What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-03-18 compared with 2020-02-26 · 686 added, 714 removed, 790 unchanged (64% of the section changed)

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Disclosure Controls and Procedures

time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to our company’s management, as appropriate, to allow timely decisions regarding required disclosure.

Our management, under the supervision and with the participation of our principal executive and 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 company’s management, as appropriate, to allow timely decisions regarding required disclosure.

Based on such evaluation, our principal executive and financial officer have concluded that such disclosure controls and procedures were effective as of December 31, 2020 (the end of the period covered by this Annual Report).

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Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting for the three months ended December 31, 2019 that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

There were no changes in the Company's internal control over financial reporting for the year ended December 31, 2020 that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

Other Information.

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Directors, Executive Officers and Corporate Governance.

Information concerning our directors, executive officers and corporate governance is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2020 Annual Meeting of Stockholders.

Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3).

Code of Ethics

We have a code of ethics applicable to our Board of Directors, principal executive officers, principal financial officer, principal accounting officer and persons performing similar functions.

The text of this code of ethics may be found on our website at www.whlr.us.

We will post a notice of any waiver from, or amendment to, any provision of our code of ethics on our website.

Except as set forth below, the information required by this item will be contained in the Company’s definitive proxy statement for the 2021 Annual Meeting (our “Proxy Statement”) and is incorporated herein by reference.

The Company has adopted an ethics code of conduct 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.

Any amendments to such code, or any waivers of its requirements, will be posted on our website.

Executive Compensation.

Incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K with respect to the 2020 Annual Meeting of Stockholders.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

The information required by this Item will be contained in our Proxy Statement and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Except as set forth below, the information required by this item will be contained in the Company’s Proxy Statement and is incorporated herein by reference.

Securities Authorized for Issuance Under Equity Compensation Plans

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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

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)

Equity compensation plans not approved by stockholders — — —

Total — — 173,811

(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.

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Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be contained in the Company’s Proxy Statement and incorporated herein by reference.

Principal Accounting Fees and Services.

The information by this item will be contained in the Company’s Proxy Statement and is incorporated herein by reference.

Exhibits and Financial Statement Schedules.

Financial Statements .

The following financial statements filed as a part of this Annual Report on Form 10-K is as follows:

The financial statements filed as a part of this Annual Report on Form 10-K are as follows:

Report of Independent Registered Public Accounting Firm

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Schedule III- Real Estate and Accumulated Depreciation

All other financial statements 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.

The list of exhibits filed as a part of this Annual Report on Form 10-K in response to Item 601 of Regulation S-K is submitted on the Exhibit Index attached hereto and incorporated herein by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WHEELER REAL ESTATE INVESTMENT TRUST, INC.

/s/ Crystal Plum

Chief Financial Officer

February 26, 2020

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 Dave Kelly 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.

/S/ DAVID KELLY

Chief Executive Officer

February 26, 2020

/S/ CRYSTAL PLUM

Chief Financial Officer

February 26, 2020

/S/ ANDREW JONES

Chairman of Board of Directors

February 26, 2020

/S/ CLAYTON ("CHIP") ANDREWS

February 26, 2020

Clayton (“Chip”) Andrews

/S/ DEBORAH MARKUS

February 26, 2020

Deborah Markus

/S/ JOSEPH D.

February 26, 2020

Daniel Khoshaba

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.

See the Exhibit Index at the end of this Annual Report on Form 10-K, which is incorporated by reference.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

To the Board of Directors and Stockholders

Wheeler Real Estate Investment Trust, Inc.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

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 purposes of expressing an opinion on the effectiveness of the Company’s 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.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of Investment Properties for Impairment

Description of Matter

At December 31, 2020, the Company’s investment properties totaled $392.7 million.

As more fully described in Note 2 to the consolidated financial statements, the Company evaluates its investment properties for impairment whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable, but at least annually.

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.

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 by management in its analysis.

We compared the significant assumptions used by management to relevant market information and other applicable sources.

In addition, we compared the forecasted future cash flows and operating income before depreciation and amortization to historical actual results and evaluated significant variances.

As part of our evaluation, we assessed the historical accuracy of management’s estimates and 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.

/s/ Cherry Bekaert LLP

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Virginia Beach, Virginia

February 26, 2020

March 18, 2021

Wheeler Real Estate Investment Trust, Inc.

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Rents and other tenant receivables, net 9,153 6,905

Notes receivable, net

Assets held for sale 13,072 1,737

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Deferred costs and other assets, net 15,430 21,025

Total Assets $ 489,379 $ 484,365

Loans payable, net $ 334,266 $ 340,913

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Below market lease intangibles, net 4,554 6,716

Warrant liability 594 —

Operating lease liabilities 13,200 11,921

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Total Liabilities 376,967 371,133

Series D Cumulative Convertible Preferred Stock (no par value, 4,000,000 shares authorized, 3,600,636 shares issued and outstanding;

Series D Cumulative Convertible Preferred Stock (no par value, 4,000,000 shares authorized, 3,529,293 and 3,600,636 shares issued and outstanding, respectively;

$109.13 million and $101.66 million aggregate liquidation preference, respectively) 95,563 87,225

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Accumulated deficit ( 260,867 ) ( 251,580 )

Total Shareholders’ Equity

Total Stockholders’ Equity 14,918 23,927

Noncontrolling interests 1,931 2,080

Total Equity 16,849 26,007

Total Liabilities and Equity $ 489,379 $ 484,365

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Rental revenues $ 60,039 $ 62,442

Asset management fees

Other revenues 964 720

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Depreciation and amortization 17,291 21,319

Impairment of goodwill

Impairment of notes receivable — 5,000

Impairment of real estate

Impairment of assets held for sale 600 1,598

Corporate general & administrative 5,831 6,633

Other operating expenses

Total Operating Expenses 42,608 53,702

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Operating Income 18,418 10,854

Interest income

Interest expense ( 17,092 ) ( 18,983 )

Net Loss from Continuing Operations Before Income Taxes

Other expense ( 1,039 ) —

Net Income (Loss) Before Income Taxes 287 ( 8,129 )

Income tax expense — ( 15 )

Net Loss from Continuing Operations

Net Income from Discontinued Operations

Net loss attributable to noncontrolling interests

Net Loss Attributable to Wheeler REIT

Preferred Stock dividends - declared

Net Income (Loss) 287 ( 8,144 )

Net income (loss) attributable to noncontrolling interests 42 ( 105 )

Net Income (Loss) Attributable to Wheeler REIT 245 ( 8,039 )

Preferred Stock dividends - undeclared ( 14,528 ) ( 14,629 )

Net Loss Attributable to Wheeler REIT Common Shareholders

Loss per share from continuing operations (basic and diluted)

Income per share from discontinued operations

Deemed contribution related to preferred stock redemption 726 —

Net Loss Attributable to Wheeler REIT Common Stockholders $ ( 13,557 ) $ ( 22,668 )

Loss per share:

Basic and Diluted $ ( 1.40 ) $ ( 2.34 )

Weighted-average number of shares:

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(in thousands, except share data)

Noncontrolling

Preferred Stock

Paid-in Capital

Accumulated Deficit

Shareholders’ Equity

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

December 31, 2018

562 $ 453 1,875,748 $ 41,000 9,511,464 $ 95 $ 233,697 $ ( 233,184 ) $ 42,061 235,032 $ 2,194 $ 44,255

Accretion of Series B Preferred

Stock discount — — — 87 — — — — 87 — — 87

Conversion of Series B

Preferred Stock to Common

Conversion of operating

partnership units to Common

Stock — — — — 1,013 — 2 — 2 ( 1,013 ) ( 2 ) —

Issuance of Common Stock

under Share Incentive Plan — — — — 181,807 2 164 — 166 — — 166

Issuance of Common Stock

outside Share Incentive Plan

Issuance of Common Stock for

acquisition of JANAF

Adjustment for noncontrolling

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Dividends and distributions — — — — — — — ( 10,357 ) ( 10,357 ) — — ( 10,357 )

Net Loss — — — — — — — ( 8,039 ) ( 8,039 ) — ( 105 ) ( 8,144 )

December 31, 2019

562 453 1,875,748 41,087 9,694,284 97 233,870 ( 251,580 ) 23,927 234,019 2,080 26,007

Accretion of Series B Preferred

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partnership units to Common

Issuance of Common Stock

under Share Incentive Plan

Stock — — — — 9,590 — 21 — 21 ( 9,590 ) ( 21 ) —

Adjustment for noncontrolling

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Dividends and distributions — — — — — — — ( 10,258 ) ( 10,258 ) — — ( 10,258 )

Preferred Stock redemption

discount — — — — — — — 726 726 — — 726

Net Income — — — — — — — 245 245 — 42 287

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

See accompanying notes to consolidated financial statements.

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CASH FLOWS FROM OPERATING ACTIVITIES:

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

Net Income (Loss) $ 287 $ ( 8,144 )

Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities

Depreciation 11,317 12,020

Amortization 5,974 9,299

Loan cost amortization 1,097 1,707

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Gain on disposal of properties ( 23 ) ( 1,394 )

Gain on disposal of properties-discontinued operations

Credit losses on operating lease receivables 1,131 449

Impairment of notes receivable — 5,000

Impairment of goodwill

Impairment of real estate

Impairment of assets held for sale 600 1,598

Changes in assets and liabilities, net of acquisitions

Net changes in assets and liabilities:

Rent and other tenant receivables, net ( 2,402 ) ( 1,592 )

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CASH FLOWS FROM INVESTING ACTIVITIES:

Investment property acquisitions, net of restricted cash acquired

Investment property acquisitions — ( 24 )

Capital expenditures ( 2,271 ) ( 2,711 )

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Cash received from disposal of properties-discontinued operations — 19

Net cash provided by (used in) investing activities

Net cash provided by investing activities 2,237 868

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments for deferred financing costs ( 3,143 ) ( 779 )

Dividends and distributions paid

Proceeds from sales of Preferred Stock, net of expenses

Loan proceeds 38,350 31,665

Loan principal payments ( 31,493 ) ( 43,415 )

Net financing cash flows used in discontinued operations

Net cash (used in) provided by financing activities

Preferred stock redemption ( 1,106 ) —

Paycheck Protection Program proceeds 552 —

Net cash provided by (used in) financing activities 3,160 ( 12,529 )

INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 21,177 3,592

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Non-cash Transactions:

Debt incurred for acquisitions

Conversion of Series B Preferred Stock to Common Stock

Conversion of common units to Common Stock $ 21 $ 2

Issuance of Common Stock for acquisition

Accretion of Preferred Stock discounts $ 677 $ 680

Deemed contribution related to preferred stock discount $ 726 $ —

Other Cash Transactions:

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Wheeler Real Estate Investment Trust, Inc.

(the “Trust” or “REIT”) is a Maryland corporation formed on June 23, 2011.

(the “Trust,” the “REIT,” or "Company") 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.

As of December 31, 2019 , the Trust, through the Operating Partnership, owned and operated sixty-one centers, one office and six undeveloped properties.

Thirteen of these properties are located in Virginia, three are located in Florida, seven are located in North Carolina, twenty-four are located in South Carolina, twelve are located in Georgia, two are located in Kentucky, two are located in Tennessee, one is located in New Jersey, one is located in Alabama, one is located in West Virginia, one is located in Oklahoma and one is located in Pennsylvania.

As of December 31, 2020, the Trust, through the Operating Partnership, owned and operated sixty centers and six undeveloped properties.

Twelve of these properties are located in Virginia, three are located in Florida, seven are located in North Carolina, twenty-three are located in South Carolina, twelve are located in Georgia, two are located in Kentucky, two are located in Tennessee, one is located in New Jersey, one is located in Alabama, one is located in West Virginia, one is located in Oklahoma and one is located in Pennsylvania.

The Company’s portfolio had total net rentable space of approximately 5,561,766 square feet and a leased level of approximately 88.9 % at December 31, 2020.

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economy and consumers’ disposable income, which it believes generates more predictable property-level cash flows.

On October 24, 2014, the Trust, through the Operating Partnership, acquired (i) Wheeler Interests, LLC (“WI”), an acquisition and asset management firm, (ii) Wheeler Real Estate, LLC (“WRE”), a real estate leasing, management and administration firm and (iii) WHLR Management, LLC (“WM” and collectively with WI and WRE the “Operating Companies”), a real estate business operations firm, from Jon S.

Wheeler, the Company's then Chairman and CEO, resulting in the Company becoming an internally-managed REIT.

Accordingly, the responsibility for identifying targeted real estate investments, the handling of the disposition of real estate investments, administering our day-to-day business operations, including but not limited to, leasing, property management, payroll and accounting functions, acquisitions, asset management and administration are now handled internally.

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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.

Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt.

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.

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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 to 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.

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 includes various Level 3 fair value assumptions including 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 correct estimates, then impairment adjustments may be necessary in the future.

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.

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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 investments for the years ended December 31, 2019 and 2018.

Assets Held For Sale and Discontinued Operations

The Company may decide to sell properties that are held for use.

The Company records these properties as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of

Wheeler Real Estate Investment Trust, Inc.

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Summary of Significant Accounting Policies (continued)

Assets Held For Sale and Discontinued Operations

The Company may decide to sell properties that are held for use.

The Company records these properties as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year.

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 charge is recognized.

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.

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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.

Restricted cash represents amounts held by lenders for real estate taxes, insurance, reserves for capital improvements, leasing costs, tenant security deposits and funds held for the 2020 tender offer, see Note 8 for further details related to the tender offer.

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.

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A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease.

As of December 31, 2020 and 2019, the Company’s allowance for uncollectible tenant receivables totaled $ 994 thousand and $ 1.14 million, respectively.

Wheeler Real Estate Investment Trust, Inc.

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Summary of Significant Accounting Policies (continued)

December 31, 2019 and 2018 , the Company’s allowance for uncollectible tenant receivables totaled $1.14 million and $1.07 million , respectively.

