0001144204-18-059250.txt : 20181113 0001144204-18-059250.hdr.sgml : 20181113 20181113140419 ACCESSION NUMBER: 0001144204-18-059250 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 43 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181113 DATE AS OF CHANGE: 20181113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Reven Housing REIT, Inc. CENTRAL INDEX KEY: 0001487782 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 841306078 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-37865 FILM NUMBER: 181177112 BUSINESS ADDRESS: STREET 1: 875 PROSPECT STREET STREET 2: SUITE 304 CITY: LA JOLLA STATE: CA ZIP: 92037 BUSINESS PHONE: 858-459-4000 MAIL ADDRESS: STREET 1: 875 PROSPECT STREET STREET 2: SUITE 304 CITY: LA JOLLA STATE: CA ZIP: 92037 FORMER COMPANY: FORMER CONFORMED NAME: Bureau of Fugitive Recovery Inc DATE OF NAME CHANGE: 20100323 10-Q 1 tv506445_10q.htm FORM 10-Q

 

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended September 30, 2018

 

-OR-

 

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transaction period from _________ to ________

 

Commission File Number 001-37865

 

Reven Housing REIT, Inc.

(Exact name of Registrant in its charter)

 

Maryland   84-1306078
(State or Other Jurisdiction of Incorporation or Organization)   (I.R.S. Employer Identification Number)

 

875 Prospect Street, Suite 304

La Jolla, CA 92037

(Address of principal executive offices)

 

Registrant's Telephone Number, Including Area Code:   (858) 459-4000

 

Not Applicable

(Former name or former address, if changed since last report)

 

Indicate by check mark whether the issuer (1) 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. Yes x   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 x   No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 o   Non-accelerated filer x
Accelerated filer o   Smaller reporting company x
      Emerging growth company o

 

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 x

 

The number of outstanding shares of the registrant's common stock, as of October 31, 2018: 10,945,074

 

 

 

 

 

 

REVEN HOUSING REIT, INC.

FORM 10-Q

INDEX

 

    Page
PART I – FINANCIAL INFORMATION    
     
Item 1.  Financial Statements (Unaudited)   4
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations   15
Item 3.  Quantitative and Qualitative Disclosure About Market Risk   23
Item 4.  Controls and Procedures   23
     
PART II - OTHER INFORMATION    
     
Item 6.  Exhibits   24
     
SIGNATURES   25

 

 2 

 

 

FORWARD-LOOKING STATEMENTS

 

Various statements contained in this Quarterly Report on Form 10-Q of Reven Housing REIT, Inc. (the “Company,” “we,” “our” and “us”), including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the single-family rental industry sector and our business model, macroeconomic factors beyond our control, competition in identifying and acquiring our properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association (“HOA”) and insurance costs, our dependence on third parties for key services, risks related to evaluation of properties, poor resident selection and defaults and non-renewals by our residents, performance of our information technology systems, our ability to raise the capital required to acquire additional properties, and risks related to our indebtedness. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under Part I. Item 1A. “Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2017 as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Annual Report on Form 10-K and in our other periodic filings. The forward-looking statements speak only as of the date made, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.

 

 3 

 

 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2018 and December 31, 2017

 

   2018     
   (unaudited)   2017 
         
ASSETS          
           
Investments in single-family residential properties:          
Land  $11,328,161   $10,996,361 
Buildings and improvements   52,677,702    49,399,791 
    64,005,863    60,396,152 
Accumulated depreciation   (6,061,956)   (4,542,707)
Investments in single-family residential properties, net   57,943,907    55,853,445 
           
Cash and cash equivalents   22,766,393    6,442,322 
Restricted cash   1,259,492    - 
Rent and other receivables   614,329    645,441 
Lease origination costs, net   388,084    317,359 
Deferred stock issuance costs   -    553,296 
Other assets, net   652,220    1,774,978 
           
Total Assets  $83,624,425   $65,586,841 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Accounts payable and accrued liabilities  $1,405,822   $1,453,142 
Resident security deposits   757,683    697,379 
Notes payable, net   50,082,837    30,493,124 
           
Total Liabilities   52,246,342    32,643,645 
           
Commitments and contingencies (Note 9)          
           
Stockholders' Equity          
Preferred stock, $.001 par value; 25,000,000 shares authorized; No shares issued or outstanding   -    - 
Common stock, $.001 par value; 100,000,000 shares authorized; 10,945,074 and 10,734,025 shares issued and outstanding at at September 30, 2018 and December 31, 2017, respectively   10,945    10,734 
Additional paid-in capital   42,543,805    41,677,465 
Accumulated deficit   (11,176,667)   (8,745,003)
           
Total Stockholders' Equity   31,378,083    32,943,196 
           
Total Liabilities and Stockholders' Equity  $83,624,425   $65,586,841 

 

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

 

 4 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

For the Three and Nine Months Ended September 30, 2018 and 2017

 

   Three Months   Three Months   Nine Months   Nine Months 
   Ended   Ended   Ended   Ended 
   September 30,   September 30,   September 30,   September 30, 
   2018   2017   2018   2017 
Revenue:                    
Rental income  $2,211,085   $2,043,322   $6,623,163   $5,814,135 
                     
Expenses:                    
Property operating and maintenance   780,415    593,339    2,081,009    1,694,969 
Real estate taxes   371,741    346,669    1,104,657    988,839 
Depreciation and amortization   597,928    537,968    1,631,824    1,458,933 
General and administration   511,158    558,074    1,702,990    1,860,473 
Noncash share-based compensation   39,375    -    39,375    - 
                     
Total expenses   2,300,617    2,036,050    6,559,855    6,003,214 
                     
Operating (loss) income   (89,532)   7,272    63,308    (189,079)
                     
Other income (expenses):                    
Net gain on sale of single family residential properties   -    -    -    75,796 
Casualty (loss) gain, net   -    (978,181)   76,133    (895,194)
Loss on early extinguishment of debt   (642,845)   -    (642,845)   - 
Previously deferred stock issuance costs   -    -    (674,144)   - 
Other   7,993    5,466    22,989    13,628 
Interest expense   (441,341)   (342,253)   (1,277,105)   (967,410)
                     
Total other income (expenses), net   (1,076,193)   (1,314,968)   (2,494,972)   (1,773,180)
                     
Net loss  $(1,165,725)  $(1,307,696)  $(2,431,664)  $(1,962,259)
                     
Net loss per share                    
(Basic and fully diluted)  $(0.11)  $(0.12)  $(0.23)  $(0.18)
                     
Weighted average number of common shares outstanding   10,779,070    10,734,025    10,769,062    10,734,025 

 

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

 

 5 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

For the Nine Months Ended September 30, 2018 and 2017

 

   2018   2017 
         
Cash Flows From Operating Activities:          
Net loss  $(2,431,664)  $(1,962,259)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Depreciation and amortization   1,631,824    1,458,933 
Noncash share-based compensation   39,375    - 
Amortization of deferred loan fees   152,982    108,117 
Casualty loss, net   -    895,194 
Gain on sale of single-family residential properties   -    (75,796)
Loss on early extinguishment of debt   642,845    - 
Previously deferred stock issuance costs   674,144    - 
Changes in operating assets and liabilities:          
Rent and other receivables   31,112    (427,708)
Other assets   (298,153)   79,262 
Accounts payable and accrued liabilities   77,679    192,408 
Resident security deposits   60,304    126,711 
Net cash provided by operating activities   580,448    394,862 
           
Cash Flows From Investing Activities:          
Acquisitions of single-family residential properties   (1,681,413)   (10,117,039)
Capital improvements for single-family residential properties   (1,928,298)   (668,268)
Proceeds from disposition of single-family residential properties   -    205,027 
Insurance proceeds received for property damages   1,420,912    554,806 
Lease origination costs   (183,300)   (219,407)
Net cash used in investing activities   (2,372,099)   (10,244,881)
           
Cash Flows From Financing Activities:          
Proceeds from notes payable   54,098,630    7,968,633 
Proceeds from issuance of shares   702,176    - 
Payments of notes payable   (33,742,217)   (405,750)
Payment of loan fees   (1,562,527)   (220,773)
Payments of stock issuance costs   (120,848)   (556,604)
Net cash provided by financing activities   19,375,214    6,785,506 
           
Net Increase (Decrease) In Cash, Cash Equivalents, and Restricted Cash   17,583,563    (3,064,513)
Cash, Cash Equivalents, and Restricted Cash at the Beginning of the Period   6,442,322    10,044,977 
           
Cash, Cash Equivalents, and Restricted Cash at the End of the Period  $24,025,885   $6,980,464 
           
Supplemental Disclosure:          
           
Cash paid for interest  $1,216,513   $837,127 

 

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

 

 6 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 1. ORGANIZATION AND OPERATION

 

Reven Housing REIT, Inc. is a Maryland corporation (Reven Housing REIT, Inc., which along with its wholly-owned subsidiaries, are also referred to herein collectively as the “Company”) which acquires portfolios of occupied and rented single-family residential properties located throughout the United States with the objective of receiving income from rental property activity and future profits from the sale of rental property at appreciated values.

 

As of September 30, 2018, the Company owned 826 single-family homes in the Houston, Jacksonville, Memphis, Birmingham and Atlanta metropolitan areas.

 

NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”), and the rules and regulations of the Securities Exchange Commission (“SEC”).

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K filed with the SEC on March 29, 2018. The results of operations for the period ended September 30, 2018 are not necessarily indicative of the operating results for the full year.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Reven Housing REIT, Inc, Reven Housing REIT OP, LP, a Delaware limited partnership which is its 100% owned operating partnership, and its wholly-owned subsidiaries, which have been formed primarily for financing purposes. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and reported amounts of revenues and expenses for the periods presented. Accordingly, actual results could differ from those estimates.

 

Financial Instruments

 

The carrying value of the Company’s financial instruments, as reported in the accompanying condensed consolidated balance sheets, approximates fair value due to their short-term nature. The Company’s short term financial instruments consist of cash and cash equivalents, restricted cash, rent and other receivables, escrow deposits, accounts payable and accrued liabilities, and resident security deposits.

 

The carrying value of the Company’s notes payable, as reported in the accompanying condensed consolidated balance sheets, approximates fair value due to their market interest rate and because their security and payment terms are similar to other debt instruments currently being issued.

 

 7 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Investments in Single-Family Residential Properties

 

The Company accounts for its investments in single-family residential properties as asset acquisitions and records these acquisitions at their purchase price. The purchase price is allocated between land, building, improvements and existing leases based upon their relative fair values at the date of acquisition. The purchase price for purposes of this allocation is inclusive of acquisition costs, which typically include legal fees, title fees, property inspection and valuation fees, as well as other closing costs.

 

Building improvements and buildings are depreciated over estimated useful lives of approximately 10 to 27.5 years, respectively, using the straight-line method. Lease origination costs are amortized over the average remaining term of the in-place leases which is generally less than one year. Maintenance and repair costs are charged to expenses as incurred.

 

The Company assesses its investments in single-family residential properties for impairment whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value. Should impairment exist, the asset is written down to its estimated fair value. The Company did not recognize any impairment loss for the nine-month period ended September 30, 2018. During the quarter ended September 30, 2017, the company reduced its carrying value of its homes by $2.6 million due to hurricane damages in Houston and Jacksonville. Substantially all of those damages have since been repaired.

 

Cash and Cash Equivalents

 

The Company considers all demand deposits, money market accounts and certificates of deposit with a maturity of three months or less to be cash equivalents. The Company maintains its cash accounts at quality financial institutions. The combined account balances at one or more institutions typically exceed the federal insurance coverage and thus there is a concentration of credit risk related to amounts on deposit in excess of available federal insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions non-performance.

 

Restricted Cash

 

Pursuant to the terms of the note payable referred to in Note 5, the Company is required to establish, maintain, and fund monthly specified reserve accounts. These reserve accounts include property tax reserves, insurance reserves, and capital expenditure reserves.

 

Rent and Other Receivables

 

Rent and other receivables represent the amount of rent receivables, security deposits and net rental funds which are held by the property managers on behalf of the Company, net of any allowance for amounts deemed uncollectible.

 

Deferred Loan Fees

 

Costs incurred in the placement of the Company’s notes payable are deferred and amortized using the effective interest method over the term of the loans as a component of interest expense on the consolidated statements of operations. These deferred loan fees are offset against the notes payable in the accompanying balance sheets.

 

Deferred Stock Issuance Costs

 

Deferred stock issuance costs represent amounts paid for legal, consulting, and other offering expenses in conjunction with the future raising of additional capital to be completed within one year. These costs are netted against additional paid-in capital as a cost of the stock issuance upon closing of the respective stock placement. During the nine-month period ended September 30, 2018, such capital raise was postponed indefinitely, and the Company expensed the related $674,144 of deferred stock issuance costs incurred pertaining to its previously filed registration statement on Form S-11.

 

 8 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Security Deposits

 

Security deposits represent amounts deposited by tenants at the inception of the lease. As of September 30, 2018 and December 31, 2017, the Company had $757,683 and $697,379, respectively, in resident security deposits. Security deposits are refundable, net of any outstanding charges and fees, upon expiration of the underlying lease.

 

Revenue Recognition

 

Residential properties are leased to tenants under short term rental agreements of generally one year and revenue is recognized over the lease term on a straight-line basis.

 

Income Taxes

 

The Company intends to elect to be taxed as a real estate investment trust (“REIT”), as defined in the Internal Revenue Code, commencing with the taxable year ended December 31, 2018. Accordingly, the Company does not expect to be subject to federal income tax, provided that it continues to qualify as a REIT and distributions to the stockholders equal or exceed REIT taxable income.

 

Qualification and taxation as a REIT depends upon the Company’s ability to meet the various qualification tests imposed under the Internal Revenue Code related to the percentage of income that are earned from specified sources, the percentage of assets that fall within specified categories, the diversity of capital stock ownership, and the percentage of earnings that are distributed. Accordingly, no assurance can be given that the Company will be organized or be able to operate in a manner to qualify or remain qualified as a REIT. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal and state income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates, and the Company may be ineligible to qualify as a REIT for four subsequent tax years. Even if the Company qualifies as a REIT, it may be subject to certain state or local income taxes.

