AlthoughTable we expect total general and administrative expenses for our properties will remain consistent for the remainder of 2015, we currently anticipate that only a portion of operating-related personnel expenses will be settled with Restricted Stock as a result of our board of directors voting to suspend our cash distribution on our common stock effective as of August 4, 2015, as described above under “Exit Strategy”. As a result, absent a waiver by the Advisor of a portion of operating-related personnel expenses, we expect an increase in general and administrative expenses going forward. See “Expense Support Agreements” above for additional information. Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2015

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-54684

Global Income Trust, Inc.

(Exact name of registrant as specified in its charter)


Maryland		26-4386951
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

CNL Center at City Commons 450 South Orange Avenue Orlando, Florida		32801
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (407) 650-1000

Indicate by check mark whether the registrant (1) has 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 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 shares of common stock outstanding as of ~~August~~October 330, 2015 was 8,257,410.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

INDEX

	~~Page~~		Page
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited):
Item 1.	Condensed Consolidated Financial Statements (unaudited):
~~Condensed Consolidated Balance Sheets~~	Condensed Consolidated Balance Sheets	1		1
~~Condensed Consolidated Statements of Operations~~	Condensed Consolidated Statements of Operations	2		2
~~Condensed Consolidated Statements of Comprehensive Loss~~	Condensed Consolidated Statements of Comprehensive Loss	3		3
~~Condensed Consolidated Statements of Stockholders’ Equity~~	Condensed Consolidated Statements of Stockholders’ Equity	4		4
~~Condensed Consolidated Statements of Cash Flows~~	Condensed Consolidated Statements of Cash Flows	5		5
~~Notes to Condensed Consolidated Financial Statements~~	Notes to Condensed Consolidated Financial Statements	6		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3. Quantitative and Qualitative Disclosures about Market Risk		30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk			29
Item 4. Controls and Procedures		30
Item 4.	Controls and Procedures			29
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		31
Item 1.	Legal Proceedings			30
Item 1A. Risk Factors		31
Item 1A.	Risk Factors			30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3. Defaults Upon Senior Securities		31
Item 3.	Defaults Upon Senior Securities			30
Item 4. Mine Safety Disclosures		31
Item 4.	Mine Safety Disclosures			30
Item 5. Other Information		31
Item 5.	Other Information			30
Item 6. Exhibits		31
Item 6.	Exhibits			30
Signatures		32		31
Exhibits		33		32

Item 1. Financial Statements

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,2015			December 31,2014
	September 30,2015			December 31,2014
ASSETS
Real estate investment properties, net	$	59,~~668~~139,~~218~~085		$	60,797,152
Cash and cash equivalents		1514,~~125~~538,~~448~~220			6,716,533
Lease intangibles, net		1110,~~883~~888,~~356~~807			13,872,453
Restricted cash		2,067,082			2,231,728
Deferred rent		1,769,263			2,051,321
Other assets		814,516			265,594
Loan costs, net		367,449			482,643
Assets held for sale		—			23,334,983
Deferred rent		1,864,322			2,051,321
Total assets	$	89,584,422		$	109,752,407
Restricted cash		1,762,308			2,231,728
Other assets		844,214			265,594
Loan costs, net		405,319			482,643
Total assets	$	91,553,185		$	109,752,407
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Mortgage notes payable	$	55,~~401~~039,~~811~~590		$	56,095,907
Accounts payable and accrued expenses		~~790~~1,~~838~~062,480			826,606
Unearned rent		634,112			704,788
Real estate taxes payable		786,438			1,030,510
Real estate taxes payable		524,292			1,030,510
Unearned rent		669,259			704,788
Other liabilities		441,144			455,848
Due to related parties		45,881			55,094
Due to related parties		45,696			55,094
Other liabilities		—			455,848
Liabilities associated with assets held for sale		—			13,742,627
Total liabilities		57,~~837~~603,~~893~~648			72,911,380
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.01 par value per share, authorized and unissued 200,000,000 shares		—			—
Common stock $0.01 par value per share, 1,120,000,000 shares authorized, 8,419,689 shares issued and 8,257,410 shares outstanding		82,575			82,575
Capital in excess of par value		70,070,012			70,070,012
Accumulated distributions		(1718,~~601~~116,~~674~~340	)		(14,940,106	)
Accumulated deficit		(1820,~~843~~054,~~628~~587	)		(17,796,900	)
Accumulated other comprehensive income (loss)		8,007			(574,554	)
Accumulated other comprehensive loss		(886	)		(574,554	)
Total stockholders’ equity		3331,~~715~~980,~~292~~774			36,841,027
Total liabilities and stockholders’ equity	$	9189,~~553~~584,~~185~~422		$	109,752,407

See accompanying notes to condensed consolidated financial statements.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Quarter Ended June 30,						Six Months Ended June 30,
	Quarter Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues:
Rental income from operating leases	$	2,~~375~~286,~~584~~374		$	2,393,158		$	47,~~768~~055,~~743~~117		$	47,~~819~~212,~~691~~850
Tenant reimbursement income		~~317~~339,~~216~~733			~~380~~381,~~662~~913			~~665~~1,~~874~~005,607			~~707~~1,~~277~~089,190
Total revenues		2,~~692~~626,~~800~~107			2,~~773~~775,~~820~~071			58,~~434~~060,~~617~~724			58,~~526~~302,~~968~~040
Operating expenses:
Property operating expenses		~~667~~682,~~799~~308			~~752~~746,~~387~~914			12,~~360~~043,~~747~~055			12,~~409~~156,~~175~~089
General and administrative		~~195~~740,~~678~~540			~~294~~340,~~838~~628			~~675~~1,~~716~~416,256			~~621~~957,~~109~~386
Property management fees		7869,~~781~~572			7476,~~669~~562			~~158~~227,~~320~~892			~~139~~215,~~349~~911
Depreciation and amortization		1,~~497~~499,~~735~~495			1,~~551~~553,~~885~~665			34,~~002~~501,~~206~~701			34,~~103~~657,~~770~~435
Total operating expenses		2,~~439~~991,~~993~~915			2,~~673~~717,~~779~~769			58,~~196~~188,~~989~~904			57,~~273~~986,~~403~~821
Operating income		252,807			100,041			237,628			253,565
Operating income (loss)		(365,808	)		57,302			(128,180	)		315,219
Other income (expense):
Interest and other income		1510,~~506~~341			16,~~222~~023			1222,~~253~~594			718,~~326~~614
Interest expense and loan cost amortization		(~~844~~843,~~987~~800	)		(~~868~~872,~~533~~563	)		(12,~~690~~534,~~897~~697	)		(12,~~737~~615,~~593~~421	)
Total other expense		(~~829~~833,~~481~~459	)		(~~867~~866,~~311~~540	)		(12,~~678~~512,~~644~~103	)		(12,~~730~~596,~~267~~807	)
Loss from continuing operations before income taxes		(~~576~~1,~~674~~199,267	)		(~~767~~809,~~270~~238	)		(12,~~441~~640,~~016~~283	)		(12,~~476~~281,~~702~~588	)
Income tax expense		(411,~~020~~692	)		(1312,~~243~~208	)		(1728,~~280~~972	)		(2638,~~388~~596	)
Loss from continuing operations		(~~580~~1,~~694~~210,959	)		(~~780~~821,~~513~~446	)		(12,~~458~~669,~~296~~255	)		(12,~~503~~320,~~090~~184	)
Income (loss) from discontinued operations, net of tax		—			(208,796	)		300,997			(61,721	)
Income from discontinued operations, net of tax		—			232,301			300,997			166,228
Loss before gain on sale of real estate		(~~580~~1,~~694~~210,959	)		(~~989~~589,~~309~~145	)		(12,~~157~~368,~~299~~258	)		(12,~~564~~153,~~811~~956	)
Gain on sale of real estate, net of tax		~~110,571~~—			—			110,571			—
Net loss	$	(~~470~~1,~~123~~210,959	)	$	(~~989~~589,~~309~~145	)	$	(12,~~046~~257,~~728~~687	)	$	(12,~~564~~153,~~811~~956	)
Net income (loss) per share of common stock (basic and diluted)
Continuing operations	$	(0.0615	)	$	(0.0910	)	$	(0.1731	)	$	(0.1828	)
Discontinued operations		—			(0.03	)		0.04			(0.0102	)
	$	(0.0615	)	$	(0.1207	)	$	(0.1327	)	$	(0.1926	)
Weighted average number of shares of common stock outstanding (basic and diluted)		8,257,410			8,257,410			8,257,410			8,257,410

See accompanying notes to condensed consolidated financial statements.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

	Quarter Ended June 30,						Six Months Ended June 30,
	Quarter Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net loss	$	(~~470~~1,~~123~~210,959	)	$	(~~989~~589,~~309~~145	)	$	(12,~~046~~257,~~728~~687	)	$	(12,~~564~~153,~~811~~956	)
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments		4(8,~~276~~893	)		(52719,~~944~~387	)		(~~612~~621,~~563~~456	)		(84803,~~418~~805	)
Reclassification of cumulative foreign currency translation adjustments		—			—			1,195,124			—
Total other comprehensive income (loss)		4(8,~~276~~893	)		(52719,~~944~~387	)		~~582~~573,~~561~~668			(84803,~~418~~805	)
Comprehensive loss	$	(~~465~~1,~~847~~219,852	)	$	(1,~~042~~308,~~253~~532	)	$	(~~464~~1,~~167~~684,019	)	$	(12,~~649~~957,~~229~~761	)

See accompanying notes to condensed consolidated financial statements.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

~~Six~~Nine Months Ended ~~June~~September 30, 2015 (Unaudited) and the Year Ended December 31, 2014

													Accumulated
	Common Stock				Capital in								Other			Total
	Number		Par		Excess of		Accumulated			Accumulated			Comprehensive			Stockholders’
	of Shares		Value		Par Value		Distributions			Deficit			Income (Loss)			Equity
Balance at December 31, 2013		8,257,410	$	82,575	$	70,070,012	$	(9,572,863	)	$	(13,191,862	)	$	550,003		$	47,937,865
Net loss		—		—		—		—			(4,605,038	)		—			(4,605,038	)
Other comprehensive loss		—		—		—		—			—			(1,124,557	)		(1,124,557	)
Distributions declared ($0.0017808 per share per day)		—		—		—		(5,367,243	)		—			—			(5,367,243	)
Balance at December 31, 2014		8,257,410		82,575		70,070,012		(14,940,106	)		(17,796,900	)		(574,554	)		36,841,027
Net loss		—		—		—		—			(12,~~046~~257,~~728~~687	)		—			(12,~~046~~257,~~728~~687	)
Other comprehensive income		—		—		—		—			—			~~582~~573,~~561~~668			~~582~~573,~~561~~668
Distributions declared ($0.0017808 per share per day)		—		—		—		(23,~~661~~176,~~568~~234	)		—			—			(23,~~661~~176,~~568~~234	)
Balance at June 30, 2015		8,257,410	$	82,575	$	70,070,012	$	(17,601,674	)	$	(18,843,628	)	$	8,007		$	33,715,292
Balance at September 30, 2015		8,257,410	$	82,575	$	70,070,012	$	(18,116,340	)	$	(20,054,587	)	$	(886	)	$	31,980,774

See accompanying notes to condensed consolidated financial statements.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2015			2014
Operating activities:
Net loss	$	(12,~~046~~257,~~728~~687	)	$	(12,~~564~~153,~~811~~956	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		34,~~002~~501,~~206~~701			35,~~473~~026,~~292~~957
Amortization of above- and below-market lease intangibles		~~141~~212,~~513~~270			~~159~~229,~~066~~823
Amortization of loan costs		79117,~~829~~699			~~101~~146,~~936~~009
Equity in earnings of unconsolidated entities		(1117,~~736~~126	)		—
Gain from sale of foreign discontinued operations		(238,411	)		—
Gain on sale of real estate		(110,571	)		—
Straight-line rent adjustments		~~186~~282,~~999~~058			(1,~~143~~057,~~676~~976	)
Deferred income tax		—			~~336~~315,~~639~~416
Changes in operating assets and liabilities:
Other assets		77112,~~118~~294			(~~122~~81,~~263~~869	)
Accounts payable and accrued expenses		~~(118~~150,~~145~~776	)		~~116~~77,~~162~~869
Due to related parties		(28,~~874~~689	)		(5774,~~132~~158	)
Unearned rent		(5620,~~146~~998	)		(75117,~~704~~512	)
Real estate taxes payable		(~~506~~244,~~216~~072	)		(~~476~~234,~~061~~595	)
Net cash provided by operating activities		12,~~370~~459,~~838~~244			~~747~~2,~~448~~076,008
Investing activities:
Proceeds from sale of foreign discontinued operations		8,075,267			—
Working capital assumed by buyer of foreign discontinued operations		(588,712	)		—
Proceeds from sale of real estate		2,550,386			—
Capital expenditures		(1864,~~420~~989	)		(2866,~~750~~690	)
Changes in restricted cash		~~469~~164,~~419~~644			~~374~~32,~~474~~709
Net cash provided by investing activities		10,487,940			345,724
Net cash provided by (used in) investing activities		10,136,596			(33,981	)
Financing activities:
Repayments of mortgage notes payable		(~~694~~1,~~096~~056,317	)		(~~655~~996,~~033~~581	)
Distributions to stockholders		(23,~~676~~632,~~271~~082	)		(24,~~676~~029,~~272~~108	)
Net cash used in financing activities		(34,~~370~~688,~~367~~399	)		(35,~~331~~025,~~305~~689	)
Effect of exchange rate fluctuation on cash		(7985,~~496~~754	)		(8103,~~185~~055	)
Net increase (decrease) in cash and cash equivalents		87,~~408~~821,~~915~~687			(23,~~246~~086,~~318~~717	)
Cash and cash equivalents at beginning of period		6,716,533			10,282,179
Cash and cash equivalents at end of period	$	1514,~~125~~538,~~448~~220		$	87,~~035~~195,~~861~~462
Supplemental disclosure of non-cash investing and financing transactions:
Amounts incurred but not paid:
Distributions declared	$	~~441,144~~—		$	441,144
Liabilities assumed by buyer of foreign discontinued operations	$	12,695,368		$	—
Reclassification of 5.1% retained equity interest to investment in and advances to unconsolidated entities	$	397,372		$	—

See accompanying notes to condensed consolidated financial statements.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

1.	Business and Organization

Global Income Trust, Inc. was organized in Maryland on March 4, 2009. The term “Company” includes, unless the context otherwise requires, Global Income Trust, Inc., Global Income, LP, a Delaware limited partnership (“Operating Partnership”), Global Income GP, LLC and other subsidiaries of the Company. The Company operates, and has elected to be taxed, as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2010. The Company was formed to own and operate a portfolio of income-oriented commercial real estate and real estate-related assets on a global basis.

