Wheeler Real Estate Investment Trust, Inc. 10-K

Item 9A. Controls and Procedures. Disclosure Controls and Procedures Our management, under the supervision and with the participation of our principal executive 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). Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in rules promulgated under the Exchange Act, is a process designed by, or under the supervision of, our CEO and CFO and effected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Our internal control over financial reporting is evaluated on a regular basis by personnel in our organization. The overall goals of these various evaluation activities are to monitor our internal control over financial reporting and to make modifications as necessary, as disclosure and internal controls are intended to be dynamic systems that change (including improvements and corrections) as conditions warrant. Management conducted an assessment of the effectiveness of our company’s internal control over financial reporting as of December 31, 2020, utilizing the framework established in “INTERNAL CONTROL-INTEGRATED FRAMEWORK” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this assessment, management has determined that our internal controls over financial reporting as of December 31, 2020 were effective. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management's report in this Annual Report. Changes in Internal Control Over Financial Reporting 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. 25 Item 9B. Other Information. Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance. 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. Item 11. Executive Compensation. The information required by this Item will be contained in our Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Except as set forth below, the information required by this item will be contained in the Company’s Proxy Statement and is incorporated herein by reference. Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth information as of December 31, 2020 regarding our compensation plans and the Common Stock we may issue under the plan. Equity Compensation Plan Information Table Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by stockholders (1) — — 173,811 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. Awards are granted by the Compensation Committee. Item 13. 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. Item 14. 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. PART IV 26 Item 15. Exhibits and Financial Statement Schedules. 1. Financial Statements . The financial statements filed as a part of this Annual Report on Form 10-K are as follows: Page Report of Independent Registered Public Accounting Firm 28 Consolidated Balance Sheets 30 Consolidated Statements of Operations 31 Consolidated Statements of Equity 32 Consolidated Statements of Cash Flows 33 Notes to Consolidated Financial Statements 34 2. Financial Statement Schedules . a. Schedule II- Valuation and Qualifying Accounts b. Schedule III- Real Estate and Accumulated Depreciation All other financial statement schedules have been omitted because the required information of such schedules is not present, is not present in amounts sufficient to require a schedule or is included in the consolidated financial statements. 3. Exhibits . See the Exhibit Index at the end of this Annual Report on Form 10-K, which is incorporated by reference. 27 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Virginia Beach, Virginia Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Wheeler Real Estate Investment Trust, Inc. and Subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, equity, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes and schedules (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit 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. 28 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 We have served as the Company’s auditor since 2012. Virginia Beach, Virginia March 18, 2021 29 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except par value and share data) December 31, 2020 2019 ASSETS: Investment properties, net $ 392,664 $ 416,215 Cash and cash equivalents 7,660 5,451 Restricted cash 35,108 16,140 Rents and other tenant receivables, net 9,153 6,905 Assets held for sale 13,072 1,737 Above market lease intangibles, net 3,547 5,241 Operating lease right-of-use assets 12,745 11,651 Deferred costs and other assets, net 15,430 21,025 Total Assets $ 489,379 $ 484,365 LIABILITIES: Loans payable, net $ 334,266 $ 340,913 Liabilities associated with assets held for sale 13,124 2,026 Below market lease intangibles, net 4,554 6,716 Warrant liability 594 — Operating lease liabilities 13,200 11,921 Accounts payable, accrued expenses and other liabilities 11,229 9,557 Total Liabilities 376,967 371,133 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 EQUITY: Series A Preferred Stock (no par value, 4,500 shares authorized, 562 shares issued and outstanding) 453 453 Series B Convertible Preferred Stock (no par value, 5,000,000 authorized, 1,875,748 shares issued and outstanding; $46.90 million aggregate liquidation preference) 41,174 41,087 Common Stock ($0.01 par value, 18,750,000 shares authorized, 9,703,874 and 9,694,284 shares issued and outstanding, respectively) 97 97 Additional paid-in capital 234,061 233,870 Accumulated deficit ( 260,867 ) ( 251,580 ) 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 See accompanying notes to consolidated financial statements. 30 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except share and per share data) Years Ended December 31, 2020 2019 REVENUE: Rental revenues $ 60,039 $ 62,442 Other revenues 964 720 Total Revenue 61,003 63,162 OPERATING EXPENSES: Property operations 18,886 19,127 Non-REIT management and leasing services — 25 Depreciation and amortization 17,291 21,319 Impairment of notes receivable — 5,000 Impairment of assets held for sale 600 1,598 Corporate general & administrative 5,831 6,633 Total Operating Expenses 42,608 53,702 Gain on disposal of properties 23 1,394 Operating Income 18,418 10,854 Interest expense ( 17,092 ) ( 18,983 ) Other expense ( 1,039 ) — Net Income (Loss) Before Income Taxes 287 ( 8,129 ) Income tax expense — ( 15 ) Net Income (Loss) 287 ( 8,144 ) Less: 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 ) 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: Basic and Diluted 9,698,274 9,671,847 See accompanying notes to consolidated financial statements. 31 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Equity (in thousands, except share data) Series A Series B Noncontrolling Preferred Stock Preferred Stock Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Interests Total Shares Value Shares Value Shares Value Units Value Equity Balance, December 31, 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 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 Adjustment for noncontrolling interest in operating partnership — — — — — — 7 — 7 — ( 7 ) — Dividends and distributions — — — — — — — ( 10,357 ) ( 10,357 ) — — ( 10,357 ) Net Loss — — — — — — — ( 8,039 ) ( 8,039 ) — ( 105 ) ( 8,144 ) Balance, December 31, 2019 562 453 1,875,748 41,087 9,694,284 97 233,870 ( 251,580 ) 23,927 234,019 2,080 26,007 Accretion of Series B Preferred Stock discount — — — 87 — — — — 87 — — 87 Conversion of operating partnership units to Common Stock — — — — 9,590 — 21 — 21 ( 9,590 ) ( 21 ) — Adjustment for noncontrolling interest in operating partnership — — — — — — 170 — 170 — ( 170 ) — Dividends and distributions — — — — — — — ( 10,258 ) ( 10,258 ) — — ( 10,258 ) Preferred Stock redemption discount — — — — — — — 726 726 — — 726 Net Income — — — — — — — 245 245 — 42 287 Balance, December 31, 2020 562 $ 453 1,875,748 $ 41,174 9,703,874 $ 97 $ 234,061 $ ( 260,867 ) $ 14,918 224,429 $ 1,931 $ 16,849 See accompanying notes to consolidated financial statements. 