Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | ACRE Realty Investors Inc | |
Entity Central Index Key | 1,011,109 | |
Document Type | 10-Q | |
Trading Symbol | aiii | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 20,494,631 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Real estate asset held for sale | $ 4,283,385 | $ 4,283,385 |
Cash and cash equivalents | 15,662,192 | 16,638,702 |
Other Assets | 260,623 | 125,436 |
Total assets | 20,206,200 | 21,047,523 |
LIABILITIES: | ||
Accounts payable and accrued expenses | 460,400 | 479,683 |
Due to affiliates | 208,063 | 217,076 |
Liabilities related to real estate asset held for sale | 4,401 | 1,498 |
Total liabilities | 672,864 | 698,257 |
Commitments and contingencies | ||
SHAREHOLDERS' EQUITY: | ||
Preferred shares, $.01 par value, 20,000,000 shares authorized, no shares issued and outstanding | ||
Common shares, $.01 par value, 100,000,000 shares authorized, 20,563,182 shares issued and 20,490,465 shares outstanding both at March 31, 2017 and December 31, 2016 | 205,632 | 205,632 |
Additional paid-in capital | 44,495,305 | 44,485,281 |
Treasury shares, at cost 72,717 shares both at March 31, 2017 and December 31, 2016 | (71,332) | (71,332) |
Accumulated deficit | (25,801,910) | (25,005,431) |
Total ACRE Realty Investors Inc. shareholders' equity | 18,827,695 | 19,614,150 |
Non-controlling interest - operating partnership | 705,641 | 735,116 |
Total shareholders' equity | 19,533,336 | 20,349,266 |
Total liabilities and shareholders' equity | $ 20,206,200 | $ 21,047,523 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized | 20,000,000 | 20,000,000 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 100,000,000 | 100,000,000 |
Common shares, shares issued | 20,563,182 | 20,563,182 |
Common shares, shares outstanding | 20,490,465 | 20,490,465 |
Treasury Stock Shares | 72,717 | 72,717 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Total Revenues | ||
Expenses: | ||
Property, insurance and other expenses | 3,211 | 3,505 |
Real estate taxes | 4,401 | 4,409 |
Management fees, affiliate | 89,048 | 102,326 |
Allocated salaries and other compensation | 118,098 | 167,145 |
General and administrative expenses | 611,562 | 626,572 |
Total Expenses | 826,320 | 903,957 |
Net Loss | (826,320) | (903,957) |
Loss Attributable to Non-controlling Interest | (29,841) | (37,823) |
Net Loss Attributable to Common Shareholders | $ (796,479) | $ (866,134) |
Loss Per Common Share - Basic and Diluted (Note 5) | ||
Basic | $ (0.04) | $ (0.04) |
Diluted | $ (0.04) | $ (0.04) |
Weighted Average Common Shares (Note 5) | ||
Basic | 20,430,465 | 20,207,438 |
Diluted | 21,198,424 | 21,093,809 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total ACRE Shareholders' Equity | Noncontrolling Interest | Total |
BALANCE at Dec. 31, 2016 | $ 205,632 | $ 44,485,281 | $ (71,332) | $ (25,005,431) | $ 19,614,150 | $ 735,116 | $ 20,349,266 |
BALANCE (in shares) at Dec. 31, 2016 | 20,563,182 | 20,563,182 | |||||
Net loss | (796,479) | (796,479) | (29,841) | $ (826,320) | |||
Amortization of shared based compensation | 10,390 | 10,390 | 10,390 | ||||
Adjustment for noncontrolling interest in the operating partnership | (366) | (366) | 366 | ||||
BALANCE at Mar. 31, 2017 | $ 205,632 | $ 44,495,305 | $ (71,332) | $ (25,801,910) | $ 18,827,695 | $ 705,641 | $ 19,533,336 |
BALANCE (in shares) at Mar. 31, 2017 | 20,563,182 | 20,563,182 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (826,320) | $ (903,957) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of shared-based compensation | 10,390 | 78,932 |
Changes in operating assets and liabilities | ||
Increase in other assets | (135,187) | (74,398) |
(Decrease) increase in due to affiliates | (9,013) | 28,984 |
Decrease in accounts payable and accrued expenses | (16,380) | (8,651) |
Net cash used in operating activities | (976,510) | (879,090) |
INVESTING ACTIVITIES: | ||
Net cash provided by investing activities | ||
FINANCING ACTIVITIES: | ||
Net cash provided by financing activities | ||
Net Decrease in Cash and Cash Equivalents | (976,510) | (879,090) |
Cash and Cash Equivalents, Beginning of Period | 16,638,702 | 19,874,915 |
Cash and Cash Equivalents, End of Period | 15,662,192 | 18,995,825 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for state taxes | 4,550 | 5,356 |
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES AND FINANCING ACTIVITIES: | ||
Redemption of operating partnership units for common shares | $ 35,654 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND ORGANIZATION | 1. BUSINESS AND ORGANIZATION ACRE Realty Investors Inc. (the “company”) (formerly known as Roberts Realty Investors, Inc. until its name was changed on January 30, 2015), a Georgia corporation, was formed on July 22, 1994 to serve as a vehicle for investments in, and ownership of, a professionally managed real estate portfolio of multifamily apartment communities. The company’s strategy has since changed upon the consummation of the transaction with A-III Investment Partners LLC, as described below. The company conducts all of its operations and owns all of its assets in and through ACRE Realty LP (formerly known as Roberts Properties Residential, L.P. until its name was changed on January 30, 2015), a Georgia limited partnership (the “operating partnership”), or through wholly owned subsidiaries of the operating partnership. The company controls the operating partnership as its sole general partner and had a 96.39% ownership interest in the operating partnership at both March 31, 2017 and December 31, 2016, respectively. On November 19, 2014, the company and its operating partnership entered into a Stock Purchase Agreement with A-III Investment Partners LLC (“A-III”) (the “Stock Purchase Agreement”). On January 30, 2015, the company and A-III closed the transactions contemplated under the Stock Purchase Agreement. At the closing, A-III purchased 8,450,704 shares of the company’s common stock at a purchase price of $1.42 per share, for an aggregate purchase price of $12 million, and the company issued to A-III warrants to purchase up to an additional 26,760,563 shares of common stock at an exercise price of $1.42 per share ($38 million in the aggregate). The purchase price per share and the exercise price of the warrants are subject to a potential post-closing adjustment upon completion of the sale of the company’s four