Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 8-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MJ Holdings, Inc. | |
Entity Central Index Key | 1456857 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 13,902,388 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Real estate property: | ||
Land | $551,251 | $551,251 |
Buildings and improvements | 2,540,581 | 2,442,188 |
Real estate property, gross | 3,091,832 | 2,993,439 |
Accumulated depreciation | -58,336 | -38,173 |
Real estate property, net | 3,033,496 | 2,955,266 |
Cash | 114,823 | 175,792 |
Deferred leasing costs | 178,304 | 202,545 |
Deferred rent receivable | 16,733 | 6,936 |
Prepaid expenses and other assets | 18,496 | 73,377 |
Total Assets | 3,361,852 | 3,413,916 |
Current liabilities: | ||
Note payable - related party | 1,800,000 | 1,800,000 |
Security deposits | 102,045 | 102,045 |
Accounts payable and accrued liabilities | 187,547 | 195,582 |
Total Liabilities | 2,089,592 | 2,097,627 |
Stockholders' Equity: | ||
Preferred stock, par value $0.001, 5,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, par value $0.001, 95,000,000 shares authorized; 13,886,794 and 13,878,522 shares issued and outstanding, respectively | 13,887 | 13,879 |
Additional paid-in capital | 2,660,112 | 2,640,120 |
Accumulated deficit | -1,401,739 | -1,337,710 |
Total Stockholders' Equity | 1,272,260 | 1,316,289 |
Total Liabilities and Stockholders' Equity | $3,361,852 | $3,413,916 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 13,886,794 | 13,878,522 |
Common stock, shares outstanding | 13,886,794 | 13,878,522 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenues: | ||
Rental income | $132,804 | |
Operating Expenses: | ||
Property expenses | 55,703 | |
General and administrative expenses | 73,508 | 12,859 |
Depreciation expense | 20,163 | |
Total operating expenses | 149,374 | 12,859 |
Operating loss | -16,570 | -12,859 |
Interest expense - related party | -47,459 | -1,205 |
Loss before income taxes | -64,029 | -14,064 |
Provision for income taxes | ||
Net Loss | ($64,029) | ($14,064) |
Basic and diluted net loss per common share: | ||
Weighted average shares outstanding | 13,885,227 | 12,260,983 |
Net loss per common share | ($0.01) | ($0.00) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flow from operating activities: | ||
Net loss | ($64,029) | ($14,064) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 20,163 | |
Stock-based compensation | 20,000 | |
Deferred rental income | -9,797 | |
Amortization of deferred leasing and debt costs | 9,190 | |
Changes in operating assets and liabilities: | ||
Deferred leasing costs | 17,510 | |
Prepaid and other assets | 52,422 | |
Accounts payable and accrued liabilities | -8,035 | 6,421 |
Net Cash Provided by (Used in) Operating Activities | 37,424 | -7,643 |
Cash flow from investing activities: | ||
Acquisition of real estate property | -98,393 | |
Net Cash Used in Investing Activities | -98,393 | |
Cash flow from financing activities: | ||
Proceeds from the sale of common stock | 895,000 | |
Proceeds from loans from stockholders | 5,277 | |
Net Cash Provided by Financing Activities | 900,277 | |
Net increase (decrease) in cash | -60,969 | 892,634 |
Cash at beginning of period | 175,792 | 478 |
Cash at end of period | 114,823 | 893,112 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest to related party | 45,000 | |
Supplemental schedule of non-cash financing activities: | ||
Accounts payable paid by principal stockholders | $7,665 |
Interim_Financial_Statements
Interim Financial Statements | 3 Months Ended |
Mar. 31, 2015 | |
Interim Financial Statements [Abstract] | |
Interim Financial Statements | Note 1 — Interim Financial Statements |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the condensed consolidated financial statements not misleading have been included. The balance sheet at December 31, 2014, has been derived from the Company's audited consolidated financial statements as of that date. | |
The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and the notes thereto that are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, that was filed with the SEC on March 30, 2015. The results of operations for the three months ended March 31, 2015, are not necessarily indicative of the results to be expected for the full year. | |
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 5353 Joliet, LLC and MJ Havana, LLC. Intercompany balances and transactions have been eliminated in consolidation. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies |
