Jernigan Capital — Corporate Update (April 2016)
15 slides from Jernigan Capital's corporate update, Apr 13, 2016
Slide 1: Frequently Asked Questions about JCAP Capital Initiatives
1 Frequently Asked Questions about JCAP Capital Initiatives Exhibit 99.1
Slide 2: Safe Harbor Disclosure Regarding Forward-Looking Statements
2 Safe Harbor Disclosure Regarding Forward - Looking Statements This presentation includes "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including statements regarding our future performance, future profit
Slide 3: What is the purpose of these FAQs?
3 Since our March 7, 2016 earnings announcement, a number of events have occurred that have impacted Jernigan Capital and our stock price. Many of these events are related to our capitalization, specifically our joint venture with an affiliate of Heitman Capital Management. Third parties have errone
Slide 4: Why has the stock dropped?
4 We believe the stock has dropped for a number of reasons. First, we believe there has been substantial misinformation disseminated to the market by third parties who misstated or omitted material facts, made erroneous inferences about our capital situation and speculated about events or occurrence
Slide 5: Why did JCAP choose a joint venture for capital?
5 No - In the summer of 2015, we began mining a pipeline of development investments that was much larger than that anticipated at the time of JCAP’s initial public offering in March 2015. We realized then that our opportunity to grow was greater, and presented itself more quickly, than we anticipate
Slide 6: Is the joint venture capital already committed?
6 Absolutely not – The joint venture is a $122.2 million joint venture, with $41.9 million of that capital already absorbed by our contribution of 3 existing investments to the joint venture, leaving approximately $80.3 million of capital for other investments. As stated in our Form 8 - K filing wit
Slide 7: How is JCAP compensated under the joint venture?
7 No, quite to the contrary – Under the joint venture agreement, we are first paid a preferential payment of net income from the joint venture equal to 1% of the new investments generated by the joint venture after the initial $41.9 million of investments we contributed to the joint venture on March
Slide 8: Can loans or losses be put to JCAP?
8 No – No loan can be put to JCAP by the joint venture under any circumstance. Therefore, if a loan defaults, the joint venture suffers the loan loss, with our joint venture partners absorbing 90% of that loss (subject to limited completion guarantee). However, the joint venture agreement does permi
Slide 9: Is JCAP obligated to do additional joint ventures solely with Heitman?
9 If we choose to raise capital in a joint venture with proposed terms that are the same as, or similar to the joint venture we currently have with Heitman then we are required to give it a right of first offer to participate in such joint venture – nothing in the joint venture agreement prohibits u
Slide 10: Does Heitman control the joint venture?
10 No – we are the managing member of the joint venture. Heitman recognizes our self - storage knowledge, experience and relationships and will rely on us to source all investments, manage the relationships with developers, process and service all investments and make decisions regarding financial a
Slide 11: Can Heitman remove JCAP as managing member?
11 Yes, but only upon a change of control of JCAP, Dean Jernigan’s ceasing to have an active role at JCAP, our bankruptcy or insolvency or in the event we commit fraud, or engage in conduct that is grossly negligent, willful misconduct or in bad faith. Does Heitman have the authority to remove JCAP
Slide 12: Status of the credit facility
12 We continue to diligently work with the potential lender on finalizing documentation of the credit facility and finalizing the potential lender’s due diligence. We expect the credit facility to be structured as a Senior Participating Interest in a pool of JCAP investment assets upon which the pot
Slide 13: Does the credit facility require suspending the dividend?
13 No – The potential lender has not requested a dividend suspension covenant, nor do we expect it to. We do expect a covenant that will require us to maintain a certain level of liquidity, which we expect we will continue to meet. Does the proposed credit facility contain a covenant that would requ
Slide 14: Sources of capital if the credit facility is not procured
14 Yes – We believe that Heitman will approve the joint venture’s acquisition of a number of our existing development investments, which would result in the joint venture assuming remaining funding obligations with respect to such investments and paying JCAP cash for 90% of the amount already funded
Slide 15: Plan of action regarding the stock price decline
15 First, we believe the decline in our stock price has been illogical and contrary to the strong fundamentals present in the self - storage sector. We believe the recent decline is largely due to misinformation and erroneous assumptions about the Heitman joint venture and our other financing plans.