land parcels owned at January 30, 2015, which could result in the issuance of additional shares of common stock to A-III and an increase in the number of shares of common stock issuable upon exercise of the warrants. After the closing, Roberts Realty Investors, Inc. amended its articles of incorporation to change its name to ACRE Realty Investors Inc. At the closing, the company, A-III and Charles S. Roberts (“Mr. Roberts”), Roberts Realty Investors, Inc.’s chairman and chief executive officer, entered into a Governance and Voting Agreement, dated January 30, 2015 (the “Governance and Voting Agreement”) and the company and Mr. Roberts entered into an employment agreement pursuant to which Mr. Roberts was appointed and employed by the company to serve as an Executive Vice President of our company. Pursuant to two extension agreements, the Governance and Voting Agreement and Employment Agreement were extended until December 31, 2016. On December 31, 2016, the Employment Agreement expired and Mr. Roberts ceased to be an officer or employee of our company, but remained a member of our board of directors (the “Board”). On October 10, 2016, the company, A-III and Mr. Roberts, entered into an agreement (the “Extension of Governance and Voting Agreement”), effective as of October 10, 2016, further extending the term of the Governance and Voting Agreement, but not the Employment Agreement. As a result of the Extension of Governance and Voting Agreement, the parties have agreed to extend the expiration of the term of the Governance and Voting Agreement from December 31, 2016 to June 30, 2017. As a result, all of the respective rights and obligations of the parties under, and all other terms, conditions and provisions of, the Governance and Voting Agreement shall continue in full force and effect until June 30, 2017, unless the Governance and Voting Agreement is amended in writing by the parties or is sooner terminated in accordance with the provisions thereof. Pursuant to the Extension of Governance and Voting Agreement, the parties agreed to nominate Mr. Roberts for re-election to the Board. Mr. Roberts was elected by the company’s shareholders at the annual meeting on December 14, 2016. As further discussed in Note 11, “Subsequent Events,” Mr. Roberts resigned from the Board effective April 4, 2017. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Quarterly Presentation Principles of Consolidation. The company consolidates the operating partnership, a VIE, in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The company is required to reassess whether it is the primary beneficiary of a VIE for each reporting period. Our maximum exposure to loss is the carrying value of assets and liabilities of our operating partnership which represents all of our assets and liabilities. Use of Estimates. Real Estate Asset Held For Sale. Real estate asset held for sale is recorded at the lower of the carrying amount or fair value less estimated selling costs. The company reviews the real estate asset held for sale each reporting period to determine that the carrying amount remains recoverable. If the carrying amount of the real estate asset exceeds the fair value, the asset will be written down by the amount the carrying amount exceeds the fair value amount. The fair value is determined by an evaluation of an appraisal, discounted cash flow analysis, sale price and/or other applicable valuation techniques. As of March 31, 2017, the carrying amount of our real estate asset remained recoverable. The company recognizes gains on the sales of assets when the sale has closed, title has passed to the buyer, adequate initial and continuing investment by the buyer is received and other attributes of ownership have been transferred to the buyer. All of these conditions are typically met at or shortly after closing. If any significant continuing obligation exists at the date of sale, the company defers a portion of the gain attributable to the continuing obligation until the continuing obligation has expired or is removed. Cash and Cash Equivalents. Warrants. Earnings Per Share. Share-Based Compensation. The company records share-based awards to directors, which have no vesting conditions other than time of service, at the fair value of the award, measured at the date of grant. The fair value of share-based grants is being amortized to compensation expense ratably over the requisite service period, which is the vesting period. The company records share-based awards to non-employee officers, based on the estimated fair value of such award at the grant date that is remeasured quarterly for unvested awards. We amortize expense over the requisite service period related to share-based awards granted to non-employee officers Income Taxes. In general, a valuation allowance is recorded if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Realization of the company’s deferred tax assets depends upon the company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards. The company records a valuation allowance, based on the expected timing of reversal of existing taxable temporary differences and its history of losses and future expectations of reporting taxable losses, if management does not believe it met the requirements to realize the benefits of certain of its deferred tax assets. Fair Value of Financial Instruments. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2014-09”) establishing ASC Topic 606, Revenue from Contracts with Customers Deferral of the Effective Date Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Identifying Performance Obligations and Licensing Narrow-Scope Improvements and Practical Expedients In December 2016, the FASB issued an update (“ASU No. 2016-20”) to ASC 606, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), In February 2016, the FASB issued an update (“ASU 2016-02”) establishing ASC Topic 842, Leases In March 2016, the FASB issued guidance (“ASU 2016-09”), Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In August 2016, the FASB issued an update (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Statement of Cash Flows In November 2016, the FASB issued an update (“ASU 2016-18”), Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) In January 2017, the FASB issued an update (“ASU 2017-01”), Clarifying the Definition of a Business to ASC Topic 805, Business Combinations |
REAL ESTATE ASSET HELD FOR SALE