32 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) For the Years Ended December 31, 2020 2019 CASH FLOWS FROM 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 Above (below) market lease amortization, net ( 461 ) ( 1,261 ) Straight-line expense 184 188 Share-based compensation — 2 Gain on disposal of properties ( 23 ) ( 1,394 ) Credit losses on operating lease receivables 1,131 449 Impairment of notes receivable — 5,000 Impairment of assets held for sale 600 1,598 Net changes in assets and liabilities: Rent and other tenant receivables, net ( 2,402 ) ( 1,592 ) Unbilled rent ( 1,076 ) ( 100 ) Deferred costs and other assets, net ( 661 ) ( 312 ) Accounts payable, accrued expenses and other liabilities ( 187 ) ( 2,205 ) Net operating cash flows used in discontinued operations — ( 2 ) Net cash provided by operating activities 15,780 15,253 CASH FLOWS FROM INVESTING ACTIVITIES: Investment property acquisitions — ( 24 ) Capital expenditures ( 2,271 ) ( 2,711 ) Cash received from disposal of properties 4,508 3,584 Cash received from disposal of properties-discontinued operations — 19 Net cash provided by investing activities 2,237 868 CASH FLOWS FROM FINANCING ACTIVITIES: Payments for deferred financing costs ( 3,143 ) ( 779 ) Loan proceeds 38,350 31,665 Loan principal payments ( 31,493 ) ( 43,415 ) 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 CASH, CASH EQUIVALENTS AND RESTRICTED CASH , beginning of year 21,591 17,999 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year $ 42,768 $ 21,591 Supplemental Disclosures: Non-cash Transactions: Conversion of common units to Common Stock $ 21 $ 2 Accretion of Preferred Stock discounts $ 677 $ 680 Deemed contribution related to preferred stock discount $ 726 $ — Other Cash Transactions: Cash paid for taxes $ 15 $ 6 Cash paid for interest $ 15,889 $ 17,379 The following table provides a reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 7,660 $ 5,451 Restricted cash 35,108 16,140 Cash, cash equivalents, and restricted cash $ 42,768 $ 21,591 See accompanying notes to consolidated financial statements. 33 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Organization and Basis of Presentation and Consolidation Wheeler Real Estate Investment Trust, Inc. (the “Trust,” the “REIT,” 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, 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. Accordingly, the use of the word “Company” refers to the Trust and its consolidated subsidiaries, except where the context otherwise requires. The Company includes the Trust, the Operating Partnership, the entities included in the REIT formation and the entities acquired since November 2012. The Company prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. All material balances and transactions between the consolidated entities of the Company have been eliminated. The Company owns, leases and operates income producing strip centers, neighborhood, grocery-anchored, community centers and free-standing retail properties with a strategy to acquire high quality retail properties that generate attractive risk-adjusted returns. The Company targeted competitively protected properties in communities that have stable demographics and have historically exhibited favorable trends, such as strong population and income growth. The Company considers competitively protected properties to be located in the most prominent shopping districts in their respective markets, ideally situated at major “Main and Main” intersections. The Company generally leases its properties to national and regional supermarket chains and selects retailers that offer necessity and value oriented items and generate regular consumer traffic. The Company’s tenants carry goods that are less impacted by fluctuations in the broader U.S. economy and consumers’ disposable income, which it believes generates more predictable property-level cash flows. 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 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. The Operating Companies perform property management and leasing functions for certain related and non-related third parties (the “Non-REIT Properties”), primarily through WRE. The Company converted WRE to a Taxable REIT Subsidiary (“TRS”) to accommodate serving the Non-REIT Properties since applicable REIT regulations consider the income derived from these services to be “bad” income subject to taxation. The regulations allow for costs incurred by the Company commensurate with the services performed for the Non-REIT Properties to be allocated to a TRS. During January 2014, the Company acquired Wheeler Development, LLC (“WD”) and converted it to a TRS. The Company began performing development activities for both REIT Properties and Non-REIT Properties during 2015. 34 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies Investment Properties The Company records investment properties and related intangibles at fair value upon acquisition. Investment properties include both acquired and constructed assets. Improvements and major repairs and maintenance are capitalized when the repair and maintenance substantially extends the useful life, increases capacity or improves the efficiency of the asset. All other repair and maintenance costs are expensed as incurred. The Company capitalizes interest on projects during periods of construction until the projects reach the completion point that corresponds with their intended purpose. The Company allocates the purchase price of acquisitions to the various components of the asset based upon the fair value of each component which may be derived from various observable or unobservable inputs and assumptions. Also, the Company may utilize third party valuation specialists. These components typically include buildings, land and any intangible assets related to out-of-market leases, tenant relationships and in-place leases the Company determines to exist. The Company determines fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in the analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases, tenant relationships and in-place lease value are recorded at fair value as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 5 to 40 years. The Company reviews depreciable lives of investment properties periodically and makes adjustments to reflect a shorter economic life, when necessary. Tenant allowances, tenant inducements and tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Amounts allocated to buildings are depreciated over the estimated remaining life of the acquired building or related improvements. The Company amortizes amounts allocated to tenant improvements, in-place lease assets and other lease-related intangibles over the remaining life of the underlying leases. The Company also estimates the value of other acquired intangible assets, if any, and amortizes them over the remaining life of the underlying related intangibles. The Company reviews investment properties for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable, but at least annually. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. The Company measures any impairment of investment property when the estimated undiscounted future operating income before depreciation and amortization, plus its residual value, is less than the carrying value of the property. Estimated undiscounted operating income before depreciation and amortization 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 current estimates, then impairment adjustments may be necessary in the future. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as operating income, estimated capitalization rates, or multiples, leasing prospects for vacant spaces and local market information. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets Held For Sale and Discontinued Operations The Company may decide to sell properties that are held for use. The Company records these properties as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of 35 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) the sale is considered probable and is expected within one year. Properties classified as held for sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell. When the carrying value exceeds the fair value, less estimated costs to sell an impairment expense is recognized. The Company estimates fair value, less estimated closing costs based on similar real estate sales transactions. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 and 3 inputs. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. See Note 3 for additional details on impairment of assets held for sale for the years ended December 31, 2020 and 2019. Assets held for sale are presented as discontinued operations in all periods presented if the disposition represents a strategic shift that has, or will have, a major effect on the Company's financial position or results of operations. This includes the net gain (or loss) upon disposal of property held for sale, the property's operating results, depreciation and interest expense. Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be within the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did no t record any conditional asset retirement obligation liabilities as of December 31, 2020 and 2019. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents consist primarily of bank operating accounts and money markets. Financial instruments that potentially subject the Company to concentrations of credit risk include its cash and cash equivalents and its trade accounts receivable. The Company places its cash and cash equivalents with institutions of high credit quality. Restricted cash represents amounts held by lenders for real estate taxes, insurance, reserves for capital improvements, leasing costs, tenant security deposits and funds 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. The Company's loss in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk. Tenant Receivables and Unbilled Rent Tenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2020 and 2019, the Company’s allowance for uncollectible tenant receivables totaled $ 994 thousand and $ 1.14 million, respectively. 36 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) Notes Receivable 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. The notes receivable are determined to be impaired when, based upon current information, it is no longer probable that the Company will be able to collect all contractual amounts due from the borrower. The amount of impairment loss recognized is measured as the difference between the carrying amount of the note and its estimated realizable value. The impairment on the Sea Turtle Development note is further discussed at Note 4. Above and Below Market Lease Intangibles, net The Company determines the above and below market lease intangibles upon acquiring a property. Above and below market lease intangibles are amortized over the life of the respective leases. Amortization of above and below market lease intangibles is recorded as a component of rental revenues. Deferred Costs and Other Assets, net The Company’s deferred costs and other assets consist primarily of leasing commissions, leases in place, capitalized legal and marketing costs, tenant relationships and ground lease sandwich interest intangibles associated with acquisitions. The Company’s lease origination costs consist primarily of the portion of property acquisitions allocated to lease originations and commissions paid to third parties in connection with lease originations. The Company generally records amortization of lease origination costs on a straight-line basis over the terms of the related leases. Amortization of deferred costs and other assets represents a component of depreciation and amortization expense. Paycheck Protection Program The Company received proceeds of $ 552 thousand (the "PPP funds") pursuant to the Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP funds were received in the form of a promissory note, dated April 24, 2020 (the “Promissory Note”), between the Company and KeyBank as the lender 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. 37 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) 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 Lease Contract Revenue The Company has two classes of underlying assets relating to rental revenue activity, retail and office space. The Company retains substantially all of the risks and benefits of ownership of these underlying assets and accounts for these leases as operating leases. The Company combines lease and nonlease components in lease contracts, which includes combining base rent and tenant reimbursement revenue. The Company accrues minimum rents on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. At December 31, 2020 and 2019, there were $ 4.48 million and $ 3.41 million, respectively, in unbilled rent which is included in "rents and other tenant receivables, net." Additionally, certain of the lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements as variable lease income. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. These reimbursements are considered nonlease components which the Company combines with the lease component. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by a fraction, the numerator of which is the total number of square feet being leased by the tenant, and the denominator of which is the average total square footage of all leasable buildings at the property. The Company also receives monthly payments for these reimbursements from substantially all its tenants throughout the year. The Company recognizes tenant reimbursements as variable lease income. The Company recognizes differences between estimated recoveries and the final billed amounts in the subsequent year. 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. The Company excludes these Company costs paid directly by the tenant to third parties on the Company’s behalf from both variable revenue payments recognized and the associated property operating expenses. The Company does not evaluate whether certain sales taxes and other similar taxes are the Company’s costs or tenants' costs. Instead, the Company accounts for these costs as tenant costs. The Company recognizes lease termination fees, which are included in "other revenues" on the consolidated statements of operations, in the year that the lease is terminated and collection of the fee is reasonably assured. Upon early lease termination, the Company provides for losses related to unrecovered intangibles and other assets. Beginning in April 2020, the Company received certain rent relief requests, most often in the form of rent deferral requests, as a result of COVID-19. The Company 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. 38 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) The 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, 2020 2019 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 Other 786 603 Subtotal 62,134 63,611 Credit losses on operating lease receivables ( 1,131 ) ( 449 ) Total $ 61,003 $ 63,162 Income Taxes The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90 % of its taxable income to stockholders and meet certain other asset and income tests, as well as other requirements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify. If the Company loses its REIT status it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to reasonable cause and certain other conditions were satisfied. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes and has determined that the Company had no uncertain income tax positions . Taxable REIT Subsidiary Cost Allocation The Company’s overall philosophy regarding cost allocation centers around the premise that the Trust exists to acquire, lease and manage properties for the benefit of its investors. Accordingly, a majority of the Company’s operations occur at the property level. Each property must carry its own weight by absorbing the costs associated with generating its revenues. Additionally, leases generally allow the Company to pass through to the tenant most of the costs involved in operating the property, including, but not limited to, the direct costs associated with owning and maintaining the property (landscaping, repairs and maintenance, taxes, insurance, etc.), property management and certain administrative costs. Service vendors bill the majority of the direct costs of operating the properties directly to the particular property and each property pays them accordingly. The Non-REIT Properties pay WRE property management and/or asset management fees of 3 % and 2 % of collected revenues, respectively. The Non-REIT Properties also 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). Costs incurred to manage, lease and administer the Non-REIT Properties are allocated to the TRS. 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. 