Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 21, 2016 | Jun. 30, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | Global Medical REIT Inc. | ||
Entity Trading Symbol | gmre | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,533,615 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 1,426,656 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Investment in real estate: | ||
Land | $ 4,563,852 | $ 572,400 |
Building and improvements | 51,574,271 | 23,801,362 |
Investment in real estate, gross | 56,138,123 | 24,373,762 |
Less: accumulated depreciation | (989,251) | (329,580) |
Investment in real estate, net | 55,148,872 | 24,044,182 |
Cash | 9,184,270 | 88,806 |
Restricted cash | 447,627 | 197,719 |
Accounts receivable | 0 | 2,793 |
Escrow deposits | 454,310 | 14,877 |
Deferred assets | 93,646 | 0 |
Total assets | 65,328,725 | 24,348,377 |
Liabilities: | ||
Accrued expenses | 683,857 | 338,764 |
Due to related party, net | 847,169 | 330,768 |
Convertible debenture, due to majority stockholder | 40,030,134 | 5,446,102 |
Note payable to majority stockholder | 421,000 | 38,195 |
Notes payable, net of unamortized discount of $302,892 and $291,691, respectively | 23,485,173 | 16,468,309 |
Total liabilities | 65,467,333 | 22,622,138 |
Stockholders' (deficit) equity: | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock $0.001 par value, 500,000,000 shares authorized at December 31, 2015 and December 31, 2014, respectively; 250,000 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | 250 | 250 |
Additional paid-in capital | 3,011,790 | 3,011,790 |
Accumulated deficit | (3,150,648) | (1,285,801) |
Total stockholders' (deficit) equity | (138,608) | 1,726,239 |
Total liabilities and stockholders' (deficit) equity | $ 65,328,725 | $ 24,348,377 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Parentheticals | ||
Notes payable, unamortized discount | $ 302,892 | $ 291,691 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 500,000,000 | 500,000,000 |
Common Stock, shares issued | 250,000 | 250,000 |
Common Stock, shares outstanding | 250,000 | 250,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 4 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2015 | |
Revenue: | ||
Rental revenue | $ 596,585 | $ 2,049,196 |
Other income | 71 | 12,471 |
Total revenue | 596,656 | 2,061,667 |
Expenses | ||
Acquisition fees - related party | 48,400 | 627,000 |
General and administrative | 182,930 | 505,141 |
Management fees - related party | 120,000 | 360,000 |
Depreciation expense | 200,499 | 659,671 |
Interest expense | 454,697 | 1,519,102 |
Total expenses | 1,006,526 | 3,670,914 |
Net loss | $ (409,870) | $ (1,609,247) |
Net loss per share - Basic and Diluted | $ (1.64) | $ (6.44) |
Weighted average shares outstanding - Basic and Diluted | 250,000 | 250,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' (Deficit) Equity - USD ($) | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Aug. 31, 2014 | 250,000 | 250 | 3,011,790 | (790,731) | 2,221,309 |
Net loss | $ 0 | $ 0 | $ (409,870) | $ (409,870) | |
Dividends to stockholders | $ 0 | $ 0 | $ (85,200) | $ (85,200) | |
Balance at Dec. 31, 2014 | 250,000 | 250 | 3,011,790 | (1,285,801) | 1,726,239 |
Net loss | $ 0 | $ 0 | $ (1,609,247) | $ (1,609,247) | |
Dividends to stockholders | $ 0 | $ 0 | $ (255,600) | $ (255,600) | |
Balance at Dec. 31, 2015 | 250,000 | 250 | 3,011,790 | (3,150,648) | (138,608) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 4 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2015 | |
Operating activities | ||
Net loss | $ (409,870) | $ (1,609,247) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation expense | 200,499 | 659,671 |
Amortization of deferred financing costs | 39,429 | 126,535 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,793) | 2,793 |
Prepaid expense | 19,307 | 0 |
Deferred assets | 0 | (93,646) |
Accrued expenses | 162,612 | 345,093 |
Accrued management fees due to related party | 120,000 | 360,000 |
Net cash (used in) provided by operating activities | 129,184 | (208,801) |
Investing activities | ||
Escrow deposits for purchase of properties | 62 | (439,433) |
Loans to related party | (42,915) | (135,196) |
Purchase of buildings and improvements | (2,506,697) | (31,764,361) |
Net cash used in investing activities | (2,549,550) | (32,338,990) |
Financing activities | ||
Change in restricted cash | (60,218) | (249,908) |
Loans from related party | 40,683 | 291,597 |
Proceeds from convertible debenture to majority stockholder | 910,000 | 34,584,032 |
Proceeds from note payable to majority stockholder | 0 | 382,805 |
Proceeds from notes payable from acquisitions | 1,700,000 | 7,377,500 |
Payments on notes payable from acquisitions | 0 | (349,435) |
Payments of deferred financing costs | (21,577) | (137,736) |
Dividends paid to stockholders | (85,200) | (255,600) |
Net cash provided by financing activities | 2,483,688 | 41,643,255 |
Net increase in cash and cash equivalents | 63,322 | 9,095,464 |
Cash and cash equivalents-beginning of period | 25,484 | 88,806 |
Cash and cash equivalents-end of period | 88,806 | 9,184,270 |
Supplemental cash flow information: | ||
Cash payments for interest | $ 270,778 | $ 1,165,157 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2015 | |
Organization | |
Organization | Note 1 Organization Global Medical REIT Inc. (the Company) was originally incorporated in the state of Nevada on March 18, 2011 under the name Scoop Media, Inc. (Scoop Media), which was acquired by the Hong Kong company ZH International Holdings Limited (formerly known as Heng Fai Enterprises, Ltd.) in 2013. The Company changed to its current name effective January 6, 2014 in connection with its re-domestication into a Maryland corporation and change of strategy to focus on the acquisition and leasing of licensed purpose-built healthcare facilities. The Companys primary investor goal is to provide attractive risk-adjusted returns and maximize sustainable distributable cash flow. The Companys principal investment strategy is to act on the opportunities created by the changing healthcare environment by acquiring, selectively developing and managing locally critical medical properties that are core to medical operator businesses and that meet the Companys investment criteria. In general, the Company seeks to acquire or develop specialty medical properties in desirable markets with tenants who are expected to prosper in the changing healthcare delivery environment. The Company focuses on specialty medical properties, including medical office buildings, outpatient treatment and diagnostic facilities, physical group practice clinics, ambulatory surgery centers, and specialty hospitals and treatment centers. The Company has four wholly owned Delaware limited liability company subsidiaries that were formed to own the facilities within the Companys portfolio. The wholly owned subsidiaries are as follows: GMR Memphis, LLC; GMR Pittsburgh, LLC; GMR Asheville, LLC, and GMR Omaha, LLC. On June 29, 2015, Joy Town Inc., a company incorporated in the British Virgin Islands, acquired a controlling interest in Heng Fai Enterprises, Ltd . ZH International Holdings Limited, is a Hong Kong listed company engaged in real estate development, investments, management and sales, hospitality management and investments and management. ZH International Holdings Limited owns ZH USA, LLC, (formerly known as HFE USA, LLC) the Companys majority stockholder. As of December 31, 2015, |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 Summary of Significant Accounting Policies Fiscal Year The Company changed its fiscal year from August 31 to the calendar twelve months ending December 31, effective beginning with the year ended December 31, 2014. As a result, the Companys prior fiscal period was shortened from twelve months to a four-month transition period that began on September 1, 2014 and ended on December 31, 2014. The Companys change in fiscal year was required based upon the Companys intention to qualify and be taxed as a REIT for federal income tax purposes. Consolidation Policy The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions between the Company and its subsidiaries have been eliminated. See Note 1 Organization for the names of our wholly owned subsidiaries. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Actual results could differ from those estimates. Presentation of Unamortized Debt Issuance Costs as Debt Discount On April 7, 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2015-03 entitled Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). Debt issuance costs include amounts paid to lenders and others to obtain financing and are amortized to interest expense on a straight-line basis over the term of the related loan, which approximates the effective interest method. In accordance with the provisions of ASU 2015-03, for fiscal years beginning after December 15, 2015, and interim periods within those years, debt issuance costs related to a recognized debt liability must be reclassified and presented as a debt discount in the Consolidated Balance Sheets and presented as a direct reduction from the carrying amount of that debt liability. The application of ASU 2015-03 is required to be applied retrospectively. The Company early adopted ASU 2015-03 effective for the fiscal year ended December 31, 2015. The adoption of ASU 2015-03 represents a change in accounting principal. See Note 4 Notes Payable Related to Acquisition for additional details. Income Taxes The Company plans on electing to be taxed as a REIT for federal income tax purposes beginning in 2016. REITs are generally not subject to federal income taxes if the Company can meet many specific requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal and state income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates, and the Company may be ineligible to qualify as a REIT for subsequent tax years. Even if the Company qualifies as a REIT, it may be subject to certain state or local income taxes, and if the Company creates a Taxable REIT Subsidiary (TRS), the TRS will be subject to federal, state and local taxes on its income at regular corporate rates. The Company recognizes the tax effects of uncertain tax positions only if the position is more likely than not to be sustained upon audit, based on the technical merits of the position. The Company has not identified any material uncertain tax positions