Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 18, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | GLOBAL HEALTHCARE REIT, INC. | |
Entity Central Index Key | 0000727346 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,441,040 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Property and Equipment, Net | $ 36,782,009 | $ 35,885,145 |
Cash and Cash Equivalents | 447,945 | 1,100,218 |
Restricted Cash | 351,238 | 206,989 |
Accounts Receivable, Net | 759,900 | 166,696 |
Investments in Debt Securities | 19,861 | 162,106 |
Notes Receivable | 1,000,000 | 106,334 |
Prepaid Expenses and Other | 901,558 | 668,399 |
Total Assets | 40,262,511 | 38,295,887 |
Liabilities | ||
Debt, Net of unamortized discount of $526,132 and $507,829, respectively | 37,193,521 | 35,721,341 |
Debt - Related Parties, Net of unamortized discount of $0 and $0, respectively | 875,000 | 875,000 |
Accounts Payable and Accrued Liabilities | 498,490 | 306,437 |
Accounts Payable - Related Parties | 48,280 | 118,230 |
Dividends Payable | 7,500 | 7,500 |
Derivative Liability | 2,785 | |
Lease Security Deposit | 250,600 | 280,000 |
Total Liabilities | 38,873,391 | 37,311,293 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common Stock - $0.05 Par Value; 50,000,000 Shares Authorized, 27,441,040 and 26,804,677 Shares Issued and Outstanding at September 30, 2019 and December 31, 2018, Respectively | 1,372,052 | 1,340,234 |
Additional Paid-In Capital | 10,359,464 | 10,137,148 |
Accumulated Deficit | (10,912,983) | (11,070,606) |
Total Global Healthcare REIT, Inc. Stockholders' Equity | 1,594,533 | 1,182,776 |
Noncontrolling Interests | (205,413) | (198,182) |
Total Equity | 1,389,120 | 984,594 |
Total Liabilities and Equity | 40,262,511 | 38,295,887 |
Series A - No Dividends, Non-voting [Member] | ||
Stockholders' Equity | ||
Preferred Stock, value | 401,000 | 401,000 |
Series D - 8% Cumulative, Convertible, Non-voting [Member] | ||
Stockholders' Equity | ||
Preferred Stock, value | $ 375,000 | $ 375,000 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Unamortized debt discount | $ 526,132 | $ 507,829 |
Debt discount of related parties | $ 0 | $ 0 |
Common stock, par value | $ 0.05 | $ 0.05 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 27,441,040 | 26,804,677 |
Common stock, shares outstanding | 27,441,040 | 26,804,677 |
Series A - No Dividends, Non-voting [Member] | ||
Preferred stock, par value | $ 2 | $ 2 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 200,500 | 200,500 |
Preferred stock, shares outstanding | 200,500 | 200,500 |
Series D - 8% Cumulative, Convertible, Non-voting [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 375,000 | 375,000 |
Preferred stock, shares outstanding | 375,000 | 375,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Total Revenue | $ 1,989,103 | $ 885,013 | $ 4,878,606 | $ 2,599,224 |
Expenses | ||||
General and Administrative | 320,195 | 187,035 | 891,031 | 687,649 |
Property Taxes, Insurance and Other Operating | 703,816 | 218,138 | 1,596,835 | 446,240 |
Acquisition Costs | 6,771 | 6,771 | ||
Depreciation | 323,983 | 322,986 | 969,834 | 941,569 |
Total Expenses | 1,354,765 | 728,159 | 3,464,471 | 2,075,458 |
Income from Operations | 634,338 | 156,854 | 1,414,135 | 523,766 |
Other (Income) Expense | ||||
Gain on Warrant Liability | (27) | (15,974) | (2,785) | (92,586) |
Loss on Extinguishment of Debt | 57,694 | |||
Gain on Settlement of Other Liabilities | 354 | (98,521) | ||
Gain on Sale of Investments | (1,069) | |||
Gain on Proceeds from Insurance Claim | (53,754) | (324,018) | ||
Interest Income | (19,245) | (26,248) | ||
Interest Expense | 524,503 | 590,514 | 1,595,363 | 1,783,296 |
Total Other (Income) Expense | 451,477 | 574,894 | 1,241,243 | 1,649,883 |
Net Income (Loss) | 182,861 | (418,040) | 172,892 | (1,126,117) |
Net (Income) Loss Attributable to Noncontrolling Interests | 1,221 | (948) | 7,231 | 17,965 |
Net Income (Loss) Attributable to Global Healthcare REIT, Inc. | 184,082 | (418,988) | 180,123 | (1,108,152) |
Series D Preferred Dividends | (7,500) | (7,500) | (22,500) | (22,500) |
Net Income (Loss) Attributable to Common Stockholders | $ 176,582 | $ (426,488) | $ 157,623 | $ (1,130,652) |
Net Income (Loss) per Share Attributable to Common Stockholders: | ||||
Basic | $ 0.01 | $ (0.02) | $ 0.01 | $ (0.04) |
Diluted | $ 0.01 | $ (0.02) | $ 0.01 | $ (0.04) |
Weighted Average Common Shares Outstanding: | ||||
Basic | 27,438,076 | 27,078,034 | 27,228,919 | 26,900,729 |
Diluted | 27,438,076 | 27,078,034 | 27,228,919 | 26,900,729 |
Rental Revenue [Member] | ||||
Revenue | ||||
Total Revenue | $ 963,645 | $ 885,013 | $ 2,789,220 | $ 2,599,224 |
Healthcare Revenue [Member] | ||||
Revenue | ||||
Total Revenue | $ 1,025,458 | $ 2,089,386 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity (Unaudited) - USD ($) | Series A Preferred Stock [Member] | Series D Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Non-controlling Interests [Member] | Global Healthcare REIT, Inc. Stockholders' Equity [Member] | Total |
Balance at Dec. 31, 2017 | $ 401,000 | $ 375,000 | $ 1,315,016 | $ 9,422,924 | $ (9,048,443) | $ (183,339) | $ 2,465,497 | $ 2,282,158 |
Balance, Shares at Dec. 31, 2017 | 200,500 | 375,000 | 26,300,317 | |||||
Share Based Compensation - Restricted Stock Awards | $ 28,125 | 16,875 | 45,000 | 45,000 | ||||
Share Based Compensation - Restricted Stock Awards, shares | 562,500 | |||||||
Series D Preferred Dividends | (7,500) | (7,500) | (7,500) | |||||
Loss on Modification of Warrants Triggering Extinguishment of Debt | 29,900 | 29,900 | 29,900 | |||||
Net income (Loss) | (204,333) | (7,901) | (204,333) | (212,234) | ||||
Balance at Mar. 31, 2018 | $ 401,000 | $ 375,000 | $ 1,343,141 | 9,469,699 | (9,260,276) | (191,240) | 2,328,564 | 2,137,324 |
Balance, Shares at Mar. 31, 2018 | 200,500 | 375,000 | 26,862,817 | |||||
Balance at Dec. 31, 2017 | $ 401,000 | $ 375,000 | $ 1,315,016 | 9,422,924 | (9,048,443) | (183,339) | 2,465,497 | 2,282,158 |
Balance, Shares at Dec. 31, 2017 | 200,500 | 375,000 | 26,300,317 | |||||
Net income (Loss) | (1,126,117) | |||||||
Balance at Sep. 30, 2018 | $ 200,500 | $ 375,000 | $ 1,363,141 | 9,725,745 | (10,179,095) | (201,304) | 1,685,791 | 1,484,487 |
Balance, Shares at Sep. 30, 2018 | 401,000 | 375,000 | 27,262,817 | |||||
Balance at Dec. 31, 2017 | $ 401,000 | $ 375,000 | $ 1,315,016 | 9,422,924 | (9,048,443) | (183,339) | 2,465,497 | 2,282,158 |
Balance, Shares at Dec. 31, 2017 | 200,500 | 375,000 | 26,300,317 | |||||
Net income (Loss) | (2,007,006) | |||||||
Balance at Dec. 31, 2018 | $ 401,000 | $ 375,000 | $ 1,340,234 | 10,137,148 | (11,070,606) | (198,182) | 1,182,776 | 984,594 |
Balance, Shares at Dec. 31, 2018 | 200,500 | 375,000 | 26,804,677 | |||||
Balance at Mar. 31, 2018 | $ 401,000 | $ 375,000 | $ 1,343,141 | 9,469,699 | (9,260,276) | (191,240) | 2,328,564 | 2,137,324 |
Balance, Shares at Mar. 31, 2018 | 200,500 | 375,000 | 26,862,817 | |||||
Share Based Compensation - Restricted Stock Awards | $ 7,500 | 104,700 | 112,200 | 112,200 | ||||
Share Based Compensation - Restricted Stock Awards, shares | 150,000 | |||||||
Series D Preferred Dividends | (7,500) | (7,500) | (7,500) | |||||
Net income (Loss) | (484,831) | (11,012) | (484,831) | (495,843) | ||||
Balance at Jun. 30, 2018 | $ 200,500 | $ 375,000 | $ 1,350,641 | 9,574,399 | (9,752,607) | (202,252) | 1,948,433 | 1,746,181 |
Balance, Shares at Jun. 30, 2018 | 401,000 | 375,000 | 27,012,817 | |||||
Share Based Compensation - Restricted Stock Awards | $ 12,500 | 151,346 | 163,846 | 163,846 | ||||
Share Based Compensation - Restricted Stock Awards, shares | 250,000 | |||||||
Series D Preferred Dividends | (7,500) | (7,500) | (7,500) | |||||
Net income (Loss) | (418,988) | 948 | (418,988) | (418,040) | ||||
Balance at Sep. 30, 2018 | $ 200,500 | $ 375,000 | $ 1,363,141 | 9,725,745 | (10,179,095) | (201,304) | 1,685,791 | 1,484,487 |
Balance, Shares at Sep. 30, 2018 | 401,000 | 375,000 | 27,262,817 | |||||
Balance at Dec. 31, 2018 | $ 401,000 | $ 375,000 | $ 1,340,234 | 10,137,148 | (11,070,606) | (198,182) | 1,182,776 | 984,594 |
Balance, Shares at Dec. 31, 2018 | 200,500 | 375,000 | 26,804,677 | |||||
Series D Preferred Dividends | (7,500) | (7,500) | (7,500) | |||||
Share Based Compensation - Restricted Stock Awards and Stock Options | $ 13,636 | 36,893 | 50,529 | 50,529 | ||||
Share Based Compensation - Restricted Stock Awards and Stock Options, shares | 272,727 | |||||||
Net income (Loss) | 164,296 | (4,141) | 164,296 | 160,155 | ||||
Balance at Mar. 31, 2019 | $ 401,000 | $ 375,000 | $ 1,353,870 | 10,174,041 | (10,913,810) | (202,323) | 1,390,101 | 1,187,778 |
Balance, Shares at Mar. 31, 2019 | 200,500 | 375,000 | 27,077,404 | |||||
Balance at Dec. 31, 2018 | $ 401,000 | $ 375,000 | $ 1,340,234 | 10,137,148 | (11,070,606) | (198,182) | 1,182,776 | 984,594 |
Balance, Shares at Dec. 31, 2018 | 200,500 | 375,000 | 26,804,677 | |||||
Net income (Loss) | 172,892 | |||||||
Balance at Sep. 30, 2019 | $ 401,000 | $ 375,000 | $ 1,372,052 | 10,359,464 | (10,912,983) | (205,413) | 1,594,533 | 1,389,120 |
Balance, Shares at Sep. 30, 2019 | 200,500 | 375,000 | 27,441,040 | |||||
Balance at Mar. 31, 2019 | $ 401,000 | $ 375,000 | $ 1,353,870 | 10,174,041 | (10,913,810) | (202,323) | 1,390,101 | 1,187,778 |
Balance, Shares at Mar. 31, 2019 | 200,500 | 375,000 | 27,077,404 | |||||
Series D Preferred Dividends | (7,500) | (7,500) | (7,500) | |||||
Share Based Compensation - Restricted Stock Awards and Stock Options | $ 13,636 | 110,813 | 124,450 | 124,450 | ||||
Share Based Compensation - Restricted Stock Awards and Stock Options, shares | 272,727 | |||||||
Net income (Loss) | (168,255) | (1,869) | (168,255) | (170,124) | ||||
Balance at Jun. 30, 2019 | $ 401,000 | $ 375,000 | $ 1,367,507 | 10,284,854 | (11,089,565) | (204,192) | 1,338,796 | 1,134,604 |
Balance, Shares at Jun. 30, 2019 | 200,500 | 375,000 | 27,350,131 | |||||
Series D Preferred Dividends | (7,500) | (7,500) | (7,500) | |||||
Share Based Compensation - Restricted Stock Awards and Stock Options | $ 4,545 | 74,610 | 79,155 | 79,155 | ||||
Share Based Compensation - Restricted Stock Awards and Stock Options, shares | 90,909 | |||||||
Net income (Loss) | 184,082 | (1,221) | 184,082 | 182,861 | ||||
Balance at Sep. 30, 2019 | $ 401,000 | $ 375,000 | $ 1,372,052 | $ 10,359,464 | $ (10,912,983) | $ (205,413) | $ 1,594,533 | $ 1,389,120 |
Balance, Shares at Sep. 30, 2019 | 200,500 | 375,000 | 27,441,040 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities: | ||||||||
Net income (loss) | $ 182,861 | $ 160,155 | $ (418,040) | $ (212,234) | $ 172,892 | $ (1,126,117) | $ (2,007,006) | $ (3,001,618) |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | ||||||||
Depreciation | 323,983 | 322,986 | 969,834 | 941,569 | ||||
Amortization and Accretion | 103,572 | 115,462 | ||||||
Bad Debt Expense | 56,000 | |||||||
Increase in Deferred Rent Receivable | (61,949) | (68,552) | ||||||
Stock Based Compensation | 254,134 | 321,046 | ||||||
Gain on Sale of Investments | 1,069 | |||||||
Loss on Extinguishment of Debt | (57,694) | |||||||
Gain on Settlement of Debt | (98,521) | |||||||
Gain on Derivative Liability | (2,785) | (92,586) | ||||||
Changes in Operating Assets and Liabilities: | ||||||||
Accounts & Rents Receivable | (593,204) | (60,713) | ||||||
Lease Security Deposit | (29,400) | |||||||
Prepaid Expenses | (171,210) | (25,512) | ||||||
Accounts Payable and Accrued Liabilities | 114,296 | 384,273 | ||||||
Cash Provided by Operating Activities | 755,111 | 404,043 | ||||||
Cash Flows From Investing Activities: | ||||||||
Issuance of Note Receivable | (893,666) | |||||||
Purchase of Investments in Debt Securities | (7,727) | (64,426) | ||||||
Proceeds from Sale of Investments in Debt Securities | 151,041 | |||||||
Capital Expenditures on Property and Equipment Additions | (1,866,698) | (565,036) | ||||||
Cash Used in Investing Activities | (2,617,050) | (629,462) | ||||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from Issuance of Debt, Outside Parties | 1,800,187 | 493,533 | ||||||
Payments on Debt, Outside Parties | (414,887) | (373,868) | ||||||
Cash Overdraft | 6,529 | |||||||
Deferred Loan Costs Paid | (8,885) | (31,875) | ||||||
Dividends Paid on Preferred Stock | (22,500) | (22,500) | ||||||
Cash Provided by Financing Activities | 1,353,915 | 71,819 | ||||||
Net Increase (Decrease) in Cash | (508,024) | (153,600) | ||||||
Cash and Cash Equivalent and Restricted Cash at Beginning of the Year | $ 1,307,207 | $ 972,148 | 1,307,207 | 972,148 | 972,148 | |||
Cash and Cash Equivalent and Restricted Cash at End of the Year | 799,183 | 818,548 | 799,183 | 818,548 | 1,307,207 | $ 972,148 | ||
Supplemental Disclosure of Cash Flow Information | ||||||||
Cash Paid for Interest | 1,613,109 | 1,446,855 | ||||||
Cash Paid for Income Taxes | ||||||||
Cash and Cash Equivalent | 447,945 | 447,945 | 1,100,218 | |||||
Restricted Cash | 351,238 | 818,548 | 351,238 | 818,548 | $ 206,989 | |||
Total Cash and Cash Equivalent and Restricted Cash | $ 799,183 | $ 818,548 | 799,183 | 818,548 | ||||
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||||||||
Dividends declared on Series D Preferred Stock | 22,500 | 22,500 | ||||||
Accrued Interest Paid by Proceeds from Debt | 22,800 | |||||||
Offers from Line of Credit to Settle Bonds Payable | $ 509,479 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of the Business Global Healthcare REIT, Inc. (the “Company” or “Global”) was organized with the intent of operating as a real estate investment trust (REIT) for the purpose of investing in real estate and other assets related to the healthcare industry. The Company’s focus has partially shifted toward owning and operating its real estate assets. Prior to the Company changing its name to Global Healthcare REIT, Inc. on September 30, 2013, the Company was known as Global Casinos, Inc. Global Casinos, Inc. operated two gaming casinos which were split-off and sold on September 30, 2013. Simultaneous with the split-off and sale of the gaming operations, the Company acquired West Paces Ferry Healthcare REIT, Inc. (WPF) in a transaction accounted for as a reverse acquisition whereby WPF was deemed to be the accounting acquirer. The Company acquires, develops, leases, manages and disposes of healthcare real estate, and provides financing to healthcare providers. As of September 30, 2019, the Company owned eleven healthcare properties which are primarily leased or managed by third-party operators under triple-net operating terms. However, the Company operates the facilities internally when advantageous and expedient. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and in conjunction with the rules and regulations of the Securities Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary to make the consolidated financial statements not misleading have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the entire year. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission. Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements. In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02, “Leases: Topic 842 (ASU 2016-02)”, to supersede nearly all existing lease guidance under GAAP. The guidance would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. ASU 2016-02 is effective for the Company as of January 1, 2019 and adoption requires using a modified retrospective approach with the option to elect certain practical expedients. The Company has determined that it does not have any leases that fall under the guidance of ASU 2016-02 and it had no impact on its consolidated financial statements. Recently Issued Accounting Pronouncements The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2019. Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net loss. Reclassification adjustments are amounts reclassified to Notes Receivable that were presented in Prepaid Expenses and Other in previous period. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 2. GOING CONCERN The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. For the nine months ended September 30, 2019, the Company had net income of $172,892 and reported net cash provided by operations of $755,111. During the years ended December 31, 2018 and December 31, 2017, the Company incurred net losses of $2,007,006 and $3,001,618, respectively, and as of September 30, 2019 had an accumulated deficit of $10,912,983. These circumstances raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to generate sufficient revenues and cash flows to operate profitably and meet contractual obligations or raise additional capital through debt financing or through sales of common stock. Failure to achieve the necessary levels of profitability and cash flows or obtain additional funding would be detrimental to the Company. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. PROPERTY AND EQUIPMENT The gross carrying amount and accumulated depreciation of the Company’s property and equipment as of September 30, 2019 and December 31, 2018 are as follows: September 30, 2019 December 31, 2018 Land $ 1,597,500 $ 1,597,500 Land Improvements 242,000 200,000 Buildings and Improvements 36,153,900 36,076,632 Furniture, Fixtures and Equipment 1,511,826 1,469,976 Construction in Progress 5,621,767 3,916,187 45,126,993 43,260,295 Less Accumulated Depreciation (6,784,984 ) (5,815,150 ) Less Impairment (1,560,000 ) (1,560,000 ) $ 36,782,009 $ 35,885,145 For the Nine Months Ended September 30, 2019 2018 Depreciation Expense $ 969,834 $ 941,569 Cash Paid for Capital Expenditures $ 1,866,698 $ 565,036 |