Upon adoption of ASC Topic 842 "Leases," reserves for uncollectible accounts were recorded and

reclassified to "rental revenues".

Prior to adoption, reserves for uncollectible accounts were recorded as an operating expense, provision for credit losses.

The standard also provides guidance on calculating reserves;

however, those did not impact the Company.

During the years ended December 31, 2019 and 2018 , the Company recorded a credit loss on operating lease receivables in the amount $449 thousand and $511 thousand , respectively, related to tenant receivables that were specifically identified as potentially uncollectible based on the an assessment of the tenant’s credit-worthiness.

During the years ended December 31, 2019 and 2018 , the Company did no t realize any recoveries related to tenant receivables previously written off.

Notes Receivable

Notes receivable represent financing to Sea Turtle Development as discussed in Note 4 for development of the project.

The notes are secured by a second deed of trust on the underlying real estate known as Sea Turtle Development.

Notes receivable represent financing to Sea Turtle Development ("Sea Turtle") as discussed in Note 4.

The notes were secured by a second deed of trust on the underlying real estate known as Sea Turtle Development.

The Company evaluates the collectability of both the interest and principal of the notes receivable based primarily upon the projected fair market value of the project at stabilization.

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The impairment on the Sea Turtle Development note is further discussed at Note 4.

Goodwill is deemed to have an indefinite economic life and is not subject to amortization.

Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired.

The Company performed its goodwill impairment test using the simplified method, whereby the fair value of this reporting unit is compared to its carrying value.

If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that reporting unit, goodwill is not considered impaired.

If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then goodwill is considered impaired by an amount equal to that difference.

During the last quarter of 2018, the market capitalization of the Company’s common stock sustained a significant decline so that it fell below the book value of the Company’s net assets.

The outcome of the annual goodwill impairment test resulted in a full impairment of goodwill of $5.49 million , which was recorded in the consolidated financial statements during the year ended December 31, 2018, which reduced the carrying value to zero .

See Note 6 for assessment of Goodwill impairment.

Above and Below Market Lease Intangibles, net

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The Company generally records amortization of lease origination costs on a straight-line basis over the terms of the related leases.

Amortization of lease origination costs, leases in place, legal and marketing costs, tenant relationships and ground lease sandwich interest represents a component of depreciation and amortization expense.

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 that matures on April 24, 2022 bearing interest at a fixed rate of 1 % per annum, payable monthly commencing seven months from the date of the note.

Under the terms of the PPP, the principal may be forgiven if the proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, mortgage interest, rent and utilities.

See Note 12 for additional details regarding forgiveness.

The PPP proceeds are included in "accounts payable, accrued expenses and other liabilities" on the consolidated balance sheets.

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, 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 statement 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 record debt issuance costs in connection with raising funds through the issuance of debt.

These costs may be paid in the form of cash, or equity (such as warrants).

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.

Wheeler Real Estate Investment Trust, Inc.

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Summary of Significant Accounting Policies (continued)

Operating Partnership Purchase of Stock

The Operating Partnership purchased 71,343 shares of the Series D Preferred Stock on September 22, 2020 from an unaffiliated investor at $ 15.50 per share.

The Company considers the purchase of the REIT's equity securities to be retired in the consolidated financial statements.

See Note 8 for additional details.

Revenue Recognition

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The Company recognizes differences between estimated recoveries and the final billed amounts in the subsequent year.

These differences were not material for the years ended December 31, 2019 and 2018.

These differences were no t material for the years ended December 31, 2020 and 2019.

Additionally, the Company has tenants who pay real estate taxes directly to the taxing authority.

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Instead, the Company accounts for these costs as tenant costs.

The Company recognizes lease termination fees, which is 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.

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 provides for losses related to unrecovered intangibles and other assets.

Lease termination fees during the year ended December 31, 2018 are primarily a result of early lease termination fees on SEG recaptures and the early termination of the Farm Fresh at Berkley Shopping Center.

Asset Management Fees

Asset management fees are generated from Non-REIT properties.

The Non-REIT Properties pay WRE property management and/or asset management fees of 3% and 2% of collected revenues, respectively for services performed.

Revenues are governed by the management fee agreements for the various properties.

Obligations under the agreements include and are not limited to:

managing of maintenance, janitorial, security, landscaping, vendors, back office (collecting rents, paying bills), etc.

Each of the obligations are bundled together to be one service and are satisfied over time.

Non-REIT Properties are billed monthly and typically pay monthly for these services.

Commissions are generated from Non-REIT properties.

The Non-REIT Properties pay WRE leasing commissions based on the total contractual revenues to be generated under the new/renewed lease agreement ( 6% for new leases and 3% for renewals).

Revenues are governed by the leasing commission agreements for the various properties.

Obligations under the agreements include and are not limited to:

monitoring upcoming vacancies, new tenant identification, proposal preparation, lease negotiation, document preparation, etc.

Each of the obligations are bundled together to be one service as the overall

Beginning in April 2020, the Company received certain rent relief requests, most often in the form of rent deferral requests, as a result of COVID-19.

The Company evaluates each tenant rent relief request on an individual basis, considering a number of factors.

Not all tenant requests ultimately result in concessions or modification of agreements, nor is the Company forgoing its contractual rights under its lease agreements.

The Financial Accounting Standards Board (the "FASB") issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19.

The Lease Modification Q&A clarifies that entities may elect to treat qualifying lease concessions as if they were based on enforceable rights and obligations, and may choose to apply or not to apply modification accounting to those qualifying concessions.

Qualifying concessions must be in response to COVID-19 and not have a substantial increase in the lessee’s obligation or the lessor’s rights under the contract.

The Company has elected not to apply ASC 842 modification guidance for concessions that did not increase the lease term, generally these concessions do not impact the overall economics of the lease.

Concessions that extend the lease term are accounted for under ASC 842, lease modification guidance.

Wheeler Real Estate Investment Trust, Inc.

2 unchanged sentences

Summary of Significant Accounting Policies (continued)

objective of these services is to maintain the overall occupancy of the property.

Revenue is recognized and billed upon lease execution.

The below table disaggregates the Company’s revenue by type of service for the years ended December 31, 2020 and 2019 (in thousands):

Years Ended December 31,

Minimum rent $ 46,349 $ 49,006

Tenant reimbursements - variable lease revenue 13,273 13,369

Percentage rent - variable lease revenue 393 334

Straight-line rents 1,155 182

Lease termination fees 178 117

Asset management fees

Other 786 603

Subtotal 62,134 63,611

Credit losses on operating lease receivables ( 1,131 ) ( 449 )

Total $ 61,003 $ 63,162

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 shareholders and meet certain other asset and income tests, as well as other requirements.

The TRS' have accrued $22 thousand and $13 thousand at December 31, 2019 and 2018, respectively, for federal and state income tax expenses.

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.

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These costs include compensation and benefits, property management, leasing and other corporate, general and administrative expenses associated with generating the TRS' revenues.

Financial Instruments

The carrying amount of financial instruments included in assets and liabilities approximates fair market value due to their immediate or short-term maturity.

Wheeler Real Estate Investment Trust, Inc.

2 unchanged sentences

Summary of Significant Accounting Policies (continued)

Financial Instruments

The carrying amount of financial instruments included in assets and liabilities approximates fair market value due to their immediate or short-term maturity.

Use of Estimates

1 unchanged sentence

The Company’s actual results could differ from these estimates.

Advertising Costs For Leasing Activities

The Company expenses advertising and promotion costs as incurred.

The Company incurred advertising and promotion costs associated with leasing activities of $276 thousand and $261 thousand for the years ended December 31, 2019 and 2018 , respectively.

Corporate General and Administrative Expense

A detail for the "corporate general & administrative" ("CG&A") line item from the consolidated statements of operations is presented below (in thousands):

A detail for the "corporate general & administrative" line item from the consolidated statements of operations is presented below (in thousands):

Professional fees $ 2,466 $ 2,534

1 unchanged sentence

Corporate administration 1,240 1,259

Taxes and licenses

Capital related costs

Acquisition and development costs

Allocation of CG&A to Non-REIT management and leases services

An allocation of professional fees, compensation and benefits, corporate administration and travel is included in Non-REIT management and leasing services on the consolidated statements of operations, which can vary period to period depending on the relative operational fluctuations of these respective services.

Advertising costs for leasing activities 117 276

Other 419 573

Total $ 5,831 $ 6,633

Other Expense

Other expense represents expenses which are non-operating in nature.

Other expenses during the year ended December 31, 2020 were $ 1.04 million in legal settlement costs and reimbursement of 2019 proxy costs, see Note 10 and Note 11 for additional details.

Leases Commitments

5 unchanged sentences

The operating lease ROU assets include any lease payments made and excludes lease incentives.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (continued)

The Company's lease terms may include options to extend the lease when it is reasonably certain that the company will exercise that option.

3 unchanged sentences

In the event the Company modifies existing ground leases or enters into new ground leases, such leases may be classified as finance leases.

Other Operating Expense

In July 2018, the Company recorded lease termination expense of $250 thousand to allow a space to be available for a high credit grocery store tenant.

Noncontrolling Interests

2 unchanged sentences

Accordingly, noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity.

On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests.

Consolidated statements of equity include beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.

On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Summary of Significant Accounting Policies (continued)

Company and noncontrolling interests.

Consolidated statements of equity include beginning balances, activity for the period and ending balances for stockholders’ equity, noncontrolling interests and total equity.

The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s net assets (total assets less total liabilities).

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The guidance will require that the Company estimate the lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected.

The Company will also be

The Company will also be required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes.

The guidance would be effective for interim and annual reporting periods beginning after December 15, 2022, per FASB's issuance of ASU 2019-10, "Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates." The Company is currently in the process of evaluating the impact the adoption of the guidance will have on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)".

This update modifies the disclosure requirements on fair value measurements in Topic 820 with several removals, modifications and additions for disclosures, which includes both prospective and retrospective disclosures.

The guidance adds prospective disclosures related to the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements including measurement uncertainty disclosures to communicate the uncertainty in the measurement as of the reporting date.

The Company adopted this ASU as of January 1, 2020.

The adoption did not have material impact on its consolidated financial statements upon adoption of the guidance and there were no retrospective disclosures necessary.

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.

Wheeler Real Estate Investment Trust, Inc.

2 unchanged sentences

Summary of Significant Accounting Policies (continued)

required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes.

Effective Dates".

The Company is currently in the process of evaluating the impact the adoption of the guidance will have on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)".

This update modifies the disclosure requirements on fair value measurements in Topic 820 with several removals and additions for disclosures.

The guidance will add disclosures related to the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

The guidance would be effective for interim and annual reporting periods beginning after December 15, 2019.

The Company anticipates that there will be no material impact on its consolidated financial statements, but will contain additional disclosures upon adoption of the guidance.

Reclassifications

The Company has reclassified certain prior period amounts in the accompanying consolidated financial statements in order to be consistent with the current period presentation.

These reclassifications had no effect on net loss, total assets, total liabilities or equity.

Tenant reimbursements and provision for credit losses were reclassified to rental revenues on the consolidated statements of operations to conform to 2019 presentation as a result of adopting ASU 2016-02, “Leases (Topic 842).” There are two reclassifications within the consolidated statement of cash flows, one pertains to the straight-line expense operating activity adjustment on those leases which the Company is a lessee and the other is the presentation of credit losses on operating lease receivables.

These reclassifications did not impact cash provided by (used in) operating, investing, or financing activities.

During 2019, it was determined that the six undeveloped Land Parcels (the “Land Parcels”) previously classified as assets held for sale within discontinued operations at December 31, 2018 no longer meet the definition of assets held for sale.

Management’s intention to sell the parcels has not changed;

however, they are in secondary and tertiary markets with minimal land sales and it is not probable they will sell in the next twelve months.

Accordingly, the assets and liabilities of the Land Parcels were reclassified to “land and land improvements” within investment properties for all periods presented, see Note 3, and the impairment losses related to the Land Parcels were reclassified to "impairment of real estate" within operating expenses on the consolidated statements of operations.

These reclassifications had no effect on net income, total assets, total liabilities or equity.

The revenue from asset management fees and commissions were reclassified to other revenues on the consolidated statements of operations for consistency with current period presentation.

Investment properties consist of the following (in thousands):

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The Company’s depreciation expense on investment properties was $ 11.32 million and $ 12.02 million for the years ended December 31, 2020 and 2019, respectively.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Real Estate (continued)

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.

JANAF Acquisition

On January 18, 2018, the Company acquired JANAF, a retail shopping center located in Norfolk, Virginia, for a purchase price of $85.65 million , paid through a combination of cash, restricted cash, debt assumption and the issuance of 150,000 shares of Common Stock at $7.53 per share.

The shopping center, anchored by BJ's Wholesale Club, totaled 810,137 square feet and was 94% leased at the acquisition date.

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 cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.

Purchase price allocation of assets acquired:

Investment property (a)

Lease intangibles and other assets (b)

Above market leases (d)

Restricted cash (c)

Below market leases (d)

Net purchase price allocation of assets acquired:

Purchase consideration:

Consideration paid with cash

Consideration paid with restricted cash (c)

Consideration paid with assumption of debt (e)

Consideration paid with common stock

Total consideration (f)

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:

the market approach valuation methodology for land by considering similar transactions in the markets;

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;

the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates.

Represents the purchase price allocation of lease intangibles and other assets.

Lease intangibles includes in place leases and ground lease sandwich interests associated with replacing existing leases.

The income approach was used to determine the allocation of these intangible assets which included estimated market rates and expenses.

Represents the purchase price allocation of deleveraging reserve (the “Deleveraging Reserve”) released upon the maturity or earlier payment in full of the loan or until the reduction of the principal balance of the loan to $50.00 million.

Assets Held for Sale and Dispositions

At December 31, 2020, assets held for sale included Columbia Fire Station, Berkley Shopping Center, a .75 acre land parcel at Berkley and two outparcels at Rivergate Shopping Center, as the Company has committed to a plan to sell each property.