The Company is externally advised by CNL Global Income Advisors, LLC (“Advisor”) and its property manager is CNL Global Income Managers, LLC (“Property Manager”), each of which is a Delaware limited liability company and a wholly owned affiliate of CNL Financial Group, LLC, the Company’s sponsor (“Sponsor”). The Sponsor is an affiliate of CNL Financial Group, Inc. (“CNL”). The Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying, recommending and executing acquisitions and dispositions on behalf of the Company pursuant to an advisory agreement between the Company, the Operating Partnership and the Advisor.

Substantially all of the Company’s operating, administrative and property management services are provided by sub-advisors to the Advisor and sub-property managers to the Property Manager. In addition, certain unrelated sub-property managers have been engaged by the Company or sub-property managers to provide certain property management services.

From April 23, 2010 through April 23, 2013, the Company received aggregate offering proceeds of approximately $83.7 million, including proceeds received through the Company’s distribution reinvestment plan.

On January 20, 2015, the Company’s board of directors approved $7.43 as the estimated net asset value per share of the Company’s common stock as of December 31, 2014, exclusive of any portfolio premium and based on estimated year end balances.

On August 10, 2015, the Company entered into a purchase and sale agreement with Griffin Capital Corporation, a non-affiliated third-party buyer (“Buyer”), for the sale of its remaining three real estate properties (“Sale”) for an aggregate sales price of approximately $93.65 ~~Refer~~million toin cash, less the loans that encumber the properties that will be assumed by the ~~Note~~Buyer. 11It is currently anticipated that Griffin Capital Essential Asset REIT, Inc., ~~“Subsequent~~a ~~Events”~~non-traded real estate investment trust sponsored by the Buyer, will acquire the U.S. Properties in the Sale via an assignment at the time of the closing of the Sale. The Sale is subject to approval by the Company’s stockholders, obtaining lender consents with respect to the loans to be assumed by the Buyer, and other customary closing conditions. The purchase and sale agreement with the Buyer contains termination rights for ~~additional~~both ~~information~~the Company and the Buyer; and the Company has agreed to pay to the Buyer a termination fee of $3 million if the Company terminates the purchase and sale agreement, under the terms described further in the purchase and sale agreement. The Company anticipates that the closing of the Sale will occur in the fourth quarter of 2015, shortly after the stockholder vote, however, there can be no assurance that the closing conditions will be satisfied, that the Sale will be consummated, or the timing of the Sale.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management are necessary for the fair statement of the Company’s results for the interim periods presented. Operating results for the quarter and six months ended June 30, 2015 may not be indicative of the results that may be expected for the year ending December 31, 2015. Amounts as of December 31, 2014 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

21. ~~Summary~~Business ofand ~~Significant~~Organization ~~Accounting Policies~~ (continued)

In connection with the proposed Sale, the Company’s board of directors approved a plan of liquidation and dissolution (the “Plan of Dissolution”), including the complete liquidation and dissolution of the Company contemplated thereby pursuant to which the Company would be liquidated and dissolved, subject to consummation of the Sale and approval of the liquidation and dissolution of the Company by the Company’s stockholders. Upon liquidation and dissolution, stockholders will receive an aggregate amount currently estimated to be $7.01 per share of outstanding common stock of the Company. This is based on the cash proceeds that the Company expects to receive in connection with the Sale, the proceeds of the liquidation of the Company’s remaining 5.1% interest in the entities that own the German properties (described, below), the amount of cash on hand less closing costs, transaction costs, and other liabilities, plus a direct payment to the stockholders from the Company’s Sponsor, or an affiliate of the Sponsor, representing a reimbursement of certain organization, offering and operating expenses.

In connection with the Sale and the Plan of Dissolution, the board of directors of the Company, including a majority of the independent directors, approved a sale of the Company’s remaining 5.1% interest in the entities that own the German properties, to the Company’s Sponsor, or an affiliate of the Sponsor, for an aggregate sale price of $500,000. The sale of the Company’s remaining 5.1% interest in the entities that own the German properties to the Sponsor, or an affiliate of the Sponsor, is subject to the stockholders’ approval of the Sale and the subsequent liquidation and dissolution of the Company.

2.	Summary of Significant Accounting Policies

Basis of Presentation and Consolidation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management are necessary for the fair statement of the Company’s results for the interim periods presented. Operating results for the quarter and nine months ended September 30, 2015 may not be indicative of the results that may be expected for the year ending December 31, 2015. Amounts as of December 31, 2014 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Investment in and Advances to Unconsolidated Entities —– The Company accounts for its investment in and advances to unconsolidated entities under the equity method of accounting as the Company exercises significant influence, but does not maintain a controlling financial interest over these entities. These investments are recorded initially at cost and subsequently adjusted for cash contributions, distributions and equity in earnings (loss) of the unconsolidated entities on a three month lag. Under this method, the Company recognizes income or loss in each period based on its 5.1% interest in the net income (loss) of the unconsolidated entities at the end of each reporting period, which is included in interest and other income (expense) in the accompanying condensed consolidated statement of operations. In any given period, the Company could be recording more or less income than actual cash distributions received and more or less than what the Company may receive in the event of an actual liquidation. The Company’s investment in and advances to unconsolidated entities is included in other assets in the accompanying condensed consolidated balance sheet.

Reclassifications – Certain amounts in the prior year’s condensed consolidated financial statements have been reclassified to conform to current year presentation with no effect on previously reported net loss or equity. See Note 5. “Assets and Associated Liabilities Held for Sale” for additional information.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. For example, significant assumptions are made in the allocation of purchase price, analysis of real estate impairments, contingent assets and liabilities and the assessment of probability of repayments of expenses under the expense support agreement. Actual results could differ from those estimates.

Adopted Accounting Pronouncements – In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This update changes the criteria for reporting discontinued operations where only disposals representing a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, such as a major line of business or geographical area, should be presented as a discontinued operation. This ASU is effective prospectively for all disposals (or classifications as held for sale) of components of an entity that occur on or after the effective date. As a result, no changes were made for properties classified as held for sale prior to January 1, 2015. Effective January 1, 2015, the Company adopted this ASU. This ASU impacts the determination of which property disposals qualify as discontinued operations, as well as, requires additional disclosures about discontinued operations.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

2.	Summary of Significant Accounting Policies (continued)

~~Recent~~Reclassifications ~~Accounting Pronouncements~~ – InCertain ~~May~~amounts ~~2014,~~in the ~~FASB~~prior ~~issued~~year’s ~~ASU~~condensed ~~No. 2014-09,~~consolidated ~~“Revenue~~financial ~~from~~statements ~~Contracts~~have ~~with~~been ~~Customers,”~~reclassified ~~as a new Accounting Standard Concept (“ASC”) topic (Topic 606). The core principle of this amendment is that an entity should recognize revenue~~ to ~~depict~~conform ~~the transfer of promised goods or services~~ to ~~customers~~current inyear anpresentation ~~amount~~with ~~that~~no ~~reflects~~effect ~~the~~on ~~consideration~~previously toreported ~~which~~net ~~the~~loss ~~entity expects to be entitled in exchange for those goods~~ or ~~services~~equity. ~~The~~See ~~standard~~Note ~~further~~5. ~~provides~~“Assets ~~guidance~~and ~~for~~Associated ~~any~~Liabilities ~~entity~~Held ~~that either enters into contracts with customers to transfer goods or services or enters into contracts~~ for ~~the~~Sale” ~~transfer of nonfinancial assets, unless those contracts are within the scope of other standards (~~for ~~example, lease contracts). This ASU 2014-09 is effective for~~additional ~~annual reporting periods beginning after December 15, 2016, expected to be deferred one year, including interim periods within that reporting period, with earlier adoption not permitted~~information. ASU 2014-09 can be adopted using one of two retrospective application methods: 1) retrospectively to each prior reporting period presented or 2) as a cumulative-effect adjustment as of the date of adoption. The adoption of ASU 2014-09 will not have a significant effect on the Company’s consolidated financial position, results of operations or cash flows.

InUse ~~February~~of ~~2015,~~Estimates ~~the~~– ~~FASB~~The ~~issued~~preparation ~~ASU~~of ~~2015-02,~~financial ~~“Amendments~~statements toin ~~the Consolidation~~conformity ~~Analysis,”~~with ~~which~~GAAP requires ~~amendments~~management to ~~both~~make estimates ~~the variable interest entity~~ and ~~voting~~assumptions ~~models.~~that ~~The~~affect ~~amendments (i) modify~~ the ~~identification~~reported amounts of ~~variable~~assets ~~interests~~and ~~(fees~~liabilities ~~paid~~as toof athe ~~decision~~date ~~maker~~of orthe ~~service~~financial ~~provider)~~statements, the ~~VIE characteristics~~reported ~~for~~amounts aof ~~limited~~revenues ~~partnership or similar entity~~ and ~~primary~~expenses ~~beneficiary~~during ~~determination under~~ the ~~VIE~~reporting ~~model~~periods, and ~~(ii) eliminate~~ the ~~presumption~~disclosures ~~within~~of ~~the current voting model that a general partner controls a limited partnership or~~contingent ~~similar entity~~liabilities. ~~The~~For ~~new guidance is effective for annual reporting periods~~example, ~~and~~significant ~~interim~~assumptions ~~periods~~are ~~within~~made ~~those~~in ~~annual~~the ~~periods,~~allocation ~~beginning~~of ~~after~~purchase ~~December 15~~price, ~~2015~~analysis ~~with~~of ~~early~~real ~~adoption~~estate ~~permitted.~~impairments, ~~The~~contingent ~~amendments~~assets ~~may~~and beliabilities ~~applied~~and ~~using~~the ~~either~~assessment aof ~~modified retrospective~~probability orof ~~full~~repayments ~~retrospective~~of ~~approach.~~expenses ~~The~~under ~~Company is currently evaluating~~ the ~~effect~~expense support ~~the~~agreement. ~~guidance~~Actual ~~will have on its consolidated financial position,~~ results ofcould ~~operations~~differ orfrom ~~cash~~those ~~flows~~estimates.

Adopted Accounting Pronouncements – In April ~~2015~~2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) ~~2015~~No. 2014-0308, “~~Simplifying the~~ Presentation of ~~Debt~~Financial ~~Issuance~~Statements ~~Costs~~(Topic 205) and Property,” ~~which~~Plant, ~~requires~~and ~~that~~Equipment ~~loan~~(Topic ~~costs~~360): Reporting ~~related~~Discontinued toOperations aand ~~recognized~~Disclosures ~~debt~~of ~~liability~~Disposals beof ~~presented~~Components inof ~~the~~an ~~balance~~Entity.” This ~~sheet~~update aschanges athe ~~direct~~criteria ~~deduction~~for ~~from~~reporting ~~the~~discontinued ~~carrying~~operations ~~amount~~where ofonly ~~that~~disposals ~~debt~~representing ~~liability,~~a ~~consistent~~strategic ~~with~~shift ~~debt~~that ~~discounts~~has (or ~~premiums.~~will ~~The~~have) ~~new~~a ~~guidance~~major effect ison ~~effective~~an ~~for~~entity’s ~~annual~~operations ~~reporting~~and ~~periods~~financial results, ~~and~~ ~~interim~~such ~~periods~~as ~~within~~a ~~those~~major ~~annual~~line ~~periods,~~of ~~beginning~~business ~~after~~or ~~December 15~~geographical area, ~~2015~~should ~~with~~be ~~early~~presented ~~adoption~~as ~~permitted~~a discontinued operation. ~~The~~This ASU is toeffective beprospectively ~~applied~~for ~~retrospectively~~all ~~for~~disposals ~~each~~(or ~~period~~classifications ~~presented.~~as ~~Upon~~held for ~~adoption,~~sale) of components of an entity isthat ~~required~~occur toon ~~comply~~or ~~with~~after the ~~applicable~~ ~~disclosures~~effective ~~for~~date. As a ~~change~~result, inno anchanges ~~accounting~~were ~~principle.~~made ~~The~~for ~~Company~~properties ~~will~~classified ~~not~~as ~~early~~held ~~adopt~~for ~~ASU~~sale ~~2015-03~~prior ~~and~~to ~~has~~January 1, ~~determined~~2015. Effective January 1, ~~that~~2015, the ~~amendments~~Company ~~will~~adopted this ~~impact~~ASU. ~~the~~This ~~Company’s~~ASU ~~presentation~~impacts ofthe ~~its~~determination ~~consolidated~~of ~~financial~~which ~~position~~property ~~but~~disposals ~~will~~qualify ~~not~~as ~~have a~~discontinued ~~material~~operations, ~~impact~~as onwell ~~the~~as, ~~Company’s~~requires ~~consolidated~~additional ~~results~~disclosures ofabout ~~operations~~discontinued ~~or cash flows~~operations.

Recent Accounting Pronouncements – In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” as a new Accounting Standard Concept (“ASC”) topic (Topic 606). The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard further provides guidance for any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, lease contracts). The FASB subsequently issued ASU 2015-14 to defer the effective date of ASU 2014-09 until annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with earlier adoption permitted. ASU 2014-09 can be adopted using one of two retrospective application methods: 1) retrospectively to each prior reporting period presented or 2) as a cumulative-effect adjustment as of the date of adoption. The adoption of ASU 2014-09 will not have a significant effect on the Company’s consolidated financial position, results of operations or cash flows.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which requires amendments to both the variable interest entity and voting models. The amendments (i) modify the identification of variable interests (fees paid to a decision maker or service provider), the VIE characteristics for a limited partnership or similar entity and primary beneficiary determination under the VIE model, and (ii) eliminate the presumption within the current voting model that a general partner controls a limited partnership or similar entity. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The amendments may be applied using either a modified retrospective or full retrospective approach. The Company is currently evaluating the effect the guidance will have on its consolidated financial position, results of operations or cash flows.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

2.	Summary of Significant Accounting Policies (continued)

In April 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires that loan costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts or premiums. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The ASU is to be applied retrospectively for each period presented. Upon adoption, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company has determined that it will not early adopt this ASU and that the amendments will not materially impact the presentation of the Company’s consolidated financial position and will not have a material impact on the Company’s consolidated results of operations or cash flows.

3.	Real Estate Investment Properties, net

As of ~~June~~September 30, 2015 and December 31, 2014, real estate investment properties consisted of the following (excluding properties held for sale):

	June 30,2015			December 31,2014
	September 30,2015			December 31,2014
Land and land improvements	$	11,939,925		$	11,935,351
Building and improvements		50,~~549~~578,~~262~~802			50,545,179
Tenant improvements		4,865,600			4,865,600
Equipment		93110,~~564~~594			83,801
Less: accumulated depreciation		(78,~~780~~355,~~133~~836	)		(6,632,779	)
	$	59,~~668~~139,~~218~~085		$	60,797,152

Depreciation expense on the Company’s real estate investment properties was approximately $0.6 million for each of the quarters, respectively, and $1.27 million ~~for~~and ~~each~~$1.8 ofmillion for the ~~quarters~~nine ~~and six~~ months ended ~~June~~September 30, 2015 and 2014, respectively.