The significant accounting policies followed by the Company for interim reporting are consistent with those included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. There were no material changes to our significant accounting policies during the interim period ended March 31, 2015. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (the "FASB") issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. The new guidance was originally set to become effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption was not permitted. However, on April 29, 2015, the FASB issued for public comment a proposed update that would defer the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, but would allow early adoption for annual reporting periods beginning after December 15, 2016. The Company is currently in the process of evaluating the impact of adoption of the new accounting guidance on its consolidated financial statements and has not determined the impact of adoption on its consolidated financial statements. | |
In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The new guidance is effective for the annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Since this guidance primarily addresses certain disclosures to the financial statements, we anticipate no impact on our financial position, results of operations or cash flows from adopting this standard. The Company is currently in the process of evaluating the additional disclosure requirements of the new guidance and has not determined the impact of adoption on its financial statement disclosures. | |
In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This guidance provides that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for fiscal years and interim periods beginning after December 15, 2015 and is required to be applied on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. As of March 31, 2015, we had $11,475 in debt issuance costs associated with a $1.8 million note payable that would be reclassified from other assets to a reduction in the carrying amount of the note payable. The adoption of this standard is not expected to have a material impact on our financial position and will not impact our results of operations or cash flows. | |
Going_Concern
Going Concern | 3 Months Ended |
Mar. 31, 2015 | |
Going Concern [Abstract] | |
Going Concern | Note 3 — Going Concern |
The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the three months ended March 31, 2015, the Company incurred a net loss of $64,029. The Company had an accumulated deficit of $1,401,739 as of March 31, 2015. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. | |
The Company's future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. Although we can provide no assurances, we believe our cash on hand, coupled with revenues generated by rental income and our ability to refinance our equity in the real estate we own, will provide sufficient liquidity and capital resources to fund our business for the next twelve months. | |
In the event the Company experiences liquidity and capital resource constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all, then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our financial position, results of operations, and our ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Real_Estate_Property_Acquisiti
Real Estate Property Acquisitions | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Real Estate Property Acquisitions [Abstract] | ||||||||||||
Real Estate Property Acquisitions | Note 4 — Real Estate Property Acquisitions | |||||||||||
5353 Joliet Street | ||||||||||||
In June 2014, through its wholly-owned subsidiary, 5353 Joliet LLC, the Company acquired an owner-occupied 22,144 square foot industrial building situated on 1.4 acres of land in Denver, Colorado for $2,214,000. The acquisition was funded with proceeds from the issuance of a secured promissory note in the amount of $1,800,000 and $414,000 of cash on-hand. The promissory note is held by Chemtov Mortgage Group ("CMG"), an entity wholly-owned by the Company's co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to 5353 Mortgage Loan, LLC, a single purpose entity created solely for the purpose of this transaction. CMG invested $100,000 of the $1,800,000 of funds used to finance the purchase of the promissory note. CMG acts as the loan servicing entity for the promissory note, administering the note, processing payments from the Company, and transferring all payments to 5353 Mortgage Loan, LLC. CMG charges no administration fees for servicing the promissory note. | ||||||||||||