At December 31, 2019, assets held for sale included St.

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.

The impairment expenses during the years ended December 31, 2020 and 2019 are as follows (in thousands):

Years Ended December 31,

Columbia Fire Station $ 600 $ —

Matthews — 451

Perimeter Square — 1,147

Total $ 600 $ 1,598

Wheeler Real Estate Investment Trust, Inc.

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Real Estate (continued)

Represents the purchase price allocation of above/below market leases.

The income approach was used to determine the allocation of above/below market leases using market rental rates for similar properties.

Assumption of $53.71 million of debt at a rate of 4.49% , maturing July 2023 with monthly principal and interest payments of $333,159 and assumption of $5.16 million of debt at a rate of 4.95% , maturing January 2026 with monthly principal and interest payments of $29,964 .

Represents the components of purchase consideration paid.

Assets Held for Sale

At December 31, 2018, assets held for sale included a 1.28 acre undeveloped land parcel at Harbor Pointe ("Harbor Pointe land parcel"), Graystone Crossing and Jenks Plaza.

All three were sold during the year ended December 31, 2019.

Additionally, in 2019 the Board committed to a plan to sell Perimeter Square and St.

Perimeter Square sold in July 2019.

Matthews is classified as assets held for sale as of December 31, 2019.

The Harbor Pointe land parcel sale represents discontinued operations as it was a strategic shift that has a major effect on the Company's financial position or results of operations.

Accordingly, the assets and liabilities associated with the Harbor Pointe land parcel have been reclassified for all periods presented.

The impairment charge on assets held for sale was $1.60 million and $0 million for the years ended December 31, 2019 and 2018, respectively.

These impairment charges resulted from reducing the carrying value of Perimeter Square and St.

Matthews for the amounts that exceeded the properties' fair value less estimated selling costs.

These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 inputs.

As of December 31, 2019 and 2018, assets held for sale and associated liabilities, excluding discontinued operations, consisted of the following (in thousands):

As of December 31, 2020 and 2019, assets held for sale and associated liabilities consisted of the following (in thousands):

Investment properties, net $ 12,593 $ 1,651

2 unchanged sentences

Deferred costs and other assets, net 194 9

Total assets held for sale, excluding discontinued operations

Loans payable

Accounts payable

Total liabilities associated with assets held for sale, excluding discontinued operations

As of December 31, 2019 and 2018, assets held for sale and associated liabilities for discontinued operations, consisted of the following (in thousands):

Investment properties, net

Total assets held for sale, discontinued operations

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Real Estate (continued)

Total assets held for sale $ 13,072 $ 1,737

Loans payable $ 12,838 $ 1,974

Accounts payable

Total liabilities associated with assets held for sale, discontinued operations

In May 2019, an approximate 10,000 square foot outparcel at the JANAF property was demolished resulting in a $331 thousand write-off to make way for a new approximate 20,000 square foot building constructed by a new grocer tenant.

Below market leases, net 25 —

Accounts payable, accrued expenses and other liabilities 261 52

Total liabilities associated with assets held for sale $ 13,124 $ 2,026

The following properties were sold during the years ending December 31, 2020 and 2019:

Contract Price

Disposal Property Contract Price Gain (Loss) Net Proceeds

(in thousands)

July 12, 2019

Perimeter Square

March 18, 2019

Graystone Crossing

February 7, 2019

Harbor Pointe Land Parcel (1.28 acres)

January 11, 2019

October 22, 2018

Monarch Bank Building

September 27, 2018

Shoppes at Eagle Harbor

June 19, 2018

Laskin Road Land Parcel (1.5 acres)

January 12, 2018

Chipotle Ground Lease at Conyers Crossing

The sale of the Chipotle ground lease at Conyers Crossing, Shoppes at Eagle Harbor, Monarch Bank Building, Jenks Plaza, Graystone Crossing and Perimeter Square did not represent a strategic shift that has a major effect on the Company's financial position or results of operations.

Accordingly, the operating results of these properties remains classified within continuing operations for all periods presented.

December 31, 2020 Riversedge North $ 3,000 $ 49 $ 2,843

January 21, 2020 St.

Matthews 1,775 ( 26 ) 1,665

July 12, 2019 Perimeter Square 7,200 ( 95 ) —

March 18, 2019 Graystone Crossing 6,000 1,433 1,744

February 7, 2019 Harbor Pointe Land Parcel (1.28 acres) 550 — 19

January 11, 2019 Jenks Plaza 2,200 387 1,840

In May 2019, an approximate 10,000 square foot outparcel at the JANAF property was demolished resulting in a $ 331 thousand write-off to make way for a new approximate 20,000 square foot building constructed by a new grocer tenant, Aldi.

JANAF Executive Building

In April 2019, the Company absorbed an approximate 25,000 square foot outparcel at JANAF as a result of an unlawful detainer with a delinquent tenant, Mariner Investments, LTD.

Impairment of Investment Properties

The annual review of investment properties for impairment performed for the year ended December 31, 2019 resulted in no impairment adjustment for the Company's properties in continuing operations.

During 2018, the Company made the strategic decision to sell the undeveloped land parcels as opposed to holding for development purposes.

Upon this determination the properties were classified as held for sale.

Based on real estate sales transactions for undeveloped land within the surrounding markets it was determined that the carrying value of the properties exceeded the fair value, less estimated selling costs by $3.94 million ;

accordingly, an impairment loss of that amount was recognized in 2018 and was previously included in the loss from discontinued operations in the consolidated statement of operations, but has been reclassified as continuing operations as of December 31, 2019 as detailed in Note 2.

These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs.

There was no impairment loss recorded during 2019 for the undeveloped land parcels.

Notes Receivable

On May 7, 2019, Sea Turtle filed a Chapter 11 Voluntary Petition for Bankruptcy in the United States Bankruptcy Court for the District of South Carolina in Charleston.

As such, the Company recognized $ 5.00 million in impairment expense on the notes receivable for the year ended December 31, 2019, bringing the carrying value to zero, as the estimated fair value of Sea Turtle was not expected to provide for the cash required to repay the notes receivable.

Additionally, the notes receivable were on nonaccrual status during 2019 and the Company did not recognize $ 1.44 million of interest income during the year ended December 31, 2019.

No interest income was recognized in 2020.

See Note 10 for further details on the outcome of bankruptcy proceedings.

Wheeler Real Estate Investment Trust, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Continued)

Notes Receivable

On September 29, 2016, the Company entered into an $11.00 million note receivable for the partial funding of the Sea Turtle Development (“Sea Turtle”) and a $1.00 million note receivable in consideration for the sale of 10.39 acres of land owned by the Company.

Sea Turtle was a related party as Jon Wheeler, the Company's former CEO, is the managing member as discussed in Note 12.

The rate on the loans is 12% annually.

Interest only payments at a rate of 8% are due on the notes at the beginning of every calendar quarter starting October 2016.

Interest at a rate of 4% accrues and is due at maturity.

The notes mature the earlier of September 29, 2021 or the disposition of the property.

Both promissory notes are subordinated to the construction loans made by the Bank of Arkansas (“BOKF”), totaling $20.00 million .

On or about April 9, 2019, BOKF filed a Verified Complaint in state court in Beaufort County, South Carolina for Sea Turtle’s default on payment of the BOKF construction loans, and for the appointment of a receiver, injunctive relief and accounting records.

On May 7, 2019, Sea Turtle filed a Chapter 11 Voluntary Petition for Bankruptcy in the United States Bankruptcy Court for the District of South Carolina in Charleston.

The bankruptcy petition automatically stayed BOKF’s suit.

The pleadings in the state court action and the bankruptcy action state that Sea Turtle has been in default on its payments to BOKF since September, 2018.

The pleadings further state that the project is $8.00 million over budget as of August 8, 2018.

Sea Turtle has retained a broker to try and sell the property.

There is a possibility that a judicially approved sale of the property will not bring a price that exceeds what is owed to BOKF on its construction loans.

If a sale is not approved through the bankruptcy court in 2020, it is expected that the bankruptcy petition will be dismissed and BOKF will resume its suit in South Carolina state court, possibly leading to a foreclosure on the property.

The pending legal proceedings have provided additional uncertainty with regards to the estimated fair market value of the development.

As such, the Company recognized $5.00 million in impairment charges on the notes receivable for the year ended December 31, 2019, as the estimated fair value of Sea Turtle is not expected to provide for the cash required to repay the notes receivable in the event of a judicially approved sale.

For the year ended December 31, 2018, the Company recognized a $1.74 million impairment charge on the notes receivable.

The total impairment charge on the notes receivable is $12.00 million and the carrying value is zero as of December 31, 2019.

The fair market value of Sea Turtle is based on the three-level valuation hierarchy for fair value measurement and represents 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.

Additionally, the Company placed the notes receivable on nonaccrual status and has not recognized $1.44 million and $1.44 million of interest income due on the notes for the years ended December 31, 2019 and 2018, respectively.

Subsequent to December 31, 2019, the Bankruptcy Court approved BOKF’s credit bid purchase of Sea Turtle in February, 2020, for $18.75 million .

Deferred Costs

Deferred costs, net of amortization and other assets are as follows (in thousands):

Deferred costs and other assets, net of amortization are as follows (in thousands):

Leases in place, net $ 10,233 $ 14,968

Tenant relationships, net

Ground lease sandwich interest, net 1,941 2,215

Lease origination costs, net 1,334 1,038

Tenant relationships, net 1,308 2,173

Legal and marketing costs, net 22 43

Other 592 588

Total deferred costs and other assets, net $ 15,430 $ 21,025

1 unchanged sentence

During the years ended December 31, 2020 and 2019, the Company’s intangible amortization expense totaled $ 5.97 million and $ 9.30 million, respectively.

Amortization expense for the year ended December 31, 2018 includes $1.38 million of accelerated amortization on intangibles related to the SEG early lease termination at Ladson Crossing, South Park, St.

Matthews and Tampa Festival.

Future amortization of lease origination costs, leases in place, legal and marketing costs, tenant relationships and ground lease sandwich interest is as follows (in thousands):

For the Years Ended December 31,

Relationships, net

Ground Lease Sandwich Interest, net

As part of the acquisition of the Operating Companies on October 24, 2014, the Company recorded preliminary goodwill of $7.00 million .

In June 2015, the Company finalized its valuation of the Operating Companies.

In accordance with the valuation, the Company recorded a fair value discount of $1.18 million to the $6.75 million in common units issued for the acquisition of the Operating Companies due to the one year restriction on their conversion into shares of Common Stock, and reallocated $337 thousand to finite-lived intangibles during the year ended December 31, 2015.

Effective December 1, 2018, the Company early adopted ASU 2017-04, Intangibles – Goodwill and Other:

Simplifying the Accounting for Goodwill Impairment (Topic 350), which eliminates the requirement to compute the implied fair value of goodwill to test for impairment.

Instead, a goodwill impairment is measured as the amount by which the carrying amount of a reporting unit exceeds its fair value.

For the purposes of the goodwill impairment test performed during the year ended December 31, 2018, the Company estimated the fair value of its sole reporting unit, described above, using the market approach.

Under the market approach, the Company utilized the market capitalization of its Common Stock, Series B Preferred, Series D Preferred and noncontrolling operating partnership units.

The significant inputs used in this analysis are readily available from public markets and can be derived from identical market transactions, as such they have been classified as level 1 within the fair value hierarchy.

Based on this approach, the Company determined that the carrying value of its sole reporting unit exceeded its fair value by more than the goodwill balance $5.49 million , resulting in a $5.49 million impairment of goodwill for the year ended December 31, 2018, reducing the carrying value to zero .

Future amortization of leases in place, ground lease sandwich interest, lease origination costs, tenant relationships, and legal and marketing costs is as follows (in thousands):

For the Years Ended December 31, Leases In

Place, net Ground Lease Sandwich Interest, net Lease

Costs, net Tenant

Relationships, net Legal &

Costs, net Total

2021 $ 2,669 $ 274 $ 216 $ 444 $ 8 $ 3,611

2022 2,109 274 174 354 6 2,917

2023 1,632 274 156 227 5 2,294

2024 1,119 274 141 128 3 1,665

2025 794 274 117 62 — 1,247

Thereafter 1,910 571 530 93 — 3,104

$ 10,233 $ 1,941 $ 1,334 $ 1,308 $ 22 $ 14,838

Wheeler Real Estate Investment Trust, Inc.

