Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

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Stockholders' Equity
 12 Months Ended
Dec. 31, 2013
Equity [Abstract]  
Stockholders' Equity

8. Stockholders’ Equity

Distributions

Our Board of Directors declared the following distributions per share for the years ended December 31, 2013, 2012, and 2011:

 

     For the year ended December 31,  
     2013      2012     2011  

Common Stock

    $ 1.50       $ 1.50      $ 1.50   

Senior Common Stock

      1.05         1.05        1.05   

Series A Preferred Stock

      1.9374996         1.9374996        1.9374996   

Series B Preferred Stock

      1.8750         1.8750        1.8750   

Series C Preferred Stock (1)

      1.7813         1.6328 (1)      N/A (1) 

 

(1)  The Series C Preferred Stock was issued on January 31, 2012.

 

For federal income tax purposes, distributions paid to stockholders may be characterized as ordinary income, capital gains, return of capital or a combination of the foregoing. We had no capital gains during the last three years. The characterization of distributions during each of the last three years is reflected in the table below:

 

     Ordinary Income     Return of Capital  

Common Stock

     

For the year ended December 31, 2011

      16.62560 %      83.37440 % 

For the year ended December 31, 2012

      0.00000 %      100.00000 % 

For the year ended December 31, 2013

      18.32962 %      81.67038 % 

Senior Common Stock

     

For the year ended December 31, 2011

      100.00000 %      0.00000 % 

For the year ended December 31, 2012

      0.00000 %      100.00000 % 

For the year ended December 31, 2013

      100.00000 %      0.00000 % 

Series A Preferred Stock

     

For the year ended December 31, 2011

      100.00000 %      0.00000 % 

For the year ended December 31, 2012

      91.70830 %      8.29170 % 

For the year ended December 31, 2013

      100.00000 %      0.00000 % 

Series B Preferred Stock

     

For the year ended December 31, 2011

      100.00000 %      0.00000 % 

For the year ended December 31, 2012

      91.70830 %      8.29170 % 

For the year ended December 31, 2013

      100.00000 %      0.00000 % 

Series C Preferred Stock

     

For the year ended December 31, 2011

      N/A        N/A (1) 

For the year ended December 31, 2012

      91.70830 %      8.29170 % 

For the year ended December 31, 2013

      100.00000 %      0.00000 % 

 

(1) There was no Series C Preferred Stock outstanding during the year ended December 31, 2011.

Recent Activity

On April 29, 2013, we completed a public offering of 1,265,000 shares of our common stock at a public offering price of $18.90 per share. Gross proceeds of the offering totaled $23.9 million and net proceeds, after deducting offering expenses borne by us, were $22.6 million, which we used to acquire real estate.

On June 24, 2013, we completed a public offering of 1,320,000 shares of our common stock at a public offering price of $18.82 per share. On July 11, 2013, the underwriters partially exercised their option to purchase an additional 158,000 shares of common stock. Gross proceeds of the offering were $27.8 million and net proceeds, after deducting offering expenses borne by us, were $26.3 million, which we used to acquire real estate.

On November 25, 2013, we completed a public offering of 1,377,500 shares of our common stock at a public offering price of $18.15 per share. On December 26, 2013, the underwriters partially exercised their option to purchase an additional 26,422 shares of common stock. Gross proceeds of the offering totaled $25.5 million and net proceeds, after deducting offering expenses borne by us, were $24.2 million, which we used to acquire real estate.

 

Ongoing Activity

We have an open market sale agreement, or the ATM Program, with Jefferies LLC, or Jefferies, under which we may, from time to time, offer to sell shares of our common stock with an aggregate sales price of up to $25.0 million on the open market through Jefferies, as agent, or to Jefferies, as principal. During the year ended December 31, 2013, we raised approximately $7.8 million in gross proceeds under the ATM Program. As of December 31, 2013, we had sold a total of 762,478 shares with aggregate gross proceeds of $14.0 million, and have a remaining capacity to sell up to $11.0 million of common stock under the ATM Program with Jefferies.

In March 2011, we commenced an offering of an aggregate of 3,500,000 shares of our senior common stock, par value $0.001 per share, at a price to the public of $15.00 per share, of which 3,000,000 shares are intended to be offered pursuant to the primary offering and 500,000 shares are intended to be offered pursuant to our senior common distribution reinvestment plan, or the DRIP. We, however, reserve the right to reallocate the number of shares being offered between the primary offering and the DRIP. As of December 31, 2013, we had sold 307,979 shares of senior common stock in this ongoing offering, for gross proceeds of $4.6 million, and issued an additional 10,223 shares of senior common stock under the DRIP program.

Notes to Employees

The following table is a summary of the outstanding note issued to an employee of the Adviser for the exercise of stock options (dollars in thousands):

 

Date Issued

    Outstanding Balance
of Employee Loan at
December 31, 2013		      Outstanding Balance
of Employee Loans at
December 31, 2012		      Maturity Date
of Note		    Interest Rate
on Note		  

Apr 2006

    $ —         $ 3       Apr 2015      7.77 % 

May 2006

      —           32       May 2016      7.87 % 

Nov 2006

      375         375       Nov 2015      8.15 % 
  

 

 

     

 

 

        
   $ 375       $ 410         
  

 

 

     

 

 

        

In accordance with ASC 505-10-45-2, “Equity,” receivables from employees for the issuance of capital stock to employees prior to the receipt of cash payment should be reflected in the balance sheet as a reduction to stockholders’ equity. Therefore, this note was recorded as a full recourse loan to the employee and is included in the equity section of the accompanying consolidated balance sheets. As of December 31, 2013, this loan maintained its full recourse status.