 

Incentive Compensation Plan

 

During 2012, the Company established the 2012 Incentive Compensation Plan, which was subsequently amended and restated in December 2013 (“2012 Plan”). The 2012 Plan allows for the grant of options and other awards representing up to 1,650,000 shares of the Company’s common stock. Such awards may be granted to officers, directors, employees, consultants and other persons who provide services to the Company or any related entity. Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as determined by a committee designated by the Board of Directors, but in no event, longer than ten years.

 

During January 2018, an additional 35,505 shares were issued to officers, directors and employees as part of their accrued compensation for the year ended December 31, 2017. Subsequent to September 30, 2018, the Company issued 9,918 shares to directors as part of their accrued compensation for the period ended September 30, 2018. A total of 541,782 shares have been issued under the 2012 plan to date.

 

Net Loss Per Share

 

Net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any) are not included in the computation if the effect would be anti-dilutive and would increase earnings or decrease loss per share. For the three and nine months ended September 30, 2017, potentially dilutive securities excluded from the calculations were 263,588 shares issuable upon exercise of outstanding warrants granted in prior years. These warrants were converted, or expired, during the quarter ended September 30, 2018.

 

Segment Reporting

 

The Company has determined that it has one reportable segment with activities related to leasing and operating single-family homes as rental properties. The Company's rental properties are geographically dispersed and management evaluates operating performance at the market level and while each market and its properties are unique, the aggregate market portfolios have similar economic interests and operating performance.

 

 9 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

 

New Accounting Pronouncements

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2014-09, ASU 2015-14 and ASU 2016-08 are herein collectively referred to as the "New Revenue Recognition Standards". The New Revenue Recognition Standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company has adopted the New Revenue Recognition Standards effective as of January 1, 2018, and has applied the modified retrospective method. The Company has evaluated its revenue streams and, as they are primarily related to leasing activities which are scoped out of the New Revenue Recognition Standards, has determined that the adoption of such standards does not have a material impact on the consolidated financial statements and thus there is no cumulative adjustment upon adoption. The Company evaluated its real estate sales contracts through September 30, 2018 and 2017 and determined they qualified as sales to noncustomers. The gain on the sale of real estate for the property sold through September 30, 2017 was recognized on the full accrual method based on the existing accounting standards and was determined to be a completed contract as of September 30, 2017; therefore, the adoption of the new revenue recognition standards did not have an impact on the Company’s real estate sale contracts.

 

In February 2016, the FASB issued ASU 2016-02, Leases, a new lease standard which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). Under ASU 2016-02, lessor accounting will be substantially similar to the current model, but aligned with certain changes to the lessee model and ASU 2014-09. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company’s rental revenue is primarily generated from short-term operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard is expected to impact the Company’s consolidated financial statements as the Company has an operating office lease arrangement for which it is the lessee. The new standard will be effective for the Company beginning on January 1, 2019, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, requiring application of the new guidance at the beginning of the earliest comparative period presented and provides for certain practical expedients. The Company is currently evaluating the impact on its consolidated financial statements.

 

Subsequent Events

 

Management has evaluated events subsequent to September 30, 2018 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements.

 

 10 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 3. INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES

 

The following table summarizes the Company’s investments in single-family residential properties. The homes are generally leased to individual tenants under leases with terms of one year or less.

 

               Investments in       Investments in 
               Single-Family       Single-Family 
   Number       Buildings and   Residential   Accumulated   Residential 
   of Homes   Land   Improvements   Properties, Gross   Depreciation   Properties, Net 
                         
Total at December 31, 2017   799   $10,996,361   $49,399,791   $60,396,152   $(4,542,707)  $55,853,445 
                               
Purchases and improvements during 2018:                              
Acquisitions   27    331,800    1,349,613    1,681,413    -    1,681,413 
Improvements   -    -    1,928,298    1,928,298    -    1,928,298 
Depreciation   -    -    -    -    (1,519,249)   (1,519,249)
                               
Total at September 30, 2018   826   $11,328,161   $52,677,702   $64,005,863   $(6,061,956)  $57,943,907 

 

Approximately $987,000 of improvements made during the nine months ended September 30, 2018 were related to renovations resulting from casualty losses incurred during 2017, and were primarily funded with insurance proceeds received during the period ended September 30, 2018.

 

NOTE 4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 

At September 30, 2018 and December 31, 2017, accounts payable and accrued liabilities consisted of the following:

 

   2018   2017 
         
Accounts payable  $36,925   $162,221 
Real estate taxes payable   1,031,027    781,898 
Accrued compensation, board fees and other   337,870    416,633 
Interest payable   -    92,390 
   $1,405,822   $1,453,142 

 

 11 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 5. NOTES PAYABLE

 

On September 28, 2018, the Company, through Reven Housing Funding 1, LLC, a wholly-owned subsidiary, refinanced its entire single-family home portfolio by entering into a $51,362,000 loan with Arbor Agency Lending, LLC, on behalf of the Federal Home Loan Mortgage Corporation (Freddie Mac). The loan is a seven-year, monthly interest-only payable loan accruing interest at 4.74% per annum, with principal due and payable at its maturity on October 1, 2025. The loan is secured by 824 of the Company’s currently owned single-family homes and the Company has also guaranteed approximately $12.8 million of the loan balance. Proceeds of approximately $33 million were utilized to pay off and replace the Company’s eight previously outstanding notes. Additionally, as a result of the loan, the Company received approximately $17 million of cash, net of transaction fees, prepayment fees, and loan payoffs which Reven intends to use for the future acquisitions of single-family homes.

 

Early Extinguishment of Debt

 

As a result of the early payoff of the Company’s previous loans on September 28, 2018 mentioned above, the Company incurred $642,845 of loss on early extinguishment of debt primarily consisting of unamortized financing costs and prepayment fees.

 

A summary of the Company’s notes payable as of September 30, 2018 and December 31, 2017 is as follows:

 

   2018   2017  

Interest

Rate

(Fixed)

   Maturity Date
Note                  
Reven Housing Fund 1, LLC  $51,362,000   $-    4.74%  October, 2025
Reven Housing Texas, LLC   -    7,312,030    4.50%  April, 2020
Reven Housing Texas 2, LLC   -    4,890,978    4.50%  January, 2022
Reven Housing Tennessee, LLC   -    3,830,791    4.50%  April, 2020
Reven Housing Florida, LLC   -    3,442,987    4.50%  April, 2020
Reven Housing Florida 2, LLC   -    4,805,389    4.50%  April, 2020
Reven Housing Georgia, LLC   -    1,780,765    4.50%  July, 2020
Reven Housing Tennessee, LLC   -    1,148,726    4.50%  September, 2020
Reven Housing Alabama, LLC   -    3,793,920    4.25%  January, 2023
    51,362,000    31,005,586         
Less deferred loan fees, net   (1,279,163)   (512,462)        
Notes payable, net  $50,082,837   $30,493,124         

 

Costs incurred in the placement of the Company’s debt are deferred and amortized using the effective interest method over the term of the loans as a component of interest expense on the condensed consolidated statements of operations. The amount of unamortized fees are deducted from the remaining principal amount owed on the corresponding notes payable. Unamortized deferred loan costs and fees totaled $1,279,163 and $512,462 as of September 30, 2018 and December 31, 2017, respectively.

 

During the three months ended September 30, 2018 and 2017, the Company incurred $441,341 and $342,253, respectively, of interest expense related to the notes payable, which includes $50,994 and $39,998, respectively, of amortization of deferred loan fees. During the nine months ended September 30, 2018 and 2017, the Company incurred $1,277,105 and $967,410, respectively, of interest expense related to the notes payable, which includes $152,982 and $108,117, respectively, of amortization of deferred loan fees.

 

 12 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 6. STOCKHOLDERS’ EQUITY AND STOCK COMPENSATION

 

On October 16, 2014, the Company issued 425,000 shares of the Company’s common stock under the 2012 Plan to certain officers and consultants of the Company. The shares issued are subject to restrictions and future vesting conditions based on the Company reaching certain future milestones. During the year ended December 31, 2016, 106,250 of these shares became vested upon the achievement of certain milestones related to our public offering of common stock mentioned above. Accordingly, $425,000 of noncash share-based compensation expense was then recognized based on the value of the shares on the date of grant. None of the remaining 318,750 shares were vested as of the issuance date. Compensation expense will be recognized in the applicable future periods on these unvested shares should the applicable milestones be achieved in accordance with the vesting schedule. There is no assurance that these milestones will in fact be achieved and that the shares will in fact vest in the future.

 

In January 2018, the Company issued 35,505 shares of the Company’s common stock under the 2012 Plan to certain directors, officers, and consultants of the Company as payment for accrued 2017 compensation. Subsequent to September 30, 2018, in November 2018, the Company approved the issuance of 9,918 shares of the Company’s common stock under the 2012 Plan to certain directors as payment for accrued 2018 compensation for the three month period ending September 30, 2018.

 

The Company had previously issued outstanding warrants that allowed holders to purchase up to 263,588 shares at an exercise price of $4.00 per share.  During September 2018, 175,544 shares were issued upon the exercise of warrants and the Company received total proceeds on exercise of $702,176. The remaining warrants expired on September 27, 2018.

 

Share Repurchase Program

 

In March 2018, the Company authorized our existing share repurchase program, authorizing the repurchase of up to $500,000 of our outstanding common stock from time to time in the open market. The program has an expiration date of December 31, 2018. All repurchased shares are constructively retired and returned to an authorized and unissued status. The Company did not repurchase and retire any of our shares as of the period ended September 30, 2018. Subsequent to September 30, 2018, the Company has repurchased a nominal number of shares under the program.

 

Distributions

 

In October 2018, the Company declared its first distribution of $0.01 per share on the Company’s common shares. The distribution will be made on or about November 15, 2018 to shareholders of record as of October 25, 2018.

 

NOTE 7. INCOME TAXES

 

The Company intends to elect REIT status effective for the year ending December 31, 2018. The Company would then generally not be subject to income taxes assuming it complied with the various distribution rules applicable to REITs. The Company has also incurred current and prior year net operating losses; thus, the Company does not expect to incur current income tax expenses even if it does not choose to elect REIT status in 2018.

 

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and expected carry-forwards are available to reduce taxable income. The Company records a valuation allowance when, in the opinion of management, it is more likely than not, that the Company will not realize some or all deferred tax assets. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance equal to the deferred tax asset at September 30, 2018 and December 31, 2017. At December 31, 2017 the Company had federal and state net operating loss carry-forwards of approximately $5,350,000. The federal and state tax loss carry-forwards will begin to expire in 2032, unless previously utilized.

 

Pursuant to Internal Revenue Code Section 382, use of the Company’s net operating loss carry-forwards may be limited if a cumulative change in ownership of more than 50% occurs within a three-year period. Management believes that such an ownership change had occurred but has not yet performed a study of the limitations on the net operating losses.

 

 13 

 

 

REVEN HOUSING REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2018 and 2017

 

NOTE 8. RELATED PARTY TRANSACTIONS

 

Reven Capital, LLC, which is wholly-owned by Chad M. Carpenter, a shareholder of the Company and its Chief Executive Officer, currently subleases office space from the Company on a month to month basis for a monthly rental of $500. For each of the three month periods ended September 30, 2018 and 2017, the Company received income from Reven Capital, LLC of $1,500, respectively. For each of the nine month periods ended September 30, 2018 and 2017, the Company received income from Reven Capital, LLC of $4,500, respectively.

 

NOTE 9. COMMITMENTS AND CONTINGENCIES

 

Purchase Commitments

 

The Company has entered into purchase contracts to acquire approximately 200 homes at a contract price of approximately $22.4 million. However, it is not yet known if the purchases of these properties will close because properties may fall out of escrow through the closing process for various reasons.

 

Legal and Regulatory

 

The Company is subject to potential liability under laws and government regulations and various claims and legal actions arising in the ordinary course of the Company’s business. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts established for those claims. Based on information currently available, management is not aware of any legal or regulatory claims that would have a material effect on the Company’s condensed consolidated financial statements and, therefore, no accrual has been recorded as of the periods ended September 30, 2018 and December 31, 2017.

 

 14 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2017. This discussion and analysis contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set further under Part I. Item 1A. “Risk Factors” in our most recent Annual Report on Form 10-K as updated by our other periodic reporting.

 

Overview

 

We are an internally managed Maryland corporation that engages in the acquisition, ownership and operation of portfolios of leased single-family residential properties in the United States. We operate our portfolio properties as single family rentals, or SFRs, and we generate most of our revenue from rental income from the existing tenants of the SFRs we have acquired. We intend to elect to be taxed as a real estate investment trust (“REIT”), as defined in the Internal Revenue Code, commencing with the taxable year ending December 31, 2018.

 

As of September 30, 2018, we have invested an aggregate of approximately $64 million and own a total of 826 homes, of which 263 homes are in the Houston, Texas metropolitan area, 252 homes are in the Jacksonville, Florida metropolitan area, 120 homes are in the Memphis, Tennessee metropolitan area (with two of the Memphis homes located just across the border in Mississippi), 144 homes are in the Birmingham, Alabama metropolitan area, and 47 homes are in the Atlanta, Georgia metropolitan area.

 

On September 28, 2018, we completed the refinancing of our entire single-family home portfolio by entering into a $51,362,000 seven-year, monthly interest-only payable loan accruing interest at 4.74% per annum, with principal due and payable at its maturity on October 1, 2025. The loan is secured by 824 of our currently owned single-family homes. Proceeds of approximately $33 million were utilized to pay off and replace the Company’s eight previously outstanding notes. Additionally, as a result of the loan, the Company received approximately $17 million of cash, net of transaction fees, prepayment fees, and loan payoffs, which we intend to use for the future acquisitions of single-family homes.

 

We intend to expand our acquisitions in our current and other select markets in the United States that fit our investment criteria. As of September 30, 2018, our portfolio properties were 92.9% occupied.

 

Our principal objective is to generate cash flow, while gaining home price appreciation, or HPA, at the same time through the ownership of our portfolio properties. With this objective in mind, we have developed our primary business strategy of acquiring portfolios of leased SFRs. We believe the execution of this strategy will allow us to generate immediate and steady cash flow from rental income from the SFRs that we acquire while potentially gaining significant HPA over time. While our goal is to grow our company and generate available cash flow that will allow us to pay all of our operating costs for the operation of our portfolio properties and distribute profits to our stockholders in the form of quarterly dividends, there can be no assurance we will be able to do so.

