FORM 6-K
  
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
 
Date of Report: November 27, 2019
Commission File No.: 000-29992
 
OPTIBASE LTD.
(Translation of registrant’s name into English)

8 Hamanofim Street
Herzliya 4672559, Israel
+972-73-7073700
 (Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ☒      Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____ 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____ 
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. 
 
Yes ☐      No ☒
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________   
 
Attached hereto and incorporated by way of reference herein is a press release issued by the Registrant and entitled “Optibase Ltd. announces third quarter results”.
 
Signatures 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 
 
  OPTIBASE LTD.
 
  (the “Registrant”)
 
       

By:
/s/ Amir Philips
 
    Amir Philips
 
    Chief Executive Officer  
       
Date: November 27, 2019
     



Media Contacts:
Amir Philips, CEO, Optibase Ltd.
011-972-73-7073-700
info@optibase-holdings.com

Investor Relations Contact:
Marybeth Csaby, for Optibase
+1- 917-664-3055
Marybeth.Csaby@gmail.com
 
OPTIBASE LTD. ANNOUNCES THIRD QUARTER RESULTS

HERZLIYA, Israel, November 27, 2019 – Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the third quarter ended September 30, 2019.

Revenues from fixed income real estate totaled $4 million for the quarter ended September 30, 2019 compared to revenues of $4.1 million for the third quarter of 2018.

Net loss attributable to Optibase Ltd shareholders for the quarter ended September 30, 2019 was $496,000 or $0.1 per basic and diluted share compared to net loss of $219,000 million or $0.04 per basic and diluted share for the third quarter of 2018.

For the nine months ended September 30, 2019 revenues totaled $12.1 million compared to revenues of $12.5 million for the nine months ended September 30, 2018. Net loss attributable to Optibase Ltd Shareholders for the period was $875,000 or $0.17 per basic and diluted share, compared to a net loss of $2 million or $0.38 per basic and diluted share for the nine months ended September 30, 2018.

Weighted average shares outstanding used in the calculation for the periods were approximately 5.2 million basic and diluted shares for each period.

As of September 30, 2019, we had cash and cash equivalents of $15.8 million, and shareholders' equity of $73.5 million, compared with $13.8 million, and $73.4 million, respectively, as of December 31, 2018.

Amir Philips, Chief Executive Officer of Optibase commented on the third quarter results: "This quarter our fixed income real estate rent slightly decreased compared to the third quarter of 2018 and our net loss has increased compared to the third quarter of 2018. The increase in our net loss is mostly attributed to an increase in our Equity share in losses of associates, net, related to our investment in 300 River Holdings, LLC. For the third quarter of 2019, we generated NOI of $3.3 million representing a stability compared to the third quarter of 2018. In addition, for the third quarter of 2019, our Recurring FFO decreased to $1.1 million compared to Recurring FFO of $1.2 million for the third quarter of 2018. The decrease in our Recurring FFO is mainly due to an increase in our Equity share in losses of associates, net, related to our investment in 300 River Holdings, LLC." Mr. Philips concluded: “We continue our work to maintain our basic parameters and to increase our financial stability as we progress through 2019.”


OPTIBASE REPORTS/2

ACCOUNTING AND OTHER DISCLOSURES
 
Non-GAAP Net Operating Income, or NOI, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is operating income, which, to calculate NOI, is adjusted to add back real estate depreciation, and amortization, general and administrative expenses and other operation expenses less gain on sale of operating properties. We use NOI internally as a performance measure and believe that NOI (when combined with the primary GAAP presentations) provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense item that are incurred at the property level.

We consider the NOI to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, to understand the core property operations prior to depreciation and amortization expenses and general and administrative costs. In addition, because prospective buyers of real estate have different overhead structures, with varying marginal impact to overhead by acquiring real estate, we consider the NOI to be a useful measure for determining the value of a real estate asset or groups of assets.

The metric NOI should only be considered as supplemental to the metric operating income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. NOI should also not be used as a supplement to, or substitute for, cash flow from operating activities (computed in accordance with generally accepted accounting principles in the United States).
 