and recognizes interest and penalties in income tax expense, if applicable. The Company is currently not under examination by any income tax jurisdiction. Purchase of Real Estate Transactions in which real estate assets are purchased that are not subject to an existing significant lease or are attached or related to a major healthcare provider are treated as asset acquisitions, and as such are recorded at their purchase price, including acquisition fees, which is allocated to land and building based upon their relative fair values at the date of acquisition. Investment properties that are acquired either subject to a significant existing lease or as part of a portfolio level transaction with significant leasing activity are treated as a business combination under Accounting Standards Codification (ASC) Topic 805, Business Combinations, and as such are recorded at fair value, allocated to land, building and the existing lease, if applicable, based upon their fair values at the date of acquisition, with acquisition fees and other costs expensed as incurred. Fair value is determined based on ASC Topic 820, Fair Value Measurements and Disclosures, primarily based on unobservable data inputs. In making estimates of fair values for purposes of allocating the purchase price of individually acquired properties, the Company utilizes its own market knowledge and published market data. In this regard, the Company also utilizes information obtained from county tax assessment records to assist in the determination of the fair value of the land and building. The Company utilizes market comparable transactions such as price per square foot to assist in the determination of fair value for purposes of allocating the purchase price of properties acquired as part of portfolio level transactions. Impairment of Long Lived Assets The Company evaluates its real estate assets for impairment periodically or whenever events or circumstances indicate that its carrying amount may not be recoverable. If an impairment indicator exists, we compare the expected future undiscounted cash flows against the carrying amount of an asset. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, we would record an impairment loss for the difference between the estimated fair value and the carrying amount of the asset. Depreciation Expense Depreciation expense is computed using the straight-line method over the estimated useful lives of the buildings and improvements, which are generally between 5 and 40 years. Cash and Cash Equivalents The Company considers all demand deposits, cashiers checks, money market accounts and certificates of deposits with a maturity of three months to be cash equivalents. The Company maintains their cash and cash equivalents and escrow deposits at financial institutions. The combined account balances may exceed the Federal Depository Insurance Corporation insurance coverage, and, as a result, there may be a concentration of credit risk related to amounts on deposit. The Company does not believe that this risk is significant. Restricted Cash Restricted cash represents cash required by a third party lender to be held by the Company as a reserve for debt service. Escrow Deposits Escrow deposits include funds held in escrow to be used for the acquisition of future properties. Deferred Assets The deferred asset balance of $93,646 as of December 31, 2015, consists of $23,295 in deferred rent receivable and $70,351 in deferred costs related to the Companys securities offering. In accordance with the provisions of ASC Topic 340, Other Assets and Deferred Costs, the Company is deferring specific incremental costs directly attributable to its offering of equity securities and will charge them against the gross proceeds of the offering as a reduction of additional paid-in capital. Revenue Recognition The Companys operations currently consist of rental revenue earned from three tenants under leasing arrangements which provide for minimum rent, escalations, and charges to the tenant for the real estate taxes and operating expenses. The leases have been accounted for as operating leases. For operating leases with contingent rental escalators revenue is recorded based on the contractual cash rental payments due during the period. Revenue from leases with fixed annual rental escalators are recognized on a straight-line basis over the initial lease term, subject to a collectability assessment. If the Company determines that collectability of rents is not reasonably assured, future revenue recognition is limited to amounts contractually owed and paid, and, when appropriate, an allowance for estimated losses is established. The Company consistently assesses the need for an allowance for doubtful accounts, including an allowance for operating lease straight-line rent receivables, for estimated losses resulting from tenant defaults, or the inability of tenants to make contractual rent and tenant recovery payments. The Company also monitors the liquidity and creditworthiness of its tenants and operators on a continuous basis. This evaluation considers industry and economic conditions, property performance, credit enhancements and other factors. For operating lease straight-line rent amounts, the Company's assessment is based on amounts estimated to be recoverable over the term of the lease. As of December 31, 2015 and December 31, 2014 no allowance was recorded as it was not deemed necessary. Segment Reporting ASC Topic 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity's reportable segments. The Company has determined that they have one reportable segment, with activities related to investing in medical properties. The Company evaluates the operating performance of its investments on an individual asset level basis. Fair Value of Financial Instruments Fair value is a market-based measurement and should be determined based on the assumptions that market participants would use in pricing an asset or liability. In accordance with ASC Topic 820, the valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1- Inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets; Level 2- Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and Level 3- Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company considers the carrying values of cash and cash equivalents, escrow deposits, accounts and other receivables, and accounts payable and accrued expenses to approximate the fair value for these financial instruments because of the short period of time since origination or the short period of time between origination of the instruments and their expected realization. Due to the short-term nature of these instruments, Level 1 and Level 2 inputs are utilized to estimate the fair value of these financial instruments. Related Party Disclosures The Company enters into transactions with affiliated entities, or related parties, which are recorded net as Due to Related Parties in the accompanying Consolidated Balance Sheets. Related party disclosures are governed by ASC Topic 850, Related Party Disclosures. Refer to Note 6 Related Party Transactions for additional information regarding the Companys related party transactions. Net Loss Per Share The Company calculates basic and diluted loss per share using the weighted average common shares outstanding. The Company has no issued and outstanding non-vested shares of common stock and therefore no dilutive effects of non-vested shares and accordingly the Companys calculation and the resulting amount of basic and diluted loss per share are identical. Reclassification The Company reclassified $197,719 from the line item Cash and Cash Equivalents in its accompanying Consolidated Balance Sheets as of December 31, 2014 into the line item Restricted Cash to properly reflect the Companys funds that are restricted. The Company also reclassified $572,400 from the line item Building and Improvements in its accompanying Consolidated Balance Sheets as of December 31, 2014 into the line item Land to properly reflect the asset balances related to the acquisition of the Asheville facility in 2014. |
Property Portfolio
Property Portfolio | 12 Months Ended |
Dec. 31, 2015 | |
Property Portfolio | |
Property Portfolio | Note 3 Property Portfolio A rollforward of the gross investment in land, building and improvements as of December 31, 2015 is as follows: Land Building & Improvements Gross Investment Balances as of January 1, 2015 $ 572,400 $ 23,801,362 $ 24,373,762 Acquisitions: Tennessee Facilities 2,704,452 17,451,238 20,155,690 West Mifflin Facility 1,287,000 10,321,671 11,608,671 Total Additions: 3,991,452 27,772,909 31,764,361 Balances as of December 31, 2015 $ 4,563,852 $ 51,574,271 $ 56,138,123 Properties Owned as of December 31, 2015 Tennessee Facilities On December 31, 2015, the Company acquired a six building, 52,266 square foot medical clinic portfolio for a purchase price of $20.0 million (approximately $20.2 including legal and related fees). Five of the facilities are located in Tennessee and one facility is located in Mississippi. The portfolio will be leased back through Gastroenterology Center of the Midsouth, P.C. via an absolute triple-net lease agreement that expires in 2027. The tenant has two successive options to renew the lease for five year periods on the same terms and conditions as the primary non-revocable lease term with the exception of rent, which will be computed at the same rate of escalation used during the fixed lease term. Base rent increases by 1.75% each lease year commencing on January 1, 2018. The property is owned in fee simple. Funding for the transaction and all related costs was received in the form of a convertible debenture (Convertible Debenture) the Company issued to its majority stockholder in the total amount of $20,900,000. Refer to Note 6 Related Party Transactions for additional details regarding the funding of this transaction. West Mifflin Facility On September 25, 2015, the Company acquired a combined approximately 27,193 square foot surgery center and medical office building located in West Mifflin, Pennsylvania and the adjacent parking lot for approximately $11.35 million (approximately $11.6 million including legal and related fees). The facilities are operated by Associates in Ophthalmology, LTD and Associates Surgery Centers, LLC, respectively, and leased back to those entities by the Company via two separate lease agreements that expire in 