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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission file number: 001-37815

Global Medical REIT Inc.

(Exact name of registrant as specified in its charter)

Maryland

    

46-4757266

(State or other jurisdiction of incorporation or
organization)

 

(I.R.S. Employer Identification No.)

 

 

 

 7373 Wisconsin Avenue, Suite 800

Bethesda, MD

 

20814

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (202) 524-6851

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol(s):

    

Name of each exchange on which registered:

Common Stock, par value $0.001 per share

 

GMRE

 

NYSE

 Series A Preferred Stock, par value $0.001 per share

 

GMRE PrA

 

NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

þ

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of the registrant’s common stock outstanding at August 5, 2024 was 65,587,648

Table of Contents

TABLE OF CONTENTS

PART I   FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets – June 30, 2024 and December 31, 2023

3

Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2024 and 2023

4

Condensed Consolidated Statements of Comprehensive (Loss) Income – Three and Six Months Ended June 30, 2024 and 2023

5

Condensed Consolidated Statements of Equity – Three and Six Months Ended June 30, 2024 and 2023

6

Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2024 and 2023

8

Notes to the Unaudited Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

39

Item 4.

Controls and Procedures

39

PART II OTHER INFORMATION

Item 1.

Legal Proceedings

40

Item 1A.

Risk Factors

40

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

40

Item 3.

Defaults Upon Senior Securities

40

Item 4.

Mine Safety Disclosures

40

Item 5.

Other Information

40

Item 6.

Exhibits

41

Signatures

42

-2-

Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Balance Sheets

(unaudited and in thousands, except par values)

As of

    

June 30, 2024

    

December 31, 2023

    

Assets

Investment in real estate:

Land

$

162,391

$

164,315

Building

 

1,028,539

 

1,035,705

Site improvements

 

21,960

 

21,974

Tenant improvements

 

66,004

 

66,358

Acquired lease intangible assets

 

136,394

 

138,617

 

1,415,288

 

1,426,969

Less: accumulated depreciation and amortization

 

(271,764)

 

(247,503)

Investment in real estate, net

 

1,143,524

 

1,179,466

Cash and cash equivalents

 

4,978

 

1,278

Restricted cash

 

2,840

 

5,446

Tenant receivables, net

 

8,073

 

6,762

Due from related parties

410

193

Escrow deposits

 

925

 

673

Deferred assets

 

28,360

 

27,132

Derivative asset

27,672

25,125

Goodwill

5,903

5,903

Other assets

 

18,530

 

15,722

Total assets

$

1,241,215

$

1,267,700

Liabilities and Equity

Liabilities:

Credit Facility, net of unamortized debt issuance costs of $5,968 and $7,067 at June 30, 2024 and December 31, 2023, respectively

$

599,032

$

585,333

Notes payable, net of unamortized debt issuance costs of $40 and $66 at June 30, 2024 and December 31, 2023, respectively

 

14,638

 

25,899

Accounts payable and accrued expenses

 

11,962

 

12,781

Dividends payable

 

16,280

 

16,134

Security deposits

 

3,973

 

3,688

Other liabilities

 

12,809

 

12,770

Acquired lease intangible liability, net

 

4,149

 

5,281

Total liabilities

 

662,843

 

661,886

Commitments and Contingencies

Equity:

Preferred stock, $0.001 par value, 10,000 shares authorized; 3,105 issued and outstanding at June 30, 2024 and December 31, 2023, respectively (liquidation preference of $77,625 at June 30, 2024 and December 31, 2023, respectively)

 

74,959

 

74,959

Common stock, $0.001 par value, 500,000 shares authorized; 65,588 shares and 65,565 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

 

66

 

66

Additional paid-in capital

 

722,627

 

722,418

Accumulated deficit

 

(268,885)

 

(238,984)

Accumulated other comprehensive income

 

27,672

 

25,125

Total Global Medical REIT Inc. stockholders' equity

 

556,439

 

583,584

Noncontrolling interest

 

21,933

 

22,230

Total equity

 

578,372

 

605,814

Total liabilities and equity

$

1,241,215

$

1,267,700

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Operations

(unaudited and in thousands, except per share amounts)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2024

    

2023

    

2024

    

2023

    

Revenue

Rental revenue

$

34,214

$

36,317

$

69,283

$

72,517

Other income

 