 

In October 2018, we declared our first distribution of $0.01 per share on our common shares. The distribution will be made on or about November 15, 2018 to shareholders of record as of October 25, 2018.

 

We plan to continue to acquire and manage single-family homes with a focus on long term earnings growth and appreciation in asset value. Our ability to identify and acquire single-family properties that meet our investment criteria will be affected by home prices in our markets, the inventory of properties available through our acquisition channels, competition for our target assets, our capital available for investment, and the cost of that capital. We believe the housing market environment in our markets remains attractive for single-family property acquisitions and rentals. Pricing for housing in certain markets remains attractive and demand for housing is growing. At the same time, we continue to face relatively steady competition for new properties and residents from local operators and institutional managers. Housing prices across our markets have appreciated over the past years. Despite these gains, we believe housing in certain of our markets continues to provide attractive acquisition opportunities and remains inexpensive relative to replacement cost and affordability metrics.

 

We anticipate continued strong rental demand for single-family homes. While new building activity has begun to increase, it remains below historical averages and we believe substantial under-investment in residential housing over the past years will create upward pressure on home prices and rents as demand exceeds supply.

 

 15 

 

 

Property Portfolio

 

The following tables represent our investment in the homes as of September 30, 2018:

 

Total Portfolio of Single-Family Homes — Summary Statistics
(as of September 30, 2018)
Market  No. of Homes  

Aggregate

Investment

  

Average

Investment per

Home

  

Properties

Leased

  

Properties

Vacant

  

Portfolio

Occupancy

Rate

  

Average Age

(years)

  

Average Size

(sq. ft.)

  

Average

Monthly Rent

  

Average

Remaining

Lease Term

(Months)

 
Atlanta, Georgia   47   $3,478,297   $74,006    44    3    93.6%   30    1,453   $919    2.8 
Birmingham, Alabama   144    9,973,063    69,257    124    20    86.1%   57    1,302    848    4.1 
Houston, Texas   263    22,533,386    85,678    250    13    95.1%   49    1,452    1,139    3.7 
Jacksonville, Florida   252    18,229,481    72,339    234    18    92.9%   55    1,289    943    5.7 
Memphis, Tennesee   120    9,791,636    81,597    115    5    95.8%   44    1,675    999    8.6 
Totals   826   $64,005,863   $77,489    767    59    92.9%   50    1,409   $996    5.0 

 

Results of Operations

 

Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017

 

The following table sets forth a comparison of the results of operations for the three months ended September 30, 2018 and 2017:

 

           $   % 
   2018   2017   Change   Change 
                 
Revenue:                    
Rental income  $2,211,085   $2,043,322   $167,763    8.2%
                     
Expenses:                    
Property operating and maintenance   780,415    593,339    187,076    31.5%
Real estate taxes   371,741    346,669    25,072    7.2%
Depreciation and amortization   597,928    537,968    59,960    11.1%
General and administration   511,158    558,074    (46,916)   -8.4%
Noncash share-based compensation   39,375    -    39,375      
                     
Total expenses   2,300,617    2,036,050    264,567    13.0%
                     
Operating (loss) income   (89,532)   7,272    (96,804)   1331.2%
                     
Other (expenses) income:                    
Casualty (loss) gain, net   -    (978,181)   978,181    -100.0%
Loss on early extinguishment of debt   (642,845)   -    (642,845)     
Other   7,993    5,466    2,527    46.2%
Interest expense   (441,341)   (342,253)   (99,088)   29.0%
                     
Total other expenses   (1,076,193)   (1,314,968)   238,775    18.2%
                     
Net loss  $(1,165,725)  $(1,307,696)  $141,971    10.9%

 

For the three months ended September 30, 2018, we had total rental income of $2,211,085 compared to total rental income of $2,043,322 for the three months ended September 30, 2017. The increase is due primarily to an increase in the number of homes owned during the 2018 period when compared to the number of homes owned during the three months ended September 30, 2017. As of September 30, 2018, we owned 826 homes; at September 30, 2017, we owned 755 homes.

 

As of September 30, 2018, 767, or approximately 92.9%, of our 826 homes were occupied. During the three months ended September 30, 2018, we had 63 home leases turnover, which represented approximately 7.6% of our end of the quarter portfolio. As of September 30, 2017, 709, or approximately 93.9%, of our 755 homes were occupied. During the quarter ended September 30, 2017, we had 65 home leases turnover, which represented approximately 8.6% of our end of the quarter portfolio.

 

 16 

 

 

For the three months ended September 30, 2018, we had property operating and maintenance expenses of $780,415 compared to $593,339 for the corresponding prior year period. Property operating and maintenance expenses consist of insurance, property management fees paid to third parties, repairs and maintenance costs, home owner association fees, and other miscellaneous property costs. Real estate taxes for the three months ended September 30, 2018 were $371,741 compared to $346,669 for the three months ended September 30, 2017. The increase in property operating, maintenance expenses from 2017 to 2018 is primarily due to an increase in repairs and insurance costs in the current period when compared to the prior year. The increase in real estate taxes in the current quarter compared to the corresponding prior period are primarily due to an increase in the number of homes owned. We had net operating income from rentals of $1,058,929 for the three months ended September 30, 2018 compared to net operating income from rentals of $1,103,314 in the corresponding prior year period. This resulted in a net operating income margin of approximately 47.9% in 2018 compared to 54.0% in the corresponding prior year period. The decrease in operating margin was primarily due to the increase in repair and insurance costs in the current period.

 

Depreciation and amortization on our home investments increased to $597,928 for the three months ended September 30, 2018 compared to $537,968 in 2017, reflecting the corresponding increase in the number of single family homes owned.

 

General and administrative expenses for the three months ended September 30, 2018 totaled $511,158 compared to $558,074 for the corresponding prior year period. General and administrative expenses consist of personnel costs, outside director fees, occupancy fees, public company filing fees, legal, accounting, and other general expenses. The nominal decrease in our general and administrative expenses is due primarily to a portion of the directors’ fees being paid in stock in 2018 when compared to 2017. Noncash share-based compensation for the three months ended September 30, 2018 was $39,375. There was no noncash share-based compensation awarded during the three months ended September 30, 2017.

 

The above results in total expenses of $2,300,617 for the three months ended September 30, 2018 resulting in an operating loss for the three months ended September 30, 2018 of $89,532, compared to total expenses of $2,036,050 for the three months ended September 30, 2017 and a corresponding operating income of $7,272 for the three months ended September 30, 2017.

 

During the quarter ended September 30, 2017, we had net casualty losses of $978,181 due to Hurricane Harvey and Irma. There were no casualty gains or losses during the three months ended September 30, 2018. On September 28, 2018, we refinanced our loan portfolio with a new loan and paid off our prior debt. This resulted in a loss on early extinguishment of debt of $642,845 due to the write-off of unamortized loan fees of $424,642 and the payment of prepayment charges of $218,203. Other income was $7,993 for the three months ended September 30, 2018 as compared to other income of $5,466 for the three months ended September 30, 2017. Interest expense on our notes payable was $441,341 for the three months ended September 30, 2018 compared to $342,253 for the three months ended September 30, 2017. The increase is primarily due to higher note payable balances for the three months ended September 30, 2018 when compared to the corresponding period in 2017. This resulted in net other expense of $1,076,193 for the three months ended September 30, 2018 compared to a net other expense of $1,314,968 for the three months ended September 30, 2017.

 

Net loss for the three months ended September 30, 2018 was $1,165,725. The net loss for the three months ended September 30, 2017 was $1,307,696. The weighted average number of shares outstanding for the three months ended September 30, 2018 increased to 10,779,070 from 10,734,025 for the three months ended September 30, 2017 resulting in a net loss per share of $0.11 for the three months ended September 30, 2018 and a net loss per share of $0.12 for the three months ended September 30, 2017. You will note that the loss on early extinguishment of debt of $642,845 during the three months ended September 30, 2018 caused the net loss per share to increase $0.06 per share. The net casualty loss of $978,181 resulted in an increase in the net loss per share of $0.09 during the three months ended September 30, 2017.

 

 17 

 

 

Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017

 

The following table sets forth a comparison of the results of operations for the nine months ended September 30, 2018 and 2017:

 

           $   % 
   2018   2017   Change   Change 
                 
Revenue:                    
Rental income  $6,623,163   $5,814,135   $809,028    13.9%
                     
Expenses:                    
Property operating and maintenance   2,081,009    1,694,969    386,040    22.8%
Real estate taxes   1,104,657    988,839    115,818    11.7%
Depreciation and amortization   1,631,824    1,458,933    172,891    11.9%
General and administration   1,702,990    1,860,473    (157,483)   -8.5%
Noncash share-based compensation   39,375    -    39,375      
                     
Total expenses   6,559,855    6,003,214    556,641    9.3%
                     
Operating (loss) income   63,308    (189,079)   252,387    133.5%
                     
Other (expenses) income:                    
Net gain on sale of residential properties   -    75,796    (75,796)   -100.0%
Casualty (loss) gain, net   76,133    (895,194)   971,327    -108.5%
Loss on early extinguishment of debt   (642,845)   -    (642,845)     
Previously deferred stock issuance costs   (674,144)   -    (674,144)     
Other   22,989    13,628    9,361    68.7%
Interest expense   (1,277,105)   (967,410)   (309,695)   32.0%
                     
Total other expenses   (2,494,972)   (1,773,180)   (721,792)   -40.7%
                     
Net loss  $(2,431,664)  $(1,962,259)  $(469,405)   -23.9%

 

For the nine months ended September 30, 2018, we had total rental income of $6,623,163 compared to total rental income of $5,814,135 for the nine months ended September 30, 2017. The increase in total rental and other income is due primarily to the increase in rental homes owned for the 2018 time period as compared to 2017.

 

For the nine months ended September 30, 2018, we had property operating and maintenance expenses of $2,081,009 compared to $1,694,969 for the nine months ended September 30, 2017. Real estate taxes for the nine months ended September 30, 2018 were $1,104,657 compared to $988,839 for the nine months ended September 30, 2017. The increase in property operating, maintenance expenses is due to higher repairs and insurance costs in the current period. The increase in real estate taxes from 2017 to 2018 is due primarily to a corresponding increase in our inventory of single family homes.

 

We had net operating income from rentals of $3,437,497 for the first nine months of 2018 compared to net operating income from rentals of $3,130,327 in the corresponding prior year’s period. The increase in net operating income is due primarily to the increase in rental homes owned during the current 2017 period offset by an increase in repairs and insurance costs. This results in a net operating income margin of approximately 51.9% in 2018 compared to a net operating income margin of 53.8% in 2017.

 

Depreciation and amortization increased to $1,631,824 during the nine months ended September 30, 2018 compared to $1,458,933 during the nine months ended September 30, 2017, reflecting the corresponding increase in our number of single family homes owned.

 

General and administrative expenses for the nine months ended September 30, 2018 totaled $1,702,990 compared to $1,860,473 for the prior year period. The decrease in our general and administrative expenses is due primarily to a decrease in legal, accounting, and miscellaneous travel and promotional expenses in 2018 when compared to 2017, due to a decrease in acquisition and promotional activities in the current period. Additionally, a portion of the directors’ fees were paid in stock in 2018 when compared to 2017. Noncash share-based compensation for the nine months ended September 30, 2018 was $39,375. There was no noncash share-based compensation awarded during the nine months ended September 30, 2017.

 

We sold two residential properties during the nine months ended September 30, 2017 for a gain of $75,796. There were no corresponding sales during the nine months ended September 30, 2018. We had net casualty gains of $76,133 during the nine months ended September 30, 2018, compared to net casualty losses of $895,194 due primarily to Hurricane Harvey and Irma during the nine months ended September 30, 2017. On September 28, 2018, we refinanced our loan portfolio with a new loan and paid off our prior debt. This resulted in a loss on early extinguishment of debt of $642,845 consisting of the to the write-off of unamortized loan fees of $424,642 and the payment of prepayment charges of $218,203. During the nine months ended September 30, 2018 we expensed $674,144 of previously deferred stock issuance costs relating to a postponed capital raise; there was not a corresponding charge during the nine months ended September 30, 2017. Other income was $22,989 for the nine months ended September 30, 2018 as compared to other income of $13,628 for the nine months ended September 30, 2017. Interest expense on our notes payable was $1,277,105 for the nine months ended September 30, 2018 compared to $967,410 for the nine months ended September 30, 2017. The increase is primarily due to higher note payable balances for the nine months ended September 30, 2018 when compared to the corresponding period in 2017. This resulted in net other expense of $2,494,972 for the nine months ended September 30, 2018 compared to a net other expense of $1,773,180 for the nine months ended September 30, 2017.

 

 18 

 

 

Net loss for the nine months ended September 30, 2018 was $2,431,664. The net loss for the nine months ended September 30, 2017 was $1,962,259. The weighted average number of shares outstanding for the nine months ended September 30, 2018 increased to 10,769,062 from 10,734,025 for the nine months ended September 30, 2017, resulting in a net loss per share of $0.23 for the nine months ended September 30, 2018 and a net loss per share of $0.18 for the nine months ended September 30, 2017. The loss on early extinguishment of debt caused the loss per share to increase $0.06 per share in 2018. Additionally, the expensing of $674,144 of previously deferred stock issuance costs during the period ended September 30, 2018 caused the net loss per share to increase an additional $0.06 per share. The net casualty loss in the period ended September 30, 2017 caused the net loss per share to increase $0.08 in that period.

 

Liquidity and Capital Resources

 

Liquidity is a measure of our ability to meet potential cash requirements, fund and maintain our assets and operations, make interest payments and fund other general business needs. Our liquidity, to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond our control. Our near-term liquidity requirements consist primarily of acquiring properties, funding our operations, and making interest payments.

 

Our liquidity and capital resources as of September 30, 2018 consisted primarily of cash and cash equivalents of $22,766,393. We believe our current liquidity and the expected cash flows from operations will be sufficient to fund the present level of our operations through the 12 months following the date of this report. However, our future acquisition activity will depend primarily on our ability to raise funds from the further issuance of shares of our common stock or units of our operating partnership combined with new loan transactions secured by our current and future home inventories. In order to purchase additional single-family homes, we intend to opportunistically utilize the capital markets to raise additional capital, including through the issuance of debt and equity securities, but there can be no assurance that we will be able to access adequate liquidity sources on favorable terms, or at all.

