SEC Filing - CTO Realty Growth

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 1

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-11350

CTO REALTY GROWTH, INC.

(Exact name of registrant as specified in its charter)


Maryland		59-0483700
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1140 N. Williamson Blvd., Suite 140
Daytona Beach, Florida		32114
(Address of principal executive offices)		(Zip Code)

(386) 274-2202

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbols	Name of each exchange on which registered:
Common Stock, $0.01 par value per share	CTO	NYSE
6.375% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share	CTO PrA	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒

Non-accelerated Filer	☐	Smaller Reporting Company	☐

		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 21, 2021, there were 5,962,150 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

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Explanatory Note

This Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) to the Quarterly Report on Form 10-Q of CTO Realty Growth, Inc., a Maryland corporation (the “Company”), amends the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 (the “Quarterly Report”), which was initially filed with the Securities and Exchange Commission on October 28, 2021. Capitalized terms used in this Explanatory Note and not otherwise defined herein shall have the meanings ascribed to such terms in the Quarterly Report.

This Amendment No. 1 is being filed to correct an error in Note 17, Long-Term Debt, included in Part 1, Item 1 of the Quarterly Report. The Quarterly Report incorrectly stated that, after the Company’s third quarter 2021 dividend, the conversion rate of the 2025 Notes is equal to 19.1756 shares of common stock for each $1,000 principal amount of 2025 Notes, which represents an adjusted conversion price of $52.15 per share of common stock. This Amendment No. 1 revises the Quarterly Report to correctly disclose that, after the Company’s third quarter 2021 dividend, the conversion rate for the 2025 Notes is equal to 19.1410 shares of common stock for each $1,000 principal amount of 2025 Notes, which represents an adjusted conversion price of $52.24 per share of common stock. There are no changes to the amounts shown in the Company’s consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income (loss), consolidated statements of stockholders’ equity or consolidated statements of cash flows.

No other changes in the Quarterly Report are being made by this Amendment No. 1. However, in accordance with Rule 12b-15 promulgated under the Securities Exchange Act of 1934, as amended, the complete text of Part I, Item 1, as amended, is included herein.

This Amendment No. 1 also amends and restates the exhibit list in Part II, Item 6 of the Quarterly Report and re-files certain currently dated certifications of our principal executive officer and principal financial officer as Exhibits 31.1, 31.2, 32.1 and 32.2 hereto. This Amendment No. 1 speaks as of the date of the Quarterly Report, and has not been updated to reflect events occurring subsequent to the original filing date of the Quarterly Report.

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INDEX


		Page
		No.
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets – September 30, 2021 (Unaudited) and December 31, 2020		4

Consolidated Statements of Operations – Three and nine months ended September 30, 2021 and 2020 (Unaudited)		5

Consolidated Statements of Comprehensive Income (Loss) – Three and nine months ended September 30, 2021 and 2020 (Unaudited)		6

Consolidated Statements of Stockholders’ Equity – Three and nine months ended September 30, 2021 and 2020 (Unaudited)		7

Consolidated Statements of Cash Flows – Nine months ended September 30, 2021 and 2020 (Unaudited)		8

