Filing identity and reporting period
The supplied filing is Global Medical REIT Inc.’s Form 10-Q for the quarter ended February 28, 2014, not a filing identified as Chiron Real Estate Inc. for 2014 Q2. The company, formerly Scoop Media, Inc., was a development-stage company and had not commenced operations. It had recently shifted its plans from an internet business to healthcare real estate and completed its conversion to a Maryland corporation in January 2014.
Financial results and condition
| Metric | Three months ended February 28, 2014 | Six months ended February 28, 2014 | Comparable 2013 period |
|---|---|---|---|
| Revenue | None | None | None |
| General and administrative expense / net loss | $13,687 | $21,352 | Expense and net loss: $3,572 and $31,192, respectively |
| Cash used in operating activities | Not separately stated | $104 | $28,192 used |
| Cash provided by financing activities | Not separately stated | None | $25,000 |
At February 28, 2014, cash was $3,415 and prepaid expenses were $3,632. Current liabilities totaled $44,304, including $23,315 due to the majority shareholder. Working capital and stockholders’ equity were each negative $37,257. Accumulated deficit was $117,257. The related-party balance was unsecured, non-interest-bearing, and due on demand. The filing reports no interest or income taxes paid and no material off-balance-sheet arrangements.
Changes, outlook, and risks
- Six-month expenses and net loss fell by $9,840 from the 2013 period, while quarterly expenses and net loss rose by $10,115. Management attributed the quarterly increase to professional fees for the re-domestication and SEC reporting, and the six-month decrease to lower professional fees than in the prior year.
- Management stated that continuing losses and negative operating cash flows raise substantial doubt about the company’s ability to continue as a going concern. Continued operations and planned acquisitions depend on obtaining additional debt or equity financing; no future funding agreement with the controlling shareholder was in place.
- On April 15, 2014, the company signed an agreement to buy a Select Medical long-term acute care hospital in Omaha for approximately $21.7 million. It paid a $200,000 deposit on April 17, described as nonrefundable except in limited circumstances. Closing depended on specified conditions, including obtaining a financing commitment by April 17 and receiving a ground lessor waiver. The notes state a closing by May 15, 2014, with a possible extension to May 30; MD&A instead says May 15, 2015, an apparent inconsistency requiring verification.
- David A. Young became CEO in February 2014. The filing said the company expected to appoint a permanent CFO by the period ending May 31, 2014. Management reported disclosure controls effective at period-end and no material quarterly changes in internal control over financial reporting.
- The filing cautions that forward-looking statements are subject to risks and uncertainty and gives no assurance that financing or the proposed acquisition would be completed. It reports no pending material legal proceedings.
Important facts for investors to verify
- Confirm the issuer and period: the document is for Global Medical REIT Inc., quarter ended February 28, 2014, despite the request metadata naming another company and period.
- Check the hospital purchase’s final closing date, financing, required consents and other closing conditions, and treatment of the deposit.
- Assess available funding and liquidity in light of the going-concern uncertainty, minimal cash, and demand payable to the controlling shareholder.
- Verify subsequent developments in the planned REIT strategy, acquisition activity, and CFO appointment; the filing provides no completed acquisition or quantified operating outlook.