39 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported periods. The Company’s actual results could differ from these estimates. Corporate General and Administrative Expense A detail for the "corporate general & administrative" line item from the consolidated statements of operations is presented below (in thousands): December 31, 2020 2019 Professional fees $ 2,466 $ 2,534 Compensation and benefits 1,589 1,991 Corporate administration 1,240 1,259 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 The Company determines if an arrangement is a lease at inception. Operating leases, in which the Company is the lessee, are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on our consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and the lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU assets include any lease payments made and excludes lease incentives. The Company's lease terms may include options to extend the lease when it is reasonably certain that the company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elects the practical expedient to combine lease and associated nonlease components. The lease components are the majority of its leasing arrangements and the Company accounts for the combined component as an operating lease. In the event the Company modifies existing ground leases or enters into new ground leases, such leases may be classified as finance leases. Noncontrolling Interests Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the 40 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) Company and noncontrolling interests. Consolidated statements of equity include beginning balances, activity for the period and ending balances for stockholders’ equity, noncontrolling interests and total equity. The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are exchanged for the Company’s $ 0.01 par value per share common stock ("Common Stock"). In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital. Adoption of ASC Topic 842, “Leases” In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases (Topic 842)”, to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. The Company adopted ASU 2016-02 as of January 1, 2019 using the modified retrospective approach within ASU 2018-11, which allows for the application date to be the beginning of the reporting period in which the entity first applies the new standard. The Company did not have a cumulative-effect adjustment as of the adoption date. The Company elected the package of transition practical expedients where the company is either the lessee or lessor, which among other things, allowed the Company to carry forward the historical lease classifications and use hindsight in determining the lease terms. The standard had a material impact on the Company's consolidated balance sheets, but did not have a material impact on the consolidated statements of operations. The most significant impact was the recognition of ROU assets and lease liabilities of approximately $ 11.90 million and $ 11.99 million, respectively, for operating leases as of January 1, 2019, calculated based on an incremental borrowing rate of 4.84 %. The difference between the ROU assets and lease liabilities at adoption represents the accrued straight-line rent liability previously recognized under ASC 840. The standard had no impact on the Company's cash flows. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This update enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better calculate credit loss estimates. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, such as accounts receivable and loans. The guidance will require that the Company estimate the lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. The Company will also be required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes. The guidance would be effective for interim and annual reporting periods beginning after December 15, 2022, per FASB's issuance of ASU 2019-10, "Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates." The Company is currently in the process of evaluating the impact the adoption of the guidance will have on its consolidated financial statements. 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. 41 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 2. Summary of Significant Accounting Policies (continued) 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 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. 3. Real Estate Investment properties consist of the following (in thousands): December 31, 2020 2019 Land and land improvements $ 97,117 $ 100,599 Buildings and improvements 354,738 366,082 Investment properties at cost 451,855 466,681 Less accumulated depreciation ( 59,191 ) ( 50,466 ) Investment properties, net $ 392,664 $ 416,215 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. A significant portion of the Company’s land, buildings and improvements serve as collateral for its mortgage loans. Accordingly, restrictions exist as to the encumbered property's transferability, use and other common rights typically associated with property ownership. Assets Held for Sale and Dispositions At December 31, 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. Matthews. 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, 2020 2019 Columbia Fire Station $ 600 $ — St. Matthews — 451 Perimeter Square — 1,147 Total $ 600 $ 1,598 42 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 3. Real Estate (continued) As of December 31, 2020 and 2019, assets held for sale and associated liabilities consisted of the following (in thousands): December 31, 2020 2019 Investment properties, net $ 12,593 $ 1,651 Rents and other tenant receivables, net 132 77 Above market leases, net 153 — Deferred costs and other assets, net 194 9 Total assets held for sale $ 13,072 $ 1,737 December 31, 2020 2019 Loans payable $ 12,838 $ 1,974 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: Disposal Property Contract Price Gain (Loss) Net Proceeds (in thousands) 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. 4. 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. 43 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 5. Deferred Costs Deferred costs and other assets, net of amortization are as follows (in thousands): December 31, 2020 2019 Leases in place, net $ 10,233 $ 14,968 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 As of December 31, 2020 and 2019, the Company’s intangible accumulated amortization totaled $ 60.33 million and $ 57.15 million, respectively. During the years ended December 31, 2020 and 2019, the Company’s intangible amortization expense totaled $ 5.97 million and $ 9.30 million, respectively. Future amortization of leases in place, ground lease sandwich interest, lease origination costs, tenant relationships, and legal and marketing costs is as follows (in thousands): For the Years Ended December 31, Leases In Place, net Ground Lease Sandwich Interest, net Lease Origination Costs, net Tenant Relationships, net Legal & Marketing Costs, net Total 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 44 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Loans Payable The Company’s loans payable consist of the following (in thousands except monthly payment): Property/Description Monthly Payment Interest Rate Maturity December 31, 2020 December 31, 2019 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) $ 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) $ 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 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 Less loans payable on assets held for sale, net loan amortization costs 12,838 1,974 Total Loans Payable, net $ 334,266 $ 340,913 (1) Includes loans payable on assets held for sale, see Note 3. (2) Collateralized by LaGrange Marketplace, Ridgeland and Georgetown. (3) Collateralized by Ladson Crossing, Lake Greenwood Crossing and South Park. (4) Collateralized by Cardinal Plaza, Franklinton Square, and Nashville Commons. (5) Collateralized by Clover Plaza, South Square, St. George, Waterway Plaza and Westland Square. (6) Collateralized by Darien Shopping Center, Devine Street, Lake Murray, Moncks Corner and South Lake. (7) Collateralized by Surrey Plaza and Amscot Building. 