Notes to Consolidated Financial Statements (Unaudited)		10

PART II—OTHER INFORMATION

ITEM 6. EXHIBITS		48

SIGNATURES		50

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CTO REALTY GROWTH, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	As of
	(Unaudited) September 30, 2021		December 31, 2020
ASSETS
Real Estate:
Land, at Cost	$	162,297	$	166,512
Building and Improvements, at Cost		256,902		305,614
Other Furnishings and Equipment, at Cost		701		672
Construction in Process, at Cost		1,675		323
Total Real Estate, at Cost		421,575		473,121
Less, Accumulated Depreciation		(22,385)		(30,737)
Real Estate—Net		399,190		442,384
Land and Development Costs		6,702		7,083
Intangible Lease Assets—Net		64,624		50,176
Assets Held for Sale—See Note 25		835		833
Investment in Joint Ventures		25,575		48,677
Investment in Alpine Income Property Trust, Inc.		37,468		30,574
Mitigation Credits		3,405		2,622
Mitigation Credit Rights		21,573		—
Commercial Loan and Master Lease Investments		38,993		38,320
Cash and Cash Equivalents		7,005		4,289
Restricted Cash		68,546		29,536
Refundable Income Taxes		856		26
Deferred Income Taxes—Net		215		—
Other Assets—See Note 13		11,695		12,180
Total Assets	$	686,682	$	666,700
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts Payable	$	1,402	$	1,047
Accrued and Other Liabilities—See Note 19		12,716		9,090
Deferred Revenue—See Note 20		3,656		3,319
Intangible Lease Liabilities—Net		3,036		24,163
Liabilities Held for Sale—See Note 25		831		831
Deferred Income Taxes—Net		—		3,521
Long-Term Debt		229,894		273,830
Total Liabilities		251,535		315,801
Commitments and Contingencies—See Note 23
Stockholders’ Equity:
Preferred Stock – 100,000,000 shares authorized; $0.01 par value, 6.375% Series A Cumulative Redeemable Preferred Stock, $25.00 Per Share Liquidation Preference, 3,000,000 shares issued and outstanding at September 30, 2021; 50,000 shares authorized; $100.00 par value, no shares issued or outstanding at December 31, 2020		30		—
Common Stock – 500,000,000 shares authorized; $0.01 par value, 5,960,912 shares issued and outstanding at September 30, 2021; 25,000,000 shares authorized; $1.00 par value, 7,310,680 shares issued and 5,915,756 shares outstanding at December 31, 2020		60		7,250
Treasury Stock – 0 shares at September 30, 2021 and 1,394,924 shares at December 31, 2020		—		(77,541)
Additional Paid-In Capital		86,899		83,183
Retained Earnings		348,681		339,917
Accumulated Other Comprehensive Loss		(523)		(1,910)
Total Stockholders’ Equity		435,147		350,899
Total Liabilities and Stockholders’ Equity	$	686,682	$	666,700

The accompanying notes are an integral part of these consolidated financial statements.

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CTO REALTY GROWTH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share, per share and dividend data)


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2021		2020		2021		2020
Revenues
Income Properties	$	13,734	$	12,933	$	36,757	$	35,409
Management Fee Income		940		683		2,361		2,080
Interest Income from Commercial Loan and Master Lease Investments		726		413		2,136		2,300
Real Estate Operations		1,177		543		4,318		631
Total Revenues		16,577		14,572		45,572		40,420
Direct Cost of Revenues
Income Properties		(3,984)		(3,592)		(9,688)		(8,273)
Real Estate Operations		(252)		(1,682)		(867)		(3,263)
Total Direct Cost of Revenues		(4,236)		(5,274)		(10,555)		(11,536)
General and Administrative Expenses		(2,680)		(3,341)		(8,477)		(8,604)
Impairment Charges		—		—		(16,527)		(1,905)
Depreciation and Amortization		(5,567)		(4,761)		(15,428)		(14,334)
Total Operating Expenses		(12,483)		(13,376)		(50,987)		(36,379)
Gain on Disposition of Assets		22,666		289		28,106		7,365
Gain (Loss) on Extinguishment of Debt		—		—		(641)		1,141
Other Gains and Income		22,666		289		27,465		8,506
Total Operating Income		26,760		1,485		22,050		12,547
Investment and Other Income (Loss)		(797)		(1,030)		8,438		(5,746)
Interest Expense		(1,986)		(2,478)		(6,851)		(8,384)
Income (Loss) Before Income Tax Benefit (Expense)		23,977		(2,023)		23,637		(1,583)
Income Tax Benefit (Expense)		(30)		501		4,371		410
Net Income (Loss) Attributable to the Company		23,947		(1,522)		28,008		(1,173)
Distributions to Preferred Stockholders		(1,129)		—		(1,129)		—
Net Income (Loss) Attributable to Common Stockholders	$	22,818	$	(1,522)	$	26,879	$	(1,173)

Per Share Information—See Note 15:
Basic and Diluted Net Income (Loss) Attributable to Common Stockholders	$	3.87	$	(0.33)	$	4.56	$	(0.25)

Weighted Average Number of Common Shares
Basic		5,901,095		4,654,329		5,892,900		4,673,049
Diluted		5,901,095		4,654,329		5,892,900		4,673,049

Dividends Declared and Paid - Preferred Stock	$	0.3763	$	—	$	0.3763	$	—
Dividends Declared and Paid - Common Stock	$	1.00	$	0.40	$	3.00	$	0.90

The accompanying notes are an integral part of these consolidated financial statements.

