Overview
On December 16, 2016, the Company and its newly formed operating partnership,
Presidential OP, entered into an interest contribution agreement (the "Initial
Agreement") with First Capital Real Estate Trust Incorporated ("FC REIT"), First
Capital Real Estate Operating Partnership (the "FC OP"), Township Nine Owner,
LLC (T9/JV), Capital Station Holdings, LLC, Capital Station Member, LLC, Capital
Station 65 LLC and Avalon Jubilee LLC.
On January 6, 2017, the Company and the other parties to the Initial Agreement
entered into the First Amendment to the Initial Agreement (the "Amendment," and,
together with the Initial Agreement, the "Agreement") and FC OP entered into the
Agreement of Limited Partnership (the "Limited Partnership Agreement") of
Presidential OP, as limited partner, with the Company as general partner. The
Agreement contemplated that Presidential OP would acquire from FC OP a 31.3333%
interest in the owner of a residential community referred to as the "Avalon
Property" (as defined below) and 66% (the "T9 Transferred Interest") of FC OP's
92% interest (FC/T9 Interest) in the owner of a development property known as
the "T9 Property." The purchase price for the interests was to be payable in
limited partnership interests in Presidential OP ("Presidential OP Units")
convertible under certain conditions into shares of the Company's Class B common
stock or redeemable for cash at the Company's discretion.
Presidential OP's acquisition of the interest in the Avalon Property was
completed on January 6, 2017. The Avalon Property consisted of 251
non-contiguous single-family residential lots, at various stages of development,
within the Jubilee at Los Lunas subdivision located in Los Lunas, New Mexico
(the "Avalon Property"). At the Closing, in exchange for the contribution to
Presidential OP of FC OP's membership interests in the Avalon Property, FC OP
received 4,632,000 Presidential OP Units in, and became a limited partner of,
Presidential OP. Such limited partnership interests were convertible, upon the
satisfaction of certain conditions, into shares of Class B common stock of the
Company on a one-for-one basis or redeemable into cash at the Company's
discretion. Presidential OP never completed its acquisition of the T9 Property
from FC OP and all agreements related to the acquisition and transfer of the
interests in the property were canceled.
In connection with the Closing, FC REIT paid $800,000 to Presidential to be used
as operating capital, of which $300,000 was used for direct fees in connection
with the transaction. The Company recorded this payment as other income in 2017.
The agreements also provided that FC REIT would contribute additional working
capital for the seamless integration of the FC REIT properties, up listing of
the Company on a national securities exchange and asset growth plans as
conditions precedent to the closing of the agreement. FC REIT did not provide
the required working capital to complete these activities. All the agreements
relating to the FC REIT transactions entered into in 2016 and 2017 were
considered terminated due to the lack of performance by FC REIT except the
31.3333% ownership interest in the Avalon Property. On March 21, 2018 FC OP
redeemed its 4,632,000 shares of Presidential OP Units in exchange for $90,381
previously owed to Presidential from FC REIT. Upon the redemption of the
Presidential OP Units the Presidential OP Partnership was terminated pursuant to
the terms of the Limited Partnership Agreement and Presidential retained the
31.3333% interest in the Avalon Property. The Company believes that it does not
have any further obligations to FC REIT or any other parties in connection with
the Agreement due to the lack of contractual performance by FC REIT, numerous
closing conditions precedent in the Agreement not being met, and the balance of
transactions contemplated in the Agreement not being completed.
On January 6, 2017 Presidential OP recorded the fair value of their interest in
Avalon Jublee LLC at $4,222,027 based on the appraised value of the property
under the assumptions that the partnership would be building and selling
single-family homes. In 2018 the managing members in the Avalon Property changed
their focus from building and selling single-family homes to improving and
selling developed lots. The change in strategy has significantly impaired our
investment.