The promissory note bears interest at 10% per annum, provides for cash interest payments on a monthly basis, matures on June 1, 2016, and is callable at the option of the Company at any time after June 19, 2015. The Company has guaranteed the promissory note and has pledged its ownership interest in 5353 Joliet LLC, and as such its fee-simple ownership interest in the property as security for the promissory note. The promissory note does not restrict the Company's ability to incur future indebtedness. For the three months ended March 31, 2015, the Company recorded $45,000 of interest expense related to the promissory note. | ||||||||||||
In September 2014, the Company entered into a lease agreement contingent upon the lessee obtaining city and state licenses and permits for its intended operations at the premises. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014. The lease agreement is for a term of seven years and a monthly rent obligation of $25,835, subject to annual increases of 2% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred - see Note 5 below for additional lease details. | ||||||||||||
503 Havana Street | ||||||||||||
In September 2014, through its wholly-owned subsidiary, MJ Havana LLC, acquired an owner-occupied 1,250 square foot building situated on 23,625 square feet of land in Aurora, Colorado for $756,000, exclusive of closing costs. The acquisition was funded with cash on-hand. The property is zoned B-2 and has been approved by the city of Aurora as a retail dispensary for recreational marijuana. | ||||||||||||
Prior to closing on the property acquisition, the Company had pre-negotiated a 10-year lease agreement with a third-party, a licensed marijuana dispensary company serving both medical and adult (21+) customers in Colorado. Once the closing of the property was completed with the seller, the pre-negotiated lease was executed in September 2014 with the third-party. Pursuant to the terms of the lease agreement, the Company agreed to contribute $150,000 to improvements to the property - see Note 5 below for additional lease details. As of March 31, 2015, the Company had paid $121,026 towards the tenant's building improvements. | ||||||||||||
A summary of real estate property at March 31, 2015, is as follows: | ||||||||||||
Estimated | March 31, | |||||||||||
Life | 2015 | |||||||||||
Buildings and improvements | 30 years | $ | 2,540,581 | |||||||||
Land | Not depreciated | 551,251 | ||||||||||
Total real estate property | 3,091,832 | |||||||||||
Less: Accumulated depreciation | (58,336 | ) | ||||||||||
Real estate property, net | $ | 3,033,496 |
Operating_Leases
Operating Leases | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Operating Leases [Abstract] | ||||||||||||
Operating Leases | Note 5 — Operating Leases | |||||||||||
The Company generates revenues by leasing its acquired real estate properties through operating leasing arrangements. A summary of revenues generated from our rental properties for the three months ended March 31, 2015 and 2014, is as follows: | ||||||||||||
For the three months ended | ||||||||||||
March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Revenues: | ||||||||||||
Rental payments | $ | 111,254 | $ | — | ||||||||
Reimbursed operating expenses | 11,753 | — | ||||||||||
Deferred rental income | 9,797 | — | ||||||||||
Total revenues from rental properties | $ | 132,804 | $ | — | ||||||||
503 Havana Street | ||||||||||||
In September 2014, the Company entered into a non-cancelable operating lease agreement with a marijuana dispensary (the "Lessee") to move into the Company's acquired property located at 503 Havana Street in Aurora, Colorado. The lease agreement is for a term of ten years and a monthly rent obligation of $11,250, subject to annual increases of 3% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the Lessee as additional rent based on the actual expenses incurred. Pursuant to the terms of the lease agreement, the Company has agreed to contribute $150,000 to improvements to the property. | ||||||||||||
Upon the expiration of the term of ten years, the Lessee has the option to renew the lease agreement for one additional ten-year term, on the same terms as provided in the lease agreement. During the third year of the lease agreement, the Lessee may exercise an option to purchase the Property. | ||||||||||||
5353 Joliet Street | ||||||||||||
In September 2014, the Company entered into a lease agreement for its property and warehouse building located at 5353 Joliet Street in Denver, Colorado. The lease agreement is for a term of seven years and a monthly rent obligation of $25,835, subject to annual increases of 2% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred. | ||||||||||||