2030. Each lease has two successive options by the tenants to renew for five year periods. Base rent increases by 2% each lease year commencing on October 1, 2018. The property is owned in fee simple. In connection with the acquisition of the facilities, the Company borrowed $7,377,500 from Capital One, National Association (Capital One) and funded the remainder of the purchase price with the proceeds from a Convertible Debenture it issued to its majority stockholder in the total amount of $4,545,838. Refer to Note 4 Notes Payable Related to Acquisitions and Note 6 Related Party Transactions for additional details regarding the funding of this transaction. Asheville Facility On September 19, 2014, the Company acquired an approximately 8,840 square foot medical office building known as the Orthopedic Surgery Center, located in Asheville, North Carolina for approximately $2.5 million. The Asheville facility is subject to an operating lease which expires in 2017, with lease options to renew up to five years. The property is owned in fee simple. In connection with the acquisition of the Asheville facility, the Company borrowed $1.7 million from the Bank of North Carolina and funded the remainder of the purchase price with the proceeds from a Convertible Debenture it issued to its majority stockholder and with the Companys existing cash. Refer to Note 4 Notes Payable Related to Acquisitions for additional details regarding the funding of this transaction. Omaha Facility On June 5, 2014, the Company completed the acquisition of a 56-bed long term acute care hospital located at 1870 S 75 th Depreciation expense was $659,671 and $200,499 for the twelve months ended December 31, 2015 and the four months ended December 31, 2014, respectively. For information related to property transactions that occurred subsequent to December 31, 2015 refer to Note 11 Subsequent Events. |
Notes Payable Related to Acquis
Notes Payable Related to Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable Related to Acquisitions | |
Notes Payable Related to Acquisitions | Note 4 Notes Payable Related to Acquisitions Summary of Notes Payable Related to Acquisitions, Net of Debt Discount As disclosed in Note 2 Summary of Significant Accounting Policies effective for the fiscal year ended December 31, 2015, the Company early adopted the provisions of ASU 2015-03, which requires retrospective application. The adoption of ASU 2015-03 represents a change in accounting principle. A detail of the impact of adopting ASU 2015-03 on the Companys Notes Payable Related to Acquisitions, net of unamortized discount balances, as of December 31, 2015 and December 31, 2014, is as follows December 31, 2015 December 31, 2014 Notes payable related to acquisitions, gross $ 23,788,065 $ 16,760,000 Less: Unamortized debt discount (deferred financing costs) (302,892) (291,691) Notes payable related to acquisitions, net $ 23,485,173 $ 16,468,309 The Company incurred financing costs related to the Omaha, Asheville, and West Mifflin loans that are treated as debt discounts. A rollforward of the unamortized debt discount balance as of December 31, 2015 is as follows: Balance as of January 1, 2015, net $ 291,691 Additions West Mifflin financing 137,736 Debt discount amortization expense (126,535) Balance as of December 31, 2015, net $ 302,892 A rollforward of the unamortized debt discount balance as of December 31, 2014 is as follows: Balance as of September 1, 2014, net $ 309,543 Additions Asheville financing 21,577 Debt discount amortization expense (39,429) Balance as of December 31, 2014, net $ 291,691 Amortization expense is included in the Interest Expense line item in the accompanying Consolidated Statements of Operations. West Mifflin Note Payable In order to finance a portion of the purchase price for the West Mifflin facility, on September 25, 2015 the Company entered into a Term Loan and Security Agreement with Capital One to borrow $7,377,500. The note bears interest at 3.72% per annum and all unpaid interest and principal is due on September 25, 2020. Interest is paid in arrears and interest payments begin on November 1, 2015, and on the first day of each calendar month thereafter. Principal payments begin on November 1, 2018 and on the first day of each calendar month thereafter based on an amortization schedule with the principal balance due on the maturity date. The note may not be prepaid in whole or in part prior to September 25, 2017. Thereafter, the Company, at its option, may prepay the note at any time, in whole (but not in part) on at least thirty calendar days but not more than sixty calendar days advance written notice. The note has an early termination fee of two percent if prepaid prior to September 25, 2018. No principal payments were made for the twelve months ended December 31, 2015. The note balance as of December 31, 2015 was $7,377,500. Interest expense incurred on this note was $51,078 for the twelve months ended December 31, 2015. As of December 31, 2015, scheduled principal payments due for each fiscal year ended December 31 are listed below as follows: 2018 $ 22,044 2019 136,007 2020 7,219,449 Total $ 7,377,500 Asheville Note Payable In order to finance a portion of the purchase price of the Asheville facility, on September 15, 2014 the Company entered into a Promissory Note with the Bank of North Carolina to borrow $1,700,000. The note bears interest on the outstanding principal balance at the simple, fixed interest rate of 4.75% per annum and all unpaid principal and interest is due on February 15, 2017. Commencing on October 15, 2014, the Company made on the 15 th th Interest expense on this note was $81,160 and $20,188 for the twelve months ended December 31, 2015 and the four months ended December 31, 2014, respectively. As of December 31, 2015, scheduled principal payments due for each fiscal year ended December 31 are listed below as follows: 2016 $ 52,719 2017 1,609,382 Total $ 1,662,101 Omaha Note Payable In order to finance a portion of the purchase price for the Omaha facility, on June 5, 2014 the Company entered into a Term Loan and Security Agreement with Capital One, National Association to borrower $15,060,000. The loan bears interest at 4.91% per annum and all unpaid interest and principal is due on June 5, 2017 (the Maturity Date). Interest is paid in arrears and payments began on August 1, 2014, and are due on the first day of each calendar month thereafter. Principal payments begin on January 1, 2015 and are due on the first day of each calendar month thereafter based on an amortization schedule with the principal balance due on the Maturity Date. The loan may not be prepaid in whole or in part prior to June 5, 2016, thereafter, the Company, at its option, may prepay the loan at any time, in whole (but not in part) on at least 30 calendar days, but not more than 60 calendar days, advance written notice. The prepayment amount will be equal to the outstanding principal balance of the loan, any accrued and unpaid interest and all other fees, expenses and obligations including an early termination fee of $301,200. The Company made principal payments in the amount of $311,536 for the twelve months ended December 31, 2015. No principal payments were made for the four months ended December 31, 2014. The note balance as of December 31, 2015 and December 31, 2014 was $14,748,464 and $15,060,000, respectively. Interest expense on this note was $679,987 and $252,644 for the twelve months ended December 31, 2015 and the four months ended December 31, 2014, respectively. As of December 31, 2015, scheduled principal payments due for each fiscal year ended December 31 are listed below as follows: 2016 $ 325,323 2017 14,423,141 Total $ 14,748,464 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | Note 5 Stockholders Equity Preferred Stock The Companys charter authorizes the issuance of 100,000,000 shares of preferred stock, par value $0.001 per share. As of December 31, 2015 and December 31, 2014, no shares of preferred stock were issued and outstanding. Common Stock The Company has 500,000,000 of authorized shares of common stock, $0.001 par value. As of December 31, 2015 and December 31, 2014, there were 250,000 outstanding common shares outstanding, respectively. Effective November 7, 2014, the Company amended its articles of incorporation to increase the number of authorized shares of common stock, $0.001 par value (the common stock), from 100,000,000 to 500,000,000 and effected a reverse stock split of the outstanding shares of its common stock at the ratio of 1-for-400 (the Reverse Stock Split). As of December 31, 2014 and August 31, 2014, there were 250,000 outstanding common shares. All references to shares of the Companys common stock in Report refer to the number of shares of common stock after giving effect to the Reverse Stock Split (unless otherwise indicated). Pursuant to a previously declared dividend approved by the Board of Directors and in compliance with applicable provisions of the Maryland General Corporation Law, the Company has paid a monthly dividend of $0.0852 per share, an aggregate of $21,300 per month, each month during the twelve month period from January 1, 2015 through December 31, 2015 and also during the four month period from September 1, 2014 through December 31, 2014. Accordingly, during the twelve months ended December 31, 2015 the Company paid total dividends to holders of its common stock in the amount of $255,600. During the four months ended December 31, 2014, the Company paid total dividends to holders of its common stock in the amount of $85,200. As disclosed in Note 11 Subsequent Events, on March 2, 2016, ZH USA, LLC converted $15,000,000 of principal under the Convertible Debenture into 1,176,656 shares of our unregistered common stock. Shares of our unregistered common stock issuable to ZH USA, LLC under the Convertible Debenture are subject to customary anti-dilution rights in the event of stock splits, stock dividends and similar corporate events. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | Note 6 Related Party Transactions Allocated General and Administrative Expenses In the future, the Company may receive an allocation of general and administrative expenses from the Advisor that are either clearly applicable to or were reasonably allocated to the operations of the properties. There were no allocated general and administrative expenses from the Advisor for the fiscal year ended December 31, 2015 or for the four months ended December 31, 2014. Convertible Debenture, due to Majority Stockholder The Company has received funds from its majority stockholder ZH USA, LLC in the form of convertible interest bearing (8% per annum, payable in arrears) due on demand unsecured debt, which are classified as Convertible debenture, due to majority stockholder on the accompanying Consolidated Balance Sheets. The Company may prepay the note at any time, in whole or in part. ZH USA, LLC may elect to convert all or a portion of the outstanding principal amount of the note into shares of common stock in an amount equal to the principal amount of the note, together with accrued but unpaid interest, divided by $12.748. A rollforward of the funding from ZH USA, LLC classified as convertible debenture, due to majority stockholder as of December 31, 2015 is as follows: Balance as of January 1, 2015 $ 5,446,102 Funds advanced for Tennessee Facilities acquisition 20,900,000 Funds advanced for West Mifflin acquisition 4,545,838 Funds advanced for Plano acquisition (closed post 12.31.15; see Note 11) 9,000,000 Fund advanced to be used for future acquisitions 138,194 Total funded during twelve months ended December 31, 2015 34,584,032 Balance as of December 31, 2015 $ 40,030,134 A rollforward of the funding from ZH USA, LLC classified as convertible debenture, due to majority stockholder as of December 31, 2014 is as follows: Balance as of September 1, 2014 $ 4,536,102 Proceeds received for convertible debenture 910,000 Balance as of December 31, 2014 $ 5,446,102 Interest expense on the convertible debenture was $581,342 and $142,436 for the twelve months ended December 31, 2015 and the four months ended December 31, 2014, respectively. The Company analyzed the conversion option in the convertible debenture for derivative accounting treatment under ASC Topic 815, Derivatives and Hedging, and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis in accordance with ASC Topic 470-20, Debt with Conversion and Other Options, to determine if the conversion option was subject to a beneficial conversion feature and determined that the instrument does not have a beneficial conversion feature. Note Payable to Majority Stockholder The Company has received funds from its majority stockholder ZH USA, LLC in the form of a non-interest bearing due on demand note payable, which is classified as Note payable to majority stockholder on the accompanying Consolidated Balance Sheets. A rollforward of the funding from the majority stockholder as of December 31, 2015 is as follows: Balance as of January 1, 2015 $ 38,195 Proceeds received from majority stockholder 382,805 Balance as of December 31, 2015 $ 421,000 A rollforward of the funding from the majority stockholder as of December 31, 2014 is as follows: Balance as of September 1, 2014 $ 38,195 Proceeds received from majority stockholder - Repayments of note payable - Balance as of December 31, 2014 $ 38,195 Due to Related Parties, Net A rollforward of the due (to) from related parties balance, net as of December 31, 2015 is as follows: Due from Advisor Due to Advisor Mgmt. Fees Due to Advisor Other Funds Due to Other Related Party Total Due (To) From Related Parties, Net Balance as of January 1, 2015 $ 42,915 (270,000) (103,683) - (330,768) Management fees due to Advisor (c) - (360,000) - - (360,000) Funds loaned by Advisor (a) - - (136,597) - (136,597) Funds loaned to Advisor (b) 135,196 - - - 135,196 Funds loaned by Other Related Party (a) - - - (155,000) (155,000) Balance as of December 31, 2015 $ 178,111 (630,000) (240,280) (155,000) (847,169) (a) Total funds loaned to the Company of $291,597 were primarily used by the Company for general corporate purposes. (b) Funds loaned were used by the Advisor for the Asheville facility acquisition. (c) This amount represents a cash flow statement operating activity. A rollforward of the due (to) from related parties balance, net as of December 31, 2014 is as follows: Due from Advisor Due to Advisor Mgmt. Fees Due to Advisor Other Funds Due to Other Related Party Total Due (To) From Related Parties, Net Balance as of September 1, 2014 $ - (150,000) (63,000) - (213,000) Management fees due to Advisor - (120,000) - - (120,000) Funds loaned by Advisor - - (40,683) - (40,683) Funds loaned to Advisor 42,915 - - - 42,915 Balance as of December 31, 2014 $ 42,915 (270,000) (103,683) - (330,768) Management Agreement On November 10, 2014, the Company entered into a Management Agreement, with an effective date of April 1, 2014, with Inter-American Management, LLC (the Advisor), a Delaware limited liability company and an affiliate of the Company. |
Rental Revenue
Rental Revenue | 12 Months Ended |
Dec. 31, 2015 | |
Rental Revenue | |
Rental Revenue | Note 7 Rental Revenue The aggregate annual minimum cash to be received by the Company on the noncancelable operating leases related to its portfolio of facilities in effect as of December 31, 2015, are as follows for the subsequent years ended December 31; as listed below. 2016 $ 3,945,243 2017 3,790,242 2018 3,800,505 2019 3,864,307 2020 3,929,203 Thereafter 24,659,288 Total $ 43,988,788 The Omaha facility constituted approximately 80% of the Companys rental revenue for the twelve months ended December 31, 2015 and the West Mifflin and Asheville facilities constituted approximately 10% each. The Omaha facility constituted approximately 90% of the Companys rental revenue for the four months ended December 31, 2014 and the Asheville facility constituted approximately 10%. The West Mifflin facility was not owned by the Company in 2014. |
Omaha Land Lease Rent Expense
Omaha Land Lease Rent Expense | 12 Months Ended |
Dec. 31, 2015 | |
Omaha Land Lease Rent Expense | |
Omaha Land Lease Rent Expense | Note 8 Omaha Land Lease Rent Expense The Omaha facility land lease initially was to expire in 2023 with options to renew up to 60 years. However, as of December 31, 2015, the Company exercised two five-year lease renewal options and therefore the land lease currently expires in 2033, subject to future renewal options by the Company. Under the terms of the land lease, annual rents increase 12.5% every fifth anniversary of the lease. The initial land lease increase will occur in April 2017. During the fiscal year ended December 31, 2015 and the four months ended December 31, 2014, the Company expensed $79,892 and $44,908 related to this lease. The aggregate minimum cash payments to be made by the Company on the non-cancelable Omaha facility related land lease in effect as of December 31, 2015, are as follows for the subsequent years ended December 31; as listed below. 2016 $ 59,877 2017 59,877 2018 63,619 2019 67,362 2020 67,362 Thereafter 973,586 Total $ 1,291,683 |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies | |
Commitments And Contingencies | Note 9 - Commitments and Contingencies Litigation The Company is not presently subject to any material litigation nor, to its knowledge, is any material litigation threatened against the Company, which if determined unfavorably to the Company, would have a material adverse effect on the Companys financial position, results of operations, or cash flows. Environmental Matters The Company follows a policy of monitoring its properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at its properties, the Company is not currently aware of any environmental liability with respect to its properties that would have a material effect on its financial position, results of operations, or cash flows. Additionally, the Company is not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that management believes would require additional disclosure or the recording of a loss contingency. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 10 Income Taxes For the 2016 tax year, the Company is planning to elect and qualify as a REIT under the Internal Revenue Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distribute at least 90% of its adjusted taxable income to its stockholders. It is managements current intention to adhere to these requirements and be eligible to be a REIT for the year ended December 31, 2016. As a REIT, the Company generally will not be subject to corporate level federal income tax on taxable income currently distributed to stockholders. If the Company fails to qualify as a REIT for the 2016 tax year, it will be subject to federal and state income taxes at corporate tax rates. Even if the Company qualifies to be taxed as a REIT for 2016, it may be subject to federal and state taxes on any undistributed taxable income. For the 2016 tax year, the Company intends to distribute all of its taxable income; therefore, no provision for federal or state income taxes has been recorded in the financial statements. Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company had federal and state net operating loss carry forwards of approximately $1,352,000, which begin expiring in 2028. The Company has adopted ASC Topic 740, Accounting for Income Taxes, as of its inception. Pursuant to ASC Topic 740, the Company is required to compute tax asset benefits for non-capital losses carried forward. The potential benefit of the net operating loss has not been recognized in these financial statements because it cannot be assured it is more likely than not it will utilize the loss carried forward in future years. Significant components of the deferred tax assets and liabilities as of December 31, 2015 and December 31, 2014, after applying enacted corporate income tax rates, are as follows: December 31, 2015 December 31, 2014 Deferred income tax asset: Net operating loss carry forward $ 460,000 $ 184,000 Valuation allowance (460,000) (184,000) Net deferred tax asset $ - $ - The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible profits. As a result of this analysis of all available evidence, both positive and negative, the Company concluded that it is not likely that its net deferred tax assets will ultimately be recovered; as such, it recorded a valuation allowance for the net operating loss and a reserve due to the anticipated REIT election for calendar year 2016. The Company follows ASC Topic 740 to recognize, measure, present and disclose in our consolidated financial statements uncertain tax positions that it has taken or expects to take on a tax return. As of December 31, 2015 and December 31, 2014, the Company did not have any liabilities for uncertain tax positions that it believes should be recognized in its financial statements. The Company is not subject and has not been subject to any federal or state income tax examinations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events: | |