Based on the redemption features associated with FC OP's limited partnership
interest in Presidential OP, the non-controlling interest of FC OP's interest is
reported as equity in the mezzanine. The redemption feature allowed FC OP to
redeem their interest in Presidential OP one year after their initial
contribution whereby such interest could be redeemed in full or partial through
the settlement of cash or issuance of the Company's Class B Common Stock, based
solely on the Company's discretion. The Company has elected to adjust the
non-controlling interest to the redemption amount at each balance sheet date. As
of December 31, 2017, the redemption amount of the non-controlling interest was
less than the initial carrying value adjusted for the portion of net income
allocated to the non-controlling interest for the year-end December 31, 2017 and
as such, the non-controlling interest is reported at its carrying amount.
On December 31, 2020 the Avalon Property consisted of 34 finished, single-family
subdivision lots and approximately 21.42 acres of subsequent phases of
undeveloped land in Los Lunas, New Mexico.
We outsource the management of the Mapletree Industrial Center to Signature
Community Management LLC ("Signature") and our asset management to Signature
Community Investment Group LLC ("SCIG"), companies owned by our CEO. We accrued
a management fee of $40,291 and an asset management fee of $12,090 during 2020.
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We obtain funds for working capital and investment from our available cash,
operating activities, and refinancing of mortgage loans on our real estate.
On July 28, 2015, Palmer-Mapletree LLC, a wholly-owned subsidiary of the Company
entered into a Loan Agreement (the "Loan Agreement") with Natixis Real Estate
Capital LLC providing for a mortgage loan in the principal amount of $1,750,000
(the "Loan") at an interest rate of 6.031%. $934,794 of the loan proceeds were
used to repay the prior mortgage loan and line of credit on the Mapletree
Property. $123,757 of the Loan proceeds was set aside for capital improvements
and reserves for the property. We received net proceeds of $585,125. The Loan
matures on August 5, 2025 and requires monthly principal and interest payments
of $11,308 and escrows for insurance, taxes and capital improvements. Escrow
balances are considered restricted cash.
Critical Accounting Policies
In preparing the consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP"),
management is required to make estimates and assumptions that affect the
financial statements and disclosures. These estimates require difficult, complex
and subjective judgments. Management has discussed with the Audit Committee the
implementation of the critical accounting policies described below and the
estimates required with respect to such policies.
Real Estate
Real estate is carried at cost, net of accumulated depreciation. Additions and
improvements are capitalized whereas repairs and maintenance are charged to
rental property operating expenses as incurred. Depreciation is generally
provided on the straight-line method over the estimated useful life of the
asset. The useful life of each property, as well as the allocation of the costs
associated with a property to its various components, requires estimates by
management. If management incorrectly estimates the allocation of those costs or
incorrectly estimates the useful lives of its real estate, depreciation expense
may be miscalculated.
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The Company reviews its properties for impairment if events or changes in
circumstances warrant. If impairment were to occur, the property would be
written down to its estimated fair value. The Company assesses the
recoverability of its investment in real estate based on undiscounted cash flow
estimates. The future estimated cash flows of a property are based on current
rental revenues and operating expenses, as well as the current local economic
climate affecting the property. Considerable judgment is required in making
these estimates and changes in these estimates could cause the estimated cash
flows to change and impairment could occur. As of December 31, 2020, the
Company's net real estate was carried at $659,075.
Rental Revenue Recognition
Rental revenues include revenues from the leasing of space at our Mapletree
property, which primarily consist of monthly base rents in addition to the
reimbursement of utilities. Other rental revenues, which are included as a
component of rental revenue, primarily include fees related to build-out or
other services performed by the Company on the property.
The Company adopted ASU 2014-09, Revenue from Contracts with Customers (ASC 606)
effective January 1, 2018, and its adoption did not have a material effect on
the consolidated financial statements, as the majority of the Company's revenue
is recognized under ASC 840, Leases, and subsequently ASC 842, Leases, upon its
adoption, which are scoped out of ASC 606. ASC 606 establishes a single
comprehensive model for entities to use in accounting for revenue arising from
contract with customers and supersedes most of the existing revenue recognition
guidance. This standard requires us to recognize for certain of our revenue
sources the transfer of promised goods or services to customers in an amount
that reflects the consideration we are entitled to in exchange for those goods
or services. The Company's other rental revenues recognized in accordance with
ASC 606 are recognized over time as the performance obligations are satisfied.