Investments in Debt Securities
Investments in Debt Securities | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Debt Securities | 4. INVESTMENTS IN DEBT SECURITIES At September 30, 2019 and December 31, 2018, the Company held investments in marketable securities that were classified as held-to-maturity and carried at amortized costs. Held-to-maturity securities consisted of the following: September 30, 2019 December 31, 2018 State and Municipal Bonds $ 19,861 $ 162,106 Contractual maturity of held-to-maturity securities at September 30, 2019 is September 1, 2043 and September 1, 2022, and total value of securities at their respective maturity dates is $60,000. Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties. The Company received proceeds of $151,041 from the sale of debt securities and recognized a gain on sale of investments of $1,069 during the nine months ended September 30, 2019 and invested $7,727 in purchase of investments in debt securities. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Notes Receivable | 5. NOTES RECEIVABLE Note Receivable: Accounts Receivable Line of Credit (“ARLOC”) – Infinity Health Interests, LLC As part of the transition to a new tenant at High Street Nursing facility, the Company committed a $250,000 Accounts Receivable Line of Credit (“ARLOC”) to an affiliate of Infinity Health Interests, LLC (“Infinity”) in order to ensure that no disruptions in management of the facility occur. The ARLOC is secured by a first lien on all the receivables of the facility as well as a personal guarantee from the two principals of Infinity. The Company expects facility level operational performance to improve under Infinity’s stewardship and commitment to the surrounding community. As of September 30, 2019 and December 31, 2018 the Company had lent $250,000 and $106,334, respectively, to Infinity under this agreement. The interest rate is 10% payable at the maturity date on August 31, 2019. The maturity date is under negotiation for further extension, currently the note is technically in default at the default interest rate of 15% annually. Note Receivable: Commercial Promissory Note – Receivership Estate of Healthcare Management of Oklahoma, LLC The Company purchased a $750,000 note from F&M Bank on August 6, 2019, as part of a Receivership certificate in our Southern Hills SNF, for $694,609 paid to F&M bank and $55,391 paid to the Receiver. The maturity date of the note is February 07, 2018, and carries an interest rate of 6.75% as of September 30, 2019 (prime rate +2%). The note is past its maturity date and is in default. This purchase was made to facilitate the termination of the Receivership and transfer of the HMO assets and operations, subject to the approval of the Oklahoma Department of Health, to Southern Hills Rehab Center, LLC, a wholly-owned subsidiary of the Company. |
Debt and Debt-Related Parties
Debt and Debt-Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Debt-Related Parties | 6. DEBT AND DEBT-RELATED PARTIES The following is a summary of the Company’s debt outstanding as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Senior Secured Promissory Notes $ 1,485,000 $ 1,485,000 Senior Unsecured Promissory Notes 300,000 300,000 Senior Secured Promissory Notes - Related Parties 875,000 875,000 Fixed-Rate Mortgage Loans 22,551,595 21,049,981 Variable-Rate Mortgage Loans 4,618,006 4,618,006 Line of Credit 7,229,052 7,240,183 Other Debt 1,536,000 1,536,000 38,594,653 37,104,170 Premium, Unamortized Discount and Debt Issuance Costs (526,132 ) (507,829 ) $ 38,068,521 $ 36,596,341 As presented in the Consolidated Balance Sheets: Debt, Net $ 37,193,521 $ 35,721,341 Debt - Related Parties, Net 875,000 875,000 $ 38,068,521 $ 36,596,341 Corporate Senior and Senior Secured Promissory Notes From November through December 2016, the Company undertook a private offering of its 10% Senior Secured Promissory Notes. The notes are secured by all assets of the Company not serving as collateral for other notes. As of December 31, 2016, $600,000 of the notes had been issued of which $450,000 were issued to the directors of the Company or entities or persons affiliated with these directors. The notes initially bore interest at a rate of 10% payable monthly with principal and unpaid interest due at maturity, originally January 13, 2018. The notes were issued with warrants to purchase 600,000 shares of common stock at an exercise price of $0.75 per share. The warrants have a cashless exercise provision. In 2017, an additional $600,000 in notes were sold and issued, of which $425,000 were to related parties. At December 31, 2017, there were outstanding an aggregate of $1.2 million in senior secured notes. The maturity date of all the senior secured notes was extended to December 31, 2018 prior to their original maturity date. For every $1.00 in principal amount of note, investors got one warrant exercisable for one year to purchase an additional share of common stock at an exercise price of $.75 per share. The warrants have a cashless exercise provision and were valued using the Black-Scholes pricing model. The maturity date of the 1.2 million warrants issued along with the notes was extended to December 31, 2018. In October 2017, the Company sold an aggregate of $300,000 in senior unsecured notes. The notes bear interest at the rate of 10% per annum and are due in 2020. For every $1.00 in principal amount of note, investors got one warrant exercisable for one year to purchase an additional share of common stock at an exercise price of $.75 per share. The warrants have a cashless exercise provision. In October 2018, the Company, through a registered broker-dealer acting as Placement Agent, undertook a private offering to accredited investors of Units, each Unit consisting of an 11% Senior Secured Note, due in three years, (October 31, 2021) and one Warrant for each $1.00 in principal amount of Note exercisable for three years to purchase a share of Common Stock at an exercise price of $0.50 per share. The Company and the Placement Agent completed the Offering in December 2018 having sold an aggregate of $1,160,000 in Notes and Warrants. The net proceeds to the Company were $1,092,400, after deducting Placement Agent fees of $67,600, and issued 111,000 warrants to the Placement Agent with $21,453 of the fair value of the warrants recorded as loan cost. The Offering also included the exchange of an aggregate of $1.075 million in outstanding senior secured 10% Notes and Warrants for Units in the Offering. No proceeds were realized from the exchange and no fees were paid to the Placement Agent for such exchanges. During 2018, among the $1.075 million senior secured notes that were extended to October 31, 2021 by virtue of the exchange, $875,000 were to related parties. As of September 30, 2019 the Company had not renewed or repaid $125,000 in 10% notes with a maturity date of December 31, 2018, and those notes were technically in default. The value of the warrants issued to the note holders was calculated using the Black-Scholes pricing model using the following significant assumptions: December 31, 2018 Volatility 122% - 123 % Risk-free Interest Rate 2.76% - 2.94 % Exercise Price $ 0.50 Fair Value of Common Stock $ 0.30 - $0.35 Expected Life 2.9 – 3.0 years During the year ended December 31, 2017, the Company issued 900,000 warrants in connection with its note offerings with a value on the issue date estimated to be $121,435, bifurcated from the value of the note. As of December 31, 2017, the unamortized balance of discount on notes was $77,105. During the year ended December 31, 2018, the Company issued 1,160,000 warrants with a value on the issue date estimated to be $207,025 bifurcated from the value of the note and exchanged 1,075,000 existing warrants for new ones in connection with its note offerings. As a result of the modification the Company recognized a loss on extinguishment of $248,346. As of September 30, 2019, the unamortized balance of discount on notes was $129,580. Amortization expense was $54,433 and $57,856 for the nine months ended September 30, 2019 and 2018, respectively. Mortgage Loans and Lines of Credit Secured by Real Estate Mortgage loans and other debts such as line of credit here are collateralized by all assets of each nursing home property and an assignment of its rents. Collateral for certain mortgage loans includes the personal guarantee of Christopher Brogdon. Mortgage loans for the periods presented consisted of the following: Face Principal Outstanding at Stated Interest Maturity Property Amount September 30, 2019 December 31, 2018 Rate Date Southern Hills Retirement Center Line of Credit (1)(2) $ 7,229,052 $ 7,229,052 $ 7,119,743 5.75% Fixed October 28, 2019 Eastman Nursing Home (2,3) 3,570,000 3,481,745 3,561,461 5.50% Fixed October 26, 2021 Goodwill Nursing Home (2) 5,005,000 4,308,416 4,390,082 5.50% Fixed March 19, 2020 Warrenton Nursing Home (4) 3,768,600 3,757,190 2,287,323 3.73% Fixed July 1, 2049 Edward Redeemer Health & Rehab 2,303,815 2,081,053 2,138,128 5.50% Fixed January 16, 2020 Glen Eagle Health & Rehab (5) 2,761,250 3,103,926 2,761,250 5.50% Fixed May 25, 2021 Glen Eagle Health and Rehab Line of Credit (2)(5) 400,000 - 120,440 6.50% Fixed September 30, 2019 Providence of Sparta Nursing Home (6) 3,039,300 2,932,665 2,975,337 3.88% Fixed November 1, 2047 Meadowview Healthcare Center (7) 3,000,000 2,886,600 2,936,400 6.00% Fixed October 30, 2022 GL Nursing Home (8) 5,000,000 4,618,006 4,618,006 Prime Plus 1.50%/ 5.75% Floor August 3, 2037 $ 34,398,653 $ 32,908,170 (1) On October 31, 2017, the Company, through its wholly-owned subsidiaries Southern Tulsa, LLC and Southern Tulsa TLC, LLC, as Co-Borrowers, consummated a new Line of Credit with Southern Bank (formerly First Commercial Bank) pursuant to a Promissory Note in the principal amount of $7,229,052 (the “Line of Credit”). Under the Line of Credit, the Company refinanced the prior mortgage on its skilled nursing facility in Tulsa for $1,546,801, funded open market and tender offer purchases of its Industrial Revenue Bonds covering the ALF and ILF as well as provided working capital for improvements to the ALF and ILF. As of December 31, 2018, a total of $7,119,743 was drawn under the Line of Credit, and as of September 30, 2019, a total of $7,229,052 was drawn under the Line of Credit. The interest rate on the Line of Credit increased from 5.25% to 5.75% effective April 28, 2019 and will remain at that rate until the Line of Credit converts to an amortizing loan. Monthly payments of interest began on November 30, 2017 and continue until the Promissory Note is paid in full on the Maturity Date. The Maturity Date was been extended multiple times; initially from April 30, 2018 to October 30, 2018. The Maturity Date was further extended in three month increments to October 28, 2019. The Credit Note is secured by a First Mortgage and Assignment of Rents on Real Property for Southern Hills Rehabilitation Center, a Junior Lien and Assignment of Rents on Real Property for it Southern Hills Independent Living Facility location and a Junior Lien on Real Property for its Southern Hills Assisted Living Facility location. With the retirement of the Tulsa Industrial Authority Bonds effective November 1, 2018, Southern Bank (formerly First Commercial Bank) moved into a senior position on the ALF and ILF properties. (2) Mortgage loans are non-recourse to the Company except for (i) the senior loan held by ServisFirst Bank on Meadowview (Ohio), (ii) the loans held by Colony Bank on Eastman and Glen Eagle, and (iii) the Southern Hills line of credit and Goodwill loan owed to Southern Bank (formerly First Commercial Bank). (3) The loan at Eastman was renewed on November 26, 2018 with the maturity extended to October 26, 2021. (4) The original loan was extended on January 19, 2019 to January 20, 2020 and the Company capitalized $8,885 in loan costs paid. The loan was subsequently refinanced in June 2019. The Company has incurred $156,671 in unamortized loan costs to refinance this debt with another lender. The refinance was treated as debt extinguishment, with a new maturity date of July 1, 2049 and an interest rate of 3.73%. For the nine months ended September 30, 2019, amortization expense related to loan costs of the prior loan totaled $8,885 and amortization expense related to loan costs for the new loan, which began in July 2019, totaled $870. (5) Amortization expense related to loan costs of this loan totaled $656 for the nine months ended September 30, 2019. Amortizing payments began in January 2019. In June 2018 the Company converted the original note to a fixed note which qualified as debt extinguishment, unamortized debt discount on the original note was expensed as a loss on extinguishment of $27,794. In April 2018, the Company capitalized $22,800 in fees and interest and added it to principal. The Company is subject to financial covenants and customary affirmative and negative covenants, including compliance with the covenants of all other notes and bonds. As of September 30, 2019, the Company was not in compliance with some unrelated notes and bonds, which is considered to be a technical Event of Default as defined in the note agreement, but the Company believes that it is in good standing with the Lender. In October 2018 the Lender extended the Company a line of credit with a limit of $200,365 to provide working capital to scale operations at the facility. As of December 31, 2018 the Company had drawn $120,440 on the line. The line of credit was expanded in February 2019 to $400,000 with a maturity date of September 30, 2019. Prior to September 30, 2019, the Company had drawn $400,000 on the line which was subsequently merged into the amortizing note due May 21, 2021. (6) The senior debt and subordinated debt owed in relation to Providence of Sparta was refinanced into a single senior HUD note during 2017. Amortization expense related to loan costs totaled $3,738 for the nine months ended September 30, 2019. (7) Amortization expense related to loan costs of this loan totaled $6,978 for the nine months ended September 30, 2019. The Company is subject to financial covenants and customary affirmative and negative covenants, including compliance with the covenants of all other notes and bonds. As of September 30, 2019, the Company was not in compliance with some unrelated notes and bonds, which is considered to be a technical Event of Default as defined in the note agreement, but the Company believes that it is in good standing with the Lender. (8) The mortgage loan collateralized by the GL Nursing Home is 80% guaranteed by the USDA and requires an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year. The Company is subject to financial covenants and customary affirmative and negative covenants. As of September 30, 2019, the Company was not in compliance with certain of these financial and non-financial covenants which is considered to be a technical Event of Default as defined in the note agreement. The Company is also delinquent in installment payments due under the mortgage. Remedies available to the lender in the event of a continuing Event of Default, at its option, include, but are not necessarily limited to the following (1) lender may declare the principal and all accrued interest on the note due and payable; and (2) lender may exercise additional rights and remedies under the note agreement to include taking possession of the collateral or seeking satisfaction from the guarantors. The Company has been notified by the lender regarding the Events of Default. Guarantors under the mortgage loan include Christopher Brogdon. With our consent, Mr. Brogdon has assumed operations of the facility and is dealing with the lender. Other mortgage loans contain non-financial covenants, including reporting obligations, with which the Company has not complied in some instances or in an untimely manner. These mortgage loans are technically in default; however our relationship with these lenders is considered good. Bonds Payable - Tulsa County Industrial Authority On March 1, 2014, Southern Tulsa, LLC (Southern Tulsa), a subsidiary of WPF that owns the Southern Hills Retirement Center, entered into a loan agreement with the Tulsa County Industrial Authority (Authority) in the State of Oklahoma pursuant to which the Authority lent to Southern Tulsa the proceeds from the sale of the Authority’s Series 2014 Bonds. The Series 2014 Bonds consisted of $5,075,000 of principal in Series 2014A First Mortgage Revenue Bonds and $625,000 of principal in Series 2014B Taxable First Mortgage Revenue Bonds. During the year ended December 31, 2017, $127,000 of Series 2014B Taxable First Mortgage Revenue Bond were retired with $60,000 in cash payments and $67,000 in non-cash payments; $452,000 of Series 2014A First Mortgage Revenue Bonds were retired with non-cash payments. Deferred loan costs incurred of $478,950 and an original issue discount of $78,140 related to the loan are amortized to interest expense over the life of the loan. Amortization expense related to deferred loan costs and the original issue discount totaled $14,113 and $2,283, respectively, for the nine months ended September 30, 2018. The Bonds were retired in full in November 2018. As of September 30, 2019 and December 31, 2018, restricted cash of $0 and $1,179, respectively is related to these bonds. Other Debt Other debt due at September 30, 2019 and December 31, 2018 includes unsecured notes payable issued to entities controlled by the Company used to facilitate the acquisition of the nursing home properties. Face Principal Outstanding at Stated Interest Maturity Property Amount September 30, 2019 December 31, 2018 Rate Date Goodwill Nursing Home $ 2,180,000 $ 1,536,000 $ 1,536,000 13% (1) Fixed December 31, 2019 (1) The subordinated note on Goodwill matured on July 1, 2015. Investors in the Goodwill note were entitled to an additional 5% equity in Goodwill Hunting, LLC every six months if the note is not paid when due. Effective December 31, 2015, the investors holding the subordinated debt executed an Agreement Among Lenders pursuant to which they (i) agreed to waive any and all equity ratchets and (ii) agreed to extend the maturity date of the subordinated debt to June 30, 2017. In exchange, Goodwill Hunting agreed to pay the investors an additional one-time premium equal to 5% of the principal amount of the individual note at such time as the note is repaid. Effective May 3, 2017, we entered into an Allonge and Modification Agreement with the Goodwill investors pursuant to which they agreed to (i) waive all accrued interest through December 31, 2017, (ii) reduce interest rate to 13% beginning January 1, 2018 and (iii) extend the maturity date of the notes to December 31, 2019. In exchange, the Company agreed that upon repayment of the notes, the investors would be entitled to a one-time premium payment in the amount of 15% of the principal balance of the notes. Our corporate debt at September 30, 2019 and December 31, 2018 includes unsecured notes and notes secured by all assets of the Company not serving as collateral for other notes. Face Principal Outstanding at Stated Interest Maturity Series Amount September 30, 2019 December 31, 2018 Rate Date 10% Senior Secured Promissory Note $ 125,000 $ 125,000 $ 125,000 10.0% Fixed December 31, 2018 10% Senior Unsecured Promissory Notes 300,000 300,000 300,000 10.0% Fixed October 31, 2020 11% Senior Secured Promissory Notes 2,235,000 2,235,000 2,235,000 11.0% Fixed October 31, 2021 $ 2,660,000 $ 2,660,000 For the nine months ended September 30, 2019 and 2018, the Company received proceeds from the issuance of debt of $1,800,187 and $493,533, respectively. Cash payments on debt totaled $414,887 and $373,868 for the nine months ended September 30, 2019 and 2018, respectively. Amortization expense for deferred loan costs totaled $103,572 and $115,462 for the nine months ended September 30, 2019 and 2018, respectively. Future maturities and principal reduction payments of all notes and bonds payable listed above for the next five years and thereafter are as follows: Years 2019 $ 19,603,962 (1) 2020 6,893,587 2021 5,705,128 2022 140,332 2023 145,757 2024 and after 6,105,887 $ 38,594,653 (1) Any note or bond that is not in compliance with all financial and non-financial covenants is considered to have an immediate maturity, including those that require compliance with covenants on any and all other notes. The notes secured by the facilities at Meadowview and Abbeville have such covenants which were in technical non-compliance at September 30, 2019, but the Company believes that its relationships with these lenders is good. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 7. STOCKHOLDERS’ EQUITY Preferred Stock The Company has authorized 10,000,000 shares of preferred stock. These shares may be issued in series with such rights and preferences as may be determined by the Board of Directors. Series A Convertible Redeemable Preferred Stock The Company’s Board of Directors has authorized 2,000,000 shares of $2.00 stated value, Series A Preferred Stock. The preferred stock has a senior liquidation preference value of $2.00 per share, has no voting or redemption rights and does not accrue dividends. As of September 30, 2019 and December 31, 2018, the Company has 200,500 shares of Series A Preferred stock outstanding. Series D Convertible Preferred Stock The Company has established a class of preferred stock designated “Series D Convertible Preferred Stock” (Series D preferred stock) and authorized an aggregate of 1,000,000 non-voting shares with a stated value of $1.00 per share. Holders of the Series D preferred stock are entitled to receive dividends at the annual rate of eight percent (8%) based on the stated value per share computed on the basis of a 360-day year and twelve 30-day months. Dividends are cumulative, shall be declared quarterly, and are calculated from the date of issue and payable on the fifteenth day of April, July, October and January. The dividends may be paid, at the option of the holder either in cash or by the issuance of shares of the Company’s common stock valued at the market price on the dividend record date. Shares of the Series D preferred stock are redeemable at the Company’s option. At the option of the holder, shares of the Series D preferred stock plus any declared and unpaid dividends are convertible to shares of the Company’s common stock at a conversion rate of $1.00 per share. As of September 30, 2019 and December 31, 2018, the Company had 375,000 shares of Series D preferred stock outstanding. During the nine months ended September 30, 2019 and 2018, the Company paid $22,500 and $22,500, respectively, for Series D preferred stock dividends. Dividends of $22,500 and $22,500 were declared during the nine months ended September 30, 2019 and 2018, respectively, with dividends of $7,500 accrued and payable as of September 30, 2019 and 2018. All quarterly dividends previously declared have been paid. Restricted Stock Awards The following table summarizes the restricted stock unit activity during the nine months ended September 30, 2019 and 2018. September 30, 2019 September 30, 2018 Outstanding Non-Vested Restricted Stock Units, Beginning - - Granted 636,363 962,500 Vested (545,453 ) (821,875 ) Outstanding Non-Vested Restricted Stock Units, Ending 90,910 140,625 In connection with these director and executive restricted stock grants, the Company recognized stock-based compensation of $180,000 and $321,046 for the nine months ended September 30, 2019 and 2018, respectively. Common Stock Warrants As of September 30, 2019 and December 31, 2018, the Company had 2,598,130 and 3,142,586, respectively, of outstanding warrants to purchase common stock at a weighted average exercise price of $0.54 and $0.60, respectively. During the nine-month period ended September 30, 2019 and 2018, an aggregate of 544,456 and 241,135 warrants with a weighted average exercise price of $0.88 and $0.74, respectively, expired. The aggregate intrinsic value of the common stock warrants outstanding at September 30, 2019 was $0. Common Stock Options As of September 30, 2019 and December 31, 2018, the Company had 600,000 and 600,000, respectively, of outstanding options to purchase common stock at a weighted average exercise price of $0.36. During the nine-month period ended September 30, 2019 and 2018, no options expired. The aggregate intrinsic value of the common stock options outstanding at September 30, 2019 was $0. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | 8. RELATED PARTIES Clifford Neuman provides office space for the Company’s Controller at no charge. As of September 30, 2019 and December 31, 2018, the Company owed Mr. Neuman for legal services rendered $48,280 and $118,230, respectively. Creative Cyberweb developed and maintains the Company’s website and is affiliated with CFO Zvi Rhine’s family. The ongoing upkeep is $450 per month. In January 2018, the Directors modified the Directors’ Compensation Plan to provide the annual grants be subject to ratable vesting over 12 months. In March 2019, the Board approved an annual grant to three of its Directors without other compensation plans, restricted stock awards of 90,909 shares each, subject to vesting. In July 2019, the Board approved a pro-rated annual grant to two of its Directors without other compensation plans restricted stock awards of 90,909 shares in aggregate, subject to vesting. In connection with these director restricted stock grants, the Company recognized stock-based compensation of $90,000 and $135,000 for the nine months ended September 30, 2019 and 2018, respectively. In May 2018, the Company approved a compensation agreement for CFO Zvi Rhine that included (i) base salary of $165,000 per year (which accrues beginning January 1, 2018 but payable only after the Company raises capital of at least $600,000), (ii) 150,000 shares of restricted stock vesting one-half each on January 1, 2019 and January 1, 2020, and (iii) options to purchase 600,000 of the Company’s common stock at an exercise price of $.36 per share, each expiring on March 31, 2023, and vesting one quarter each on April 1, 2018, April 1, 2019, October 1, 2019, and April 1, 2020. For the nine months ended September 30, 2019 the Company has accrued $183,950 in salaries and recognized $90,000 in stock-based compensation for Directors and $74,134 for Mr. Rhine. On April 15, 2019, the Company executed an Amendment No. 1 to Employment Agreement (the “Amendment”), with an effective date of April 1, 2019, with Mr. Rhine. Pursuant to the Amendment, the Company granted Mr. Rhine a bonus for 2018 services in the amount of $90,000 payable in shares of restricted common stock. The shares were valued at $0.33 per share (the closing price of the Company’s stock on April 2, 2019), resulting in 272,727 shares of Common Stock. The Amendment also defines a Bonus Plan for Mr. Rhine for future periods which provides for additional incentive compensation if certain performance milestones are achieved. |
Facility Leases
Facility Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Facility Leases | 9. FACILITY LEASES The following table summarizes our leasing arrangements related to the Company’s healthcare facilities at September 30, 2019: Facility Monthly Lease (1) Lease Expiration Renewal Option, if any Eastman (2) $ 60,000 October 31, 2022 None Warrenton $ 55,724 June 30, 2026 Term may be extended for one Goodwill (3) $ 40,125 February 1, 2027 Term may be extended for one Edwards Redeemer (4) $ 48,728 October 31, 2022 Term may be extended for one Providence $ 42,519 June 30, 2026 Term may be extended for one Meadowview (5) $ - October 31, 2023 Term may be extended for one GL Nursing (6) $ - - None Glen Eagle (7) $ - - None Southern Hills SNF (8) $ - - Term may be extended for two Southern Hills ALF (9) $ - - None Southern Hills ILF (10) $ - - None (1) Monthly lease income reflects rent income on a straight-line basis over, where applicable, the term of each lease. (2) On October 18, 2019, the Company terminated the lease at its Eastman property and is pursuing a Receivership to assume the operations of the facility. (3) In January 2016, the Goodwill facility was closed by Georgia regulators and all residents were removed. In a transaction related to the sale of the Greene Point facility, an affiliate of the buyer of Greene Point executed a ten-year operating lease covering Goodwill. After investing approximately $2.0 million in capital improvements in the property, the lease operator obtained all regulatory approvals and began admitting patients in December 2016. The lease became effective on February 1, 2017, and the facility began generating rental revenue thereafter. (4) Cadence informed the Company that it intended to close the Edwards Redeemer facility due to unprofitable operations. In violation of the operating lease, Cadence began moving patients from the facility and, as of October 18, 2019, all patients had been removed. In response to our Petition, on October 17, 2019, the District Court of Oklahoma County, State of Oklahoma issued a Temporary Order Appointing Receiver (the “Order”) pursuant to a Motion to Appoint Receiver filed by Edwards Redeemer Property Holdings, LLC (“Edwards Property”), a wholly-owned subsidiary of the Company, with respect as a skilled nursing facility. The Order was issued due to the violations by Cadence of the business-preservation obligations contained in the lease between Edwards Property and the Operator. The Company will allow Edwards Redeemer to remain closed for the purpose of undertaking extensive renovations to the facility. The renovations are expected to take up to 12 months. (5) The lease was generating $33,000 in monthly gross rent; however, the operator experienced adverse results in late 2017 and throughout 2018. In April 2018 the Company recognized a bad debt expense of $56,000 related to rent receivables previously booked in 2018 at the Meadowview facility. Effective December 1, 2018, the Company completed the operations transfer to an affiliate of Infinity Health Interests, LLC (“Infinity”). The lease is structured with a lower base rent component than the prior operator but also includes occupancy-based escalators that will better align facility operations with future rental payments. (6) Effective January 1, 2016, the GL Nursing facility was leased to another operator for a period of ten years at a monthly base rent of $30,000 which was subject to increases based on census levels. Under the terms of the lease, the Company agreed to fund certain capital expenditures, which it was unable to fulfill. In July 2016, the new tenant served notice that it was terminating the lease effective August 31, 2016. The Company entered into a Lease Termination Agreement under which it paid the tenant $145,000 and is obligated to make future payments. Effective August 30, 2016, the Company entered into a new lease agreement with another nursing home operator. The lease term was to commence at the end of a straddle period. During the straddle period, the Company made working capital advances to enable the operator to cover cash flow deficits resulting from initial operations of the facility. Prior to the end of the straddle period, the lease operator informed the Company that it would vacate the facility. An entity affiliated with Mr. Brogdon, who is a guarantor of the mortgage, assumed operations of the facility in March 2018 under an OTA. We do not expect the facility to generate any future revenue for the Company. (7) The Company entered into a management agreement with Cadence Healthcare Solutions to operate Glen Eagle after expending approximately $1.0 million in capital improvements. The facility passed its licensure survey and began admitting patients in June 2018. Effective October 12, 2018, the facility gained its certification and started collecting revenues from Medicare and Medicaid in April 2019. On October 17, 2019, the Company terminated its management with Cadence Healthcare Solutions and is currently operating the building independently. (8) Lease agreement dated May 21, 2014 with lease payments commencing February 1, 2015. On May 10, 2016, the Company obtained a Court Order appointing a Receiver to control and operate the Southern Hills SNF. The former lease operator represented that it was unable to meet the financial commitments of the facility, including the payment of rent, payroll and other operating requirements. In October 2017, the Receiver engaged a new manager for the facility at the request of the Company. In May 2019 the lease expired, and in July 2019 the facility was leased to Southern Hills Rehab Center LLC, a wholly owned subsidiary of the Company, to conduct operations. Commencement of the lease is contingent upon regulatory approval of the transfer of the Certificates of Need and appropriate licenses to operate the facility, and the lease term extends five years from the contingent commencement date. The Company plans to operate this building independently. (9) The Company plans to operate the Southern Hills ALF independently once construction is complete and a state license is secured. (10) The Company has been operating the Southern Hills ILF independently since October 2019. Lessees are responsible for payment of insurance, taxes and other charges while under the lease. Should the lessees not pay all such charges as required under the leases, or if there is no tenant, the Company may become liable for such operating expenses. We have been required to cover those expenses at Glen Eagle as well as the Southern Hills ALF and ILF. Future cash payments for rent to be received during the initial terms of the leases for the next five years and thereafter are as follows (excludes Abbeville, Edwards Redeemer, Southern Tulsa SNF and Southern Tulsa ALF and ILF due to properties being independently operated, and GL Nursing): Years 2019 $ 625,725 2020 2,540,490 2021 2,585,058 2022 2,508,774 2023 1,922,794 2024 and Thereafter 5,120,111 $ 15,302,952 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. FAIR VALUE MEASUREMENTS Financial assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels: Level 1— Quoted market prices in active markets for identical assets or liabilities at the measurement date. Level 2— Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data. Level 3— Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our consolidated balance sheets include the following financial instruments: cash and cash equivalents, advances to related parties, notes receivable, restricted cash, accounts payable, debt and lease security deposit. We consider the carrying values of our short-term financial instruments to approximate fair value because they generally expose the Company to limited credit risk, because of the short period of time between origination of the financial assets and liabilities and their expected settlement, or because of their proximity to acquisition date fair values. The carrying value of debt approximates fair value based on borrowing rates currently available for debt of similar terms and maturities. Upon acquisition of real estate properties, the Company determines the total purchase price of each property and allocates this price base on the fair value of the tangible assets and intangible assets, if any, acquired and any liabilities assumed based on Level 3 inputs. These Level 3 inputs can include comparable sales values, discount rates, and capitalization rate assumptions from a third party appraisal or other market sources. Assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 are summarized below: Fair Value Measurement Total Level 1 Level 2 Level 3 Warrant Liability $ - $ - $ - $ - Investment in Debt Securities 19,861 19,861 - - Fair Value at September 30, 2019 $ 19,861 $ 19,861 $ - $ - Warrant Liability $ 2,785 $ - $ - $ 2,785 Investment in Debt Securities 162,106 162,106 - - Fair Value at December 31, 2018 $ 164,891 $ 162,106 $ - $ 2,785 Because these warrants have full reset adjustments tied to future issuance of equity securities by the Company, it is subject to derivative liability treatment under ASC 815-40-15. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other (Income) Expense on the Company’s Consolidated Statement of Operations until the warrants are exercised, expire, or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined each reporting period by utilizing the Black-Scholes option pricing model. The investments in debt securities are recorded at amortized cost since they are considered held-to-maturity. The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the nine months ended September 30, 2019 and 2018: 2019 2018 Beginning Balance January 1 $ 2,785 $ 95,371 Change in Fair Value of Warrant Liability (2,785 ) (92,586 ) Ending Balance, September 30 $ - $ 2,785 The significant assumptions used in the Black-Scholes option pricing model as of September 30, 2019 and December 31, 2018 include the following: September 30, 2019 December 31, 2018 Volatility - % 63.58% - 91.93 % Risk-free Interest Rate - % 2.36% - 2.59 % Exercise Price $ - $ 0.75 - 1.37 Fair Value of Common Stock $ - $ 0.33 Expected Life - 0.45 – 0.99 years |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 11. SEGMENT REPORTING The Company had two primary reporting segments during the nine months ended September 30, 2019, which include real estate services and healthcare services. The Company reports segment information based on the “management approach” defined in ASC 280, Segment Reporting. Total assets for the healthcare services and real estate services segments were $ 880,632 and $39,381,879, respectively, as of September 30, 2019 and $145,260 and $38,150,627, respectively, as of December 31, 2018. Statements of Operations Items for the Nine Months Ended September 30, 2019 September 30, 2018 Real Estate Services Healthcare Services Consolidated Real Estate Services Healthcare Services Consolidated Rental Revenue $ 2,789,220 $ - $ 2,789,220 $ 2,599,224 $ - $ 2,599,224 Healthcare Revenue - 2,089,386 2,089,386 - - - Total Revenue 2,789,220 2,089,386 4,878,606 2,599,224 - 2,599,224 Expenses General and Administrative 575,930 315,101 891,031 569,807 117,842 687,649 Property Taxes, Insurance and Other Operating 117,778 1,479,047 1,596,835 105,593 340,647 446,240 Acquisition Costs 6,771 - 6,771 - - - Depreciation 959,427 10,407 969,834 936,943 4,626 941,569 Total Expenses 1,659,916 1,804,555 3,464,471 1,612,343 463,115 2,075,458 Income (Loss) from Operations 1,129,304 284,831 1,414,135 986,881 (463,115 ) 523,766 Other (Income) Expense Gain on Warrant Liability (2,785 ) - (2,785 ) (92,586 ) - (92,586 ) Loss on Extinguishment of Debt - - - 57,694 - 57,694 Gain on Settlement of Other Liabilities - - - (98,521 ) - (98,521 ) Gain on Sale of Investments (1,069 ) - (1,069 ) - - - Gain from Insurance Claim (324,018 ) - (324,018 ) - - - Interest Income (26,248 ) - (26,248 ) - - - Interest Expense 1,595,363 - 1,595,363 1,783,296 - 1,783,296 Total Other (Income) Expense 1,241,243 - 1,241,243 1,649,883 - 1,649,883 Net Income (Loss) (111,939 ) 284,831 172,892 (663,002 ) (463,115 ) (1,126,117 ) Net Loss Attributable to Noncontrolling Interests 7,231 - 7,231 17,965 - 17,965 Net Income (Loss) Attributable to Global Healthcare REIT, Inc. $ (104,708 ) $ 284,831 $ 180,123 $ (645,037 ) $ (463,115 ) $ (1,108,152 ) Statements of Operations Items for the Three Months Ended September 30, 2019 September 30, 2018 Real Estate Services Healthcare Services Consolidated Real Estate Services Healthcare Services Consolidated Rental Revenue $ 963,645 $ - $ 963,645 $ 885,013 $ - $ 885,013 Healthcare Revenue - 1,025,458 1,025,458 - - - Total Revenue 963,645 1,025,458 1,989,103 885,013 - 885,013 Expenses General and Administrative 185,263 134,932 320,195 176,036 10,999 187,035 Property Taxes, Insurance and Other Operating 29,892 673,924 703,816 48,964 169,174 218,138 Acquisition Costs 6,771 - 6,771 - - - Depreciation 320,514 3,469 323,983 319,516 3,470 322,986 Total Expenses 542,440 812,325 1,354,765 544,516 183,643 728,159 Income (Loss) from Operations 421,205 213,133 634,338 340,497 (183,643 ) 156,854 Other (Income) Expense Gain on Warrant Liability (27 ) - (27 ) (15,974 ) - (15,974 ) Loss on Extinguishment of Debt - - - - - - Gain on Settlement of Other Liabilities - - - 354 - 354 Gain from Insurance Claim (53,754 ) (53,754 ) Interest Income (19,245 ) - (19,245 ) - - - Interest Expense 524,503 - 524,503 590,514 - 590,514 Total Other (Income) Expense 451,477 - 451,477 574,894 - 574,894 Net Income (Loss) (30,272 ) 213,133 182,861 (234,397 ) (183,643 ) (418,040 ) Net Loss Attributable to Noncontrolling Interests 1,221 - 1,221 (948 ) - (948 ) Net Income (Loss) Attributable to Global Healthcare REIT, Inc. $ (29,051 ) $ 213,133 $ 184,082 $ (235,345 ) $ (183,643 ) $ (418,988 ) |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 12. LEGAL PROCEEDINGS The Company and/or its affiliated subsidiaries are involved in the following litigation: Bailey v. GL Nursing, LLC, et. al in the Circuit Court of Lonoke County, Arkansas, 23rd Circuit, The Company’s wholly-owned subsidiary was named as a co-defendant in the action arising out of a claimed personal injury suffered by the plaintiff while a resident of the skilled nursing home owned, but not operated, by GL Nursing. As of this date, we have engaged legal counsel but no further information is known regarding the merits of the claim. After initial inquiry, it does not appear that the lease operator of the facility had in effect general liability insurance covering the GL Nursing, as landlord, as required by the operating lease. As we simply were the owners of the property and not the operators, we believe that primary responsibility, if any, falls with the operator at the time. Under the terms of the lease, the operator has a duty to indemnify the Company, a claim which we intend to assert. While it is too early to assess the Company’s exposure, we believe at this time that the likelihood of an adverse outcome is remote. Southern Tulsa, LLC v. Healthcare Management of Oklahoma, LLC, This matter was brought by us to have the appointment of a Receiver for the Southern Tulsa SNF and to recover damages from our former operator at that facility. The Court ordered the appointment of a Receiver effective May 10, 2016. Other claims and matters are pending. The Company has entered into an agreement with the Receiver to assign operations and assets to a subsidiary of the Company and, once the assignments are approved by the State, discharge the Receiver. Thomas v. Edwards Redeemer Property Holdings, LLC, et.al., This action arises from a personal injury claim brought by heirs of a former resident of our Edwards Redeemer facility. We are entitled to indemnification from the lease operator and should be covered under the lease operator’s general liability policy. As we are not the operators of the facility and believe we have indemnity coverage, we believe we have no exposure. The lease operator’s insurance carrier is providing a defense and indemnity and, as a result, we believe the likelihood of a material adverse result is remote. Edwards Redeemer Property Holdings LLC v. Edwards Redeemer Healthcare & Rehab, LLC, This action was brought by us against the former lease operator for breaching the lease agreement, removing all the patients and closing the facility. On October 17, 2019, the Court entered an Order Appointing a Receiver. Other claims are pending. Dodge NH, LLC v. Eastman Healthcare & Rehab, LLC, This action was brought by us against the former lease operator for numerous violations of the operating lease, including violation of the cross-default provisions with Edwards Redeemer, which had been operated by an affiliate of the Eastman operator. We also served a Notice of Termination with respect to the operating lease. On October 18, 2019, the Court entered an Order granting to us a Temporary Restraining Order requiring the lease operator to maintain the status quo of the facility. On November 8, 2019, we filed a Motion for Appointment of Receiver, which Motion is pending. |
Other Income
Other Income | 9 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other Income | 13. OTHER INCOME During the nine months ended September 30, 2019, the Company received proceeds from insurance claims in excess of the cost of repairs. The net gain of $324,018 has been recognized under other income as Gain on Proceeds from Insurance Claim. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSEQUENT EVENTS Edwards Redeemer Cadence informed the Company that it intended to close the Edwards Redeemer facility due to unprofitable operations. In violation of the operating lease, Cadence began moving patients from the facility and, as of October 18, 2019, all patients had been removed. In response to our Petition, on October 17, 2019, the District Court of Oklahoma County, State of Oklahoma issued a Temporary Order Appointing Receiver (the “Order”) pursuant to a Motion to Appoint Receiver filed by Edwards Redeemer Property Holdings, LLC (“Edwards Property”), a wholly-owned subsidiary of the Company, with respect as a skilled nursing facility. The Order was issued due to the violations by Cadence of the business-preservation obligations contained in the lease between Edwards Property and the Operator. The Company will allow Edwards Redeemer to remain closed for the purpose of undertaking extensive renovations to the facility. The renovations are expected to take up to 12 months. Eastman The operating leases at Edwards Redeemer and Eastman contain cross-default provisions, meaning a default by the lessee under one lease constituted a default under the other. Inasmuch as Cadence’s defaults at Edward Redeemer were incurable, on October 18, 2019 we delivered to Cadence a Notice of Termination of the lease covering Eastman. Concurrently, we applied for a Temporary Restraining Order requiring Cadence to continue to operate the facility and maintain the status quo under the provisions of the operating lease. Subsequently, the Company has filed a Motion to Appoint Receiver as under the terms of the operating lease, Cadence is required to turn over operations of Eastman to the Company, as Lessor. Abbeville Effective October 17, 2019, the Company’s affiliate Global Abbeville, LLC terminated the Management Agreement dated January 1, 2018, between Global Abbeville, LLC, a wholly-owned subsidiary of the Company and Cadence Healthcare Solutions, LLC. The Company plans to operate Abbeville with its existing staff at the location. Southern Hills Effective October 16, 2019, the Receiver at Southern Hills terminated its Management Agreement with Cadence Healthcare Solutions, LLC dated October 1, 2017. The Company plans to operate Southern Hills with its existing staff at the location. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of the Business | Organization and Description of the Business Global Healthcare REIT, Inc. (the “Company” or “Global”) was organized with the intent of operating as a real estate investment trust (REIT) for the purpose of investing in real estate and other assets related to the healthcare industry. The Company’s focus has partially shifted toward owning and operating its real estate assets. Prior to the Company changing its name to Global Healthcare REIT, Inc. on September 30, 2013, the Company was known as Global Casinos, Inc. Global Casinos, Inc. operated two gaming casinos which were split-off and sold on September 30, 2013. Simultaneous with the split-off and sale of the gaming operations, the Company acquired West Paces Ferry Healthcare REIT, Inc. (WPF) in a transaction accounted for as a reverse acquisition whereby WPF was deemed to be the accounting acquirer. The Company acquires, develops, leases, manages and disposes of healthcare real estate, and provides financing to healthcare providers. As of September 30, 2019, the Company owned eleven healthcare properties which are primarily leased or managed by third-party operators under triple-net operating terms. However, the Company operates the facilities internally when advantageous and expedient. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and in conjunction with the rules and regulations of the Securities Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary to make the consolidated financial statements not misleading have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the entire year. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements. In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02, “Leases: Topic 842 (ASU 2016-02)”, to supersede nearly all existing lease guidance under GAAP. The guidance would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. ASU 2016-02 is effective for the Company as of January 1, 2019 and adoption requires using a modified retrospective approach with the option to elect certain practical expedients. The Company has determined that it does not have any leases that fall under the guidance of ASU 2016-02 and it had no impact on its consolidated financial statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2019. Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. |
Reclassification | Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net loss. Reclassification adjustments are amounts reclassified to Notes Receivable that were presented in Prepaid Expenses and Other in previous period. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property Plant and Equipment | The gross carrying amount and accumulated depreciation of the Company’s property and equipment as of September 30, 2019 and December 31, 2018 are as follows: September 30, 2019 December 31, 2018 Land $ 1,597,500 $ 1,597,500 Land Improvements 242,000 200,000 Buildings and Improvements 36,153,900 36,076,632 Furniture, Fixtures and Equipment 1,511,826 1,469,976 Construction in Progress 5,621,767 3,916,187 45,126,993 43,260,295 Less Accumulated Depreciation (6,784,984 ) (5,815,150 ) Less Impairment (1,560,000 ) (1,560,000 ) $ 36,782,009 $ 35,885,145 For the Nine Months Ended September 30, 2019 2018 Depreciation Expense $ 969,834 $ 941,569 Cash Paid for Capital Expenditures $ 1,866,698 $ 565,036 |
Investments in Debt Securities
Investments in Debt Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments in Marketable Securities | At September 30, 2019 and December 31, 2018, the Company held investments in marketable securities that were classified as held-to-maturity and carried at amortized costs. Held-to-maturity securities consisted of the following: September 30, 2019 December 31, 2018 State and Municipal Bonds $ 19,861 $ 162,106 |
Debt and Debt-Related Parties (
Debt and Debt-Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | The following is a summary of the Company’s debt outstanding as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Senior Secured Promissory Notes $ 1,485,000 $ 1,485,000 Senior Unsecured Promissory Notes 300,000 300,000 Senior Secured Promissory Notes - Related Parties 875,000 875,000 Fixed-Rate Mortgage Loans 22,551,595 21,049,981 Variable-Rate Mortgage Loans 4,618,006 4,618,006 Line of Credit 7,229,052 7,240,183 Other Debt 1,536,000 1,536,000 38,594,653 37,104,170 Premium, Unamortized Discount and Debt Issuance Costs (526,132 ) (507,829 ) $ 38,068,521 $ 36,596,341 As presented in the Consolidated Balance Sheets: Debt, Net $ 37,193,521 $ 35,721,341 Debt - Related Parties, Net 875,000 875,000 $ 38,068,521 $ 36,596,341 |
Schedule of Weighted Average Assumptions | The value of the warrants issued to the note holders was calculated using the Black-Scholes pricing model using the following significant assumptions: December 31, 2018 Volatility 122% - 123 % Risk-free Interest Rate 2.76% - 2.94 % Exercise Price $ 0.50 Fair Value of Common Stock $ 0.30 - $0.35 Expected Life 2.9 – 3.0 years |
