Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 07, 2017 | Jun. 30, 2016 | |
Entity Registrant Name | PRESIDENTIAL REALTY CORP/DE/ | ||
Entity Central Index Key | 731,245 | ||
Document Type | 10-K | ||
Trading Symbol | PDNLB | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 176,040 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Common Class [Member] | |||
Entity Common Stock, Shares Outstanding | 442,533 | ||
Common Class B [Member] | |||
Entity Common Stock, Shares Outstanding | 4,746,147 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Real estate (Note 2) | $ 1,169,459 | $ 1,118,345 |
Less: accumulated depreciation | 646,770 | 602,220 |
Net real estate | 522,689 | 516,125 |
Prepaid expenses | 90,613 | 139,587 |
Other receivables (net of valuation allowance of $2,426 in 2016 and $790 in 2015) | 18,446 | 27,784 |
Cash | 78,400 | 442,922 |
Mortgage escrow | 138,135 | 116,581 |
Other assets | 5,492 | 5,453 |
Total Assets | 853,775 | 1,248,452 |
Liabilities: | ||
Mortgage payable | 1,575,945 | 1,590,024 |
Accounts payable and accrued liabilities | 1,073,724 | 635,865 |
Other liabilities | 46,702 | 38,841 |
Total Liabilities | 2,696,371 | 2,264,730 |
Presidential Stockholders' Deficit: | ||
Additional paid-in capital | 3,108,471 | 3,108,471 |
Accumulated deficit | (4,951,109) | (4,124,791) |
Total Stockholders' Deficit | (1,842,596) | (1,016,278) |
Total Liabilities and Stockholders' Deficit | 853,775 | 1,248,452 |
Common Class A [Member] | ||
Presidential Stockholders' Deficit: | ||
Common stock | 4 | 4 |
Common Class B [Member] | ||
Presidential Stockholders' Deficit: | ||
Common stock | $ 38 | $ 38 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Valuation allowance for other receivables | $ 2,426 | $ 790 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common Class A [Member] | ||
Common stock, authorized | 700,000 | 700,000 |
Common stock, issued | 442,533 | 442,533 |
Common Class B [Member] | ||
Common stock, authorized | 999,300,000 | 999,300,000 |
Common stock, issued | 3,846,147 | 3,846,147 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | ||
Rental | $ 938,903 | $ 931,844 |
Interest on mortgages - notes receivable | 200 | |
Total Revenue | 938,903 | 932,044 |
Costs and Expenses: | ||
General and administrative | 1,001,853 | 914,882 |
Rental property: | ||
Operating expenses | 557,176 | 566,610 |
Interest expense and amortization of mortgage costs | 121,468 | 93,475 |
Real estate taxes | 41,697 | 41,069 |
Depreciation on real estate | 44,550 | 50,905 |
Total Costs and Expenes | 1,766,744 | 1,666,941 |
Other Income: | ||
Gain on the extinguishment of debt | 228,261 | |
Investment income | 1,523 | 11,259 |
Net loss | $ (826,318) | $ (495,377) |
Net loss per Common Share -basic and diluted (in dollars per share) | $ (0.19) | $ (0.12) |
Weighted Average Number of Shares Outstanding - | ||
basic (in shares) | 4,288,680 | 4,288,680 |
diluted (in shares) | 4,288,680 | 4,288,680 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Dec. 31, 2014 | $ 42 | $ 2,922,982 | $ (3,629,414) | $ (706,390) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock based compensation | 185,489 | 185,489 | ||
Net loss | (495,377) | (495,377) | ||
Balance at ending at Dec. 31, 2015 | 42 | 3,108,471 | (4,124,791) | (1,016,278) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (826,318) | (826,318) | ||
Balance at ending at Dec. 31, 2016 | $ 42 | $ 3,108,471 | $ (4,951,109) | $ (1,842,596) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (826,318) | $ (495,377) |
Adjustments to reconcile net loss to net cash flow from operating activities: | ||
Depreciation and amortization | 60,282 | 71,983 |
Investment income | (8,900) | |
Non-cash compensation | 2,680 | |
Bad debt recovery | (5,523) | |
Bad debt | 1,636 | |
Gain on debt extiguishment | (228,261) | |
Decrease (Increase) in: | ||
Other receivables | 7,702 | 7,090 |
Prepaid expenses | 48,974 | 9,681 |
Mortgage escrows | (21,554) | (105,805) |
Other assets | (39) | (45) |
Increase (decreases) in: | ||
Accounts payable and accrued liabilities | 437,859 | 275,830 |
Other liabilities | 7,861 | (147,028) |
Total adjustments | 542,721 | (128,298) |
Net cash flow used in operating activities | (283,597) | (623,675) |
Cash Flows from Investing Activities: | ||
Payments received on notes receivable | 405 | |
Investment income Broadway Partners Fund II | 8,900 | |
Payments disbursed for capital improvements | (51,114) | (13,613) |
Net cash flow (used in) investing activities | (51,114) | (4,308) |
Cash Flows from Financing Activities: | ||
Payment of Line of credit | (500,000) | |
Proceeds of mortgage financing net of mortgage costs | 1,578,484 | |
Principal payments on mortgage debt | (29,811) | (450,192) |
Net cash flow (used in) / provided by financing activities | (29,811) | 628,292 |
Net (decrease) increase in Cash | (364,522) | 309 |
Cash, Beginning of Year | 442,922 | 442,613 |
Cash, End of Year | 78,400 | 442,922 |
Supplemental cash flow information: | ||
Interest paid in cash | 105,890 | 63,358 |
Schedule of non-cash investing and financing activites | ||
Issuance of a stock option for accrued deferred compensation | $ 185,489 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Organization Presidential Realty Corporation (“Presidential” or the “Company”) is operated as a self-administrated, self-managed Real Estate Investment Trust (“REIT”). The Company is engaged principally in the ownership of income producing real estate. Presidential operates in a single business segment, investments in real estate related assets. Basis of Presentation and Going Concern Considerations For the year ended December 31, 2016, the Company had a loss from operations and accumulated deficit. This combined with a history of operating losses and working capital deficiency, has been detrimental to our operations and could potentially affect our ability to meet our obligations and continue as a going concern. Our ability to continue as a going concern is dependent upon the successful execution of strategies to achieve profitability, and increase working capital by raising debt and/or equity. The accompanying financial statements do not include any adjustments that may result from this uncertainty. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results. Real Estate Real estate is stated at cost. Generally, depreciation is provided on the straight-line method over the assets estimated useful lives, which range from twenty to thirty-nine years for buildings and improvements and from three to ten years for furniture and equipment. Maintenance and repairs are charged to operations as incurred and renewals and replacements are capitalized. The Company reviews each of its property investments for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment of properties is determined to exist when estimated amounts recoverable through future operations on an undiscounted basis are below the properties carrying value. If a property is determined to be impaired, it is written down to its estimated fair value. Principles of Consolidation The consolidated financial statements include the accounts of Presidential Realty Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Rental Revenue Recognition The Company acts as lessor under operating leases. Rental revenue is recorded on the straight-line basis from the later of the date of the commencement of the lease or the date of acquisition of the property subject to existing leases, which averages minimum rents over the terms of the leases. Certain leases require the tenants to reimburse a pro rata share of real estate taxes, utilities and maintenance costs. Recognition