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16. Subsequent Events

12 Months Ended

Dec. 31, 2015

16. SUBSEQUENT EVENTS

Acquisition of Non-Controlling Interests

Effective January 1, 2016, we purchased an aggregate of 24.5% in membership interests in GL Nursing, LLC in consideration of 54,000 shares of common stock. As a result of this transaction, the Company owns 100% of the membership interests in GL Nursing, LLC.

Issuance of Restricted Stock

Effective January 14, 2016, the Company issued to each of its five directors a restricted stock award of 45,455 shares or, an aggregate of 227,275 shares of common stock valued at $0.66 per share in consideration of services provided.

Bankruptcy of Significant Lease Operator

On January 22, 2016, a lease operator that operates Middle Georgia Nursing Home in Eastman, Georgia, Edwards Redeemer Nursing Center in Oklahoma City, OK, Goodwill Nursing Home in Macon, Georgia, and formerly operated Golden Years Manor in Lonoke, Arkansas filed a voluntary petition in bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in the US District Court in Chattanooga, TN. As of December 31, 2015, the Company was due rents of $575,600 from the lease operator and held security deposits of $176,667. The Company has recorded an allowance for uncollectible accounts of $398,933 related to rents due from the lease operator as of December 31, 2015. Deferred rent receivables arising from the straight line recognition of rents related to these leases totaled $177,044 as of December 31, 2015. The Company has recorded an allowance for uncollectible accounts of $177,044 related to the deferred rent receivables as of December 31, 2015. Under the Chapter 11 Bankruptcy, the lease operator can either assume or reject the leases at Middle Georgia, Edwards Redeemer and Goodwill. As of the date of this Report, the lease operator has not made any binding elections, but has verbally represented that he intends to assume the leases at Middle Georgia and Edwards Redeemer and reject the lease covering Goodwill. If the lease operator assumes a lease, he is required to bring the leases current as a condition to such assumption. As of the date of this Annual Report, we are negotiating the terms of new amendments to the operating leases for Middle Georgia and Edwards Redeemer, but there can be no assurance if those amendments will be accepted.

Effective January 1, 2016, we re-leased the Golden Years Manor facility to an unaffiliated third party operator after a history of poor performance by the lease operator. The new lease has an initial rent of $30,000 per month and increases based on census targets. The lease has a 10-year term.

Closure of Goodwill Nursing Home

The Goodwill Nursing Home located in Macon, Georgia was closed by State of Georgia regulators in January, 2016. All residents of the Goodwill facility have been moved, and the property is currently vacant. We do not expect the lease operator in bankruptcy to assume the current lease, and we are negotiati ng with new lease operators to recertify the facility and assume operations. There can be no assurance that those efforts will be successful.

Repayment of Gemini Gaming LLC Note

During the first q uarter ended March 31, 2016, the Company collected an aggregate of $573,428 in repayment of the note from Gemini Gaming, LLC which the Company accepted in full satisfaction of the total outstanding liability under the note. The transaction resulted in the Company recognizing a nominal bad debt expense in the amount of $9,044.

GLOBAL HEALTHCARE REIT, INC.

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

AS OF DECEMBER 31, 2015

		Initial Cost		Cost Capitalized Subsequent to Acquisition		Total Amounts at End of Period
Property Description	Encumbrances	Land	Buildings and Improvements	Land	Buildings and Improvements	Land	Buildings and Improvements	Total	Accumulated Depreciation

Middle Georgia Nursing Home	$ 3,849,678	$ 50,000	$ 4,830,100	$ -	$ -	$ 50,000	$ 4,830,100	$ 4,880,100	$ 680,167
Warrenton Health and Rehabilitation	2,562,765	110,000	3,390,000	-	-	110,000	3,390,000	3,500,000	172,486
Southern Hills Retirement Center	6,848,155	710,000	4,290,000	-	3,300,300	710,000	7,604,336	8,314,336	146,158
Goodwill Nursing Home	5,857,047	180,000	6,146,651	-	-	180,000	6,146,651	6,326,651	386,700
Edwards Redeemer Health & Rehab	2,249,772	200,000	2,844,148	-	-	200,000	2,844,148	3,044,148	100,634
Providence of Sparta Nursing Home	2,736,506	190,000	2,695,473	-	-	190,000	2,695,473	2,885,473	102,915
Providence of Green Point Healthcare Center	2,817,000	33,500	2,970,469	-	-	33,500	2,970,469	3,003,969	158,596
Meadowview Healthcare Center	3,200,000	77,500	2,922,500	-	-	77,500	2,922,500	3,000,000	99,800
Golden Years Manor Nursing Home	6,321,537	60,000	6,758,540	-	-	60,000	6,758,540	6,818,540	184,055
Total	$ 36,442,460	$ 1,611,000	$ 36,847,881	$ -	$ 3,300,300	$ 1,611,000	$ 40,162,217	$ 41,773,217	$ 2,031,511

(1) Buildings and Improvements includes Land Improvements, Buildings and Improvements and Furniture, Fixtures, and Equipment which are depreciated over 15, 30, and 10 years, respectively.
(2) Reconciliation of Real Estate and Accumulated Depreciation:

	Cost	Accumulated Depreciation
Balance at December 31, 2013	$ 8,380,100	$ 291,500

Additions	36,590,463	-
Sale of Property	(3,795,395)	-
Depreciation Expense	-	624,311

Balance at December 31, 2014	41,175,168	915,811

Additions	598,049	-
Depreciation Expense	-	1,115,700

Balance at December 31, 2015	$ 41,773,217	$ 2,031,511