27

 

34

 

77

 

64

Total revenue

 

34,241

 

36,351

 

69,360

 

72,581

Expenses

General and administrative

 

4,589

4,462

9,035

8,266

Operating expenses

 

7,236

7,223

14,619

14,759

Depreciation expense

 

10,127

10,468

20,240

20,962

Amortization expense

 

3,866

4,337

7,838

8,732

Interest expense

 

6,992

8,468

13,883

16,739

Preacquisition expense

 

2

44

Total expenses

 

32,810

 

34,960

 

65,615

 

69,502

Income before (loss) gain on sale of investment properties

1,431

1,391

3,745

3,079

(Loss) gain on sale of investment properties

(3,383)

12,786

(3,383)

13,271

Net (loss) income

$

(1,952)

$

14,177

$

362

$

16,350

Less: Preferred stock dividends

 

(1,455)

(1,455)

(2,911)

(2,911)

Less: Net loss (income) attributable to noncontrolling interest

 

260

(902)

195

(947)

Net (loss) income attributable to common stockholders

$

(3,147)

$

11,820

$

(2,354)

$

12,492

Net (loss) income attributable to common stockholders per share – basic and diluted

$

(0.05)

$

0.18

$

(0.04)

$

0.19

Weighted average shares outstanding – basic and diluted

 

65,588

65,544

65,580

65,534

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(unaudited and in thousands)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2024

    

2023

    

2024

    

2023

    

Net (loss) income

$

(1,952)

$

14,177

$

362

$

16,350

Other comprehensive (loss) income :

(Decrease) increase in fair value of interest rate swap agreements

 

(1,613)

 

8,449

 

2,547

 

1,185

Total other comprehensive (loss) income

 

(1,613)

 

8,449

 

2,547

 

1,185

Comprehensive (loss) income

 

(3,565)

 

22,626

 

2,909

 

17,535

Less: Preferred stock dividends

 

(1,455)

 

(1,455)

 

(2,911)

(2,911)

Less: Comprehensive loss (income) attributable to noncontrolling interest

 

383

 

(1,501)

 

1

(1,027)

Comprehensive (loss) income attributable to common stockholders

$

(4,637)

$

19,670

$

(1)

$

13,597

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Equity

(unaudited and in thousands, except per share amounts)

For the Six Months Ended June 30, 2024:

Global

Accumulated

Medical

Additional

Other

REIT Inc.

Non-

Common Stock

Preferred Stock

Paid-in

Accumulated

Comprehensive

Stockholders’

controlling

Total

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Equity

    

Interest

    

Equity

Balances, December 31, 2023

 

65,565

$

66

 

3,105

$

74,959

$

722,418

$

(238,984)

$

25,125

$

583,584

$

22,230

$

605,814

Net income (loss)

 

 

 

 

 

 

557

 

 

557

 

(195)

 

362

LTIP Units redeemed for common stock

23

209

209

(209)

Change in fair value of interest rate swap agreements

 

 

 

 

 

 

 

2,547

 

2,547

 

 

2,547

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

2,552

 

2,552

Dividends to common stockholders ($0.42 per share)

 

 

 

 

 

 

(27,547)

 

 

(27,547)

 

 

(27,547)

Dividends to preferred stockholders ($0.9375 per share)

 

 

 

 

 

 

(2,911)

 

 

(2,911)

 

 

(2,911)

Dividends to noncontrolling interest

 

 

 

 

 

 

 

 

 

(2,445)

 

(2,445)

Balances, June 30, 2024

 

65,588

$

66

 

3,105

$

74,959

$

722,627

$

(268,885)

$

27,672

$

556,439

$

21,933

$

578,372

For the Three Months Ended June 30, 2024:

Global

Accumulated

Medical

Additional

Other

REIT Inc.