REAL ESTATE ASSET HELD FOR SALE | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE ASSET HELD FOR SALE | 3. REAL ESTATE ASSET HELD FOR SALE As of March 31, 2017 and December 31, 2016, the company owned the land parcel known as Highway 20, a 38-acre site located in the City of Cumming, Georgia in Forsyth County, in the North Atlanta metropolitan area, zoned for 210 multifamily apartment units, which is classified as held for sale. On October 7, 2016, the operating partnership entered into a sale contract with Roberts Capital Partners, LLC, a related party, to sell Highway 20 for a purchase price of $4,725,000, including a reimbursement of $1,050,000 relating to prepaid sewer taps. This transaction is expected to close during the second quarter of 2017, subject to certain closing conditions. The table below sets forth the assets and liabilities related to real estate asset held for sale at March 31, 2017 and December 31, 2016: March 31, December 31, Real Estate Asset Held for Sale $ 4,283,385 $ 4,283,385 Liabilities Related to Real Estate Asset Held For Sale $ 4,401 $ 1,498 |
NON-CONTROLLING INTEREST - OPER
NON-CONTROLLING INTEREST - OPERATING PARTNERSHIP | 3 Months Ended |
Mar. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
NON-CONTROLLING INTEREST - OPERATING PARTNERSHIP | 4. NON-CONTROLLING INTEREST – OPERATING PARTNERSHIP Holders of operating partnership units (“OP Units”) generally have the right to require the operating partnership to redeem their units for shares of the company’s common stock. Upon submittal of units for redemption, the operating partnership has the option either (a) to acquire those units in exchange for shares, currently on the basis of 1.647 shares for each unit submitted for redemption (the “Conversion Factor”), or (b) to pay cash for those units at their fair market value, based upon the then current trading price of the shares and using the same exchange ratio. Prior to December 29, 2015, we had an informal policy of issuing shares, in lieu of cash in exchange for units. On December 28, 2015, our Board formally adopted a policy whereby we shall only issue our common stock for redemption of units, rather than paying cash for such redemption in accordance with the operating partnership agreement. As a result of this change in policy, the company now requires the issuance of shares of common stock of the company in payment for the redemption of OP Units and therefore has effective control over the redemption and therefore the non-controlling interest is now being classified in permanent equity as of December 28, 2015 as opposed to temporary equity, and similarly at March 31, 2017 and December 31, 2016. In July 2013, the operating partnership privately offered to investors who held both units of the operating partnership and shares of common stock the opportunity to contribute shares to the operating partnership in exchange for units (provided that the investors were “accredited investors” under SEC Rule 501 of Regulation D under the Securities Act of 1933, as amended). This opportunity remains open to those accredited investors. Consistent with the Conversion Factor noted above, the offering of units uses a “Contribution Factor” such that an accredited investor who contributes shares to the operating partnership will receive one unit for every 1.647 shares contributed. The non-controlling interest of the unitholders in the operating partnership on the accompanying consolidated balance sheets is calculated by multiplying the non-controlling interest ownership percentage at the balance sheet date by the operating partnership’s net assets (total assets less total liabilities). The non-controlling interest ownership percentage is calculated at any point in time by dividing (x) (the number of units outstanding multiplied by 1.647) by (y) the total number of shares plus (the number of units outstanding multiplied by 1.647). The non-controlling interest ownership percentage will change as additional shares and/or units are issued or as units are redeemed for shares of the company’s common stock or as the company’s common stock is contributed to the operating partnership and units are issued in accordance with the Contribution Factor. The non-controlling interest of the unitholders in the income or loss of the operating partnership in the accompanying consolidated statements of operations is calculated based on the weighted average percentage of units outstanding during the period, which was 3.61% and 4.19% for the three months ended March 31, 2017 and 2016. There were 466,259 units outstanding both at March 31, 2017 and December 31, 2016. The equity balance of the non-controlling interest of the unitholders was $705,641 at March 31, 2017 and $735,116 at December 31, 2016. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | 5. SHAREHOLDERS’ EQUITY Private Placement. Warrants. Redemption of Units for Shares. Contribution of Shares to the Operating Partnership. Restricted Stock. Treasury Stock. Earnings Per Share. Three Months Ended March 31, Numerator 2017 2016 Net loss attributable to common shareholders – basic $ (796,479 ) $ (866,134 ) Loss attributable to non-controlling interest (29,841 ) (37,823 ) Net loss – diluted $ (826,320 ) $ (903,957 ) Denominator Weighted average number of common shares – basic 20,430,465 20,207,438 Effect of potential dilutive securities: Weighted average operating partnership units, assuming conversion of all units to common shares 767,959 886,371 Weighted average number of common shares – diluted (a) 21,198,424 21,093,809 (a) Due to the net loss for the three months ended March 31, 2017 and 2016, the incremental shares related to the unvested restricted stock and the warrants were excluded as they were anti-dilutive. Furthermore, the average share price of the company’s common stock was below the exercise price of the warrants for the three months ended March 31, 2017 and 2016. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 6. INCOME TAXES The company prepared the provision following the guidance of FASB ASC 740, Income Taxes |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. The company measures and/or discloses the estimated fair value of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels: · Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; · Level 2 - inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and · Level 3 - unobservable inputs for the asset or liability that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining fair value of financial and non-financial assets and liabilities. Accordingly, the fair values may not reflect the amounts ultimately realized on a sale or other disposition of these assets. Below summarizes the methods and assumptions used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value. · Cash and cash equivalents: The carrying amount of the cash approximates fair value. · Real estate asset held for sale: Highway 20 is carried at the lower of the carrying amount or fair value, less the estimated selling costs. · Accounts payable and accrued expenses: The carrying amount approximates fair value due to the short term nature of these liabilities. The company held no financial assets or liabilities required to be measured at fair value on a recurring or nonrecurring basis as of March 31, 2017 and December 31, 2016. From time to time, we record certain assets at fair value on a nonrecurring basis when there is evidence of impairment. There was no impairment charge on Highway 20 during the three months ended March 31, 2017 and 2016. As of March 31, 2017 and December 31, 2016, Highway 20 is carried at net realizable value. We determined the fair value of Highway 20 using Level 3 inputs. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 8. SEGMENT REPORTING FASB ASC Topic 280-10, Segment Reporting |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS Management Agreement. The Manager maintains an administrative services agreement with A-III, pursuant to which A-III and its affiliates, including Avenue Capital Group and C-III Capital Partners, will provide a management team along with appropriate support personnel for the Manager to deliver the management services to the company. Under the terms of the Management Agreement, among other things, the Manager will refrain from any action that, in its reasonable judgment made in good faith, is not in compliance with the investment guidelines and would, when applicable, adversely affect the qualification of the company as a REIT. The Management Agreement has an initial five-year term and will be automatically renewed for additional one-year terms thereafter unless terminated either by the company or the Manager in accordance with its terms. For the services to be provided by the Manager, the company is required to pay the Manager the following fees: · an annual base management fee equal to 1.50% of the company’s “Equity” (as defined below), calculated and payable quarterly in arrears in cash; · a property management fee equal to 4.0% of the gross rental receipts received each month at the company’s and its subsidiaries’ properties, calculated and payable monthly in arrears in cash; · an acquisition fee equal to 1.0% of the gross purchase price paid for any property or other investment acquired by the company or any of its subsidiaries, subject to certain conditions and limitations and payable in arrears in cash with respect to all such acquisitions occurring after the date of the Management Agreement; · a disposition fee equal to the lesser of (a) 50% of a market brokerage commission for such disposition and (b) 1.0% of the sale price with respect to any sale or other disposition by the company or any of its subsidiaries of any property or other investment, subject to certain conditions and limitations and payable in arrears in cash with respect to all such dispositions occurring after the date of the Management Agreement with certain exceptions (this disposition fee does not apply to the sale of the four legacy land parcels that the company owned as of January 30, 2015); and · an incentive fee (as described below) based on the company’s “Adjusted Net Income” (as defined below) for the trailing four quarter period in excess of the “Hurdle Amount” (as defined below), calculated and payable in arrears in cash on a rolling quarterly basis. For purposes of calculating the base management fee, “Equity” means (a) the sum of (1) the net proceeds from all issuances of the company’s common stock and OP Units (without double counting) and other equity securities on and after the closing, which will include the common stock issued to A-III in the recapitalization transaction (allocated on a pro rata basis for such issuances during the fiscal quarter of any such issuance) and any issuances of common stock or OP Units in exchange for property investments and other investments by the company, plus (2) the product of (x) the sum of (i) the number of shares of common stock issued and outstanding immediately before the closing of the recapitalization transaction and (ii) the number of shares of common stock for which the number of OP Units issued and outstanding immediately before the date of the closing of the recapitalization transaction (excluding any OP Units held by the company) may be redeemed in accordance with the terms of the agreement of limited partnership of the operating partnership and (y) the purchase price per share paid by A-III for the shares of common stock the company issued to A-III in the recapitalization transaction, as the purchase price per share may be subsequently adjusted as described above, plus (3) the retained earnings of the company and the operating partnership (without double counting) calculated in accordance with GAAP at the end of the most recently completed fiscal quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), minus (b) any amount in cash that the company or the operating partnership has paid to repurchase common stock, OP Units, or other equity securities of the company as of the closing date of the recapitalization transaction. Equity excludes (1) any unrealized gains, losses or non-cash equity compensation expenses that have impacted shareholders’ equity as reported in the financial statements prepared in accordance with GAAP, regardless of whether such items are included in other comprehensive income or loss, or in net income, (2) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above in each case, after discussions between the Manager and the company’s independent directors and approval by a majority of the independent directors and (3) the company’s accumulated deficit as of the closing date of the recapitalization transaction. For purposes of the Management Agreement, “Incentive Fee” means an incentive fee, calculated