3 unchanged sentences

The Company’s loans payable consist of the following (in thousands except monthly payment):

Property/Description

Monthly Payment

December 31, 2018

Harbor Pointe (1)

December 2018

Perimeter Square (1)

Interest only

Perimeter Square construction loan (1)

Interest only

Revere Term Loan

Senior convertible notes

LIBOR + 295 basis points

Property/Description Monthly Payment Interest

Rate Maturity December 31,

2020 December 31,

KeyBank Line of Credit (6)

LIBOR + 350 basis points

Columbia Fire Station

Shoppes at TJ Maxx

First National Bank Line of Credit (7)

LIBOR + 300 basis points

September 2020

LIBOR + 350 basis points

Walnut Hill Plaza

September 2022

Litchfield Market Village

November 2022

Twin City Commons

KeyBank Credit Agreement (6)

$ 350,000 LIBOR + 350 basis points December 2020 $ — $ 17,879

Columbia Fire Station $ 45,580 14.00 % December 2020 3,893 4,051

Tuckernuck $ 33,880 3.88 % February 2021 5,193 5,344

First National Bank (7)

$ 24,656 LIBOR + 350 basis points March 2021 1,045 1,214

Lumber River $ 10,723 LIBOR + 350 basis points April 2021 1,367 1,404

Rivergate $ 104,178 LIBOR + 295 basis points April 2021 21,164 21,545

JANAF Bravo $ 36,935 4.65 % April 2021 6,263 6,372

Litchfield Market Village $ 46,057 5.50 % November 2022 7,418 7,452

Twin City Commons $ 17,827 4.86 % January 2023 2,915 2,983

Walnut Hill Plaza $ 26,850 5.50 % March 2023 3,287 3,759

Powerscourt Financing Agreement (6)

Interest only 13.50 % March 2023 25,000 —

New Market $ 48,747 5.65 % June 2023 6,508 6,713

Benefit Street Note (3)

$ 53,185 5.71 % June 2023 7,145 7,361

Deutsche Bank Note (2)

Tampa Festival

September 2023

Forrest Gallery

September 2023

Riversedge North

December 2023

$ 33,340 5.71 % July 2023 5,567 5,642

JANAF $ 333,159 4.49 % July 2023 48,875 50,599

Tampa Festival $ 50,797 5.56 % September 2023 7,920 8,077

Forrest Gallery $ 50,973 5.40 % September 2023 8,226 8,381

Riversedge North $ 11,436 5.77 % December 2023 — 1,767

South Carolina Food Lions Note (5)

Cypress Shopping Center

Port Crossing

Freeway Junction

September 2024

Harrodsburg Marketplace

September 2024

Graystone Crossing (1)

Bryan Station

November 2024

Crockett Square

Interest only

December 2024

Pierpont Centre

Interest only

February 2025

Alex City Marketplace

Interest only

Butler Square

Interest only

Brook Run Shopping Center

Interest only

Beaver Ruin Village I and II

Interest only

Sunshine Shopping Plaza

Interest only

$ 68,320 5.25 % January 2024 11,473 11,675

Cypress Shopping Center $ 34,360 4.70 % July 2024 6,163 6,268

Port Crossing $ 34,788 4.84 % August 2024 5,909 6,032

Freeway Junction $ 41,798 4.60 % September 2024 7,582 7,725

Harrodsburg Marketplace $ 19,112 4.55 % September 2024 3,343 3,416

Bryan Station $ 23,489 4.52 % November 2024 4,312 4,394

Crockett Square Interest only 4.47 % December 2024 6,338 6,338

Pierpont Centre $ 39,435 4.15 % February 2025 8,001 8,113

Shoppes at Myrtle Park $ 33,180 4.45 % February 2025 5,892 —

Folly Road $ 41,482 4.65 % March 2025 7,223 5,922

Alex City Marketplace Interest only 3.95 % April 2025 5,750 5,750

Butler Square Interest only 3.90 % May 2025 5,640 5,640

Brook Run Shopping Center Interest only 4.08 % June 2025 10,950 10,950

Beaver Ruin Village I and II Interest only 4.73 % July 2025 9,400 9,400

Sunshine Shopping Plaza Interest only 4.57 % August 2025 5,900 5,900

Barnett Portfolio (4)

Interest only

September 2025

Fort Howard Shopping Center

Interest only

Conyers Crossing

Interest only

Grove Park Shopping Center

Interest only

Parkway Plaza

Interest only

Winslow Plaza

Interest only

December 2025

Chesapeake Square

Berkley/Sangaree/Tri-County

Interest only

December 2026

Interest only

December 2026

Franklin Village

Interest only

Village of Martinsville

Laburnum Square

Interest only

September 2029

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 4,553 4,620

JANAF BJ's $ 29,964 4.95 % January 2026 4,844 4,957

Chesapeake Square $ 23,857 4.70 % August 2026 4,279 4,354

Berkley/Sangaree/Tri-County Interest only 4.78 % December 2026 9,400 9,400

Riverbridge Interest only 4.48 % December 2026 4,000 4,000

Franklin Village $ 45,336 4.93 % January 2027 8,404 8,516

Village of Martinsville $ 89,664 4.28 % July 2029 15,979 16,351

Laburnum Square Interest only 4.28 % September 2029 7,665 7,665

Total Principal Balance (1)

353,916 347,059

Unamortized debt issuance cost (1)

( 6,812 ) ( 4,172 )

Total Loans Payable, including assets held for sale 347,104 342,887

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George, Waterway Plaza and Westland Square.

(6) Collateralized by Darien Shopping Center, Devine Street, Lake Murray, Moncks Corner, Shoppes at Myrtle Park, South Lake and St.

Matthews (assets held for sale).

The various maturity dates are disclosed below within Note 7 under the KeyBank Line of Credit.

(6) Collateralized by Darien Shopping Center, Devine Street, Lake Murray, Moncks Corner and South Lake.

(7) Collateralized by Surrey Plaza and Amscot Building.

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Loans Payable (continued)

KeyBank Line of Credit

As of December 31, 2019, the Company has borrowed $17.88 million under the Amended and Restated Credit Agreement with KeyBank National Association ("KeyBank"), which is collateralized by 7 properties.

At December 31, 2019, the outstanding borrowings are accruing interest at 5.29% .

The Amended and Restated Credit Agreement contains certain financial covenants that the Company must meet, including minimum leverage, fixed charge coverage and debt service coverage ratios as well as a minimum tangible net worth requirement.

The Company was in compliance with the financial covenants as of December 31, 2019.

The Amended and Restated Credit Agreement also contains certain events of default, and if they occur, may cause KeyBank to terminate the Amended and Restated Credit Agreement and declare amounts owed to become immediately payable.

As of December 31, 2019, the Company has not incurred an event of default under the Amended and Restated Credit Agreement.

The KeyBank Line of Credit had the following activity during the years ended December 31, 2019 and 2018:

On March 2, 2018, KeyBank reduced the liquidity requirement from $5.00 million to $3.50 million through March 31, 2018.

The liquidity requirement reverted back to $5.00 million subsequent to March 31, 2018 until such time as the Total Commitment (as defined in the Amended and Restated Credit Agreement) has been reduced to $52.50 million and $3.50 million at all times thereafter;

On August 7, 2018, the Amended and Restated Credit Agreement was modified effective July 1, 2018 which provided for an extension to August 23, 2018 by which the outstanding borrowings were to be reduced to $52.50 million , in addition to modifying certain covenants.

The Company and KeyBank anticipated that an over advance (the “Overadvance”) on the Borrowing Base Availability (as defined in the Amended and Restated Credit Agreement) would exist and agreed that the Company should have a period through October 31, 2018 to repay such Overadvance or otherwise properly balance the Borrowing Base Availability;

On October 15, 2018, KeyBank extended the time which the Company is to repay the Overadvance of $3.83 million to February 28, 2019 or otherwise properly balance the Borrowing Base Availability;

On March 11, 2019, KeyBank extended the time which the Company is to repay the Overadvance to March 31, 2019 or otherwise properly balance the Borrowing Base Availability;

$850 thousand principal paydown on March 19, 2019;

Entered into a First Amendment to the Amended and Restated Credit Agreement (the "First Amendment to the Amended and Restated Credit Agreement") on April 25, 2019.

The First Amendment to the Amended and Restated Credit Agreement, among other provisions, waived the Overadvance and replaced the Borrowing Base Availability (as defined in the Amended and Restated Credit Agreement) with an interest coverage ratio.

Additionally, the KeyBank Line of Credit shall be reduced to $27.00 million by July 31, 2019, $7.50 million by September 30, 2019 and the interest rate increases to LIBOR plus 350 basis points on August 31, 2019 if the outstanding balance is not below $11.00 million ;

$1.00 million principal payment and began making monthly principal payments of $250 thousand on May 1, 2019 in accordance with the First Amendment to the Amended and Restated Credit Agreement;

Entered into the Second Amendment to the Amended and Restated Credit Agreement (the "Second Amendment to the Amended and Restated Credit Agreement") effective December 21, 2019 and the Company began making monthly principal payments of $350 thousand on November 1, 2019.

The Second Amendment to the Amended and Restated Credit Agreement, among other provisions, requires a pledge of additional collateral of $15.00 million in residual equity interests.

Additionally, the KeyBank Line of Credit shall be reduced to $10.00 million by January 31, 2020, $2.00 million by April 30, 2020 and fully matures on June 30, 2020.

The following collateralized portions of the Amended and Restated Credit Agreement had principal paydowns associated with each property’s refinancing as noted below:

$9.13 million paydown from New Market, Ridgeland and Georgetown, refinancing proceeds on June 28, 2018;

$6.80 million paydown and a $3.83 million reduction of Overadavance on the Borrowing Base Availability from Ladson Crossing, Lake Greenwood and South Park, refinancing proceeds in September 2018;

KeyBank Credit Agreement

The KeyBank Credit Agreement was paid in full as of December 22, 2020.

The KeyBank Credit Agreement had the following activity during the years ended December 31, 2020 and 2019:

• Entered into a First Amendment to the KeyBank Credit Agreement (the "First Amendment") on April 25, 2019.

The First Amendment, among other provisions, increases the interest rate to LIBOR plus 350 basis points on August 31, 2019 if the outstanding balance is not below $ 11.00 million;

• Began making monthly principal payments of $ 250 thousand on May 1, 2019 in accordance with the First Amendment;

• Entered into the Second Amendment to the KeyBank Credit Agreement (the "Second Amendment") on January 24, 2020, effective December 21, 2019, and the Company began making monthly principal payments of $ 350 thousand on November 1, 2019.

The Second Amendment, among other provisions, requires a pledge of additional collateral of $ 15.00 million in residual equity interests and staggered maturity dates with an ultimate maturity of June 30, 2020;

• Entered into a Third Amendment to the KeyBank Credit Agreement (the "Third Amendment") on July 21, 2020.

The Third Amendment, among other provisions, reduces the pledge of additional collateral by two properties and extends the maturity to December 31, 2020;

• The KeyBank Credit Agreement had principal paydowns as noted below:

◦ $ 850 thousand paydown on March 19, 2019;

◦ $ 1.00 million paydown on May 1, 2019;

◦ $ 15.46 million paydown from Village of Martinsville refinancing proceeds on June 28, 2019;

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◦ $ 7.16 million paydown from Litchfield Market Village refinancing proceeds on November 1, 2019;

◦ $ 1.78 million paydown from St.

Matthews sale proceeds on January 21, 2020;

◦ $ 5.75 million paydown from Shoppes at Myrtle Park refinancing proceeds on January 23, 2020;

◦ $ 2.50 million paydown from cash released to the Company from restricted cash accounts on May 20, 2020;

◦ $ 1.00 million paydown on November 12, 2020;

◦ $ 3.00 million final paydown from Powerscourt Financing Agreement proceeds on December 22, 2020.

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.

The Powerscourt Financing Agreement provides for a term loan in the aggregate principal of $ 25.00 million.

The proceeds of the Powerscourt Financing Agreement are intended for the following:

(i) to paydown the Company’s indebtedness on the KeyBank Credit Agreement, (ii) to redeem certain shares of the Company’s Series D Preferred, and (iii) to pay fees and expenses in connection with the transactions contemplated by the Powerscourt Financing Agreement.

The Powerscourt Financing Agreement is at a rate of 13.50 % and matures on March 31, 2023 with quarterly interest only payments beginning on January 15, 2021.

In conjunction with the Powerscourt Financing Agreement, the Company issued to Powerscourt XXII, LP a warrant to purchase an aggregate of 496,415 shares of the Company’s Common Stock (see the “Powerscourt Warrant Agreement” below).

Powerscourt Warrant Agreement

Pursuant to Powerscourt Financing Agreement, the Company issued Powerscourt Investments XXII, LP, a warrant (the “Warrant”) to purchase 496,415 shares of Common Stock for $ 3.12 per share (the “Powerscourt Warrant Agreement”).

The 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.

The Powerscourt Warrant Agreement contains terms and features that give rise to derivative liability classification.

The Company utilized the Monte Carlo simulation model to calculate the fair value of these warrants at the date of commitment.

Significant observable and unobservable inputs include stock price, conversion price, annual 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.

Wheeler Real Estate Investment Trust, Inc.

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Loans Payable (continued)

The warrants were valued at approximately $ 594 thousand and the Company recorded a liability included on the consolidated balance sheet.

The fair value at the commitment date for the Company’s warranty liability was based upon the following assumptions as of December 31, 2020:

Exercise price $ 3.12

Stock price $ 2.75

Expected term 3.0 years

Expected volatility % 72.00 %

Risk free interest rate 0.17 %

Revere Term Loan Agreement

As of December 31, 2019, the Revere Term Loan was paid in full.

The following amendments and payments were made to the Revere Term Loan during the years ended December 31, 2019 and 2018:

Second Amendment executed on May 14, 2018 extended the maturity from May 15, 2018 to November 1, 2018 with monthly principal payments of $200 thousand , until the balance of the Revere Term Loan is less than $3.50 million , at which time the monthly principal payments reduced to $100 thousand .

The Second Amendment increased the interest rate from 8.00% to 9.00% and increased the “Exit Fee” from $360 thousand to $500 thousand .

If the balance of the Revere Term Loan was not less than $3.50 million by July 15, 2018, then the interest rate would increase to 10% ;

Paid $500 thousand towards principal in conjunction with the Second Amendment;

Paid down $2.60 million on the Revere Term Loan in conjunction with the sale of the undeveloped land parcel at Laskin Road on June, 19, 2018 and made a $150 thousand principal payment on June 28, 2018 as part of the Deutsche Bank refinance, as discussed below;

Paid down $1.30 million on the Revere Term Loan in conjunction with the sale of Shoppes at Eagle Harbor and per the Third Amendment paid a $75 thousand release fee on September 27, 2018;

Paid down $299 thousand as part of the sale of Monarch Bank on October 22, 2018;

Fourth Amendment executed on November 5, 2018, extended the maturity date to February 1, 2019 from November 1, 2018, increased the “Exit Fee” to $575 thousand from $500 thousand and increased the interest rate to 10% from 9% ;

Paid down $100 thousand on the Revere Term Loan in conjunction with the Fourth Amendment;

Fifth Amendment executed on November 21, 2018, resulted in the Company paying the $575 thousand Exit Fee with proceeds from the Riversedge North refinance;

The following amendments and payments were made to the Revere Term Loan during the year ended December 31, 2019:

• Sixth Amendment executed on January 29, 2019, extended the maturity date to April 1, 2019 from February 1, 2019 and created an additional “Exit Fee” of $ 20 thousand;

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The Warrants fully expired in 2019.