45 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Loans Payable (continued) 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; ◦ $ 7.55 million paydown from Laburnum Square refinancing proceeds on August 1, 2019; ◦ $ 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; and ◦ $ 2.50 million paydown from cash released to the Company from restricted cash accounts on May 20, 2020; ◦ $ 1.00 million paydown on November 12, 2020; ◦ $ 3.00 million final paydown from Powerscourt Financing Agreement proceeds on December 22, 2020. 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. 46 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. 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 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; • Paid down $ 323 thousand with proceeds from the sale of Jenks Plaza on January 11, 2019; • Paid down $ 30 thousand in conjunction with the sale of a Harbor Pointe parcel on February 7, 2019; and • Paid down the remaining principal balance and the $ 20 thousand Exit Fee on March 29, 2019 from operating cash flows. Revere Warrant Agreement In connection with the Revere Term Loan, the Company and Revere entered into the Revere Warrant Agreement dated as of April 8, 2016, pursuant to which the Company agreed to issue the Warrant to Revere. The terms of the Revere Warrant Agreement provide that solely in the event of an Event of Default (as defined in the Revere Term Loan) under the Revere Term Loan, Revere shall have the right to purchase an aggregate of up to 750,000 shares of the Company’s Common Stock for an exercise price equal to $ 0.0001 per share. The Warrant was exercisable at any time and from time to time during the period starting on April 8, 2016 and expiring on February 1, 2019 at 11:59 p.m., Virginia Beach, Virginia time, solely in the event of an Event of Default under the Revere Term Loan. The Company did not receive any proceeds from the issuance of the Warrant; rather the Warrant served as collateral for the Revere Term Loan, the proceeds of which were used as partial consideration for the A-C Portfolio. The issuance of the Warrant was exempt from registration pursuant to the exemption provided by Rule 506 of Regulation D under the Securities Act of 1933, as amended based upon the above facts, because Revere was an accredited investor and because the issuance of the Warrant was a private transaction by the Company and did not involve any public offering. The Warrant was treated as embedded equity and separate disclosure is not necessary. The Warrants fully expired in 2019. 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 47 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Loans Payable (continued) On January 15, 2019, the Company renewed the promissory notes for $ 6.25 million and $ 247 thousand at Perimeter Square. The loans were extended to March 2019 with interest only payments beginning February 15, 2019. The loans bear interest at 6.50 %. In April 2019, the Company extended the $ 6.50 million of Perimeter Square loans to June 5, 2019. 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. Harbor Pointe Payoff On February 7, 2019, the principal balance on the Harbor Pointe loan was paid in full with the sale of a 1.28 acre parcel located at the property, as detailed in Note 3. Graystone Crossing Payoff 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 $ 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 $ 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. 48 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Loans Payable (continued) 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. 49 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 6. Loans Payable (continued) Debt Maturity 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 2022 12,586 2023 111,875 2024 44,240 2025 91,426 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, 2021 of $ 43.93 million. All loans due to mature are collateralized by properties within the portfolio. Additionally, the Company expects to meet the short-term liquidity requirements, through a combination of the following: • suspension of Series A Preferred, Series B Preferred and Series D Preferred dividends; • available cash and cash equivalents; • cash flows from operating activities; • refinancing of maturing debt; • possible sale of six undeveloped land parcels; and • sale of additional properties, if necessary. 7. 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 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 2022 40,091 2023 34,385 2024 27,053 2025 21,239 Thereafter 46,311 Total minimum rents $ 213,140 8. Equity and Mezzanine Equity 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"). 50 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) Substantially all of our business is conducted through the Company’s Operating Partnership. The Trust is the sole general partner of the Operating Partnership and owned a 98.53 % interest in the Operating Partnership as of December 31, 2020. Limited partners in the Operating Partnership have the right to redeem their common units for cash or, at our option, common shares at a ratio of one common unit for one common share. Distributions to common unit holders are paid at the same rate per unit as dividends per share to the Trust’s common stockholders. As of December 31, 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, 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, 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, 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 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 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”). Commencing September 21, 2023, the holder’s will be entitled to cumulative cash dividends at an annual dividend rate of the Initial Rate increased by 2 % of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 14 %. Dividends are payable quarterly in arrears on or before January 15 th , April 15 th , July 15 th and October 15 th of each year. On or after September 21, 2021, the Company may, at its option, redeem the Series D Preferred, for cash at a redemption price of $ 25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date. The holder of the Series D Preferred may convert shares at any time into shares of the Company’s Common Stock at an initial conversion rate of $ 16.96 per share of Common Stock. On September 21, 2023, the holders of the Series D Preferred may, at their option, elect to cause the Company to redeem any or all of their shares at a redemption price of $ 25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date, payable in cash or in shares of Common Stock, or any combination thereof, at the holder’s option. The Series D Preferred requires the Company maintain asset coverage of at least 200 %. If we fail to maintain asset coverage of at least 200 % calculated by determining the percentage value of (i) our total assets plus accumulated depreciation and accumulated amortization minus our total liabilities and indebtedness as reported in our financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) (exclusive of the book value of any Redeemable and Term Preferred Stock (defined below)) over (ii) the aggregate liquidation preference, plus an amount equal to all accrued and unpaid dividends, of outstanding shares of our Series D Preferred and any outstanding shares of term preferred stock or preferred stock providing for a fixed mandatory redemption date or maturity date (collectively referred to as 51 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. 