Upon completion of the Company’s initial public offering on July 1, 2016, the Company and the Advisor entered into an amended and restated management agreement (the “Management Agreement”). Certain material terms of the Management Agreement are summarized in the section titled “

,” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 12, 2018.

 

 

The Company’s management fee to the Advisor is calculated in accordance with the terms of the Management Agreement which requires an annual base management fee equal to 1.5% of our stockholders’ equity (as defined in the Management Agreement). For the three and nine months ended September 30, 2018, management fees of $1,104 and $3,280, respectively, were incurred and expensed by the Company and during the nine months ended September 30, 2018, the Company paid management fees to the Advisor in the amount of $3,239. For the three and nine months ended September 30, 2017, management fees of $804 and $2,059, respectively, were incurred and expensed by the Company and during the nine months ended September 30, 2017, the Company paid management fees to the Advisor in the amount of $1,876. Accrued management fees due to the Advisor were $1,105 and $1,064 as of September 30, 2018 and December 31, 2017, respectively. No incentive management fee was incurred by the Company during the three and nine months ended September 30, 2018 or September 30, 2017, respectively.

 

 

Effective May 8, 2017, the Company and the Advisor entered into an agreement pursuant to which, for a period of one year commencing on May 8, 2017, the Company agreed to reimburse the Advisor for $125 of the annual salary of the General Counsel and Secretary of the Company for so long as he continues to be primarily dedicated to the Company in his capacity as its General Counsel and Secretary. This agreement expired in May 2018 and was not renewed. In the future, the Company may receive additional allocations of general and administrative expenses from the Advisor that are either clearly applicable to or were reasonably allocated to the operations of the Company. Other than via the terms of the reimbursement agreement, there were no allocated general and administrative expenses from the Advisor for the three and nine months ended September 30, 2018 and September 30, 2017.

 

 

All related party balances are due on demand and non-interest-bearing.

 

A rollforward of the due (to) from related parties balance, net, as of September 30, 2018, is as follows:

 

Net amount accrued of $41 consists of $3,280 in management fee expense incurred, net of $3,239 of accrued management fees that were paid to the Advisor. This represents a cash flow operating activity.

Aggregate amount of $49 represents amounts paid by the Company on behalf of several related party entities for miscellaneous purposes. This represents a cash flow investing activity.