Senior Convertible Notes

Effective as of December 15, 2018, the Company extended the $1.37 million Amended Convertible Notes to June 15, 2019 with monthly principal and interest payments of $234,199 at a rate of 9.00% .

On June 10, 2019, through scheduled principal and interest payments the senior convertible notes were paid in full.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Loans Payable (continued)

First National Bank Line of Credit Renewal

On January 10, 2018, the Company extended the First National Bank Line of Credit to June 15, 2018 with interest only payments due monthly at a rate of LIBOR + 3.00% with a floor of 4.25% .

On June 15, 2018 the Company extended the First National Bank Line of Credit to October 10, 2018 with principal and interest payments due monthly at a rate of LIBOR + 3.50% .

On October 15, 2018, the Company extended the First National Bank Line of Credit to September 15, 2020 with interest only payments due monthly at a rate of LIBOR + 3.00% with a floor of 4.25% .

On January 11, 2019, the Company paid $1.51 million on the First National Bank Line of Credit, the portion collateralized by Jenks Plaza, as detailed in Note 3.

On January 18, 2018, the Company assumed a promissory note for $53.71 million for the purchase of JANAF at a rate of 4.49% .

The loan matures in July 2023 with monthly principal and interest payments of $333,159 .

On January 18, 2018, the Company assumed a promissory note for $5.16 million for the purchase of JANAF at a rate of 4.95% .

The loan matures in January 2026 with monthly principal and interest payments of $29,964 .

JANAF - Bravo

On January 18, 2018, the Company executed a promissory note for $6.50 million for the purchase of JANAF at a rate of 4.65% .

The loan matures in January 2021 with interest due monthly through January 2019 and monthly principal and interest payments of $36,935 beginning in February 2019.

Shoppes at Eagle Harbor Renewal and Payoff

On March 11, 2018, the Company renewed the promissory note for $3.32 million on Shoppes at Eagle Harbor for five years.

The loan matures in March 2023 with monthly principal and interest payments of $26,528 .

The loan bears interest at 5.10% .

On September 27, 2018, the Company paid down the remaining balance on the Shoppes at Eagle Harbor promissory note in conjunction with the sale of Shoppes at Eagle Harbor, as detailed in Note 3.

New Market Refinance

On May 23, 2018, the Company executed a promissory note for $7.00 million for the refinancing of New Market at a rate of 5.65% .

The loan matures in June 2023 with monthly principal and interest payments of $48,747 .

Lumber River Renewal

On June 15, 2018, the Company extended the $1.48 million promissory note on Lumber River to October 10, 2018 with monthly principal and interest payments of $10,723 at a rate of LIBOR + 3.50% .

On November 8, 2018, the Company extended the $1.46 million promissory note on Lumber River to October 10, 2020 with monthly principal and interest payments of $10,723 at a rate of LIBOR + 3.50% .

First National Bank Loan Paydown and Amendment

On January 11, 2019, the Company paid $ 1.51 million on the First National Bank Loan, the portion collateralized by Jenks Plaza, as detailed in Note 3.

On October 14, 2020, the Company entered into the Second Amendment to extend the $ 1.13 million First National Bank Loan to March 15, 2021 with monthly principal and interest payments of $ 25 thousand.

The First National Bank Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25 %.

Perimeter Square Refinance

Wheeler Real Estate Investment Trust, Inc.

2 unchanged sentences

Loans Payable (continued)

Deutsche Bank Refinance

On June 28, 2018, the Company executed a loan agreement for $5.74 million on Georgetown, Ridgeland and LaGrange Marketplace at a rate of 5.71% .

The loan matures in July 2023 with monthly principal and interest payments of $33,340 .

Benefit Street Refinance

On September 7, 2018, the Company executed a promissory note for $7.60 million for the refinancing of Ladson Crossing, Lake Greenwood Crossing and South Park at a rate of 5.71% .

The loan matures in June 2023 with monthly principal and interest payments of $53,185 .

Perimeter Square Refinance and Construction Loan

On October 5, 2018, the Company executed a promissory note for $247 thousand for construction at Perimeter at a rate of 6.00% with a December 2018 maturity date.

Monthly interest only payments were due through December 2018.

On January 15, 2019, the Company renewed the promissory notes for $ 6.25 million and $ 247 thousand at Perimeter Square.

3 unchanged sentences

On July 12, 2019, the principal balance on the Perimeter Square loans were paid in full with the sale of the property, as detailed in Note 3.

Monarch Bank Building Payoff

On October 22, 2018, the principal balance on the Monarch Bank Building loan was paid in full with the sale of the property, as detailed in Note 3.

Riversedge Refinance

On December 11, 2018, the Company executed a promissory note for $1.80 million for the refinance of Riversedge to December 10, 2023 with monthly principal and interest payments of $11,436 at a rate of 5.77% .

In conjunction with the refinance, the Company paid the $575 thousand exit fee on the Revere Term Loan.

Harbor Pointe Payoff

2 unchanged sentences

On March 18, 2019, the principal balance on the Graystone Crossing loan was paid in full with the sale of the property, as detailed in Note 3.

Senior Convertible Notes

On June 10, 2019, through scheduled principal and interest payments the senior convertible notes were paid in full.

Village of Martinsville Refinance

On June 28, 2019, the Company executed a promissory note for $ 16.50 million for the refinancing of Village of Martinsville at a rate of 4.28 %.

The loan matures on July 6, 2029 with monthly principal and interest payments of $89,664 .

The loan matures on July 6, 2029 with monthly principal and interest payments of $ 90 thousand.

Laburnum Square Refinance

On August 1, 2019, the Company executed a promissory note for $ 7.67 million for the refinancing of Laburnum Square at a rate of 4.28 %.

The loan is interest only through August 2024 with principal and interest payments of $37,842 beginning in September 2024.

The loan is interest only through August 2024 with principal and interest payments of $ 38 thousand beginning in September 2024.

The loan matures on September 5, 2029.

Litchfield Market Village Refinance

On November 1, 2019, the Company executed a promissory note for $ 7.50 million for the refinancing of Litchfield Market Village at a fixed interest rate of 5.50 %.

The loan matures on November 1, 2022 with monthly principal and interest payments of $ 46 thousand.

Shoppes at Myrtle Park Refinance

On January 23, 2020, the Company refinanced the Shoppes at Myrtle Park collateralized portion of the KeyBank Credit Agreement for $ 6.00 million at a fixed interest rate of 4.45 %.

The loan matures in February 2025 with monthly principal and interest payments of $ 33 thousand.

Folly Road Refinance

On March 23, 2020, the Company executed a promissory note for $ 7.35 million for the refinancing of Folly Road at a rate of 4.65 %.

The loan matures in March 2025 with monthly principal and interest payments of $ 41 thousand.

Wheeler Real Estate Investment Trust, Inc.

2 unchanged sentences

Loans Payable (continued)

Litchfield Market Village Refinance

On November 1, 2019 the Company executed a promissory note for $7.50 million for the refinancing of Litchfield Market Village at a fixed interest rate of 5.50% .

The loan matures on November 1, 2022 with monthly principal and interest payments of $46,057 .

Loan Covenants

Certain of the Company’s loans payable have covenants with which the Company is required to comply.

As of December 31, 2019 , the Company believes it is in compliance with covenants and is not considered in default on any loans.

Loan Modification Agreements

On September 4, 2020, the Company executed Loan Modification Agreements on three properties whereby the Company was able to use restricted cash to fund debt service for 90 days, representing a total of $ 488 thousand to be replenished over the subsequent twelve-month period.

Lumber River Extension

On October 14, 2020, the Company entered into the Third Amendment to extend the $ 1.39 million Lumber River Loan to April 10, 2021 with monthly principal and interest payments of $ 11 thousand.

The Lumber River Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25 %.

Walnut Hill Plaza Amendment

On July 15, 2020, the Company entered into the Third Amendment to reduce the Walnut Hill Plaza loan by $ 443 thousand to $ 3.30 million using proceeds from restricted cash reserves and received three months of forbearance on principal payments.

On October 16, 2020, the Company entered into the Fourth Amendment to receive forbearance on principal payments through December 29, 2020 and extend the maturity date to March 2023.

Tuckernuck Extension

On November 1, 2020, the Company entered into a Second Amended Forbearance Agreement to extend the Tuckernuck Loan to February 1, 2021 with monthly principal and interest payments of $ 34 thousand.

Rivergate Extension

On November 19, 2020, the Company entered into an agreement to extend the maturity date from October 20, 2020 to April 20, 2021 with monthly principal payments of $ 48 thousand plus accrued and unpaid interest.

Riversedge North Payoff

On December 31, 2020, the principal balance on the Riversedge North loan was paid in full with the sale of the property, as detailed in Note 3.

Columbia Fire Station Extension

Effective September 3, 2020, the Company extended the Columbia Fire Station promissory note ("Columbia Fire Station Loan") to December 3, 2020, with the monthly principal payment increasing $ 20 thousand for a total monthly principal and interest payment of $ 46 thousand beginning on October 3, 2020.

On December 7, 2020, the Company received a letter demanding payment in full from Pinnacle Bank for all amounts due under Columbia Fire Station Loan and the interest rate increased to 14 %, the default rate.

On December 29, 2020, Pinnacle Bank filed a suit against the Company, guarantor.

On January 21, 2021, the Company entered into a Forbearance Agreement (the "Forbearance Agreement") with Pinnacle Bank at an interest rate of 14 % and made a $ 500 thousand principal payment.

The Forbearance Agreement, among other provisions, extends the maturity date of the Columbia Fire Station Loan to July 21, 2021 and waives all defaults and late fees existing prior to the Forbearance Agreement.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Loans Payable (continued)

Debt Maturity

The Company’s scheduled principal repayments on indebtedness as of December 31, 2019 , including loans payable on assets held for sale, are as follows (in thousands):

The Company’s scheduled principal repayments on indebtedness as of December 31, 2020, including assets held for sale, are as follows (in thousands):

For the Years Ended December 31,

2021 $ 43,933

Thereafter 49,856

Total principal repayments and debt maturities $ 353,916

The Company has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flows from operating activities and other expected financing sources to meet these needs.

In particular, the Company has considered its scheduled debt maturities for the year ending December 31, 2020 of $62.07 million , including $17.88 million on the KeyBank Line of Credit which is collateralized by seven properties within the portfolio.

The Company plans to pay this obligation through a combination of refinancings, dispositions and operating cash.

Subsequent to December 31, 2019, the $21.55 million Rivergate loan has been extended to March 20, 2020 and the KeyBank Line of Credit has been reduced to $10.00 million as of January 31, 2020, a result of refinancing of Shoppes at Myrtle Park and selling of St.

Matthews combined with monthly principal payments.

In particular, the Company has considered its scheduled debt maturities for the year ending December 31, 2021 of $ 43.93 million.

All loans due to mature are collateralized by properties within the portfolio.

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• sale of additional properties, if necessary.

Management is working with lenders to refinance certain properties off of the KeyBank Line of Credit in an effort to reduce the balance prior to maturity.

The loans are expected to have customary interest rates similar to current loans.

They are subject to formal lender commitment, definitive documentation and customary conditions.

Rentals under Operating Leases

Future minimum rents to be received under noncancelable tenant operating leases, excluding rents on assets held for sale properties, for each of the next five years and thereafter, excluding CAM and percentage rent based on tenant sales volume, as of December 31, 2019 are as follows (in thousands):

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Rentals under Operating Leases (continued)

Future minimum rents to be received under noncancelable tenant operating leases, excluding rents on assets held for sale properties, for each of the next five years and thereafter, excluding tenant reimbursements and percentage rent based on tenant sales volume, as of December 31, 2020 are as follows (in thousands):

For the Years Ended December 31,

2021 $ 44,061

Thereafter 46,311

Total minimum rents $ 213,140

1 unchanged sentence

The Company has authority to issue 33,750,000 shares of stock, consisting of 18,750,000 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”), 4,000,000 shares as Redeemable Preferred Stock ("Series D Preferred") and 4,500 shares of Series A Preferred Stock ("Series A Preferred").

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Equity and Mezzanine Equity (continued)

Substantially all of our business is conducted through the Company’s Operating Partnership.

1 unchanged sentence

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 shareholders.

As of December 31, 2019 and 2018 , there were 14,105,712 of common units outstanding with the Trust owning 13,871,693 and 13,870,680 , respectively, of these common units.

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, 2020 and 2019, there were 15,227,758 and 14,105,712 , respectively, of common units outstanding with the Trust owning 15,003,329 and 13,871,693 , respectively, of these common units.

Series A Preferred Stock

At December 31, 2019 and December 31, 2018, the Company had 562 shares without par value Series A

Preferred Stock ("Series A Preferred") issued and outstanding, 4,500 authorized and a $1,000 liquidation preference per share, or $562 thousand in aggregate.

The Series A Preferred accrues cumulative dividends at a rate of 9% per annum, which is paid quarterly.

At December 31, 2020 and 2019, the Company had 562 shares without par value Series A Preferred Stock ("Series A Preferred") issued and outstanding, 4,500 authorized and a $ 1,000 liquidation preference per share, or $ 562 thousand in aggregate.

The Series A Preferred accrues cumulative dividends at a rate of 9 % per annum, which is paid or accumulated quarterly.

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 plus any accrued but unpaid dividends.

Series B Preferred Stock

At December 31, 2019 and December 31, 2018, the Company had 1,875,748 shares and 5,000,000 shares of no par value Series B Preferred issued and authorized with a $25.00 liquidation preference per share, or $46.90 million .