Such revenues are not material to the consolidated financial statements. During
the year ended December 31, 2017, prior to the adoption of ASC 606, the Company
recognized other rental revenue in the period services were provided and the
respective revenue was realizable and earned.
The Company adopted ASU 2016-02, Leases (ASC 842) effective January 1, 2019, and
its adoption did not have a material effect on the consolidated financial
statements. As a lessor, the adoption of ASU 2016-02 (as amended by subsequent
ASUs) did not change the timing of revenue recognition of the Company's rental
revenues. Revenues from the leasing of space at our property to tenants includes
(i) lease components, including fixed and variable lease payments, and nonlease
components which include reimbursement of electric expense and (ii)
reimbursement of real estate taxes. As lessor, we have elected to combine the
lease and nonlease components of our operating lease agreements and account for
the components as a single lease component in accordance with ASC 842.
Revenues derived from fixed lease payments are recognized on a straight-line
basis over the non-cancelable period of the lease, together with renewal options
that are reasonably certain of being exercised. We commence rental revenue
recognition when the underlying asset is available for use by the lessee.
Revenue derived from the reimbursement of real estate taxes and electric expense
are generally recognized in the same period as the related expenses are
incurred, which did not change as a result of the adoption of ASU 2016-02.
The Company assesses the collectability of lease receivables (including future
minimum rental payments) both at commencement and throughout the lease term. If
our assessment of collectability changes during the lease term, any difference
between the revenue that would have been received under the straight-line method
and the lease payments that have been collected will be recognized as a current
period adjustment to rental revenue. Rental revenue associated with leases where
collectability has been deemed less than probable is recognized on a cash basis
in accordance with ASC 842.
Allowance for Doubtful Accounts
The Company assesses the collectability of amounts due from tenants and other
receivables, using indicators such as past-due accounts, the nature and age of
the receivable, the payment history and the ability of the tenant or debtor to
meet its payment obligations. Management's estimate of allowances for doubtful
accounts is subject to revision as these factors change. Any subsequent recovery
of tenant receivables that were previously reserved is recorded as a reduction
in the allowance of bad debt. As of December 31, 2020, 2019, 2018 and 2017, the
allowance relating to tenant receivables was $6,764, $860, $450 and $0,
respectively.
Investments in Joint Venture
The Company (through Presidential OP) has an equity investment in a joint
venture and accounts for this investment using the fair value method of
accounting.
Income Taxes
We operate in a manner intended to enable us to continue to qualify as a Real
Estate Investment Trust under Sections 856 to 860 of the Code. Under those
sections, a REIT which meets certain requirements is not subject to Federal
income tax on that portion of its taxable income which is distributed to its
shareholders, if at least 90% of its REIT taxable income (exclusive of capital
gains) is so distributed. As a result of using our ordinary tax loss carry
forwards in 2020 there was no requirement to make a distribution in 2021. In
addition, no provision for income taxes was required at December 31, 2020. If
the Company fails to distribute the required amounts of income to its
shareholders, or otherwise fails to meet the REIT requirements, we would fail to
qualify as a REIT and substantial adverse tax consequences could result. We
believe that we will not be required to pay a dividend in 2022 to maintain our
REIT status.
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Results of Operations
Results of Operations for the year ended December 31, 2020 compared to the year
ended December 31, 2019 were as follows:
2020 2019
Total Revenue $ 1,017,613 $ 1,022,724
Operating expenses 600,335 610,115
Net (loss) $ (7,881 ) $ (21,119 )
Revenues decreased by $5,111 for the year ended December 31, 2020, compared to
the year ended December 31, 2019, as a result of lower occupancy at the
Mapletree Industrial Center.
Net loss for the year ended December 31, 2020 was $7,881 compared to net loss of
$21,119 for the year ended December 31, 2019, a decrease in the loss of $13,238.
The decrease was comprised of: (i) higher general and administrative expenses of
approximately $30,000 caused by increases in insurance and professional fees,
(ii) lower rental income of $5,111, (iii) increase in other income of $40,000,
(iv) offset by a $9,780 decrease in operating expenses.