Subsequent Events | Note 11 Subsequent Events Completed Property Acquisition Subsequent to December 31, 2015 Plano Facility On January 28, 2016, the Company closed on an Asset Purchase Agreement with an unrelated party Star Medreal, LLC, a Texas limited liability company, to acquire an approximately 24,000 square foot, eight bed acute hospital facility located in Plano, Texas, along with all real property and improvements thereto for approximately $17.5 million. Under the terms of the agreement, the Company was obligated to pay a development fee of $500,000 to Lumin, LLC at closing. The property will be leased back via an absolute triple-net lease agreement that expires in 2036. The tenant will be Star Medical Center, LLC and Lumin Health, LLC will serve as guarantor. Lumin Health, LLC is an affiliate and management company for Star Medical Center, LLC. The tenant has two successive options to renew the lease for ten year periods on the same terms and conditions as the primary non-revocable lease term with the exception of rent, which will be computed at then prevailing fair market value as determined by an appraisal process defined in the lease. The terms of the lease also provide for a tenant allowance up to $2.75 million for a 6,400 square foot expansion to be paid by the Company. On January 28, 2016, the Company entered into a Promissory Note and Deed of Trust with East West Bank to borrow the principal amount of $9,223,500. The loan matures on January 28, 2021, five years from the closing date. At closing the Company paid the lender a non-refundable deposit of $50,000.00 and a non-refundable commitment fee of $46,117.50. The loan shall bear interest at a rate per annum equal to the Wall Street Journal Prime Rate (as quoted in the "Money Rates" column of The Wall Street Journal (Western Edition), rounded to two decimal places, as it may change from time to time, plus 0.50%, but not less than 4.0%. Loan payments will consist of both and interest and principal pay down component. The Company will begin making loan payments on March 10, 2016, and on the tenth day of each calendar month thereafter. The entire outstanding principal balance of the loan, together with accrued and unpaid interest and any other amounts due under the loan documents, will be due and payable on the maturity date. The Company may prepay the loan in full at any time, or in part from time to time, without premium or penalty. Additional funding for this transaction was received from the Companys majority stockholder during the year ended December 31, 2015 in the amount of $9,369,310 (consisting of $9,025,000 funded directly for this transaction and $344,310 that was in escrow from previous funding from the majority stockholder). The $9,369,310 was recorded by the Company as of December 31, 2015 as unsecured Convertible Debentures due to its majority stockholder on demand, bearing interest at eight percent per annum. The majority stockholder may elect to convert all or a portion of the outstanding principal amount of the Convertible Debenture into shares of the Companys common stock in an amount equal to the principal amount of the Convertible Debenture, together with accrued but unpaid interest, divided by $12.748. Executed Property Purchase Agreements Subsequent to December 31, 2015 Melbourne Facility On January 8, 2016, the Company entered into a Purchase Agreement to acquire a 78,000 square-foot medical office building located on the Melbourne Bayfront for a purchase price of $15.45 million from Marina Towers, LLC, a Florida limited liability company. The facility is located at 709 S. Harbor City Blvd., Melbourne, FL on 1.9 acres of land. The acquisition includes the site and building, an easement on the adjacent property to the north for surface parking, all tenant leases, and above and below ground parking garages. The entire facility will be leased back to FCID Holdings, Inc. via a 10-year absolute triple-net master lease agreement that expires in 2026. The tenant has two successive options to renew the lease for five-year periods on the same terms and conditions as the primary non-revocable lease term with the exception of rent, which will be adjusted to the prevailing fair market rent at renewal and will escalate in successive years during the extended lease period at two percent annually. The acquisition, which the Company plans to fund using third party debt and Convertible Debenture Westland Facility On February 23, 2016, the Company entered into a purchase agreement to acquire a two-story medical office building and ambulatory surgery center located in Westland, Michigan. The property contains 15,018 leasable square feet and is located on a 1.3 acre site. Under the purchase agreement, the Company would acquire the site and building, including parking for an aggregate purchase price of $4.75 million. The entire facility will be leased back to The Surgical Institute of Michigan, LLC under a triple-net master lease agreement that expires in 2026, subject to two successive five-year renewal options for the tenant on the same terms as the initial lease, except that the rental rate will be subject to adjustment upon each renewal based on then-prevailing market rental rates. The purchase agreement contains customary covenants, representations and warranties. The Companys due diligence period expires on March 28, 2016. The Company expects to close the acquisition in March 2016, although there can be no assurance that the transaction will close. Dividends On January 19, 2016, the Company declared a dividend of $0.0852 per share payable to the holders of its common stock of record at the close of business January 27, 2016. Dividends shall be paid no later than the 20th day of the following month subject to compliance with applicable provisions of the Maryland General Corporation Law. The aggregate amount of the dividend was $21,300. On February 17, 2016, the Company declared a dividend of $0.0852 per share payable to the holders of its common stock of record at the close of business February 26, 2016. Dividends shall be paid no later than the 20th day of the following month subject to compliance with applicable provisions of the Maryland General Corporation Law. The aggregate amount of the dividend was $21,300. Common Stock Activity On March 2, 2016, ZH USA, LLC converted $15,000,000 of principal under the Convertible Debenture into 1,176,656 shares of our unregistered common stock. Shares of our unregistered common stock issuable to ZH USA, LLC under the Convertible Debenture are subject to customary anti-dilution rights in the event of stock splits, stock dividends and similar corporate events. The Convertible Debenture was issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(2) of the Securities Act of 1933, as amended. Formation of UPREIT Structure On March 14, the Company entered into a series of internal agreements and transactions pursuant to which the Company has implemented an UPREIT operating partnership structure. The Company and its wholly owned subsidiary, Global Medical REIT GP LLC, a Delaware limited liability company (the GP), entered into an Agreement of Limited Partnership pursuant to which the Company serves as the initial limited partner, and the GP serves as the sole general partner, of the Companys operating partnership, Global Medical REIT L.P., a Delaware limited partnership (the OP) (the Partnership Agreement). In addition, the Company entered into a Contribution and Assignment Agreement (the Contribution Agreement) with the OP pursuant to which the Company contributed to the OP 100% of the limited liability company interests in two wholly owned subsidiaries that own certain of the Companys properties in exchange for limited partnership units of the OP. These subsidiaries are GMR Plano, LLC, a Delaware limited liability company, and GMR Memphis, LLC, a Delaware limited liability company. The Company intends to contribute its ownership interests in the subsidiaries that own the Companys other properties upon receipt of the required lender consents. The Company is the sole member of the GP, which is the sole general partner of the OP. Going forward, the Company will conduct substantially all of its operations and make substantially all of its investments through the OP. Pursuant to the Partnership Agreement, though the GP, the Company will have full, complete and exclusive responsibility and discretion in the management and control of the OP, including the ability to cause the OP to enter into certain major transactions including acquisitions, dispositions, refinancings and selection of lessees, to make distributions to partners and to cause changes in the OPs business activities. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies: | |
Fiscal Year | Fiscal Year The Company changed its fiscal year from August 31 to the calendar twelve months ending December 31, effective beginning with the year ended December 31, 2014. As a result, the Companys prior fiscal period was shortened from twelve months to a four-month transition period that began on September 1, 2014 and ended on December 31, 2014. The Companys change in fiscal year was required based upon the Companys intention to qualify and be taxed as a REIT for federal income tax purposes. |
Consolidation, Policy | Consolidation Policy The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions between the Company and its subsidiaries have been eliminated. See Note 1 Organization for the names of our wholly owned subsidiaries. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Actual results could differ from those estimates. |