of rental revenue is generally discontinued when the rental is delinquent for ninety days or more, or earlier if management determines that collection is doubtful. Allowance for Doubtful Accounts The Company assesses the collectability of amounts due from tenants and other receivables, using indicators such as past-due accounts, the nature and age of the receivable, the payment history and the ability of the tenant or debtor to meet its payment obligations. Management’s estimate of allowances for doubtful accounts is subject to revision as these factors change. Any subsequent recovery of tenant receivable that were previously reserved is recorded as a reduction in the provision of bad debt expense. As of December 31, 2016 and 2015, the allowance relating to tenant receivables was $2,426 and $790, respectively. Net Income (Loss) Per Share Basic net loss per share data is computed by dividing net loss by the weighted average number of shares of Class A and Class B common stock outstanding (excluding non-vested shares) during each period. Diluted net income per share is computed by dividing net income by the weighted average shares outstanding, including the dilutive effect, if any, of non-vested shares. For the years ended December 31, 2016 and 2015, the weighted average shares outstanding as used in the calculation of diluted loss per share do not include 740,000, of outstanding stock options and 1,700,000 of outstanding warrants, as their inclusion would be antidilutive. Cash and cash equivalents Cash includes cash on hand, cash in banks and cash in money market funds. Cash equivalents represent short-term, highly liquid investment which are readily convertible to cash and have maturities of three months or less. Management Estimates The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated balance sheets and the reported amounts of income and expense for the reporting period. Actual results could differ from those estimates. Accounting for Stock Awards The Company recognizes the cost of employee and non-employee services received in exchange for awards of equity instruments as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the fair value of the stock award and options, is recognized as expense, less expected forfeitures, over the requisite service period, which typically equals the vesting period. Stock-based compensation expense was $0 in 2016 and 2015. Accounting for Income Taxes The Company accounts for income taxes utilizing the asset and liability approach requiring the recognition of deferred tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards and temporary differences between the basis of assets and liabilities for financial reporting purposes and tax purposes and for net operating loss and other carryforwards. A valuation allowance is provided for deferred tax assets based on the likelihood of realization. Mortgage costs The Company amortize mortgage costs over the life of the loan. Recent Accounting Pronouncements Effective January 1, 2016, the Company adopted Accounting Standards Update 2015-03, which requires the presentation of debt issuance costs as a reduction of the debt liability on the balance sheet, consistent with the accounting for debt discounts. Amortization of debt issuance costs and debt discounts are each recorded as non-cash interest expense over the life of the respective debt instrument. The presentation of debt issuance costs as of and for the year ended December 31, 2015 has been reclassified to conform to this guidance. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40). The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This standard is effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter. The adoption of ASU 2014-15 did not have a material effect on the consolidated financial statements, however it may affect future disclosures. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Company’s financial position or results of operations. In March 2016, FASB issued ASU No. 2016-09, “Improvements to Employee Share-based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the standard and the impact on its consolidated financial statements and footnote disclosures. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15. The new guidance clarifies eight cash flow classification issues where current GAAP was either unclear or has no specific guidance. The new standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those fiscal years. All entities may elect to early adopt ASU 2016-15 in any interim period. If an entity early adopts it must adopt all eight of the amendments in the same period and if early adopted in an interim period any adjustments should be reflected as of the beginning of the year. The amendments in ASU 2016-15 will be applied using the modified retrospective transition method for each period presented. The Company is evaluating the impact the adoption of this guidance will have on the classification of certain items on its statements of cash flows. |
Real Estate
Real Estate | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate [Abstract] | |
Real Estate | 2. Real Estate Real estate is comprised of the following: December December Land $ 79,100 $ 79,100 Buildings 1,039,984 995,215 Furniture and equipment 50,375 44,030 Total $ 1,169,459 $ 1,118,345 Rental revenue is from our only property Palmer Maple Tree which constituted all of the rental revenue for the Company for the years ended December 31, 2016 and 2015. |
Investments in Partnership
Investments in Partnership | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Partnership | 3. Investments in Partnership We received distributions from Broadway Partners Fund II in the amount of $0 and $8,900 during the years ended December 31, 2016 and 2015, respectively. This amount is reported as investment income on the statement of operations at December 2015. This investment was previously written off. The Company recognizes income received on the cash basis . |
Mortgage Debt
Mortgage Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Mortgage Debt | 4. Mortgage Debt On July 28, 2015, Palmer-Mapletree LLC, a wholly-owned subsidiary of the Company entered into a Loan Agreement (the “Loan Agreement”) with Natixis Real Estate Capital LLC providing for a mortgage loan in the principal amount of $1,750,000 (the “Loan”) at an interest rate of 6.031%. $934,794 of the loan proceeds were used to repay the prior mortgage loan and line of credit on the Mapletree Property. $123,757 of the Loan proceeds was set aside for capital improvements and reserves for the property. We received net proceeds of $585,125. The Loan matures on August 5, 2025 and requires monthly principal and interest payments of $11,308. The loan is presented net of unamortized mortgage costs, the outstanding balance of the loan and mortgage costs at December 31, 2016 and 2015 was $1,710,651 and $134,706, respectively and $1,740,462 and $150,438, respectively. The Company is required to maintain certain Financial Covenants. The Company was in compliance with the covenants at December 31, 2016. Maturities of Mortgage payments for the next five years are as follows: 2017 $ 33,596 2018 $ 35,680 2019 $ 37,892 2020 $ 40,241 2021 $ 42,737 Thereafter $ 1,520,415 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes Presidential has elected to qualify as a Real Estate Investment Trust under the Internal Revenue Code. A REIT which distributes at least 90% of its real estate investment trust taxable income to its shareholders each year by the end of the following year and which meets certain other conditions will not be taxed on any of its taxable income as long as they distribute the required amounts to its shareholders. ASC 740 prescribes a more likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken. If the Company’s tax position in relation to a transaction was not likely to be upheld, the Company would be required to record the accrual for the tax and interest thereon. As of December 31, 2016, the tax years that remain open to examination by the federal, state and local taxing authorities are the 2012 – 2016 tax years and the Company was not required to accrue any liability for those tax years. The Company has accumulated a net operating loss carry forward of approximately $20,900,000 expiring from 2028 through 2036. For the year ended December 31, 2016, the Company had a tax loss of approximately $600,000 ($.14 per share), which was all ordinary loss. For the year ended December 31, 2015, the Company had a tax loss of approximately $197,700 ($.05 per share), which was all ordinary loss. |