Results of Operations for the year ended December 31, 2019 compared to the year
ended December 31, 2018 were as follows:
2019 2018
Total Revenue $ 1,022,724 $ 970,779
Operating expenses 610,115 583,561
Net (loss) $ (21,119 ) $ (4,308,176 )
Revenues increased by $51,945 for the year ended December 31, 2019, compared to
the year ended December 31, 2018, due to higher occupancy at the Mapletree
Industrial Center.
The net loss for the year ended December 31, 2019 was $21,119 compared to a net
loss of $4,308,176 for the year ended December 31, 2018, a decrease of
$4,287,057. The decrease was primarily due to an unrealized loss of $4,255,383
on our investment in the Avalon Property. The decrease was also comprised of:
(i) lower general and administrative expenses of approximately $49,000 due to a
decrease in professional and filling fees, and (ii) improved rental income of
approximately $52,000 for the year, offset by an increase in operating expenses
of approximately $27,000 mostly from higher repairs and maintenance costs of
$22,000 at the Mapletree property.
Results of Operations for the year ended December 31, 2018 compared to the year
ended December 31, 2017 were as follows:
2018 2017
Total Revenue $ 970,779 $ 910,658
Operating expenses 583,561 606,116
Net (loss) income $ (4,308,176 ) $ 367,368
Revenues increased by $60,121 for the year ended December 31, 2018, compared to
the year ended December 31, 2017, because of higher occupancy at the Mapletree
Industrial Center.
Net loss for the year ended December 31, 2018 was $4,308,176 compared to net
income of $367,368 for the year ended December 31, 2017, a decrease of
$4,675,544. The decrease was comprised of: (i) lower general and administrative
expenses of approximately $115,000 mostly due to lower officers compensation of
$117,000, (ii) decreases in operating expenses of approximately $23,000 mostly
from lower insurance costs and leasing commissions, and (iii) higher rental
income of $60,121 in the period, which was offset by an unrealized loss of
$4,255,383 in our investment in the Avalon Property and the receipt of $500,000
($800,000 less direct fees of $300,000) of other income related to the FC REIT
transaction.
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Results of Operations for the year ended December 31, 2017 compared to the year
ended December 31, 2016 were as follows:
2017 2016
Total Revenue $ 910,658 $ 938,903
Operating expenses 606,116 557,176
Net (loss) Income $ 367,368 $ (826,318 )
Revenues decreased by $28,245 for the year ended December 31, 2017, compared to
the year ended December 31, 2016, because of lower occupancy at the Mapletree
Industrial Center.
Net income for the year ended December 31, 2017 was $367,368 compared to a net
loss of $826,318 for the year ended December 31, 2016, an improvement of
$1,193,686. The increase in net income was comprised of: (i) lower general and
administrative expenses of approximately $654,000 primarily due to lower
officer's compensation costs (we discontinued the payment of salary to our
President in June of 2017 and in January of 2017 we discontinued accruing salary
for our CEO in connection with the FC REIT transaction), lower professional fees
related to the FC REIT transaction and lower costs due to the cessation of the
lease at our corporate offices, (ii) lower operating expenses of approximately
$49,000 due to lower insurance costs and leasing commissions, and (iii) lower
rental income of $28,245, all of which was offset by $800,000 of income received
from FC REIT in connection with the January 6, 2017 transaction. We incurred
direct fees of $300,000 which reduced the other income recorded to $500,000. We
also recognized an unrealized gain of $116,331 in connection with our investment
in the Avalon Property.
Results of Operations for the six months ended June 30, 2021 compared to the six
months ended June 30, 2020 were as follows:
2021 2020
Total Revenue $ 517,175 $ 526,522
Operating expenses 288,133 293,196
Net Income $ 9,669 $ 22,144
Revenues decreased by $9,347 for the six months ended June 30, 2021, compared to
the six months ended June 30, 2020, because of lower occupancy at the Mapletree
Industrial Center.
