Quarterly report pursuant to Section 13 or 15(d)

DEBT

v3.5.0.2
DEBT
9 Months Ended
Sep. 30, 2016
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
NOTE 5. DEBT
 
Mortgage Notes Payable
 
As of September 30, 2016, the Company’s mortgage notes payable consisted of the following:
 
 
 
 
 
Deferred
 
 
 
 
 
 
 
 
 
Principal
 
Financing
 
 
 
Contractual
 
 
 
 
 
Amount
 
Costs, Net
 
Net Balance
 
Interest Rate
 
Loan Maturity
 
Accredo/Walgreens loan
 
$
7,298,384
 
$
(163,671)
 
$
7,134,713
 
 
3.95
%
 
7/1/2021
 
 
Unsecured Credit Facility
 
On June 7, 2016, the Company, through the Operating Partnership, entered into a credit agreement (the “Unsecured Credit Agreement”) with Pacific Mercantile Bank. Pursuant to the Unsecured Credit Agreement, the Company was provided with a $12,000,000 unsecured credit facility with an interest rate equal to 1% over an independent index which is the highest rate on corporate loans, which had posted by at least 75% of the USA’s thirty (30) largest banks known as The Wall Street Journal Prime Rate as published in the Wall Street Journal (the “Index”), which had an initial rate of 4.5%. Payments under the Unsecured Credit facility are interest only and are due on the 15 th day of each month. The Unsecured Credit facility matures June 15, 2017. The Company drew $11,000,000 on the Unsecured Facility in June 2016. As of September 30, 2016, in connection with the Unsecured Credit Agreement, the Company incurred $2,547 of deferred financing costs, of which $792 was being amortized as a component of interest expense over the term of the agreement. As of September 30, 3016, there was $6,963,500 outstanding under the Unsecured Credit Facility.
 
Pursuant to the terms of the mortgage note payable and the Unsecured Credit Facility, the Company and/or the Operating Partnership is subject to certain financial loan covenants. The Company was in compliance with all of its financial debt covenants as of September 30, 2016.
 
The following summarizes the future principal repayment of the Company’s mortgage notes payable and Unsecured Credit Facility as of September 30, 2016:
 
 
 
Mortgage Note
 
Unsecured
 
 
 
 
 
Payable
 
Credit Facility
 
Total
 
Remaining 2016
 
$
32,239
 
$
–
 
$
32,239
 
2017
 
 
132,180
 
 
6,963,500
 
 
7,095,680
 
2018
 
 
137,496
 
 
–
 
 
137,496
 
2019
 
 
143,027
 
 
–
 
 
143,027
 
2020
 
 
148,780
 
 
–
 
 
148,780
 
2021
 
 
6,704,662
 
 
–
 
 
6,704,662
 
Total principal
 
 
7,298,384
 
 
6,963,500
 
 
14,261,884
 
Deferred financing costs, net
 
 
(163,671)
 
 
(1,755)
 
 
(165,426)
 
Total
 
$
7,134,713
 
$
6,961,745
 
$
14,096,458
 
 
During the three and nine months ended September 30, 2016, the Company incurred $174,271 and $214,921 of interest expense, respectively. As of September 30, 2016, $11,957 of interest expense was payable. Included in interest expense during the three and nine months ended September 30, 2016 was $9,452 and $10,637 of amortization of deferred financing costs, respectively.