Business Context and Reporting Period
This Form 8-K Current Report was filed by Global Medical REIT Inc. (not Chiron Real Estate Inc.) on December 12, 2018. The filing reports the entry into a material definitive agreement regarding a public equity offering.
Key Financial Metrics and Transaction Details
- Offering Size: 3,500,000 shares of common stock.
- Offering Price: $9.00 per share to the public.
- Gross Proceeds: Expected to be $31.5 million.
- Underwriting Discount: Underwriters purchase 1,111,111 shares at $9.00 and the remainder at $8.55 per share.
- Over-Allotment Option: 30-day option for underwriters to purchase up to 525,000 additional shares.
- Existing Debt: As of September 30, 2018, $197.4 million outstanding under a Revolving Credit Facility (LIBOR + 1.90%).
Material Changes and Use of Proceeds
The primary material change is the execution of an Underwriting Agreement with Stifel, Nicolaus & Company, Incorporated and BMO Capital Markets Corp. The Company intends to use the net proceeds to:
- Repay a portion of the outstanding indebtedness under its Revolving Credit Facility.
- Fund future acquisitions.
- Support other general corporate purposes.
The Company notes that amounts repaid under the Revolving Credit Facility may be re-borrowed in the future to fund its capital program.
Outlook, Risks, and Management Commentary
- Closing Date: The Offering is expected to close on December 14, 2018.
- Debt Maturity: The Revolving Credit Facility has an initial termination date of August 7, 2022, extendable by one year if no default occurs.
- Legal Opinion: Venable LLP provided an opinion regarding the legality of the shares.
- Risk Disclosure: The filing states that the description of the Underwriting Agreement is qualified in its entirety by reference to the full text of the agreement and the Prospectus.
Investor Verification Checklist
- Verify the final closing date and actual gross proceeds received (expected $31.5 million).
- Confirm the exact amount of debt repaid from the $197.4 million Revolving Credit Facility balance.
- Review the full Underwriting Agreement (Exhibit 1.1) for specific indemnification and termination provisions.
- Check if the 525,000 share over-allotment option was exercised by the underwriters.
- Monitor future re-borrowing activity under the Revolving Credit Facility as indicated by management.