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 are to be redeemed for failure to maintain the Asset Coverage Ratio, such shares will be redeemed solely in cash at a redemption price equal to $ 25.00 per share plus an amount equal to all accrued but unpaid dividends, if any, on such shares (whether or not declared) to and including the redemption date. Dividends on the Series D Preferred cumulate from the end of the most recent dividend period for which dividends have been paid. Dividends on the Series D Preferred cumulate whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends and (iii) such dividends are authorized by our Board of Directors or declared by us. Dividends on the Series D Preferred do not bear interest. If the Company, fails to pay any dividend within three (3) business days after the payment date for such dividend, the then-current dividend rate increases following the payment date by an additional 2.0 % of the $ 25.00 stated liquidation preference per share, or $ 0.50 per annum, until we pay the dividend, subject to our ability to cure the failure. On December 20, 2018, the Company suspended the Series D Preferred dividend. As such, the Series D Preferred shares began accumulating dividends at 10.75 % beginning January 1, 2019 and will continue to accumulate dividends at this rate until all accumulated dividends have been paid. Holders of shares of the Series D Preferred have no voting rights. Pursuant to the Company's Articles Supplementary, if dividends on the Series D Preferred are in arrears for six or more consecutive quarterly periods (a "Preferred Dividend Default"), 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): Series D Preferred Balance December 31, 2018 $ 76,955 Accretion of Preferred Stock discount 593 Undeclared dividends 9,677 Balance December 31, 2019 87,225 Accretion of Preferred Stock discount 590 Undeclared dividends 9,581 Redemption of Preferred Stock ( 1,833 ) Balance December 31, 2020 $ 95,563 52 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) Earnings per share Basic earnings per share for the Company’s common stockholder is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the Company’s weighted-average shares of Common Stock outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) attributable to common stockholders, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the weighted-average number of common shares including any dilutive shares. 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, 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 Series D Preferred Stock 3,529,293 5,202,378 3,600,636 5,307,541 Warrants to purchase Common Stock — 496,415 — — Dividends 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 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 For the year ended December 31, 2019 $ 51 $ 90.00 $ 4,221 $ 2.25 $ 9,677 $ 2.69 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 stockholders approved the 2015 Long-Term Incentive Plan (the "2015 Incentive Plan"). The 2015 Incentive Plan allows for issuance of up to 125,000 shares of the Company's Common Stock to employees, directors, officers and consultants for services rendered to the Company. The 2015 Incentive Plan replaced the 2012 Stock Incentive Plan. As of December 31, 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 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. 53 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 8. Equity and Mezzanine Equity (continued) For the Years Ended December 31, Shares Issued Market Value (in thousands) 2020 — $ — 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. Tender Offer 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. 9 . Lease Commitments 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, 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 Year Amscot $ 25 $ 25 2045 Beaver Ruin Village 54 54 2054 Beaver Ruin Village II 22 22 2056 Leased office space Charleston, SC — 67 2019 Moncks Corner 121 121 2040 Devine Street (1) 396 396 2051 JANAF (2) 282 290 2069 Total $ 900 $ 975 (1) Lease options are exercised through 2035 with options which are reasonably certain to be exercised through 2051. (2) Includes $ 131 thousand and $ 139 thousand in variable percentage rent, during the years ended December 31, 2020 and 2019, respectively. Supplemental information related to leases is as follows (in thousands): For the Years Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 583 $ 644 Leased assets obtained in exchange for new operating lease liabilities $ 1,285 $ 11,904 54 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 9. 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, 2021 $ 902 2022 905 2023 907 2024 909 2025 913 Thereafter 23,785 Total minimum lease payments (1) 28,321 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. On December 31, 2020, the Company sold its corporate headquarters in Virginia Beach to an unrelated party for approximately $ 2.84 million, net of costs to sell, and simultaneously leased the building for 10 years at an annual base rent of $ 265 thousand, plus taxes and other operating and maintenance expenses. The transaction qualified for sale leaseback accounting in accordance with ASC 842 and the Company used the incremental borrowing rate associated with the previous loan on the office building of 5.77 % for purposes of calculating the lease liability. The lease agreement includes an option for five years and the Company recognized only the initial term of the lease as part of its ROU asset and lease liability. As a result of this transaction, a gain of $ 49 thousand was recognized, which is included in "gain on disposal of properties" on the consolidated statements of operations with the remaining gain of $ 725 thousand deferred over the life of the lease. 10. Commitments and Contingencies Insurance The Company carries comprehensive liability, fire, extended coverage, business interruption and rental loss insurance covering all of the properties in its portfolio under a blanket insurance policy, in addition to other coverages, such as trademark and pollution coverage that may be appropriate for certain of its properties. Additionally, the Company carries a directors’, officers’, entity and employment practices liability insurance policy that covers such claims made against the Company and its directors and officers. The Company believes the policy specifications and insured limits are appropriate and adequate for its properties given the relative risk of loss, the cost of the coverage and industry practice; however, its insurance coverage may not be sufficient to fully cover its losses. Concentration of Credit Risk The Company is subject to risks incidental to the ownership and operation of commercial real estate. These risks include, among others, the risks normally associated with changes in the general economic climate, trends in the retail industry, creditworthiness of tenants, competition for tenants and customers, changes in tax laws, interest rates, the availability of financing and potential liability under environmental and other laws. The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically located in the Southeast, Mid-Atlantic and Northeast, which markets represented approximately 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. 55 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 10. Commitments and Contingencies (continued) Regulatory and Environmental As the owner of the buildings on our properties, the Company could face liability for the presence of hazardous materials (e.g., asbestos or lead) or other adverse conditions (e.g., poor indoor air quality) in its buildings. Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if the Company does not comply with such laws, it could face fines for such noncompliance. Also, the Company could be liable to third parties (e.g., occupants of the buildings) for damages related to exposure to hazardous materials or adverse conditions in its buildings, and the Company could incur material expenses with respect to abatement or remediation of hazardous materials or other adverse conditions in its buildings. In addition, some of the Company’s tenants routinely handle and use hazardous or regulated substances and wastes as part of their operations at our properties, which are subject to regulation. Such environmental and health and safety laws and regulations could subject the Company or its tenants to liability resulting from these activities. Environmental liabilities could affect a tenant’s ability to make rental payments to the Company, and changes in laws could increase the potential liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise materially and adversely affect the Company’s operations. The Company is not aware of any material contingent liabilities, regulatory matters or environmental matters that may exist. Litigation The Company is involved in various legal proceedings arising in the ordinary course of its business, including, but not limited to commercial disputes. The Company believes that such litigation, claims and administrative proceedings will not have a material adverse impact on its financial position or its results of operations. The Company records a liability when it considers the loss probable and the amount can be reasonably estimated. In addition, the below legal proceedings are in process. Jon Wheeler v. Wheeler Real Estate Investment Trust, Inc., Circuit Court for the City of Virginia Beach, Virginia. Former CEO, Jon Wheeler, alleged that his employment was improperly terminated and that he was owed severance and bonus payments pursuant to his Employment Agreement. 