At December 31, 2020 and 2019, the Company had 1,875,748 shares and 5,000,000 shares of Series B Convertible Preferred Stock, without par value ("Series B Preferred") issued and authorized with a $ 25.00 liquidation preference per share, or $ 46.90 million in aggregate.

The Series B Preferred bears interest at a rate of 9 % per annum.

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, $0.01 par value per share, 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.

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, plus an amount equal to all accumulated, accrued and unpaid dividends to and including the date of payment.

The Series Preferred B has no maturity date and will remain outstanding indefinitely unless subject to a mandatory or voluntary conversion as described above.

In conjunction with the 2014 issuances of Series B Preferred 1,986,600 warrants were issued.

Each warrant permitted investors to purchase 0.125 share of Common Stock at an exercise price of $44 per share of Common Stock, subject to adjustment.

On April 29, 2019, the 1,986,600 warrants exchangeable into 248,325 shares of Common Stock expired.

The warrants were registered on the Nasdaq Stock Market under the trading symbol "WHLRW" (CUSIP No.:

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Equity and Mezzanine Equity (continued)

The Series B Preferred has no maturity date and will remain outstanding indefinitely unless subject to a mandatory or voluntary conversion as described above.

Series D Preferred Stock- Redeemable Preferred Stock

In January 2018, the Company, issued and sold 1,363,636 shares of Series D Preferred, in a public offering.

Each share of Series D Preferred Stock was sold to investors at an offering price of $16.50 per share, resulting in net proceeds of $21.16 million , which included the impact of the underwriters' selling commissions and legal, accounting and other professional fees.

At December 31, 2019 and 2018, the Company had 3,600,636 issued and 4,000,000 authorized shares of Series D Preferred with a $25.00 liquidation preference per share, or $101.66 million and $91.98 million in aggregate, respectively.

At December 31, 2020 and 2019, the Company had 3,529,293 and 3,600,636 issued, respectively, and 4,000,000 authorized shares of Series D Cumulative Convertible Preferred Stock, without par value ("Series D Preferred") with a $ 25.00 liquidation preference per share, or $ 109.13 million and $ 101.66 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”).

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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 Stock 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 Stock, 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.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Equity and Mezzanine Equity (continued)

“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 Stock, 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 Stock 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 Stock 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.

On May 3, 2018, the Company filed a Certificate of Correction (the “Certificate of Correction”) with the State Department of Assessments and Taxation of Maryland (the “SDAT”) correcting an inadvertently omitted reference to “accumulated amortization” in “Section 10(a) (Mandatory Redemption for Asset Coverage)” of the Articles Supplementary for the Series D Preferred that was previously filed with SDAT on September 16, 2016.

The Certificate of Correction became effective upon filing.

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 Stock do not bear interest.

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.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Equity and Mezzanine Equity (continued)

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.

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.

However, if dividends on the Series D Preferred are in arrears for six or more consecutive quarterly periods, the number of directors on our Board of Directors will automatically be increased by two , and holders of shares of the Series D Preferred and the holders of shares of Parity Preferred Stock upon which like voting rights have been conferred and are exercisable (voting together as a single class) will be entitled to vote, at a special meeting called upon the written request of the holders of at least 20% of such stock or at our next annual meeting and at each subsequent annual meeting of stockholders, for the election of two additional directors to 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 set apart for payment.

The Series D Preferred Directors will be elected by a plurality of the votes cast in the election.

For the avoidance of doubt, the Board of Directors shall not be 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 Stock and Parity Preferred Stock to deliver such written request for the election of the Series D Preferred Directors.

Pursuant to the Company's Articles Supplementary, if dividends on the Series D Preferred are in arrears for six or more consecutive quarterly periods (a "Preferred Dividend Default"), the number of directors on our Board of Directors will automatically be increased by two , and holders of shares of the Series D Preferred and the holders of Series A Preferred and Series B Preferred (the Series A Preferred and Series B Preferred together, being the "Parity Preferred Stock"), shall be entitled to vote for the election of two additional directors ("Series D Preferred Directors").

A Preferred Dividend Default occurred on April 15, 2020.

The election of such directors will take place upon the written request of the holders of record of at least 20 % of the Series D Preferred and Parity Preferred Stock.

The Board of Directors is not permitted to fill the vacancies on the Board of Directors as a result of the failure of the holders of 20 % of the Series D Preferred and Parity Preferred Stock to deliver such written request for the election of the Series D Preferred Directors.

The Series D Preferred Directors may serve on our Board of Directors, until all unpaid dividends on such Series D Preferred and Parity Preferred Stock, if any, have been paid or declared a sum sufficient for the payment thereof set apart for payment.

On September 22, 2020, the Operating Partnership purchased 71,343 shares of Series D Preferred at $ 15.50 per share.

These shares are deemed to be retired on the consolidated financial statements.

The book value of the shares purchased included both accreted and unaccreted issuance costs and dividends in arrears totaling $ 1.83 million.

The changes in the carrying value of the Series D Preferred for the years ended December 31, 2020 and 2019 is as follows (in thousands):

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Accretion of Preferred Stock discount 593

Issuance of Preferred Stock for acquisition of JANAF

Undeclared dividends 9,677

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Undeclared dividends 9,581

Redemption of Preferred Stock ( 1,833 )

Balance December 31, 2020 $ 95,563

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Equity and Mezzanine Equity (continued)

Earnings per share

Basic earnings per share for the Company’s common shareholders is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net 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 shareholders, excluding amounts attributable to preferred shareholders and the net income (loss) attributable to noncontrolling interests, by the weighted-average number of common shares including any dilutive shares.

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.

As of December 31, 2020 and 2019, the below shares are able to be converted to Common Stock.

The common units, convertible preferred stock, cumulative convertible preferred stock, and warrants have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive.

December 31, 2019

December 31, 2018

Outstanding shares

Potential Dilutive Shares

Outstanding shares

Potential Dilutive Shares

December 31, 2020 December 31, 2019

Outstanding shares Potential Dilutive Shares Outstanding shares Potential Dilutive Shares

Common units 224,429 224,429 234,019 234,019

Series B Preferred Stock 1,875,748 1,172,343 1,875,748 1,172,343

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Warrants to purchase Common Stock — 496,415 — —

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Equity and Mezzanine Equity (continued)

On December 20, 2018, the Board of Directors suspended payment of the fourth quarter dividends on shares of its Series A Preferred, Series B Preferred and Series D Preferred, which has not been reinstated as of December 31, 2019.

The following table summarizes the preferred stock dividends (in thousands except for per share amounts):

Series A Preferred

Series B Preferred

Series D Preferred

Record Date/Arrears Date

Series A Preferred Series B Preferred Series D Preferred

Record Date/Arrears Date Arrears Per Share Arrears Per Share Arrears Per Share

For the year ended December 31, 2020 $ 51 $ 90.00 $ 4,221 $ 2.25 $ 9,488 $ 2.69

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There were no dividends declared to holders of Common Stock for the years ended December 31, 2020 and 2019 .

The total cumulative dividends in arrears for Series A Preferred (per share $ 202.50 ), Series B Preferred (per share $ 5.06 ) and Series D Preferred (per share $ 5.92 ) as of December 31, 2020 is $ 30.51 million.

2015 Long-Term Incentive Plan

On June 4, 2015, the Company's shareholders approved the 2015 Long-Term Incentive Plan (the "2015 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 ("Stock Incentive Plan").

The 2015 Incentive Plan replaced the 2012 Stock Incentive Plan.

As of December 31, 2020, there are 41,104 shares available for issuance under the Company’s 2015 Incentive Plan and there were no shares issued in 2020 or 2019.

2016 Long-Term Incentive Plan

On June 15, 2016, the Company's shareholders approved the 2016 Long-Term Incentive Plan (the "2016 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

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Equity and Mezzanine Equity (continued)

For the Years Ended December 31, Shares Issued Market Value

(in thousands)

2019 181,807 166

As of December 31, 2020, there are 132,707 shares available for issuance under the Company’s 2016 Incentive Plan.

Stock Appreciation Rights Agreement

On August 4, 2020, the Company’s Board of Directors granted a Stock Appreciation Rights Agreement (the “SARs”) which will not be effective until approved by the stockholders at the 2021 Annual Meeting of Stockholders.

The SARs allows for issuance of 5,000,000 shares of the Company's Common Stock at a strike price of $ 1.85 per share to Daniel Khoshaba, Chief Executive Officer of the Company, upon meeting certain market price thresholds.

The SARs expires in the year 2030.

On December 23, 2020, the Company announced a “modified Dutch auction” tender offer to purchase up to $ 19.00 million in shares of its Series D Preferred at a price not greater than $ 18.00 nor less than $ 15.50 per Series D Preferred Share, to the sellers in cash, less any applicable withholding taxes and without interest.

Unless the offer is extended or terminated, the tender offer is scheduled to expire at the end of the day on January 25, 2021.

See Note 12 for further details.

Lease Commitments

The Company has ground leases that are accounted for as operating leases.

The Company has ground leases and leases its corporate headquarters;

both are accounted for as operating leases.

The Charleston, SC lease ended August 31, 2019 and was accounted for as an operating lease.

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, 2019, the weighted average remaining lease term is 35 years.

The following properties are subject to leases which require the Company to make fixed annual rental payments and variable lease payments, which are immaterial and include escalation clauses and renewal options as follows (in thousands):

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Lease Commitments (continued)

As of December 31, 2020 and 2019, the weighted average remaining lease term is 32 and 35 years, respectively.

The following properties are subject to leases which require the Company to make the following fixed annual rental payments and variable lease payments, which are immaterial and include escalation clauses and renewal options as follows (in thousands):

For the Years Ended December 31,

2020 2019 Expiration

Amscot $ 25 $ 25 2045

Beaver Ruin Village 54 54 2054

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Devine Street (1)

Total ground leases

Total $ 900 $ 975

(1) Lease options are exercised through 2035 with options which are reasonably certain to be exercised through 2051.

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Leased assets obtained in exchange for new operating lease liabilities $ 1,285 $ 11,904

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Lease Commitments (continued)

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, 2020 and a reconciliation of those cash flows to the operating lease liabilities at December 31, 2020 are as follows (in thousands):

For the Years Ended December 31,

Thereafter 23,785

Total minimum lease payments (1)

Discount ( 15,121 )

Operating lease liabilities $ 13,200

(1) Operating lease payments include $ 7.54 million related to options to extend lease terms that are reasonably certain of being exercised.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

On December 31, 2020, the Company sold its corporate headquarters in Virginia Beach to an unrelated party for approximately $ 2.84 million, net of costs to sell, and simultaneously leased the building for 10 years at an annual base rent of $ 265 thousand, plus taxes and other operating and maintenance expenses.

The transaction qualified for sale leaseback accounting in accordance with ASC 842 and the Company used the incremental borrowing rate associated with the previous loan on the office building of 5.77 % for purposes of calculating the lease liability.

The lease agreement includes an option for five years and the Company recognized only the initial term of the lease as part of its ROU asset and lease liability.

As a result of this transaction, a gain of $ 49 thousand was recognized, which is included in "gain on disposal of properties" on the consolidated statements of operations with the remaining gain of $ 725 thousand deferred over the life of the lease.

Commitments and Contingencies

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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 Northeast, Mid-Atlantic and Southeast, which markets represented approximately 4% , 36% and 60% , respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2019 .

The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically located in the Southeast, Mid-Atlantic and Northeast, which markets represented approximately 61 %, 35 % and 4 %, respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2020.

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.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies (continued)

Regulatory and Environmental

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In addition, the below legal proceedings are in process.

JCP Investment Partnership LP, et al v.

Wheeler Real Estate Investment Trust, Inc., Circuit Court for Baltimore County, Maryland.

This is an action brought by a large minority shareholder of the Company alleging that in 2018, the Company breached an asset coverage ratio covenant, so as to require the Company to buy back a portion of its Series D Preferred.

The Company is defending this suit on the grounds it validly amended the Articles Supplementary through the Certificate of Correction filed with the Maryland Department of Taxation on or about May 3, 2018, curing any alleged breach of the covenant.

Plaintiffs are no t seeking any specific damage amount;

rather, their prayer for

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies (continued)

relief asks the Court to order that the Company must redeem the Series D Preferred in accordance with the terms of the original Articles Supplementary, not commit any further alleged violations of the Articles Supplementary, and award them their costs, expenses and attorneys' fees.

In the event a redemption is required, the redemption provisions of the Articles Supplementary permit the Company to redeem those Series D Preferred that it chooses to redeem (not necessarily JCP's Preferred Shares).

Accordingly, it is difficult to assess the Company's anticipated exposure in this case at this time.

After discovery was completed, JCP filed a motion for summary judgment, which the Court denied on January 29, 2020.

In February 2020, the parties reached a settlement which provides JCP will dismiss the lawsuit without prejudice.

Jon Wheeler v.

Wheeler Real Estate Investment Trust, Inc., Circuit Court for the City of Virginia Beach, Virginia.

Former CEO, Jon Wheeler, alleges that he was improperly terminated and is owed severance and bonus payments pursuant to his Employment Agreement.

Altogether, his alleged damages total approximately $1.00 million .

The Company is defending the action on the grounds that Jon Wheeler was properly terminated for cause, including for his failure to properly apprise the Board of Directors of critical information, and placing his own personal interests above the Company's, including contracting counsel about filing suit on his behalf against the Company and the Board of Directors while he was still CEO and President of the Board.

The Company has filed a Counterclaim against Jon Wheeler for approximately $150 thousand for reimbursement of personal expenses the Company paid, but that Jon Wheeler should have borne.

Trial of this action was held on December 17-20, 2019.

Post-trial briefs were submitted on January 31, 2020.

The Court is expected to make its rulings by mid-March, 2020.

At this juncture, the outcome of the matter cannot be predicted.

WD-1 Associates, LLC, et al, Court of Common Pleas for Beaufort County, South Carolina.