4.	Operating Leases

The following is a schedule of future minimum lease payments to be received for the remainder of 2015, each of the next four years and thereafter, in the aggregate, under non-cancellable operating leases, as of ~~June~~September 30, 2015:

2015	$	42,~~907~~453,~~064~~532
2016		9,873,482
2017		9,985,713
2018		9,062,490
2019		3,931,325
Thereafter		16,814,991
	$	5452,~~575~~121,~~065~~533

The above future minimum lease payments exclude tenant reimbursements, straight-line rent adjustments, amortization of above-market lease intangibles, and base rent attributable to any renewal options that may be exercised by the tenants in the future.

5. Assets and Associated Liabilities Held for Sale

Foreign Discontinued Operations

During 2014, in connection with the Company’s evaluation of potential strategic alternatives for the Company as a whole, the Company entered into a share purchase agreement for the sale of 94.9% of its equity interest in the entities that owned the German properties. In January 2015, the Company completed the sale in exchange for aggregate proceeds of approximately $8.1 million, net of transaction costs, of which approximately $0.3 million was held back until the completion of the acquisition audit and other closing conditions. In May 2015, the Company received $0.1 million related to the other closing conditions while the remaining balance will be received upon completion of the acquisition audit. In addition, the Company retained a 5.1% non-controlling equity interest and a 5.1% interest in a note totaling approximately $0.4 million, which was calculated on the basis of selling in-substance real estate pursuant to ASC 360-20 and, therefore, represents 5.1% of the net carrying value of the German portfolio as of the disposition date. All assets and liabilities of these entities were classified as assets held for sale and liabilities associated with assets held for sale, respectively, under guidance previous to ASU 2014-08, on the condensed consolidated balance sheet as of December 31, 2014 and all operating results relating to these properties have been treated as discontinued operations for all periods presented; refer to Note 6. “Discontinued Operations” for additional information.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

5. Assets and Associated Liabilities Held for Sale ~~(continued)~~

Foreign Discontinued Operations

During 2014, in connection with the Company’s evaluation of potential strategic alternatives for the Company as a whole, the Company entered into a share purchase agreement for the sale of 94.9% of its equity interest in the entities that own the German properties. In January 2015, the Company completed the sale in exchange for aggregate proceeds of approximately $8.1 million, net of transaction costs, of which approximately $0.3 million was held back until the completion of the acquisition audit and other closing conditions. In May 2015, the Company received $0.1 million related to the other closing conditions while the remaining balance will be received upon completion of the acquisition audit. In addition, the Company retained a 5.1% non-controlling equity interest and a 5.1% interest in a note totaling approximately $0.4 million, which was calculated on the basis of selling in-substance real estate pursuant to ASC 360-20 and, therefore, represents 5.1% of the net carrying value of the German portfolio as of the disposition date. All assets and liabilities of these entities were classified as assets held for sale and liabilities associated with assets held for sale, respectively, under guidance previous to ASU 2014-08, on the condensed consolidated balance sheet as of December 31, 2014 and all operating results relating to these properties have been treated as discontinued operations for all periods presented; refer to Note 6. “Discontinued Operations” for additional information.

Austin Property

In February 2015, the Company committed to a plan to sell the Austin Property as part of the Company’s continuous evaluation of strategic alternatives. In June 2015, the Company completed the sale of its Austin Property and recorded a gain of approximately $0.1 million in the accompanying condensed consolidated statements of operations for the ~~quarter~~nine ~~and six~~ months ended ~~June~~ September 30, 2015. The sale of the Austin Property did not cause a strategic shift in the Company nor iswas it considered individually significant; therefore, it did not qualify as discontinued operations under ASU 2014-08.

As of December 31, 2014, assets held for sale consisted of the following:


	Foreign Discontinued Operations			Austin Property			Total
Land and land improvements	$	4,785,552		$	1,819,000		$	6,604,552
Building and improvements		14,450,480			952,562			15,403,042
Tenant improvements		—			53,000			53,000
Less: accumulated depreciation		(688,372	)		(358,562	)		(1,046,934	)

Operating real estate held for sale		18,547,660			2,466,000			21,013,660
Lease intangibles, net		1,799,349			—			1,799,349
Deferred rent		45,208			—			45,208
Restricted cash		182,345			—			182,345
Loan costs, net		130,632			—			130,632
Other assets		163,789			—			163,789

Total assets held for sale	$	20,868,983		$	2,466,000		$	23,334,983

As of December 31, 2014, liabilities associated with assets held for sale consisted of the following relating to the foreign discontinued operations:


Mortgages notes payable	$	13,228,159
Unearned rent		6,139
Accounts payable and accrued expenses		453,041
Due to related party		55,288

Total liabilities held for sale	$	13,742,627

These balance sheet amounts for the foreign discontinued operations were converted from Euro to U.S. dollars at an exchange rate of $1.22 per Euro as of December 31, 2014.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

5.	Assets and Associated Liabilities Held for Sale (continued)

These balance sheet amounts for the foreign discontinued operations were converted from Euro to U.S. dollars at an exchange rate of $1.22 per Euro as of December 31, 2014.

6.	Discontinued Operations

The condensed consolidated financial statements reflect reclassifications of rental income, property expenses, interest expense and other income and expenses relating to the German properties from continuing operations to income (loss) from discontinued operations for all periods presented. The Company recognized approximately $0.2 million for financial statement purposes as a gain on sale of foreign discontinued operations related to the January 2015 sale of its 94.9% interest in the German properties.

The following is a summary of the income from discontinued operations of the Company’s foreign operations for the quarter and ~~six~~nine months ended ~~June~~September 30, 2015 and 2014:

	Quarter EndedJune 30,					Six Months EndedJune 30,(1)
	Quarter EndedSeptember 30,					Nine Months EndedSeptember 30,(1)
	2015		2014			2015(2)			2014
Revenues	$	—	$	~~658~~538,~~013~~556		$	184,025		$	1,~~291~~830,~~813~~369
Expenses		—		(~~198~~168,~~765~~976	)		(79,189	)		(~~380~~553,~~595~~925	)
Depreciation and amortization		—		~~(199,433~~—	)		—			(369,522	)
Operating income		—		~~259~~369,~~815~~580			104,836			~~541~~906,~~696~~922
Gain on sale of foreign discontinued operations (3)		—		—			238,411			—
Gain on sale of foreign discontinued operations(3)		—		—			238,411			—
Interest expense and loan cost amortization		—		(~~125~~116,~~481~~498	)		(34,958	)		(~~252~~368,~~254~~751	)
Income from discontinued operations before income tax benefit (expense)		—		134,334			308,289			289,442
Income from discontinued operations before income taxes		—		253,082			308,289			538,171
Income tax benefit (expense)		—		(343,130	)		(7,292	)		(351,163	)
Income tax expense		—		(20,781	)		(7,292	)		(371,943	)
Income (loss) from discontinued operations	$	—	$	(208,796	)	$	300,997		$	(61,721	)
Income from discontinued operations, net of tax	$	—	$	232,301		$	300,997		$	166,228

FOOTNOTES:

(1) The accompanying condensed consolidated statements of operations related to the German properties have been converted from Euro to U.S. dollars at the average exchange rate of $1.1312 per Euro and $1.3736 per Euro for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively.

(2)

Amounts related to the German properties represent results of operations through the disposition date in January 2015.

(3)

Amount includes approximately $1.2 million reclassification of cumulative foreign currency translation adjustments included in the accompanying condensed consolidated statement of comprehensive loss.

The Advisor waived its rights to any disposition fee related to the sale of the 94.9% equity interest in the entities that own the German properties.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

7.	Lease Intangibles, net

The gross carrying amount and accumulated amortization of the Company’s intangible assets as of ~~June~~September 30, 2015 ~~and~~ and December 31, 2014 were as follows:

	June 30,2015			December 31,2014
	September 30,2015			December 31,2014
In place leases	$	23,675,450		$	23,675,450
Above-market leases		1,634,300			1,634,300
Gross carrying amount		25,309,750			25,309,750
Accumulated amortization		(1314,~~426~~420,~~394~~943	)		(11,437,297	)
Net book value	$	1110,~~883~~888,~~356~~807		$	13,872,453

Amortization expense on the Company’s intangibles, net was approximately $1.0 million and $13.90 million for the quarter and ~~six~~nine months ended ~~June~~September 30, 2015, respectively, of which approximately $0.07 million and $0.12 million, respectively, was treated as a reduction of rental income from operating leases and approximately $0.9 million and $12.8 million, respectively, was included in depreciation and amortization.

Amortization expense on the Company’s intangibles, net ~~was~~ was approximately $1.0 million and $23.1 million for the quarter and ~~six~~nine months ended ~~June~~September 30, 2014, respectively, of which approximately $0.07 million ~~was~~and $0.2 million, respectively, were treated as a reduction of rental income from operating leases and approximately $1.0 million ~~was~~ and $2.9 million, respectively, were included in depreciation and amortization for each of the ~~quarters~~quarter and ~~six~~nine months ended ~~June~~September 30, 2014, respectively.

The estimated future amortization for the Company’s intangible assets for the remainder of 2015, each of the next four years and thereafter, as of ~~June~~September 30, 2015 was as follows:

	In placeleases		Above-marketleases		Total
2015	$	1923,~~847,585~~792	$	~~141~~70,~~513~~757	$	1994,~~989,098~~549
2016		3,695,169		283,026		3,978,195
2017		3,695,169		283,026		3,978,195
2018		1,859,439		78,429		1,937,868
2019		—		—		—
Thereafter		—		—		—
	$	1110,~~097~~173,~~362~~569	$	~~785~~715,~~994~~238	$	1110,~~883~~888,~~356~~807

As of ~~June~~September 30, 2015 and December 31, 2014, the weighted average useful lives of in-place leases ~~and~~ and above market lease were 32.18 years and 3.6 years, respectively.

8.	Indebtedness

The net carrying value and the estimated fair value of mortgage notes payable was approximately $55.40 million and $57.41 million as of ~~June~~September 30, 2015, respectively, and approximately $56.1 million and $58.1 million as of December 31, 2014, respectively, based on rates and spreads the Company would expect to obtain for similar borrowings with similar loan terms. Because 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 related to the Company’s mortgage notes payable is categorized as Level 3 on the three-level valuation hierarchy.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

9.	Related Party Arrangements

In March 2014, the Company entered into the Amended and Restated Expense Support Agreement with its Advisor. Pursuant to the Amended and Restated Expense Support Agreement, effective January 1, 2014, the Advisor agreed to accept Restricted Stock in lieu of cash in payment for up to the full amount of asset management fees and operating-related personnel expenses owed by the Company to the Advisor under the advisory agreement for services rendered after December 31, 2013. The amount of such expense support is equal to the positive excess, if any, of (i) aggregate stockholder cash distributions declared in the applicable quarter, over (ii) the Company’s aggregate modified funds from operations (as defined and revised in the Amended and Restated Expense Support Agreement) for such quarter, determined each calendar quarter on a non-cumulative basis (“Expense Support Amount”). The number of shares of Restricted Stock to be issued to the Advisor in a given quarter is determined by dividing (x) the Expense Support Amount for the applicable quarter, by (y) the most recent price per share of the Company’s common stock, or the most recent estimated net asset value (“NAV”) per share of its common stock.

Generally, Restricted Stock will vest immediately prior to or upon the occurrence of a listing of the Company’s common stock, a merger, a sale of all or substantially all of the Company’s assets, or another liquidity or exit event, as described in the Amended and Restated Expense Support Agreement (“Exit Event”). In order for the Restricted Stock to vest upon the occurrence of an Exit Event, however, the consideration or other value attributable to the Company’s common stock as a result of the Exit Event, plus total distributions received by the Company’s stockholders since inception, excluding distributions received by the Advisor, must exceed, and only to the extent that it exceeds, an amount equal to 100% of the stockholder’s invested capital, excluding the Advisor’s invested capital, plus a cumulative 6% priority return on investment (“Vesting Threshold”).

The Restricted Stock will also vest immediately in the event the advisory agreement is terminated without cause by the Company before the occurrence of an Exit Event, provided that the most recent NAV, plus total distributions received by stockholders, other than the Advisor, prior to such termination of the advisory agreement exceeds, and only to the extent that it exceeds, the Vesting Threshold. Restricted Stock shall be immediately and permanently forfeited under various circumstances, including certain circumstances relating to a termination of the advisory agreement. The Amended and Restated Expense Support Agreement was effective beginning January 1, 2014 and continues until terminated by the Advisor in writing with 120 days’ notice.

In August 2015, the Company received a waiver from the Advisor that forgave all asset management fees and personnel expenses then-owed, and waived all asset management fees and personnel-related expenses that would accrue in future periods pursuant to the advisory agreement (“Advisor Fee Waiver”). As a result of the Advisor Fee Waiver, the Company did not incur any asset management fees or personnel-related expenses during the quarter ended September 30, 2015.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

9.	Related Party Arrangements (continued)

The following fees and expenses were settled in connection with the Amended and Restated Expense Support Agreement, including amounts included in income from discontinued operations, net of tax, for the ~~three~~quarter and nine months ended ~~June~~September 30, 2015 and 2014, and cumulatively as of ~~June~~September 30, 2015:

	Quarter Ended June 30,				Six Months Ended June 30,				As ofJune 30,
	Quarter EndedSeptember 30,				Nine Months EndedSeptember 30,				As ofSeptember 30,
	2015		2014		2015		2014		2015
	2015(4)		2014		2015		2014		2015
Asset management fees	$	~~240,123~~—	$	301,529	$	501,979	$	~~603~~904,~~058~~587	$	1,708,095
Reimbursable personnel-related expenses		~~92,067~~—		~~113~~98,~~462~~682		242,396		~~244~~343,~~457~~139		694,953
	$	~~332,190~~—	$	~~414~~400,~~991~~211	$	744,375	$	~~847~~1,~~515~~247,726	$	2,403,048
Then-current offering price (1)	$	7.43	$	10.00	$	7.43	$	10.00	$	7.43
Then-current offering price(1)	$	7.43	$	10.00	$	7.43	$	10.00	$	7.43
Restricted stock shares (2)		44,709		41,499		100,185		84,752		280,267
Restricted stock shares(2)		—		40,021		100,185		124,773		280,267
Cash distributions on Restricted Stock (3)	$	34,221	$	3,697	$	55,696	$	3,697	$	87,776
Cash distributions on Restricted Stock(3)	$	14,682	$	7,977	$	70,378	$	14,774	$	102,458

FOOTNOTES:

⁽¹⁾

The then-current offering prices are based on the Company’s NAV per share or historical offering price at the date in which the expense support amounts were ultimately settled under the Expense Support Agreements.

(2) ~~Cumulative~~The Restricted Stock shares ~~are comprised of approximately 235,000 issued to the Advisor and approximately 45,000 issuable to the Advisor as of June 30, 2015. In addition, the Restricted Stock shares~~ were treated as unissued for financial reporting purposes because the vesting criteria had not been met as of ~~June~~September 30, 2015.

⁽³⁾

The cash distributions have been recognized as compensation expense and are included in general and administrative expense in the accompanying condensed consolidated statements of operations.

