Quarterly report pursuant to Section 13 or 15(d)

INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE

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INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE
6 Months Ended
Jun. 30, 2019
Real Estate [Abstract]  
INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE

NOTE 10– INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE

 

On May 9, 2017, the Company and LLC1 purchased certain real property from an unaffiliated party. The Company and LLC1 have agreed that the Company purchased and owns 49% of the building and LLC1 purchased and owns 51% of the building. The contracted purchase price for the building was $2,420,000 and the total amount paid at closing was $2,501,783 including, fees, insurance, interest and real estate taxes. The Company paid for their building interest by delivering cash at closing of $209,971 and being a co-borrower on a note in the amount of $2,057,000, of which the Company has agreed with LLC1 to pay $1,007,930.

 

The allocated portion of the results in an equity method investment in a privately-held, related party, company are included in the Company’s condensed consolidated statements of operations. For the three and six months ended June 30, 2019, a gain of $5,856 and $4,816, respectively, and a net gain of $3,046 and $741, for the three and six months ended June 30, 2018, respectively, is included in “Other income (expense), net”. As of June 30, 2019, and December 31, 2018, the carrying value of the Company’s investment in undivided interest in real estate was $1,231,779 and $1,226,963, respectively.

 

The unaudited condensed balance sheets as of June 30, 2019, and December 31, 2018, and the statement of operations for the six months ended June 30, 2019, and 2018, for the real property is as follows:

 

    (Unaudited)   (Unaudited)
Current assets:  

June 30,

2019

 

December 31,

2018

Cash   $ 380     $ 2,257  
Due from InnerScope     50,300       30,500  
Prepaid expenses and other current assets     63,530       72,931  
Total current assets     114,210       105,958  
 Land and Building, net     2,332,502       2,354,282  
Other Assets, net     49,634       53,323  
Total assets   $ 2,496,345     $ 2,513,563  
                 
Current portion of mortgage payable   $ 41,022     $ 40,122  
Other current liabilities     47,894       48,551  
Total current liabilities     88,916       88,673  
Mortgage payable, long-term     1,941,786       1,969,076  
Security deposits     13,064       13,064  
Total liabilities     2,043,766       2,070,813  
Total equity     452,579       442,750  
Total liabilities and equity   $ 2,496,345     $ 2,513,563  

 

    2019   2018
Rental income   $ 149,029     $ 63,211  
Expenses:                
Property taxes     4,430       6,646  
Depreciation and amortization     21,780       11,446  
Insurance     14,130       2,033  
Repairs and maintenance     13,916       3,549  
Utilities and other     20,703       10,087  
Interest expense     64,242       32,355  
Total expenses     139,201       67,916  
Net income (loss)   $ 9,828     $ (4,705 )