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. BOKF, NA v. 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. , 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. 56 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 10. 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. The proceeds of the bonds were to provide funding for the construction of public infrastructure and other site improvements and to be repaid by incremental additional property taxes generated by development. Harbor Pointe Associates, LLC, then owned by an affiliate of former CEO, Jon Wheeler, entered into an Economic Development Agreement with the Grove Economic Development Authority for this infrastructure development and in the event the ad valorem taxes were insufficient to cover annual debt service, Harbor Pointe Associates, LLC would reimburse the Grove Economic Development Authority (the “Harbor Pointe Agreement”). In 2014, Harbor Pointe Associates, LLC was acquired by the Company. The total debt service shortfall over the life of the bond is uncertain as it is based on ad valorem taxes, assessed property values, property tax rates, LIBOR and future potential development ranging until 2036. The Company’s future total principal obligation under the Harbor Pointe Agreement will be no more than $ 2.21 million, the principal amount of the bonds, as of December 31, 2020. 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 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. 11. Related Party Transactions 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): December 31, 2020 2019 Amounts paid to affiliates $ 106 $ — Amounts received from affiliates $ — $ 19 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. 57 Table of Contents Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Continued) 12. Subsequent Events Paycheck Protection Program On January 8, 2021, KeyBank notified the Company that the PPP Promissory Note application for forgiveness has been approved. Tender offer 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 58 Table of Contents 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. 59 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule II-Valuation and Qualifying Accounts December 31, 2020 Description Balance at Beginning of Year Charged to Costs and Expense Deductions from Reserves Balance at End of Year (in thousands) Allowance for doubtful accounts: Year Ended December 31, 2020 $ 3,293 $ 1,131 $ ( 3,430 ) $ 994 Year Ended December 31, 2019 $ 3,269 $ 426 $ ( 402 ) $ 3,293 60 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule III-Real Estate and Accumulated Depreciation December 31, 2020 Initial Cost Costs Capitalized Subsequent to Acquisition Gross Amount at which Carried at End of Period Property Name Land Building and Improvements Improvements (net) Carrying Costs Land Building and Improvements Total (in thousands) Amscot Building $ — $ 462 $ 31 $ — $ — $ 493 $ 493 Lumber River Village 800 4,487 151 — 942 4,496 5,438 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 Walnut Hill Plaza 734 2,414 1,334 — 734 3,748 4,482 Tampa Festival 4,653 6,691 442 — 4,695 7,091 11,786 Forrest Gallery 3,015 7,455 1,081 — 3,015 8,536 11,551 Winslow Plaza 1,325 3,684 210 — 1,370 3,849 5,219 Clover Plaza 356 1,197 29 — 356 1,226 1,582 St. 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 Waterway Plaza 1,280 1,248 214 — 1,299 1,443 2,742 Cypress Shopping Center 2,064 4,579 476 — 2,064 5,055 7,119 Harrodsburg Marketplace 1,431 2,485 72 — 1,509 2,479 3,988 Port Crossing Shopping Center 792 6,921 167 — 792 7,088 7,880 LaGrange Marketplace 390 2,648 277 — 430 2,885 3,315 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 Bryan Station 1,658 2,756 85 — 1,658 2,841 4,499 Crockett Square 1,546 6,834 183 — 1,565 6,998 8,563 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 Brook Run Properties 300 — 8 — 300 8 308 Alex City Marketplace 454 7,837 1,610 — 716 9,185 9,901 Butler Square 1,024 6,401 224 — 1,024 6,625 7,649 Brook Run Shopping Center 2,209 12,919 593 — 2,377 13,344 15,721 Beaver Ruin Village 2,604 8,284 102 — 2,604 8,386 10,990 Beaver Ruin Village II 1,153 2,809 5 — 1,153 2,814 3,967 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 Sunshine Plaza 1,183 6,368 500 — 1,222 6,829 8,051 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 61 Initial Cost Costs Capitalized Subsequent to Acquisition Gross Amount at which Carried at End of Period Property Name Land Building and Improvements Improvements (net) Carrying Costs Land Building and Improvements Total Conyers Crossing $ 2,034 $ 6,820 $ 94 $ — $ 2,034 $ 6,914 $ 8,948 Darien Shopping Center 188 1,054 — — 188 1,054 1,242 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 Litchfield Market Village 2,970 4,716 127 — 3,046 4,767 7,813 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 Franklin Village 2,608 9,426 26 — 2,608 9,452 12,060 Village at Martinsville 5,208 12,879 241 — 5,228 13,100 18,328 New Market Crossing 993 5,216 363 — 1,042 5,530 6,572 Rivergate Shopping Center 1,570 30,694 146 — 1,672 30,738 32,410 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. 62 Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule III-Real Estate and Accumulated Depreciation Property Name Encumbrances Accumulated Depreciation Date of Construction Date Acquired Depreciation Life (in thousands) Amscot Building (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 St. 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 63 Property Name Encumbrances Accumulated Depreciation Date of Construction Date Acquired Depreciation Life (in thousands) 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. (4) Properties secure a $ 9.4 million mortgage note. (5) Properties secure a $ 7.4 million mortgage note. (6) Properties secure a $ 5.6 million mortgage note. (7) Properties secure a $ 7.2 million mortgage note. 64 Schedule III-Real Estate and Accumulated Depreciation (Continued) 2020 2019 (in thousands) Balance at beginning of period $ 468,499 $ 482,103 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 65 Exhibit 3.1 Articles of Amendment and Restatement of the Registrant (Filed as exhibit to Form 8-K, filed on August 8, 2016). 3.2 Articles of Supplementary of the Registrant dated September 16, 2016 (Filed as exhibit to Form 8-K, filed on September 20, 2016). 3.3 Articles of Supplementary of the Registrant dated December 1, 2016 (Filed as exhibit to Form 8-K, filed on December 5, 2016). 3.4 Articles of Amendment and Restatement, effective March 31, 2017 (Filed as exhibit to Form 8-K, filed on April 3, 2017). 3.5 Articles of Amendment and Restatement, effective March 31, 2017 (Filed as exhibit to Form 8-K, filed on April 3, 2017). 3.6 Articles of Amendment of Wheeler Real Estate Investment Trust, Inc. (Filed as exhibit to Form 8-K, filed on May 29, 2020). 3.7 Amended and Restated Bylaws of Registrant (Filed as exhibit to Form S-11/A (Registration No. 333-177262) previously filed on February 14, 2012 pursuant to the Securities Act of 1933). 3.8 Bylaws of Wheeler Real Estate Investment Trust, Inc., as amended (Filed as exhibit to Form 8-K, filed on May 29, 2020). 3.9 Certificate of Correction of Articles Supplementary (Filed as exhibit to Form 8-K, filed on May 4, 2018). 3.10 Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. (Filed as exhibit to Form S-11 (Registration No. 333-198245) previously filed on August 20, 2014 pursuant to the Securities Act of 1933). 3.11 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series A Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on April 15, 2015). 3.12 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Amended Designation of Series B Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on July 15, 2016). 3.13 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series D Cumulative Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on September 20, 2016). 