Presentation of Unamortized Debt Issuance Costs as Debt Discount | Presentation of Unamortized Debt Issuance Costs as Debt Discount On April 7, 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2015-03 entitled Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). Debt issuance costs include amounts paid to lenders and others to obtain financing and are amortized to interest expense on a straight-line basis over the term of the related loan, which approximates the effective interest method. In accordance with the provisions of ASU 2015-03, for fiscal years beginning after December 15, 2015, and interim periods within those years, debt issuance costs related to a recognized debt liability must be reclassified and presented as a debt discount in the Consolidated Balance Sheets and presented as a direct reduction from the carrying amount of that debt liability. The application of ASU 2015-03 is required to be applied retrospectively. The Company early adopted ASU 2015-03 effective for the fiscal year ended December 31, 2015. The adoption of ASU 2015-03 represents a change in accounting principal. See Note 4 Notes Payable Related to Acquisition for additional details. |
Income Taxes, Policy | Income Taxes The Company plans on electing to be taxed as a REIT for federal income tax purposes beginning in 2016. REITs are generally not subject to federal income taxes if the Company can meet many specific requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal and state income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates, and the Company may be ineligible to qualify as a REIT for subsequent tax years. Even if the Company qualifies as a REIT, it may be subject to certain state or local income taxes, and if the Company creates a Taxable REIT Subsidiary (TRS), the TRS will be subject to federal, state and local taxes on its income at regular corporate rates. The Company recognizes the tax effects of uncertain tax positions only if the position is more likely than not to be sustained upon audit, based on the technical merits of the position. The Company has not identified any material uncertain tax positions and recognizes interest and penalties in income tax expense, if applicable. The Company is currently not under examination by any income tax jurisdiction. |
Purchase of Real Estate, Policy | Purchase of Real Estate Transactions in which real estate assets are purchased that are not subject to an existing significant lease or are attached or related to a major healthcare provider are treated as asset acquisitions, and as such are recorded at their purchase price, including acquisition fees, which is allocated to land and building based upon their relative fair values at the date of acquisition. Investment properties that are acquired either subject to a significant existing lease or as part of a portfolio level transaction with significant leasing activity are treated as a business combination under Accounting Standards Codification (ASC) Topic 805, Business Combinations, and as such are recorded at fair value, allocated to land, building and the existing lease, if applicable, based upon their fair values at the date of acquisition, with acquisition fees and other costs expensed as incurred. Fair value is determined based on ASC Topic 820, Fair Value Measurements and Disclosures, primarily based on unobservable data inputs. In making estimates of fair values for purposes of allocating the purchase price of individually acquired properties, the Company utilizes its own market knowledge and published market data. In this regard, the Company also utilizes information obtained from county tax assessment records to assist in the determination of the fair value of the land and building. The Company utilizes market comparable transactions such as price per square foot to assist in the determination of fair value for purposes of allocating the purchase price of properties acquired as part of portfolio level transactions. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets The Company evaluates its real estate assets for impairment periodically or whenever events or circumstances indicate that its carrying amount may not be recoverable. If an impairment indicator exists, we compare the expected future undiscounted cash flows against the carrying amount of an asset. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, we would record an impairment loss for the difference between the estimated fair value and the carrying amount of the asset. |
Depreciation Expense, Policy | Depreciation Expense Depreciation expense is computed using the straight-line method over the estimated useful lives of the buildings and improvements, which are generally between 5 and 40 years. |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents The Company considers all demand deposits, cashiers checks, money market accounts and certificates of deposits with a maturity of three months to be cash equivalents. The Company maintains their cash and cash equivalents and escrow deposits at financial institutions. The combined account balances may exceed the Federal Depository Insurance Corporation insurance coverage, and, as a result, there may be a concentration of credit risk related to amounts on deposit. The Company does not believe that this risk is significant. |
Restricted Cash, Policy | Restricted Cash Restricted cash represents cash required by a third party lender to be held by the Company as a reserve for debt service. |
Escrow Deposits, Policy | Escrow Deposits Escrow deposits include funds held in escrow to be used for the acquisition of future properties. |
Deferred Assets, Policy | Deferred Assets The deferred asset balance of $93,646 as of December 31, 2015, consists of $23,295 in deferred rent receivable and $70,351 in deferred costs related to the Companys securities offering. In accordance with the provisions of ASC Topic 340, Other Assets and Deferred Costs, the Company is deferring specific incremental costs directly attributable to its offering of equity securities and will charge them against the gross proceeds of the offering as a reduction of additional paid-in capital. |
Revenue Recognition | Revenue Recognition The Companys operations currently consist of rental revenue earned from three tenants under leasing arrangements which provide for minimum rent, escalations, and charges to the tenant for the real estate taxes and operating expenses. The leases have been accounted for as operating leases. For operating leases with contingent rental escalators revenue is recorded based on the contractual cash rental payments due during the period. Revenue from leases with fixed annual rental escalators are recognized on a straight-line basis over the initial lease term, subject to a collectability assessment. If the Company determines that collectability of rents is not reasonably assured, future revenue recognition is limited to amounts contractually owed and paid, and, when appropriate, an allowance for estimated losses is established. The Company consistently assesses the need for an allowance for doubtful accounts, including an allowance for operating lease straight-line rent receivables, for estimated losses resulting from tenant defaults, or the inability of tenants to make contractual rent and tenant recovery payments. The Company also monitors the liquidity and creditworthiness of its tenants and operators on a continuous basis. This evaluation considers industry and economic conditions, property performance, credit enhancements and other factors. For operating lease straight-line rent amounts, the Company's assessment is based on amounts estimated to be recoverable over the term of the lease. As of December 31, 2015 and December 31, 2014 no allowance was recorded as it was not deemed necessary. |
Segment Reporting | Segment Reporting ASC Topic 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity's reportable segments. The Company has determined that they have one reportable segment, with activities related to investing in medical properties. The Company evaluates the operating performance of its investments on an individual asset level basis. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is a market-based measurement and should be determined based on the assumptions that market participants would use in pricing an asset or liability. In accordance with ASC Topic 820, the valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1- Inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets; Level 2- Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and Level 3- Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company considers the carrying values of cash and cash equivalents, escrow deposits, accounts and other receivables, and accounts payable and accrued expenses to approximate the fair value for these financial instruments because of the short period of time since origination or the short period of time between origination of the instruments and their expected realization. Due to the short-term nature of these instruments, Level 1 and Level 2 inputs are utilized to estimate the fair value of these financial instruments. |
Related Party Disclosures | Related Party Disclosures The Company enters into transactions with affiliated entities, or related parties, which are recorded net as Due to Related Parties in the accompanying Consolidated Balance Sheets. Related party disclosures are governed by ASC Topic 850, Related Party Disclosures. Refer to Note 6 Related Party Transactions for additional information regarding the Companys related party transactions. |
Net Loss Per Share, Policy | Net Loss Per Share The Company calculates basic and diluted loss per share using the weighted average common shares outstanding. The Company has no issued and outstanding non-vested shares of common stock and therefore no dilutive effects of non-vested shares and accordingly the Companys calculation and the resulting amount of basic and diluted loss per share are identical. |
Reclassification | Reclassification The Company reclassified $197,719 from the line item Cash and Cash Equivalents in its accompanying Consolidated Balance Sheets as of December 31, 2014 into the line item Restricted Cash to properly reflect the Companys funds that are restricted. The Company also reclassified $572,400 from the line item Building and Improvements in its accompanying Consolidated Balance Sheets as of December 31, 2014 into the line item Land to properly reflect the asset balances related to the acquisition of the Asheville facility in 2014. |
Schedule of Gross Investment in
Schedule of Gross Investment in land, buildings and improvements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Gross Investment in land, buildings and improvements | |