Net income for the six months ended June 30, 2021 was $9,669 compared to $22,144
for the six months ended June 30, 2020, a decrease of $12,475. The decrease in
net income was comprised of: (i) higher general and administrative expenses of
approximately $9,000 primarily due to higher professional fees, (ii) lower
rental income of approximately $9,000, offset by lower operating expenses of
approximately $5,000 due to lower insurance costs and salaries at the Mapletree
property.
Results of Operations for the three months ended June 30, 2021 compared to the
three months ended June 30, 2020 were as follows:
2021 2020
Total Revenue $ 260,971 $ 257,295
Operating expenses 126,516 145,486
Net Income $ 27,581 $ 6,242
Revenues increased by $3,676, for the three months ended June 30, 2021, compared
to the three months ended June 30, 2020, because of high occupancy at the
Mapletree Industrial Center.
Net income for the three months ended June 30, 2021 was $27,581 compared to
$6,242 for the three months ended June 30, 2020, an increase of $21,339. The
increase in net income was comprised of: (i) increase in rental income of
approximately $4,000, (ii) decrease in operating costs of $18,970 primarily
related to a reduction in salaries at the Mapletree property, offset by
increased depreciation expense due to the improvements made at the Mapletree
property.
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Results of Operations for the three months ended March 31, 2021 compared to the
three months ended March 31, 2020 were as follows:
2021 2020
Total Revenue $ 256,204 $ 269,227
Operating expenses 161,617 147,710
Net (loss) Income $ (17,912 ) $ 15,902
Revenues decreased by $13,023 for the three months ended March 31, 2021,
compared to the three months ended March 31, 2020, because of lower occupancy at
the Mapletree Industrial Center.
Net loss for the three months ended March 31, 2021 was $17,912 compared to
$15,902 for the three months ended March 31, 2020, a decrease of $33,814. The
decrease in net income was comprised of: (i) higher general and administrative
expenses of approximately $7.000 primarily due to higher professional fees, (ii)
lower rental income of approximately $13,000, and (iii) higher operating
expenses of approximately $14,000 due to higher maintenance and utility costs at
the Mapletree property.
Balance Sheet
December 31, 2020 compared to December 31, 2019
Net real estate increased by approximately $55,000 as a result of additions and
improvements to our Mapletree property of approximately $109,000 offset by
depreciation expense of approximately $54,000 in 2020.
Prepaid expenses increased by approximately $21,000 primarily as a result of
insurance costs in connection with the Mapletree property and corporate
directors and officer's insurance.
Mortgage escrow decreased by approximately $67,000 primarily due to roof and
other improvements made to the Mapletree property.
Accounts payable and accrued liabilities increased by approximately $45,000
primarily due to higher fees accrued for accounting work during the period.
Liquidity and Capital Resources
We obtain funds for working capital and investment from our available cash and
operating activities and refinancing of mortgage loans on our real estate.
The Company had a loss from continuing operations at December 31, 2020. This,
combined with a history of operating losses and working capital deficiency, has
been detrimental to our ability to grow the Company.
At December 31, 2020, we had $206,112 in available cash, an increase from
December 31, 2019. The increase in cash was due to cash provided by operating
activities of $59,304, loan proceeds from the PPP loan of $42,100, offset by
$109,449 used for capital improvements and $38,133 in principal payments.
(a) Insurance
The Company carries comprehensive liability, fire, extended coverage, auto,
workman's compensation, rental loss and acts of terrorism insurance on its
properties. The Company also carries director and officer insurance. Management
believes that its properties are adequately covered by insurance. In 2020, the
cost for this insurance was approximately $159,000.
(b) Operating Activities
Cash from operating activities includes net cash received from rental property
operations. Net cash received from rental property operations was approximately
$907,000. Net cash received from rental property operations is before additions
and improvements and mortgage amortization.
(c) Investing Activities
During 2020, the Company invested approximately $109,000 in additions and
improvements to its property.
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(d) Financing Activities
During 2020, the Company made principal payments of $38,133 in connection with
the Mapletree property and received $42,100 in proceeds from the SBA PPP loan.
Balance Sheet
December 31, 2019 compared to December 31, 2018
Net real estate increased by approximately $81,000 because of additions and
improvements of approximately $130,000 at our Mapletree property offset by
depreciation expense of approximately $49,000 in 2019.
