVERIO M FLEMMA Director March 2, 2023 Saverio M Flemma /S/ MICHELLE D. BERGMAN Director March 2, 2023 Michelle D. Bergman /S/ JOSEPH D. STILWELL Director March 2, 2023 Joseph D. Stilwell /S/ MEGAN PARISI Director March 2, 2023 Megan Parisi 72 /S/ KERRY G. CAMPBELL Director March 2, 2023 Kerry G. Campbell /S/ E.J. BORRACK Director March 2, 2023 E.J. Borrack 73