 

Credit Facilities

 

On September 28, 2018, we refinanced our entire single-family home portfolio by entering into a $51,362,000 loan with Arbor Agency Lending, LLC, on behalf of the Federal Home Loan Mortgage Corporation (Freddie Mac). The loan is a seven-year, monthly interest-only payable loan accruing interest at 4.74% per annum, with principal due and payable at its maturity on October 1, 2025. The loan is secured by 824 of our currently owned single-family homes and we also guaranteed approximately $12.8 million of the loan balance. Proceeds of approximately $33 million were utilized to pay off and replace our eight previously outstanding notes. Additionally, as a result of the loan, we received approximately $17 million of cash, net of transaction fees, prepayment fees, and loan payoffs, which we intend to use for the future acquisitions of single-family homes.

 

A summary of our notes payable as of September 30, 2018 and December 31, 2017 is as follows:

 

   2018   2017  

Interest

Rate

(Fixed)

   Maturity Date
Note                  
Reven Housing Fund 1, LLC  $51,362,000   $-    4.74%  October, 2025
Reven Housing Texas, LLC   -    7,312,030    4.50%  April, 2020
Reven Housing Texas 2, LLC   -    4,890,978    4.50%  January, 2022
Reven Housing Tennessee, LLC   -    3,830,791    4.50%  April, 2020
Reven Housing Florida, LLC   -    3,442,987    4.50%  April, 2020
Reven Housing Florida 2, LLC   -    4,805,389    4.50%  April, 2020
Reven Housing Georgia, LLC   -    1,780,765    4.50%  July, 2020
Reven Housing Tennessee, LLC   -    1,148,726    4.50%  September, 2020
Reven Housing Alabama, LLC   -    3,793,920    4.25%  January, 2023
    51,362,000    31,005,586         
Less deferred loan fees, net   (1,279,163)   (512,462)        
Notes payable, net  $50,082,837   $30,493,124         

 

 19 

 

 

Cash Flows

 

The following table summarizes our cash flows for the nine months ended September 30, 2018 and 2017.

 

           $ 
   2018   2017   Change 
Net cash provided by operating activities  $580,448   $394,862   $185,586 
Net cash used in investing activities   (2,372,099)   (10,244,881)   7,872,782 
Net cash provided by financing activities   19,375,214    6,785,506    12,589,708 
                
Net change in cash  $17,583,563   $(3,064,513)  $20,648,076 

 

Operating Activities

 

We had net cash provided by operating activities of $580,448 for the nine months ended September 30, 2018. This resulted from a net loss of $2,431,664, adding back depreciation and amortization of $1,631,824, noncash share-based compensation of $39,375, amortization of deferred loan fees of $152,982, loss on early extinguishment of debt of $642,845, cancelled offering costs of $674,144, and then decreasing the amount by the net change in operating assets and liabilities of $129,058.

 

We had net cash provided by operating activities of $394,862 for the nine months ended September 30, 2017. This resulted from a net loss of $1,962,259, adding back depreciation and amortization of $1,458,933, amortization of deferred loan fees of $108,117, casualty losses of $895,194 and then deducting gain on sale of residential properties of $75,796, and then decreasing the amount by the net change in operating assets and liabilities of $29,327.

 

Investing Activities

 

During the nine months ended September 30, 2018, we invested $1,681,413 in new homes, $1,928,298 in capital improvements for our homes (of which approximately $987,000 were for hurricane renovation costs), and $183,300 in lease origination costs. We received $1,420,912 of insurance proceeds for property damages for a total of $2,372,099 of net cash used in investing activities.

 

During the nine months ended September 30, 2017, we invested $10,117,039 in new homes, $668,268 in capital improvements for our homes, and $219,407 in lease origination costs. We received $205,027 of proceeds on the disposition of residential properties and $554,806 of insurance proceeds for property damages for a total of $10,244,881 of cash used in investing activities.

 

Financing Activities

 

During the nine months ended September 30, 2018, we had net cash provided by financing activities of $19,375,214 derived from $54,098,630 of proceeds from notes payable, $702,176 of proceeds from issuance of shares, less $33,742,217 of notes payable principal payments, less $1,562,527 of loan fees, and the payment of $120,848 of deferred offering costs.

 

During the nine months ended September 30, 2017, we had net cash provided by financing activities of $6,785,506 derived from $7,968,633 of proceeds from notes payable, less $405,750 of notes payable principal payments, less $220,773 of loan fees, less payments of deferred stock issuance costs of $556,604.

 

Our future acquisition activity relies primarily on our ability to raise funds from the further issuance of common shares combined with new loan transactions secured by our current and future home inventories. We remain focused on acquiring new capital. We believe our current cash balance combined with our estimated future net rental revenue is sufficient to fund our operating activities through the 12 months following the date of this report.

 

Off Balance Sheet Arrangements

 

None.

 

 20 

 

 

Net Operating Income

 

We define net operating income (or NOI) as total revenue less property operating and maintenance and real estate taxes. NOI is a non-GAAP measurement that excludes acquisition costs, depreciation and amortization, general and administration, legal and accounting, and interest expenses.

 

We consider NOI to be a meaningful financial measure when considered with the financial statements determined in accordance with GAAP. We believe NOI is helpful to investors in understanding the amount of income after operating expenses which is generated in a given period.

 

The following is a reconciliation of our NOI to net loss as determined in accordance with GAAP for the three and nine months ended September 30, 2018 and 2017.

 

   Three Months ended September 30,   Nine Months ended September 30, 
   2018   2017   2018   2017 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                 
Net loss  $(1,165,725)  $(1,307,696)  $(2,431,664)  $(1,962,259)
                     
Depreciation and amortization   597,928    537,968    1,631,824    1,458,933 
General and administration   511,158    558,074    1,702,990    1,860,473 
Noncash share-based compensation   39,375    -    39,375    - 
Other expenses, net   1,076,193    1,314,968    2,494,972    1,773,180 
                     
Net operating income (NOI)  $1,058,929   $1,103,314   $3,437,497   $3,130,327 
                     
Net operating income as a percentage of total revenue   47.9%   54.0%   51.9%   53.8%

 

 21 

 

 

NOI should not be considered an alternative to net loss or net cash flows from operating activities, as determined in accordance with GAAP, as indications of our performance or as measures of liquidity. Nor is NOI necessarily indicative of cash available to fund future cash needs or distributions to shareholders. In addition, although we use NOI for comparability in assessing our performance against other REITs, not all REITs compute the same non-GAAP measure of NOI. Accordingly, our basis for computing this non- GAAP measure may not be comparable with that of other REITs. This is due in part to the differences in property operating and maintenance expenses incurred by, and real estate taxes applicable to, different companies and the significant effect these items have on NOI.

 

Funds From Operations and Core Funds From Operations

 

Funds From Operations (or FFO) is a non-GAAP financial measure that we believe, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets. The National Association of Real Estate Investment Trusts (or NAREIT) defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of, and impairment losses recognized with respect to, depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated on the same basis to determine FFO.

 

Core Funds From Operations (or Core FFO) is a non-GAAP financial measure that we use as a supplemental measure of our performance. We believe that Core FFO is further helpful to investors as it provides a more consistent measurement of our performance across reporting periods by removing the impact of certain items that are not comparable from period to period. We adjust FFO for expensed acquisition fees and costs, share-based compensation, non-cash interest expense related to amortization of deferred financing costs, casualty gains and losses, loss on early extinguishment of debt, cancelled offering costs, and certain other non-comparable costs to arrive at Core FFO.

 

FFO and Core FFO should not be considered alternatives to net income (loss) or net cash flows from operating activities, as determined in accordance with GAAP, as indications of our performance or as measures of liquidity. These non-GAAP measures are not necessarily indicative of cash available to fund future cash needs. In addition, although we use these non-GAAP measures for comparability in assessing our performance against other REITs, not all REITs compute the same non-GAAP measures. Accordingly, there can be no assurance that our basis for computing these non-GAAP measures is comparable with that of other REITs. This is due in part to the differences in capitalization policies used by different companies and the significant effect these capitalization policies have on FFO and Core FFO. Real estate costs which are accounted for as capital improvements are added to the carrying value of the property and depreciated over time, whereas real estate costs that are expenses are accounted for as a current period expense. This affects FFO and Core FFO because costs that are accounted for as expenses reduce FFO and Core FFO. Conversely, real estate costs associated with assets that are capitalized and then subsequently depreciated are added back to net income to calculate FFO and Core FFO.

 

The following table sets forth a reconciliation of our net loss as determined in accordance with GAAP and our calculations of FFO and Core FFO for the three and nine months ended September 30, 2018 and 2017:

 

   Three Months ended September 30,   Nine Months ended September 30, 
   2018   2017   2018   2017 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                 
Net loss  $(1,165,725)  $(1,307,696)  $(2,431,664)  $(1,962,259)
                     
Add back depreciation and amortization   597,928    537,968    1,631,824    1,458,933 
Less gain on sale of residential properties   -    -    -    (75,796)
                     
Funds from (used in) operations  $(567,797)  $(769,728)  $(799,840)  $(579,122)
                     
Add back noncash share-based compensation   39,375    -    39,375    - 
Add back noncash amortization of deferred loan fees   50,994    39,998    152,982    108,117 
Less net casualty gain; add net casualty loss   -    978,181    (76,133)   895,194 
Add back loss on early extinguishment of debt   642,845    -    642,845    - 
Add back previously deferred stock issuance costs   -    -    674,144    - 
                     
Core funds from operations  $165,417   $248,451   $633,373   $424,189 

 

 22 

 

 

Item 3.  Quantitative and Qualitative Disclosure About Market Risk.

 

As a “smaller reporting company” defined in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

 

Item 4.  Controls and Procedures.

 

Internal Control Over Financial Reporting

 

During the three months ended September 30, 2018, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (“Exchange Act”)) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act as of September 30, 2018.  Disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2018.

 

 23 

 

 

PART II - OTHER INFORMATION

 

Item 6.   Exhibits.

 

Exhibit

No.

  Description   Method of Filing  
         
10.1*   Amended and Restated Employment Agreement dated August 14, 2018 between Chad Carpenter and Registrant   Incorporated by reference from Current Report on Form 8-K filed on August 16, 2018
         
10.2*   Amended and Restated Employment Agreement dated August 14, 2018 between Thad Meyer and Registrant   Incorporated by reference from Current Report on Form 8-K filed on August 16, 2018
         
10.3   Single Family Homes Real Estate Purchase and Sale Agreement (Birmingham 59) dated August 28, 2018   Incorporated by reference from Current Report on Form 8-K filed on August 30, 2018
         
31.1   Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
         
31.2   Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   Filed herewith
         
32.1   Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   Filed herewith
         
101.INS   XBRL Instance Document   Filed herewith
         
101.SCH   XBRL Taxonomy Extension Schema Document   Filed herewith
         
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document   Filed herewith
         
101.LAB   XBRL Taxonomy Extension Label Linkbase Document   Filed herewith
         
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document     Filed herewith
         
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document     Filed herewith

 

 

*Indicates management compensatory plan, contract or arrangement.

 

 24 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Dated: November 13, 2018 REVEN HOUSING REIT, INC.
   
  /s/ Chad M. Carpenter
  Chad M. Carpenter,
  Chief Executive Officer
  (Principal Executive Officer)
   
Dated: November 13, 2018 REVEN HOUSING REIT, INC.
   
  /s/ THAD L. MEYEr
  Thad L. Meyer,
  Chief Financial Officer
  (Principal Financial Officer)

 

 25 

EX-31.1 2 tv506445_ex31-1.htm EXHIBIT 31.1

 

Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Chad M. Carpenter, certify that:

 

1.    I have reviewed this quarterly report on Form 10-Q of Reven Housing REIT, Inc.;

 

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 13, 2018

 

  /s/ Chad M. Carpenter
  Chad M. Carpenter,
  Chief Executive Officer
  (Principal Executive Officer)

 

 

 

EX-31.2 3 tv506445_ex31-2.htm EXHIBIT 31.2

 

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Thad L. Meyer, certify that:

 

1.    I have reviewed this quarterly report on Form 10-Q of Reven Housing REIT, Inc.;

 

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 13, 2018

 

  /s/ THAD L. MEYER
  Thad L. Meyer,
  Chief Financial Officer
  (Principal Financial Officer)

 

 

EX-32.1 4 tv506445_ex32-1.htm EXHIBIT 32.1

 

Exhibit 32.1

 

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Chad M. Carpenter, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Reven Housing REIT, Inc. for the quarterly period ended September 30, 2018, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Reven Housing REIT, Inc.

 

November 13, 2018 /s/ Chad M. Carpenter
  Chad M. Carpenter,
  Chief Executive Officer
  (Principal Executive Officer)

 

I, Thad L. Meyer, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Reven Housing REIT, Inc. for the quarterly period ended September 30, 2018, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Reven Housing REIT, Inc.

