Gladstone Commercial Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stockholders' and Mezzanine Equity

Stockholders' and Mezzanine Equity

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Stockholders' and Mezzanine Equity

Stockholders’ and Mezzanine Equity

Stockholders’ Equity

The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2018 (dollars in thousands):



	Series A and B Preferred Stock	Common Stock	Senior Common Stock		Series A and B Preferred Stock		Senior Common Stock		Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive Income		Distributions in Excess of Accumulated Earnings			Total Stockholders' Equity
Balance at December 31, 2017	2,264,000	28,384,016	904,819		$	2	$	1	$	28	$	534,790		$	35	$	(268,058	)	$	266,798
Issuance of Series A and B preferred stock and common stock, net	—	31,011	—		—		—		—		643			—		—			643
Conversion of senior common stock to common stock	—	8,881	(10,522	)	—		—		—		—			—		—			—
Retirement of senior common stock, net	—	—	(2,266	)	—		—		—		(34		)	—		—			(34		)
Distributions declared to common, senior common and preferred stockholders	—	—	—		—		—		—		—			—		(13,474		)	(13,474		)
Comprehensive income	—	—	—		—		—		—		—			495		—			495
Net income	—	—	—		—		—		—		—			—		4,605			4,605
Balance at March 31, 2018	2,264,000	28,423,908	892,031		$	2	$	1	$	28	$	535,399		$	530	$	(276,927	)	$	259,033

Distributions

We paid the following distributions per share for the three months ended March 31, 2018 and 2017:



	For the three months ended March 31,
	2018		2017
Common Stock	$	0.375	$	0.375
Senior Common Stock	0.2625		0.2625
Series A Preferred Stock	0.4843749		0.4843749
Series B Preferred Stock	0.46875		0.46875
Series D Preferred Stock	0.4374999		0.4374999

Recent Activity

Common Stock ATM Program

During the three months ended March 31, 2018, we sold 0.03 million shares of common stock, raising $0.6 million in net proceeds under our common ATM program with Cantor Fitzgerald (the "Common Stock ATM Program"). As of March 31, 2018, we had a remaining capacity to sell up to $85.6 million of common stock under the Common Stock ATM Program.

Series A and B Preferred Stock ATM Programs

Under our open market sales agreement with Cantor Fitzgerald (the “Series A and B Preferred ATM Program”), we may, from time to time, offer to sell (i) shares of our 7.75% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred”), and (ii) shares of our 7.50% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred”), having an aggregate offering price of up to $40.0 million, through Cantor Fitzgerald, acting as sales agent and/or principal. We did not sell any shares of our Series A Preferred or Series B Preferred during the three months ended March 31, 2018. As of March 31, 2018, we had a remaining capacity to sell up to $37.2 million of preferred stock under the Series A and B Preferred ATM Program.

Mezzanine Equity

The 7.00% Series D Cumulative Redeemable Preferred Stock (“Series D Preferred”), is classified as mezzanine equity in our condensed consolidated balance sheets because it is redeemable at the option of the shareholder upon a change of control of greater than 50% in accordance with ASC 480-10-S99 “Distinguishing Liabilities from Equity,” which requires mezzanine equity classification for preferred stock issuances with redemption features which are outside of the control of the issuer. A change in control of our company, outside of our control, is only possible if a tender offer is accepted by over 90% of our shareholders. All other change in control situations would require input from our Board of Directors. We will periodically evaluate the likelihood that a change of control greater than 50% will take place, and if we deem this probable, we would adjust the Series D Preferred presented in mezzanine equity to their redemption value, with the offset to gain (loss) on extinguishment. We currently believe the likelihood of a change of control greater than 50% is remote.

Under our open market sales agreement with Cantor Fitzgerald (the “Series D Preferred ATM Program”), we may, from time to time, offer to sell shares of our Series D Preferred, having an aggregate offering price of up to $50.0 million, through Cantor Fitzgerald, acting as sales agent and/or principal. During the three months ended March 31, 2018, we sold approximately 0.04 million shares of our Series D Preferred for net proceeds of $0.9 million. As of March 31, 2018, we had a remaining capacity to sell up to $19.9 million of Series D Preferred under the Series D Preferred ATM Program.