Prepaid expenses increased by approximately $2,400 primarily due to higher
insurance costs in connection with the Mapletree property and directors and
officer's insurance.
Mortgage escrow decreased by approximately $34,000 primarily due to higher
spending on improvements to the Mapletree property.
Accounts payable and accrued liabilities increased by approximately $53,000
primarily due to higher accounting fees and the accrual of property management
fees owed to Signature that were not paid during the period.
Liquidity and Capital Resources
We obtain funds for working capital and investment from our available cash and
operating activities and refinancing of mortgage loans on our real estate.
The Company had a loss from continuing operations at December 31, 2019. The
Company has had a history of operating losses and working capital deficiency,
which has been detrimental our ability to grow the Company.
At December 31, 2019, we had $185,358 in available cash, an increase from
December 31, 2018. The increase in cash was due to cash provided by operating
activities of $190,960, less $130,032 used for capital improvements, and $36,141
in principal payments.
(a) Insurance
The Company carries comprehensive liability, fire, extended coverage, auto,
workman's compensation, rental loss and acts of terrorism insurance on its
properties. The Company also carries director and officer insurance. Management
believes that its properties are adequately covered by insurance. In 2019, the
cost for this insurance was approximately $141,514.
(b) Operating Activities
Cash from operating activities includes net cash received from rental property
operations. Net cash received from rental property operations was approximately
$924,000. Net cash received from rental property operations is before additions
and improvements and mortgage amortization.
(c) Investing Activities
During 2019, the Company invested approximately $130,000 in additions and
improvements to its properties
(d) Financing Activities
During 2019, the Company made principal payments of $36,141 in connection with
the Mapletree property.
Balance Sheet
December 31, 2018 compared to December 31, 2017
Net real estate increased by approximately $10,000 as a result of additions and
improvements to the Mapletree property of approximately $57,000 offset by
depreciation expense of approximately $47,000 in 2018.
Prepaid expenses decreased by approximately $23,000 primarily as a result of
lower insurance costs in connection with the Mapletree property and directors
and officer's insurance.
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Mortgage escrow decreased by approximately $6,600 primarily due to increased
improvements made to the Mapletree property.
Accounts payable and accrued liabilities increased by approximately $94,000
primarily due to higher accounting fees and the accrual of property management
fees owed to Signature that were not paid during the period.
Liquidity and Capital Resources
We obtain funds for working capital and investment from our available cash and
operating activities, and refinancing of mortgage loans on our real estate.
The Company had a loss from continuing operations at December 31, 2018. This
combined with a history of operating losses and working capital deficiency,
which has been detrimental our ability to grow the Company.
At December 31, 2018, we had $126,380 in available cash, an increase from
December 31, 2018. The increase in cash was due to cash provided by operating
activities of $112,869, less $57,231 used for capital improvements and $34,003
in principal payments.
(a) Insurance
The Company carries comprehensive liability, fire, extended coverage, auto,
workman's compensation, rental loss and acts of terrorism insurance on its
properties. The Company also carries director and officer insurance. Management
believes that its properties are adequately covered by insurance. In 2018, the
cost for this insurance was approximately $192,000.
(b) Operating Activities
Cash from operating activities includes net cash received from rental property
operations. Net cash received from rental property operations was approximately
$970,000. Net cash received from rental property operations is before additions
and improvements and mortgage amortization.
(c) Investing Activities
During 2018, the Company invested approximately $57,000 in additions and
improvements to its properties
(d) Financing Activities
During 2018, the Company made principal payments of $34,003 in connection with
the Mapletree property.
Balance Sheet
December 31, 2017 compared to December 31, 2016
Net real estate decreased by approximately $9,500 as a result of additions and
improvements to the Mapletree property of approximately $36,000 offset by
depreciation expense of approximately $46,000 in 2017.
Prepaid expenses decreased by approximately $3,200 primarily as a result of
lower prepaid insurance in connection with the Mapletree property and directors
and officer's insurance.