Commitments, Contingencies and
Commitments, Contingencies and Related Parties | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Related parties | 6. Commitments, Contingencies and Related parties A. Related Parties 1) Executive Employment Agreements a. Nickolas W. Jekogian – Mr. Jekogian’s employment agreement, as amended, expired at December 31, 2015 but the board agreed to continue Mr. Jekogian’s employment on the same terms as the agreement until otherwise terminated by the board. On January 6, 2017, as part of the First Capital transaction (See Note 13) Mr. Jekogian entered into a Cancellation and Release Agreement for the (x) cancellation of all stock options and warrants held by Mr. Jekogian as of such date and (y) termination of his Employment Agreement effective as of such date. Mr. Jekogian will continue as an employee of the Company in his capacity as Chairman and Chief Executive Officer on a month-to-month basis until such time as otherwise determined by the Company in its sole discretion. It is expected that his salary will remain unchanged. Alexander Ludwig – Mr. Ludwig’s employment agreement, as amended, expired at December 31, 2015 but the board agreed to continue Mr. Ludwig’s employment on the same terms as the agreement until otherwise terminated by the board. On January 6, 2017 as part of the First Capital transaction (See Note 13) the Company and Mr. Ludwig our President and Chief Operating Officer, entered into a Cancellation and Release Agreement for the cancellation of all stock options and warrants held by Mr. Ludwig as of such date in consideration for the issuance of (x) 450,000 shares of Class B common stock of the Company and (y) an option to purchase an additional 550,000 shares of Class B common stock of the Company. The exercise of such option is subject to certain conditions, including that the Company has consummated an equity offering, capital raise or such other offering such that the issuance of any shares of Class B common stock of the Company covered by Mr. Ludwig’s option would not be deemed “Excess Shares” as that term is defined in the certificate of incorporation of the Company. The exercise price is $0.00. 2) Property Management Agreement On November 8, 2011, the Company and Signature Community Management (“Signature”), (an entity owned by our CEO) entered into a Property Management Agreement pursuant to which the Company retained Signature as the exclusive, managing and leasing agent for the Company’s Mapletree Property. Signature receives compensation of 5% of monthly rental income actually received from tenants at the Mapletree Property. The property Management Agreement renewed for a one year term on November 8, 2016 and will automatically renew for one year terms until it is terminated by either party upon written notice. The Company incurred management fees of approximately $40,000 and $40,500 for the years ended December 31, 2016 and 2015, respectively. 3) Asset Management Agreement On November 8, 2011, the Company entered into an Asset Management Agreement with Signature pursuant to which the Company engaged Signature to oversee the Mapletree Property. Signature will receive an asset management fee of 1.5% of the monthly gross rental revenues collected for the Mapletree Property. The Asset Management Agreement renewed for a one year term on November 8, 2016 and will automatically renew for one year terms until it is terminated by either party upon written notice. The Company incurred asset management fees of approximately $12,000 for the years ended December 31, 2016 and 2015, respectively. 4) Sublease Prior to September 22, 2016 the Company subleased their executive office space under a month to month lease with Signature for a monthly rental payment of $1,100 or $13,200 per year. The Company incurred $9.900 and $13,200 in rent expense for the years ended December 31, 2016 and 2015, respectively. On September 22, 2016 the Company signed a new sublease for their executive office space under a month to month lease with Nexelus for a monthly rental payment of $1,500 or $18,000 per year. Either party may terminate the sublease upon 30 days prior written notice. The company incurred $4,500 in rent expenses for the year ended December 31, 2016. The Company incurred total rent of $14,400 and $13,200 for the years ended December 31, 2016 and 2015, respectively. B) Other liabilities On July 28, 2015 the Company successfully refinanced the Mapletree Property and made payments of $50,000 each and issued the option agreements to each of three former officers. The options call for the issuance of a number of shares of restricted stock based on the value at the public offering price equal to the balance due of $413,750. The options vest upon the consummation of an underwritten registered public offering of the Company’s Class B Common Stock with gross proceeds of not less than $20,000,000. The options expire 5 years from the grant date. The underlying shares of the exercised options must be held for a period of 180 days, therefore a discount for lack of marketability was applied. The Company recorded an extinguishment of debt gain of $228,261 based on the carrying value of the deferred compensation of $413,750 and the fair value of the options issued of $185,489. C) Other liabilities (Continued) These options were valued using a monte carlo model valuation methodology. The model embodies relevant assumptions that address the features underlying these instruments. Significant assumption used in the monte carlo model to value these options were, the following: Exercises price - $1.00; Term - 5 years; Discount for lack of marketability - 29.19%; Volatility - 108.6%; Risk-free interest rate - 1.61%; Dividend rate - 0%. D) Legal Proceedings In the ordinary course of business, we may be subject to litigation from time to time. Except as discussed below, there is no current, pending or, to our knowledge, threatened litigation or administrative action to which we are a party or of which our property is the subject (including litigation or actions involving our officers, directors, affiliates, or other key personnel, or holders of record or beneficially of more than 5% of any class of our voting securities, or any associate of such party) which in our opinion has, or is expected to have, a material adverse effect upon our business, prospects, financial condition or operations. There is pending in the United States District Court for the Southern District of New York (Civ. Act. No. 16-cv-08633) an action entitled JFURTI, LLC and JACOB FRYDMAN, Suing Individually and Derivatively and On Behalf of All Similarly Situated Limited Partners and Shareholders in the Name and Right of FIRST CAPITAL