The lease was contingent upon the lessee, obtaining city and state licenses and permits for its intended operations at the premises, within the dates provided in the lease agreement. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014. | ||||||||||||
Upon the expiration of the seven-year term, the lessee has the option to renew the lease for two separate five-year terms, subject to rent reviews and adjustments, as set out in the lease agreement. | ||||||||||||
Future minimum rental payments, excluding the reimbursement of specified operating expenses, for non-cancelable operating lease agreements are as follows as of March 31, 2015: | ||||||||||||
2015 | $ | 336,325 | ||||||||||
2016 | 457,890 | |||||||||||
2017 | 468,449 | |||||||||||
2018 | 479,261 | |||||||||||
2019 | 490,332 | |||||||||||
Thereafter | 1,368,512 | |||||||||||
Total minimal rental payments | $ | 3,600,769 |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 — Related Party Transactions |
In February 2014, in connection with the change in control of the Company, the principal stockholders paid $7,665 of the Company's accounts payable, which was recorded as a capital contribution to the Company. | |
During the three months ended March 31, 2014, the Company borrowed $5,277 from its principal stockholders. | |
During the three months ended March 31, 2015, the Company paid $45,000 for interest due pursuant to the $1.8 million promissory note held by CMG, wholly-owned by the Company's co-CEO and shareholder, Shawn Chemtov - see Note 4 above for additional details regarding promissory note held by related party. | |
Stockholder_Loans_Payable
Stockholder Loans Payable | 3 Months Ended |
Mar. 31, 2015 | |
Stockholder Loans Payable [Abstract] | |
Stockholder Loans Payable | Note 7 — Stockholder Loans Payable |
Stockholder loans payable consisted of three promissory notes with two of its stockholders in which the company may borrow up to $25,000, $20,000, and $10,000, respectively. These borrowings accrued interest at 5%, 8%, and 8% per annum, respectively. They were due in part in December 2014 and December 2016. | |
In February 2014, in connection with the change of control of the Company, Messrs. Chemtov and Laufer, purchased the Stock holder loans from Messrs. Peraman and Sarfoh. | |
On August 31, 2014, the outstanding balance of $99,450 for the stockholder loans and the associated accrued interest were converted to 19,890 shares of the Company's common stock at a conversion price of $5.00 per share. | |
For the three months ended March 31, 2014, the Company accrued interest expense of $1,205 related to the outstanding stockholder loans. | |
Sale_of_Unregistered_Securitie
Sale of Unregistered Securities | 3 Months Ended |
Mar. 31, 2015 | |
Sale of Unregistered Securities [Abstract] | |
Sale of Unregistered Securities | Note 8 — Sale of Unregistered Securities |
The Company conducted a private placement of its shares of common stock, whereby we sold 1,615,000 shares of common stock for an aggregate of $1,615,000. We began accepting subscriptions on March 24, 2014 and closed the private placement on April 9, 2014. | |
For the three months ended March 31, 2014, the Company received proceeds from the private placement of $895,000. | |
The shares were issued pursuant to an exemption from the registration requirements under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder (“Regulation D”) since, among other things, the transactions did not involve a public offering and the securities were acquired for investment purposes only and not with a view to or for sale in connection with any distribution thereof. Offers and sales were made solely to persons qualifying as “accredited investors” (as such term is defined by Rule 501 of Regulation D). | |
The securities offered will not be and have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. | |
Stock_Based_Compensation
Stock Based Compensation | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Stock Based Compensation [Abstract] | |||||||||||
Stock Based Compensation | Note 9 — Stock Based Compensation | ||||||||||
Warrants | |||||||||||
A summary of warrants issued, exercised and expired during the three months ended March 31, 2015, is as follows: | |||||||||||
Weighted | |||||||||||
Avg. | |||||||||||
Exercise | |||||||||||
Warrants: | Shares | Price | |||||||||
Balance at January 1, 2015 | 166,665 | $ | 5.88 | ||||||||
Issued | — | — | |||||||||
Exercised | — | — | |||||||||
Expired | — | — | |||||||||
Balance at March 31, 2015 | 166,665 | $ | 5.88 | ||||||||
Common Stock | |||||||||||