⁽⁴⁾

No amounts were incurred for asset management fees or personnel-related expenses during the period as a result of the Advisor Fee Waiver.

The expenses and fees incurred by and reimbursable to the Company’s related parties for the quarter and nine months ended September 30, 2015 and 2014 and the related amounts unpaid as of September 30, 2015 and December 31, 2014 were as follows:


	Quarter Ended September 30,				Nine Months Ended September 30,				September 30,		December 31,
	2015		2014		2015		2014		2015		2014
Reimbursable expenses:
Operating expenses^{(1) (2)}	$	27,078	$	124,527	$	312,019	$	437,961	$	16,925	$	20,564
Asset management fees⁽²⁾		—		301,529		501,979		904,587		—		—
Property management fees		69,203		101,483		235,080		295,031		28,956		89,818

	$	96,281	$	527,539	$	1,049,078	$	1,637,579	$	45,881	$	110,382

FOOTNOTES:

⁽¹⁾

In general, amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2015

(UNAUDITED)

9.	Related Party Arrangements (continued)

~~The~~(2) ~~expenses~~For ~~and~~the quarter ended September 30, 2015, no asset management fees or operating-related personnel expenses were incurred byas ~~and~~a ~~reimbursable~~result toof the Advisor Fee Waiver. For the nine months ended September 30, 2015, the Company’s incurred $0.5 million in asset management fees and $0.2 million in operating-related ~~parties~~personnel expenses for which the ~~quarter~~Advisor agreed to receive Restricted Stock in lieu of cash pursuant to the terms of the Amended and ~~six~~Restated Expense Support Agreement. As a result, asset management fees of $0.5 million and operating expenses of $0.2 million were reduced for the nine months ended ~~June~~ September 30, 2015. For the quarter and nine months ended September 30, 2014, the Company incurred $0.3 million and ~~the~~$0.9 million, respectively, in asset management fees and $0.1 million and $0.3 million, respectively, in operating-related ~~amounts~~personnel ~~unpaid~~expenses asfor which the Advisor agreed to receive Restricted Stock in lieu of ~~June 30~~cash pursuant to the terms of the Amended and Restated Expense Support Agreement. As a result, ~~2015~~asset management fees of $0.3 million and ~~December 31~~$0.9 million, ~~2014~~respectively, and operating expenses of $0.1 million and $0.3 million, respectively, were asreduced ~~follows:~~for the quarter and nine months ended September 30, 2014. Since the lowest possible fair value at vesting was zero, no value was assigned to the Restricted Stock issuable for the nine months ended September 30, 2015 or for the quarter and nine months ended September 30, 2014.

	Quarter Ended June 30,				Six Months Ended June 30,				June 30,		December 31,
	2015		2014		2015		2014		2015		2014
Reimbursable expenses:
Operating expenses (1) (2)	$	98,919	$	145,171	$	284,940	$	313,432	$	13,355	$	20,564
Asset management fees (2)		240,123		301,529		501,979		603,058		—		—
Property management fees		78,781		101,758		165,877		193,548		32,341		89,818
	$	417,823	$	548,458	$	952,796	$	1,110,038	$	45,696	$	110,382

The Advisor waived its rights to any disposition fee related to the sale of the Austin Property.

~~FOOTNOTES:~~The Advisor waived its rights to any disposition fee related to the sale of the 94.9% equity interest in the entities that own the German properties.

~~(1)~~10. InEquity ~~general,~~– ~~amounts are recorded as general and administrative expenses in the accompanying condensed consolidated statements of operations.~~Distributions

~~(2)~~The ~~For~~board ~~the~~of ~~quarter~~directors ~~and~~approved ~~six months ended June 30, 2015,~~ the ~~Company~~suspension incurred $0.2 million and $0.5 million, respectively, in asset management fees and $0.1 million and $0.2 million, respectively, in operating-related personnel expenses for which the Advisor agreed to receive Restricted Stock in lieu of cash ~~pursuant~~distributions toon ~~the~~its ~~terms~~common ofstock ~~the~~effective ~~Amended and Restated Expense Support Agreement. As a result~~August 4, ~~asset management fees of $0.2 million and $0.5 million, respectively, and operating expenses of $0.1 million and $0.2 million, respectively, were reduced for the quarter and six months ended June 30,~~ 2015. For the quarter and six months ended June 30, 2014, the Company incurred $0.3 million and $0.6 million, respectively, in asset management fees and $0.1 million and $0.2 million, respectively, in operating-related personnel expenses for which the Advisor agreed to receive Restricted Stock in lieu of cash pursuant to the terms of the Amended and Restated Expense Support Agreement. As a result, asset management fees of $0.3 million and $0.6 million, respectively, and operating expenses of $0.1 million and $0.2 million, respectively, were reduced for the quarter and six months ended June 30, 2014. Since the lowest possible fair value at vesting was zero, no value was assigned to the Restricted Stock.

10During the nine months ended September 30, 2015 and 2014, the Company declared distributions of $3.2 ~~Commitments~~million and ~~Contingencies~~$4.0 million, respectively, of which $3.6 million and $4.0 million, respectively, were paid in cash to stockholders.

11.	Commitments and Contingencies

In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company.

12.	Subsequent Events

In November 2015, the Company filed with the SEC a definitive proxy statement to notify stockholders of the special meeting of the stockholders, to be held on December 10, 2015, to solicit proxies in favor of the Sale and Plan of Dissolution, including the complete liquidation and dissolution of the Company.

GLOBAL INCOME TRUST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2015

(UNAUDITED)

11. Subsequent Events

On August 10, 2015, the Company entered into a purchase and sale agreement with Griffin Capital Corporation, Inc., a non-affiliated third party buyer (the “Buyer”), for the sale of its remaining three real estate properties (the “Sale”) for an aggregate sales price of approximately $93.65 million in cash, less the loans that encumber the properties that will be assumed by the Buyer. The Sale is subject to approval by the Company’s stockholders, obtaining lender consents with respect to the assumption of the loans to be assumed by the Buyer, and other customary closing conditions. The purchase and sale agreement with the Buyer contains termination rights for both the Company and the Buyer; and the Company has agreed to pay to the Buyer a termination fee of $3 million if the Company terminates the purchase and sale agreement, under the terms described further in the purchase and sale agreement. There can be no assurance that the closing conditions will be satisfied, that the Sale will be consummated, or the timing of the Sale.

In connection with the proposed Sale, the Company’s board of directors approved a plan of liquidation and dissolution (the “Plan of Dissolution”) pursuant to which the Company would be liquidated and dissolved, subject to consummation of the Sale and approval of the liquidation and dissolution of the Company by the Company’s stockholders. Upon liquidation and dissolution, stockholders will receive an aggregate amount currently estimated to be $7.01 per share of outstanding common stock of the Company. This is based on the cash proceeds that the Company expects to receive in connection with the Sale, the proceeds of the liquidation of the Company’s remaining 5.1% interest in the entities that own the German properties (described, below), the amount of cash on hand less closing costs, transaction costs, and other liabilities, plus a direct payment to the stockholders from the Company’s Sponsor, or an affiliate of the Sponsor, representing a reimbursement of certain organization, offering and operating expenses.

The board of directors approved the suspension of cash distributions on its common stock effective August 4, 2015.

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

INTRODUCTION

The following discussion is based on the unaudited condensed consolidated financial statements as of ~~June~~September 30, 2015 and December 31, 2014, and for the quarter and ~~six~~nine months ended ~~June~~September 30, 2015 and 2014. Amounts as of December 31, 2014 included in the unaudited condensed consolidated financial statements have been derived from the audited consolidated financial statements as of that date. This information should be read in conjunction with the accompanying unaudited condensed ~~consolidated~~ consolidated financial statements and the notes thereto, as well as the audited consolidated financial statements, notes and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2014. Capitalized terms used in the Item 2 have the same meaning as in the accompanying condensed consolidated financial statements unless otherwise defined herein.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements ~~contained under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere~~ in this Quarterly Report on Form 10-Q for the ~~three~~quarterly period and the nine months ended ~~June~~September 30, 2015 (this “Quarterly Report”) ~~that~~contain ~~are not statements of historical or current fact may constitute~~ “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbor created by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance in connection with discussions of future operating or financial performance, business strategy and portfolios, projected growth prospects, cash flows, costs and financing needs, legal proceedings, amount and timing of anticipated future distributions, estimated per share net asset value of the Company’s common stock, and/or other matters. The Company’s forward-looking statements are not guarantees of future performance. While the Company’s management believes its forward-looking statements are reasonable, such statements are inherently susceptible to uncertainty and changes in circumstances. As with any projection or forecast, forward-looking statements are necessarily dependent on assumptions, data and/or methods that may be incorrect or imprecise, and may not be realized. The Company’s forward-looking statements are based on management’s current expectations and a variety of risks, uncertainties and other factors, many of which are beyond the Company’s ability to control or accurately predict. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company’s actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors. Given these uncertainties, the Company cautions you not to place undue reliance on such statements.

Important factors that could cause the Company’s actual results to vary materially from those expressed or implied in its forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions, and the following: risks associated with the Company’s inability to ~~identify~~complete a liquidity ~~event~~ or other strategic transaction ~~alternative~~on favorable terms or, ~~even~~at ifall ~~identified,~~and liquidation at less than the ~~Company’s~~subscription ~~inability~~price toof ~~complete~~the ~~such~~stock; athe ~~transaction~~impact of regulations requiring periodic valuations of the Company on ~~favorable~~a ~~terms~~per orshare atbasis, ~~all~~the inherent uncertainties of such periodic valuations, and ~~liquidation~~that atsuch ~~less~~estimated ~~than~~net asset valuation may not reflect the ~~subscription~~ ~~price~~amount realized by the Company upon a sale of its properties and/or the ~~stock~~amount that a stockholder receives upon liquidity of their investment in the Company; ~~risks~~the risks associated with reliance on the Company’s advisor and its affiliates, including conflicts of interest; risks associated with the Company’s investment strategy; the risks associated with a worsening economic environment in the U.S. or globally, including financial market fluctuations; the risks associated with real estate markets, including declining real estate values; the risks associated with the limited amount of proceeds raised in the Company’s offering of its shares, including the limited number of investments made and the Company’s tenant credit concentrations; the risks associated with the Company’s limited capital resources, including the Company’s failure to obtain, renew or extend necessary financing or to access the debt or equity markets; the risks associated with the use of debt to finance the Company’s business activities, including refinancing and interest rate risk and the Company’s failure to comply with debt covenants; the Company’s inability to make necessary improvements to properties on a timely or cost-efficient basis; risks related to property expansions and renovations; defaults on or non-renewal of leases by tenants; failure

1716

including refinancing and interest rate risk and the Company’s failure to comply with debt covenants; the Company’s inability to make necessary improvements to properties on a timely or cost-efficient basis; risks related to property expansions and renovations; defaults on or non-renewal of leases by tenants; failure to re-lease properties on favorable terms or at all and competition for tenants; the impact of current and future environmental, zoning and other governmental regulations affecting the Company’s properties; the impact of changes in accounting rules; ~~the impact of regulations requiring periodic valuation of the Company on a per share basis;~~ inaccuracies of the Company’s accounting estimates; unknown liabilities of acquired properties or liabilities caused by property managers or operators; consequences of the Company’s net operating losses; increases in operating costs and other expenses; uninsured losses or losses in excess of the Company’s insurance coverage; the impact of outstanding and/or potential litigation; risks associated with the Company’s tax structuring; failure to qualify for and maintain the Company’s qualification as a REIT for federal income tax purposes; and the Company’s inability to protect its intellectual property and the value of its brand. ~~Given these uncertainties, the Company cautions you not to place undue reliance on such statements.~~

For further information regarding risks and uncertainties associated with the Company’s business, and other important factors that could cause the Company’s actual results to vary materially from those expressed or implied in its forward-looking statements, please refer to the factors listed and described under ~~“Management’s Discussion and Analysis of Financial Condition and~~in ~~Results of Operations” and~~ the ~~“Risk Factors” sections of the~~ Company’s ~~documents~~reports filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s ~~other~~ quarterly reports on Form 10-Q and the Company’s annual report on Form 10-K, copies of which may be obtained from the Company’s website at www.incometrust.com.

All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this cautionary note. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to, and expressly disclaims any obligation to, publicly release the results of any revisions to its forward-looking statements to reflect new information, changed assumptions, the occurrence of unanticipated subsequent events or circumstances, or changes to future operating results over time, except as otherwise required by law.

OVERVIEW

Global Income Trust, Inc. was organized as a Maryland corporation on March 4, 2009 and has elected to be taxed, and currently qualifies as a REIT for federal income tax purposes. The terms “us,” “we,” “our,” “our Company” and “Global Income Trust, Inc.” include Global Income Trust, Inc. and each of its subsidiaries. Refer to our “Exit Strategy” section below, for additional information.

Our Advisor and Property Manager

Our Advisor and our Property Manager are each wholly owned by affiliates of our Sponsor, which is an affiliate of CNL, a leading private investment management firm providing global real estate and alternative investments. The Advisor is responsible for managing our affairs on a day-to-day basis and for identifying, recommending and executing acquisitions and dispositions on our behalf pursuant to an advisory agreement.

Substantially all of our operating, administrative and property management services are provided by sub-advisors to the Advisor and by sub-property managers to the Property Manager. InThrough ~~addition~~January 2015, certain unrelated sub-property managers ~~have~~were ~~been~~ engaged to provide certain property management services. This network of sub-advisors and sub-property managers ~~offers~~offered us access to ~~professionals~~ professionals experienced in making and managing real estate and real estate-related investments.

Our Real Estate Portfolio

We were formed primarily to acquire and operate a diverse portfolio of income-oriented commercial real estate and real estate-related assets on a global basis. As of December 31, 2014, we owned a distribution center outside of Austin in Pflugerville, Texas, two office buildings in Fort Worth, Texas, a distribution center in Jacksonville Florida and five value-retail centers across Germany. We focused on assets that we believed would provide a steady income stream and we made investments in select suburban markets that we believed offered investors attractive risk-adjusted returns.

As17 discussed further below in “Exit Strategy,” in January 2015, we sold 94.9% of our equity interest in the entities that own our five value-retail centers in Germany and retained a 5.1% non-controlling interest with limited protective rights. In June 2015, we sold our Austin Property located in Pflugerville, Texas. As of August 3, 2015, we owned three properties located in Texas and Florida comprised of approximately 1.1 million square feet of leasable space and our portfolio was 100% leased with a weighted average remaining lease term of 5.4 years. Our tenants include Mercedes-Benz Financial Services USA, LLC, DynCorp International, LLC and Samsonite, LLC. Refer to our “Exit Strategy” section below, for additional information.