Non-

Common Stock

Preferred Stock

Paid-in

Accumulated

Comprehensive

Stockholders’

controlling

Total

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Equity

    

Interest

    

Equity

Balances, March 31, 2024

 

65,587

$

66

 

3,105

$

74,959

$

722,623

$

(251,963)

$

29,285

$

574,970

$

22,128

$

597,098

Net loss

 

 

 

 

 

 

(1,692)

 

 

(1,692)

 

(260)

 

(1,952)

LTIP Units redeemed for common stock

1

4

4

(4)

Change in fair value of interest rate swap agreements

(1,613)

(1,613)

(1,613)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

1,319

 

1,319

Dividends to common stockholders ($0.21 per share)

 

 

 

 

 

 

(13,774)

 

 

(13,774)

 

 

(13,774)

Dividends to preferred stockholders ($0.46875 per share)

 

 

 

 

 

 

(1,456)

 

 

(1,456)

 

 

(1,456)

Dividends to noncontrolling interest

 

 

 

 

 

 

 

 

 

(1,250)

 

(1,250)

Balances, June 30, 2024

 

65,588

$

66

 

3,105

$

74,959

$

722,627

$

(268,885)

$

27,672

$

556,439

$

21,933

$

578,372

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Equity - Continued

(unaudited and in thousands, except per share amounts)

For the Six Months Ended June 30, 2023:

Global

Accumulated

Medical

Additional

Other

REIT Inc.

Non-

Common Stock

Preferred Stock

Paid-in

Accumulated

Comprehensive

Stockholders’

controlling

Total

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Equity

    

Interest

    

Equity

Balances, December 31, 2022

65,518

$

66

 

3,105

$

74,959

$

721,991

$

(198,706)

$

34,674

$

632,984

$

16,081

$

649,065

Net income

 

 

 

 

 

 

15,403

 

 

15,403

 

947

 

16,350

LTIP Units redeemed for common stock

47

427

427

(427)

OP Units issued for a property acquisition

5,482

5,482

Change in fair value of interest rate swap agreements

 

 

 

 

 

 

 

1,185

 

1,185

 

 

1,185

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

1,835

 

1,835

Dividends to common stockholders ($0.42 per share)

 

 

 

 

 

 

(27,530)

 

 

(27,530)

 

 

(27,530)

Dividends to preferred stockholders ($0.9375 per share)

 

 

 

 

 

 

(2,911)

 

 

(2,911)

 

 

(2,911)

Dividends to noncontrolling interest

 

 

 

 

 

 

 

 

 

(2,084)

 

(2,084)

Balances, June 30, 2023

 

65,565

$

66

 

3,105

$

74,959

$

722,418

$

(213,744)

$

35,859

$

619,558

$

21,834

$

641,392

For the Three Months Ended June 30, 2023:

Global

Accumulated

Medical

Additional

Other

REIT Inc.

Non-

Common Stock

Preferred Stock

Paid-in

Accumulated

Comprehensive

Stockholders’

controlling

Total

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Equity

    

Interest

    

Equity

Balances, March 31, 2023

 

65,530

$

66

 

3,105

$

74,959

$

722,113

$

(211,794)

$

27,410

$

612,754

$

15,721

$

628,475

Net income

 

 

 

 

 

 

13,275

 

 

13,275

 

902

 

14,177

LTIP Units redeemed for common stock

35

305

305

(305)

OP Units issued for a property acquisition

5,482

5,482

Change in fair value of interest rate swap agreements

8,449

8,449

8,449

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

1,147

 

1,147

Dividends to common stockholders ($0.21 per share)

 

 

 

 

 

 

(13,769)

 

 

(13,769)

 

 

(13,769)

Dividends to preferred stockholders ($0.46875 per share)

 

 

 

 

 

 

(1,456)

 

 

(1,456)

 

 

(1,456)

Dividends to noncontrolling interest

 

 

 

 

 

 

 

 

 

(1,113)

 

(1,113)

Balances, June 30, 2023

 

65,565

$

66

 

3,105

$

74,959

$

722,418

$

(213,744)

$

35,859

$

619,558

$

21,834

$

641,392

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Cash Flows

(unaudited and in thousands)

Six Months Ended June 30, 

    

2024

    

2023

    

Operating activities

Net income

$

362

$

16,350

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation expense

 

20,240

 

20,962

Amortization of acquired lease intangible assets

 

7,629

 

8,679

Amortization of above market leases, net

 

500

 

578

Amortization of debt issuance costs and other

 

1,125

 

1,202

Stock-based compensation expense

 

2,552

 

1,835

Capitalized preacquisition and other costs charged to expense

82

76

Reserve for uncollectible accounts, net

822

Loss (gain) on sale of investment properties