 

November 13, 2018 /s/ THAD L. MEYER
  Thad L. Meyer,
 

Chief Financial Officer

(Principal Financial Officer)

 

The foregoing certifications are not deemed filed with the Securities and Exchange Commission for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), and are not to be incorporated by reference into any filing of Reven Housing REIT, Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

 

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A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard is expected to impact the Company&#8217;s consolidated financial statements as the Company has an operating office lease arrangement for which it is the lessee. The new standard will be effective for the Company beginning on January 1, 2019, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, requiring application of the new guidance at the beginning of the earliest comparative period presented and provides for certain practical expedients. 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It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K filed with the SEC on March 29, 2018. 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color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; 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top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; 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top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr><tr><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 22%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: center; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">Total at December 31, 2017</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">49,399,791</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; 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font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr><tr><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: center; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">Total at September 30, 2018</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; 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background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">826</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">11,328,161</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">52,677,702</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; 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letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; 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color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr><tr><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 22%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: center; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">Total at December 31, 2017</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">799</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">10,996,361</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">49,399,791</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">60,396,152</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">(4,542,707</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">)</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(204, 238, 255); border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; width: 10%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">55,853,445</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr><tr><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">52,677,702</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">64,005,863</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">(6,061,956</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">)</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; 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font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">$</div></div></td><td style="background: rgb(255, 255, 255); border-bottom: 2.5pt double rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; text-align: right; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">57,943,907</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 2.5pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr></table><div style="clear:both;"></div></div> 2025-10-30 <div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">NOTE 4. 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font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div><div style="text-align:center;"><table style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; border-image: initial; border-collapse: collapse; margin-bottom: 0in; width: 70%; margin-top: 0in;;margin : 0px auto;;text-align:left;"><tr><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td colspan="2" style="border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; 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text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td colspan="2" style="border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; 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text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td></tr><tr><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; 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font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr><tr><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; width: 74%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">Accounts payable</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr></table><div style="clear:both;"></div><div style="clear:both;"></div></div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">At September 30, 2018 and December 31, 2017, accounts payable and accrued liabilities consisted of the following:</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; 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font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td colspan="2" style="border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; 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text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0px 0px 1pt; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td><td colspan="2" style="border-bottom: 1pt solid rgb(0, 0, 0); border-left-width: initial; border-left-color: initial; border-right-width: initial; border-right-color: initial; border-top: none; 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text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">&#160;</div></div></div></td></tr><tr><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; 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padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td colspan="2" style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td></tr><tr><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; width: 74%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">Accounts payable</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(204, 238, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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The amount of unamortized fees are deducted from the remaining principal amount owed on the corresponding notes payable. 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During the nine months ended September 30, 2018 and 2017, the Company incurred $1,277,105 and $967,410, respectively, of interest expense related to the notes payable, which includes $152,982 and $108,117, respectively, of amortization of deferred loan fees.</div></div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">A summary of the Company&#8217;s notes payable as of September 30, 2018 and December 31, 2017 is as follows:</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px; background: none;"><div style="white-space: pre-line; 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font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-right: 0px; margin-bottom: 0px; margin-top: 0px; line-height: normal; background: none;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></td><td style="background: rgb(255, 255, 255); border-width: initial; border-top-style: none; border-bottom-style: none; border-color: initial; padding: 0pt 0px; vertical-align: bottom; font-size: 10pt; line-height: 10pt;"><div style="font-family: &quot;times new roman&quot;, times, serif; 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table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 175544 702176 2018-09-27 0.01 $500,000 of our outstanding common stock 22400000 <div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">NOTE 9. COMMITMENTS AND CONTINGENCIES</div></div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;"><div style="text-decoration:underline;display:inline;">Purchase Commitments</div></div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">The Company has entered into purchase contracts to acquire approximately 200 homes at a contract price of approximately $22.4 million. 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Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts established for those claims. Based on information currently available, management is not aware of any legal or regulatory claims that would have a material effect on the Company&#8217;s condensed consolidated financial statements and, therefore, no accrual has been recorded as of the periods ended September 30, 2018 and December 31, 2017.</div></div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 0 0 674144 0 7993 5466 22989 13628 799 27 0 0 826 <div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;"><div style="text-decoration:underline;display:inline;">New Accounting Pronouncements</div></div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">In May 2014, the FASB issued ASU 2014-09, </div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-style:italic;display:inline;">Revenue from Contracts with Customers (Topic&#160;606)</div></div><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">, which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB issued ASU 2015-14, </div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-style:italic;display:inline;">Revenue from Contracts with Customers (Topic&#160;606): Deferral of the Effective Date</div></div><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">, which delays the effective date of ASU 2014-09 by one year. 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Early adoption is permitted but not before annual periods beginning after December&#160;15, 2016. The Company has adopted the New Revenue Recognition Standards effective as of January&#160;1, 2018, and has applied the modified retrospective method. The Company has evaluated its revenue streams and, as they are primarily related to leasing activities which are scoped out of the New Revenue Recognition Standards, has determined that the adoption of such standards does not have a material impact on the consolidated financial statements and thus there is no cumulative adjustment upon adoption. The Company evaluated its real estate sales contracts through September 30, 2018 and 2017 and determined they qualified as sales to noncustomers. The gain on the sale of real estate for the property sold through September 30, 2017 was recognized on the full accrual method based on the existing accounting standards and was determined to be a completed contract as of September 30, 2017; therefore, the adoption of the new revenue recognition standards did not have an impact on the Company&#8217;s real estate sale contracts.</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px; background: none;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); background: none; text-decoration: none; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; margin-bottom: 0px; margin-top: 0px; text-align: justify; margin-right: 0px;"><div style="white-space: pre-line; font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">In February 2016, the FASB issued ASU 2016-02, </div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-style:italic;display:inline;">Leases</div></div><div style="font-family: &quot;times new roman&quot;, times, serif; font-size: 10pt; color: rgb(0, 0, 0); letter-spacing: 0px; top: 0px;;display:inline;">, a new lease standard which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). Under ASU 2016-02, lessor accounting will be substantially similar to the current model, but aligned with certain changes to the lessee model and ASU 2014-09. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company&#8217;s rental revenue is primarily generated from short-term operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard is expected to impact the Company&#8217;s consolidated financial statements as the Company has an operating office lease arrangement for which it is the lessee. The new standard will be effective for the Company beginning on January 1, 2019, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, requiring application of the new guidance at the beginning of the earliest comparative period presented and provides for certain practical expedients. The Company is currently evaluating the impact on its consolidated financial statements.</div></div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="color: rgb(0, 0, 0); font: 10pt &quot;times new roman&quot;, times, serif; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; margin: 0px; text-align: justify;"><div style="text-decoration:underline;display:inline;">Subsequent Events</div></div><div style="color: rgb(0, 0, 0); font: 10pt &quot;times new roman&quot;, times, serif; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; margin: 0px; text-align: justify; background: none;">&#160;</div><div style="color: rgb(0, 0, 0); font: 10pt &quot;times new roman&quot;, times, serif; letter-spacing: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial; margin: 0px; text-align: justify;">Management has evaluated events subsequent to September 30, 2018 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements.</div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> iso4217:USD xbrli:shares xbrli:pure iso4217:USD xbrli:shares EX-101.SCH 6 rven-20180930.xsd XBRL TAXONOMY EXTENSION SCHEMA 1001 - Document - Document And Entity Information link:presentationLink link:definitionLink link:calculationLink 1002 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS link:presentationLink link:definitionLink link:calculationLink 1003 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) link:presentationLink link:definitionLink link:calculationLink 1004 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS link:presentationLink link:definitionLink link:calculationLink 1005 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS link:presentationLink link:definitionLink link:calculationLink 1006 - Disclosure - ORGANIZATION AND OPERATION link:presentationLink link:definitionLink link:calculationLink 1007 - Disclosure - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES link:presentationLink link:definitionLink link:calculationLink 1008 - Disclosure - INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES link:presentationLink link:definitionLink link:calculationLink 1009 - Disclosure - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES link:presentationLink link:definitionLink link:calculationLink 1010 - Disclosure - NOTES PAYABLE link:presentationLink link:definitionLink link:calculationLink 1011 - Disclosure - STOCKHOLDERS' EQUITY AND STOCK COMPENSATION link:presentationLink link:definitionLink link:calculationLink 1012 - Disclosure - INCOME TAXES link:presentationLink link:definitionLink link:calculationLink 1013 - Disclosure - RELATED PARTY TRANSACTIONS link:presentationLink link:definitionLink link:calculationLink 1014 - Disclosure - COMMITMENTS AND CONTINGENCIES link:presentationLink link:definitionLink link:calculationLink 1015 - Disclosure - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) link:presentationLink link:definitionLink link:calculationLink 1016 - Disclosure - INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES (Tables) link:presentationLink link:definitionLink link:calculationLink 1017 - Disclosure - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) link:presentationLink link:definitionLink link:calculationLink 1018 - Disclosure - NOTES PAYABLE (Tables) link:presentationLink link:definitionLink link:calculationLink 1019 - Disclosure - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual) link:presentationLink link:definitionLink link:calculationLink 1020 - Disclosure - INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES (Details) link:presentationLink link:definitionLink link:calculationLink 1021 - Disclosure - INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES (Details Textual) link:presentationLink link:definitionLink link:calculationLink 1022 - Disclosure - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) link:presentationLink link:definitionLink link:calculationLink 1023 - Disclosure - NOTES PAYABLE (Details) link:presentationLink link:definitionLink link:calculationLink 1024 - Disclosure - NOTES PAYABLE (Details Textual) link:presentationLink link:definitionLink link:calculationLink 1025 - Disclosure - STOCKHOLDERS' EQUITY AND STOCK COMPENSATION (Details Textual) link:presentationLink link:definitionLink link:calculationLink 1026 - Disclosure - INCOME TAXES (Details Textual) link:presentationLink link:definitionLink link:calculationLink 1027 - Disclosure - RELATED PARTY TRANSACTIONS (Details Textual) link:presentationLink link:definitionLink link:calculationLink 1028 - Disclosure - COMMITMENTS AND CONTINGENCIES (Details Textual) link:presentationLink link:definitionLink link:calculationLink EX-101.CAL 7 rven-20180930_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE EX-101.DEF 8 rven-20180930_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE EX-101.LAB 9 rven-20180930_lab.xml XBRL TAXONOMY EXTENSION LABEL LINKBASE EX-101.PRE 10 rven-20180930_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 11 R1.htm IDEA: XBRL DOCUMENT v3.10.0.1
Document And Entity Information - shares
9 Months Ended
Sep. 30, 2018
Oct. 31, 2018
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
Entity Registrant Name Reven Housing REIT, Inc.  
Entity Central Index Key 0001487782  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Trading Symbol RVEN  
Entity Common Stock, Shares Outstanding   10,945,074
Entity Emerging Growth Company false  
Entity Small Business true  
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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Investments in single-family residential properties:    
Land $ 11,328,161 $ 10,996,361
Buildings and improvements 52,677,702 49,399,791
Investments in real estate, gross 64,005,863 60,396,152
Accumulated depreciation (6,061,956) (4,542,707)
Investments in single-family residential properties, net 57,943,907 55,853,445
Cash and cash equivalents 22,766,393 6,442,322
Restricted cash 1,259,492 0
Rent and other receivables 614,329 645,441
Lease origination costs, net 388,084 317,359
Deferred stock issuance costs 0 553,296
Other assets, net 652,220 1,774,978
Total Assets 83,624,425 65,586,841
LIABILITIES AND STOCKHOLDERS' EQUITY    
Accounts payable and accrued liabilities 1,405,822 1,453,142
Resident security deposits 757,683 697,379
Notes payable, net 50,082,837 30,493,124
Total Liabilities 52,246,342 32,643,645
Commitments and contingencies (Note 9)
Stockholders' Equity    
Preferred stock, $.001 par value; 25,000,000 shares authorized; No shares issued or outstanding 0 0
Common stock, $.001 par value; 100,000,000 shares authorized; 10,945,074 and 10,734,025 shares issued and outstanding at at September 30, 2018 and December 31, 2017, respectively 10,945 10,734
Additional paid-in capital 42,543,805 41,677,465
Accumulated deficit (11,176,667) (8,745,003)
Total Stockholders' Equity 31,378,083 32,943,196
Total Liabilities and Stockholders' Equity $ 83,624,425 $ 65,586,841
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Sep. 30, 2018
Dec. 31, 2017
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 25,000,000 25,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 10,945,074 10,734,025
Common stock, shares outstanding 10,945,074 10,734,025
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Revenue:        
Rental income $ 2,211,085 $ 2,043,322 $ 6,623,163 $ 5,814,135
Expenses:        
Property operating and maintenance 780,415 593,339 2,081,009 1,694,969
Real estate taxes 371,741 346,669 1,104,657 988,839
Depreciation and amortization 597,928 537,968 1,631,824 1,458,933
General and administration 511,158 558,074 1,702,990 1,860,473
Noncash share-based compensation 39,375 0 39,375 0
Total expenses 2,300,617 2,036,050 6,559,855 6,003,214
Operating (loss) income (89,532) 7,272 63,308 (189,079)
Other income (expenses):        
Net gain on sale of single family residential properties 0 0 0 75,796
Casualty (loss) gain, net 0 (978,181) 76,133 (895,194)
Loss on early extinguishment of debt (642,845) 0 (642,845) 0
Previously deferred stock issuance costs 0 0 (674,144) 0
Other 7,993 5,466 22,989 13,628
Interest expense (441,341) (342,253) (1,277,105) (967,410)
Total other income (expenses), net (1,076,193) (1,314,968) (2,494,972) (1,773,180)
Net loss $ (1,165,725) $ (1,307,696) $ (2,431,664) $ (1,962,259)
Net loss per share        
(Basic and fully diluted) $ (0.11) $ (0.12) $ (0.23) $ (0.18)
Weighted average number of common shares outstanding 10,779,070 10,734,025 10,769,062 10,734,025
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Cash Flows From Operating Activities:        
Net loss $ (1,165,725) $ (1,307,696) $ (2,431,664) $ (1,962,259)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation and amortization 597,928 537,968 1,631,824 1,458,933
Noncash share-based compensation 39,375 0 39,375 0
Amortization of deferred loan fees 50,994 39,998 152,982 108,117
Casualty loss, net     0 895,194
Gain on sale of single-family residential properties     0 (75,796)
Loss on early extinguishment of debt 642,845 0 642,845 0
Previously deferred stock issuance costs 0 0 674,144 0
Changes in operating assets and liabilities:        
Rent and other receivables     31,112 (427,708)
Other assets     (298,153) 79,262
Accounts payable and accrued liabilities     77,679 192,408
Resident security deposits     60,304 126,711
Net cash provided by operating activities     580,448 394,862
Cash Flows From Investing Activities:        
Acquisitions of single-family residential properties     (1,681,413) (10,117,039)
Capital improvements for single-family residential properties     (1,928,298) (668,268)
Proceeds from disposition of single-family residential properties     0 205,027
Insurance proceeds received for property damages     1,420,912 554,806
Lease origination costs     (183,300) (219,407)
Net cash used in investing activities     (2,372,099) (10,244,881)
Cash Flows From Financing Activities:        
Proceeds from notes payable     54,098,630 7,968,633
Proceeds from issuance of shares     702,176 0
Payments of notes payable     (33,742,217) (405,750)
Payment of loan fees     (1,562,527) (220,773)
Payments of stock issuance costs     (120,848) (556,604)
Net cash provided by financing activities     19,375,214 6,785,506
Net Increase (Decrease) In Cash, Cash Equivalents, and Restricted Cash     17,583,563 (3,064,513)
Cash, Cash Equivalents, and Restricted Cash at the Beginning of the Period     6,442,322 10,044,977
Cash, Cash Equivalents, and Restricted Cash at the End of the Period $ 24,025,885 $ 6,980,464 24,025,885 6,980,464
Supplemental Disclosure:        
Cash paid for interest     $ 1,216,513 $ 837,127
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ORGANIZATION AND OPERATION
9 Months Ended
Sep. 30, 2018
Organization And Operation [Abstract]  
Nature of Operations [Text Block]
NOTE 1. ORGANIZATION AND OPERATION
 
Reven Housing REIT, Inc. is a Maryland corporation (Reven Housing REIT, Inc., which along with its wholly-owned subsidiaries, are also referred to herein collectively as the “Company”) which acquires portfolios of occupied and rented single-family residential properties located throughout the United States with the objective of receiving income from rental property activity and future profits from the sale of rental property at appreciated values.
 