Schedule of Mortgage Loan Debt | Mortgage loans for the periods presented consisted of the following: Face Principal Outstanding at Stated Interest Maturity Property Amount September 30, 2019 December 31, 2018 Rate Date Southern Hills Retirement Center Line of Credit (1)(2) $ 7,229,052 $ 7,229,052 $ 7,119,743 5.75% Fixed October 28, 2019 Eastman Nursing Home (2,3) 3,570,000 3,481,745 3,561,461 5.50% Fixed October 26, 2021 Goodwill Nursing Home (2) 5,005,000 4,308,416 4,390,082 5.50% Fixed March 19, 2020 Warrenton Nursing Home (4) 3,768,600 3,757,190 2,287,323 3.73% Fixed July 1, 2049 Edward Redeemer Health & Rehab 2,303,815 2,081,053 2,138,128 5.50% Fixed January 16, 2020 Glen Eagle Health & Rehab (5) 2,761,250 3,103,926 2,761,250 5.50% Fixed May 25, 2021 Glen Eagle Health and Rehab Line of Credit (2)(5) 400,000 - 120,440 6.50% Fixed September 30, 2019 Providence of Sparta Nursing Home (6) 3,039,300 2,932,665 2,975,337 3.88% Fixed November 1, 2047 Meadowview Healthcare Center (7) 3,000,000 2,886,600 2,936,400 6.00% Fixed October 30, 2022 GL Nursing Home (8) 5,000,000 4,618,006 4,618,006 Prime Plus 1.50%/ 5.75% Floor August 3, 2037 $ 34,398,653 $ 32,908,170 (1) On October 31, 2017, the Company, through its wholly-owned subsidiaries Southern Tulsa, LLC and Southern Tulsa TLC, LLC, as Co-Borrowers, consummated a new Line of Credit with Southern Bank (formerly First Commercial Bank) pursuant to a Promissory Note in the principal amount of $7,229,052 (the “Line of Credit”). Under the Line of Credit, the Company refinanced the prior mortgage on its skilled nursing facility in Tulsa for $1,546,801, funded open market and tender offer purchases of its Industrial Revenue Bonds covering the ALF and ILF as well as provided working capital for improvements to the ALF and ILF. As of December 31, 2018, a total of $7,119,743 was drawn under the Line of Credit, and as of September 30, 2019, a total of $7,229,052 was drawn under the Line of Credit. The interest rate on the Line of Credit increased from 5.25% to 5.75% effective April 28, 2019 and will remain at that rate until the Line of Credit converts to an amortizing loan. Monthly payments of interest began on November 30, 2017 and continue until the Promissory Note is paid in full on the Maturity Date. The Maturity Date was been extended multiple times; initially from April 30, 2018 to October 30, 2018. The Maturity Date was further extended in three month increments to October 28, 2019. The Credit Note is secured by a First Mortgage and Assignment of Rents on Real Property for Southern Hills Rehabilitation Center, a Junior Lien and Assignment of Rents on Real Property for it Southern Hills Independent Living Facility location and a Junior Lien on Real Property for its Southern Hills Assisted Living Facility location. With the retirement of the Tulsa Industrial Authority Bonds effective November 1, 2018, Southern Bank (formerly First Commercial Bank) moved into a senior position on the ALF and ILF properties. (2) Mortgage loans are non-recourse to the Company except for (i) the senior loan held by ServisFirst Bank on Meadowview (Ohio), (ii) the loans held by Colony Bank on Eastman and Glen Eagle, and (iii) the Southern Hills line of credit and Goodwill loan owed to Southern Bank (formerly First Commercial Bank). (3) The loan at Eastman was renewed on November 26, 2018 with the maturity extended to October 26, 2021. (4) The original loan was extended on January 19, 2019 to January 20, 2020 and the Company capitalized $8,885 in loan costs paid. The loan was subsequently refinanced in June 2019. The Company has incurred $156,671 in unamortized loan costs to refinance this debt with another lender. The refinance was treated as debt extinguishment, with a new maturity date of July 1, 2049 and an interest rate of 3.73%. For the nine months ended September 30, 2019, amortization expense related to loan costs of the prior loan totaled $8,885 and amortization expense related to loan costs for the new loan, which began in July 2019, totaled $870. (5) Amortization expense related to loan costs of this loan totaled $656 for the nine months ended September 30, 2019. Amortizing payments began in January 2019. In June 2018 the Company converted the original note to a fixed note which qualified as debt extinguishment, unamortized debt discount on the original note was expensed as a loss on extinguishment of $27,794. In April 2018, the Company capitalized $22,800 in fees and interest and added it to principal. The Company is subject to financial covenants and customary affirmative and negative covenants, including compliance with the covenants of all other notes and bonds. As of September 30, 2019, the Company was not in compliance with some unrelated notes and bonds, which is considered to be a technical Event of Default as defined in the note agreement, but the Company believes that it is in good standing with the Lender. In October 2018 the Lender extended the Company a line of credit with a limit of $200,365 to provide working capital to scale operations at the facility. As of December 31, 2018 the Company had drawn $120,440 on the line. The line of credit was expanded in February 2019 to $400,000 with a maturity date of September 30, 2019. Prior to September 30, 2019, the Company had drawn $400,000 on the line which was subsequently merged into the amortizing note due May 21, 2021. (6) The senior debt and subordinated debt owed in relation to Providence of Sparta was refinanced into a single senior HUD note during 2017. Amortization expense related to loan costs totaled $3,738 for the nine months ended September 30, 2019. (7) Amortization expense related to loan costs of this loan totaled $6,978 for the nine months ended September 30, 2019. The Company is subject to financial covenants and customary affirmative and negative covenants, including compliance with the covenants of all other notes and bonds. As of September 30, 2019, the Company was not in compliance with some unrelated notes and bonds, which is considered to be a technical Event of Default as defined in the note agreement, but the Company believes that it is in good standing with the Lender. (8) The mortgage loan collateralized by the GL Nursing Home is 80% guaranteed by the USDA and requires an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year. The Company is subject to financial covenants and customary affirmative and negative covenants. As of September 30, 2019, the Company was not in compliance with certain of these financial and non-financial covenants which is considered to be a technical Event of Default as defined in the note agreement. The Company is also delinquent in installment payments due under the mortgage. Remedies available to the lender in the event of a continuing Event of Default, at its option, include, but are not necessarily limited to the following (1) lender may declare the principal and all accrued interest on the note due and payable; and (2) lender may exercise additional rights and remedies under the note agreement to include taking possession of the collateral or seeking satisfaction from the guarantors. The Company has been notified by the lender regarding the Events of Default. Guarantors under the mortgage loan include Christopher Brogdon. With our consent, Mr. Brogdon has assumed operations of the facility and is dealing with the lender. |
Schedule of Other Debt | Other debt due at September 30, 2019 and December 31, 2018 includes unsecured notes payable issued to entities controlled by the Company used to facilitate the acquisition of the nursing home properties. Face Principal Outstanding at Stated Interest Maturity Property Amount September 30, 2019 December 31, 2018 Rate Date Goodwill Nursing Home $ 2,180,000 $ 1,536,000 $ 1,536,000 13% (1) Fixed December 31, 2019 (1) The subordinated note on Goodwill matured on July 1, 2015. Investors in the Goodwill note were entitled to an additional 5% equity in Goodwill Hunting, LLC every six months if the note is not paid when due. Effective December 31, 2015, the investors holding the subordinated debt executed an Agreement Among Lenders pursuant to which they (i) agreed to waive any and all equity ratchets and (ii) agreed to extend the maturity date of the subordinated debt to June 30, 2017. In exchange, Goodwill Hunting agreed to pay the investors an additional one-time premium equal to 5% of the principal amount of the individual note at such time as the note is repaid. Effective May 3, 2017, we entered into an Allonge and Modification Agreement with the Goodwill investors pursuant to which they agreed to (i) waive all accrued interest through December 31, 2017, (ii) reduce interest rate to 13% beginning January 1, 2018 and (iii) extend the maturity date of the notes to December 31, 2019. In exchange, the Company agreed that upon repayment of the notes, the investors would be entitled to a one-time premium payment in the amount of 15% of the principal balance of the notes. |
Schedule of Unsecured Notes and Notes Secured by All Assets | Our corporate debt at September 30, 2019 and December 31, 2018 includes unsecured notes and notes secured by all assets of the Company not serving as collateral for other notes. Face Principal Outstanding at Stated Interest Maturity Series Amount September 30, 2019 December 31, 2018 Rate Date 10% Senior Secured Promissory Note $ 125,000 $ 125,000 $ 125,000 10.0% Fixed December 31, 2018 10% Senior Unsecured Promissory Notes 300,000 300,000 300,000 10.0% Fixed October 31, 2020 11% Senior Secured Promissory Notes 2,235,000 2,235,000 2,235,000 11.0% Fixed October 31, 2021 $ 2,660,000 $ 2,660,000 |
Schedule of Future Maturities of Notes Payable | Future maturities and principal reduction payments of all notes and bonds payable listed above for the next five years and thereafter are as follows: Years 2019 $ 19,603,962 (1) 2020 6,893,587 2021 5,705,128 2022 140,332 2023 145,757 2024 and after 6,105,887 $ 38,594,653 (1) Any note or bond that is not in compliance with all financial and non-financial covenants is considered to have an immediate maturity, including those that require compliance with covenants on any and all other notes. The notes secured by the facilities at Meadowview and Abbeville have such covenants which were in technical non-compliance at September 30, 2019, but the Company believes that its relationships with these lenders is good. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Restricted Stock Awards | The following table summarizes the restricted stock unit activity during the nine months ended September 30, 2019 and 2018. September 30, 2019 September 30, 2018 Outstanding Non-Vested Restricted Stock Units, Beginning - - Granted 636,363 962,500 Vested (545,453 ) (821,875 ) Outstanding Non-Vested Restricted Stock Units, Ending 90,910 140,625 |
Facility Leases (Tables)
Facility Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Leasing Arrangements | The following table summarizes our leasing arrangements related to the Company’s healthcare facilities at September 30, 2019: Facility Monthly Lease (1) Lease Expiration Renewal Option, if any Eastman (2) $ 60,000 October 31, 2022 None Warrenton $ 55,724 June 30, 2026 Term may be extended for one Goodwill (3) $ 40,125 February 1, 2027 Term may be extended for one Edwards Redeemer (4) $ 48,728 October 31, 2022 Term may be extended for one Providence $ 42,519 June 30, 2026 Term may be extended for one Meadowview (5) $ - October 31, 2023 Term may be extended for one GL Nursing (6) $ - - None Glen Eagle (7) $ - - None Southern Hills SNF (8) $ - - Term may be extended for two Southern Hills ALF (9) $ - - None Southern Hills ILF (10) $ - - None (1) Monthly lease income reflects rent income on a straight-line basis over, where applicable, the term of each lease. (2) On October 18, 2019, the Company terminated the lease at its Eastman property and is pursuing a Receivership to assume the operations of the facility. (3) In January 2016, the Goodwill facility was closed by Georgia regulators and all residents were removed. In a transaction related to the sale of the Greene Point facility, an affiliate of the buyer of Greene Point executed a ten-year operating lease covering Goodwill. After investing approximately $2.0 million in capital improvements in the property, the lease operator obtained all regulatory approvals and began admitting patients in December 2016. The lease became effective on February 1, 2017, and the facility began generating rental revenue thereafter. (4) Cadence informed the Company that it intended to close the Edwards Redeemer facility due to unprofitable operations. In violation of the operating lease, Cadence began moving patients from the facility and, as of October 18, 2019, all patients had been removed. In response to our Petition, on October 17, 2019, the District Court of Oklahoma County, State of Oklahoma issued a Temporary Order Appointing Receiver (the “Order”) pursuant to a Motion to Appoint Receiver filed by Edwards Redeemer Property Holdings, LLC (“Edwards Property”), a wholly-owned subsidiary of the Company, with respect as a skilled nursing facility. The Order was issued due to the violations by Cadence of the business-preservation obligations contained in the lease between Edwards Property and the Operator. The Company will allow Edwards Redeemer to remain closed for the purpose of undertaking extensive renovations to the facility. The renovations are expected to take up to 12 months. (5) The lease was generating $33,000 in monthly gross rent; however, the operator experienced adverse results in late 2017 and throughout 2018. In April 2018 the Company recognized a bad debt expense of $56,000 related to rent receivables previously booked in 2018 at the Meadowview facility. Effective December 1, 2018, the Company completed the operations transfer to an affiliate of Infinity Health Interests, LLC (“Infinity”). The lease is structured with a lower base rent component than the prior operator but also includes occupancy-based escalators that will better align facility operations with future rental payments. (6) Effective January 1, 2016, the GL Nursing facility was leased to another operator for a period of ten years at a monthly base rent of $30,000 which was subject to increases based on census levels. Under the terms of the lease, the Company agreed to fund certain capital expenditures, which it was unable to fulfill. In July 2016, the new tenant served notice that it was terminating the lease effective August 31, 2016. The Company entered into a Lease Termination Agreement under which it paid the tenant $145,000 and is obligated to make future payments. Effective August 30, 2016, the Company entered into a new lease agreement with another nursing home operator. The lease term was to commence at the end of a straddle period. During the straddle period, the Company made working capital advances to enable the operator to cover cash flow deficits resulting from initial operations of the facility. Prior to the end of the straddle period, the lease operator informed the Company that it would vacate the facility. An entity affiliated with Mr. Brogdon, who is a guarantor of the mortgage, assumed operations of the facility in March 2018 under an OTA. We do not expect the facility to generate any future revenue for the Company. (7) The Company entered into a management agreement with Cadence Healthcare Solutions to operate Glen Eagle after expending approximately $1.0 million in capital improvements. The facility passed its licensure survey and began admitting patients in June 2018. Effective October 12, 2018, the facility gained its certification and started collecting revenues from Medicare and Medicaid in April 2019. On October 17, 2019, the Company terminated its management with Cadence Healthcare Solutions and is currently operating the building independently. (8) Lease agreement dated May 21, 2014 with lease payments commencing February 1, 2015. On May 10, 2016, the Company obtained a Court Order appointing a Receiver to control and operate the Southern Hills SNF. The former lease operator represented that it was unable to meet the financial commitments of the facility, including the payment of rent, payroll and other operating requirements. In October 2017, the Receiver engaged a new manager for the facility at the request of the Company. In May 2019 the lease expired, and in July 2019 the facility was leased to Southern Hills Rehab Center LLC, a wholly owned subsidiary of the Company, to conduct operations. Commencement of the lease is contingent upon regulatory approval of the transfer of the Certificates of Need and appropriate licenses to operate the facility, and the lease term extends five years from the contingent commencement date. The Company plans to operate this building independently. (9) The Company plans to operate the Southern Hills ALF independently once construction is complete and a state license is secured. (10) The Company has been operating the Southern Hills ILF independently since October 2019. |