and payable after each fiscal quarter, in an amount equal to the excess, if any, of (i) the product of (A) 20% and (B) the excess, if any, of (1) the company’s Adjusted Net Income (described below) for such fiscal quarter and the immediately preceding three fiscal quarters over (2) the Hurdle Amount (described below) for such four fiscal quarters, less (ii) the sum of the Incentive Fees already paid or payable for each of the three fiscal quarters preceding that fiscal quarter. Any adjustment to the Incentive Fee calculation proposed by the Manager will be subject to the approval of a majority of the independent directors. For purposes of calculating the Incentive Fee, “Adjusted Net Income” for the preceding four fiscal quarters means the net income calculated in accordance with GAAP after all base management fees but before any acquisition expenses, expensed costs related to equity issuances, incentive fees, depreciation and amortization and any non-cash equity compensation expenses for such period. Adjusted Net Income will be adjusted to exclude one-time events pursuant to changes in GAAP, as well as other non-cash charges after discussion between the Manager and the independent directors and approval by a majority of the independent directors in the case of non-cash charges. Adjusted Net Income includes net realized gains and losses, including realized gains and losses resulting from dispositions of properties and other investments during the applicable measurement period. For purposes of calculating the Incentive Fee, the “Hurdle Amount” is, with respect to any four fiscal quarter period, the product of (i) 7% and (ii) the weighted average gross proceeds per share of all issuances of common stock and OP Units (excluding issuances of common stock and OP Units, or their equivalents, as equity incentive awards), with each such issuance weighted by both the number of shares of common stock and OP Units issued in such issuance and the number of days that such issued shares of common stock and OP Units were outstanding during such four fiscal quarter period. After the 2015 fiscal year, the Incentive Fee will be prorated for partial quarterly periods based on the number of days in such partial period compared to a 90-day quarter. The Manager is also entitled to receive a termination fee from the company under certain circumstances equal to four times the sum of (x) the average annual base management fee, (y) the average annual incentive fee, and (z) the average annual acquisition fees and disposition fees, in each case earned by the Manager in the most recently completed eight calendar quarters immediately preceding the termination. Additionally, the company will be responsible for paying all of its own operating expenses and the Manager will be responsible for paying its own expenses, except that the company will be required to pay or reimburse certain expenses incurred by the Manager and its affiliates in connection with the performance of the Manager’s obligations under the Management Agreement, including: · reasonable out of pocket expenses incurred by personnel of the Manager for travel on the company’s behalf; · the portion of any costs and expenses incurred by the Manager or its affiliates with respect to market information systems and publications, research publications and materials that are allocable to the company in accordance with the expense allocation policies of the Manager or such affiliates; · all insurance costs incurred with respect to insurance policies obtained in connection with the operation of the company’s business, including errors and omissions insurance covering activities of the Manager and its affiliates and any of their employees relating to the performance of the Manager’s duties and obligations under the Management Agreement or of its affiliates under the administrative services agreement between the Manager and A-III, other than insurance premiums incurred by the Manager for employer liability insurance; · expenses relating to any office or office facilities, including disaster backup recovery sites and facilities, maintained expressly for the company and separate from offices of the Manager; · the costs of the wages, salaries, and benefits incurred by the Manager with respect to certain Dedicated Employees (as defined in the Management Agreement) that the Manager elects to provide to the company pursuant to the Management Agreement; provided that (A) if any such Dedicated Employee devotes less than 100% of his or her working time and efforts to matters related to the company and its business, the company will be required to bear only a pro rata portion of the costs of the wages, salaries and benefits the Manager incurs for such Dedicated Employee based on the percentage of such employee’s working time and efforts spent on matters related to the company, (B) the amount of such wages, salaries and benefits paid or reimbursed with respect to the Dedicated Employees shall be subject to the approval of the Compensation Committee of the Board and, if required by the Board, of the Board and (C) during the one-year period following the date of the Management Agreement, the aggregate amount of cash compensation paid to Dedicated Employees of the Manager and its affiliates by the company, or reimbursed by the company to the Manager in respect thereof, will not exceed $500,000; and · any equity-based compensation that the company, upon the approval of the Board or the Compensation Committee of the Board, elects to pay to any director, officer or employee of the company or the Manager or any of the Manager’s affiliates who provides services to the company or any of its subsidiaries. For the three months ended March 31, 2017 and 2016, the company incurred a base management fee of $89,048 and $102,326, respectively, which was classified in management fee, affiliate in the consolidated statements of operations. In addition to the base management fee, the company is required to reimburse certain expenses, related wages, salaries and benefits incurred by the Manager. For the three months ended March 31, 2017 and 2016, the company reimbursed expenses of $118,098 and $167,145, respectively, which was classified in allocated salaries and other compensation, affiliate in the consolidated statements of operations. At March 31, 2017 and December 31, 2016, the unpaid portion of the base management fee and