REAL ESTATE TRUST INCORPORATED and FIRST CAPITAL REAL ESTATE OPERATING PARTNERSHIP, L.P., Plaintiffs, against FORUM PARTNERS INVESTMENT MANAGEMENT, LLC; RUSSELL C. PLATT; MARBLE 15 SCS; PRESIDENTIAL REALTY CORPORATION; PRESIDENTIAL REALTY OPERATING PARTNERSHIP; SUNEET SINGAL; JAVIER VANDE STEEG; MICHAEL MCCOOK; FRANK GRANT; RICHARD LEIDER; FIRST CAPITAL REAL ESTATE ADVISORS, LP; FIRST CAPITAL REAL ESTATE INVESTMENTS, LLC; FIRST CAPITAL BORROWER, LLC; UNITED 25250 TILDEN, LLC; and PHOENIX AMERICAN FINANCIAL SERVICES, INC. Defendants, and FIRST CAPITAL REAL ESTATE TRUST INCORPORATED and FIRST CAPITAL REAL ESTATE OPERATING PARTNERSHIP, L.P., Nominal Derivative Defendants. The action has been brought under the Racketeer Influenced And Corrupt Organizations Act (“RICO”), the Securities Exchange Act of 1934 (the “Exchange Act”) and for breach of contract and fraudulent conveyance and seeks treble, actual and punitive damages, injunctive relief, an accounting and attorneys’ fees. The amended complaint alleges twenty one causes of action that the defendants engaged in a fraudulent scheme (the “Fraudulent Scheme”) to take control of First Capital REIT (a publicly registered fully reporting 1933 and 1934 Act public company that is organized as a real estate investment trust), and use First Capital REIT to divert monies for their own purposes. The underlying actions alleged against the Company arise from the Company’s transactions and proposed transactions with First Capital REIT. The plaintiff’s seek injunctions against the FC Parties enjoining them from disposing of any assets and setting aside any conveyances that have taken place. The action was initially commenced in November 2016 and the RICO claims were added by way of an amended complaint filed December 29, 2016. On February 17, 2017 a motion to dismiss the complaint was filed on behalf of the Company and other defendants. That motion is still in the briefing stage. The Company believes that as to the Company and its operating partnership, the claims have no merit. |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | 7. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash. The Company generally maintains its cash in money market funds with financial institutions. Although the Company may maintain balances at these institutions in excess of the FDIC insurance limit, the Company does not anticipate and has not experienced any losses. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Common Stock | 8. Common Stock The Class A and Class B common stock of Presidential have identical rights except that the holders of Class A common stock are entitled to elect two-thirds of the Board of Directors and the holders of the Class B common stock are entitled to elect one-third of the Board of Directors. Other than as described in Note 11, no shares of common stock of Presidential are reserved. |
Warrants and Options
Warrants and Options | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Warrants and Options | 9. Warrants and Options The Company issued to Mr. Nicholas W. Jekogian our CEO a Warrant in January 2014 to purchase 1,700,000 shares of the Company’s Class B Common Stock at an exercise price of $0.10 per share in exchange for the complete cancellation of $425,000 of deferred compensation accrued under Mr. Nicholas W. Jekogian’s employment agreement. On November 8, 2011, the Company issued 740,000 options at an exercise price of $1.25. A total of 148,000 shares vest six months after the grant date. The aggregate intrinsic value was $0.00. The remaining options vest upon the achievement of performance milestones. Options vesting on the achievement of performance milestones will not be recognized as compensation until such milestones are deemed probable of achievement. The Company has approximately $592,000 of unrecognized compensation expense respectively, related to unvested share-based compensation awards. For the years ended December 31, 2016 and 2015 compensation expense was $0. Approximately $592,000 will vest upon the achievement of performance milestones. See Note 13 subsequent events for cancelations and modification of options and warrants. The weighted-average fair value per share of the options granted is $1.00 estimated on the date of grant using the Black-Scholes-Merton option pricing model; the expected volatility is based upon historical volatility of the Company’s stock. The expected term is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. |
Estimated Fair Value of Financi
Estimated Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Value of Financial Instruments | 10. Estimated Fair Value of Financial Instruments At December 31, 2016 and 2015, the carrying amounts of the Company’s financial instruments, which include cash, accounts receivable and accounts payable, and accrued expenses approximate their fair value due to their generally short maturities. Based upon current borrowing rates with similar maturities the carrying value of long-term debt approximates the fair value as of December 31, 2016 and 2015. |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | 11. Stock Compensation On August 15, 2012 the stockholders approved the 2012 Incentive Plan which reserves 1,000,000 shares of Class B common stock for distribution to executive officers (including executive officers who are also directors), employees, directors, independent agents, consultants and attorneys in accordance with the 2012 Plan’s terms. The 2012 Plan provides for the grant of any or all of the following types of awards (collectively, “Awards”): (a) stock options and (b) restricted stock. Awards may be granted singly, in combination, or in tandem, as determined by the Compensation Committee. The maximum number of shares of Class B common stock with respect to which incentive stock options may be granted to any one individual in any calendar year shall not exceed $100,000 in fair market value as determined at the time of grant. If any outstanding Award is canceled, forfeited, delivered to us as payment for the exercise price or surrendered to us for tax withholding purposes, shares of Class B common stock allocable to such Award may again be available for Awards under the 2012 Incentive Plan. In 2005, shareholders approved the adoption of the Company’s 2005 Restricted Stock Plan (the “2005 Plan”). The 2005 Plan provided that a total of 115,000 shares of the Company’s Class B common stock may be issued to employees, directors and consultants of the Company, to provide incentive compensation. The 2005 Plan was administered by the Compensation Committees of the Company’s Board of Directors, which had the authority, among other things, to determine the terms and conditions of any award under the 2005 Plan. The 2005 Plan expired on June 15, 2015. The following is a summary of the Company’s activity for the 2012 and 2005 Plans in 2016 and 2015: Value Shares at Date of Vested Date of Issuance Issued Grant Shares Balance, December 31, 2014 642,100 0.20 642,100 Shares issued in 2015 - - - Balance, December 31, 2015 642,100 0.20 642,100 Shares issued in 2016 - - - Balance, December 31, 2016 642,100 0.20 642,100 |
Future Minimum Annual Base Rent
Future Minimum Annual Base Rents | 12 Months Ended |
Dec. 31, 2016 | |
Future Minimum Annual Base Rents [Abstract] | |
