7.	Indebtedness

In August 2018, in connection with the Riverview acquisition, the Company entered into a secured mortgage loan agreement with Florida Community Bank in the amount of approximately $5.0 million (“Riverview Loan”). The Riverview loan matures on August 31, 2023. The Riverview loan accrues interest at a rate of the sum of LIBOR plus 2.25%, with monthly payments of interest for the first 24 months, and monthly payments of interest and principal during the remaining months using a 30-year amortization period with the remaining balance payable at maturity. The Company may prepay, without penalty, all or any part of the Riverview Loan at any time.

The following table provides details of the Company’s indebtedness as of September 30, 2018 and December 31, 2017:

	September 30,			December 31,
	2018			2017
Mortgages and notes payable:
Mortgage loans ⁽¹⁾	$	24,500,000		$	19,500,000
Notes payable		312,500			312,500
Mortgages and notes payable		24,812,500			19,812,500
Loan costs, net		(335,555	)		(279,514	)
Total mortgages and notes payable, net	$	24,476,945		$	19,532,986

FOOTNOTE:

(1)

As of September 30, 2018, the Company’s mortgage loans are collateralized by its Summer Vista, Mid America Surgery, and Riverview properties.

The fair market value of the mortgage and notes payable was approximately $24.9 million as of September 30, 2018, which is based on current rates and spreads the Company would expect to obtain for similar borrowings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values is categorized as Level 3 on the three-level valuation hierarchy.

The following is a schedule of future principal payments and maturity for the Company’s indebtedness for the remainder of 2018, each of the next four years and thereafter, in the aggregate, as of September 30, 2018:

2018	$	32,036
2019		199,072
2020		5,829,156
2021		295,611
2022		13,304,382
Thereafter		5,152,243
	$	24,812,500