allocated expenses in the amount of $207,146 and $216,991, respectively, was recorded in due to affiliates in the consolidated balance sheets. Transactions with Roberts Properties, Inc. and Roberts Properties Construction (the “Roberts Companies”) and its Affiliates Reimbursement Arrangement for Consulting Services. Additionally, at the request of the company, Roberts Construction performed repairs and maintenance and other consulting services related to the company’s land parcels. Roberts Construction received cost reimbursements of $68 for the three months ended March 31, 2016. There were no cost reimbursements to Robert Construction for the three months ended March 31, 2017. These cost reimbursements were recorded in general and administrative expenses in the consolidated statement of operations. For a period of 180 days after the closing of the recapitalization transaction with A-III, the company had the right to request the reasonable assistance of employees of Roberts Properties, Inc. with respect to transition issues and questions relating to the company’s properties and operations. This 180 day period terminated July 30, 2015. The employees of Roberts Properties, Inc. continued to provide limited services with respect to transition issues from July 30, 2015 through March 31, 2017. Consistent with the expired arrangement for transition services, the cost for these services was reimbursed in an amount equal to an agreed-upon hourly billing rate for each employee multiplied by the number of hours that the employee provided such services to the company. Under Mr. Roberts’ Employment Agreement, which expired December 31, 2016, Mr. Roberts agreed to supervise the disposition of the remaining legacy property. Affiliates of Mr. Roberts provided services to the company in connection with the sale of such property through December 31, 2016. Prior to the expiration of Mr. Roberts’ Employment Agreement, the company reimbursed the Roberts Companies the fees and costs for such services, which is included in the disclosure below and will be considered selling costs for purposes of the true-up arrangement under the Stock Purchase Agreement. Following the expiration of Mr. Roberts’ Employment Agreement on December 31, 2016, the company was no longer obligated to incur fees and costs for such services and accordingly, during the three months ended March 31, 2017 did not incur any such fees or costs. Under these arrangements, the company incurred costs with Roberts Properties of $296 and $16,979 for the three months ended March 31, 2017 and 2016, respectively, which were recorded in general and administrative expenses in the consolidated statements of operations. Roberts Properties also received cost reimbursements in the amount of $23 for the three months ended March 31, 2016 for the company’s operating costs and other related expenses paid by Roberts Properties. There were no cost reimbursements during the three months ended March 31, 2017. At March 31, 2017 and December 31, 2016, the unpaid portion of these costs in the amount of $254 and $85 is recorded in due to affiliates in the consolidated balance sheets. See Note 11, “Subsequent Events.” Sale of Highway 20 . The operating partnership entered into a contract to sell Highway 20 to Roberts Capital Partners, LLC, which is an affiliate of Mr. Roberts, who was a director of the company as of March 31, 2017 but has since resigned from the board as described in Note 11, “Subsequent Events.” The company’s Audit Committee approved the transaction in accordance with the committee’s charter and in compliance with applicable listing rules of the Exchange. The Board also approved the transaction in accordance with its Code of Business Conduct and Ethics. See Note 3, “Real Estate Held for Sale,” for details of the transaction Sublease of Office Space. Extension Agreement Extending Term of Governance and Voting Agreement and Employment Agreement On February 1, 2016, the company, A-III and Mr. Roberts, entered into the First Extension Agreement, effective as of January 28, 2016, extending the terms of the Employment Agreement by and between the company and Mr. Roberts and the Governance and Voting Agreement by and among the company, A-III and Mr. Roberts. On June 15, 2016, the company, A-III and Mr. Roberts, entered into the Second Extension Agreement, effective as of June 15, 2016, further extending the terms of the Employment Agreement and the Governance and Voting Agreement. As a result of these amendments, the parties have agreed to extend the expiration of the term of each of the Employment Agreement and the Governance and Voting Agreement from June 30, 2016, the first extension date, to December 31, 2016. On December 31, 2016, the Employment Agreement expired and Mr. Roberts ceased to be an officer or employee of our company, but remained a member of our Board. On October 10, 2016, the company, A-III and Mr. Roberts, entered into the Extension of Governance and Voting Agreement, effective as of October 10, 2016, further extending the term of the Governance and Voting Agreement, but not the Employment Agreement. As a result of the Extension of Governance and Voting Agreement, the parties have agreed to extend the expiration of the term of the Governance and Voting Agreement from December 31, 2016 to June 30, 2017 and agreed to nominate Mr. Roberts for re-election to the Board. Mr. Roberts was elected by the company’s shareholders at the annual meeting on December 14, 2016. As a result, all of the respective rights and obligations of the parties under, and all other terms, conditions and provisions of, the Governance and Voting Agreement shall continue in full force and effect until June 30, 2017, unless the Governance and Voting Agreement is amended in writing by the parties or is sooner terminated in accordance with the provisions thereof. Effective April 4, 2017, Mr. Roberts resigned from the Board. See Note 11, “Subsequent Events.” |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES The company and the operating partnership may be subject to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes that the final outcome of these matters should not have a material adverse effect on the company’s financial position, results of operations or cash flows. Under various federal, state, and local environmental laws and regulations, the company may be required to investigate and clean up the effects of hazardous or toxic substances at its properties, including properties that have previously been sold. The preliminary environmental assessment of the company’s property has not revealed any environmental liability that the company believes would have a material adverse effect on its business, assets, or results of operations, nor is the company aware of any such environmental liability. See Note 9, “Related Party Transactions,” for details of the company’s management agreement and sublease for office space with related parties. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS Effective April 4, 2017, Mr. Roberts resigned from the Board. As a result of his resignation from the Board, all rights and obligations of Mr. Roberts under the Governance and Voting Agreement, dated January 30, 2015, as further amended and as described in Notes 1, “Business and Organization,” and 9, “Related Party Transactions,” were terminated upon his resignation. |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Quarterly Presentation |
Principles of Consolidation | Principles of Consolidation. The company consolidates the operating partnership, a VIE, in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The company is required to reassess whether it is the primary beneficiary of a VIE for each reporting period. Our maximum exposure to loss is the carrying value of assets and liabilities of our operating partnership which represents all of our assets and liabilities. |
Use of Estimates | Use of Estimates. |
Real Estate Assets Held For Sale. | Real Estate Asset Held For Sale. Real estate asset held for sale is recorded at the lower of the carrying amount or fair value less estimated selling costs. The company reviews the real estate asset held for sale each reporting period to determine that the carrying amount remains recoverable. If the carrying amount of the real estate asset exceeds the fair value, the asset will be written down by the amount the carrying amount exceeds the fair value amount. The fair value is determined by an evaluation of an appraisal, discounted cash flow analysis, sale price and/or other applicable valuation techniques. As of March 31, 2017, the carrying amount of our real estate asset remained recoverable. The company recognizes gains on the sales of assets when the sale has closed, title has passed to the buyer, adequate initial and continuing investment by the buyer is received and other attributes of ownership have been transferred to the buyer. All of these conditions are typically met at or shortly after closing. If any significant continuing obligation exists at the date of sale, the company defers a portion of the gain attributable to the continuing obligation until the continuing obligation has expired or is removed. |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Warrants | Warrants. |
Earnings Per Share | Earnings Per Share. |
Share Based Compensation | Share-Based Compensation. . |
Income Taxes | Income Taxes. In general, a valuation allowance is recorded if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Realization of the company’s deferred tax assets depends upon the company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards. The company records a valuation allowance, based on the expected timing of reversal of existing taxable temporary differences and its history of losses and future expectations of reporting taxable losses, if management does not believe it met the requirements to realize the benefits of certain of its deferred tax assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2014-09”) establishing ASC Topic 606, Revenue from Contracts with Customers Deferral of the Effective Date Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Identifying Performance Obligations and Licensing Narrow-Scope Improvements and Practical Expedients In December 2016, the FASB issued an update (“ASU No. 2016-20”) to ASC 606, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), In February 2016, the FASB issued an update (“ASU 2016-02”) establishing ASC Topic 842, Leases In March 2016, the FASB issued guidance (“ASU 2016-09”), Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In August 2016, the FASB issued an update (“ASU 2016-15”), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Statement of Cash Flows In November 2016, the FASB issued an update (“ASU 2016-18”), Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) In January 2017, the FASB issued an update (“ASU 2017-01”), Clarifying the Definition of a Business to ASC Topic 805, Business Combinations |
REAL ESTATE ASSETS (Tables)
REAL ESTATE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of real estate assets held for sale and the liabilities related to real estate assets held for sale | The table below sets forth the assets and liabilities related to real estate asset held for sale at March 31, 2017 and December 31, 2016: March 31, December 31, Real Estate Asset Held for Sale $ 4,283,385 $ 4,283,385 Liabilities Related to Real Estate Asset Held For Sale $ 4,401 $ 1,498 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of reconciliation of loss available for common shareholders and the weighted average number of shares and units | The following table shows the reconciliation of loss available for common shareholders and the weighted average number of shares used in the company’s basic and diluted earnings per share computations. Three Months Ended March 31, Numerator 2017 2016 Net loss attributable to common shareholders – basic $ (796,479 ) $ (866,134 ) Loss attributable to non-controlling interest (29,841 ) (37,823 ) Net loss – diluted $ (826,320 ) $ (903,957 ) Denominator Weighted average number of common shares – basic 20,430,465 20,207,438 Effect of potential dilutive securities: Weighted average operating partnership units, assuming conversion of all units to common shares 767,959 886,371 Weighted average number of common shares – diluted (a) 21,198,424 21,093,809 (a) Due to the net loss for the three months ended March 31, 2017 and 2016, the incremental shares related to the unvested restricted stock and the warrants were excluded as they were anti-dilutive. Furthermore, the average share price of the company’s common stock was below the exercise price of the warrants for the three months ended March 31, 2017 and 2016. |
BUSINESS AND ORGANIZATION (Deta