Future Minimum Annual Base Rents | 12. Future Minimum Annual Base Rents Future minimum annual base rental revenue for the next five years for commercial real estate owned at December 31, 2016, and subject to non-cancelable operating leases is as follows: Year Ending December 31, 2017 $ 344,857 2018 23,795 2019 8,800 2020 0 2021 0 Thereafter 0 Total $ 377,452 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On December 16, 2016, the “Company” and its newly formed operating partnership, Presidential Realty Operating Partnership LP (“Presidential OP”), entered into an interest contribution agreement (the “Initial Agreement”) with First Capital Real Estate Trust Incorporated (“FC REIT”), First Capital Real Estate Operating Partnership (the “FC OP”), Township Nine Owner, LLC (T9/JV), Capital Station Holdings, LLC, Capital Station Member, LLC, Capital Station 65 LLC and Avalon Jubilee LLC. On January 6, 2017, the Company and the other parties to the Initial Agreement entered into the First Amendment to the Initial Agreement (the “Amendment,” and, together with the Initial Agreement, the “Agreement”) and FC OP entered into the Agreement of Limited Partnership (the “Limited Partnership Agreement”) of Presidential OP, as limited partner, with the Company as general partner. The Agreement contemplated that the Company would acquire from FC OP its 31.3333% interest in the owner of a residential community referred to as the “Avalon Property” and 66% percent (the “T9 Transferred Interest”) of its 92% interest (FC/T9 Interest) in the owner of a development property known as the “T9 Property.” The purchase price for the interests is payable in limited partnership interests in Presidential OP (“Presidential OP Units”) convertible under certain conditions into shares of the Company’s Class B common stock. The Company’s acquisition of the interest in the Avalon Property was completed on January 6, 2017. The Avalon Property consists of 251 non-contiguous single-family, residential lots and a 10,000 square foot clubhouse, within the Jubilee at Los Lunas subdivision located in Los Lunas, New Mexico (the “Avalon Property”). At the Closing, in exchange for the contribution to Presidential OP of FC OP’s membership interests in Avalon, FC OP received 4,632,000 Presidential OP Units in, and became a limited partner of, Presidential OP. Such limited partnership interests are convertible, upon the satisfaction of certain conditions, into shares of Class B common stock of the Company on a one-for-one basis. In connection with the Closing, FC REIT paid $800,000 to Presidential to be used as operating capital. On March 31, 2017, the Company and Presidential OP entered into a second amendment to the Agreement pursuant to which the T9 Transferred Interest was assigned to PRES-T9 Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of Presidential OP (PRES-T9). PRES-T9 was admitted as a member of the T9/JV. The Second Amendment also provides for the satisfaction of certain conditions prior to the issuance and delivery of 100% of the Presidential OP Units to be issued in connection with the transaction. Those Presidential OP Units will be held back (the “Holdback Units”) until a new appraisal of the FC/T9 Interest has been obtained and the loan secured by the T9 Properties has been extended or refinanced. The loan is currently in default. Presidential has an opportunity for 30 days to endeavor to obtain an extension or refinancing of the loan. Thereafter, the FC Parties will continue to seek an extension/refinancing of the loan. If the appraisal and the loan extension/refinancing are not obtained within 180 days, then the FC Parties and Presidential may within 10 days mutually agree in writing to extend the time to complete the extension/refinancing of the loan, or either the FC Parties or Presidential may elect to cancel the transfer of the T9 Transferred Interest following 10 days prior written notice to the other party. The number of Presidential OP Units ultimately issued if these conditions are satisfied is subject to adjustment based on the new appraisal and the amount of the mortgage debt (the extended/refinanced loan) at that time. These adjustments could result in a material change in the number of Presidential OP Units that are ultimately issued and delivered if the conditions are satisfied. The final number of Presidential OP Units will be determined by taking the amount of the new appraisal, subtracting therefrom the amount of the extended/refinanced loan and the legal costs and expenses incurred by the Company in securing the extended/refinanced loan and multiplying the amount thereby obtained by 66%. In connection with the Agreement, Palisades Pacific Realty Trust, Inc (“Palisades”) became a consultant to the Company to provide services relating to the integration of the First Capital properties (the interests in the Avalon Property and T9 Property) and in connection with potential capital raising activities. The Company paid Palisades $200,000 and reimbursed certain expenses approved by the Company. Palisades notified the Company on March 1, 2017 that they were ceasing to provide services thus terminating the arrangement. Palisades has requested reimbursement of certain other expenses which the Company believes it is not responsible for. In connection with and as a condition of the Agreement, on January 6, 2017, the Company entered into various agreements with the officers, directors and Management of the Company to restructure amounts owed to them as well as change the equity compensation due or held by them. The Company entered into an agreement with Signature Group Advisors, LLC (“Signature”), an affiliate of Nickolas W. Jekogian, III, a director, Chairman and Chief Executive Officer of the Company, and an adviser to the Company (the “Signature Agreement”) pursuant to which (i) Signature will receive $1,000,000 payable in cash as consideration for sourcing, negotiating and documenting the transactions contemplated by the Agreement (“Transaction Fee”), which will become earned, due and payable upon the closing by the Company or Presidential OP of a preferred stock offering (or similar instrument) of at least $50,000,000 in gross proceeds; and (ii) commencing on the closing for the T9 Property under the Agreement, Signature will be engaged as a consultant to the Company for a four year term. The fee payable to Signature as a consultant (the “Consulting Fee”) will be $500,000 per annum, payable in cash in arrears on each anniversary of the closing for the T9 Property; provided, however, that no portion of the Consulting Fee will be earned or paid unless and until the net asset value of the Company is at least $200,000,000. On January 6, 2017, the Company and Mr. Alexander Ludwig, our President and Chief Operating Officer, entered into a Cancellation and Release Agreement for the cancellation of all stock options and warrants held by Mr. Ludwig as of such date in consideration for the issuance of (x) 450,000 shares of Class B common stock of the Company and (y) an option to purchase an additional 550,000 shares of Class B common stock of the Company. The exercise of such option is subject to certain conditions, including that the issuance of any shares of Class B common stock of the Company covered by Mr. Ludwig’s option would not be deemed “Excess Shares” as that term is defined in our certificate of incorporation. The exercise price of the option is $0.00. On January 6, 2017, Mr. Jekogian entered into a Cancellation and Release Agreement for the (x) cancellation of all stock options and warrants held by Mr. Jekogian as of such date and (y) termination of his Employment Agreement effective as of such date. Mr. Jekogian will continue as an employee of the Company in his capacity as Chairman and Chief Executive Officer on a month-to-month basis until such time as otherwise determined by the Company in its sole discretion. It is expected that his salary will remain unchanged. On January 6, 2017, each of Richard