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CTO REALTY GROWTH, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2021		2020		2021		2020
Net Income (Loss) Attributable to the Company	$	23,947	$	(1,522)	$	28,008	$	(1,173)
Other Comprehensive Income (Loss):
Cash Flow Hedging Derivative - Interest Rate Swaps (Net of Income Tax Benefit (Expense) of $0, $0.02 million, $0, and ($0.5) million, respectively)		217		73		1,387		(1,793)
Total Other Comprehensive Income (Loss), Net of Income Tax		217		73		1,387		(1,793)
Total Comprehensive Income (Loss)	$	24,164	$	(1,449)	$	29,395	$	(2,966)

The accompanying notes are an integral part of these consolidated financial statements.

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CTO REALTY GROWTH, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands)

For the three months ended September 30, 2021:


	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Stockholders' Equity
Balance July 1, 2021	$	—	$	60	$	—	$	13,676	$	331,895	$	(740)	$	344,891
Net Income Attributable to the Company		—		—		—		—		23,947		—		23,947
Issuance of Preferred Stock, Net of Underwriting Discount and Expenses		30		—		—		72,640		—		—		72,670
Exercise of Stock Options and Common Stock Issuance		—		—		—		(83)		—		—		(83)
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		—		666		—		—		666
Preferred Stock Dividends Declared for the Period		—		—		—		—		(1,129)		—		(1,129)
Common Stock Dividends Declared for the Period		—		—		—		—		(6,032)		—		(6,032)
Other Comprehensive Income		—		—		—		—				217		217
Balance September 30, 2021	$	30	$	60	$	—	$	86,899	$	348,681	$	(523)	$	435,147

For the three months ended September 30, 2020:


	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Stockholders' Equity
Balance July 1, 2020	$	—	$	6,047	$	(77,541)	$	32,888	$	324,075	$	(1,792)	$	283,677
Net Loss Attributable to the Company		—		—		—		—		(1,522)		—		(1,522)
Exercise of Stock Options and Common Stock Issuance		—		2		—		72		—		—		74
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		—		543		—		—		543
Common Stock Dividends Declared for the Period		—		—		—		—		(1,863)		—		(1,863)
Other Comprehensive Income, Net of Income Tax		—		—		—		—		—		73		73
Balance September 30, 2020	$	—	$	6,049	$	(77,541)	$	33,503	$	320,690	$	(1,719)	$	280,982

For the nine months ended September 30, 2021:


	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Stockholders' Equity
Balance January 1, 2021	$	—	$	7,250	$	(77,541)	$	83,183	$	339,917	$	(1,910)	$	350,899
Net Income Attributable to the Company		—		—		—		—		28,008		—		28,008
Vested Restricted Stock and Performance Shares		—		—		—		(436)		—		—		(436)
Issuance of Preferred Stock, Net of Underwriting Discount and Expenses		30		—		—		72,409		—		—		72,439
Common Stock Equity Issuance Costs		—		—		—		(197)		—		—		(197)
Exercise of Stock Options and Common Stock Issuance		—		—		—		289		—		—		289
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		—		2,002		—		—		2,002
Par Value $0.01 per Share and Treasury Stock Derecognized at January 29, 2021		—		(7,190)		77,541		(70,351)		—		—		—
Preferred Stock Dividends Declared for the Period		—		—		—		—		(1,129)		—		(1,129)
Common Stock Dividends Declared for the Period		—		—		—		—		(18,115)		—		(18,115)
Other Comprehensive Income		—		—		—		—		—		1,387		1,387
Balance September 30, 2021	$	30	$	60	$	—	$	86,899	$	348,681	$	(523)	$	435,147

For the nine months ended September 30, 2020:


	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Stockholders' Equity
Balance January 1, 2020	$	—	$	6,017	$	(73,441)	$	26,690	$	326,073	$	74	$	285,413
Net Loss Attributable to the Company		—		—		—		—		(1,173)		—		(1,173)
Stock Repurchase		—		—		(4,100)		—		—		—		(4,100)
Equity Component of Convertible Debt		—		—		—		5,248		—		—		5,248
Vested Restricted Stock and Performance Shares		—		24		—		(562)		—		—		(538)
Exercise of Stock Options and Common Stock Issuance		—		8		—		416		—		—		424
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		—		1,711		—		—		1,711
Common Stock Dividends Declared for the Period