Business Context and Reporting Period
This Form 8-K is filed by Griffin-American Healthcare REIT IV, Inc. (the "Registrant") on March 29, 2017. The filing reports the entry into a material definitive agreement, specifically Amendment No. 3 to the Dealer Manager Agreement with Griffin Capital Securities, LLC and Griffin-American Healthcare REIT IV Advisor, LLC, in connection with the Registrant's initial public offering.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. Instead, it details the following fee structures and financial terms established by the Third Amendment:
- Class I Common Stock Dealer Manager Fee: Maximum of 1.5% of gross offering proceeds, fully funded by the Advisor.
- Class T Common Stock Dealer Manager Fee: Maximum of 3.0% of gross offering proceeds (1.0% funded by the Registrant; up to 2.0% funded by the Advisor).
- Stockholder Servicing Fee (Class T): Maximum of 4.0% of gross offering proceeds, accruing daily at 1/365th of 1.0% of the purchase price per share (excluding shares sold via the distribution reinvestment plan).
- Purchase Price Adjustment: The purchase price for Class I and Class T shares will be reduced if the dealer manager fee is less than the maximum thresholds specified above.
Material Changes Versus Prior Period
The Third Amendment modifies the previously executed Dealer Manager Agreement (dated February 16, 2016, and amended in June 2016 and February 2017). The material changes include:
- Establishment of specific maximum caps on dealer manager fees for Class I and Class T shares.
- Definition of funding responsibilities for the dealer manager fees between the Registrant and the Advisor.
- Implementation of a mechanism to reduce share purchase prices if actual fees paid are below the maximum caps.
- Formalization of the stockholder servicing fee structure for Class T shares and corresponding fees for participating dealers.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, outlook, or management commentary regarding future financial performance. The primary contingency noted is that the stockholder servicing fee may be reduced or limited by agreement with certain dealers. The material terms of the agreement are qualified in their entirety by the Third Amendment (Exhibit 10.1).
Investor Verification Checklist
- Verify the final offering price of Class I and Class T shares to confirm if the purchase price reduction mechanism was triggered.
- Review the full text of Amendment No. 3 (Exhibit 10.1) for any additional covenants or conditions not summarized in the 8-K.
- Confirm the total gross offering proceeds to calculate the actual dollar amount of fees paid to the Dealer Manager and Advisor.
- Check subsequent filings to determine if the stockholder servicing fee was reduced by agreement with specific dealers.