3.14 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Amended Designation of Additional Series D Cumulative Convertible Preferred Units (Filed as exhibit to Form 8-K, filed on December 5, 2016). 3.15 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. (Filed as exhibit to Form 8-K, filed on September 5, 2019). 3.16 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P., dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020). 3.17 Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P, dated March 12, 2021 (Filed as an exhibit to Form 8-K, filed on March 12, 2021). 4.1 Form of Certificate of Common Stock of Registrant (Filed as exhibit to Form 8-K, filed on April 3, 2017). 4.2 Form of Certificate of Series B Preferred Stock of Registrant (Filed as exhibit to Form S-11/A (Registration No. 333-194831) previously filed on April 23, 2014 pursuant to the Securities Act of 1933). 4.3 Form of Certificate of Series D Preferred Stock of the Registrant (Filed as exhibit to Form 8-K, filed on September 20, 2016). 4.4 Description of Securities (Filed herewith). 10.1 Wheeler Real Estate Investment Trust, Inc. 2015 Long-Term Incentive Plan (Filed as exhibit to Form 8-K, filed on June 8, 2015). 66 10.2 Wheeler Real Estate Investment Trust, Inc. 2016 Long-Term Incentive Plan (Filed as exhibit to Form 8-K, filed on June 16, 2016). 10.3 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). 10.4 Employment Agreement with David Kelly (Filed as exhibit to Form 8-K, filed on February 20, 2018). 10.5 Employment Agreement with Matthew Reddy (Filed as exhibit to Form 8-K, filed on February 20, 2018). 10.6 Employment Agreement with M. Andrew Franklin (Filed as exhibit to Form 8-K, filed on February 20, 2018). 10.7 Employment Agreement with Crystal Plum (Filed as exhibit to Form 8-K, filed on February 20, 2020). 10.8 Tax Protection Agreement dated October 24, 2014, by and among Jon S. Wheeler, Wheeler REIT, L.P., and Wheeler Real Estate Investment Trust, Inc (Filed as exhibit to Form 8-K, filed on October 30, 2014). 10.9 Shareholders Rights Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and Westport Capital Partners LLC as agent on behalf of certain investor (Filed as exhibit to Form 8-K, filed on March 19, 2015). 10.10 Letter Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and Jon S. Wheeler (Filed as exhibit to Form 8-K, filed on March 19, 2015). 10.11 Tax Protection Agreement dated February 8, 2017 (Filed as exhibit to Form 8-K, filed on February 10, 2017). 10.12 Amended and Restated Credit Agreement dated December 21, 2017 (Filed as exhibit to Form 8-K, filed on December 22, 2017). 10.13 Keybank Letter Agreement Amendment to the Amended and Restated Credit Agreement dated March 2, 2018 (Filed as exhibit to Form 8-K/A, filed on March 7, 2018). 10.14 KeyBank Letter Amendment to the Amended and Restated Credit Agreement dated August 7, 2018 (Filed as exhibit to Form 8-K/A, filed on August 8, 2018). 10.15 KeyBank Letter Amendment to the Amended and Restated Credit Agreement dated October 15, 2018 (Filed as exhibit to Form 8-K/A, filed on October 19, 2018). 10.16 KeyBank Letter Amendment to the Amended and Restated Credit Agreement dated February 28, 2019 (Filed as exhibit to Form 8-K/A, filed on March 14, 2019). 10.17 First Amendment to the KeyBank Amended and Restated Credit Agreement dated April 25, 2019 (Filed as exhibit to Form 8-K/A, filed on May 1, 2019). 10.18 Second Amendment to the KeyBank Amended and Restated Credit Agreement dated January 24, 2020 (Filed as exhibit to Form 8-K, filed on January 28, 2020). 10.19 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). 10.20 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). 10.21 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). 10.22 First Amendment to JANAF Purchase and Sale Agreement, dated December 2, 2016 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.23 Second Amendment to JANAF Purchase and Sale Agreement, dated January 6, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.24 Third Amendment to JANAF Purchase and Sale Agreement, dated January 9, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.25 Fourth Amendment to JANAF Purchase and Sale Agreement, dated January 11, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 67 10.26 Fifth Amendment to JANAF Purchase and Sale Agreement, dated January 13, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.27 Sixth Amendment to JANAF Purchase and Sale Agreement, dated February 3, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.28 Seventh Amendment to JANAF Purchase and Sale Agreement, dated March 6, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.29 Eighth Amendment to JANAF Purchase and Sale Agreement, dated March 7, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.30 Ninth Amendment to JANAF Purchase and Sale Agreement, dated March 8, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.31 Tenth Amendment to JANAF Purchase and Sale Agreement, dated June 9, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.32 Eleventh Amendment to JANAF Purchase and Sale Agreement, dated October 17, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.33 Twelfth Amendment to JANAF Purchase and Sale Agreement, dated November 9, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.34 Thirteenth Amendment to JANAF Purchase and Sale Agreement, dated November 30, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.35 Fourteenth Amendment to JANAF Purchase and Sale Agreement, dated December 19, 2017 (Filed as exhibit to Form 8-K, filed on January 9, 2018). 10.36 Fifteenth Amendment to JANAF Purchase and Sale Agreement, dated January 17, 2018 (Filed as exhibit to Form 10-K, filed on March 7, 2018). 10.37 JANAF Loan Agreement dated June 5, 2013 (Filed as exhibit to Form 8-K, filed on January 23, 2018). 10.38 Powerscourt Financing Agreement, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020). 10.39 Common Stock Purchase Warrant, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020). 10.40 Registration Rights Agreement, dated December 22, 2020 (Filed as an exhibit to Form 8-K, filed on December 23, 2020). 10.41 Wilmington Financing Agreement, dated March 12, 2021 (Filed as an exhibit to Form 8-K, filed on March 12, 2021). 10.42 Form of Common Stock Purchase Warrant, dated March 12, 2021 (Filed as an exhibit to Form 8-K, filed on March 12, 2021). 10.43 Registration Rights Agreement dated March 12, 2021, (Filed as an exhibit to Form 8-K, filed on March 12, 2021). 14.1 Code of Ethics (Filed as exhibit to Form S-11 (Registration No. 333-177262) previously filed on October 12, 2011 pursuant to the Securities Act of 1933). 21.1 Subsidiaries of Registrant (Filed herewith). 23.1 Consent of Cherry Bekaert LLP (Filed herewith). 31.1 Certification of the Chief Executive Officer of Wheeler Real Estate Investment Trust, Inc. pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith). 31.2 Certification of the Chief Financial Officer of 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). 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith). 68 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith). 101.INS XBRL Instance Document (Filed herewith). 101.SCH XBRL Taxonomy Extension Schema Document (Filed herewith). 101.CAL XBRL Taxonomy Extension Calculation Linkbase (Filed herewith). 101.DEF XBRL Taxonomy Extension Definition Linkbase (Filed herewith). 101.LAB XBRL Taxonomy Extension Labels Linkbase (Filed herewith). 101.PRE XBRL Taxonomy Extension Presentation Linkbase (Filed herewith). Item 16. Form 10-K Summary. Not applicable. 69 SIGNATURES Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WHEELER REAL ESTATE INVESTMENT TRUST, INC. /s/ Daniel Khoshaba Daniel Khoshaba Chief Executive Officer /s/ Crystal Plum Crystal Plum Chief Financial Officer Date: March 18, 2021 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 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) Crystal Plum /S/ STEFANI D. CARTER Chairman of Board of Directors March 18, 2021 Stefani D. Carter /S/ ANDREW JONES Director March 18, 2021 Andrew Jones /S/ CLAYTON ("CHIP") ANDREWS Director March 18, 2021 Clayton (“Chip”) Andrews /S/ JOSEPH D. STILWELL Director March 18, 2021 Joseph D. Stilwell /S/ PAULA J. POSKON Director March 18, 2021 Paula J. Poskon /S/ KERRY G. CAMPBELL Director March 18, 2021 Kerry G. Campbell /S/ E.J. BORRACK Director March 18, 2021 E.J. Borrack 70