Non-GAAP Funds from operation, or FFO, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income, which, to calculate FFO, is adjusted to add back depreciation and amortization and after adjustments for unconsolidated associates. We make certain adjustments to FFO, which it refers to as Non-GAAP recurring FFO or recurring FFO, to account for items we do not believe are representative of ongoing operating results, including transaction costs associated with acquisitions. We use FFO internally as a performance measure and we believe FFO (when combined with the primary GAAP presentations) is a useful, supplemental measure of our operating performance as it’s a recognized metric used extensively by the real estate industry. We also believe that Recurring FFO is a useful, supplemental measure of our core operating performance. The company believes that financial analysts, investors and shareholders are better served by the presentation of operating results generated from its FFO and Recurring FFO measures.
 
We consider the FFO and Recurring FFO to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, in analyzing our operating performance.
 
The metric’s FFO and Recurring FFO should only be considered as supplemental to the metric net income as a measure of our performance. FFO (i) does not represent cash flow from operations as defined by GAAP, (ii) is not indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is not an alternative to cash flow as a measure of liquidity, and (iv) should not be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating our operating performance.
2

 
OPTIBASE REPORTS/3

Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data
 
A reconciliation of operating income to NOI is as follows:

   
Nine months ended
   
Three months ended
 
   
September 30
   
September 30
   
September 30
   
September 30
 
   
2019
   
2018
   
2019
   
2018
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
GAAP Operating income
   
4,629
     
4,422
     
1,531
     
1,517
 
                                 
Adjustments:
                               
Real estate depreciation and amortization
   
3,238
     
3,233
     
1,087
     
1,081
 
                                 
General and administrative
   
2,010
     
2,568
     
671
     
742
 
                                 
Non-GAAP Net Operating Income NOI
   
9,877
     
10,223
     
3,289
     
3,340
 
 
A reconciliation of net income to FFO and Recurring FFO is as follows:

   
Nine months ended
   
Three months ended
 
   
September 30
   
September 30
   
September 30
   
September 30
 
   
2019
   
2018
   
2019
   
2018
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
GAAP Net income (loss) attributable to Optibase LTD
   
(875
)
   
(1,977
)
   
(496
)
   
(219
)
                                 
Adjustments :
                               
Real estate depreciation and amortization
   
3,238
     
3,233
     
1,087
     
1,081
 
                                 
Pro-rata share of real estate depreciation and
amortization from unconsolidated associates
   
2,234
     
1,925
     
777
     
673
 
                                 
Non-controlling interests share in the above adjustments
   
(870
)
   
(845
)
   
(293
)
   
(287
)
                                 
Non-GAAP Fund From Operation (FFO)
   
3,727
     
2,336
     
1,075
     
1,248
 
                                 
Non-GAAP Recurring Fund From Operation (Recurring FFO)
   
3,727
     
2,336
     
1,075
     
1,248
 
                                 
Amounts in thousands
                               

3

OPTIBASE REPORTS/4

About Optibase
Optibase invests in the fixed-income real estate field and currently holds properties and beneficial interest in real-estate assets and projects in Switzerland, Germany, Texas, Philadelphia, PA, Miami, FL, and in Chicago, IL, USA and is currently looking for additional real estate investment opportunities. Optibase was previously engaged in the field of digital video technologies until the sale of its video solutions business to Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia in July 2010. For further information, please visit www.optibase-holdings.com.

This press release contains forward-looking statements concerning our marketing and operations plans. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, difficulties in finding suitable real-estate properties for investment, availability of financing for the acquisition of real-estate, difficulties in leasing of real-estate properties, insolvency of tenants, difficulties in the disposition of real-estate projects, risk relating to collaborative arrangements with our partners relating to our real-estate properties, risks relating to the full consummation of the transaction for the sale of our video solutions business, general economic conditions and other risk factors. For a more detailed discussion of these and other risks that may cause actual results to differ from the forward looking statements in this press release, please refer to Optibase's most recent annual report on Form 20-F. The Company does not undertake any obligation to update forward-looking statements made herein.