Schedule of Gross Investment in land, buildings and improvements | A rollforward of the gross investment in land, building and improvements as of December 31, 2015 is as follows: Land Building & Improvements Gross Investment Balances as of January 1, 2015 $ 572,400 $ 23,801,362 $ 24,373,762 Acquisitions: Tennessee Facilities 2,704,452 17,451,238 20,155,690 West Mifflin Facility 1,287,000 10,321,671 11,608,671 Total Additions: 3,991,452 27,772,909 31,764,361 Balances as of December 31, 2015 $ 4,563,852 $ 51,574,271 $ 56,138,123 |
Schedule of Note Payable Relate
Schedule of Note Payable Related to Acquistion (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Note Payable Related to Acquistion (Tables): | |
Schedule of Note Payable Related to Acquistions, net of unamortized discount balances | . A detail of the impact of adopting ASU 2015-03 on the Companys Notes Payable Related to Acquisitions, net of unamortized discount balances, as of December 31, 2015 and December 31, 2014, is as follows December 31, 2015 December 31, 2014 Notes payable related to acquisitions, gross $ 23,788,065 $ 16,760,000 Less: Unamortized debt discount (deferred financing costs) (302,892) (291,691) Notes payable related to acquisitions, net $ 23,485,173 $ 16,468,309 |
Schedule of Rollforward of the unamortized debt discount balance as of December 31, 2015 | The Company incurred financing costs related to the Omaha, Asheville, and West Mifflin loans that are treated as debt discounts. A rollforward of the unamortized debt discount balance as of December 31, 2015 is as follows: Balance as of January 1, 2015, net $ 291,691 Additions West Mifflin financing 137,736 Debt discount amortization expense (126,535) Balance as of December 31, 2015, net $ 302,892 |
Schedule of Rollforward of the unamortized debt discount balance as of December 31, 2014 | A rollforward of the unamortized debt discount balance as of December 31, 2014 is as follows: Balance as of September 1, 2014, net $ 309,543 Additions Asheville financing 21,577 Debt discount amortization expense (39,429) Balance as of December 31, 2014, net $ 291,691 |
Schedule of West Mifflin Note Payable | As of December 31, 2015, scheduled principal payments due for each fiscal year ended December 31 are listed below as follows: 2018 $ 22,044 2019 136,007 2020 7,219,449 Total $ 7,377,500 |
Schedule of Asheville Note Payable | As of December 31, 2015, scheduled principal payments due for each fiscal year ended December 31 are listed below as follows: 2016 $ 52,719 2017 1,609,382 Total $ 1,662,101 |
Schedule of Omaha Note Payable | As of December 31, 2015, scheduled principal payments due for each fiscal year ended December 31 are listed below as follows: 2016 $ 325,323 2017 14,423,141 Total $ 14,748,464 |
Schedule of Related Party Trans
Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Debenture, due to Majority Stockholder | |
Schedule of Rollforward of the funding from ZH USA, LLC classified as convertible debenture, due to majority stockholder as of December 31, 2015 | A rollforward of the funding from ZH USA, LLC classified as convertible debenture, due to majority stockholder as of December 31, 2015 is as follows: Balance as of January 1, 2015 $ 5,446,102 Funds advanced for Tennessee Facilities acquisition 20,900,000 Funds advanced for West Mifflin acquisition 4,545,838 Funds advanced for Plano acquisition (closed post 12.31.15; see Note 11) 9,000,000 Fund advanced to be used for future acquisitions 138,194 Total funded during twelve months ended December 31, 2015 34,584,032 Balance as of December 31, 2015 $ 40,030,134 |
Schedule of Rollforward of the funding from ZH USA, LLC classified as convertible debenture, due to majority stockholder as of December 31, 2014 | A rollforward of the funding from ZH USA, LLC classified as convertible debenture, due to majority stockholder as of December 31, 2014 is as follows: Balance as of September 1, 2014 $ 4,536,102 Proceeds received for convertible debenture 910,000 Balance as of December 31, 2014 $ 5,446,102 |
Note Payable to Majority Stockholder | |
Schedule of Rollforward of the funding from the majority stockholder as of December 31, 2015 | A rollforward of the funding from the majority stockholder as of December 31, 2015 is as follows: Balance as of January 1, 2015 $ 38,195 Proceeds received from majority stockholder 382,805 Balance as of December 31, 2015 $ 421,000 |
Schedule of Rollforward of the funding from the majority stockholder as of December 31, 2014 | A rollforward of the funding from the majority stockholder as of December 31, 2014 is as follows: Balance as of September 1, 2014 $ 38,195 Proceeds received from majority stockholder - Repayments of note payable - Balance as of December 31, 2014 $ 38,195 |
Due to Related Parties, Net (Tables) | |
Schedule of Rollforward of the due (to) from related parties balance, net as of December 31, 2015 | A rollforward of the due (to) from related parties balance, net as of December 31, 2015 is as follows: Due from Advisor Due to Advisor Mgmt. Fees Due to Advisor Other Funds Due to Other Related Party Total Due (To) From Related Parties, Net Balance as of January 1, 2015 $ 42,915 (270,000) (103,683) - (330,768) Management fees due to Advisor (c) - (360,000) - - (360,000) Funds loaned by Advisor (a) - - (136,597) - (136,597) Funds loaned to Advisor (b) 135,196 - - - 135,196 Funds loaned by Other Related Party (a) - - - (155,000) (155,000) Balance as of December 31, 2015 $ 178,111 (630,000) (240,280) (155,000) (847,169) |
Schedule of Rollforward of the due (to) from related parties balance, net as of December 31, 2014 | A rollforward of the due (to) from related parties balance, net as of December 31, 2014 is as follows: Due from Advisor Due to Advisor Mgmt. Fees Due to Advisor Other Funds Due to Other Related Party Total Due (To) From Related Parties, Net Balance as of September 1, 2014 $ - (150,000) (63,000) - (213,000) Management fees due to Advisor - (120,000) - - (120,000) Funds loaned by Advisor - - (40,683) - (40,683) Funds loaned to Advisor 42,915 - - - 42,915 Balance as of December 31, 2014 $ 42,915 (270,000) (103,683) - (330,768) |
Schedule Of Rental Revenue (Tab
Schedule Of Rental Revenue (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule Of Rental Revenue | |
Schedule Of Rental Revenue | The aggregate annual minimum cash to be received by the Company on the noncancelable operating leases related to its portfolio of facilities in effect as of December 31, 2015, are as follows for the subsequent years ended December 31; as listed below. 2016 $ 3,945,243 2017 3,790,242 2018 3,800,505 2019 3,864,307 2020 3,929,203 Thereafter 24,659,288 Total $ 43,988,788 |
Schedule of Rent Expense (Table
Schedule of Rent Expense (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Rent Expense | |
Schedule of Rent Expense | During the fiscal year ended December 31, 2015 and the four months ended December 31, 2014, the Company expensed $79,892 and $44,908 related to this lease. The aggregate minimum cash payments to be made by the Company on the non-cancelable Omaha facility related land lease in effect as of December 31, 2015, are as follows for the subsequent years ended December 31; as listed below. 2016 $ 59,877 2017 59,877 2018 63,619 2019 67,362 2020 67,362 Thereafter 973,586 Total $ 1,291,683 |
Schedule of Income Tax Expense
Schedule of Income Tax Expense Benefit (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Income Tax Expense Benefit | |
Schedule of Significant components of the deferred tax assets and liabilities as of December 31, 2015 and December 31, 2014, after applying enacted corporate income tax rates | Significant components of the deferred tax assets and liabilities as of December 31, 2015 and December 31, 2014, after applying enacted corporate income tax rates, are as follows: December 31, 2015 December 31, 2014 Deferred income tax asset: Net operating loss carry forward $ 460,000 $ 184,000 Valuation allowance (460,000) (184,000) Net deferred tax asset $ - $ - |
ORGANIZATION (Details)
ORGANIZATION (Details) | Dec. 31, 2015shares |
ORGANIZATION DETAILS | |
LLC owns an aggregate of Company's outstanding common stock | 248,825 |
LLC owns an aggregate of Company's outstanding common stock in percentage | 99.50% |
Property Portfolio (Details)
Property Portfolio (Details) | Dec. 31, 2015USD ($) |
Land | |
Balances as of January 1, 2015 | $ 572,400 |
Acquisitions: | |
Tennessee Facilities | 2,704,452 |
West Mifflin Facility | 1,287,000 |
Total Additions: | 3,991,452 |
Balances as of December 31, 2015 | 4,563,852 |
Building & Improvements | |
Balances as of January 1, 2015 | 23,801,362 |
Acquisitions: | |
Tennessee Facilities | 17,451,238 |
West Mifflin Facility | 10,321,671 |
Total Additions: | 27,772,909 |
Balances as of December 31, 2015 | 51,574,271 |
Gross Investment | |
Balances as of January 1, 2015 | 24,373,762 |
Acquisitions: | |
Tennessee Facilities | 20,155,690 |
West Mifflin Facility | 11,608,671 |
Total Additions: | 31,764,361 |
Balances as of December 31, 2015 | $ 56,138,123 |
Description Of Properties (Deta
Description Of Properties (Details) - USD ($) | Dec. 31, 2015 | Sep. 25, 2015 | Sep. 19, 2014 | Jun. 05, 2014 |
Tennessee Facilities Details | ||||
Acquired a six building, 52,266 square foot medical clinic portfolio for a purchase price | $ 20,000,000 | |||
Including legal and related fees | $ 20,200,000 | |||
Base rent increases by each lease | 1.75% | |||
Issued to its majority stockholder in the total amount | $ 20,900,000 | |||
West Mifflin Facility Details | ||||
Acquired a combined approximately 27,193 square foot surgery center and medical office building located in West Mifflin | $ 11,350,000 | |||
Including legal and related fees | $ 11,600,000 | |||
Base rent increases by each each lease year commencing on October 1, 2018 | 2.00% | |||
Convertible Debenture issued to majority stockholder in the total amount | $ 4,545,838 | |||
Asheville Facility Details | ||||
Company owns 8,840 square foot medical office building in Asheville, was acquired for | $ 2,500,000 | |||
Company borrowed from the Bank of North Carolina | $ 1,700,000 | |||
Omaha Facility Details | ||||
56-bed long term acute care hospital in Omaha was acquired for | $ 21,700,000 | |||
Company borrowed from Capital One | 15,060,000 | |||
Including legal and related fees | $ 21,900,000 |
Notes Payable Related to Acqu28
Notes Payable Related to Acquisitions, balances as follows (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Notes Payable Related to Acquisitions, balances as follows details | ||