Brandt, Robert Feder and Jeffrey Joseph, non-management directors of the Company, and Jeffrey Rogers, a former non-management director of the Company, entered into Issuance and Release Agreements for the issuance of an aggregate of 450,000 shares of Class B common stock of the Company in consideration of the release of the Company’s obligations to pay past due and current director’s fees, of which 90,000 were issued to the current directors for their services in connection with the Agreement. On January 6, 2017, the Company and Presidential OP entered into an Acknowledgement and Certification (the “Shareholder Certification”) with Mr. Jekogian, The BBJ Family Irrevocable Trust (the “Trust”), FC OP and FC REIT, pursuant to which the Trust agreed to, among other things, (i) exchange its shares of Class A stock for shares of Class B stock of the Company upon the occurrence and satisfaction of certain conditions, (ii) refrain from taking certain actions, and (iii) vote its shares of Class A stock in favor of certain actions. Pursuant to such Shareholder Certification, the Company agreed not to issue or cause to be issued any additional shares of its Class A stock. In connection with the foregoing, certain holders of Class A common stock of the Company, representing an aggregate of 49,000 shares of Class A common stock, entered into a Proxy and Option to Purchase with The BBJ Family Irrevocable Trust designating The BBJ Family Irrevocable Trust as proxy to vote on all matters with respect to their shares. In addition, such agreement granted The BBJ Family Irrevocable Trust an option to purchase such shares at a purchase price of $2.00 per share. During the first quarter the trust exercised its option and purchased 49,000 shares of Class A common stock. The Company was not a party to that agreement. |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization | Organization Presidential Realty Corporation (“Presidential” or the “Company”) is operated as a self-administrated, self-managed Real Estate Investment Trust (“REIT”). The Company is engaged principally in the ownership of income producing real estate. Presidential operates in a single business segment, investments in real estate related assets. |
Basis of Presentation and Going Concern Considerations | Basis of Presentation and Going Concern Considerations For the year ended December 31, 2016, the Company had a loss from operations and accumulated deficit. This combined with a history of operating losses and working capital deficiency, has been detrimental to our operations and could potentially affect our ability to meet our obligations and continue as a going concern. Our ability to continue as a going concern is dependent upon the successful execution of strategies to achieve profitability, and increase working capital by raising debt and/or equity. The accompanying financial statements do not include any adjustments that may result from this uncertainty. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results. |
Real Estate | Real Estate Real estate is stated at cost. Generally, depreciation is provided on the straight-line method over the assets estimated useful lives, which range from twenty to thirty-nine years for buildings and improvements and from three to ten years for furniture and equipment. Maintenance and repairs are charged to operations as incurred and renewals and replacements are capitalized. The Company reviews each of its property investments for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment of properties is determined to exist when estimated amounts recoverable through future operations on an undiscounted basis are below the properties carrying value. If a property is determined to be impaired, it is written down to its estimated fair value. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Presidential Realty Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Rental Revenue Recognition | Rental Revenue Recognition The Company acts as lessor under operating leases. Rental revenue is recorded on the straight-line basis from the later of the date of the commencement of the lease or the date of acquisition of the property subject to existing leases, which averages minimum rents over the terms of the leases. Certain leases require the tenants to reimburse a pro rata share of real estate taxes, utilities and maintenance costs. Recognition of rental revenue is generally discontinued when the rental is delinquent for ninety days or more, or earlier if management determines that collection is doubtful. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company assesses the collectability of amounts due from tenants and other receivables, using indicators such as past-due accounts, the nature and age of the receivable, the payment history and the ability of the tenant or debtor to meet its payment obligations. Management’s estimate of allowances for doubtful accounts is subject to revision as these factors change. Any subsequent recovery of tenant receivable that were previously reserved is recorded as a reduction in the provision of bad debt expense. As of December 31, 2016 and 2015, the allowance relating to tenant receivables was $2,426 and $790, respectively. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net loss per share data is computed by dividing net loss by the weighted average number of shares of Class A and Class B common stock outstanding (excluding non-vested shares) during each period. Diluted net income per share is computed by dividing net income by the weighted average shares outstanding, including the dilutive effect, if any, of non-vested shares. For the years ended December 31, 2016 and 2015, the weighted average shares outstanding as used in the calculation of diluted loss per share do not include 740,000, of outstanding stock options and 1,700,000 of outstanding warrants, as their inclusion would be antidilutive. |
Cash and cash equivalents | Cash and cash equivalents Cash includes cash on hand, cash in banks and cash in money market funds. Cash equivalents represent short-term, highly liquid investment which are readily convertible to cash and have maturities of three months or less. |
Management Estimates | Management Estimates The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated balance sheets and the reported amounts of income and expense for the reporting period. Actual results could differ from those estimates. |
Accounting for Stock Awards | Accounting for Stock Awards The Company recognizes the cost of employee and non-employee services received in exchange for awards of equity instruments as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the fair value of the stock award and options, is recognized as expense, less expected forfeitures, over the requisite service period, which typically equals the vesting period. Stock-based compensation expense was $0 in 2016 and 2015. |
Accounting for Income Taxes | Accounting for Income Taxes The Company accounts for income taxes utilizing the asset and liability approach requiring the recognition of deferred tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards and temporary differences between the basis of assets and liabilities for financial reporting purposes and tax purposes and for net operating loss and other carryforwards. A valuation allowance is provided for deferred tax assets based on the likelihood of realization. |