As discussed further below in “Exit Strategy,” in January 2015, we sold 94.9% of our equity interest in the entities that own our five value-retail centers in Germany and retained a 5.1% non-controlling interest with limited protective rights. In June 2015, we sold our Austin Property located in Pflugerville, Texas. As of October 30, 2015, we owned three properties located in Texas and Florida comprised of approximately 1.1 million square feet of leasable space and our portfolio was 100% leased with a weighted average remaining lease term of 5.2 years. Our tenants include Mercedes-Benz Financial Services USA, LLC, DynCorp International, LLC and Samsonite, LLC. Refer to our “Exit Strategy” section below, for additional information.

Exit Strategy

During 2013, upon the completion of our Offering, our board of directors formed a Special Committee and began exploring possible strategic alternatives. In connection therewith, in August 2013, the Special Committee engaged SunTrust Robinson Humphrey, Inc. (“STRH”) as its financial advisor.

In January 2015, we completed the sale of a 94.9% controlling equity interest in the entities that ~~owned~~own the German properties and retained a 5.1% non-controlling interest with limited protective rights. In June 2015, we completed the sale of ~~out~~ our Austin Property in Pflugerville, Texas as part of our continuous evaluation of strategic alternatives.

The Special Committee, along with STRH, evaluated the strategic alternatives of our three remaining properties. On August 10, 2015, we entered into a purchase and sale agreement with Griffin Capital Corporation, ~~Inc.,~~ a non-affiliated third party buyer (~~the~~ “Buyer”), for the sale of our remaining three real estate properties (~~the~~ “Sale”) for an aggregate sales price of approximately $93.65 million in cash, less the loans that encumber the properties that will be assumed by the Buyer. It is currently anticipated that Griffin Capital Essential Asset REIT, Inc., a non-traded real estate investment trust sponsored by the Buyer, will acquire the U.S. Properties in the Sale via an assignment at the time of the closing of the Sale. The Sale is subject to approval by our stockholders, obtaining lender consents with respect to the ~~assumption of the~~ loans to be assumed by the Buyer, and other customary closing conditions. The purchase and sale agreement with the Buyer contains termination rights for both us and the Buyer; and we have agreed to pay to the Buyer a termination fee of $3 million if we terminate the purchase and sale agreement, under the terms described further in the purchase and sale agreement. ~~There~~We anticipate that the closing of the Sale will occur in the fourth quarter of 2015, shortly after the stockholder vote, however, there can be no assurance that the ~~closing~~ closing conditions will be satisfied, that the Sale will be consummated, or the timing of the Sale.

In connection with the proposed Sale, our board of ~~directors~~ directors approved a plan of liquidation and dissolution (~~the~~ “Plan of Dissolution”), including the complete liquidation and dissolution of the Company contemplated thereby pursuant to which we would be liquidated and dissolved, subject to consummation of the Sale and approval of the liquidation and our dissolution by our stockholders. Upon liquidation and dissolution, our stockholders will receive an aggregate amount currently estimated to be $7.01 per share of our outstanding common stock. This is based on the cash proceeds that we expect to receive in connection with the Sale, the proceeds of the liquidation of our remaining 5.1% interest in the entities that own the German properties (described, below), the amount of cash on hand less closing costs, transaction costs, and other liabilities, plus a direct payment to the stockholders from our Sponsor, or an affiliate of our Sponsor, representing a reimbursement of certain organization, offering and operating expenses.

In connection with the Sale and the Plan of Dissolution, our board of directors, including a majority of our independent directors, approved a sale of our remaining 5.1% interest in the entities that own the German properties, to our Sponsor, or an affiliate of our Sponsor, for an aggregate sale price of $500,000. The sale of our remaining 5.1% interest in the entities that own the German properties to our Sponsor, or an affiliate of our Sponsor, is subject to the stockholders’ approval of the Sale and our subsequent liquidation and dissolution.

InA ~~light~~special meeting of the ~~pending~~stockholders ~~Sale~~will ~~and~~be ~~the~~held ~~Plan~~on ofDecember ~~Dissolution~~10, ~~our~~2015, ~~board of directors voted~~ to ~~suspend~~consider ~~our~~and ~~cash~~vote ~~distribution~~upon onthe ~~our~~Sale ~~common~~and ~~stock~~the Plan ~~effective as~~ of ~~August~~ 4Dissolution, ~~2015.~~including ~~Accordingly,~~our complete weliquidation ~~will~~and ~~not~~dissolution ~~declare~~contemplated orthereby. ~~issue~~We ~~any~~have ~~further~~filed ~~distributions~~with onthe ~~our~~SEC ~~common~~a ~~stock~~definitive ~~after~~proxy ~~the~~statement, ~~effective~~to notify ~~date~~stockholders of the ~~suspension.~~special ~~The~~meeting ~~accrued~~and ~~distributions up~~ to solicit ~~and~~proxies ~~through~~in ~~the~~favor ~~effective date~~ of the ~~suspension~~Sale ~~will~~and bePlan ~~paid~~of ~~to stockholders on or about September 9, 2015~~Dissolution.

~~Refer~~In tolight of the pending Sale and the Plan of Dissolution, our ~~Form~~board ~~8-K~~of ~~filed~~directors voted to suspend our cash distribution on our common stock effective as of August 124, 2015. ~~for~~Accordingly, ~~additional~~we ~~information~~have not declared or issued any further distributions on our common stock since the effective date of the suspension.

1918

Refer to our Form 8-K filed on August 12, 2015 for additional information.

Our Debt Financing

Through subsidiaries of our operating partnership that were formed to make our investments, we generally borrowed, on a non-recourse basis, amounts that we believed would maximize the return to our stockholders. The use of non-recourse financing allowed us to improve returns to our stockholders and to limit our exposure on an investment to the amount invested. Non-recourse indebtedness means the indebtedness of the borrower or its subsidiaries is collateralized only by the assets to which such indebtedness relates, without recourse to our assets, outside of the assets of the borrower, or any of its subsidiaries, other than in the case of customary carve-outs for which the borrower or its subsidiaries act as guarantor in connection with such indebtedness, such as fraud, misappropriation, misapplication of funds, environmental conditions and material misrepresentation.

Expense Support from our Advisor

Pursuant to the advisory agreement with our Advisor, our Advisor is entitled to asset management fees and reimbursement of certain personnel-related expenses it incurs on our behalf. Effective January 1, 2014, our Advisor agreed to accept forfeitable restricted stock, in lieu of cash, as payment for such fees and reimbursements if certain distribution coverage metrics were not met, subject to an amended and restated expense support agreement. As a result, our cash from operations was positively impacted by expense support provided by our Advisor. AsIn ~~described~~August ~~above under “Exit Strategy”~~2015, ~~our~~we ~~board~~received ofa ~~directors~~waiver ~~voted~~from ~~to suspend~~ our ~~cash~~Advisor ~~distribution~~that onforgave ~~our~~all ~~common~~asset ~~stock~~management ~~effective~~fees and aspersonnel-related ofexpenses ~~August 4~~then-owed, ~~2015.~~and ~~Since~~waived weall ~~will~~asset ~~not~~management ~~declare~~fees ~~distributions subsequent~~and topersonnel-related ~~the~~expenses ~~suspension,~~that ~~the~~would ~~distribution~~accrue ~~coverage~~in ~~metrics~~future ~~may~~periods bepursuant ~~partially~~to ~~met~~our ~~during~~advisory ~~the~~agreement ~~third quarter of 2015, and therefore, our~~ (“Advisor ~~will~~Fee ~~not~~Waiver”). beAs ~~required~~a toresult ~~accept~~of ~~restricted~~the ~~stock~~Advisor asFee Waiver, ~~full~~we ~~settlement~~did ~~and~~not ~~payment~~incur ofany asset management fees ~~and~~ ~~operating~~or personnel-related ~~personnel~~ expenses. Weduring ~~expect that subsequent to~~ the ~~third~~ quarter ofended ~~2015~~September 30, ~~none~~2015 ofand ~~these~~do ~~expenses~~not ~~will be settled in the form of restricted stock, absent a waiver of these expenses by the Advisor, and~~ expect to ~~settle~~incur ~~these expenses~~such infees ~~the~~or ~~form~~expenses ofgoing ~~cash~~forward.

Distributions

As described above under “Exit Strategy”, in light of the pending Sale and the Plan of Dissolution, our board of directors voted to suspend our cash distribution on our common stock effective as of August 4, 2015. ~~Accordingly,~~The weaccrued ~~will not declare or issue any further~~ distributions onup ~~our~~to ~~common~~and ~~stock~~through ~~after~~ the effective date of the suspension. ~~The~~were ~~accrued~~paid ~~distributions up~~ to ~~and~~stockholders ~~through~~in ~~the~~September ~~effective~~2015. ~~date~~We ofdid ~~the~~not ~~suspension~~and will benot ~~paid~~declare toor ~~stockholders~~issue any further distributions on orour ~~about~~common ~~September~~stock 9,after ~~2015~~the effective date of the suspension.

LIQUIDITY AND CAPITAL RESOURCES

General

Since the close of our Offering in April 2013, our primary source of capital to date has been unused proceeds from our Offering and during 2015, from net sales proceeds from the sale of our 94.9% interest in the entities that own the German properties and the sale of our property in Austin, Texas

Subsequent to April 2013, our principal demands for funds have been for:

•

the payment of operating expenses,

•

the payment of debt service on our outstanding indebtedness, and

• the payment of distributions (this demand ceased with the last distribution payment in September 2015).

Equity and Debt Capital

As a REIT, we are required to distribute at least 90% of our taxable income (excluding net capital gains); therefore, as with other REITs, we must obtain debt and/or equity capital in order to fund our growth.

20As of September 30, 2015, we had an aggregate debt leverage ratio of 61.4% of the aggregate carrying value of our assets. However, if needed, our articles of incorporation and the borrowing policy limitation adopted by our board of directors permit borrowings up to approximately 75% of the aggregate carrying value of our assets and in certain circumstances, in excess of these levels if approved by the board of directors.

~~As of June 30~~Generally, ~~2015,~~the weloan ~~had~~agreements anfor ~~aggregate~~our ~~debt~~mortgage ~~leverage~~loans ~~ratio~~contain ofcustomary ~~60.5%~~affirmative, ofnegative ~~the~~and ~~aggregate~~financial covenants, ~~carrying~~representations, ~~value~~warranties ofand ~~our assets.~~borrowing ~~However~~conditions, ifas ~~needed,~~set ~~our~~forth ~~articles~~in ofthe ~~incorporation~~loan ~~and~~agreements. ~~the~~The ~~borrowing~~loan ~~policy~~agreements ~~limitation~~also ~~adopted~~contain bycustomary ~~our~~events ~~board~~ of ~~directors~~default ~~permit~~and ~~borrowings~~remedies upfor tothe ~~approximately~~lenders. ~~75%~~The ofborrowers ~~the~~are ~~aggregate~~normally ~~carrying~~direct ~~value~~or indirect subsidiaries of our ~~assets~~operating ~~and~~partnership. inAs ~~certain~~of ~~circumstances~~September 30, 2015, we were in ~~excess~~ ofcompliance ~~these~~with ~~levels~~all ifof ~~approved~~our bydebt ~~the~~covenants ~~board~~for ofour ~~directors~~mortgage notes payable.

~~Generally~~As described above under “Exit Strategy”, ~~the~~on ~~loan~~August 10, ~~agreements~~2014, we entered into a purchase and sale agreement for the Sale our ~~mortgage~~remaining ~~loans~~three properties, ~~contain~~subject ~~customary~~to ~~affirmative, negative~~approval ~~and~~by ~~financial~~our ~~covenants~~stockholders, ~~representations,~~obtaining ~~warranties~~lender ~~and~~consents ~~borrowing~~with ~~conditions~~respect to the loans to be assumed by the Buyer, asand ~~set~~other ~~forth~~customary closing conditions. We are in the ~~loan~~process ~~agreements~~of working with our lenders to obtain the necessary lender consents required by the purchase and sale agreement. ~~The~~To ~~loan~~the ~~agreements~~extent ~~also~~we ~~contain~~don’t ~~customary~~obtain ~~events~~approval offrom ~~default~~our stockholders and ~~remedies~~execute ~~for~~under the ~~lenders.~~purchase ~~The~~and ~~borrowers~~sale ~~are~~agreement, ~~normally~~we ~~direct~~may seek to refinance our three remaining properties, but in doing orso ~~indirect~~may ~~subsidiaries~~face difficulties if the remaining term of our ~~operating~~tenant’s ~~partnership~~lease obligations is less than five years. AsFor example, the senior loans entered into at the time of ~~June 30~~our purchase on two of our properties each have an expected maturity in 2016. While each such senior loan contains a provision through which the loan can be extended for approximately two years, ~~2015~~the extension triggers a substantial increase in the interest rate. Therefore, if we ~~were~~don’t inexecute ~~compliance~~under ~~with~~the ~~all~~purchase ofand ~~our~~sale agreement described above, we expect to refinance the debt ~~covenants~~prior ~~for~~to ~~our~~its ~~mortgage~~initial ~~notes~~maturity. ~~payable~~The terms of any refinancing could be less favorable than the current terms if the properties’ tenants have not exercised their options to extend, or we have not otherwise negotiated an extension of the leases.

AsAny ~~described~~lease ~~above~~extensions ~~under~~could ~~“Exit~~create ~~Strategy”,~~an onobligation ~~August 10,~~to ~~2014,~~pay welease ~~entered~~commissions ~~into a purchase~~ and ~~sale~~may ~~agreement~~also ~~for the Sale our remaining three~~provide ~~properties, subject to approval by~~ our ~~stockholders,~~tenants ~~where~~with ~~our~~some ~~Buyer~~period ~~will~~of ~~assume~~free ~~our~~or ~~existing~~reduced ~~indebtedness~~rent. ToSome, ~~the~~but ~~extent~~not weall ~~don’t~~of ~~obtain approval from~~ our ~~stockholders~~debt ~~and~~instruments ~~execute~~require ~~under~~us ~~the~~to ~~purchase~~fund ~~and~~reserves ~~sale~~that ~~agreement,~~can webe ~~may~~used ~~seek~~ to ~~refinance our~~pay ~~three~~lease ~~remaining~~commissions ~~properties,~~ but inthese ~~doing~~growing soreserves ~~may~~would ~~face~~not ~~difficulties~~necessarily ifbe ~~the~~sufficient ~~remaining~~to ~~term~~fund ofall ~~our tenant’s~~ such lease ~~obligations is less than five years~~commissions. ~~For example~~Therefore, to the ~~senior~~extent ~~loans~~we ~~entered~~don’t ~~into~~sell ~~at the time of~~ our ~~purchase~~three onremaining ~~two of our~~ properties, ~~each~~as ~~have~~described anabove ~~expected~~under ~~maturity~~“Exit inStrategy”, ~~2016.~~we ~~While~~expect ~~each~~to ~~such~~retain ~~senior loan contains~~ a ~~provision~~portion ~~through~~of ~~which~~ the ~~loan~~remaining ~~can~~unused benet ~~extended~~proceeds ~~for~~from ~~approximately~~our ~~two~~Offering ~~years,~~and ~~the~~net ~~extension~~sales proceeds ~~triggers~~from athe ~~substantial~~sales ~~increase~~of inassets ~~the~~for ~~interest~~this ~~rate~~purpose. ~~Therefore~~Also, ~~if we~~any ~~don’t~~amendment ~~execute under the purchase and sale agreement described above, we expect~~ to ~~refinance~~ the ~~debt prior to its initial maturity. The~~ terms of ~~any~~existing ~~refinancing~~leases could berequire ~~less~~approval ~~favorable~~by ~~than~~ the ~~current~~lender ~~terms~~providing if the ~~properties’~~loan ~~tenants have~~secured ~~not~~by ~~exercised their options to extend, or we have not otherwise negotiated an extension of~~ the ~~leases~~related property.