As of September 30, 2018, the Company owned 826 single-family homes in the Houston, Jacksonville, Memphis, Birmingham and Atlanta metropolitan areas.
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]
NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
 
The accompanying condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”), and the rules and regulations of the Securities Exchange Commission (“SEC”).
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K filed with the SEC on March 29, 2018. The results of operations for the period ended September 30, 2018 are not necessarily indicative of the operating results for the full year.
 
Principles of Consolidation
 
The accompanying consolidated financial statements include the accounts of Reven Housing REIT, Inc, Reven Housing REIT OP, LP, a Delaware limited partnership which is its 100% owned operating partnership, and its wholly-owned subsidiaries, which have been formed primarily for financing purposes. All significant intercompany accounts and transactions have been eliminated in consolidation.
 
Use of Estimates
 
The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and reported amounts of revenues and expenses for the periods presented. Accordingly, actual results could differ from those estimates.
 
Financial Instruments
 
The carrying value of the Company’s financial instruments, as reported in the accompanying condensed consolidated balance sheets, approximates fair value due to their short-term nature. The Company’s short term financial instruments consist of cash and cash equivalents, restricted cash, rent and other receivables, escrow deposits, accounts payable and accrued liabilities, and resident security deposits.
 
The carrying value of the Company’s notes payable, as reported in the accompanying condensed consolidated balance sheets, approximates fair value due to their market interest rate and because their security and payment terms are similar to other debt instruments currently being issued.
 
Investments in Single-Family Residential Properties
 
The Company accounts for its investments in single-family residential properties as asset acquisitions and records these acquisitions at their purchase price. The purchase price is allocated between land, building, improvements and existing leases based upon their relative fair values at the date of acquisition. The purchase price for purposes of this allocation is inclusive of acquisition costs, which typically include legal fees, title fees, property inspection and valuation fees, as well as other closing costs.
 
Building improvements and buildings are depreciated over estimated useful lives of approximately 10 to 27.5 years, respectively, using the straight-line method. Lease origination costs are amortized over the average remaining term of the in-place leases which is generally less than one year. Maintenance and repair costs are charged to expenses as incurred.
 
The Company assesses its investments in single-family residential properties for impairment whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value. Should impairment exist, the asset is written down to its estimated fair value. The Company did not recognize any impairment loss for the nine-month period ended September 30, 2018. During the quarter ended September 30, 2017, the company reduced its carrying value of its homes by $2.6 million due to hurricane damages in Houston and Jacksonville. Substantially all of those damages have since been repaired.
 
Cash and Cash Equivalents
 
The Company considers all demand deposits, money market accounts and certificates of deposit with a maturity of three months or less to be cash equivalents. The Company maintains its cash accounts at quality financial institutions. The combined account balances at one or more institutions typically exceed the federal insurance coverage and thus there is a concentration of credit risk related to amounts on deposit in excess of available federal insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions non-performance.
 
Restricted Cash
 
Pursuant to the terms of the note payable referred to in Note 5, the Company is required to establish, maintain, and fund monthly specified reserve accounts. These reserve accounts include property tax reserves, insurance reserves, and capital expenditure reserves.
 
Rent and Other Receivables
 
Rent and other receivables represent the amount of rent receivables, security deposits and net rental funds which are held by the property managers on behalf of the Company, net of any allowance for amounts deemed uncollectible.
 
Deferred Loan Fees
 
Costs incurred in the placement of the Company’s notes payable are deferred and amortized using the effective interest method over the term of the loans as a component of interest expense on the consolidated statements of operations. These deferred loan fees are offset against the notes payable in the accompanying balance sheets.
 
Deferred Stock Issuance Costs
 
Deferred stock issuance costs represent amounts paid for legal, consulting, and other offering expenses in conjunction with the future raising of additional capital to be completed within one year. These costs are netted against additional paid-in capital as a cost of the stock issuance upon closing of the respective stock placement. During the nine-month period ended September 30, 2018, such capital raise was postponed indefinitely, and the Company expensed the related $674,144 of deferred stock issuance costs incurred pertaining to its previously filed registration statement on Form S-11.
 
Security Deposits
 
Security deposits represent amounts deposited by tenants at the inception of the lease. As of September 30, 2018 and December 31, 2017, the Company had $757,683 and $697,379, respectively, in resident security deposits. Security deposits are refundable, net of any outstanding charges and fees, upon expiration of the underlying lease.
 
Revenue Recognition
 
Residential properties are leased to tenants under short term rental agreements of generally one year and revenue is recognized over the lease term on a straight-line basis.
 
Income Taxes
 
The Company intends to elect to be taxed as a real estate investment trust (“REIT”), as defined in the Internal Revenue Code, commencing with the taxable year ended December 31, 2018. Accordingly, the Company does not expect to be subject to federal income tax, provided that it continues to qualify as a REIT and distributions to the stockholders equal or exceed REIT taxable income.
 
Qualification and taxation as a REIT depends upon the Company’s ability to meet the various qualification tests imposed under the Internal Revenue Code related to the percentage of income that are earned from specified sources, the percentage of assets that fall within specified categories, the diversity of capital stock ownership, and the percentage of earnings that are distributed. Accordingly, no assurance can be given that the Company will be organized or be able to operate in a manner to qualify or remain qualified as a REIT. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal and state income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates, and the Company may be ineligible to qualify as a REIT for four subsequent tax years. Even if the Company qualifies as a REIT, it may be subject to certain state or local income taxes.
 
Incentive Compensation Plan
 
During 2012, the Company established the 2012 Incentive Compensation Plan, which was subsequently amended and restated in December 2013 (“2012 Plan”). The 2012 Plan allows for the grant of options and other awards representing up to 1,650,000 shares of the Company’s common stock. Such awards may be granted to officers, directors, employees, consultants and other persons who provide services to the Company or any related entity. Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as determined by a committee designated by the Board of Directors, but in no event, longer than ten years.
 
During January 2018, an additional 35,505 shares were issued to officers, directors and employees as part of their accrued compensation for the year ended December 31, 2017. Subsequent to September 30, 2018, the Company issued 9,918 shares to directors as part of their accrued compensation for the period ended September 30, 2018. A total of 541,782 shares have been issued under the 2012 plan to date.
 
Net Loss Per Share
 
Net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any) are not included in the computation if the effect would be anti-dilutive and would increase earnings or decrease loss per share. For the three and nine months ended September 30, 2017, potentially dilutive securities excluded from the calculations were 263,588 shares issuable upon exercise of outstanding warrants granted in prior years. These warrants were converted, or expired, during the quarter ended September 30, 2018.
 
Segment Reporting
 
The Company has determined that it has one reportable segment with activities related to leasing and operating single-family homes as rental properties. The Company's rental properties are geographically dispersed and management evaluates operating performance at the market level and while each market and its properties are unique, the aggregate market portfolios have similar economic interests and operating performance.
 
New Accounting Pronouncements
 
In May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
, which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB issued ASU 2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date
, which delays the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
, which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2014-09, ASU 2015-14 and ASU 2016-08 are herein collectively referred to as the "New Revenue Recognition Standards". The New Revenue Recognition Standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company has adopted the New Revenue Recognition Standards effective as of January 1, 2018, and has applied the modified retrospective method. The Company has evaluated its revenue streams and, as they are primarily related to leasing activities which are scoped out of the New Revenue Recognition Standards, has determined that the adoption of such standards does not have a material impact on the consolidated financial statements and thus there is no cumulative adjustment upon adoption. The Company evaluated its real estate sales contracts through September 30, 2018 and 2017 and determined they qualified as sales to noncustomers. The gain on the sale of real estate for the property sold through September 30, 2017 was recognized on the full accrual method based on the existing accounting standards and was determined to be a completed contract as of September 30, 2017; therefore, the adoption of the new revenue recognition standards did not have an impact on the Company’s real estate sale contracts.
 
In February 2016, the FASB issued ASU 2016-02,
Leases
, a new lease standard which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). Under ASU 2016-02, lessor accounting will be substantially similar to the current model, but aligned with certain changes to the lessee model and ASU 2014-09. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company’s rental revenue is primarily generated from short-term operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard is expected to impact the Company’s consolidated financial statements as the Company has an operating office lease arrangement for which it is the lessee. The new standard will be effective for the Company beginning on January 1, 2019, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, requiring application of the new guidance at the beginning of the earliest comparative period presented and provides for certain practical expedients. The Company is currently evaluating the impact on its consolidated financial statements.
 
Subsequent Events
 
Management has evaluated events subsequent to September 30, 2018 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements.
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INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES
9 Months Ended
Sep. 30, 2018
Residential Homes [Abstract]  
Residential Homes [Text Block]
NOTE 3. INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES
 
The following table summarizes the Company’s investments in single-family residential properties. The homes are generally leased to individual tenants under leases with terms of one year or less.
 
 
 
 
 
 
 
 
 
 
 
 
Investments in
 
 
 
 
 
Investments in
 
 
 
 
 
 
 
 
 
 
 
 
Single-Family
 
 
 
 
 
Single-Family
 
 
 
Number
 
 
 
 
 
Buildings and
 
 
Residential
 
 
Accumulated
 
 
Residential
 
 
 
of Homes
 
 
Land
 
 
Improvements
 
 
Properties, Gross
 
 
Depreciation
 
 
Properties, Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total at December 31, 2017
 
 
799
 
 
$
10,996,361
 
 
$
49,399,791
 
 
$
60,396,152
 
 
$
(4,542,707
)
 
$
55,853,445
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases and improvements during 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions
 
 
27
 
 
 
331,800
 
 
 
1,349,613
 
 
 
1,681,413
 
 
 
-
 
 
 
1,681,413
 
Improvements
 
 
-
 
 
 
-
 
 
 
1,928,298
 
 
 
1,928,298
 
 
 
-
 
 
 
1,928,298
 
Depreciation
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
(1,519,249
)
 
 
(1,519,249
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total at September 30, 2018
 
 
826
 
 
$
11,328,161
 
 
$
52,677,702
 
 
$
64,005,863
 
 
$
(6,061,956
)
 
$
57,943,907
 
 
Approximately $987,000 of improvements made during the nine months ended September 30, 2018 were related to renovations resulting from casualty losses incurred during 2017, and were primarily funded with insurance proceeds received during the period ended September 30, 2018.
XML 19 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
9 Months Ended
Sep. 30, 2018
Accounts Payable and Accrued Liabilities [Abstract]  
Accounts Payable and Accrued Liabilities Disclosure [Text Block]
NOTE 4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 
At September 30, 2018 and December 31, 2017, accounts payable and accrued liabilities consisted of the following:
 
 
 
2018
 
 
2017
 
 
 
 
 
 
 
 
Accounts payable
 
$
36,925
 
 
$
162,221
 
Real estate taxes payable
 
 
1,031,027
 
 
 
781,898
 
Accrued compensation, board fees and other
 
 
337,870
 
 
 
416,633
 
Interest payable
 
 
-
 
 
 
92,390
 
 
 
$
1,405,822
 
 
$
1,453,142
 
XML 20 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
NOTES PAYABLE
9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
NOTE 5. NOTES PAYABLE
 
On September 28, 2018, the Company, through Reven Housing Funding 1, LLC, a wholly-owned subsidiary, refinanced its entire single-family home portfolio by entering into a $51,362,000 loan with Arbor Agency Lending, LLC, on behalf of the Federal Home Loan Mortgage Corporation (Freddie Mac). The loan is a seven-year, monthly interest-only payable loan accruing interest at 4.74% per annum, with principal due and payable at its maturity on October 1, 2025. The loan is secured by 824 of the Company’s currently owned single-family homes and the Company has also guaranteed approximately $12.8 million of the loan balance. Proceeds of approximately $33 million were utilized to pay off and replace the Company’s eight previously outstanding notes. Additionally, as a result of the loan, the Company received approximately $17 million of cash, net of transaction fees, prepayment fees, and loan payoffs which Reven intends to use for the future acquisitions of single-family homes.
 
Early Extinguishment of Debt
 
As a result of the early payoff of the Company’s previous loans on September 28, 2018 mentioned above, the Company incurred $642,845 of loss on early extinguishment of debt primarily consisting of unamortized financing costs and prepayment fees.
 
A summary of the Company’s notes payable as of September 30, 2018 and December 31, 2017 is as follows:
 
 
 
2018
 
 
2017
 
 
Interest
Rate
(Fixed)
 
 
Maturity Date
Note
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reven Housing Fund 1, LLC
 
$
51,362,000
 
 
$
-
 
 
 
4.74
%
 
October, 2025
Reven Housing Texas, LLC
 
 
-
 
 
 
7,312,030
 
 
 
4.50
%
 
April, 2020
Reven Housing Texas 2, LLC
 
 
-
 
 
 
4,890,978
 
 
 
4.50
%
 
January, 2022
Reven Housing Tennessee, LLC
 
 
-
 
 
 
3,830,791
 
 
 
4.50
%
 
April, 2020
Reven Housing Florida, LLC
 
 
-
 
 
 
3,442,987
 
 
 
4.50
%
 
April, 2020
Reven Housing Florida 2, LLC
 
 
-
 
 
 
4,805,389
 
 
 
4.50
%
 
April, 2020
Reven Housing Georgia, LLC
 
 
-
 
 
 
1,780,765
 
 
 
4.50
%
 
July, 2020
Reven Housing Tennessee, LLC
 
 
-
 
 
 
1,148,726
 
 
 
4.50
%
 
September, 2020
Reven Housing Alabama, LLC
 
 
-
 
 
 
3,793,920
 
 
 
4.25
%
 
January, 2023
 
 
 
51,362,000
 
 
 
31,005,586
 
 
 
 
 
 
 
Less deferred loan fees, net
 
 
(1,279,163
)
 
 
(512,462
)
 
 
 
 
 
 
Notes payable, net
 
$
50,082,837
 
 
$
30,493,124
 
 
 
 
 
 
 
 
Costs incurred in the placement of the Company’s debt are deferred and amortized using the effective interest method over the term of the loans as a component of interest expense on the condensed consolidated statements of operations. The amount of unamortized fees are deducted from the remaining principal amount owed on the corresponding notes payable. Unamortized deferred loan costs and fees totaled $1,279,163 and $512,462 as of September 30, 2018 and December 31, 2017, respectively.
 
