Members’/Shareholders' Equity

12 Months Ended

Dec. 31, 2022

Public Offering of Common Stock

On June 30, 2021, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with Truist Securities, Inc., as the representative of the other several underwriters named in the Underwriting Agreement. On July 2, 2021, the Company issued 1,666,667 shares of common stock at a price to the public of $30.00 per share in accordance with the Underwriting Agreement. Net proceeds from the issuance were approximately $46.7 million, after deducting the underwriting fees and other offering costs incurred.

Dividends

Cash dividends for the periods presented were declared for all issued and outstanding common shares or units, including vested and unvested under the respective Long-Term Incentive Plan in effect during the period of dividend declaration. The portion of the cash attributable to the unvested restricted shares issued under the 2021 Long-Term Incentive Plan ("2021 LTIP") is included in accrued liabilities on the consolidated balance sheet and will be paid in cash once the unvested restricted shares fully vest. Any accrued but unpaid cash dividends attributable to the unvested restricted shares issued under the 2018 Long-Term Incentive Plan ("2018 LTIP") was paid in accordance with the Merger Agreement immediately prior to consummation of the Merger. See Note 9 - Revolving Credit Facility for discussion over the Company's restrictions on certain payments, including dividends.

The table below summarizes the following cash distributions declared to common shareholders and unitholders during the periods presented below:


Quarter Ended	Per Share/Unit Distribution(1)		Total Distribution
			(In millions)
2022
December 31, 2022	$	0.34	$	6.7
September 30, 2022	$	0.31	$	6.2
June 30, 2022	$	0.31	$	6.2
March 31, 2022	$	0.31	$	6.2

2021
December 31, 2021	$	0.31	$	6.2
September 30, 2021	$	0.28	$	5.5
June 30, 2021	$	—	$	—
March 31, 2021(2)	$	0.29	$	8.8

2020
December 31, 2020	$	0.30	$	3.8

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(1)Per unit amounts for dividends declared before the Closing Date of the Merger have been effected by giving adjustment to the 1-for-12 reverse stock split and exchange ratio of 97.796467.

(2)On February 4, 2021, the Board of Managers of REP LLC declared a $3.8 million cash dividend, paid on February 5, 2021. On March 4, 2021, the Board of Directors of the Company declared a cash dividend of $0.28 per share or $5.0 million total, paid on May 7, 2021.

Share-Based and Unit-Based Compensation

In connection with the Merger, the Company shareholders adopted an omnibus equity incentive plan, the 2021 LTIP, for the employees, consultants and the directors of the Company and its affiliates who perform services for the Company. The holders of unvested restricted units issued under the 2018 LTIP were issued substitute awards under the 2021 LTIP at the closing of the Merger. Upon the closing of the Merger and after giving effect to the adjustment resulting from the one-for-twelve reverse stock split, the 2021 LTIP had 1,387,022 shares of common stock available for issuance, of which 440,784 shares remained available as of December 31, 2022.

2021 Long-Term Incentive Plan

The 2021 LTIP will provide for potential grants of: (i) incentive stock options qualified as such under U.S. federal income tax laws ("ISO's:); (ii) stock options that do not qualify as incentive stock options; (iii) stock appreciation rights, or SARs; (iv) restricted stock awards; (v) restricted stock units, or RSUs; (vi) stock awards; (vii) performance awards; (viii) dividend equivalents; (ix) other stock-based awards; (x) cash awards; and (xi) substitute awards, all of which will collectively be referred to as the "Awards".

The 2021 LTIP authorizes the Compensation Committee to administer the plan and designate eligible persons as participants, determine the type or types of Awards to be granted to an eligible person, determine the number of shares of stock or amount of cash to be covered by the Awards, approve the forms of award agreements for use under the plan, determine the terms and conditions of any Award, modify, waive or adjust any term or condition of an Award that has been granted, among other responsibilities delegated by the Company's Board.

Restricted Shares: The Company granted 367,420, 174,575, and 397,739 restricted shares to executives, employees and independent directors of the Company during the year ended December 31, 2022, three months ended December 31, 2021, and year ended September 30, 2021, respectively. The holder of these restricted shares receive dividends, in arrears, once the shares vest. The Company has accrued for these dividends which are reported in accrued liabilities and other non-current liabilities.

All restricted shares granted have a service period between 3 and 36 months. The Company estimates the fair values of the restricted shares as the closing price of the Company's common stock on the grant date of the award, with the expense amortized on a straight-line basis and recognized over the vesting period.

The following table presents the Company's restricted stock activity during the year ended December 31, 2022 under the 2021 LTIP:


2021 Long-Term Incentive Plan
	Restricted Shares	Weighted Average Grant Date Fair Value(1)
Unvested at December 31, 2021	366,789	$	19.41
Granted	367,420	$	17.63
Vested	(192,899)	$	19.25
Forfeited	(5,101)	$	23.46
Unvested at December 31, 2022	536,209	$	18.39

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(1) For the three months ended December 31, 2021, the Company granted 174,575 restricted shares at a weighted average grant date fair value of $23.46. For the year ended September 30, 2021, the Company granted 397,739 restricted shares at a weighted average grant date fair value of $21.16.

For the year ended December 31, 2022, the three months ended December 31, 2021, and year ended September 30, 2021, the total equity-based compensation expense is $3.9 million, $0.9 million, and $6.1 million, respectively, for all periods and is included in general and administrative costs on the Company's consolidated statement of operations for the restricted share awards granted under the 2021 LTIP. At the time of the forfeiture, the Company will recognize any forfeited shares as a reduction to share-based compensation expense on the consolidated statement of operations and a decrease to shareholders' equity on the consolidated balance sheet. Any unpaid dividends on forfeited shares will be recognized as a decrease to accrued liabilities and an increase to shareholders' equity on the consolidated balance sheet. Approximately $8.3 million of additional equity-based compensation expense will be recognized over the weighted average life of 28 months for the unvested restricted share awards as of December 31, 2022 granted under the 2021 LTIP.

2018 Long-Term Incentive Plan

In connection with the Merger and in accordance with the Merger Agreement, each unvested restricted unit outstanding under the 2018 LTIP was converted into restricted shares of the Company under the 2021 LTIP. The holders of unvested restricted units issued under the 2018 LTIP were issued substitute awards under the 2021 LTIP at the closing of the Merger.

The Company granted 13,309 restricted units to executives and employees of the Company during the year ended September 30, 2021. Total unit-based compensation expense of $0.7 million is for all of the issuances outstanding during the period of January 2021 through the date of the merger, February 26, 2021. Unit-based compensation expense is included in general and administrative costs on the Company's consolidated statement of operations.