Quarterly report pursuant to Section 13 or 15(d)

Equity and Mezzanine Equity

v3.19.1
Equity and Mezzanine Equity
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
Equity and Mezzanine Equity
Equity and Mezzanine Equity

Stockholders’ Equity

The following table summarizes the changes in our equity for the three months ended March 31, 2019 and 2018 (in thousands):
 
 
Three Months Ended March 31,
Series A and B Preferred Stock
2019
2018
Balance, beginning of period
$
2

$
2

Issuance of Series A and B preferred stock, net


Balance, end of period
$
2

$
2

Senior Common Stock
 
 
Balance, beginning of period
$
1

$
1

Issuance of senior common stock, net


Balance, end of period
$
1

$
1

Common Stock
 
 
Balance, beginning of period
$
29

$
28

Issuance of common stock, net
1


Balance, end of period
$
30

$
28

Additional Paid in Capital
 
 
Balance, beginning of period
$
559,977

$
534,790

Issuance of Series A and B preferred stock and common stock, net
14,111

643

Retirement of senior common stock, net

(34
)
Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership
(220
)

Balance, end of period
$
573,868

$
535,399

Accumulated Other Comprehensive Income
 
 
Balance, beginning of period
$
(148
)
$
35

Comprehensive income
(722
)
495

Balance, end of period
$
(870
)
$
530

Distributions in Excess of Accumulated Earnings
 
 
Balance, beginning of period
$
(310,117
)
$
(268,058
)
Distributions declared to common, senior common, and preferred stockholders
(13,913
)
(13,474
)
Net income
4,628

4,605

Balance, end of period
$
(319,402
)
$
(276,927
)
Total Stockholders' Equity
 
 
Balance, beginning of period
$
249,744

$
266,798

Issuance of Series A and B preferred stock and common stock, net
14,112

643

Retirement of senior common stock, net

(34
)
Distributions declared to common, senior common, and preferred stockholders
(13,913
)
(13,474
)
Comprehensive income
(722
)
495

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership
(220
)

Net income
4,628

4,605

Balance, end of period
$
253,629

$
259,033

Non-Controlling Interest
 
 
Balance, beginning of period
$
4,675

$

Distributions declared to Non-controlling OP Unit holders
(278
)

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership
220


Net income
45


Balance, end of period
$
4,662

$

Total Equity
$
258,291

$
259,033



Distributions

We paid the following distributions per share for the three months ended March 31, 2019 and 2018:
 
 
 
For the three months ended March 31,
 
 
2019
 
2018
Common Stock and Non-controlling OP Units
 
$
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, 2019, we sold 0.7 million shares of common stock, raising $14.1 million in net proceeds under our open market sales agreement with Cantor Fitzgerald (the “Common Stock ATM Program”). As of March 31, 2019, we had remaining capacity to sell up to $55.6 million of common stock under the Common Stock ATM Program.

Series A and B Preferred Stock ATM Programs

Under another 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, 2019. As of March 31, 2019, we had remaining capacity to sell up to $37.2 million of preferred stock under the Series A and B Preferred ATM Program.

Mezzanine Equity

Our 7.00% Series D Cumulative Redeemable Preferred Stock (“Series D Preferred”) is classified as mezzanine equity on 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 a third 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, 2019, we did not sell any shares of our Series D Preferred under our Series D Preferred ATM Program. As of March 31, 2019, we had remaining capacity to sell up to $18.6 million of Series D Preferred under the Series D Preferred ATM Program.

Amendment to Articles of Incorporation

On April 11, 2018, we filed with the Maryland State Department of Assessments and Taxation an Articles Supplementary reclassifying 3,500,000 authorized but unissued shares of our convertible senior common stock (the “Senior Common Stock”), as authorized but unissued shares of our common stock. As a result of the reclassification, there were 57,969 authorized but unissued shares of Senior Common Stock.

On April 11, 2018, we also filed with the Maryland State Department of Assessments and Taxation an Articles of Amendment to increase the number of shares of capital stock we have authority to issue to 100,000,000 and authorized common stock to 87,700,000 shares.

Universal Shelf Registration Statement

On January 11, 2019, we filed a universal registration statement on Form S-3, File No. 333-229209, and an amendment thereto on Form-S-3/A on January 24, 2019 (collectively referred to as the “Universal Shelf”). The Universal Shelf became effective on February 13, 2019 and replaces our prior universal shelf registration statement. The Universal Shelf allows us to issue up to $500.0 million of securities. As of March 31, 2019, we had the ability to issue up to $489.2 million under the Universal Shelf.