During the three months ended September 30, 2018 and 2017, the Company incurred $441,341 and $342,253, respectively, of interest expense related to the notes payable, which includes $50,994 and $39,998, respectively, of amortization of deferred loan fees. During the nine months ended September 30, 2018 and 2017, the Company incurred $1,277,105 and $967,410, respectively, of interest expense related to the notes payable, which includes $152,982 and $108,117, respectively, of amortization of deferred loan fees.
XML 21 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
STOCKHOLDERS' EQUITY AND STOCK COMPENSATION
9 Months Ended
Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE 6. STOCKHOLDERS’ EQUITY AND STOCK COMPENSATION
 
On October 16, 2014, the Company issued 425,000 shares of the Company’s common stock under the 2012 Plan to certain officers and consultants of the Company. The shares issued are subject to restrictions and future vesting conditions based on the Company reaching certain future milestones. During the year ended December 31, 2016, 106,250 of these shares became vested upon the achievement of certain milestones related to our public offering of common stock mentioned above. Accordingly, $425,000 of noncash share-based compensation expense was then recognized based on the value of the shares on the date of grant. None of the remaining 318,750 shares were vested as of the issuance date. Compensation expense will be recognized in the applicable future periods on these unvested shares should the applicable milestones be achieved in accordance with the vesting schedule. There is no assurance that these milestones will in fact be achieved and that the shares will in fact vest in the future.
 
In January 2018, the Company issued 35,505 shares of the Company’s common stock under the 2012 Plan to certain directors, officers, and consultants of the Company as payment for accrued 2017 compensation. Subsequent to September 30, 2018, in November 2018, the Company approved the issuance of 9,918 shares of the Company’s common stock under the 2012 Plan to certain directors as payment for accrued 2018 compensation for the three month period ending September 30, 2018.
 
The Company had previously issued outstanding warrants that allowed holders to purchase up to 263,588 shares at an exercise price of $4.00 per share.  During September 2018, 175,544 shares were issued upon the exercise of warrants and the Company received total proceeds on exercise of $702,176. The remaining warrants expired on September 27, 2018.
 
Share Repurchase Program
 
In March 2018, the Company authorized our existing share repurchase program, authorizing the repurchase of up to $500,000 of our outstanding common stock from time to time in the open market. The program has an expiration date of December 31, 2018. All repurchased shares are constructively retired and returned to an authorized and unissued status. The Company did not repurchase and retire any of our shares as of the period ended September 30, 2018. Subsequent to September 30, 2018, the Company has repurchased a nominal number of shares under the program.
 
Distributions
 
In October 2018, the Company declared its first distribution of $0.01 per share on the Company’s common shares. The distribution will be made on or about November 15, 2018 to shareholders of record as of October 25, 2018.
XML 22 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
INCOME TAXES
9 Months Ended
Sep. 30, 2018
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
NOTE 7. INCOME TAXES
 
The Company intends to elect REIT status effective for the year ending December 31, 2018. The Company would then generally not be subject to income taxes assuming it complied with the various distribution rules applicable to REITs. The Company has also incurred current and prior year net operating losses; thus, the Company does not expect to incur current income tax expenses even if it does not choose to elect REIT status in 2018.
 
Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and expected carry-forwards are available to reduce taxable income. The Company records a valuation allowance when, in the opinion of management, it is more likely than not, that the Company will not realize some or all deferred tax assets. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance equal to the deferred tax asset at September 30, 2018 and December 31, 2017. At December 31, 2017 the Company had federal and state net operating loss carry-forwards of approximately $5,350,000. The federal and state tax loss carry-forwards will begin to expire in 2032, unless previously utilized.
 
Pursuant to Internal Revenue Code Section 382, use of the Company’s net operating loss carry-forwards may be limited if a cumulative change in ownership of more than 50% occurs within a three-year period. Management believes that such an ownership change had occurred but has not yet performed a study of the limitations on the net operating losses.
XML 23 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
RELATED PARTY TRANSACTIONS
9 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]
NOTE 8. RELATED PARTY TRANSACTIONS
 
Reven Capital, LLC, which is wholly-owned by Chad M. Carpenter, a shareholder of the Company and its Chief Executive Officer, currently subleases office space from the Company on a month to month basis for a monthly rental of $500. For each of the three month periods ended September 30, 2018 and 2017, the Company received income from Reven Capital, LLC of $1,500, respectively. For each of the nine month periods ended September 30, 2018 and 2017, the Company received income from Reven Capital, LLC of $4,500, respectively.
XML 24 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
COMMITMENTS AND CONTINGENCIES
9 Months Ended
Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
NOTE 9. COMMITMENTS AND CONTINGENCIES
 
Purchase Commitments
 
The Company has entered into purchase contracts to acquire approximately 200 homes at a contract price of approximately $22.4 million. However, it is not yet known if the purchases of these properties will close because properties may fall out of escrow through the closing process for various reasons.
 
Legal and Regulatory
 
The Company is subject to potential liability under laws and government regulations and various claims and legal actions arising in the ordinary course of the Company’s business. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts established for those claims. Based on information currently available, management is not aware of any legal or regulatory claims that would have a material effect on the Company’s condensed consolidated financial statements and, therefore, no accrual has been recorded as of the periods ended September 30, 2018 and December 31, 2017.
XML 25 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
9 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]
Basis of Presentation
 
The accompanying condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”), and the rules and regulations of the Securities Exchange Commission (“SEC”).
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K filed with the SEC on March 29, 2018. The results of operations for the period ended September 30, 2018 are not necessarily indicative of the operating results for the full year.
Consolidation, Policy [Policy Text Block]
Principles of Consolidation
 
The accompanying consolidated financial statements include the accounts of Reven Housing REIT, Inc, Reven Housing REIT OP, LP, a Delaware limited partnership which is its 100% owned operating partnership, and its wholly-owned subsidiaries, which have been formed primarily for financing purposes. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates, Policy [Policy Text Block]
Use of Estimates
 
The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and reported amounts of revenues and expenses for the periods presented. Accordingly, actual results could differ from those estimates.
Fair Value of Financial Instruments, Policy [Policy Text Block]
Financial Instruments
 
The carrying value of the Company’s financial instruments, as reported in the accompanying condensed consolidated balance sheets, approximates fair value due to their short-term nature. The Company’s short term financial instruments consist of cash and cash equivalents, restricted cash, rent and other receivables, escrow deposits, accounts payable and accrued liabilities, and resident security deposits.
 
The carrying value of the Company’s notes payable, as reported in the accompanying condensed consolidated balance sheets, approximates fair value due to their market interest rate and because their security and payment terms are similar to other debt instruments currently being issued.
Property Acquisitions [Policy Text Block]
Investments in Single-Family Residential Properties
 
The Company accounts for its investments in single-family residential properties as asset acquisitions and records these acquisitions at their purchase price. The purchase price is allocated between land, building, improvements and existing leases based upon their relative fair values at the date of acquisition. The purchase price for purposes of this allocation is inclusive of acquisition costs, which typically include legal fees, title fees, property inspection and valuation fees, as well as other closing costs.
 
Building improvements and buildings are depreciated over estimated useful lives of approximately 10 to 27.5 years, respectively, using the straight-line method. Lease origination costs are amortized over the average remaining term of the in-place leases which is generally less than one year. Maintenance and repair costs are charged to expenses as incurred.
 
The Company assesses its investments in single-family residential properties for impairment whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value. Should impairment exist, the asset is written down to its estimated fair value. The Company did not recognize any impairment loss for the nine-month period ended September 30, 2018. During the quarter ended September 30, 2017, the company reduced its carrying value of its homes by $2.6 million due to hurricane damages in Houston and Jacksonville. Substantially all of those damages have since been repaired.
Cash and Cash Equivalents, Policy [Policy Text Block]
Cash and Cash Equivalents
 
The Company considers all demand deposits, money market accounts and certificates of deposit with a maturity of three months or less to be cash equivalents. The Company maintains its cash accounts at quality financial institutions. The combined account balances at one or more institutions typically exceed the federal insurance coverage and thus there is a concentration of credit risk related to amounts on deposit in excess of available federal insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions non-performance.
Restricted Cash And Restricted Cash Equivalents Policy [Policy Text Block]
Restricted Cash
 
Pursuant to the terms of the note payable referred to in Note 5, the Company is required to establish, maintain, and fund monthly specified reserve accounts. These reserve accounts include property tax reserves, insurance reserves, and capital expenditure reserves.
Advances to Property Manager [Policy Text Block]
Rent and Other Receivables
 
Rent and other receivables represent the amount of rent receivables, security deposits and net rental funds which are held by the property managers on behalf of the Company, net of any allowance for amounts deemed uncollectible.
Deferred Loan Fees, Policy [Policy Text Block]
Deferred Loan Fees
 
Costs incurred in the placement of the Company’s notes payable are deferred and amortized using the effective interest method over the term of the loans as a component of interest expense on the consolidated statements of operations. These deferred loan fees are offset against the notes payable in the accompanying balance sheets.
Deferred Stock Issuance Costs [Policy Text Block]
Deferred Stock Issuance Costs
 
Deferred stock issuance costs represent amounts paid for legal, consulting, and other offering expenses in conjunction with the future raising of additional capital to be completed within one year. These costs are netted against additional paid-in capital as a cost of the stock issuance upon closing of the respective stock placement. During the nine-month period ended September 30, 2018, such capital raise was postponed indefinitely, and the Company expensed the related $674,144 of deferred stock issuance costs incurred pertaining to its previously filed registration statement on Form S-11.
Security Deposits [Policy Text Block]
Security Deposits
 
Security deposits represent amounts deposited by tenants at the inception of the lease. As of September 30, 2018 and December 31, 2017, the Company had $757,683 and $697,379, respectively, in resident security deposits. Security deposits are refundable, net of any outstanding charges and fees, upon expiration of the underlying lease.
Revenue Recognition, Policy [Policy Text Block]
Revenue Recognition
 
Residential properties are leased to tenants under short term rental agreements of generally one year and revenue is recognized over the lease term on a straight-line basis.
Income Tax, Policy [Policy Text Block]
Income Taxes
 
The Company intends to elect to be taxed as a real estate investment trust (“REIT”), as defined in the Internal Revenue Code, commencing with the taxable year ended December 31, 2018. Accordingly, the Company does not expect to be subject to federal income tax, provided that it continues to qualify as a REIT and distributions to the stockholders equal or exceed REIT taxable income.
 
Qualification and taxation as a REIT depends upon the Company’s ability to meet the various qualification tests imposed under the Internal Revenue Code related to the percentage of income that are earned from specified sources, the percentage of assets that fall within specified categories, the diversity of capital stock ownership, and the percentage of earnings that are distributed. Accordingly, no assurance can be given that the Company will be organized or be able to operate in a manner to qualify or remain qualified as a REIT. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal and state income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates, and the Company may be ineligible to qualify as a REIT for four subsequent tax years. Even if the Company qualifies as a REIT, it may be subject to certain state or local income taxes.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]
Incentive Compensation Plan
 
During 2012, the Company established the 2012 Incentive Compensation Plan, which was subsequently amended and restated in December 2013 (“2012 Plan”). The 2012 Plan allows for the grant of options and other awards representing up to 1,650,000 shares of the Company’s common stock. Such awards may be granted to officers, directors, employees, consultants and other persons who provide services to the Company or any related entity. Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as determined by a committee designated by the Board of Directors, but in no event, longer than ten years.
 
During January 2018, an additional 35,505 shares were issued to officers, directors and employees as part of their accrued compensation for the year ended December 31, 2017. Subsequent to September 30, 2018, the Company issued 9,918 shares to directors as part of their accrued compensation for the period ended September 30, 2018. A total of 541,782 shares have been issued under the 2012 plan to date.
Earnings Per Share, Policy [Policy Text Block]
Net Loss Per Share
 
Net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any) are not included in the computation if the effect would be anti-dilutive and would increase earnings or decrease loss per share. For the three and nine months ended September 30, 2017, potentially dilutive securities excluded from the calculations were 263,588 shares issuable upon exercise of outstanding warrants granted in prior years. These warrants were converted, or expired, during the quarter ended September 30, 2018.
Segment Reporting, Policy [Policy Text Block]
Segment Reporting
 
The Company has determined that it has one reportable segment with activities related to leasing and operating single-family homes as rental properties. The Company's rental properties are geographically dispersed and management evaluates operating performance at the market level and while each market and its properties are unique, the aggregate market portfolios have similar economic interests and operating performance.
New Accounting Pronouncements, Policy [Policy Text Block]
New Accounting Pronouncements
 
In May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
, which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB issued ASU 2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date
, which delays the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
, which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2014-09, ASU 2015-14 and ASU 2016-08 are herein collectively referred to as the "New Revenue Recognition Standards". The New Revenue Recognition Standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company has adopted the New Revenue Recognition Standards effective as of January 1, 2018, and has applied the modified retrospective method. The Company has evaluated its revenue streams and, as they are primarily related to leasing activities which are scoped out of the New Revenue Recognition Standards, has determined that the adoption of such standards does not have a material impact on the consolidated financial statements and thus there is no cumulative adjustment upon adoption. The Company evaluated its real estate sales contracts through September 30, 2018 and 2017 and determined they qualified as sales to noncustomers. The gain on the sale of real estate for the property sold through September 30, 2017 was recognized on the full accrual method based on the existing accounting standards and was determined to be a completed contract as of September 30, 2017; therefore, the adoption of the new revenue recognition standards did not have an impact on the Company’s real estate sale contracts.
 