During the three months ended March 31, 2015, the Company issued 8,272 shares of common stock for consulting services and recorded $20,000 of stock-based compensation expense for these consulting services, which has been classified as General and administrative expenses. The stock-based compensation expense was calculated based on the grant date fair value of the common stock shares issued in exchange for the consulting services. | |||||||||||
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 — Subsequent Events |
On May 4, 2015, the Company acquired real estate property located at 1126 South Sheridan Boulevard in Denver, Colorado, for $771,750, exclusive of closing costs. The Company funded the acquisition through the issuance of a promissory note in the amount of $925,000 of which $771,750 was used to purchase the property. The balance of the funds will be used by the Company as working capital. The promissory note bears interest at 10% per annum and matures on June 1. 2017. The promissory note is collateralized with the Company's ownership interest in the newly acquired property and its previously acquired property located at 503 Havana Street in Aurora, Colorado. The newly acquired property is 17,729 square feet with a 3,828 square foot one story free-standing building. The property is zoned B-2 and has been approved by the city of Denver as a retail dispensary for recreational marijuana. | |
On May 4, 2015, the Company entered into a lease agreement for the newly acquired property with the existing tenant of the property. The lease is for a term of 10 years and a total rent obligation of approximately $1,327,088. Insurance and real property taxes shall be paid by the Company and subsequently charged to the tenant as additional rent, based on the actual expenses incurred. Upon the expiration of the initial lease term of 10 years, the tenant has the option to renew the lease for one additional ten-year term on the same terms as provided in the lease. During the third year of the lease, the tenant may exercise an option to purchase the property, subject to the terms of the lease. | |
The acquisition of the real estate property, including the new lease agreement, will be accounted for as a business combination. Due to the timing of the acquisition, certain disclosures, including the preliminary allocation of the purchase price, have been omitted from this Quarterly Report on Form 10-Q because the initial accounting for the business combination was incomplete as of the filing date. The Company expects to complete the initial accounting for the acquisition during the interim period ended June 30, 2015, and include the required disclosures for the business combination in the Company's Quarterly Report on Form 10-Q for the second quarter of 2015. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board (the "FASB") issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. The new guidance was originally set to become effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption was not permitted. However, on April 29, 2015, the FASB issued for public comment a proposed update that would defer the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, but would allow early adoption for annual reporting periods beginning after December 15, 2016. The Company is currently in the process of evaluating the impact of adoption of the new accounting guidance on its consolidated financial statements and has not determined the impact of adoption on its consolidated financial statements. | |
In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The new guidance is effective for the annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Since this guidance primarily addresses certain disclosures to the financial statements, we anticipate no impact on our financial position, results of operations or cash flows from adopting this standard. The Company is currently in the process of evaluating the additional disclosure requirements of the new guidance and has not determined the impact of adoption on its financial statement disclosures. | |
In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This guidance provides that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for fiscal years and interim periods beginning after December 15, 2015 and is required to be applied on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. As of March 31, 2015, we had $11,475 in debt issuance costs associated with a $1.8 million note payable that would be reclassified from other assets to a reduction in the carrying amount of the note payable. The adoption of this standard is not expected to have a material impact on our financial position and will not impact our results of operations or cash flows. | |