~~Any~~In ~~lease~~the ~~extensions~~event ~~could~~unforeseen ~~create~~capital ~~an obligation~~expenditures toare ~~pay~~necessary ~~lease~~for ~~commissions~~which ~~and~~we ~~may~~do ~~also~~not ~~provide~~have ~~our~~sufficient ~~tenants~~cash ~~with~~reserves ~~some~~to ~~period~~fund, ofwe ~~free~~may orbe ~~reduced~~forced ~~rent.~~to ~~Some,~~defer ~~but~~making ~~not~~such improvements ~~all~~which ofcould ~~our~~impact ~~debt~~the ~~instruments~~ability ~~require~~for us to ~~fund~~renew ~~reserves~~an ~~that~~existing ~~can~~lease beor ~~used~~obtain toa ~~pay~~new lease ~~commissions~~on ~~but~~the ~~these~~property ~~growing~~and ~~reserves would~~could ~~not~~negatively ~~necessarily~~impact bethe ~~sufficient~~value toof ~~fund~~our ~~all such lease commissions~~property. ~~Therefore~~If necessary, ~~to the extent~~ we ~~don’t~~may ~~sell~~use our ~~three~~cash ~~remaining~~on ~~properties~~hand asin ~~described~~the ~~above~~event ~~under “Exit Strategy”, we expect to retain a portion~~ of ~~the remaining~~unforeseen ~~unused~~significant ~~net~~capital ~~proceeds~~expenditures ~~from~~or ~~our~~we ~~Offering~~may ~~and~~be ~~dispositions~~forced ~~for this purpose. Also, any amendment~~ to ~~the~~sell ~~terms~~one ofor ~~existing~~more ~~leases~~properties ~~could~~at ~~require~~an ~~approval~~unfavorable bytime ~~the~~to ~~lender~~meet ~~providing~~our ~~the loan secured by the related property~~obligations.

In the event unforeseen capital expenditures are necessary for which we do not have sufficient cash reserves to fund, we may be forced to defer making such improvements which could impact the ability for us to renew an existing lease or obtain a new lease on the property and could negatively impact the value of our property. If necessary, we may use our cash on hand in the event of unforeseen significant capital expenditures or we may be forced to sell one or more properties at an unfavorable time to meet our obligations and to continue paying distributions.

Cash from Operating Activities

We do not expect to meet future cash needs for general and administrative expenses and, debt service from the net operating income from our properties, which is comprised of rental income and tenant reimbursements less property operating expenses and property management fees (“NOI”). The leases for our three remaining properties are non-cancelable and provide for annual base rents, payable monthly, with periodic increases throughout the lease terms. Each tenant generally has the option to extend the lease term for an additional period (generally ranging from two to ten years). In addition, the tenants are generally responsible for the payment of some, and in two cases substantially all, of the operating expenses of the property. In the event the property operating expenses exceed a cap, as defined in the tenant lease agreements, the excess expenses are not reimbursable.

Based on annualized base rents, our portfolio had a weighted average remaining lease term of 5.42 years as of ~~June~~September 30, 2015, with approximately 100% of our rental revenues scheduled to expire in 2018 or later. Therefore, we do not expect lease turnover or increases in property expenses to have a significant impact on our cash flow from operations in the near term. However, since we only own three properties, we are vulnerable to tenant and geographic concentrations, whereby a default or non-renewal by one of our significant tenants or economic downturns in certain geographic regions would have a negative impact on our results of operations and cash flow from operations.

2120

We experienced a positive cash flow from operating activities for the ~~six~~nine months ended ~~June~~September 30, 2015 ~~and~~ and 2014 of approximately $12.45 million and $02.71 million, respectively. The increase in cash flows from operating activities is primarily related to cash rents received during the ~~six~~nine months ended ~~June~~September 30, 2015 as compared with the “free rent” granted during the ~~six~~nine months ended ~~June~~September 30, 2014 under the February 2014 lease extension of the Jacksonville Distribution Center. This increase was partially offset by lower NOI resulting from the sale of 94.9% of our equity interest in the entities that own the German properties in January 2015 and the sale of our property in Austin, Texas in June 2015. We only have three remaining leases and therefore expect decreases in our operating cash flows in 2015 as compared with prior periods.

During each of the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, our cash from operations was positively impacted by expense support provided by our Advisor, as described in “Results of Operations – General and Administrative Expenses and Asset Management Fees”. ~~As described above under “Exit Strategy~~”, ~~our~~In ~~board of directors voted to suspend our cash distribution on our common stock effective as of August 4~~addition, ~~2015. Since~~ we ~~will~~did not ~~declare~~incur ~~distributions~~any subsequent to the suspension, the distribution coverage metrics may be partially met during the third quarter of 2015, and therefore, our Advisor will not be required to accept restricted stock as full settlement and payment of asset management fees and operating-related personnel expenses. ~~We expect that only a portion of these expenses will be settled in the form of restricted stock starting~~ during the quarter ended September 30, 2015 and, ~~absent~~will anot ~~waiver~~incur of these ~~expenses~~fees byand ~~the~~expenses ~~Advisor~~going forward, ~~expect~~due to ~~settle~~the ~~these~~Advisor ~~expenses~~Fee inWaiver ~~the~~described ~~form~~above ofin ~~cash~~“Expense ~~going~~Support ~~forward~~from our Advisor.”

Foreign Discontinued Operations

Approximately 32.32% and 1918.10% of our total revenues, including the properties included in discontinued operations, for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively, related to properties in Germany. In January 2015, we completed the sale of 94.9% of ~~our~~ our equity interest in the entities that own the German properties, which resulted in proceeds, net of closing costs, of approximately $8.1 million, of which approximately $0.3 million was held back until the completion of the acquisition audit and other closing conditions. In May 2015, we received $0.1 million related to the other closing conditions while the remaining amounts are expected to be received upon completion of the acquisition audit.

Working Capital

As of ~~June~~September 30, 2015, we had $1514.1 5 million in cash and cash equivalents, which is primarily reflective of the $78.91 million in net sales proceeds received from the sale of our 94.9% interest in the entities that ~~owned~~own the German properties, the $2.6 million in net sale proceeds received from the sale of our Austin property as well as unused net proceeds from our Offering. As described above under “Exit Strategy”, subject to stockholder approval, we intend to use the proceeds received from the sale of our 94.9% equity interest, along with the proceeds from the sale of our property in Austin, Texas and the proceeds from the anticipated Sale of our three remaining properties, to make a distribution to our stockholders.

Repayment of Debt

The majority of our debt outstanding as of December 31, 2014 requires monthly repayment of a portion of the outstanding principal. During each of the ~~six~~ nine months ended ~~June~~September 30, 2015 and 2014, we repaid approximately $01.71 million and $1.0 million of our mortgage notes payable, respectively. Our remaining scheduled principal payments in 2015 are approximately $0.74 million.

Distributions

During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, we had insufficient cash flows from operating activities or funds from operations to fund a portion of our distributions; therefore, such amounts were partially funded from unused proceeds of our Offering. Our board of directors authorized a daily distribution of $0.0017808 per share of common stock, which based on a 365 days calendar year, was equal to an annualized distribution rate of 8.7% relative to our estimated NAV per share as of December 31, 2014. Distributions were payable to all common stockholders of record as of the close of business on each day, payable monthly, until terminated or amended. As described above under “Exit Strategy”, our board of directors voted to suspend the cash distribution on our common stock effective as of August 4, 2015.

The payment of distributions, through our last payment in September 2015, represented a significant use of cash. Our primary sources of cash for the payment of distributions was net operating income generated by our leases, net of our general and administrative expenses, debt service payments and other operating expenses and unused Offering proceeds. We do not expect to pay out future cash distributions as a result of suspending our cash distributions effective August 4, 2015.

2221

The following table presents total distributions declared and paid, net cash provided by operating activities and funds from operations (“FFO”) for the quarter and ~~six~~nine months ended ~~June~~September 30, 2015 and 2014:

	DistributionsDeclared DailyPer Share		Total CashDistributionsDeclared (1)		CashDistributionsPaid		Net CashProvided byOperatingActivities (2)		FFO (3)
	DistributionsDeclaredDaily PerShare		Total CashDistributionsDeclared (1)		CashDistributionsPaid		Net CashProvided byOperatingActivities (2)		FFO (3)
2015 Quarter
First	$	0.0017808	$	1,323,429	$	1,323,429	$	45,252	$	689,455
Second		0.0017808		1,338,139		1,338,139		1,325,586		912,086
Total	$	0.0035616	$	2,661,568	$	2,661,568	$	1,370,838	$	1,601,541
Third (4)		0.0017808		514,666		970,514		1,088,406		292,272
Total	$	0.0053424	$	3,176,234	$	3,632,082	$	2,459,244	$	1,893,813
2014 Quarter
First	$	0.0017808	$	1,323,429	$	1,323,429	$	82,503	$	1,146,472
Second		0.0017808		1,338,139		1,338,139		664,945		762,009
Total	$	0.0035616	$	2,661,568	$	2,661,568	$	747,448	$	1,908,481
Third		0.0017808		1,352,836		1,352,836		1,328,560		964,520
Total	$	0.0053424	$	4,014,404	$	4,014,404	$	2,076,008	$	2,873,001

FOOTNOTES:

(1) Our net loss was approximately $12.03 million and $12.62 million, respectively, and cash distributions declared was ~~each~~ approximately $3.2 million and $4.70 million for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, approximately 4936% and 7248%, respectively, of distributions declared to stockholders were considered to be funded with other sources (i.e., Offering proceeds), and approximately 5164% and 2852%, respectively, were considered to be funded with cash provided by operations for GAAP purposes.

⁽²⁾

Net cash provided by operating activities agrees with the condensed consolidated statements of cash flows in our condensed consolidated financial statements. Such amount generally represents net income or loss adjusted for items not using cash, such as depreciation and amortization expense, and items not providing cash, such as straight-line rent adjustments. It can also include cash that resulted from the collection of a receivable or the postponement of making a vendor payment and, alternatively, excludes cash earned that has not been collected or the payment of expenses accrued in the applicable period.

⁽³⁾	See reconciliation of FFO in “Funds from Operations and Modified Funds from Operations” below.

⁽⁴⁾	As described above under “Exit Strategy”, our board of directors voted to suspend the cash distribution on our common stock effective as of August 4, 2015 and paid the last distribution payment in September 2015.

Generally, distributions up to the amount of our current or accumulated earnings and profits will be taxable to the recipient stockholders as ordinary income.

In addition, in connection with the proposed Sale described above under “Exit Strategy”, our board of directors approved the Plan of Dissolution pursuant to which we would be liquidated and dissolved, subject to consummation of the Sale and approval of the liquidation and our dissolution by our stockholders. Upon liquidation and dissolution, our stockholders will receive an aggregate amount currently estimated to be $7.01 per share of our outstanding common stock. This is based on the cash proceeds that we expect to receive in connection with the Sale, the proceeds of the liquidation of our remaining 5.1% interest in the entities that own the German properties, the amount of cash on hand less closing costs, transaction costs, and other liabilities, plus a direct payment to the stockholders from our Sponsor, or an affiliate of our Sponsor, representing a reimbursement of certain organization, offering and operating expenses.

Expense Support Agreements

During the quarter ~~and six month~~ ended ~~June~~September 30, 2015, ~~respectively,~~no ~~approximately~~asset $0management fees or operating-related personnel expenses were incurred as a result of the Advisor Fee Waiver described above under “Expense Support from our Advisor.2” ~~million~~During ~~and~~the nine months ended September 30, 2015 approximately $0.5 million in asset management fees and $0.~~1 million and $0.~~2 million in operating-related personnel expenses were settled and paid in the form of restricted stock in accordance with the terms of the Amended and Restated Expense Support Agreement, as described above under “Expense Support from our Advisor. ” During the quarter and ~~six~~nine ~~month~~months ended ~~June~~ September 30, 2014, respectively, approximately $0.3 million and $0.69 million in asset management fees and $0.1 million and $0.2 3 million in operating-related personnel expenses were settled and paid in the form of restricted stock in accordance with the terms of the Amended and Restated Expense Support Agreement. In accordance therewith, we determined that approximately 45,000 and 42,000 shares, respectively, of Restricted Stock were issuable to the Advisor related to the quarters ended June 30, 2015 and 2014. The shares related to the quarter ended June 30, 2015 will be issued by August 14, 2015.

As described above under “Exit Strategy”, in light of the pending Sale and the Plan of Dissolution, our board of directors voted to suspend our cash distribution on our common stock effective as of August 4, 2015. Accordingly, we will not declare or issue any further distributions on our common stock after the effective date of the suspension. Since we will not declare distributions subsequent to the suspension, the distribution coverage metrics may be partially met during the third quarter of 2015, and therefore, our Advisor will not be required to accept restricted stock as full settlement and payment of asset management fees and operating-related personnel expenses. We expect that only a portion of these expenses will be settled in the form of restricted stock during the quarter ended September 30, 2015 and, absent a waiver of these expenses by the Advisor, expect to settle the remainder of these expenses in the form of cash going forward.

We are not aware of any other material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our properties, other than those described above, risk factors identified in Part II, Item 1A of this report and the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2014.

RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and the notes thereto.

During the quarters ended September 30, 2015 and ~~six~~2014, the results of three real estate investment properties and four real estate investment properties, respectively, contributed to loss from continuing operations. During the nine months ended ~~June~~September 30, 2015 and 2014, the results of four real estate investment properties (including our Austin Property, which was sold in June 2015) contributed to ~~income~~loss from continuing operations. As described above, we sold 94.9% of our equity interest in the entities that own our German properties in January 2015 and, as such, the results of operations for these five properties are included in income from discontinued operations in the accompanying condensed consolidated statements of operations for all periods presented.

Comparison of the quarter and ~~six~~nine months ended ~~June~~September 30, 2015 to the quarter and ~~six~~nine months ended ~~June~~September 30, 2014

Revenues. Rental revenue and tenant reimbursements were approximately $2.76 million and $58.41 million for the quarter and ~~six~~nine months ended ~~June~~ September 30, 2015, respectively, as compared to approximately $2.8 million and $58.53 million, respectively, for the quarter and ~~six~~nine months ended ~~June~~September 30, 2014. Tenant reimbursement income represents amounts tenants are required to reimburse us in accordance with the lease agreements and are recognized in the period in which the related reimbursable expenses are incurred.