In February 2016, the FASB issued ASU 2016-02,
Leases
, a new lease standard which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). Under ASU 2016-02, lessor accounting will be substantially similar to the current model, but aligned with certain changes to the lessee model and ASU 2014-09. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company’s rental revenue is primarily generated from short-term operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard is expected to impact the Company’s consolidated financial statements as the Company has an operating office lease arrangement for which it is the lessee. The new standard will be effective for the Company beginning on January 1, 2019, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, requiring application of the new guidance at the beginning of the earliest comparative period presented and provides for certain practical expedients. The Company is currently evaluating the impact on its consolidated financial statements.
Subsequent Events, Policy [Policy Text Block]
Subsequent Events
 
Management has evaluated events subsequent to September 30, 2018 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements.
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INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES (Tables)
9 Months Ended
Sep. 30, 2018
Residential Homes [Abstract]  
Schedule of Real Estate Properties [Table Text Block]
The homes are generally leased to individual tenants under leases with terms of one year or less.
 
 
 
 
 
 
 
 
 
 
 
 
Investments in
 
 
 
 
 
Investments in
 
 
 
 
 
 
 
 
 
 
 
 
Single-Family
 
 
 
 
 
Single-Family
 
 
 
Number
 
 
 
 
 
Buildings and
 
 
Residential
 
 
Accumulated
 
 
Residential
 
 
 
of Homes
 
 
Land
 
 
Improvements
 
 
Properties, Gross
 
 
Depreciation
 
 
Properties, Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total at December 31, 2017
 
 
799
 
 
$
10,996,361
 
 
$
49,399,791
 
 
$
60,396,152
 
 
$
(4,542,707
)
 
$
55,853,445
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases and improvements during 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions
 
 
27
 
 
 
331,800
 
 
 
1,349,613
 
 
 
1,681,413
 
 
 
-
 
 
 
1,681,413
 
Improvements
 
 
-
 
 
 
-
 
 
 
1,928,298
 
 
 
1,928,298
 
 
 
-
 
 
 
1,928,298
 
Depreciation
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
(1,519,249
)
 
 
(1,519,249
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total at September 30, 2018
 
 
826
 
 
$
11,328,161
 
 
$
52,677,702
 
 
$
64,005,863
 
 
$
(6,061,956
)
 
$
57,943,907
 
XML 27 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)
9 Months Ended
Sep. 30, 2018
Accounts Payable and Accrued Liabilities [Abstract]  
Schedule of Accrued Liabilities [Table Text Block]
At September 30, 2018 and December 31, 2017, accounts payable and accrued liabilities consisted of the following:
 
 
 
2018
 
 
2017
 
 
 
 
 
 
 
 
Accounts payable
 
$
36,925
 
 
$
162,221
 
Real estate taxes payable
 
 
1,031,027
 
 
 
781,898
 
Accrued compensation, board fees and other
 
 
337,870
 
 
 
416,633
 
Interest payable
 
 
-
 
 
 
92,390
 
 
 
$
1,405,822
 
 
$
1,453,142
 
XML 28 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
NOTES PAYABLE (Tables)
9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Schedule of Debt [Table Text Block]
A summary of the Company’s notes payable as of September 30, 2018 and December 31, 2017 is as follows:
 
 
 
2018
 
 
2017
 
 
Interest
Rate
(Fixed)
 
 
Maturity Date
Note
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reven Housing Fund 1, LLC
 
$
51,362,000
 
 
$
-
 
 
 
4.74
%
 
October, 2025
Reven Housing Texas, LLC
 
 
-
 
 
 
7,312,030
 
 
 
4.50
%
 
April, 2020
Reven Housing Texas 2, LLC
 
 
-
 
 
 
4,890,978
 
 
 
4.50
%
 
January, 2022
Reven Housing Tennessee, LLC
 
 
-
 
 
 
3,830,791
 
 
 
4.50
%
 
April, 2020
Reven Housing Florida, LLC
 
 
-
 
 
 
3,442,987
 
 
 
4.50
%
 
April, 2020
Reven Housing Florida 2, LLC
 
 
-
 
 
 
4,805,389
 
 
 
4.50
%
 
April, 2020
Reven Housing Georgia, LLC
 
 
-
 
 
 
1,780,765
 
 
 
4.50
%
 
July, 2020
Reven Housing Tennessee, LLC
 
 
-
 
 
 
1,148,726
 
 
 
4.50
%
 
September, 2020
Reven Housing Alabama, LLC
 
 
-
 
 
 
3,793,920
 
 
 
4.25
%
 
January, 2023
 
 
 
51,362,000
 
 
 
31,005,586
 
 
 
 
 
 
 
Less deferred loan fees, net
 
 
(1,279,163
)
 
 
(512,462
)
 
 
 
 
 
 
Notes payable, net
 
$
50,082,837
 
 
$
30,493,124
 
 
 
 
 
 
 
XML 29 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Oct. 31, 2018
Jan. 31, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
Dec. 31, 2012
Accounting Policies [Line Items]              
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount     263,588   263,588    
Deferred Offering Costs       $ 0   $ 553,296  
Security Deposit       757,683   $ 697,379  
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period   35,505          
Depreciation       $ 1,519,249      
Buildings and Improvements [Member]              
Accounting Policies [Line Items]              
Depreciation         $ 2,600,000    
Buildings and Improvements [Member] | Minimum [Member]              
Accounting Policies [Line Items]              
Property, Plant and Equipment, Useful Life       10 years      
Buildings and Improvements [Member] | Maximum [Member]              
Accounting Policies [Line Items]              
Property, Plant and Equipment, Useful Life       27 years 6 months      
Reven Housing REIT Inc [Member]              
Accounting Policies [Line Items]              
Noncontrolling Interest, Ownership Percentage by Parent       100.00%      
Incentive Compensation Plan 2012 [Member]              
Accounting Policies [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized             1,650,000
Share-based Compensation Arrangement by Share-based Payment Award, Description       Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as determined by a committee designated by the Board of Directors, but in no event, longer than ten years.      
Stock Issued During Period, Shares, Share-based Compensation, Gross       541,782      
Subsequent Event [Member] | Director [Member]              
Accounting Policies [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period 9,918            
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES (Details)
9 Months Ended
Sep. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
RESIDENTIAL HOMES, NET [Line Items]    
Number of Homes 826 799
Property Plant and Equipment at Beginning $ 55,853,445  
Property Plant and Equipment, Acquisitions 1,681,413  
Property Plant And Equipment, Improvements 1,928,298  
Property Plant And Equipment, Depreciation (1,519,249)  
Property Plant and Equipment at Ending 57,943,907  
Accumulated Depreciation $ (6,061,956) $ (4,542,707)
Acquisitions    
RESIDENTIAL HOMES, NET [Line Items]    
Number of Homes 27  
Accumulated Depreciation $ 0  
Improvements    
RESIDENTIAL HOMES, NET [Line Items]    
Number of Homes 0  
Accumulated Depreciation $ 0  
Depreciation    
RESIDENTIAL HOMES, NET [Line Items]    
Number of Homes 0  
Property Plant And Equipment, Depreciation $ (1,519,249)  
Land    
RESIDENTIAL HOMES, NET [Line Items]    
Property Plant and Equipment at Beginning 10,996,361  
Property Plant and Equipment, Acquisitions 331,800  
Property Plant And Equipment, Improvements 0  
Property Plant And Equipment, Depreciation 0  
Property Plant and Equipment at Ending 11,328,161  
Buildings and Improvements    
RESIDENTIAL HOMES, NET [Line Items]    
Property Plant and Equipment at Beginning 49,399,791  
Property Plant and Equipment, Acquisitions 1,349,613  
Property Plant And Equipment, Improvements 1,928,298  
Property Plant And Equipment, Depreciation 0  
Property Plant and Equipment at Ending 52,677,702  
Investments In Single-Family Residential Properties [Member]    
RESIDENTIAL HOMES, NET [Line Items]    
Property Plant and Equipment at Beginning 60,396,152  
Property Plant and Equipment, Acquisitions 1,681,413  
Property Plant And Equipment, Improvements 1,928,298  
Property Plant And Equipment, Depreciation 0  
Property Plant and Equipment at Ending $ 64,005,863  
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
INVESTMENTS IN SINGLE-FAMILY RESIDENTIAL PROPERTIES (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Cost of Property Repairs and Maintenance $ 780,415 $ 593,339 $ 2,081,009 $ 1,694,969
Hurricane [Member]        
Cost of Property Repairs and Maintenance     $ 987,000  
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Accounts Payable And Accrued Expenses [Line Items]    
Accounts payable $ 36,925 $ 162,221
Real estate taxes payable 1,031,027 781,898
Accrued compensation, board fees and other 337,870 416,633
Interest payable 0 92,390
Accounts payable and accrued liabilities $ 1,405,822 $ 1,453,142
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
NOTES PAYABLE (Details) - USD ($)
1 Months Ended 9 Months Ended
Sep. 28, 2018
Sep. 30, 2018
Dec. 31, 2017
Note      
Notes payable, net   $ 50,082,837 $ 30,493,124
Maturity Date Oct. 01, 2025    
Debt Instrument, Interest Rate, Stated Percentage 4.74%    
Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   51,362,000 31,005,586
Less deferred loan fees, net   (1,279,163) (512,462)
Notes payable, net   50,082,837 30,493,124
Reven Housing Funding 1 LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 51,362,000 0
Maturity Date   Oct. 30, 2025  
Debt Instrument, Interest Rate, Stated Percentage   4.74%  
Reven Housing Texas, LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 7,312,030
Maturity Date   Apr. 30, 2020  
Debt Instrument, Interest Rate, Stated Percentage   4.50%  
Reven Housing Texas 2 LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 4,890,978
Maturity Date   Jan. 31, 2022  
Debt Instrument, Interest Rate, Stated Percentage   4.50%  
Reven Housing Tennessee, LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 3,830,791
Maturity Date   Apr. 30, 2020  
Debt Instrument, Interest Rate, Stated Percentage   4.50%  
Reven Housing Florida, LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 3,442,987
Maturity Date   Apr. 30, 2020  
Debt Instrument, Interest Rate, Stated Percentage   4.50%  
Reven Housing Florida 2, LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 4,805,389
Maturity Date   Apr. 30, 2020  
Debt Instrument, Interest Rate, Stated Percentage   4.50%  
Reven Housing Georgia, LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 1,780,765
Maturity Date   Jul. 31, 2020  
Debt Instrument, Interest Rate, Stated Percentage   4.50%  
Reven Housing Tennessee 2, LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 1,148,726
Maturity Date   Sep. 30, 2020  
Debt Instrument, Interest Rate, Stated Percentage   4.50%  
Reven Housing Alabama, LLC [Member] | Notes Payable to Banks [Member]      
Note      
Long-term Debt, Gross   $ 0 $ 3,793,920
Maturity Date   Jan. 31, 2023  
Debt Instrument, Interest Rate, Stated Percentage   4.25%  
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
NOTES PAYABLE (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Sep. 28, 2018
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
Notes Payable [Line Items]            
Debt Instrument, Maturity Date Oct. 01, 2025          
Interest Expense, Debt   $ 441,341 $ 342,253 $ 1,277,105 $ 967,410  
Amortization of Financing Costs   50,994 39,998 152,982 108,117  
Debt Instrument, Interest Rate, Stated Percentage 4.74%          
Debt Instrument, Face Amount $ 51,362,000          
Proceeds From Notes Payable 33,000,000     54,098,630 7,968,633  
Payments to Acquire Real Estate 17,000,000          
Secured Debt 12,800,000 757,683   757,683   $ 697,379
Gain (Loss) on Extinguishment of Debt $ 642,845 (642,845) $ 0 (642,845) $ 0  
Notes Payable to Banks [Member]            
Notes Payable [Line Items]            
Debt Issuance Costs, Net   $ 1,279,163   $ 1,279,163   $ 512,462
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
STOCKHOLDERS' EQUITY AND STOCK COMPENSATION (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Oct. 31, 2018
Jan. 31, 2018
Oct. 16, 2014
Sep. 30, 2018
Sep. 30, 2018
Dec. 31, 2016
STOCKHOLDERS' EQUITY AND STOCK COMPENSATION [Line Items]            
Stock Issued During Period, Shares, Issued for Services   35,505        
Allocated Share-based Compensation Expense         $ 425,000  
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period   35,505        
Sharebased Compensation Arrangement by Sharebased Payment Award Warrants Exercises in Period       175,544    
Proceeds from Warrant Exercises       $ 702,176    
Warrants Expiration Period       Sep. 27, 2018    
Shares To Be Repurchased Description         $500,000 of our outstanding common stock  
Shares Issued, Price Per Share $ 0.01          
Incentive Compensation Plan 2012 [Member]            
STOCKHOLDERS' EQUITY AND STOCK COMPENSATION [Line Items]            
Stock Issued During Period, Shares, Issued for Services     425,000      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares           106,250
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares       318,750 318,750  
Private Placement [Member]            
STOCKHOLDERS' EQUITY AND STOCK COMPENSATION [Line Items]            
Warrants To Purchase Common Stock         263,588  
Share Price       $ 4.00 $ 4.00  
Subsequent Event [Member] | Director [Member]            
STOCKHOLDERS' EQUITY AND STOCK COMPENSATION [Line Items]            
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period 9,918          
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
INCOME TAXES (Details Textual) - USD ($)
9 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Income Tax Disclosure [Line Items]    
Deferred Tax Assets, Operating Loss Carryforwards, Domestic   $ 5,350,000
Federal Tax Loss Carry Forwards Expiration expire in 2032  
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Related Party Transaction [Line Items]        
Operating Leases, Rent Expense     $ 500  
Chief Executive Officer [Member]        
Related Party Transaction [Line Items]        
Operating Leases, Rent Expense, Sublease Rentals $ 1,500 $ 1,500 $ 4,500 $ 4,500
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
COMMITMENTS AND CONTINGENCIES (Details Textual)
$ in Millions
1 Months Ended
Oct. 31, 2018
USD ($)
Subsequent Event [Member]  
Other Commitments [Line Items]  
Long-term Purchase Commitment, Amount $ 22.4
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