Schedule of Future Cash Payments for Rent to be Received During Initial Term of Lease | Future cash payments for rent to be received during the initial terms of the leases for the next five years and thereafter are as follows (excludes Abbeville, Edwards Redeemer, Southern Tulsa SNF and Southern Tulsa ALF and ILF due to properties being independently operated, and GL Nursing): Years 2019 $ 625,725 2020 2,540,490 2021 2,585,058 2022 2,508,774 2023 1,922,794 2024 and Thereafter 5,120,111 $ 15,302,952 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 are summarized below: Fair Value Measurement Total Level 1 Level 2 Level 3 Warrant Liability $ - $ - $ - $ - Investment in Debt Securities 19,861 19,861 - - Fair Value at September 30, 2019 $ 19,861 $ 19,861 $ - $ - Warrant Liability $ 2,785 $ - $ - $ 2,785 Investment in Debt Securities 162,106 162,106 - - Fair Value at December 31, 2018 $ 164,891 $ 162,106 $ - $ 2,785 |
Schedule of Changes in Fair Value of Company's Level 3 Valuation for Warrant Liability | The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the nine months ended September 30, 2019 and 2018: 2019 2018 Beginning Balance January 1 $ 2,785 $ 95,371 Change in Fair Value of Warrant Liability (2,785 ) (92,586 ) Ending Balance, September 30 $ - $ 2,785 |
Schedule of Fair Value Measurements, Valuation Techniques | The significant assumptions used in the Black-Scholes option pricing model as of September 30, 2019 and December 31, 2018 include the following: September 30, 2019 December 31, 2018 Volatility - % 63.58% - 91.93 % Risk-free Interest Rate - % 2.36% - 2.59 % Exercise Price $ - $ 0.75 - 1.37 Fair Value of Common Stock $ - $ 0.33 Expected Life - 0.45 – 0.99 years |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Total assets for the healthcare services and real estate services segments were $ 880,632 and $39,381,879, respectively, as of September 30, 2019 and $145,260 and $38,150,627, respectively, as of December 31, 2018. Statements of Operations Items for the Nine Months Ended September 30, 2019 September 30, 2018 Real Estate Services Healthcare Services Consolidated Real Estate Services Healthcare Services Consolidated Rental Revenue $ 2,789,220 $ - $ 2,789,220 $ 2,599,224 $ - $ 2,599,224 Healthcare Revenue - 2,089,386 2,089,386 - - - Total Revenue 2,789,220 2,089,386 4,878,606 2,599,224 - 2,599,224 Expenses General and Administrative 575,930 315,101 891,031 569,807 117,842 687,649 Property Taxes, Insurance and Other Operating 117,778 1,479,047 1,596,835 105,593 340,647 446,240 Acquisition Costs 6,771 - 6,771 - - - Depreciation 959,427 10,407 969,834 936,943 4,626 941,569 Total Expenses 1,659,916 1,804,555 3,464,471 1,612,343 463,115 2,075,458 Income (Loss) from Operations 1,129,304 284,831 1,414,135 986,881 (463,115 ) 523,766 Other (Income) Expense Gain on Warrant Liability (2,785 ) - (2,785 ) (92,586 ) - (92,586 ) Loss on Extinguishment of Debt - - - 57,694 - 57,694 Gain on Settlement of Other Liabilities - - - (98,521 ) - (98,521 ) Gain on Sale of Investments (1,069 ) - (1,069 ) - - - Gain from Insurance Claim (324,018 ) - (324,018 ) - - - Interest Income (26,248 ) - (26,248 ) - - - Interest Expense 1,595,363 - 1,595,363 1,783,296 - 1,783,296 Total Other (Income) Expense 1,241,243 - 1,241,243 1,649,883 - 1,649,883 Net Income (Loss) (111,939 ) 284,831 172,892 (663,002 ) (463,115 ) (1,126,117 ) Net Loss Attributable to Noncontrolling Interests 7,231 - 7,231 17,965 - 17,965 Net Income (Loss) Attributable to Global Healthcare REIT, Inc. $ (104,708 ) $ 284,831 $ 180,123 $ (645,037 ) $ (463,115 ) $ (1,108,152 ) Statements of Operations Items for the Three Months Ended September 30, 2019 September 30, 2018 Real Estate Services Healthcare Services Consolidated Real Estate Services Healthcare Services Consolidated Rental Revenue $ 963,645 $ - $ 963,645 $ 885,013 $ - $ 885,013 Healthcare Revenue - 1,025,458 1,025,458 - - - Total Revenue 963,645 1,025,458 1,989,103 885,013 - 885,013 Expenses General and Administrative 185,263 134,932 320,195 176,036 10,999 187,035 Property Taxes, Insurance and Other Operating 29,892 673,924 703,816 48,964 169,174 218,138 Acquisition Costs 6,771 - 6,771 - - - Depreciation 320,514 3,469 323,983 319,516 3,470 322,986 Total Expenses 542,440 812,325 1,354,765 544,516 183,643 728,159 Income (Loss) from Operations 421,205 213,133 634,338 340,497 (183,643 ) 156,854 Other (Income) Expense Gain on Warrant Liability (27 ) - (27 ) (15,974 ) - (15,974 ) Loss on Extinguishment of Debt - - - - - - Gain on Settlement of Other Liabilities - - - 354 - 354 Gain from Insurance Claim (53,754 ) (53,754 ) Interest Income (19,245 ) - (19,245 ) - - - Interest Expense 524,503 - 524,503 590,514 - 590,514 Total Other (Income) Expense 451,477 - 451,477 574,894 - 574,894 Net Income (Loss) (30,272 ) 213,133 182,861 (234,397 ) (183,643 ) (418,040 ) Net Loss Attributable to Noncontrolling Interests 1,221 - 1,221 (948 ) - (948 ) Net Income (Loss) Attributable to Global Healthcare REIT, Inc. $ (29,051 ) $ 213,133 $ 184,082 $ (235,345 ) $ (183,643 ) $ (418,988 ) |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Net income (Loss) | $ 182,861 | $ (170,124) | $ 160,155 | $ (418,040) | $ (495,843) | $ (212,234) | $ 172,892 | $ (1,126,117) | $ (2,007,006) | $ (3,001,618) |
Cash Provided by Operating Activities | 755,111 | $ 404,043 | ||||||||
Accumulated deficit | $ (10,912,983) | $ (10,912,983) | $ (11,070,606) |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property Plant and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment, Gross | $ 45,126,993 | $ 45,126,993 | $ 43,260,295 | ||
Less Accumulated Depreciation | (6,784,984) | (6,784,984) | (5,815,150) | ||
Less Impairment | (1,560,000) | (1,560,000) | (1,560,000) | ||
Property and Equipment, Net | 36,782,009 | 36,782,009 | 35,885,145 | ||
Depreciation Expense | 323,983 | $ 322,986 | 969,834 | $ 941,569 | |
Cash Paid for Capital Expenditures | 1,866,698 | $ 565,036 | |||
Land [Member] | |||||
Property and Equipment, Gross | 1,597,500 | 1,597,500 | 1,597,500 | ||
Land Improvements [Member] | |||||
Property and Equipment, Gross | 242,000 | 242,000 | 200,000 | ||
Buildings and Improvements [Member] | |||||
Property and Equipment, Gross | 36,153,900 | 36,153,900 | 36,076,632 | ||
Furniture, Fixtures and Equipment [Member] | |||||
Property and Equipment, Gross | 1,511,826 | 1,511,826 | 1,469,976 | ||
Construction in Progress [Member] | |||||
Property and Equipment, Gross | $ 5,621,767 | $ 5,621,767 | $ 3,916,187 |
Investments in Debt Securitie_2
Investments in Debt Securities (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Contractual maturity of held-to-maturity securities | $ 60,000 | $ 60,000 | ||
Contractual maturity of held-to-maturity securities period description | Contractual maturity of held-to-maturity securities at September 30, 2019 is September 1, 2043 and September 1, 2022. | |||
Proceeds from sale of debt securities | $ 151,041 | |||
Gain on sale of investments | 1,069 | |||
Purchase of investments in debt securities | $ 7,727 |
Investments in Debt Securitie_3
Investments in Debt Securities - Schedule of Investments in Marketable Securities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Investments in marketable securities | $ 19,861 | $ 162,106 |
State and Municipal [Member] | ||
Investments in marketable securities | $ 19,761 | $ 162,106 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Aug. 06, 2019 | Dec. 31, 2018 | |
Accounts receivable line of credit | $ 759,900 | $ 166,696 | |
F&M Bank [Member] | |||
Debt instrument, interest rate | 6.75% | ||
Investments | $ 750,000 | ||
F&M Bank [Member] | Prime Rate [Member] | |||
Debt instrument, interest rate | 2.00% | ||
Southern Hills SNF [Member] | |||
Investments | 694,609 | ||
Receivership Estate of Healthcare Management of Oklahoma, LLC [Member] | |||
Investments | $ 55,391 | ||
Infinity Health Interests, LLC [Member] | |||
Accounts receivable line of credit | $ 250,000 | ||
Loan amount, lent | $ 250,000 | $ 106,334 | |
Debt instrument, interest rate | 10.00% | ||
Debt instrument, annual interest rate | 15.00% | ||
Debt instrument, maturity date | Aug. 31, 2019 | ||
Debt instrument, maturity description | The maturity date is under negotiation for further extension |
Debt and Debt-Related Parties_2
Debt and Debt-Related Parties (Details Narrative) - USD ($) | May 03, 2018 | Mar. 01, 2014 | Oct. 31, 2018 | Oct. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Gain on extinguishment of debt | $ 57,694 | ||||||||||
Debt outstanding amount | 2,660,000 | 2,660,000 | $ 2,660,000 | ||||||||
Debt instrument, unamortized discount | 526,132 | 526,132 | 507,829 | ||||||||
Amortization expense | 103,572 | 115,462 | |||||||||
Value of bonds | 38,068,521 | 38,068,521 | $ 36,596,341 | ||||||||
Other Debt [Member] | |||||||||||
Amortization expense for deferred loan costs | 103,574 | 115,462 | |||||||||
Proceeds from the issuance of debt | 1,800,187 | 493,533 | |||||||||
Cash payments on debt | 414,887 | 373,868 | |||||||||
Southern Tulsa, LLC [Member] | |||||||||||
Debt instrument, maturity date | Oct. 30, 2018 | ||||||||||
Notes and Warrants [Member] | |||||||||||
Debt instrument, interest rate | 10.00% | ||||||||||
Debt instrument, maturity date | Oct. 31, 2021 | Oct. 31, 2021 | |||||||||
Warrants to purchase common stock | 111,000 | ||||||||||
Proceeds from private offering | $ 1,160,000 | ||||||||||
Proceed from private offering, net | 1,092,400 | ||||||||||
Placement agent fees | 67,600 | ||||||||||
Fair value of warrants | $ 21,453 | ||||||||||
Aggregate exchangeable units, value | $ 1,075,000 | ||||||||||
Related Parties [Member] | Notes and Warrants [Member] | |||||||||||
Aggregate exchangeable units, value | $ 875,000 | ||||||||||
Senior Secured Promissory Notes [Member] | |||||||||||
Debt instrument, interest rate | 11.00% | 10.00% | 10.00% | ||||||||
Senior secured promissory notes issued | $ 300,000 | $ 600,000 | |||||||||
Debt instrument, maturity date | Oct. 30, 2020 | Jan. 13, 2018 | |||||||||
Warrants to purchase common stock | 600,000 | ||||||||||
Warrants exercise price | $ 0.50 | $ 0.75 | $ 0.75 | ||||||||
Warrants description | One Warrant for each $1.00 in principal amount of Note exercisable for three years to purchase a share of Common Stock at an exercise price of $0.50 per share. | For every $1.00 in principal amount of note, investors got one warrant exercisable for one year to purchase an additional share of common stock at an exercise price of $.75 per share. The warrants have a cashless exercise provision. | |||||||||
Debt term | 3 years | ||||||||||
Senior Secured Promissory Notes [Member] | Warrant [Member] | |||||||||||
Warrants to purchase common stock | 1,160,000 | 900,000 | |||||||||
Gain on extinguishment of debt | $ 248,346 | ||||||||||
Fair value of warrants | 207,025 | $ 121,435 | |||||||||
Aggregate exchangeable units, value | $ 1,075,000 | ||||||||||
Debt instrument, unamortized discount | $ 129,580 | 129,580 | 77,105 | ||||||||
Amortization expense | $ 54,433 | 57,856 | |||||||||
Senior Secured Promissory Notes [Member] | Director [Member] | |||||||||||
Senior secured promissory notes issued | $ 450,000 | ||||||||||
Senior Secured Promissory Notes [Member] | |||||||||||
Senior secured promissory notes issued | $ 600,000 | ||||||||||
Debt instrument, maturity date | Dec. 31, 2018 | ||||||||||
Warrants exercise price | $ 0.75 | ||||||||||
Debt outstanding amount | $ 1,200,000 | ||||||||||
Warrants description | For every $1.00 in principal amount of note, investors got one warrant exercisable for one year to purchase an additional share of common stock at an exercise price of $.75 per share. | ||||||||||
Senior Secured Promissory Notes [Member] | Warrant [Member] | |||||||||||
Warrants to purchase common stock | 1,200,000 | ||||||||||
Warrant maturity date | Dec. 31, 2018 | ||||||||||
Senior Secured Promissory Notes [Member] | Related Parties [Member] | |||||||||||
Senior secured promissory notes issued | $ 425,000 | ||||||||||
10% Notes [Member] | Notes and Warrants [Member] | |||||||||||
Debt instrument, interest rate | 10.00% | 10.00% | |||||||||
Debt instrument, maturity date | Dec. 31, 2018 | ||||||||||
Non - payment of debt | $ 125,000 | $ 125,000 | |||||||||
Series 2014A First Mortgage Revenue Bonds [Member] | Southern Tulsa, LLC [Member] | |||||||||||
Value of bonds | $ 5,075,000 | ||||||||||
Assets retirement amount | 452,000 | ||||||||||
Series 2014 A First Mortgage Revenue Bonds [Member] | Southern Tulsa, LLC [Member] | |||||||||||
Value of bonds | 625,000 | ||||||||||
2014B Taxable First Mortgage Revenue Bond [Member] | Southern Tulsa, LLC [Member] | |||||||||||
Proceeds from issuance of notes payable | 127,000 | ||||||||||
Assets retirement amount | 60,000 | ||||||||||
Amortization of discount and debt issuance costs | $ 67,000 | ||||||||||
Series 2014 A Bonds [Member] | Southern Tulsa, LLC [Member] | |||||||||||
Deferred loan costs | 478,950 | ||||||||||
Debt original issue discount | $ 78,140 | ||||||||||
Series 2014 B Taxable First Mortgage Revenue Bond [Member] | Southern Tulsa, LLC [Member] | |||||||||||
Debt original issue discount | 2,283 | ||||||||||
Amortization expense for deferred loan costs | $ 14,113 | ||||||||||
Restricted cash | $ 0 | $ 0 | $ 1,179 |
Debt and Debt-Related Parties -
Debt and Debt-Related Parties - Schedule of Debt Instruments (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt instrument, gross | $ 38,594,653 | $ 37,104,170 |
Premium, Unamortized Discount and Debt Issuance Costs | (526,132) | (507,829) |
Debt instrument, net of discount | 38,068,521 | 36,596,341 |
Debt, Net | 37,193,521 | 35,721,341 |
Debt - Related Parties, Net | 875,000 | 875,000 |
Debt, total | 38,068,521 | 36,596,341 |
Senior Secured Promissory Notes [Member] | ||
Debt instrument, gross | 1,485,000 | 1,485,000 |
Senior Unsecured Promissory Notes [Member] | ||
Debt instrument, gross | 300,000 | 300,000 |
Senior Secured Promissory Notes - Related Parties [Member] | ||
Debt instrument, gross | 875,000 | 875,000 |
Fixed-Rate Mortgage Loans [Member] | ||
Debt instrument, gross | 22,551,595 | 21,049,981 |
Variable-Rate Mortgage Loans [Member] | ||
Debt instrument, gross | 4,618,006 | 4,618,006 |
Line of Credit [Member] | ||
Debt instrument, gross | 7,229,052 | 7,240,183 |
Other Debt [Member] | ||
Debt instrument, gross | $ 1,536,000 | $ 1,536,000 |
Debt and Debt-Related Parties_3
Debt and Debt-Related Parties - Schedule of Weighted Average Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019$ / shares | Dec. 31, 2018$ / shares | |
Fair Value of Common Stock | $ 0.33 | |
Minimum [Member] | Senior Secured Notes [Member] | ||
Fair Value of Common Stock | 0.30 | |
Maximum [Member] | Senior Secured Notes [Member] | ||
Fair Value of Common Stock | $ 0.35 | |
Volatility [Member] | ||
Fair value measurements valuation techniques, percent | 0 | |
Volatility [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, percent | 63.58 | |
Volatility [Member] | Minimum [Member] | Senior Secured Notes [Member] | ||
Fair value measurements valuation techniques, percent | 1.22 | |
Volatility [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, percent | 91.93 | |
Volatility [Member] | Maximum [Member] | Senior Secured Notes [Member] | ||
Fair value measurements valuation techniques, percent | 1.23 | |
Risk Free Interest Rate [Member] | ||
Fair value measurements valuation techniques, percent | 0 | |
Risk Free Interest Rate [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, percent | 2.36 | |
Risk Free Interest Rate [Member] | Minimum [Member] | Senior Secured Notes [Member] | ||
Fair value measurements valuation techniques, percent | 0.0276 | |
Risk Free Interest Rate [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, percent | 2.59 | |
Risk Free Interest Rate [Member] | Maximum [Member] | Senior Secured Notes [Member] | ||
Fair value measurements valuation techniques, percent | 0.0294 | |
Exercise Price [Member] | ||
Fair value measurements valuation techniques, exercise price | ||
Exercise Price [Member] | Senior Secured Notes [Member] | ||
Fair value measurements valuation techniques, exercise price | $ 0.50 | |
Exercise Price [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, exercise price | 0.75 | |
Exercise Price [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, exercise price | $ 1.37 | |
Expected Life [Member] | ||
Fair value measurements valuation techniques, term | 0 days | |
Expected Life [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, term | 5 months 12 days | |
Expected Life [Member] | Minimum [Member] | Senior Secured Notes [Member] | ||
Fair value measurements valuation techniques, term | 2 years 10 months 25 days | |
Expected Life [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, term | 11 months 26 days | |
Expected Life [Member] | Maximum [Member] | Senior Secured Notes [Member] | ||
Fair value measurements valuation techniques, term | 3 years |
Debt and Debt-Related Parties_4
Debt and Debt-Related Parties - Schedule of Mortgage Loan Debt (Details) - USD ($) | Feb. 28, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Long-term Debt, Gross | $ 2,660,000 | $ 2,660,000 | ||
Mortgage Loans [Member] | ||||
Long-term Debt, Gross | 34,398,653 | 32,908,170 | ||
Southern Hills Retirement Center Line of Credit [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [1],[2] | 7,229,052 | ||
Long-term Debt, Gross | [1],[2] | $ 7,229,052 | 7,119,743 | |
Debt Instrument, Interest Rate Terms | [1],[2] | 5.75% Fixed | ||
Debt instrument, maturity date | [1],[2] | Oct. 28, 2019 | ||
Eastman Nursing Home [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [1],[3] | $ 3,570,000 | ||