Mortgage escrow increased by approximately $27,600 primarily due to decreased
property improvements at our Mapletree property.
Accounts payable and accrued liabilities decreased by approximately $937,000
primarily due to $710,000 of accrued salary forgiven by Nicholas Jekogian III
our CEO and a $200,000 reduction of professional fees recorded as part of the FC
REIT transaction.
Liquidity and Capital Resources
We obtain funds for working capital and investment from our available cash and
operating activities and refinancing of mortgage loans on our real estate.
The Company had income from continuing operations at December 31, 2017. The
Company has had a history of operating losses and working capital deficiency,
which has been detrimental to our ability to grow the Company.
At December 31, 2017, we had $98,158 in available cash, an increase from
December 31, 2016. The increase in cash was due to cash provided by operating
activities of $115,531, less $36,143 used for capital improvements and $31,991
in principal payments.
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(a) Insurance
The Company carries comprehensive liability, fire, extended coverage, auto,
workman's compensation, rental loss and acts of terrorism insurance on its
properties. The Company also carries director and officer insurance. Management
believes that its properties are adequately covered by insurance. In 2017, the
cost for this insurance was approximately $142,757.
(b) Operating Activities
Cash from operating activities includes net cash received from rental property
operations. Net cash received from rental property operations was approximately
$925,000. Net cash received from rental property operations is before additions
and improvements and mortgage amortization.
(c) Investing Activities
During 2017, the Company invested approximately $36,000 in additions and
improvements to its properties.
(d) Financing Activities
During 2017, the Company made principal payments of $31,991 in connection with
the Mapletree property.
Balance Sheet
June 30, 2021 compared to December 31, 2020
Net real estate decreased by approximately $17,000 as a result of additions and
improvements to the Mapletree property of approximately $9,900 offset by
depreciation expense of approximately $27,000 for the first six months of 2021.
Prepaid expenses decreased by approximately $55,000 primarily as a result of
timing of insurance payments in connection with the Mapletree property and
directors and officers insurance.
Mortgage escrow increased by approximately $75,000 primarily due to decreased
property improvements at our Mapletree property.
Accounts payable and accrued liabilities increased by approximately $39,000
primarily due to accruals of accounting fees and property management fees owed
to Signature that were not paid during the period.
Liquidity and Capital Resources
We obtain funds for working capital and investment from our available cash and
operating activities and refinancing of mortgage loans on our real estate.
The Company had income from continuing operations at June 30, 2021. The Company
has had a history of operating losses and working capital deficiency, which has
been detrimental to our ability to grow the Company.
At June 30, 2021 we had $255,214 in available cash, compared to $206,112 at
December 31, 2020 an increase of $49,102.
Operating Activities
Cash from operating activities includes net cash received from rental property
operations. Net cash received from rental property operations was approximately
$474,000. Net cash received from rental property operations is before additions
and improvements and mortgage amortization.
Balance Sheet
March 31, 2021 compared to December 31, 2020
Net real estate decreased by approximately $14,000 due to depreciation expense
for the three months ended March 31, 2021.
Prepaid expenses decreased by approximately $31,000 primarily as a result of
timing of insurance payments in connection with the Mapletree property and
directors and officer's insurance.
Mortgage escrow increased by approximately $41,000 primarily due to decreased
property improvements at our Mapletree property.
Accounts payable and accrued liabilities increased by approximately $20,000
primarily due to accruals of accounting fees and property management fees owed
to Signature that were not paid during the period.
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Liquidity and Capital Resources
We obtain funds for working capital and investment from our available cash and
operating activities and refinancing of mortgage loans on our real estate.
The Company had loss from continuing operations of $12,144 at March 31, 2021.
The Company has had a history of operating losses and working capital
deficiency, which has been detrimental to our ability to grow the Company.
At March 31, 2021 we had $219,886 in available cash, an increase from December
31, 2020 of $13,774.
Operating Activities
Cash from operating activities includes net cash received from rental property
operations. Net cash received from rental property operations was approximately
$251,926. Net cash received from rental property operations is before additions
and improvements and mortgage amortization.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably
likely to have, a material effect on the financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources of the Company.
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