Revenues decreased during the quarter and ~~six~~nine months ended ~~June~~September 30, 2015 primarily as a result of the amendment and extension of the lease for our Jacksonville Distribution Center. Although the amendment was entered into in connection with extending the lease term to increase the potential value of the property, it resulted in lower straight-lined rent recognized over the term of the lease for GAAP purposes. In addition, our Austin Property was sold in June 2015 which contributed to decreased rental revenue and tenant reimbursements for the quarter ended September 30, 2015.

Property Operating Expenses. Property operating expenses were approximately $0.7 million and $12.40 million for the quarter and ~~six~~nine months ended ~~June~~September 30, 2015, respectively, as compared to approximately $0.87 million and $12.42 million, respectively, for the quarter and ~~six~~nine months ended ~~June~~ September 30, 2014. These expenses include property taxes, utilities and other costs that we are responsible for paying to operate our properties, some of which are reimbursable by the tenants with reimbursed amounts included in revenues. In general, as property operating expenses increase, tenant reimbursement income will increase as a result of the tenants’ obligations to pay such amounts. However, in some cases we may not be able to pass the full amount of any such increases to our tenants.

General and Administrative Expenses. General and administrative expenses are comprised primarily of reimbursable personnel expenses of affiliates of our Advisor, directors’ and officers’ insurance, accounting and legal fees, and board of directors’ fees. During the quarter and six months ended June 30, 2015, general and administrative expenses totaled $0.3 million and $0.9 million, respectively; however, approximately $0.1 million and $0.2 million, respectively, of such amounts were settled in accordance with the Amended and Restated Expense Support Agreement, described above. The Restricted Stock was valued at zero during the quarter and six months ended June 30, 2015, and as such, only the net amounts of approximately $0.2 million and $0.7 million, respectively, were recognized as general and administrative expenses for accounting purposes.

We23 incurred approximately $0.4 million and $0.8 million in general and administrative expenses during the quarter and six months ended June 30, 2014, respectively; however, approximately $0.1 million and $0.2 million, respectively, of such amounts were settled in accordance with the Amended and Restated Expense Support Agreement, described above. The Restricted Stock was valued at zero during the quarter and six months ended June 30, 2014, and as such, only the net amounts of approximately $0.3 million and $0.6 million, respectively, were recognized as general and administrative expenses for accounting purposes. See “Expense Support” below.

board of directors’ fees. During the quarter and nine months ended September 30, 2015, general and administrative expenses totaled $0.7 million and $1.6 million, respectively. No operating personnel related expenses were incurred during the quarter ended September 30, 2015 as a result of the Advisor Fee Waiver described above in Note 9. “Related Party Arrangements.” Approximately $0.2 million of operating personnel-related expenses were settled in accordance with the Amended and Restated Expense Support Agreement, described above for the nine months ended September 30, 2015. The Restricted Stock was valued at zero during the nine months ended September 30, 2015, and as such, only the net amounts of approximately $0.7 million and $1.4 million, respectively, were recognized as general and administrative expenses for accounting purposes. General and administrative expenses increased in 2015 as a result of our exploration of strategic alternatives.

We incurred approximately $0.4 million and $1.3 million in general and administrative expenses during the quarter and nine months ended September 30, 2014, respectively; however, approximately $0.1 million and $0.3 million, respectively, of such amounts were settled in accordance with the Amended and Restated Expense Support Agreement, described above. The Restricted Stock was valued at zero during the quarter and nine months ended September 30, 2014, and as such, only the net amounts of $0.3 million and $1.0 million, respectively, were recognized as general and administrative expenses for accounting purposes.

As a result of the Advisor Fee Waiver, we will not incur operating personnel-related expenses going forward.

Asset Management Fees. We incur asset management fees at an annual rate of approximately 1% of the amount of our real estate assets under management. During the nine months ended September 30, 2015 and 2014, asset management fees totaled $0.5 million and $0.7 million, respectively. No asset management fees were incurred during the quarter ended September 30, 2015 as a result of the Advisor Fee Waiver described above in Note 9. “Related Party Arrangements.” All of the asset management fees through June 30, 2015 were settled in the form of Restricted Stock in accordance with the Amended and Restated Expense Support Agreement, described above. During the quarter ended September 30, 2014, asset management fees totaled $0.2 million, of which, all were settled in accordance with the Amended and Restated Expense Support Agreement, described above. As described in Note 9. “Related Party Arrangements,” the Restricted Stock was valued at zero during the quarter ended September 30, 2014 and during the nine months ended September 30, 2015 and 2014, and as such, no asset management fee expense was recognized for accounting purposes.

As a result of the Advisor Fee Waiver, we will not incur asset management fees going forward.

Property Management Fees. We incurred approximately $0.07 million and $0.2 million in property management fees payable to our Property Manager and sub-property managers during quarter and the nine months ended September 30, 2015, respectively, as compared to approximately $0.08 million and $0.2 million during the quarter and nine months ended September 30, 2014, respectively, for services in managing our property operations. Property management fees generally range from 1.5% to 4.5% of property revenues.

Depreciation and Amortization. Depreciation and amortization was approximately $1.5 million and $4.5 million for the quarter and nine months ended September 30, 2015, respectively, as compared to approximately $1.6 million and $4.7 million for the quarter and nine months ended September 30, 2014, respectively.

Interest Expense and Loan Cost Amortization. Interest expense and loan cost amortization was approximately $0.8 million and $2.5 million for the quarter and nine months ended September 30, 2015, respectively, as compared to approximately $0.9 million and $2.6 million for the quarter and nine months ended September 30, 2014, respectively.

Income Taxes. We recognized tax expense relating to our properties in Texas of approximately $12,000 and $29,000 for the quarter and nine months ended September 30, 2015, respectively as compared to approximately $12,000 and $39,000 for the quarter and nine months ended September 30, 2014, respectively.

Analysis of Discontinued Operations. Income from discontinued operations, net of tax, was approximately $0.3 million and $0.2 million for the nine months ended September 30, 2015 and 2014, respectively. During the year ended December 31, 2014, we entered into a share purchase agreement for the sale of 94.9% of our equity interest in the entities that own our German properties, as described above in “Foreign Discontinued Operations.” Under ASC

~~Asset Management Fees. We incur asset management fees at an annual rate of approximately 1% of the amount~~ of205-20, ~~our~~we ~~real~~accounted ~~estate~~for ~~assets under management. During each of~~ the ~~quarters~~revenues and ~~six~~expenses ~~months~~associated ~~ended~~with ~~June 30,~~the ~~2015~~entities ~~and~~that ~~2014,~~own ~~asset~~our ~~management~~German ~~fees~~properties ~~totaled~~as ~~$0.2~~discontinued ~~million~~operations ~~and~~for ~~$0.5 million, respectively; however,~~ all ofperiods ~~the~~presented ~~asset management fees were settled~~ in accordance with ~~the~~GAAP. ~~Amended~~In January ~~and Restated Expense Support Agreement~~2015, ~~described~~we ~~above.~~completed Asthe ~~described~~sale inof ~~Note 9~~94.9% ~~“Related~~of ~~Party~~our ~~Arrangements,”~~equity ~~the~~interest ~~Restricted~~in ~~Stock~~these ~~was~~entities ~~valued at zero during the quarters~~ and ~~six~~recognized ~~months~~an ~~ended June 30,~~approximate ~~2015~~$0.2 ~~and~~million ~~2014,~~gain ~~and~~on asthe ~~such,~~sale. ~~no asset management fee expense was recognized for accounting purposes~~

WeDuring the ~~currently~~quarter ~~anticipate~~ended ~~that~~September 30, ~~only~~2014, ~~a portion~~income from discontinued operations, net of ~~asset~~tax ~~management~~was ~~fees~~approximately ~~will~~$0.2 bemillion. ~~settled~~During ~~with~~the ~~Restricted~~nine ~~Stock~~months asended aSeptember 30, ~~result~~2014, ofwe ~~our~~recognized ~~board~~approximately $0.4 million of ~~directors~~income ~~voting~~tax toexpense, ~~suspend~~which includes ~~our~~the ~~cash~~effects ~~distribution~~of ona change in judgment about our ~~common~~ability ~~stock~~to ~~effective~~realize asdeferred oftax ~~August~~assets 4,in ~~2015,~~future asyears ~~described~~and ~~above~~is ~~under~~reflective ~~“Exit Strategy”.~~of Asthe afact ~~result~~that, ~~absent~~during athe ~~waiver~~second quarter of ~~asset~~2014, ~~management~~it ~~fees~~was ~~from~~deemed ~~the~~more ~~Advisor,~~likely wethan ~~expect~~not anthat ~~increase~~the indeferred ~~asset~~tax ~~management~~assets related ~~fees~~to ~~going~~our ~~forward.~~German ~~See~~operations ~~“Expense~~will ~~Support~~not ~~Agreements”~~be ~~above~~realized ~~for~~due ~~additional~~to ~~information~~our current and foreseeable operations.

Property Management Fees. We incurred approximately $ 0.08 million and $0.2 million in property management fees payable to our Property Manager and sub-property managers during quarter and the six months ended June 30, 2015, respectively, as compared to approximately $0.07 million and $0.1 million during the quarter and six months ended June 30, 2014, respectively, for services in managing our property operations. Property management fees generally range from 1.5% to 4.5% of property revenues.

Depreciation and Amortization. Depreciation and amortization was approximately $1.5 million and $3.0 million for the quarter and six months ended June 30, 2015, respectively, as compared to approximately $1.6 million and $3.1 million for the quarter and six months ended June 30, 2014, respectively.

Interest Expense and Loan Cost Amortization. Interest expense and loan cost amortization was approximately $0.8 million and $1.7 million for the quarter and six months ended June 30, 2015, respectively, as compared to approximately $0.9 million and $1.7 million for the quarter and six months ended June 30, 2014, respectively.

Income Taxes. We recognized tax expense relating to our properties in Texas of approximately $4,000 and $17,000 for the quarter and six months ended June 30, 2015, respectively as compared to approximately $13,000 and $26,000 for the quarter and six months ended June 30, 2014, respectively.

Analysis of Discontinued Operations. During the year ended December 31, 2014, we entered into a share purchase agreement for the sale of 94.9% of our equity interest in the entities that own our German properties, as described above in “Foreign Discontinued Operations.” Under ASC 205-20, we accounted for the revenues and expenses associated with the entities that own our German properties as discontinued operations for all periods presented in accordance with GAAP. In January 2015, we completed the sale of 94.9% of our equity interest in these entities and recognized an approximate $0.2 million gain on the sale.

Income (loss) from discontinued operations, net of tax, was approximately $0.3 million and ($0.06) million for the six months ended June 30, 2015 and 2014, respectively. During the quarter ended June 30, 2014, loss from discontinued operations, net of tax was approximately $0.2 million. During the quarter and six months ended June 30, 2014, we recognized approximately $0.4 million of income tax expense, which includes the effects of a change in judgment about our ability to realize deferred tax assets in future years and is reflective of the fact that, during the second quarter of 2014, it was deemed more likely than not that the deferred tax assets related to our German operations will not be realized due to our current and foreseeable operations.

FUNDS FROM OPERATIONS AND MODIFIED FUNDS FROM OPERATIONS

Due to certain unique operating characteristics of real estate companies discussed below, the National Association of Real Estate Investment Trusts (“NAREIT”) promulgated a measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a real estate investment trust, or REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004, or the “White Paper.” The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, real estate asset impairment write-downs, depreciation and amortization on real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Our FFO calculation complies with NAREIT’s policy described above.

We may, in the future, make other adjustments to net loss in arriving at FFO as identified above at the time that any such other adjustments become applicable to our results of operations. FFO, for example, may exclude impairment charges of real estate-related investments. Because GAAP impairments represent non-cash charges that are not allowed to be reversed if the underlying fair values improve or because the timing of impairment charges may lag the onset of certain operating consequences, we believe FFO provides useful supplemental information related to current consequences, benefits and sustainability related to rental rates, occupancy and other core operating fundamentals. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance. While impairment charges may be excluded from the calculation of FFO as described above, investors are cautioned that due to the fact that impairments are based on estimated future undiscounted cash flows and the relatively limited term of our operations, it could be difficult to recover any impairment charges. In addition, FFO is not a useful measure in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining FFO.

Notwithstanding the widespread reporting of FFO, changes in accounting and reporting rules under GAAP that were adopted after NAREIT’s definition of FFO have prompted a significant increase in the magnitude of non-operating items included in FFO. For example, acquisition fees and expenses, which we have funded from the proceeds of our Offering and which we do not view as an operating expense of a property, are now deducted as expenses in the determination of GAAP net income. As a result, the Investment Program Association (“IPA”), an industry trade group, has standardized a measure known as modified FFO (“MFFO”), which the IPA has recommended as a supplemental measure for publicly registered, non-traded REITs and which we believe to be another additional supplemental measure to reflect the operating performance of a non-traded REIT. Under IPA Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs (“IPA Guideline”), MFFO excludes from FFO additional non-cash or non-recurring items, including the following:

•

acquisition fees and expenses which have been deducted as expenses in the determination of GAAP net income;

•

non-cash amounts related to straight-line rent;

•

amortization of above or below market intangible lease assets and liabilities;

•

accretion of discounts and amortization of premiums on debt investments;

•

impairments of loans receivable, and equity and debt investments;

•

realized gains or losses from the early extinguishment of debt;

•

realized gains or losses on the extinguishment or sales of hedges, foreign exchange, securities and other derivatives holdings except where the trading of such instruments is a fundamental attribute of our operations;

•

unrealized gains or losses related to fair value adjustments for derivatives not qualifying for hedge accounting, including interest rate and foreign exchange derivatives;

•

unrealized gains or losses related to consolidation from, or deconsolidation to, equity accounting;

•

adjustments related to contingent purchase price obligations where such adjustments have been included in the derivation of GAAP net income; and

•

adjustments related to the above items for unconsolidated entities in the application of equity accounting.

We consider MFFO as a supplemental measure when assessing our operating performance. We have calculated MFFO in accordance with the IPA Guideline. For the quarters and ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, our MFFO is FFO, excluding amortization of above- and below-market leases and straight-line rent adjustments which we believe is helpful in evaluating our results of operations for the reasons discussed below.

•

Amortization of above- and below-market leases. Under GAAP, certain intangibles are assumed to diminish predictably in value over time and are amortized, similar to depreciation and amortization of other real estate-related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, we believe that by excluding charges relating to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate.

•

Straight-line rent adjustments. Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to restate such payments from a GAAP accrual basis to a cash basis), MFFO provides useful supplemental information on the realized economic impact of lease terms, providing insight on the contractual cash flows of such lease terms, and aligns results with management’s analysis of operating performance.