BUSINESS AND ORGANIZATION (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Jan. 30, 2015 | Nov. 19, 2014 | |
Business and Organization [Line Items] | ||||
Common Stock Purchased | 20,563,182 | 20,563,182 | ||
Common Stock Purchased in value | $ 205,632 | $ 205,632 | ||
Common Stock Purchased, per share value | $ 0.01 | $ 0.01 | ||
Stock Purchase Agreement [Member] | ||||
Business and Organization [Line Items] | ||||
Common Stock Purchased | 8,450,704 | 8,450,704 | ||
Common Stock Purchased in value | $ 12,000,000 | $ 12,000,000 | ||
Common Stock Purchased, per share value | $ 1.42 | $ 1.42 | ||
Warrant Issued to Purchased Additional Shares (in shares) | 26,760,563 | 26,760,563 | ||
Warrant Issued to Purchased Additional Shares | $ 38,000,000 | $ 38,000,000 | ||
ACRE Realty LP [Member] | ||||
Business and Organization [Line Items] | ||||
Percentage of ownership interest in operating partnership | 96.39% | 96.39% |
REAL ESTATE ASSET HELD FOR SA22
REAL ESTATE ASSET HELD FOR SALE (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Real Estate Assets Held for Sale | ||
Total Real Estate Asset Held for Sale | $ 4,283,385 | $ 4,283,385 |
Liabilities Related to Real Estate Assets Held for Sale | ||
Total Liabilities Related to Real Estate Asset Held for Sale | $ 4,401 | $ 1,498 |
REAL ESTATE ASSET HELD FOR SA23
REAL ESTATE ASSET HELD FOR SALE (Details Narrative) - Highway 20 [Member] | Oct. 07, 2016USD ($) |
Purchase Price | $ 4,725,000 |
Reimbusment related to prepaid sewer taps | $ 1,050,000 |
NON-CONTROLLING INTEREST - OP24
NON-CONTROLLING INTEREST - OPERATING PARTNERSHIP (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Noncontrolling Interest [Abstract] | |||
Beginning balance | $ 735,116 | ||
Number of common shares issued for acquisition of each common unit | 1.647 | ||
Weighted average percentage of units outstanding held by noncontrolling interest | 3.61% | 4.19% | |
Units outstanding (in shares) | 466,259 | 466,259 |
SHAREHOLDERS' EQUITY (Details N
SHAREHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Jan. 30, 2015 | Nov. 19, 2014 | |
Common Stock Purchased | 20,563,182 | 20,563,182 | ||
Common Stock Purchased in value | $ 205,632 | $ 205,632 | ||
Common Stock Purchased, per share value | $ 0.01 | $ 0.01 | ||
ACRE Realty LP [Member] | ||||
Number of shares redeemed for operating partnership units | 87,366 | |||
Number of shares exchanged for operating partnership units | 143,897 | |||
Fair value of warrants issued | $ 4,910,000 | |||
Stock Purchase Agreement [Member] | ||||
Common Stock Purchased | 8,450,704 | 8,450,704 | ||
Common Stock Purchased in value | $ 12,000,000 | $ 12,000,000 | ||
Common Stock Purchased, per share value | $ 1.42 | $ 1.42 | ||
Warrant Issued to Purchased Additional Shares (in shares) | 26,760,563 | 26,760,563 | ||
Warrant Issued to Purchased Additional Shares | $ 38,000,000 | $ 38,000,000 |
SHAREHOLDERS' EQUITY (Details26
SHAREHOLDERS' EQUITY (Details Narrative 2) - USD ($) | Oct. 12, 2017 | Oct. 12, 2016 | Jan. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Treasury Shares [Member] | |||||
Weighted Grant Date Fair Value Per Share | |||||
Number of shares authorized to repurchase | 600,000 | ||||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 540,362 | ||||
Restricted Stock Plan [Member] | Restricted Stock [Member] | Officer [Member] | |||||
Number of Unvested Shares of Restricted Stock | |||||
Granted (in shares) | 180,000 | ||||
Vested (in shares) | 60,000 | ||||
Restricted Stock Plan [Member] | Restricted Stock [Member] | Roberts Properties Inc [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 10,390 | $ 78,932 | |||
Vesting period | 6 months 11 days | ||||
Number of Unvested Shares of Restricted Stock | |||||
Balance at the beginning of the period (in shares) | 260,000 | ||||
Restricted Stock Plan [Member] | Restricted Stock [Member] | Director [Member] | |||||
Number of Unvested Shares of Restricted Stock | |||||
Granted (in shares) | 60,000 | 60,000 | 60,000 | ||
Restricted Stock Plan [Member] | Restricted Stock [Member] | Independent Director [Member] | |||||
Number of Unvested Shares of Restricted Stock | |||||
Granted (in shares) | 20,000 | ||||
Vested (in shares) | 20,000 | ||||
Restricted Stock Plan [Member] | Restricted Stock [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for grant under the plan | 654,000 | ||||
Shares granted to one individual as a percentage of aggregate number of shares granted | 20.00% |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Earnings Per Share | |||
Net loss income attributable to common shareholders - basic | $ (796,479) | $ (866,134) | |
Loss income attributable to non-controlling interest | (29,841) | (37,823) | |
Net loss - diluted | $ (826,320) | $ (903,957) | |
Weighted average number of shares - basic | 20,430,465 | 20,207,438 | |
Weighted average operating partnership units, assuming conversion of all units to common shares (in shares) | [1] | 767,959 | 886,371 |
Weighted average common shares - diluted | 21,198,424 | 21,093,809 | |
[1] | Due to the net loss for the three months ended March 31, 2017 and 2016, the incremental shares related to the unvested restricted stock and the warrants were excluded as they were anti-dilutive. Furthermore, the average share price of the company's common stock was below the exercise price of the warrants for the three months ended March 31, 2017 and 2016. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | Feb. 19, 2014USD ($)a | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) |
Management fees | $ 89,048 | $ 102,326 | ||
Expenses related to Salaries and Wages | 118,098 | 167,145 | ||
Repairs and Maintenance and Other Consulting services | 3,211 | 3,505 | ||
Due to affiliates | 208,063 | $ 217,076 | ||
Robert Capital Partners LLC [Member] | ||||
Rental Area of property (in square feet) | a | 1,817 | |||
Sub lease tenure (in years) | 3 years | |||
Extension Tenure (in years) | 1 year | |||
Security Deposit | $ 20,577 | |||
Lease Rental | 8,194 | 7,898 | ||
Manager [Member] | ||||
Management fees | 89,048 | 102,326 | ||
Expenses related to Salaries and Wages | 118,098 | 167,145 | ||
Roberts Properties Inc and Roberts Properties Construction Inc [Member] | ||||
Repairs and Maintenance and Other Consulting services | 68 | |||
General and Administrative Expenses | 296 | 16,979 | ||
Cost Reimbusment | $ 23 | |||
Roberts Properties Inc [Member] | ||||
Due to affiliates | $ 254 | $ 85 |