Mortgage costs | Mortgage costs The Company amortize mortgage costs over the life of the loan. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Effective January 1, 2016, the Company adopted Accounting Standards Update 2015-03, which requires the presentation of debt issuance costs as a reduction of the debt liability on the balance sheet, consistent with the accounting for debt discounts. Amortization of debt issuance costs and debt discounts are each recorded as non-cash interest expense over the life of the respective debt instrument. The presentation of debt issuance costs as of and for the year ended December 31, 2015 has been reclassified to conform to this guidance. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40). The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This standard is effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter. The adoption of ASU 2014-15 did not have a material effect on the consolidated financial statements, however it may affect future disclosures. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Company’s financial position or results of operations. In March 2016, FASB issued ASU No. 2016-09, “Improvements to Employee Share-based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the standard and the impact on its consolidated financial statements and footnote disclosures. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15. The new guidance clarifies eight cash flow classification issues where current GAAP was either unclear or has no specific guidance. The new standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those fiscal years. All entities may elect to early adopt ASU 2016-15 in any interim period. If an entity early adopts it must adopt all eight of the amendments in the same period and if early adopted in an interim period any adjustments should be reflected as of the beginning of the year. The amendments in ASU 2016-15 will be applied using the modified retrospective transition method for each period presented. The Company is evaluating the impact the adoption of this guidance will have on the classification of certain items on its statements of cash flows. |
Real Estate (Tables)
Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate [Abstract] | |
Schedule of real estate properties | Real estate is comprised of the following: December December Land $ 79,100 $ 79,100 Buildings 1,039,984 995,215 Furniture and equipment 50,375 44,030 Total $ 1,169,459 $ 1,118,345 |
Mortgage Debt (Tables)
Mortgage Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of maturities of long-term debt | Maturities of Mortgage payments for the next five years are as follows: 2017 $ 33,596 2018 $ 35,680 2019 $ 37,892 2020 $ 40,241 2021 $ 42,737 Thereafter $ 1,520,415 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of nonvested restricted stock units activity | The following is a summary of the Company’s activity for the 2012 and 2005 Plans in 2016 and 2015: Value Shares at Date of Vested Date of Issuance Issued Grant Shares Balance, December 31, 2014 642,100 0.20 642,100 Shares issued in 2015 - - - Balance, December 31, 2015 642,100 0.20 642,100 Shares issued in 2016 - - - Balance, December 31, 2016 642,100 0.20 642,100 |
Future Minimum Annual Base Re24
Future Minimum Annual Base Rents (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Future Minimum Annual Base Rents [Abstract] | |
Schedule of future minimum annual base rental revenue | Future minimum annual base rental revenue for the next five years for commercial real estate owned at December 31, 2016, and subject to non-cancelable operating leases is as follows: Year Ending December 31, 2017 $ 344,857 2018 23,795 2019 8,800 2020 0 2021 0 Thereafter 0 Total $ 377,452 |
Organization and Summary of S25
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expense | $ 0 | $ 0 |
Allowance for doubtful accounts | $ 2,426 | $ 790 |
Buildings and Improvements [Member] | Minimum [Member] | ||
Estimated useful lives | 20 years | |
Buildings and Improvements [Member] | Maximum [Member] | ||
Estimated useful lives | 39 years | |
Furniture and Equipment [Member] | Minimum [Member] | ||
Estimated useful lives | 3 years | |
Furniture and Equipment [Member] | Maximum [Member] | ||
Estimated useful lives | 10 years | |
Equity Option [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 740,000 | 740,000 |
Warrant [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 1,700,000 | 1,700,000 |
Real Estate (Details)
Real Estate (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Real Estate [Abstract] | ||
Land | $ 79,100 | $ 79,100 |
Buildings | 1,039,984 | 995,215 |
Furniture and equipment | 50,375 | 44,030 |
Total | $ 1,169,459 | $ 1,118,345 |
Investments in Partnership (Det
Investments in Partnership (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Broadway Partners Fund II [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment income | $ 0 | $ 8,900 |
Mortgage Debt (Details)
Mortgage Debt (Details) | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 33,596 |
2,018 | 35,680 |
2,019 | 37,892 |
2,020 | 40,241 |
2,021 | 42,737 |
Thereafter | $ 1,520,415 |
Mortgage Debt (Details Narrativ
Mortgage Debt (Details Narrative) - USD ($) | Jun. 28, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Mortgage payable net of cost | $ 1,575,945 | $ 1,590,024 | |
Loan Agreement [Member] | Natixis Real Estate Capital LLC [Member] | Loans Payable [Member] | |||
Debt principal amount | $ 1,750,000 | ||
Debt interest rate | 6.031% | ||
Repayments of debt | $ 934,794 | ||
Amount transferred for capital improvements and reserves | 123,757 | ||
Proceeds from issuance of debt | $ 585,125 | ||
Maturity date | Aug. 5, 2025 | ||
Frequency of periodic payment | Monthly | ||
Periodic payment | $ 11,308 | ||
Outstanding balance of loan | 1,710,651 | 134,706 | |
Mortgage payable net of cost | $ 1,740,462 | $ 150,438 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Real estate investment trust taxable income (loss) | $ (600,000) | $ (197,700) |
Real estate investment trust taxable income (loss) per share | $ (0.14) | $ (0.05) |
Operating loss expiration term | E xpiring from 2028 through 2036. | |
Net operating loss carryforward | $ 20,900,000 | |
Real estate investment trust taxable income distributable to shareholder | 90.00% |
Commitments, Contingencies an31
Commitments, Contingencies and Related parties (Details Narrative) - USD ($) | Sep. 22, 2016 | Jan. 12, 2016 | Jan. 12, 2015 | Jan. 08, 2014 | Jan. 06, 2014 | Nov. 08, 2011 | Jul. 28, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Operating leases, rent expense | $ 14,400 | $ 13,200 | |||||||
Gains (losses) on extinguishment of debt | $ 228,261 | 228,261 | |||||||
Deferred compensation liability, current and noncurrent | 413,750 | ||||||||
Fair value of stock options issued | $ 185,489 | ||||||||
Expiration period | 5 years | ||||||||
Proceeds from issuance initial public offering | $ 20,000,000 | ||||||||
Exercise price | $ 1 | ||||||||
Expected term | 5 years | ||||||||
Expected marketability | 29.19% | ||||||||
Expected volatility rate | 108.60% | ||||||||
Risk free interest rate | 1.61% | ||||||||
Expected dividend rate | 0.00% | ||||||||
Property Management Agreement [Member] | Signature Community Management [Member] | |||||||||
Management fee of monthly rental income from tenants | 5.00% | ||||||||
Asset management fees | $ 40,000 | 40,500 | |||||||
Description of agreement term | The property Management Agreement renewed for a one year term on November 8, 2016 and will automatically renew for one year terms until it is terminated by either party upon written notice. | ||||||||
Asset Management Agreement [Member] | Signature Community Management [Member] | |||||||||
Asset management fees | $ 12,000 | $ 12,000 | |||||||
Asset management fee percentage | 1.50% | ||||||||