This is a lawsuit filed by BOKF ("Bank of Arkansas") the lead lender for Sea Turtle project in Hilton Head, South Carolina against WD-1 Associates, LLC and Jon Wheeler for default on BOKF's two construction loans.

BOKF seeks appointment of a Receiver to take over the financial management of the project that WD-1 was allegedly (mis)handling.

The lawsuit pending in Beaufort County is presently stayed as to WD-1, pursuant to the Chapter 11 Bankruptcy proceeding it filed in Charleston, South Carolina.

In the lawsuit pending in Beaufort County, BOKF has moved for a default judgment against Jon Wheeler, who personally guaranteed the two BOKF loans.

The Company's subsidiary, Wheeler Real Estate, LLC is named in the lawsuit pending in Beaufort County solely in its position as the former property manager for WD-1 Associates, to obtain financial information.

No damages are sought from Wheeler Real Estate, LLC in the Beaufort County action.

The Company's subsidiaries are creditors in the Chapter 11 Bankruptcy.

WD-1 is seeking a sale of the project real estate through the bankruptcy proceedings.

BOKF’s credit bid purchase of Sea Turtle was approved by the Bankruptcy Court for $18.75 million in February, 2020.

At this juncture, the proceeds, if any, awarded to the Company are expected to be immaterial.

Jon Wheeler v.

Former CEO, Jon Wheeler, alleged that his employment was improperly terminated and that he was owed severance and bonus payments pursuant to his Employment Agreement.

The Company filed a counterclaim against Mr.

Wheeler for reimbursement of personal expenses the Company paid, but that Mr.

Wheeler should have borne.

The Court found in favor of Jon Wheeler on his claim that his employment was terminated without cause.

The Court denied Mr.

Wheeler’s claims for a bonus and that his termination of employment was wrongful as a violation of public policy.

The Court awarded the Company $ 5 thousand on its counterclaim.

At a hearing on September 4, 2020 on Jon Wheeler’s motion for the award of attorneys’ fees, costs, and pre-judgment interest, the Court awarded Mr.

Wheeler the requested costs, but awarded no attorneys’ fees and no pre-judgment interest.

In total, Mr.

Wheeler was awarded $ 520 thousand.

In October 2020, the Company settled with Mr.

Wheeler for $ 500 thousand which is included on the Company's consolidated statements of operations under the line "other expenses." Mr.

Wheeler preserved his right to appeal the Court’s denial of an award of attorneys’ fees and pre-judgment interest.

The Virginia Supreme Court has not yet rendered a decision as to whether it will grant the Petition for Appeal and allow the appeal to proceed.

WD-I Associates, LLC, Wheeler Real Estate, LLC and Jon S.

Wheeler , Court of Common Pleas, Beaufort County, South Carolina.

BOKF (“Bank of Arkansas”), filed an action on April 9, 2019 in Beaufort County, South Carolina, for foreclosure of the mortgage it held on the real property and improvements comprising Sea Turtle Marketplace Shopping Center (“Sea Turtle”) which was owned by WD-I Associates, LLC (“WD-I”), and Jon S.

Wheeler had guaranteed the debt.

Bank of Arkansas sought the appointment of a receiver to take possession and control of Sea Turtle pending the completion of the foreclosure action.

In response, WD-I filed for relief under Chapter 11 of the United States Bankruptcy Code on May 7, 2019.

The bankruptcy filing stayed the foreclosure action in State Court.

On May 1, 2020, the Bankruptcy Court granted the dismissal of the WD-I bankruptcy case upon the provisions for payment of the $ 200 thousand to creditors.

The Company received an aggregate payment of $ 196 thousand in May 2020 and recorded the receipt on the Company's consolidated statements of operations under the line "other revenues".

David Kelly v.

Wheeler Real Estate Investment Trust, Inc.

and David Kelly, Individually, Circuit Court for the City of Virginia Beach, Virginia.

In September, 2018, former Chief Executive Officer and President Jon S.

Wheeler filed claims for defamation and tortious interference with contract expectancy, prospective business relationships and economic advantage in the Circuit Court for the City of Virginia Beach, Virginia, asserting current Chief Executive Officer and President, David Kelly, defamed him in communications with an industry association.

In February, 2019, Jon Wheeler’s counsel amended the suit to add the Company as a Defendant, but dropped all but the defamation claims.

Kelly and the Company are defending the lawsuit.

Trial is set for June 10, 2020.

, Circuit Court for the City of Virginia Beach, Virginia.

Former CEO David Kelly filed suit on May 28, 2020, alleging that his employment was improperly terminated and that he is owed severance pay and related benefits pursuant to his employment agreement.

He claims breach of his employment contract against the company.

Initially, his suit included tort claims against Joseph Stilwell and Daniel Khoshaba;

the Court dismissed those tort claims and the individual defendants at a hearing on December 15, 2020.

On his remaining claim of breach of contract, Mr.

Kelly seeks damages of $ 400 thousand, plus unpaid bonuses and benefits, pre- and post-judgment interest, attorneys’ fees, and costs.

The Company is defending the action on the grounds that Mr.

Kelly’s employment was properly terminated for cause.

Trial is set for March 2-4, 2022.

At this juncture, the outcome of the matter cannot be predicted.

Harbor Pointe Tax Increment Financing

On September 1, 2011, the Grove Economic Development Authority issued the Grove Economic Development Authority Tax Increment Revenue Note, Taxable Series 2011 in the amount of $2.42 million, bearing a variable interest rate of 2.29% , not to exceed 14% and payable in 50 semi-annual installments.

The proceeds of the bonds were to provide funding for the construction of public infrastructure and other site improvements and to be repaid by incremental additional property taxes generated by development.

Harbor Pointe Associates, LLC, then owned by an affiliate of 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.

Wheeler Real Estate Investment Trust, Inc.

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Commitments and Contingencies (continued)

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.

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.

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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.

In 2019 and 2018, we funded approximately $79 thousand and $73 thousand , respectively in debt service shortfalls.

In 2020 and 2019, we funded approximately $ 0 and $ 79 thousand, respectively in debt service shortfalls.

No amounts have been accrued for this as of December 31, 2020 as a reasonable estimate of future debt service shortfalls cannot be determined based on variables noted above.

Related Party Transactions

The following summarizes related party activity as of and for the years ended December 31, 2019 and 2018 .

The following summarizes related party activity for the years ended December 31, 2020 and 2019.

The amounts disclosed below reflect the activity between the Company and its affiliates (in thousands):

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Amounts received from affiliates $ — $ 19

Notes receivable, net

As discussed in Note 4, the Company loaned $11.00 million for the partial funding of Sea Turtle and loaned $1.00 million for the sale of land to be used in the development.

During the years ended December 31, 2019 and 2018, the Company recognized a $5.00 million and $1.74 million impairment charge, respectively, on the note receivable, reducing the carrying value to zero .

The Company has placed the notes receivable on nonaccrual status and has not recognized $1.44 million and $1.44 million of interest income due on the notes for the years ended December 31, 2019 and 2018, respectively.

At December 31, 2019, $4.22 million of accrued interest remains unpaid.

In February 2018, the Company's agreement to perform development, leasing, property and asset management services for Sea Turtle Development was terminated.

Sea Turtle Development is a related party as Jon Wheeler, the Company's former CEO, is the managing member.

Prior to the termination of the agreements, development fees of 5% of hard costs incurred were due to the Company.

Leasing, property and asset management fees were consistent with those charged for services provided to non-related properties.

The Company recovered $23 thousand and $77 thousand in amounts due from related parties for the years ended December 31, 2019 and 2018, respectively, which were previously reserved.

These recoveries are included in the respective revenue category which they relate on the consolidated statements of operations.

The total allowance on related party receivables at December 31, 2019 and 2018 is $2.15 million and $2.20 million , respectively.

Amounts due from Sea Turtle Development are reserved due to uncertainty surrounding the collectability given the pending legal proceedings and bankruptcy further detailed in Note 4.

Amounts due from other non-REIT properties have been reserved based on available cash flows at the respective properties and payment history.

There were no additional reserves recorded in 2019 and 2018.

In February 2018 the management agreements for these properties were terminated.

There were no additional reserves recorded for the years ended December 31, 2019 and 2018.

Reimbursement of Proxy Solicitation Expenses

On October 29, 2019, 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”), filed a proxy statement with the SEC in connection with the Company’s 2019 annual meeting (the “Stilwell Solicitation”).

Current director Joseph Stilwell is the owner and managing member of Stilwell Value LLC, which is the general partner of Stilwell Value Partners VII, L.P., Stilwell Activist Fund, L.P.

and Stilwell Activist Investments, L.P..

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.

The Company has agreed to reimburse the Stilwell Group for the approximate $ 439 thousand of expenses it incurred in connection with the Stilwell Solicitation.

This reimbursement was recorded on the consolidated statements of operations as “other expense.”

Tax Protection Agreement

In 2016, in connection with the acquisition of Berkley and Sangaree/Tri-County, the Operating Partnership entered into a tax protection agreement that obligates the Operating Partnership to reimburse Jon Wheeler, the Company's former CEO, for his tax liabilities resulting from the recognition of certain taxable income or gain in the event the Operating Partnership takes certain action prior to November 10, 2023 with respect to Sangaree Plaza, Tri-County Plaza and Berkley.

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Subsequent Events

On January 21, 2020, the Company completed the sale of St.

Matthews, which is collateral on the Amended and Restated Credit Agreement, for a contract price of $1.78 million , resulting in a paydown of $1.78 million to the KeyBank Line of Credit.

Shoppes at Myrtle Park Refinance

On January 23, 2020, the Company refinanced the Shoppes at Myrtle Park collateralized portion of the Amended and Restated Credit Agreement for $6.00 million at a fixed interest rate of 4.45% , resulting in a paydown of $5.75 million on the KeyBank Line of Credit.

Rivergate Extension

On January 30, 2020, effective December 21, 2019, the Company and the Synovus Bank agreed to extend the loan maturity to March 20, 2020.

Paycheck Protection Program

On January 8, 2021, KeyBank notified the Company that the PPP Promissory Note application for forgiveness has been approved.

On January 26, 2021 the Company announced, the value of Series D Preferred Shares that the Company was offering to purchase increased from $ 19.00 million to $ 20.00 million and the tender offer was extended to February 16, 2021.

On February 17, 2021 the Company announced the tender offer was further extended to March 12, 2021 and the value of Series D Preferred Shares that the Company was offering to purchase decreased from $ 20.00 million to $ 6.00 million.

The tender offer expired, in accordance with its terms, on March 12, 2021.

In accordance with the terms and conditions of the tender offer and based on the final count, the Company accepted for purchase 387,097 Series D Preferred Shares at a purchase price of $ 15.50 per share, for an aggregate cost of $ 6.00 million, excluding fees and expenses relating to the tender offer.

Tuckernuck 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.

Powerscourt Financing Agreement Payoff

On March 12, 2021, the Company paid in full the $ 25.00 million Powerscourt Financing Agreement.

The Powerscourt Warrant Agreement remains.

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 provides for a term loan in the aggregate principal of $ 35.00 million.

The proceeds of the Wilmington Financing Agreement are intended for the following:

(i) to paydown 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.

In conjunction with the Wilmington Financing Agreement, the Company issued to the holders from time to time party thereto a warrant (the “Warrant”) to purchase, in the aggregate, 1,061,719 shares of the Company’s Common Stock (see the “Wilmington Warrant Agreement” below).

The obligations of the Company under the Wilmington Financing Agreement are 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.

Wilmington Warrant Agreement

Pursuant to Wilmington Financing Agreement, the Company issued to the holders from time to time party thereto a warrant (the “Warrant”) to purchase in the aggregate, 1,061,719 shares of Common Stock in three tranches:

warrants to purchase an aggregate of 510,204 shares at an exercise price of $ 3.43 per share ("Tranche A");

warrants to purchase an aggregate of 424,242 shares at an exercise price of $ 4.125 per share ("Tranche B");

and warrants to purchase an aggregate of 127,273 shares at an exercise price of $ 6.875 per share ("Tranche C") (the “Wilmington Warrant Agreement”).

The Warrant is

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

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.