We may, in the future, make other adjustments to FFO and MFFO as identified above at the time that any such other adjustments become applicable to our results of operations. MFFO, for example may exclude gains or losses related to fair value adjustments for derivatives not qualifying for hedge accounting. These items relate to a fair value adjustment, which is based on the impact of current market fluctuations and underlying assessments of general market conditions and specific performance of the holding, which may not be directly attributable to our current operating performance. As these gains or losses relate to underlying long-term assets and liabilities, where we are not speculating or trading assets, management believes MFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals rather than changes that may reflect anticipated gains or losses. We believe MFFO provides useful supplemental information related to current consequences, benefits and sustainability related to rental rates, occupancy and other core operating fundamentals.

We believe that MFFO is helpful in assisting management to assess the sustainability of our distribution and operating performance in future periods, particularly for periods after our offering and acquisition stages are completed, because MFFO excludes acquisition fees and expenses that affect property operations only in the period in which a property is acquired; however, MFFO should only be used by investors to assess the sustainability of our operating performance for periods after the completion of our Offering and the acquisition of our properties. Acquisition fees and expenses have a negative effect on our cash flows from operating activities during the periods in which properties are acquired.

Presentation of MFFO also is intended to provide useful information to investors as they compare the operating performance of different non-traded REITs, although it should be noted that not all REITs calculate MFFO the same way, so comparisons with other REITs may not be meaningful. Neither the Securities and Exchange Commission, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate MFFO. Furthermore, FFO and MFFO are not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should not be construed as historic performance measures or as more relevant or accurate than the current GAAP methodology in calculating net income (loss) and its applicability in evaluating our operating performance.

2726

~~The~~ NAREIT ~~following~~nor ~~table~~any ~~presents~~other aregulatory ~~reconciliation~~body has passed judgment on the acceptability of the adjustments that we use to calculate MFFO. Furthermore, FFO and MFFO are not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO ~~for~~should ~~three~~not ~~months~~be ~~ended~~construed ~~June 30:~~as historic performance measures or as more relevant or accurate than the current GAAP methodology in calculating net income (loss) and its applicability in evaluating our operating performance.

	Quarter Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net loss	$	(470,123	)	$	(989,309	)	$	(1,046,728	)	$	(1,564,811	)
Adjustments:
Gain on sale of foreign discontinued operations		—			—			(238,411	)		—
Gain on sale of real estate		(110,571	)		—			(110,571	)		—
Depreciation and amortization (including amortization of in place lease intangible assets):
Continuing operations		1,497,735			1,551,885			3,002,206			3,103,770
Discontinued operations		—			199,433			—			369,522
FFO adjustments from unconsolidated entities (1):		(4,955	)		—			(4,955	)		—
FFO		912,086			762,009			1,601,541			1,908,481
Amortization of above- and below-market lease intangible assets(2):
Continuing operations		70,757			70,757			141,513			141,513
Discontinued operations		—			11,322			—			17,553
Straight-line rent adjustments(3):
Continuing operations		95,059			(538,235	)		186,999			(1,130,253	)
Discontinued operations		—			(8,561	)		—			(13,423	)
MFFO	$	1,077,902		$	297,292		$	1,930,053		$	923,871
Weighted average number of shares of common stock outstanding (basic and diluted)		8,257,410			8,257,410			8,257,410			8,257,410
Net loss per share (basic and diluted)	$	(0.06	)	$	(0.12	)	$	(0.13	)	$	(0.19	)
FFO per share (basic and diluted)	$	0.11		$	0.09		$	0.19		$	0.23
MFFO per share (basic and diluted)	$	0.13		$	0.04		$	0.23		$	0.11

The following table presents a reconciliation of net loss to FFO and MFFO for quarter and nine months ended September 30:


	Quarter Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net loss	$	(1,210,959	)	$	(589,145	)	$	(2,257,687	)	$	(2,153,956	)
Adjustments:
Gain on sale of foreign discontinued operations		—			—			(238,411	)		—
Gain on sale of real estate		—			—			(110,571	)		—
Depreciation and amortization (including amortization of in place lease intangible assets):
Continuing operations		1,499,495			1,553,665			4,501,701			4,657,435
Discontinued operations		—			—			—			369,522
FFO adjustments from unconsolidated entities ⁽¹⁾:		3,736			—			(1,219	)		—

FFO		292,272			964,520			1,893,813			2,873,001
Amortization of above- and below-market lease intangibles ⁽²⁾:
Continuing operations		70,757			70,757			212,270			212,270
Discontinued operations		—			—			—			17,553
Straight-line rent adjustments ⁽³⁾:
Continuing operations		95,059			85,700			282,058			(1,044,553	)
Discontinued operations		—			—			—			(13,423	)

MFFO	$	458,088		$	1,120,977		$	2,388,141		$	2,044,848

Weighted average number of shares of common stock outstanding (basic and diluted)		8,257,410			8,257,410			8,257,410			8,257,410

Net loss per share (basic and diluted)	$	(0.15	)	$	(0.07	)	$	(0.27	)	$	(0.26	)

FFO per share (basic and diluted)	$	0.04		$	0.12		$	0.23		$	0.35

MFFO per share (basic and diluted)	$	0.06		$	0.14		$	0.29		$	0.25

FOOTNOTES:

⁽¹⁾	This amount represents our share of the FFO or MFFO adjustments allowable under the NAREIT or IPA definitions, respectively, calculated using the HLBV method.

⁽²⁾

Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and are amortized, similar to depreciation and amortization of other real estate-related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges relating to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate.

~~(3)~~27 Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to restate such payments from a GAAP accrual basis to a cash basis), MFFO provides useful supplemental information on the realized economic impact of lease terms, providing insight on the contractual cash flows of such lease terms, and aligns results with management’s analysis of operating performance.

The fluctuation in FFO and MFFO across periods was primarily attributable to the following:

• MFFO increased during the quarter and six months ended June 30, 2015 primarily as a result of cash rents received during the periods related to our Jacksonville Distribution Center. In February 2014, we executed a lease amendment with the tenant at our Jacksonville Distribution Center, which extended the lease term from February 2018 to November 2024 and, among other things, granted “free rent” for the period from February 2014 through May 2014. Approximately $0.6 million and $1.2 million for the quarter and six months ended June 30, 2014, respectively, have been recognized as non-cash revenues in the accompanying condensed

~~consolidated~~(3) ~~statements~~Under ofGAAP, ~~operations~~rental ~~and~~receipts ~~have~~are ~~been~~allocated ~~deducted~~to periods using various methodologies. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to restate such payments from ~~MFFO~~a asGAAP ~~non-~~accrual basis to a cash ~~straight-line~~basis), ~~rent~~MFFO ~~adjustments.~~provides ~~Although~~useful supplemental information on the realized economic impact of lease ~~extension~~terms, ~~reduced~~providing ~~our~~insight ~~MFFO~~on inthe ~~2014~~contractual cash flows of such lease terms, weand ~~believe~~aligns itresults ~~enhanced~~with ~~the~~management’s ~~value~~analysis of ~~our~~operating ~~property~~performance.

•(4) The ~~aforementioned~~fluctuation ~~increase~~ in ~~MFFO~~FFO ~~was~~and ~~partially~~MFFO ~~offset~~across byperiods ~~selling~~was ~~94.9%~~primarily ofattributable ~~our equity interest in the entities that own our German properties in January 2015, as well as increased general and administrative expenses related~~ to the ~~Company’s exploration of strategic alternatives.~~following:

•

MFFO increased during the nine months ended September 30, 2015 primarily as a result of cash rents received during the period related to our Jacksonville Distribution Center. In February 2014, we executed a lease amendment with the tenant at our Jacksonville Distribution Center, which extended the lease term from February 2018 to November 2024 and, among other things, granted “free rent” for the period from February 2014 through May 2014. Approximately $1.1 million for the nine months ended September 30, 2014 has been recognized as non-cash revenues in the accompanying condensed consolidated statements of operations and has been deducted from MFFO as non-cash straight-line rent adjustments. Although the lease extension reduced our MFFO in 2014, we believe it enhanced the value of our property.

•

The aforementioned increase in MFFO was partially offset by selling 94.9% of our equity interest in the entities that own our German properties in January 2015, as well as increased general and administrative expenses related to our exploration of strategic alternatives which has resulted in a decrease in MFFO for the quarter ended September 30, 2015.

RELATED PARTY ARRANGEMENTS

We ~~have~~ entered into agreements with our Advisor and its affiliates, whereby we agree to pay certain fees to, or reimburse certain expenses of, our Advisor or its affiliates for acquisition and advisory services, organization and, asset and property management fees and reimbursement of operating costs. During the quarter ended September 30, 2015, we entered into the Advisor Fee Waiver with our Advisor. See Note 9. “Related Party Arrangements” in the accompanying condensed consolidated financial statements and “Item 13. Certain Relationships and Related Transactions, and Director Independence” in our Form 10-K for the year ended December 31, 2014 for a discussion of the various related party transactions, agreements and fees.

OFF BALANCE SHEET ARRANGEMENTS

As of ~~June~~September 30, 2015, we ~~owned~~own a 5.1% non-controlling interest in the entities that own our German Properties. The debt related to the German properties was approximately $12.12 million at the exchange rate of $1.1112 per Euro as of ~~June~~September 30, 2015.

CONTRACTUAL OBLIGATIONS

As of ~~June~~September 30, 2015, our contractual obligations were not materially different from the amounts reported for the year ended December 31, 2014. See our Annual Report on Form 10-K for the year ended December 31, 2014 for a summary of our contractual obligations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

See Item 1. “Financial Statements” and our Annual Report on Form 10-K for the year ended December 31, 2014 for a summary of our Critical Accounting Policies and Estimates.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

See Item 1. “Financial Statements” for a summary of the impact of recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates or variable rates with the lowest margins available.

The following is a schedule as of ~~June~~September 30, 2015 of our fixed rate debt maturities for the remainder of 2015, each of the next four years and thereafter (principal maturities only):

	2015			2016			2017			2018			2019			Thereafter			Total			Fair Value¹
Fixed rate debt	$	~~734~~372,~~386~~165		$	30,882,372		$	824,418		$	875,963		$	930,732		$	21,153,940		$	55,~~401~~039,~~811~~590		$	57,~~426~~057,~~452~~779
Total debt	$	~~734~~372,~~386~~165		$	30,882,372		$	824,418		$	875,963		$	930,732		$	21,153,940		$	55,~~401~~039,~~811~~590		$	57,~~426~~057,~~452~~779
	2015			2016			2017			2018			2019			Thereafter			Total
Weighted average fixed interest rates of maturities		5.77	%		5.54	%		6.08	%		6.08	%		6.08	%		6.08	%		5.78	%

FOOTNOTE:

(1) The fair market value of fixed rate debt was determined using discounted cash flows based on market interest rates as of ~~June~~September 30, 2015. We determined market rates through discussions with our existing lenders pricing our loans with similar terms and current rates and spreads.

During 2014 and through the sale of 94.9% of our equity interest in the entities that own our German properties in January 2015, we were exposed to risk from the effects of foreign currency exchange rate movements and were negatively impacted by movements in foreign currencies. Subsequent to January 2015, our exposure to the impact of future movements in the exchange rate of Euro to U.S. dollars on our financial results is limited to our retained 5.1% non-controlling interest in the entities that own the German properties.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Exchange Act, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the most recent fiscal quarter, there was no change in our internal controls over financial reporting (as defined under Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

3029

PART II. OTHER INFORMATION

Item 1. Legal Proceedings – None

Item 1A. Risk Factors

There were no material changes in the Company’s risk factors disclosed in Item 1A. Risk Factors of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

During the period covered by this Quarterly Report, we did not sell any equity securities that were not registered under the Securities Act of 1933.

Secondary Sales of Registered Shares between Investors

We are not aware of any transfers of shares by investors for the quarter and ~~six~~nine months ended ~~June~~September 30, 2015, and for the quarter ended ~~June~~ September 30, 2014 we are not aware of any other trades of our shares, other than previous purchases made in our public offerings and redemptions of shares by us. For the ~~six~~nine months ended ~~June~~September 30, 2014, we are aware of transfers of 1,380 shares by investors. The shares were transferred as a sales price of $6.50 per share.

Use of Proceeds from Registered Securities

Our Offering closed on April 23, 2013; refer to our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information on the use of proceeds from our Offering.

The use of proceeds from our Offering and borrowings for the ~~six~~nine months ended ~~June~~September 30, 2015 were as follows:

Unused Offering proceeds as of December 31, 2014	$	6,716,533
Principal payments of debt		(291,886	)
Distributions to stockholders		(1,~~707~~937,~~643~~269	)
Unused Offering proceeds as of June 30, 2015	$	4,717,004
Unused Offering proceeds as of September 30, 2015	$	4,487,378

Redemption of Shares and Issuer Purchases of Equity Securities

As a result of the termination of our distribution reinvestment plan and the close of our Offering in April 2013, our board of directors suspended our stock redemption plan effective April 10, 2013. Therefore, we did not redeem any shares of our common stock during the three months ended ~~June~~September 30, 2015.

Item 3. Defaults Upon Senior Securities – None

Item 4. Mine Safety Disclosures – Not applicable

Item 5. Other Information – None

Item 6. Exhibits

The exhibits required by this item are set forth in the Exhibit Index attached hereto and are filed or incorporated as part of this report.

3130

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on the ~~14th~~5th day of ~~August~~November, 2015.

GLOBAL INCOME TRUST, INC. By: /s/ Thomas K. Sittema THOMAS K. SITTEMA Chief Executive Officer and President (Principal Executive Officer) ~~By: /s/ Tammy J. Tipton TAMMY J. TIPTON Chief Financial Officer (Principal Financial Officer)~~

32By: /s/ Tammy J. Tipton TAMMY J. TIPTON Chief Financial Officer (Principal Financial Officer)

EXHIBIT INDEX

Exhibits:
31.1		Certification of the Chief Executive Officer of Global Income Trust, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
31.2		Certification of the Chief Financial Officer of Global Income Trust, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
32		Certification of the Chief Executive Officer and Chief Financial Officer of Global Income Trust, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
101		The following materials from Global Income Trust, Inc. Quarterly Report on Form 10-Q for the quarter and six months ended June 30, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (loss), (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.

Exhibits:

33The following exhibits are included, or incorporated by reference in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (and are numbered in accordance with Item 601 of Regulation S-K).



10.25		Purchase and Sale Agreement by and between GIT Imeson Park FL, LLC, IN-105 Heritage III, LLC, GIT Heritage IV TX, LLC, Global Income Trust, Inc., and Griffin Capital Corporation, dated August 10, 2015. (Previously filed as Exhibit 10.1 to the Current Report on Form 8-K filed August 12, 2015, and incorporated herein by reference.)

31.1		Certification of the Chief Executive Officer of Global Income Trust, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

31.2		Certification of the Chief Financial Officer of Global Income Trust, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

32.1		Certification of the Chief Executive Officer and Chief Financial Officer of Global Income Trust, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

101		The following materials from Global Income Trust, Inc. Quarterly Report on Form 10-Q for the quarter and nine months ended September 30, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (loss), (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.

Large accelerated filer

Accelerated filer

Non-accelerated filer

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Smaller reporting company

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