MacKenzie Realty Capital, Inc.MKZR

MacKenzie Realty Capital, Inc. Segments Disclosure

10-KFiled Sep 29, 20253 min read

NOTE 16 – SEGMENT REPORTING



ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments.



We operate as a single reportable segment, income-producing real estate properties, which includes activities related to acquiring, owning, developing, and managing real estate investments. Although our properties are geographically diversified throughout the United States, we do not distinguish or group our operations on a geographical basis for purposes of allocating resources or measuring performance. Our business is managed as one segment for internal purposes. The investment committee led by the Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates performance and makes resource allocation decisions on this basis. The CODM evaluates operating performance primarily based on the Company’s net income (loss). While our real estate portfolio could be categorized into residential and commercial properties, the CODM does not evaluate performance or allocate resources using these categories. Expenses that are significant are the same as those presented in our consolidated statements of operations. Additionally, the CODM reviews the asset information and capital expenditures on a consolidated basis that are the same as shown on the accompanying consolidated balance sheets and statements of cash flows.



Our customers in the United States accounted for 100% of our revenues and we do not have any property or equipment outside of the United States.



We also have a real estate-related debt and equity securities investment portfolio; however, this portfolio does not constitute a reportable segment under ASC 280.


Segment net loss includes the direct costs of the reportable segment. Certain costs, including asset management fees to related party, administrative cost reimbursements to related party, directors’ fees, and transfer agent cost reimbursements to related party, and various other general corporate costs that are not specifically allocable to the segment, are included in unallocated corporate expenses below.



The Company’s single segment derives revenue primarily from rental and other property income. The following financial metrics are regularly reviewed by the CODM:


   
June 30, 2025
    
June 30, 2024
  
Segment revenue
  
$
22,059,843
    
$
15,736,103
  
 
                
Expenses:
                
Depreciation and amortization
    
11,432,557
      
7,153,411
  
Interest expense
    
8,139,998
      
6,124,395
  
Property operating and maintenance
    
7,386,050
      
6,523,406
  
General and administrative
    
1,645,309
      
784,131
  
Professional fees
    
-
      
18,973
  
Impairment loss
    
9,500,167
      
-
  
Segment net loss
    
(16,044,238
)
    
(4,868,213
)
 
                
Reconciliation of loss:
                
Unallocated corporate expenses(1)
     (7,417,806 )     (5,049,465 )
Other income (loss), net
    
(508,233
)
    
(1,306,154
)
Loss before income tax
   $
(23,970,277
)
   $
(11,223,832
)

(1)Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to our reportable segment and include interest expense, asset management fees to related party, general and administrative, professional fees, administrative cost reimbursements to related party, directors’ fees, and transfer agent cost reimbursements to related party.



The CODM does not review disaggregated expense information beyond the categories listed above.



Entity-wide disclosures:


•
Revenue by geographic area:

•
United States: $22,059,843
•
Major customers: There is no one customer accounted for with more than 10% of total revenue, aside from the early lease termination income of $3,000,000 from one of the tenants, OS National, LLC, of our Satellite Place Office Building.

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

Earnings Per SharePP&EDebtNew Standards