Description of agreement term | The Asset Management Agreement renewed for a one year term on November 8, 2016 and will automatically renew for one year terms until it is terminated by either party upon written notice. | ||||||||
Officer Two [Member] | Palmer Mapletree Property [Member] | |||||||||
Repayments of related party debt | 50,000 | ||||||||
Officer Three [Member] | Palmer Mapletree Property [Member] | |||||||||
Repayments of related party debt | 50,000 | ||||||||
Officer One [Member] | Palmer Mapletree Property [Member] | |||||||||
Repayments of related party debt | $ 50,000 | ||||||||
Mr. Nicholas W. Jekogian [Member] | Employment Agreement [Member] | |||||||||
Base salary | $ 225,000 | ||||||||
Removal of cap | $ 200,000 | ||||||||
Mr. Nicholas W. Jekogian [Member] | Employment Agreement [Member] | Common Class B [Member] | |||||||||
Warrants issued for cancellation of deferred compensation, shares | 1,700,000 | ||||||||
Warrants issued for cancellation of deferred compensation, value | $ 425,000 | ||||||||
Description of agreement term | The extension of the employment term from May 3, 2013 to December 31, 2015. | ||||||||
Mr. Alexander Ludwig [Member] | Employment Agreement [Member] | |||||||||
Base salary | $ 225,000 | ||||||||
Removal of cap | $ 200,000 | ||||||||
Mr. Alexander Ludwig [Member] | Employment Agreement [Member] | Common Class B [Member] | |||||||||
Number of shares issued | 450,000 | ||||||||
Additional number of shares issued | 550,000 | ||||||||
Description of agreement term | The extension of the employment term from May 3, 2013 to December 31, 2015. | ||||||||
Exercise price (in dollars per share) | $ 0 | ||||||||
Executive Officer [Member] | Signature Community Management [Member] | |||||||||
Operating Leases, rent expense, sublease rentals | 13,200 | ||||||||
Operating leases rent expense sublease rentals per monthly | 1,100 | ||||||||
Operating leases, rent expense | 9,900 | $ 13,200 | |||||||
Executive Officer [Member] | Nexelus [Member] | |||||||||
Operating Leases, rent expense, sublease rentals | $ 18,000 | ||||||||
Operating leases rent expense sublease rentals per monthly | $ 1,500 | ||||||||
Operating leases, rent expense | $ 4,500 |
Warrants and Options (Details N
Warrants and Options (Details Narative) - USD ($) | Nov. 08, 2011 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 08, 2014 |
Number of option issued | |||||
Number of stocks vested | 642,100 | 642,100 | 642,100 | ||
Weighted-average fair value (in dollars per share) | |||||
Employment Agreement [Member] | Mr. Nicholas W. Jekogian [Member] | |||||
Number of option issued | 740,000 | ||||
Option exercise price (in dollars per share) | $ 1.25 | ||||
Description of vesting rights | The remaining options vest upon the achievement of performance milestones. Options vesting on the achievement of performance milestones will not be recognized as compensation until such milestones are deemed probable of achievement. | ||||
Unvested unrecognized compensation expense | $ 592,000 | ||||
Compensation expense | $ 0 | $ 0 | |||
Weighted-average fair value (in dollars per share) | $ 1 | ||||
Employment Agreement [Member] | Mr. Nicholas W. Jekogian [Member] | Vesting Tranche One [Member] | |||||
Number of stocks vested | 148,000 | ||||
Option vesting period | 6 months | ||||
Vested option aggregate intrinsic value | $ 0 | ||||
Employment Agreement [Member] | Mr. Nicholas W. Jekogian [Member] | Vesting Tranche Two [Member] | |||||
Compensation expense vest upon achievement of milestones | $ 592,000 | ||||
Employment Agreement [Member] | Mr. Nicholas W. Jekogian [Member] | Common Class B [Member] | |||||
Number of warrant called | 1,700,000 | ||||
Warrant exercise price (in dollars per share) | $ 0.10 | ||||
Deferred compensation | $ 425,000 |
Stock Compensation (Details)
Stock Compensation (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning Balance | 642,100 | 642,100 |
Shares issued | ||
Ending Balance | 642,100 | 642,100 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Beginning Balance | $ 0.20 | $ 0.20 |
Shares issued | ||
Ending Balance | $ 0.20 | $ 0.20 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Roll Forward] | ||
Beginning Balance | 642,100 | 642,100 |
Shares issued | ||
Ending Balance | 642,100 | 642,100 |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - Common Class B [Member] - shares | Aug. 15, 2012 | Dec. 31, 2005 |
2012 Incentive Plan [Member] | ||
Number of shares reserved | 1,000,000 | |
Description of plan term | The maximum number of shares of Class B common stock with respect to which incentive stock options may be granted to any one individual in any calendar year shall not exceed $100,000 in fair market value as determined at the time of grant. | |
2005 Restricted Stock Plan [Member] | ||
Number of shares reserved | 115,000 | |
Plan expiration date | Jun. 15, 2015 |
Future Minimum Annual Base Re35
Future Minimum Annual Base Rents (Details) | Dec. 31, 2016USD ($) |
Year Ending December 31, | |
2,017 | $ 344,857 |
2,018 | 23,795 |
2,019 | 8,800 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
Total | $ 377,452 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Mar. 31, 2017$ / sharesshares | Mar. 01, 2017USD ($) | Jan. 06, 2017USD ($)ft²Numbershares | Mar. 31, 2017$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Net asset value | $ 853,775 | $ 1,248,452 | ||||
Subsequent Event [Member] | Common Class A [Member] | ||||||
Number of shares purchased | shares | 49,000 | |||||
Subsequent Event [Member] | BBJ Family Irrevocable Trust [Member] | Common Class A [Member] | ||||||
Number of shares purchased | shares | 49,000 | |||||
Share price (in dollars per share) | $ / shares | $ 2 | $ 2 | ||||
Subsequent Event [Member] | Limited Partnership Agreement [Member] | First Capital Real Estate Operating Partnership ("FC OP") [Member] | Avalon Property [Member] | ||||||
Percentage of ownership interest | 31.3333% | |||||
Number of non-contiguous single-family & residential lots | Number | 251 | |||||
Area of clubhouse | ft² | 10,000 | |||||
Number of units received | shares | 4,632,000 | |||||
Subsequent Event [Member] | Limited Partnership Agreement [Member] | Township Nine Owner, LLC (T9/JV) [Member] | T9 Property [Member] | ||||||
Percentage of ownership interest | 66.00% | |||||
Subsequent Event [Member] | Limited Partnership Agreement [Member] | First Capital Real Estate Trust Incorporated ("FC REIT") [Member] | Avalon Property [Member] | ||||||
Proceeds from limited partnership investments | $ 800,000 | |||||
Subsequent Event [Member] | Second Amendment interest Contribution Agreement [Member] | Presidential Realty Operating Partnership LP ("Presidential OP") [Member] | ||||||
Description of agreement terms | The Second Amendment also provides for the satisfaction of certain conditions prior to the issuance and delivery of 100% of the Presidential OP Units to be issued in connection with the transaction. | |||||
Subsequent Event [Member] | Consulting Agreement [Member] | Palisades Pacific Realty Trust, Inc [Member] | ||||||
Payment for consulting services | $ 200,000 | |||||
Subsequent Event [Member] | Signature Agreement [Member] | Signature Group Advisors, LLC [Member] | Mr. Nickolas W. Jekogian [Member] | ||||||
Cash consideration | 1,000,000 | |||||
Gross proceeds from transactions | 50,000,000 | |||||
Consulting fee | 500,000 | |||||
Net asset value | $ 200,000,000 | |||||
Subsequent Event [Member] | Issuance and Release Agreements [Member] | Non-management Directors [Member] | Common Class B [Member] | ||||||
Number of shares purchased | shares | 450,000 | |||||
Additional number of option | shares | 550,000 | |||||
Number of shares issued for services | shares | 90,000 |