Wheeler Real Estate Investment Trust, Inc.

and Subsidiaries

Schedule II-Valuation and Qualifying Accounts

December 31, 2020

Description Balance at

of Year Charged to

Expense Deductions

Reserves Balance at

(in thousands)

6 unchanged sentences

December 31, 2020

Costs Capitalized

to Acquisition

Gross Amount at which Carried

Initial Cost Costs Capitalized

to Acquisition Gross Amount at which Carried

at End of Period

Property Name

Property Name Land Building and

Improvements Improvements

(net) Carrying

Costs Land Building and

Improvements Total

(in thousands)

1 unchanged sentence

Lumber River Village 800 4,487 151 — 942 4,496 5,438

Riversedge North

The Shoppes at TJ Maxx

Surrey Plaza 381 1,857 — — 381 1,857 2,238

Tuckernuck 2,115 6,719 1,009 — 2,171 7,672 9,843

Twin City Commons 800 3,041 142 — 800 3,183 3,983

3 unchanged sentences

Winslow Plaza 1,325 3,684 210 — 1,370 3,849 5,219

Clover Plaza 356 1,197 29 — 356 1,226 1,582

George Plaza 706 1,264 69 — 752 1,287 2,039

South Square 353 1,911 31 — 374 1,921 2,295

Westland Square 887 1,710 36 — 901 1,732 2,633

5 unchanged sentences

DF I-Courtland (1)

196 — — — 196 — 196

Edenton Commons (1)

746 — — — 746 — 746

DF I-Moyock (1)

179 — — — 179 — 179

Freeway Junction 1,521 6,755 152 — 1,521 6,907 8,428

2 unchanged sentences

Harbor Pointe (1)

1,538 — ( 359 ) — 1,179 — 1,179

DF I-Berkley 250 — — — 250 — 250

Pierpont Centre 484 9,221 171 — 676 9,200 9,876

6 unchanged sentences

Columbia Fire Station (1)

1,106 599 4,719 — 1,106 5,318 6,424

Chesapeake Square 895 4,112 966 — 1,269 4,704 5,973

1 unchanged sentence

Barnett Portfolio 3,107 8,912 281 — 3,234 9,066 12,300

Grove Park 722 4,590 84 — 741 4,655 5,396

Parkway Plaza 772 4,230 32 — 778 4,256 5,034

Fort Howard Square 1,890 7,350 212 — 1,952 7,500 9,452

Costs Capitalized

to Acquisition

Gross Amount at which Carried

Initial Cost Costs Capitalized

to Acquisition Gross Amount at which Carried

at End of Period

Property Name

Property Name Land Building and

Improvements Improvements

(net) Carrying

Costs Land Building and

Improvements Total

Conyers Crossing $ 2,034 $ 6,820 $ 94 $ — $ 2,034 $ 6,914 $ 8,948

1 unchanged sentence

Devine Street 365 1,941 — — 365 1,941 2,306

Folly Road 5,992 4,527 — — 5,992 4,527 10,519

Georgetown 742 1,917 93 — 742 2,010 2,752

Ladson Crossing 2,981 3,920 64 — 3,052 3,913 6,965

Lake Greenwood Crossing 550 2,499 17 — 550 2,516 3,066

Lake Murray 447 1,537 — — 447 1,537 1,984

Litchfield I 568 929 61 — 572 986 1,558

Litchfield II 568 936 24 — 572 956 1,528

1 unchanged sentence

Moncks Corner — 1,109 9 — — 1,118 1,118

Ridgeland 203 376 — — 203 376 579

Shoppes at Myrtle Park 3,182 5,360 824 — 3,182 6,184 9,366

South Lake 804 2,025 ( 27 ) — 804 1,998 2,802

South Park 943 2,967 98 — 1,019 2,989 4,008

Berkley 1,005 2,865 ( 50 ) — 1,005 2,815 3,820

Sangaree 2,302 2,922 636 — 2,503 3,357 5,860

Tri-County 411 3,421 376 — 635 3,573 4,208

Riverbridge 774 5,384 — — 774 5,384 6,158

Laburnum Square 3,736 5,928 215 — 3,811 6,068 9,879

3 unchanged sentences

Rivergate Shopping Center 1,570 30,694 146 — 1,672 30,738 32,410

(1) Includes impairment charges described in Note 3 of the consolidated audited financial statements.

JANAF 8,267 66,549 441 — 8,467 66,790 75,257

Totals $ 97,030 $ 348,667 $ 19,117 $ — $ 99,544 $ 365,270 $ 464,814

(1) Net of impairment expenses described in Note 3 of the consolidated audited financial statements.

Wheeler Real Estate Investment Trust, Inc.

1 unchanged sentence

Schedule III-Real Estate and Accumulated Depreciation

Property Name

Property Name Encumbrances Accumulated

Depreciation Date of

Construction Date

Acquired Depreciation

(in thousands)

Amscot Building

Lumber River Village

Riversedge North

The Shoppes at TJ Maxx

Twin City Commons

Walnut Hill Plaza

Tampa Festival

Forrest Gallery

Winslow Plaza

Westland Square

Waterway Plaza

Cypress Shopping Center

Harrodsburg Marketplace

Port Crossing Shopping Center

LaGrange Marketplace

DF I-Courtland (undeveloped land)

Edenton Commons (undeveloped land)

DF I-Moyock (undeveloped land)

Freeway Junction

Bryan Station

Crockett Square

Harbor Pointe (undeveloped land)

DF I-Berkley (undeveloped land)

Pierpont Centre

Brook Run Properties (undeveloped land)

Alex City Marketplace

Butler Square

Brook Run Shopping Center

Beaver Ruin Village

Beaver Ruin Village II

Columbia Fire Station

Chesapeake Square

Sunshine Plaza

Property Name

Amscot Building (3) $ 243 5/15/2004 5-40 years

Lumber River Village $ 1,367 1,144 11/16/2012 5-40 years

Surrey Plaza (3) 535 12/21/2012 5-40 years

Tuckernuck 5,193 1,902 11/16/2012 5-40 years

Twin City Commons 2,915 795 12/18/2012 5-40 years

Walnut Hill Plaza 3,287 2,373 12/14/2007 5-15 years

Tampa Festival 7,920 1,891 8/26/2013 5-40 years

Forrest Gallery 8,226 2,215 8/29/2013 5-40 years

Winslow Plaza 4,553 992 12/19/2013 5-40 years

Clover Plaza 1,951 243 12/23/2013 5-40 years

George Plaza 2,460 264 12/23/2013 5-40 years

South Square 2,003 356 12/23/2013 5-40 years

Westland Square 2,556 334 12/23/2013 5-40 years

Waterway Plaza 2,503 271 12/23/2013 5-40 years

Cypress Shopping Center 6,163 891 7/1/2014 5-40 years

Harrodsburg Marketplace 3,343 484 7/1/2014 5-40 years

Port Crossing Shopping Center 5,909 1,883 7/3/2014 5-40 years

LaGrange Marketplace (6) 595 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

DF I-Moyock (undeveloped land) — 8/15/2014 N/A

Freeway Junction 7,582 1,360 9/4/2014 5-40 years

Bryan Station 4,312 550 10/2/2014 5-40 years

Crockett Square 6,338 1,403 11/5/2014 5-40 years

Harbor Pointe (undeveloped land) — 11/21/2014 N/A

DF I-Berkley (undeveloped land) — 12/1/2014 N/A

Pierpont Centre 8,001 1,673 1/14/2015 5-40 years

Brook Run Properties (undeveloped land) — 3/27/2015 N/A

Alex City Marketplace 5,750 1,658 4/1/2015 5-40 years

Butler Square 5,640 1,051 4/15/2015 5-40 years

Brook Run Shopping Center 10,950 3,708 6/2/2015 5-40 years

Beaver Ruin Village (4) 1,296 7/1/2015 5-40 years

Beaver Ruin Village II (4) 435 7/1/2015 5-40 years

Columbia Fire Station 3,893 235 8/31/2018 7/1/2015 5-40 years

Chesapeake Square 4,279 1,009 7/10/2015 5-40 years

Sunshine Plaza 5,900 1,066 7/21/2015 5-40 years

Barnett Portfolio 8,770 1,570 8/21/2015 5-40 years

Grove Park 3,800 849 9/9/2015 5-40 years

Parkway Plaza 3,500 680 9/15/2015 5-40 years

Property Name Encumbrances Accumulated

Depreciation Date of

Construction Date

Acquired Depreciation

(in thousands)

Barnett Portfolio

Parkway Plaza

Fort Howard Square

Conyers Crossing

Darien Shopping Center

Devine Street

Ladson Crossing

Lake Greenwood Crossing

Litchfield II

Litchfield Market Village

Moncks Corner

Shoppes at Myrtle Park

Laburnum Square

Franklin Village

Village at Martinsville

New Market Crossing

Rivergate Shopping Center

Fort Howard Square $ 7,100 $ 1,126 9/30/2015 5-40 years

Conyers Crossing 5,960 1,301 9/30/2015 5-40 years

Darien Shopping Center (1) 144 4/12/2016 5-40 years

Devine Street (1) 252 4/12/2016 5-40 years

Folly Road 7,223 608 4/12/2016 5-40 years

Georgetown (6) 272 4/12/2016 5-40 years

Ladson Crossing (7) 553 4/12/2016 5-40 years

Lake Greenwood Crossing (7) 343 4/12/2016 5-40 years

Lake Murray (1) 236 4/12/2016 5-40 years

Litchfield I (5) 160 4/12/2016 5-40 years

Litchfield II (5) 132 4/12/2016 5-40 years

Litchfield Market Village (5) 687 4/12/2016 5-40 years

Moncks Corner (1) 162 4/12/2016 5-40 years

Ridgeland (6) 65 4/12/2016 5-40 years

Shoppes at Myrtle Park 5,892 921 4/12/2016 5-40 years

South Lake (1) 261 4/12/2016 5-40 years

South Park (7) 393 4/12/2016 5-40 years

Berkley (2) 335 11/10/2016 5-40 years

Sangaree (2) 655 11/10/2016 5-40 years

Tri-County (2) 552 11/10/2016 5-40 years

Riverbridge 4,000 727 11/15/2016 5-40 years

Laburnum Square 7,665 798 12/7/2016 5-40 years

Franklin Village 8,404 1,078 12/12/2016 5-40 years

Village at Martinsville 15,979 1,772 12/16/2016 5-40 years

New Market Crossing 6,508 690 12/20/2016 5-40 years

Rivergate Shopping Center 21,164 3,596 12/21/2016 5-40 years

JANAF 59,982 5,912 1/18/2018 5-40 years

Totals $ 59,685

(1) Properties secure a $ 25.0 million term note.

(2) Properties secure a $ 9.4 million mortgage note.

(3) Properties secure a $ 1.1 million mortgage note.

(3) These properties secure a $1.2 million bank line of credit.

(4) Properties secure a $ 9.4 million mortgage note.

6 unchanged sentences

Additions during the period:

Acquisitions — 35

Improvements 3,066 2,711

Impairments ( 600 ) ( 1,598 )

Disposals ( 6,151 ) ( 14,752 )

Balance at end of period $ 464,814 $ 468,499

Form 10-K Summary.

Not applicable.

EXHIBIT INDEX

Articles of Amendment and Restatement of the Registrant (Filed as exhibit to Form 8-K, filed on August 8, 2016).

3 unchanged sentences

Articles of Amendment and Restatement, effective March 31, 2017 (Filed as exhibit to Form 8-K, filed on April 3, 2017).

Articles of Amendment of Wheeler Real Estate Investment Trust, Inc.

(Filed as exhibit to Form 8-K, filed on May 29, 2020).

Amended and Restated Bylaws of Registrant (Filed as exhibit to Form S-11/A (Registration No.

333-177262) previously filed on February 14, 2012 pursuant to the Securities Act of 1933).

Bylaws of Wheeler Real Estate Investment Trust, Inc., as amended (Filed as exhibit to Form 8-K, filed on May 29, 2020).

Certificate of Correction of Articles Supplementary (Filed as exhibit to Form 8-K, filed on May 4, 2018).

12 unchanged sentences

(Filed as exhibit to Form 8-K, filed on September 5, 2019).

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).

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).

Form of Certificate of Common Stock of Registrant (Filed as exhibit to Form 8-K, filed on April 3, 2017).

7 unchanged sentences

2016 Long-Term Incentive Plan (Filed as exhibit to Form 8-K, filed on June 16, 2016).

Stock Appreciation Rights Agreement, dated August 4, 2020, between Wheeler Real Estate Investment Trust, Inc.

and Daniel Khoshaba (Filed as exhibit to Form 8-K, filed on August 5, 2020).

Employment Agreement with David Kelly (Filed as exhibit to Form 8-K, filed on February 20, 2018).

18 unchanged sentences

Equity Interests Pledge and Security Agreement to the KeyBank Amended and Restated Credit Agreement dated January 24, 2020 (Filed as exhibit to Form 8-K, filed on January 28, 2020).

Third Amendment to the KeyBank Amended and Restated Credit Agreement dated July 20, 2020 (Filed as exhibit to Form 8-K, filed on July 24, 2020).

Purchase and Sale Agreement dated November 3, 2016 between WHLR-JANAF, LLC, JANAF Shopping Center, LLC, JANAF Shops, LLC, JANAF HQ, LLC, and JANAF Crossing, LLC (Filed as exhibit to Form 8-K, filed on January 9, 2018).

15 unchanged sentences

JANAF Loan Agreement dated June 5, 2013 (Filed as exhibit to Form 8-K, filed on January 23, 2018).

Powerscourt Financing Agreement, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020).

Common Stock Purchase Warrant, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020).

Registration Rights Agreement, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020).

Wilmington Financing Agreement, dated March 12, 2021 (Filed as an exhibit to Form 8-K, filed on March 12, 2021).

Form of Common Stock Purchase Warrant, dated March 12, 2021 (Filed as an exhibit to Form 8-K, filed on March 12, 2021).

Registration Rights Agreement dated March 12, 2021, (Filed as an exhibit to Form 8-K, filed on March 12, 2021).

Code of Ethics (Filed as exhibit to Form S-11 (Registration No.

4 unchanged sentences

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).

Certification of the Chief Financial Officer of Wheeer Real Estate Investment Trust, Inc.

Certification of the Chief Financial Officer of Whee l er 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).

3 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith).

Instance Document (Filed herewith).

XBRL Taxonomy Extension Schema Document (Filed herewith).

101.INS XBRL Instance Document (Filed herewith).

101.SCH XBRL Taxonomy Extension Schema Document (Filed herewith).

XBRL Taxonomy Extension Calculation Linkbase (Filed herewith).

2 unchanged sentences

XBRL Taxonomy Extension Presentation Linkbase (Filed herewith).

Form 10-K Summary.

Not applicable.

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.

/s/ Daniel Khoshaba

Daniel Khoshaba

Chief Executive Officer

/s/ Crystal Plum

Chief Financial Officer

March 18, 2021

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Daniel Khoshaba 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/ DANIEL KHOSHABA

Chief Executive Officer

March 18, 2021

(Principal Executive Officer)

Daniel Khoshaba

/S/ CRYSTAL PLUM

Chief Financial Officer March 18, 2021

(Principal Financial Officer;

Principal Accounting Officer)

/S/ STEFANI D.

CARTER Chairman of Board of Directors March 18, 2021

/S/ ANDREW JONES

Director March 18, 2021

/S/ CLAYTON ("CHIP") ANDREWS

Director March 18, 2021

Clayton (“Chip”) Andrews

/S/ JOSEPH D.

Director March 18, 2021

BORRACK Director March 18, 2021

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

What changed 10-K

Item 9A. Controls and Procedures