Long-term Debt, Gross | [1],[3] | $ 3,481,745 | 3,561,461 | |
Debt Instrument, Interest Rate Terms | [1],[3] | 5.50% Fixed | ||
Debt instrument, maturity date | [1],[3] | Oct. 26, 2021 | ||
Goodwill Nursing Home [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [1] | $ 5,005,000 | ||
Long-term Debt, Gross | [1] | $ 4,308,416 | 4,390,082 | |
Debt Instrument, Interest Rate Terms | [1] | 5.50% Fixed | ||
Debt instrument, maturity date | [1] | Mar. 19, 2020 | ||
Warrenton Nursing Home [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [4] | $ 3,768,600 | ||
Long-term Debt, Gross | [4] | $ 3,757,190 | 2,287,323 | |
Debt Instrument, Interest Rate Terms | [4] | 3.73% Fixed | ||
Debt instrument, maturity date | [4] | Jul. 1, 2049 | ||
Edward Redeemer Health & Rehab [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | $ 2,303,815 | |||
Long-term Debt, Gross | $ 2,081,053 | 2,138,128 | ||
Debt Instrument, Interest Rate Terms | 5.50% Fixed | |||
Debt instrument, maturity date | Jan. 16, 2020 | |||
Glen Eagle Health & Rehab [Member] | ||||
Debt instrument, maturity date | Sep. 30, 2019 | |||
Glen Eagle Health & Rehab [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [5] | $ 2,761,250 | ||
Long-term Debt, Gross | [5] | $ 3,103,926 | 2,761,250 | |
Debt Instrument, Interest Rate Terms | [5] | 5.50% Fixed | ||
Debt instrument, maturity date | [5] | May 25, 2021 | ||
Glen Eagle Health & Rehab Line of Credit [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [1],[5] | $ 400,000 | ||
Long-term Debt, Gross | [1],[5] | 120,440 | ||
Debt Instrument, Interest Rate Terms | [1],[5] | 6.50% Fixed | ||
Debt instrument, maturity date | [1],[5] | Sep. 30, 2019 | ||
Providence of Sparta Nursing Home [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [6] | $ 3,039,300 | ||
Long-term Debt, Gross | [6] | $ 2,932,665 | 2,975,337 | |
Debt Instrument, Interest Rate Terms | [6] | 3.88% Fixed | ||
Debt instrument, maturity date | [6] | Nov. 1, 2047 | ||
Meadowview Healthcare Center [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [7] | $ 3,000,000 | ||
Long-term Debt, Gross | [7] | $ 2,886,600 | 2,936,400 | |
Debt Instrument, Interest Rate Terms | [7] | 6.00% Fixed | ||
Debt instrument, maturity date | [7] | Oct. 30, 2022 | ||
GL Nursing Home [Member] | Mortgage Loans [Member] | ||||
Debt Instrument, Face Amount | [8] | $ 5,000,000 | ||
Long-term Debt, Gross | [8] | $ 4,618,006 | $ 4,618,006 | |
Debt Instrument, Interest Rate Terms | [8] | Prime Plus 1.50%/ 5.75% Floor | ||
Debt instrument, maturity date | [8] | Aug. 3, 2037 | ||
[1] | Mortgage loans are non-recourse to the Company except for (i) the senior loan held by ServisFirst Bank on Meadowview (Ohio), (ii) the loans held by Colony Bank on Eastman and Glen Eagle, and (iii) the Southern Hills line of credit and Goodwill loan owed to Southern Bank (formerly First Commercial Bank). | |||
[2] | On October 31, 2017, the Company, through its wholly-owned subsidiaries Southern Tulsa, LLC and Southern Tulsa TLC, LLC, as Co-Borrowers, consummated a new Line of Credit with Southern Bank (formerly First Commercial Bank) pursuant to a Promissory Note in the principal amount of $7,229,052 (the "Line of Credit"). Under the Line of Credit, the Company refinanced the prior mortgage on its skilled nursing facility in Tulsa for $1,546,801, funded open market and tender offer purchases of its Industrial Revenue Bonds covering the ALF and ILF as well as provided working capital for improvements to the ALF and ILF. As of December 31, 2018, a total of $7,119,743 was drawn under the Line of Credit, and as of September 30, 2019, a total of $7,229,052 was drawn under the Line of Credit.The interest rate on the Line of Credit increased from 5.25% to 5.75% effective April 28, 2019 and will remain at that rate until the Line of Credit converts to an amortizing loan. Monthly payments of interest began on November 30, 2017 and continue until the Promissory Note is paid in full on the Maturity Date. The Maturity Date was been extended multiple times; initially from April 30, 2018 to October 30, 2018. The Maturity Date was further extended in three month increments to October 28, 2019. The Credit Note is secured by a First Mortgage and Assignment of Rents on Real Property for Southern Hills Rehabilitation Center, a Junior Lien and Assignment of Rents on Real Property for it Southern Hills Independent Living Facility location and a Junior Lien on Real Property for its Southern Hills Assisted Living Facility location. With the retirement of the Tulsa Industrial Authority Bonds effective November 1, 2018, Southern Bank (formerly First Commercial Bank) moved into a senior position on the ALF and ILF properties. | |||
[3] | The loan at Eastman was renewed on November 26, 2018 with the maturity extended to October 26, 2021. | |||
[4] | The original loan was extended on January 19, 2019 to January 20, 2020 and the Company capitalized $8,885 in loan costs paid. The loan was subsequently refinanced in June 2019. The Company has incurred $156,671 in unamortized loan costs to refinance this debt with another lender. The refinance was treated as debt extinguishment, with a new maturity date of July 1, 2049 and an interest rate of 3.73%. For the nine months ended September 30, 2019, amortization expense related to loan costs of the prior loan totaled $8,885 and amortization expense related to loan costs for the new loan, which began in July 2019, totaled $870. | |||
[5] | Amortization expense related to loan costs of this loan totaled $656 for the nine months ended September 30, 2019. Amortizing payments began in January 2019. In June 2018 the Company converted the original note to a fixed note which qualified as debt extinguishment, unamortized debt discount on the original note was expensed as a loss on extinguishment of $27,794. In April 2018, the Company capitalized $22,800 in fees and interest and added it to principal. The Company is subject to financial covenants and customary affirmative and negative covenants, including compliance with the covenants of all other notes and bonds. As of September 30, 2019, the Company was not in compliance with some unrelated notes and bonds, which is considered to be a technical Event of Default as defined in the note agreement, but the Company believes that it is in good standing with the Lender. In October 2018 the Lender extended the Company a line of credit with a limit of $200,365 to provide working capital to scale operations at the facility. As of December 31, 2018 the Company had drawn $120,440 on the line. The line of credit was expanded in February 2019 to $400,000 with a maturity of September 30, 2019. Prior to September 30, 2019, the Company had drawn $400,000 on the line which was subsequently merged into the amortizing note due May 21, 2021. | |||
[6] | The senior debt and subordinated debt owed in relation to Providence of Sparta was refinanced into a single senior HUD note during 2017. Amortization expense related to loan costs totaled $3,738 for the nine months ended September 30, 2019. | |||
[7] | Amortization expense related to loan costs of this loan totaled $6,978 for the nine months ended September 30, 2019. The Company is subject to financial covenants and customary affirmative and negative covenants, including compliance with the covenants of all other notes and bonds. As of September 30, 2019, the Company was not in compliance with some unrelated notes and bonds, which is considered to be a technical Event of Default as defined in the note agreement, but the Company believes that it is in good standing with the Lender. | |||
[8] | The mortgage loan collateralized by the GL Nursing Home is 80% guaranteed by the USDA and requires an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year. The Company is subject to financial covenants and customary affirmative and negative covenants. As of September 30, 2019, the Company was not in compliance with certain of these financial and non-financial covenants which is considered to be a technical Event of Default as defined in the note agreement. The Company is also delinquent in installment payments due under the mortgage. Remedies available to the lender in the event of a continuing Event of Default, at its option, include, but are not necessarily limited to the following (1) lender may declare the principal and all accrued interest on the note due and payable; and (2) lender may exercise additional rights and remedies under the note agreement to include taking possession of the collateral or seeking satisfaction from the guarantors. The Company has been notified by the lender regarding the Events of Default. Guarantors under the mortgage loan include Christopher Brogdon. With our consent, Mr. Brogdon has assumed operations of the facility and is dealing with the lender. |
Debt and Debt-Related Parties_5
Debt and Debt-Related Parties - Schedule of Mortgage Loan Debt (Details) (Parenthetical) - USD ($) | Feb. 28, 2019 | May 03, 2018 | Sep. 19, 2016 | Apr. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Apr. 28, 2019 | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Gain on extinguishment of debt | $ 57,694 | |||||||||||
Warrenton Nursing Home [Member] | ||||||||||||
Debt instrument, interest rate | 3.73% | 3.73% | ||||||||||
Amortization expense related to loan costs | $ 870 | |||||||||||
Unamortized loan costs | $ 156,671 | $ 156,671 | ||||||||||
Warrenton Nursing Home [Member] | January 19, 2019 to January 20, 2020 [Member] | ||||||||||||
Maturity date description | The refinance was treated as debt extinguishment, with a new maturity date of July 1, 2049 | |||||||||||
Amortization expense related to loan costs | $ 8,885 | |||||||||||
Glen Eagle Health & Rehab [Member] | ||||||||||||
Line of credit | $ 400,000 | $ 200,365 | ||||||||||
Debt Instrument, maturity date | Sep. 30, 2019 | |||||||||||
Amortization expense related to loan costs | 656 | |||||||||||
Gain on extinguishment of debt | 27,794 | |||||||||||
Capitalized fees and interest | $ 22,800 | |||||||||||
Line of credit | 400,000 | 400,000 | $ 120,440 | |||||||||
Providence of Sparta Nursing Home [Member] | ||||||||||||
Amortization expense related to loan costs | 3,738 | |||||||||||
Meadowview Healthcare Center [Member] | ||||||||||||
Amortization expense related to loan costs | 6,978 | |||||||||||
GL Nursing Home [Member] | ||||||||||||
Mortgage loan description | The mortgage loan collateralized by the GL Nursing Home is 80% guaranteed by the USDA and requires an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year. | |||||||||||
USDA guaranteed rate | 80.00% | |||||||||||
Annual renewal fee payable | 25.00% | |||||||||||
Southern Tulsa, LLC [Member] | ||||||||||||
Debt instrument, face amount | $ 7,229,052 | |||||||||||
Line of credit | $ 1,546,801 | |||||||||||
Amount drawn under the line of credit | $ 7,229,052 | $ 7,229,052 | $ 7,119,743 | |||||||||
Debt Instrument, maturity date | Oct. 30, 2018 | |||||||||||
Maturity date description | The Maturity Date was further extended in three month increments to October 28, 2019 | |||||||||||
Southern Tulsa, LLC [Member] | Minimum [Member] | ||||||||||||
Debt instrument, interest rate | 5.25% | |||||||||||
Southern Tulsa, LLC [Member] | Maximum [Member] | ||||||||||||
Debt instrument, interest rate | 5.75% |
Debt and Debt-Related Parties_6
Debt and Debt-Related Parties - Schedule of Other Debt (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | ||
Long-term Debt, Gross | $ 2,660,000 | $ 2,660,000 | |
Goodwill Nursing Home [Member] | Other Debt [Member] | |||
Debt Instrument, Face Amount | 2,180,000 | ||
Long-term Debt, Gross | $ 1,536,000 | $ 1,536,000 | |
Debt Instrument, Interest Rate Terms | [1] | 13% Fixed | |
Debt Instrument, Maturity Date | Dec. 31, 2019 | ||
[1] | The subordinated note on Goodwill matured on July 1, 2015. Investors in the Goodwill note were entitled to an additional 5% equity in Goodwill Hunting, LLC every six months if the note is not paid when due. Effective December 31, 2015, the investors holding the subordinated debt executed an Agreement Among Lenders pursuant to which they (i) agreed to waive any and all equity ratchets and (ii) agreed to extend the maturity date of the subordinated debt to June 30, 2017. In exchange, Goodwill Hunting agreed to pay the investors an additional one-time premium equal to 5% of the principal amount of the individual note at such time as the note is repaid. Effective May 3, 2017, we entered into an Allonge and Modification Agreement with the Goodwill investors pursuant to which they agreed to (i) waive all accrued interest through December 31, 2017, (ii) reduce interest rate to 13% beginning January 1, 2018 and (iii) extend the maturity date of the notes to December 31, 2019. In exchange, the Company agreed that upon repayment of the notes, the investors would be entitled to a one-time premium payment in the amount of 15% of the principal balance of the notes. |
Debt and Debt-Related Parties_7
Debt and Debt-Related Parties - Schedule of Other Debt (Details) (Parenthetical) - Goodwill Nursing Home [Member] - Other Debt [Member] | 9 Months Ended |
Sep. 30, 2019 | |
Debt description | Investors in the Goodwill note were entitled to an additional 5% equity in Goodwill Hunting, LLC every six months if the note is not paid when due. Effective December 31, 2015, the investors holding the subordinated debt executed an Agreement Among Lenders pursuant to which they (i) agreed to waive any and all equity ratchets and (ii) agreed to extend the maturity date of the subordinated debt to June 30, 2017. |
Debt reduced interest rate | 13.00% |
Debt Instrument, maturity date | Dec. 31, 2019 |
One-time premium payment, percentage | 15.00% |
Debt and Debt-Related Parties_8
Debt and Debt-Related Parties - Schedule of Our Corporate Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Long-term Debt, Gross | $ 2,660,000 | $ 2,660,000 |
10% Senior Secured Promissory Note [Member] | ||
Debt Instrument, Face Amount | 125,000 | |
Long-term Debt, Gross | $ 125,000 | 125,000 |
Debt Instrument, Interest Rate Terms | 10.0% Fixed | |
Debt Instrument, Maturity Date | Dec. 31, 2018 | |
10% Senior Unsecured Promissory Note [Member] | ||
Debt Instrument, Face Amount | $ 300,000 | |
Long-term Debt, Gross | $ 300,000 | 300,000 |
Debt Instrument, Interest Rate Terms | 10.0% Fixed | |
Debt Instrument, Maturity Date | Oct. 31, 2020 | |
11% Senior Secured Promissory Note [Member] | ||
Debt Instrument, Face Amount | $ 2,235,000 | |
Long-term Debt, Gross | $ 2,235,000 | $ 2,235,000 |
Debt Instrument, Interest Rate Terms | 11.0% Fixed | |
Debt Instrument, Maturity Date | Oct. 31, 2021 |
Debt and Debt-Related Parties_9
Debt and Debt-Related Parties - Schedule of Future Maturities of Notes Payable (Details) | Sep. 30, 2019USD ($) | |
Debt Disclosure [Abstract] | ||
2019 | $ 19,603,962 | [1] |
2020 | 6,893,587 | |
2021 | 5,705,128 | |
2022 | 140,332 | |
2023 | 145,757 | |
2024 and after | 6,105,887 | |
Long-term Debt, Fair Value | $ 38,594,653 | |
[1] | Any note or bond that is not in compliance with all financial and non-financial covenants is considered to have an immediate maturity, including those that require compliance with covenants on any and all other notes. The notes secured by the facilities at Meadowview and Abbeville have such covenants which were in technical non-compliance at September 30, 2019, but the Company believes that its relationships with these lenders is good. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Payments of preferred stock dividends | $ 22,500 | $ 22,500 | ||||
Accrued dividend | $ 7,500 | $ 7,500 | ||||
Share Based Compensation - Restricted Stock Awards | $ 163,846 | $ 112,200 | $ 45,000 | |||
Weighted average exercise price for warrant | $ 0.36 | $ 0.36 | ||||
Options to purchase common stock | 600,000 | 600,000 | ||||
Aggregate intrinsic value of common stock options outstanding | $ 0 | |||||
Directors and Executive Officers [Member] | ||||||
Share Based Compensation - Restricted Stock Awards | $ 180,000 | 321,046 | ||||
Series A Convertible Redeemable Preferred Stock [Member] | ||||||
Preferred stock, shares authorized | 2,000,000 | |||||
Preferred stock, par value | $ 2 | |||||
Liquidation preference value | $ 2 | |||||
Preferred stock, shares outstanding | 200,500 | 200,500 | ||||
Series D Convertible Preferred Stock [Member] | ||||||
Preferred stock, shares authorized | 1,000,000 | |||||
Preferred stock, par value | $ 1 | |||||
Preferred stock, shares outstanding | 375,000 | 375,000 | ||||
Preferred stock, dividend rate, percentage | 8.00% | |||||
Preferred stock, call or exercise features | Shares of the Series D preferred stock are redeemable at the Company's option. At the option of the holder, shares of the Series D preferred stock plus any declared and unpaid dividends are convertible to shares of the Company's common stock at a conversion rate of $1.00 per share. | |||||
Preferred dividends declared | $ 22,500 | 22,500 | ||||
Accrued dividend | $ 7,500 | $ 7,500 | $ 7,500 | |||
Preferred Stock [Member] | ||||||
Preferred stock, shares authorized | 10,000,000 | |||||
Warrant [Member] | ||||||
Outstanding warrants | 2,598,130 | 3,142,586 | ||||
Weighted average exercise price for warrant | $ 0.54 | $ 0.60 | ||||
Outstanding warrants, expired | 544,456 | 241,135 | ||||
Weighted average exercise price for warrant, expired | $ 0.88 | $ 0.74 | ||||