Notes payable related to acquisitions, gross | $ 23,788,065 | $ 16,760,000 |
Less: Unamortized debt discount (deferred financing costs) | (302,892) | (291,691) |
Notes payable related to acquisitions, net | $ 23,485,173 | $ 16,468,309 |
Unamortized debt discount balan
Unamortized debt discount balance is as follows (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Unamortized debt discount balance is as follows Details | ||
Balance as of January 1, 2015, net | $ 291,691 | |
Balance as of September 1, 2014, net | $ 309,543 | |
Additions - West Mifflin financing | 137,736 | 21,577 |
Debt discount amortization expense | (126,535) | (39,429) |
Balance as of December 31, 2015, net | $ 302,892 | |
Balance as of December 31, 2014, net | $ 291,691 |
West Mifflin Note Payable (Deta
West Mifflin Note Payable (Details) - USD ($) | Dec. 31, 2015 | Sep. 25, 2015 |
West Mifflin Note Payable details | ||
Company entered into a Term Loan and Security Agreement with Capital One | $ 7,377,500 | |
Loan bears interest per annum | 3.72% | |
Loan has an early termination fee | 2.00% | |
Note balance | $ 7,377,500 |
Scheduled Principal Payments Du
Scheduled Principal Payments Due On West Mifflin Note Payable (Details) | Dec. 31, 2015USD ($) |
Scheduled Principal Payments Due On West Mifflin Note Payable | |
Principal Payments due on West Mifflin Note Payable 2018 | $ 22,044 |
Principal Payments due on West Mifflin Note Payable 2019 | 136,007 |
Principal Payments due on West Mifflin Note Payable Thereafter | 7,219,449 |
Total Future Payments due on West Mifflin Note Payable | $ 7,377,500 |
Asheville Note Payable (Details
Asheville Note Payable (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 15, 2014 |
Asheville Note Payable | |||
Company entered into a Term Loan and Security Agreement with Capital One | $ 1,700,000 | ||
Loan bears interest per annum | 4.75% | ||
Company made principal payments | $ 37,899 | ||
Note balance | 1,662,101 | $ 1,700,000 | |
Interest expense on note | $ 81,160 | $ 20,188 |
Principal Payments Due On Ashev
Principal Payments Due On Asheville Note Payable (Details) | Dec. 31, 2015USD ($) |
Principal Payments Due On Asheville Note Payable | |
Principal Payments due on Asheville Note Payable 2016 | $ 52,719 |
Principal Payments due on Asheville Note Payable 2017 | 1,609,382 |
Total Future Payments due on Asheville Note Payable | $ 1,662,101 |
Omaha Note Payable (Details)
Omaha Note Payable (Details) - USD ($) | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | Jun. 05, 2014 | |
Omaha Note Payable | |||
Company entered into a Term Loan and Security Agreement with Capital One | $ 15,060,000 | ||
Loan bears interest per annum | 4.91% | ||
Early termination fee | $ 301,200 | ||
Company made principal payments | $ 311,536 | ||
Interest expense on Omaha note payable | $ 252,644 | $ 679,987 |
Scheduled Principal Payments 35
Scheduled Principal Payments Due On Omaha Note Payable (Details) | Dec. 31, 2015USD ($) |
Scheduled Principal Payments Due On Omaha Note Payable | |
Principal Payments due on Omaha Note Payable 2016 | $ 325,323 |
Principal Payments due on Omaha Note Payable 2017 | 14,423,141 |
Total Future Payments due on Omaha Note Payable | $ 14,748,464 |
STOCK TRANSACTIONS (Details)
STOCK TRANSACTIONS (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Stock Transactions Details | ||
Shares of preferred stock authorized | 100,000,000 | 100,000,000 |
Shares of preferred stock, par value | $ 0.001 | $ 0.001 |
Shares of common stock authorized | 0.001 | 0.001 |
Shares of common stock, par value | $ 500,000,000 | $ 500,000,000 |
Outstanding common stock shares | 250,000 | 250,000 |
Company has paid a monthly dividend per share | $ 0.0852 | $ 0.0852 |
Company has paid a monthly dividend per month | $ 21,300 | $ 21,300 |
Dividend amount was unpaid | $ 21,300 | $ 21,300 |
Company recorded total dividends to holders of its common stock | 255,600 | 85,200 |
Convertible debenture, due to m
Convertible debenture, due to majority stockholder (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Convertible debenture, due to majority stockholder Details | ||
Balance as of January 1, 2015 | $ 5,446,102 | |
Funds advanced for Tennessee Facilities acquisition | 20,900,000 | |
Funds advanced for West Mifflin acquisition | 4,545,838 | |
Funds advanced for Plano acquisition | 9,000,000 | |
Fund advanced to be used for future acquisitions | 138,194 | |
Total funded during twelve months ended December 31, 2015 | 34,584,032 | |
Balance as of December 31, 2015 | $ 40,030,134 | |
Balance as of September 1, 2014 | $ 4,536,102 | |
Proceeds received for convertible debenture | 910,000 | |
Balance as of December 31, 2014 | $ 5,446,102 |
Note Payable to Majority Shareh
Note Payable to Majority Shareholder (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Note Payable to Majority Shareholder Details | ||
Balance as of January 1, 2015 | $ 38,195 | |
Proceeds received from majority stockholder | 382,805 | |
Balance as of December 31, 2015 | $ 421,000 | |
Balance as of September 1, 2014 | $ 38,195 | |
Proceeds received from majority stockholder | 0 | |
Repayments of note payable | 0 | |
Balance as of December 31, 2014 | $ 38,195 |
Due To Related Parties Net Bala
Due To Related Parties Net Balance (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Due from Advisor | ||
Balance as of January 1, 2015 | $ 42,915 | |
Management fees due to Advisor (c) | 0 | |
Funds loaned by Advisor (a) | 0 | |
Funds loaned to Advisor (b) | 135,196 | |
Funds loaned by Other Related Party (a) | 0 | |
Balance as of December 31, 2015 | 178,111 | |
Balance as of September 1, 2014 | $ 0 | |
Management fees due to Advisor | 0 | |
Funds loaned by Advisor | 0 | |
Funds loaned to Advisor | 42,915 | |
Balance as of December 31, 2014 | 42,915 | |
Due to Advisor -Mgmt. Fees | ||
Balance as of January 1, 2015 | (270,000) | |
Management fees due to Advisor | (360,000) | |
Balance as of December 31, 2015 | (630,000) | |
Balance as of September 1, 2014 | (150,000) | |
Management fees due to Advisor | (120,000) | |
Balance as of December 31, 2014 | (270,000) | |
Due to Advisor - Other Funds: | ||
Balance as of January 1, 2015 | (103,683) | |
Funds loaned by Advisor (a) | (136,597) | |
Balance as of December 31, 2015 | (240,280) | |
Balance as of September 1, 2014 | (63,000) | |
Funds loaned by Advisor | (40,683) | |
Balance as of December 31, 2014 | (103,683) | |
Due to Other Related Party | ||
Funds loaned by Other Related Party (a) | (155,000) | |
Balance as of December 31, 2015 | (155,000) | |
Total Due (To) From Related Parties, Net | ||
Balance as of January 1, 2015 | (330,768) | |
Management fees due to Advisor | (360,000) | |
Funds loaned by Advisor (a) | (136,597) | |
Funds loaned to Advisor (b) | 135,196 | |
Funds loaned by Other Related Party (a) | (155,000) | |
Balance as of December 31, 2015 | $ (847,169) | |
Balance as of September 1, 2014 | (213,000) | |
Management fees due to Advisor | (120,000) | |
Funds loaned by Advisor | (40,683) | |
Funds loaned to Advisor | 42,915 | |
Balance as of December 31, 2014 | $ (330,768) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | Nov. 10, 2014 | |
Management agreement details | |||
Management fees | $ 120,000 | $ 360,000 | |
Base management fee equal to Company's net asset value per annum in percentage | 2.00% | ||
Base management fee equal to Company's net asset value payable per calendar month | $ 30,000 | ||
Paid to advisor for the acquisitions of the Tennessee facilities and the West Mifflin facility | $ 627,000 | ||
Paid to advisor for the acquisitions of the Asheville facility | $ 48,400 |
Rental Revenue (Details)
Rental Revenue (Details) | Dec. 31, 2015USD ($) |
Rental Revenue Details | |
Operating lease 2016 | $ 3,945,243 |
Operating lease 2017 | 3,790,242 |
Operating lease 2018 | 3,800,505 |
Operating lease 2019 | 3,864,307 |
Operating lease 2020 | 3,929,203 |
Operating lease Thereafter | 24,659,288 |
TotalOperating lease Future Receipts | $ 43,988,788 |
Land Lease Rent Expense (Detail
Land Lease Rent Expense (Details) - USD ($) | 4 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2015 | |
Land Lease Rent Expense | ||
Annual rents increase | 12.50% | |
Company expensed a total related to land lease | $ 44,908 | $ 79,892 |
Land Lease (Details)
Land Lease (Details) | Dec. 31, 2015USD ($) |
Land Lease | |
Land Lease 2016 | $ 59,877 |
Land Lease 2017 | 59,877 |
Land Lease 2018 | 63,619 |
Land Lease 2019 | 67,362 |
Land Lease 2020 | 67,362 |
Land Lease Thereafter | 973,586 |
TotalLand Lease Future Receipts | $ 1,291,683 |
Significant components of the d
Significant components of the deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred income tax asset: | ||
Net operating loss carry forward | $ 460,000 | $ 184,000 |
Valuation allowance | (460,000) | (184,000) |
Net deferred tax asset | $ 0 | $ 0 |
Subsequent Events Transactions
Subsequent Events Transactions (Details) - USD ($) | Mar. 02, 2016 | Feb. 23, 2016 | Feb. 17, 2016 | Jan. 28, 2016 | Jan. 19, 2016 | Jan. 08, 2016 | Dec. 31, 2015 |
Plano Facility | |||||||
Acquire an real property and improvements thereto for approximately | $ 17,500,000 | ||||||
Obligated to pay a development fee to Lumin, LLC at closing | 500,000 | ||||||
Terms of the lease also provide for a tenant allowance up to | 2,750,000 | ||||||
Promissory Note and Deed of Trust with East West Bank to borrow the principal amount | 9,223,500 | ||||||
At closing the Company paid the lender a non-refundable deposit | 50,000 | ||||||
Non-refundable commitment fee | $ 46,117.50 | ||||||
Additional fundings transaction was received from the Company's majority stockholder during the year | $ 9,369,310 | ||||||
Accrued but unpaid interest, divided | $ 12.748 | ||||||
Melbourne Facility | |||||||
Purchase Agreement to acquire medical office building located on the Melbourne Bayfront for a purchase price | $ 15,450,000 | ||||||
Westland Facility | |||||||
Purchase agreement to acquire a two-story medical office building and ambulatory surgery center | $ 4,750,000 | ||||||
Dividends | |||||||
Declared a dividend per share payable to the holders of its common stock | $ 0.0852 | $ 0.0852 | |||||
Aggregate amount of the dividend | $ 21,300 | $ 21,300 | |||||
Common Stock Activity | |||||||
ZH USA, LLC converted of principal under the Convertible Debenture | $ 15,000,000 | ||||||
ZH USA, LLC converted of principal under the Convertible Debenture shares of our unregistered common stock | 1,176,656 |