Real_Estate_Property_Acquisiti1
Real Estate Property Acquisitions (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Real Estate Property Acquisitions [Abstract] | ||||||||||||
Summary of Real Estate Property | Estimated | March 31, | ||||||||||
Life | 2015 | |||||||||||
Buildings and improvements | 30 years | $ | 2,540,581 | |||||||||
Land | Not depreciated | 551,251 | ||||||||||
Total real estate property | 3,091,832 | |||||||||||
Less: Accumulated depreciation | (58,336 | ) | ||||||||||
Real estate property, net | $ | 3,033,496 |
Operating_Leases_Tables
Operating Leases (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Operating Leases [Abstract] | ||||||||||||
Summary of Revenues From Rental Properties | For the three months ended | |||||||||||
March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Revenues: | ||||||||||||
Rental payments | $ | 111,254 | $ | — | ||||||||
Reimbursed operating expenses | 11,753 | — | ||||||||||
Deferred rental income | 9,797 | — | ||||||||||
Total revenues from rental properties | $ | 132,804 | $ | — | ||||||||
Schedule of Future Minimum Rental Payments | 2015 | $ | 336,325 | |||||||||
2016 | 457,890 | |||||||||||
2017 | 468,449 | |||||||||||
2018 | 479,261 | |||||||||||
2019 | 490,332 | |||||||||||
Thereafter | 1,368,512 | |||||||||||
Total minimal rental payments | $ | 3,600,769 |
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Stock Based Compensation [Abstract] | |||||||||||
Summary of warrants issued, exercised and expired | Weighted | ||||||||||
Avg. | |||||||||||
Exercise | |||||||||||
Warrants: | Shares | Price | |||||||||
Balance at January 1, 2015 | 166,665 | $ | 5.88 | ||||||||
Issued | — | — | |||||||||
Exercised | — | — | |||||||||
Expired | — | — | |||||||||
Balance at March 31, 2015 | 166,665 | $ | 5.88 | ||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncements | ||
Debt issuance costs | $11,475 | |
Note payable | $1,800,000 | $1,800,000 |
Going_Concern_Details
Going Concern (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Going Concern [Abstract] | |||
Net loss | $64,029 | $14,064 | |
Accumulated deficit | $1,401,739 | $1,337,710 |
Real_Estate_Property_Acquisiti2
Real Estate Property Acquisitions (Narrative) (Details) (USD $) | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | |
sqft | ||||
acre | ||||
PROPERTY ACQUISITION [Line Items] | ||||
Interest paid | $45,000 | |||
CMG [Member] | ||||
PROPERTY ACQUISITION [Line Items] | ||||
Interest paid | 45,000 | |||
Owner-occupied industrial building situated on land in Denver, Colorado [Member] | ||||
PROPERTY ACQUISITION [Line Items] | ||||
Area of building acquired (in square foot) | 22,144 | |||
Area of land on which building is situated (in acres) | 1.4 | |||
Purchase consideration | 2,214,000 | |||
Proceeds from the issuance of a secured promissory note used to fund acquisition | 1,800,000 | |||
Cash on-hand used to fund acquisition | 414,000 | |||
Lease agreement term | 7 years | |||
Monthly rent obligation | 25,835 | |||
Annual increases percentage | 2.00% | |||
Owner-occupied industrial building situated on land in Denver, Colorado [Member] | CMG [Member] | ||||
PROPERTY ACQUISITION [Line Items] | ||||
Amount invested to finance the purchase of the promissory note | 100,000 | |||
Administration fees for servicing the promissory note | ||||
Interest rate of promissory note | 10.00% | |||
Promissory note, maturity date | 1-Jun-16 | |||
Promissory note, date callable | 19-Jun-15 | |||
Interest paid | 45,000 | |||
Owner-occupied building situated on land in Aurora, Colorado [Member] | ||||
PROPERTY ACQUISITION [Line Items] | ||||
Area of building acquired (in square foot) | 1,250 | |||
Area of land on which building is situated (in acres) | 23,625 | |||
Purchase consideration | 756,000 | |||
Obligation to improvements to the property | 150,000 | |||
Payment for tenant's building improvements | $121,026 |
Real_Estate_Property_Acquisiti3
Real Estate Property Acquisitions (Schedule of Real Estate Property) (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |
Total real estate property | $3,091,832 |
Less: Accumulated depreciation | -58,336 |
Real estate property, net | 3,033,496 |
Buildings and improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Life | 30 years |
Total real estate property | 2,540,581 |
Land [Member] | |
Property, Plant and Equipment [Line Items] | |
Total real estate property | $551,251 |
Operating_Leases_Narrative_Det
Operating Leases (Narrative) (Details) (USD $) | 1 Months Ended |
Sep. 30, 2014 | |
503 Havana Street in Aurora, Colorado [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Lease agreement term | 10 years |