4

OPTIBASE REPORTS/5

Optibase Ltd.
Condensed Consolidated Statement of Operations
For the Period Ended September 30, 2019

   
Nine months ended
   
Three months ended
 
   
September 30
   
September 30
   
September 30
   
September 30
 
   
2019
   
2018
   
2019
   
2018
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
Fixed income real estate rent
   
12,094
     
12,507
     
3,987
     
4,090
 
Cost and expenses:
                               
Cost of real estate operation
   
2,217
     
2,284
     
698
     
750
 
Real estate depreciation and amortization
   
3,238
     
3,233
     
1,087
     
1,081
 
General and administrative
   
2,010
     
2,568
     
671
     
742
 
       Total cost and expenses
   
7,465
     
8,085
     
2,456
     
2,573
 
Operating income
   
4,629
     
4,422
     
1,531
     
1,517
 
                                 
Other Income
   
578
     
458
     
130
     
148
 
Financial expenses, net
   
(2,036
)
   
(2,208
)
   
(670
)
   
(705
)
Income before taxes on income
   
3,171
     
2,672
     
991
     
960
 
Taxes on income
   
(1,142
)
   
(1,130
)
   
(374
)
   
(390
)
Equity share in losses of associates, net
   
(1,270
)
   
(1,919
)
   
(563
)
   
(257
)
                                 
Net income (loss)
   
759
     
(377
)
   
54
     
313
 
                                 
Net income attributable to non-controlling interests
   
1,634
     
1,600
     
550
     
532
 
Net loss attributable to Optibase LTD
   
(875
)
   
(1,977
)
   
(496
)
   
(219
)
                                 
Net loss per share :
                               
Basic and Diluted
 
$
(0.17
)
 
$
(0.38
)
 
$
(0.10
)
 
$
(0.04
)
                                 
Number of shares used in computing earnings losses per share
                               
Basic
   
5,186
     
5,185
     
5,186
     
5,186
 
Diluted
   
5,186
     
5,185
     
5,186
     
5,186
 
                                 
Amounts in thousands
                               

5

OPTIBASE REPORTS/6

Condensed Consolidated Balance Sheets

   
September 30,
2019
   
December 31,
2018
 
   
Unaudited
   
Audited
 
Assets
           
             
Current Assets:
           
Cash and cash equivalents
   
15,796
     
13,836
 
Restricted cash
   
110
     
31
 
Trade receivables, net
   
489
     
427
 
Other accounts receivables and prepaid expenses
   
578
     
320
 
Total current assets
   
16,973
     
14,614
 
                 
Long term investments:
               
Other long term deposits and other assets
   
3,180
     
2,477
 
Investments in companies and associates
   
12,824
     
14,377
 
Total Long term investments
   
16,004
     
16,854
 
                 
Property and other assets, net:
               
Real estate properties, net
   
207,401
     
212,349
 
Other assets, net
   
150
     
141
 
Total property and other assets
   
207,551
     
212,490
 
                 
Total assets
   
240,528
     
243,958
 
                 
Liabilities and shareholders' equity
               
                 
Current Liabilities:
               
Current maturities of long term loans and bonds
   
5,955
     
5,788
 
Accounts payable and accrued expenses and other
   
5,386
     
4,103
 
Liabilities attributed to discontinued operations
   
2,061
     
2,061
 
Total current liabilities
   
13,402
     
11,952
 
                 
Long term liabilities:
               
Deferred tax liabilities
   
13,553
     
13,752
 
Land lease liability, net
   
6,012
     
6,134
 
Other long term liabilities
   
388
     
206
 
Loan from controlling shareholder
   
2,547
     
2,476
 
Long term loans, net of current maturities
   
126,910
     
130,806
 
Long term bonds, net of current maturities
   
4,245
     
5,239
 
Total long term liabilities
   
153,655
     
158,613
 
                 
Shareholders’ equity:
               
Shareholders’ equity of Optibase Ltd
   
52,134
     
53,559
 
Non-controlling interests
   
21,337
     
19,834
 
Total shareholders' equity
   
73,471
     
73,393
 
                 
Total liabilities and shareholders’ equity
   
240,528
     
243,958
 
                 
Amounts in thousands
               

6
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