Aggregate intrinsic value of common stock warrants outstanding | $ 0 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Restricted Stock Awards (Details) - Restricted Stock [Member] - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Outstanding Non-Vested Restricted Stock Units, Beginning | ||
Non-vested Restricted Stock Units Granted | 636,363 | 962,500 |
Non-vested Restricted Stock Units Vested | (545,453) | (821,875) |
Outstanding Non-vested Restricted Stock Units, Ending | 90,910 | 140,625 |
Related Parties (Details Narrat
Related Parties (Details Narrative) - USD ($) | Apr. 15, 2019 | Jul. 31, 2019 | Mar. 31, 2019 | May 30, 2018 | Jan. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Ongoing upkeep amount | $ 450 | |||||||
Employment Agreement [Member] | Zvi Rhine [Member] | ||||||||
Stock issued for service rendered, value | $ 90,000 | |||||||
Recognized stock-based compensation | 90,000 | |||||||
Base salary | $ 165,000 | 183,950 | ||||||
Raised capital value | $ 600,000 | |||||||
Vesting period, description | base salary of $165,000 per year (which accrues beginning January 1, 2018 but payable only after the Company raises capital of at least $600,000), (ii) 150,000 shares of restricted stock vesting one-half each on January 1, 2019 and January 1, 2020 | |||||||
Options exercise price | $ 0.36 | |||||||
Options expiration date | Mar. 31, 2023 | |||||||
Shares issue price per share | $ 0.33 | |||||||
Number of common stock shares issued for services, shares | 272,727 | |||||||
Employment Agreement [Member] | Zvi Rhine [Member] | January 1, 2019 [Member] | ||||||||
Number of restricted stock shares of common stock granted | 150,000 | |||||||
Employment Agreement [Member] | Zvi Rhine [Member] | January 1, 2020 [Member] | ||||||||
Number of restricted stock shares of common stock granted | 150,000 | |||||||
Employment Agreement [Member] | Zvi Rhine [Member] | April 1, 2019 [Member] | ||||||||
Base salary | 74,134 | |||||||
Mr. Neuman [Member] | ||||||||
Stock issued for service rendered, value | 48,280 | $ 118,230 | ||||||
Directors [Member] | ||||||||
Vesting period | 12 months | |||||||
Directors [Member] | Restricted Common Stock [Member] | ||||||||
Recognized stock-based compensation | $ 90,000 | $ 135,000 | ||||||
Director One [Member] | ||||||||
Number of restricted stock shares of common stock granted | 90,909 | 90,909 | ||||||
Director Two [Member] | ||||||||
Number of restricted stock shares of common stock granted | 90,909 | 90,909 | ||||||
Director Three [Member] | ||||||||
Number of restricted stock shares of common stock granted | 90,909 |
Facility Leases - Schedule of L
Facility Leases - Schedule of Leasing Arrangements (Details) | 9 Months Ended | |
Sep. 30, 2019USD ($) | ||
Eastman [Member] | ||
Monthly Lease Income | $ 60,000 | [1],[2] |
Lease Expiration | Oct. 31, 2022 | [2] |
Lease Renewal Option | None | [2] |
Warrenton [Member] | ||
Monthly Lease Income | $ 55,724 | [1] |
Lease Expiration | Jun. 30, 2026 | |
Lease Renewal Option | Term may be extended for one additional ten-year term. | |
Goodwill [Member] | ||
Monthly Lease Income | $ 40,125 | [1],[3] |
Lease Expiration | Feb. 1, 2027 | [3] |
Lease Renewal Option | Term may be extended for one additional five-year term. | [3] |
Edwards Redeemer [Member] | ||
Monthly Lease Income | $ 48,728 | [1],[4] |
Lease Expiration | Oct. 31, 2022 | [4] |
Lease Renewal Option | Term may be extended for one additional five-year term. | [4] |
Providence [Member] | ||
Monthly Lease Income | $ 42,519 | [1] |
Lease Expiration | Jun. 30, 2026 | |
Lease Renewal Option | Term may be extended for one additional ten-year term. | |
Meadowview [Member] | ||
Monthly Lease Income | [1],[5] | |
Lease Expiration | Oct. 31, 2023 | [5] |
Lease Renewal Option | Term may be extended for one additional five-year term. | [5] |
GL Nursing [Member] | ||
Monthly Lease Income | [1],[6] | |
Lease Renewal Option | None | [6] |
Glen Eagle [Member] | ||
Monthly Lease Income | [1],[7] | |
Lease Renewal Option | None | [7] |
Southern Hills SNF [Member] | ||
Monthly Lease Income | [1],[8] | |
Lease Renewal Option | Term may be extended for two additional five-year term | [8] |
Southern Hills ALF [Member] | ||
Monthly Lease Income | [1],[9] | |
Lease Renewal Option | None | [9] |
Southern Hills ILF [Member] | ||
Monthly Lease Income | [1],[10] | |
Lease Renewal Option | None | [10] |
[1] | Monthly lease income reflects rent income on a straight-line basis over, where applicable, the term of each lease. | |
[2] | On October 18, 2019, the Company terminated the lease at its Eastman property and is pursuing a Receivership to assume the operations of the facility. | |
[3] | In January 2016, the Goodwill facility was closed by Georgia regulators and all residents were removed. In a transaction related to the sale of the Greene Point facility, an affiliate of the buyer of Greene Point executed a ten-year operating lease covering Goodwill. After investing approximately $2.0 million in capital improvements in the property, the lease operator obtained all regulatory approvals and began admitting patients in December 2016. The lease became effective on February 1, 2017, and the facility began generating rental revenue thereafter. | |
[4] | Cadence informed the Company that it intended to close the Edwards Redeemer facility due to unprofitable operations. In violation of the operating lease, Cadence began moving patients from the facility and, as of October 18, 2019, all patients had been removed. In response to our Petition, on October 17, 2019, the District Court of Oklahoma County, State of Oklahoma issued a Temporary Order Appointing Receiver (the "Order") pursuant to a Motion to Appoint Receiver filed by Edwards Redeemer Property Holdings, LLC ("Edwards Property"), a wholly-owned subsidiary of the Company, with respect as a skilled nursing facility. The Order was issued due to the violations by Cadence of the business-preservation obligations contained in the lease between Edwards Property and the Operator. The Company will allow Edwards Redeemer to remain closed for the purpose of undertaking extensive renovations to the facility. The renovations are expected to take up to 12 months. | |
[5] | The lease was generating $33,000 in monthly gross rent; however, the operator experienced adverse results in late 2017 and throughout 2018. In April 2018 the Company recognized a bad debt expense of $56,000 related to rent receivables previously booked in 2018 at the Meadowview facility. Effective December 1, 2018, the Company completed the operations transfer to an affiliate of Infinity Health Interests, LLC ("Infinity"). The lease is structured with a lower base rent component than the prior operator but also includes occupancy-based escalators that will better align facility operations with future rental payments. | |
[6] | Effective January 1, 2016, the GL Nursing facility was leased to another operator for a period of ten years at a monthly base rent of $30,000 which was subject to increases based on census levels. Under the terms of the lease, the Company agreed to fund certain capital expenditures, which it was unable to fulfill. In July 2016, the new tenant served notice that it was terminating the lease effective August 31, 2016. The Company entered into a Lease Termination Agreement under which it paid the tenant $145,000 and is obligated to make future payments. Effective August 30, 2016, the Company entered into a new lease agreement with another nursing home operator. The lease term was to commence at the end of a straddle period. During the straddle period, the Company made working capital advances to enable the operator to cover cash flow deficits resulting from initial operations of the facility. Prior to the end of the straddle period, the lease operator informed the Company that it would vacate the facility. An entity affiliated with Mr. Brogdon, who is a guarantor of the mortgage, assumed operations of the facility in March 2018 under an OTA. We do not expect the facility to generate any future revenue for the Company. | |
[7] | The Company entered into a management agreement with Cadence Healthcare Solutions to operate Glen Eagle after expending approximately $1.0 million in capital improvements. The facility passed its licensure survey and began admitting patients in June 2018. Effective October 12, 2018, the facility gained its certification and started collecting revenues from Medicare and Medicaid in April 2019. On October 17, 2019, the Company terminated its management with Cadence Healthcare Solutions and is currently operating the building independently. | |
[8] | Lease agreement dated May 21, 2014 with lease payments commencing February 1, 2015. On May 10, 2016, the Company obtained a Court Order appointing a Receiver to control and operate the Southern Hills SNF. The former lease operator represented that it was unable to meet the financial commitments of the facility, including the payment of rent, payroll and other operating requirements. In October 2017, the Receiver engaged a new manager for the facility at the request of the Company. In May 2019 the lease expired, and in July 2019 the facility was leased to Southern Hills Rehab Center LLC, a wholly owned subsidiary of the Company, to conduct operations. Commencement of the lease is contingent upon regulatory approval of the transfer of the Certificates of Need and appropriate licenses to operate the facility, and the lease term extends five years from the contingent commencement date. The Company plans to operate this building independently. | |
[9] | The Company plans to operate the Southern Hills ALF independently once construction is complete and a state license is secured. | |
[10] | The Company has been operating the Southern Hills ILF independently since September 2019. |
Facility Leases - Schedule of F
Facility Leases - Schedule of Future Cash Payments for Rent to be Received During Initial Term of Lease (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 625,725 |
2020 | 2,540,490 |
2021 | 2,585,058 |
2022 | 2,508,774 |
2023 | 1,922,794 |
2024 and Thereafter | 5,120,111 |
Total | $ 15,302,952 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Warrant Liability | $ 2,785 | |
Investment in Debt Securities | 19,861 | 162,106 |
Fair Value | 19,861 | 164,891 |
Level 1 [Member] | ||
Warrant Liability | ||
Investment in Debt Securities | 19,861 | 162,106 |
Fair Value | 19,861 | 162,106 |
Level 2 [Member] | ||
Warrant Liability | ||
Investment in Debt Securities | ||
Fair Value | ||
Level 3 [Member] | ||
Warrant Liability | 2,785 | |
Investment in Debt Securities | ||
Fair Value | $ 2,785 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Changes in Fair Value of Company's Level 3 Valuation for Warrant Liability (Details) - Level 3 [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Beginning Balance | $ 2,785 | $ 95,371 |
Change in Fair Value of Warrant Liability | (2,785) | (92,586) |
Ending Balance | $ 2,785 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Fair Value Measurements, Valuation Techniques (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019$ / shares | Dec. 31, 2018$ / shares | |
Fair Value of Common Stock | $ 0.33 | |
Volatility [Member] | ||
Fair value measurements valuation techniques, percent | 0 | |
Volatility [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, percent | 63.58 | |
Volatility [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, percent | 91.93 | |
Risk Free Interest Rate [Member] | ||
Fair value measurements valuation techniques, percent | 0 | |
Risk Free Interest Rate [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, percent | 2.36 | |
Risk Free Interest Rate [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, percent | 2.59 | |
Exercise Price [Member] | ||
Fair value measurements valuation techniques, exercise price | ||
Exercise Price [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, exercise price | $ 0.75 | |
Exercise Price [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, exercise price | $ 1.37 | |
Expected Life [Member] | ||
Fair value measurements valuation techniques, term | 0 days | |
Expected Life [Member] | Minimum [Member] | ||
Fair value measurements valuation techniques, term | 5 months 12 days | |
Expected Life [Member] | Maximum [Member] | ||
Fair value measurements valuation techniques, term | 11 months 26 days |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 9 Months Ended | |
Sep. 30, 2019USD ($)Number | Dec. 31, 2018USD ($) | |
Number of reporting segment | Number | 2 | |
Total Assets | $ 40,262,511 | $ 38,295,887 |
Healthcare Services [Member] | ||
Total Assets | 880,632 | 145,260 |
Real Estate Services [Member] | ||
Total Assets | $ 39,381,879 | $ 38,150,627 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total Revenue | $ 1,989,103 | $ 885,013 | $ 4,878,606 | $ 2,599,224 | ||||||
General and Administrative | 320,195 | 187,035 | 891,031 | 687,649 | ||||||
Property Taxes, Insurance and Other Operating | 703,816 | 218,138 | 1,596,835 | 446,240 | ||||||
Acquisition costs | 6,771 | 6,771 | ||||||||
Depreciation | 323,983 | 322,986 | 969,834 | 941,569 | ||||||
Total Expenses | 1,354,765 | 728,159 | 3,464,471 | 2,075,458 | ||||||
Income (Loss) from Operations | 634,338 | 156,854 | 1,414,135 | 523,766 | ||||||
Gain on Warrant Liability | (27) | (15,974) | (2,785) | (92,586) | ||||||
Loss on Extinguishment of Debt | 57,694 | |||||||||
Gain on Settlement of Other Liabilities | 354 | (98,521) | ||||||||
Gain on Sale of Investments | (1,069) | |||||||||
Gain from Insurance Claim | (53,754) | (324,018) | ||||||||
Interest Income | (19,245) | (26,248) | ||||||||
Interest Expense | 524,503 | 590,514 | 1,595,363 | 1,783,296 | ||||||
Total Other (Income) Expense | 451,477 | 574,894 | 1,241,243 | 1,649,883 | ||||||
Net income (Loss) | 182,861 | $ (170,124) | $ 160,155 | (418,040) | $ (495,843) | $ (212,234) | 172,892 | (1,126,117) | $ (2,007,006) | $ (3,001,618) |
Net Loss Attributable to Noncontrolling Interests | 1,221 | (948) | 7,231 | 17,965 | ||||||
Net Income (Loss) Attributable to Global Healthcare REIT, Inc. | 184,082 | (418,988) | 180,123 | (1,108,152) | ||||||
Rental Revenue [Member] | ||||||||||
Total Revenue | 963,645 | 885,013 | 2,789,220 | 2,599,224 | ||||||
Healthcare Revenue [Member] | ||||||||||
Total Revenue | 1,025,458 | 2,089,386 | ||||||||
Real Estate Services [Member] | ||||||||||
Total Revenue | 963,645 | 885,013 | 2,789,220 | 2,599,224 | ||||||
General and Administrative | 185,263 | 176,036 | 575,930 | 569,807 | ||||||
Property Taxes, Insurance and Other Operating | 29,892 | 48,964 | 117,778 | 105,593 | ||||||
Acquisition costs | 6,771 | 6,771 | ||||||||
Depreciation | 320,514 | 319,516 | 959,427 | 936,943 | ||||||
Total Expenses | 542,440 | 544,516 | 1,659,916 | 1,612,343 | ||||||
Income (Loss) from Operations | 421,205 | 340,497 | 1,129,304 | 986,881 | ||||||
Gain on Warrant Liability | (27) | (15,974) | (2,785) | (92,586) | ||||||
Loss on Extinguishment of Debt | 57,694 | |||||||||
Gain on Settlement of Other Liabilities | 354 | (98,521) | ||||||||
Gain on Sale of Investments | (1,069) | |||||||||
Gain from Insurance Claim | (53,754) | (324,018) | ||||||||
Interest Income | (19,245) | (26,248) | ||||||||
Interest Expense | 524,503 | 590,514 | 1,595,363 | 1,783,296 | ||||||
Total Other (Income) Expense | 451,477 | 574,894 | 1,241,243 | 1,649,883 | ||||||
Net income (Loss) | (30,272) | (234,397) | (111,939) | (663,002) | ||||||
Net Loss Attributable to Noncontrolling Interests | 1,221 | (948) | 7,231 | 17,965 | ||||||
Net Income (Loss) Attributable to Global Healthcare REIT, Inc. | (29,051) | (235,345) | (104,708) | (645,037) | ||||||
Real Estate Services [Member] | Rental Revenue [Member] | ||||||||||
Total Revenue | 963,645 | 885,013 | 2,789,220 | 2,599,224 | ||||||
Real Estate Services [Member] | Healthcare Revenue [Member] | ||||||||||
Total Revenue | ||||||||||
Healthcare Services [Member] | ||||||||||
Total Revenue | 1,025,458 | 2,089,386 | ||||||||
General and Administrative | 134,932 | 10,999 | 315,101 | 117,842 | ||||||
Property Taxes, Insurance and Other Operating | 673,924 | 169,174 | 1,479,047 | 340,647 | ||||||
Acquisition costs | ||||||||||
Depreciation | 3,469 | 3,470 | 10,407 | 4,626 | ||||||
Total Expenses | 812,325 | 183,643 | 1,804,555 | 463,115 | ||||||
Income (Loss) from Operations | 213,133 | (183,643) | 284,831 | (463,115) | ||||||
Gain on Warrant Liability | ||||||||||
Loss on Extinguishment of Debt | ||||||||||
Gain on Settlement of Other Liabilities | ||||||||||
Gain on Sale of Investments | ||||||||||
Gain from Insurance Claim | ||||||||||
Interest Income | ||||||||||
Interest Expense | ||||||||||
Total Other (Income) Expense | ||||||||||
Net income (Loss) | 213,133 | (183,643) | 284,831 | (463,115) | ||||||
Net Loss Attributable to Noncontrolling Interests | ||||||||||
Net Income (Loss) Attributable to Global Healthcare REIT, Inc. | 213,133 | (183,643) | 284,831 | (463,115) | ||||||
Healthcare Services [Member] | Rental Revenue [Member] | ||||||||||
Total Revenue | ||||||||||
Healthcare Services [Member] | Healthcare Revenue [Member] | ||||||||||
Total Revenue | $ 1,025,458 | $ 2,089,386 |
Other Income (Details Narrative
Other Income (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | ||||
Gain on Proceeds from Insurance Claim | $ 53,754 | $ 324,018 |