Monthly rent obligation | $11,250 |
Annual increases percentage | 3.00% |
Obligation to improvements to the property | 150,000 |
Option to renew term | 10 years |
5353 Joliet Street in Denver, Colorado [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Lease agreement term | 7 years |
Monthly rent obligation | $25,835 |
Annual increases percentage | 2.00% |
Option to renew term | 5 years |
Operating_Leases_Schedule_of_R
Operating Leases (Schedule of Revenues From Rental Properties) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenues: | ||
Rental payments | $111,254 | |
Reimbursed operating expenses | 11,753 | |
Deferred rental income | 9,797 | |
Total revenues from rental properties | $132,804 |
Operating_Leases_Schedule_of_F
Operating Leases (Schedule of Future Minimum Rental Revenues) (Details) (USD $) | Mar. 31, 2015 |
Operating Leases [Abstract] | |
2015 | $336,325 |
2016 | 457,890 |
2017 | 468,449 |
2018 | 479,261 |
2019 | 490,332 |
Thereafter | 1,368,512 |
Total minimal rental payments | $3,600,769 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 1 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 28, 2014 | |
Related Party Transaction [Line Items] | |||
Accounts payable paid by principal stockholders | $7,665 | ||
Cash paid for interest to related party | 45,000 | ||
Principal Stockholders [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts payable paid by principal stockholders | 7,665 | ||
Proceeds from loans from stockholders | 5,277 | ||
CMG [Member] | |||
Related Party Transaction [Line Items] | |||
Promissory note held by related party | 1,800,000 | ||
Cash paid for interest to related party | $45,000 |
Stockholder_Loans_Payable_Deta
Stockholder Loans Payable (Details) (USD $) | 1 Months Ended | 3 Months Ended | |
Aug. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | |
Debt Instrument [Line Items] | |||
Stockholder loans and accrued interest converted to common stock | $99,450 | ||
Stockholder loans, shares converted | 19,890 | ||
Stockholder loans, conversion price | $5 | ||
Accrued interest expense related to outstanding stockholder loans | 1,205 | ||
Promissory Note One [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 5.00% | ||
Promissory Note One [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 25,000 | ||
Promissory Note Two [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 8.00% | ||
Promissory Note Two [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 20,000 | ||
Promissory Note Three [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 8.00% | ||
Promissory Note Three [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 10,000 |
Sale_of_Unregistered_Securitie1
Sale of Unregistered Securities (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Proceeds from the sale of common stock | $895,000 | ||
Common Stock [Member] | |||
Issuance of common stock (in shares) | 1,615,000 | ||
Issuance of common stock | $1,615,000 |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
STOCK-BASED COMPENSATION [Line Items] | ||
Stock-based compensation expense | $20,000 | |
Common Stock [Member] | ||
STOCK-BASED COMPENSATION [Line Items] | ||
Shares of common stock for consulting services | 8,272 | |
Stock-based compensation expense | $20,000 |
Stock_Based_Compensation_Sched
Stock Based Compensation (Schedule of Warrants Issued, Exercised and Expired) (Details) (Warrants [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Warrants [Member] | |
Shares | |
Balance at the beginning of the period | 166,665 |
Issued | |
Exercised | |
Expired | |
Balance at the end of the period | 166,665 |
Weighted Avg. Exercise Price | |
Balance at the beginning of the period | $5.88 |
Issued | |
Exercised | |
Expired | |
Balance at the end of the period | $5.88 |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent events [Member], Real estate property located at South Sheridan Boulevard in Denver, Colorado [Member], USD $) | 0 Months Ended |
4-May-15 | |
acre | |
sqft | |
Subsequent events [Member] | Real estate property located at South Sheridan Boulevard in Denver, Colorado [Member] | |
Subsequent events [Line Items] | |
Purchase consideration | $771,750 |
Proceeds from issuance of a promissory note | 925,000 |
Proceeds from the issuance of a secured promissory note used to fund acquisition | 771,750 |
Interest rate of promissory note | 10.00% |
Promissory note, maturity date | 1-Jun-17 |
Area of building acquired (in square feet) | 17,729 |
Area of land on which building is situated | 3,828 |
Lease agreement term | 10 years |
Total rent obligation | $1,327,088 |
Option to renew term | 1 year |