Global Healthcare REIT has completed the first closing of a private offering of its common stock, and with the proceeds of the offering closed upon the acquisition of its second skilled nursing facility.
The company commenced a private offering of its common stock, USD0.05 par value, on 4 December 2013.
The offering consists of up to 7.5 million shares of common stock being offered on a 2,250,000 share, all-or-none, minimum, 7,500,000 share maximum, best efforts, basis at a private offering price of USD0.75 per share.
Subscriptions for shares in the offering were sold either for cash or in exchange for outstanding notes owed by the company or an affiliate of the company. The company has also granted the placement agent with an over-allotment option covering an additional 1,500,000 shares of common stock.
On 31 December, the company completed the first closing on the minimum offering, having sold an aggregate of 4,190,562 shares of common stock for gross proceeds of USD3,142,912. Of the total subscriptions, USD465,000 in principal and USD5,414 in accrued interest of notes were exchanged for shares; and the balance of the subscriptions were paid in cash. After deducting placement agent fees of USD185,996, non-accountable expense allowance of USD62,750 and expense reimbursements, the company realised net proceeds of USD2,409,834.77 from the first closing.
The offering was sold to 42 investors.
The offering will continue until the sale of the maximum offering or until terminated by agreement of the company and its placement agent.
Immediately following the consummation of the first closing of the minimum offering, the company used approximately USD984,500 of the net proceeds to consummate the purchase of the 110 bed Warrenton Nursing Home located in Warrenton, Georgia.
Warrenton was purchased by ATL/WARR, a single purpose Georgia limited liability company (Warr LLC), which was previously owned 95 per cent by Christopher Brogdon and five per cent by an unaffiliated investor. Concurrently, Brogdon conveyed his 95 per cent membership interest in Warr LLC to the company for nominal consideration.
The total purchase price for Warrenton was USD3.5m, of which USD2.72m was paid with the proceeds of a commercial loan, and the balance with the cash paid by the company.
Warrenton is leased to a multi-unit skilled nursing home operator.
Christopher Brogdon, president of Global, says: "We are extremely pleased with the response we have received so far in the offering. This first closing enabled us to close on our second skilled nursing home and we are optimistic that we can continue the offering and accelerate our acquisition strategy. I would like to thank our shareholders for their continuing support and shared optimism."