NOTE 10: SHAREHOLDERS’ EQUITY

Preferred Shares

Dividends:

The following table summarizes the dividends we declared and paid on the preferred shares for the nine months ended September 30, 2017:

March 31, 2017

June 30, 2017

September 30, 2017

Series A Preferred Shares

Date declared

2/15/2017

5/18/2017

8/2/2017

Record date

3/1/2017

6/1/2017

9/1/2017

Date paid

3/31/2017

6/30/2017

10/2/2017

Total dividend amount

2,589

Series B Preferred Shares

Date declared

2/15/2017

5/18/2017

8/2/2017

Record date

3/1/2017

6/1/2017

9/1/2017

Date paid

3/31/2017

6/30/2017

10/2/2017

Total dividend amount

1,225

Series C Preferred Shares

Date declared

2/15/2017

5/18/2017

8/2/2017

Record date

3/1/2017

6/1/2017

9/1/2017

Date paid

3/31/2017

6/30/2017

10/2/2017

Total dividend amount

910

Series D Preferred Shares

Date declared

2/15/2017

5/18/2017

8/2/2017

Record date

3/1/2017

6/1/2017

9/1/2017

Date paid

3/31/2017

6/30/2017

9/29/2017

Total dividend amount

1,879

1,665

On June 22, 2017, we entered into a securities repurchase agreement whereby we agreed to repurchase and cancel 402,280 Series D preferred shares. The Series D Preferred Shares had a $1,879 total dividend declared on May 18, 2017 with a record date of June 1, 2017 which included a $214 payment on June 23, 2017 and a $1,665 payment on June 30, 2017.

On November 1, 2017, the board of trustees declared a fourth quarter 2017 cash dividend of $0.484375 per share on RAIT’s 7.75% Series A Cumulative Redeemable Preferred Shares, $0.5234375 per share on RAIT’s 8.375% Series B Cumulative Redeemable Preferred Shares, and $0.5546875 per share on RAIT’s 8.875% Series C Cumulative Redeemable Preferred Shares to holders of record as of December 1, 2017. The dividends are payable on January 2, 2018.

At Market Issuance Sales Agreement (ATM):

On June 13, 2014, we entered into an At Market Issuance Sales Agreement, or the 2014 Preferred ATM agreement, with MLV & Co. LLC, or MLV, providing that, from time to time during the term of the 2014 Preferred ATM agreement, on the terms and subject to the conditions set forth therein, we may issue and sell through MLV up to $150,000 aggregate amount of preferred shares.

With respect to each series of preferred shares, the maximum amount issuable is as follows: 4,000,000 Series A Preferred Shares, 1,000,000 Series B Preferred Shares, and 1,000,000 Series C Preferred Shares. Unless the 2014 Preferred ATM agreement is earlier terminated by MLV or us, the 2014 Preferred ATM agreement automatically terminates upon the issuance and sale of all of the Series A Preferred Shares, Series B Preferred Shares, and Series C Preferred Shares.

As of September 30, 2017, 2,724,935 Series A Preferred Shares, 947,496 Series B Preferred Shares, and 999,675 Series C Preferred Shares remain available for issuance under the 2014 Preferred ATM agreement.

Common Shares

Dividends:

During the three and nine months ended September 30, 2017, we paid $0 and $305, respectively, of dividends on restricted common share awards that vested in each respective period.

On December, 16 2016, the board of trustee declared a $0.09 dividend on our common shares to holders of record as of January 10, 2017. The dividend was paid January 31, 2017 and totaled $8,202.

On May 2, 2017, the board of trustees declared a $0.09 dividend on our common shares to holders of record as of May 26, 2017. The dividend was paid on June 15, 2017 and totaled $8,220.

On August 2, 2017, the board of trustees declared a $0.05 dividend on our common shares to holders of record as of August 25, 2017. The dividend paid on September 15, 2017 and totaled $4,574.

On November 1, 2017, the board of trustees decided to suspend the dividend on our common shares.

Equity Compensation:

On January 9, 2017, the compensation committee awarded 344,042 unvested restricted common share awards to one of our executive officers in order to satisfy the remaining portion of the 600,000 awards to be granted to the executive officer under a Binding Memorandum of Understanding dated September 26, 2016, or the MOU, contingent on the closing of the IRT internalization transaction. While a portion of the awards issued with respect to the MOU were granted on December 23, 2016 and this final portion on January 9, 2017, stock compensation expense of $2,068 related to all 600,000 awards was recorded in 2016 since the awards were authorized as of the December 20, 2016 IRT internalization transaction and no future service would be required after the grant date.

On February 14, 2017, the compensation committee awarded 332,500 unvested restricted common share awards, valued at $1,257 using our closing price of $3.78, to our non-executive officer employees. These awards vest over a three-year period.

On February 14, 2017, the compensation committee awarded 832,500 SARs, valued at $574 based on a Black-Scholes option pricing model at the date of grant, to our non-executive officer employees. The SARs vest over a three-year period and may be exercised between the date of vesting and February 14, 2022, the expiration date of the SARs.

On March 31, 2015, the compensation committee adopted a 2015 Annual Incentive Compensation Plan, or the annual cash bonus plan, setting forth the basis on which target cash bonus awards are earned. In addition, on March 31, 2015, the compensation committee adopted a 2015 Long Term Incentive Plan, or the 2015 LTIP, setting forth the basis on which the eligible officers could earn equity compensation that was directly linked to long-term performance. Pursuant to the 2015 LTIP, equity awards to eligible officers will consist of performance share unit (PSU) awards issued at the conclusion of a three-year performance period based on RAIT’s performance relative to three long-term performance metrics established by the compensation committee. See Note 13: Share-Based Compensation and Employee Benefits in the 2016 Annual Report on Form 10-K for further details regarding these awards.

On April 26, 2017, the compensation committee made 2017 awards, or the 2017 awards, to the eligible executives pursuant to the annual cash bonus plan and the LTIP. The grant date for three of the eligible executives was April 26, 2017 and the grant date for the other eligible executive was June 22, 2017 for the 2017 awards. The LTIP awards consist of both a performance share unit award for a three year performance period commencing January 1, 2017 and ending December 31, 2019 and an annual restricted share award vesting over a four year period. Two components of the performance share unit award have market conditions and had April 26, 2017 grant date fair values of $1.18 and $0.90 per share and had June 22, 2017 grant date fair values of $0.23 and $0.15 per share.

On June 28, 2017, the compensation committee awarded 186,912 unvested common share awards, valued at $400 using our closing stock price of $2.14, to the board’s non-management trustees, excluding the board’s chairman. These awards vest on December 31, 2017.

On June 28, 2017, the compensation committee awarded 70,093 common share awards, valued at $150 using our closing stock price of $2.14, to the board’s chairman. One-half of these awards vest immediately and one-half vest on December 31, 2017.

During the three and nine months ended September 30, 2017, we recorded $779 and $1,833 of stock compensation expense.

Dividend Reinvestment and Share Purchase Plan (DRSPP):

We have a dividend reinvestment and share purchase plan, or DRSPP, under which we registered and reserved for issuance, in the aggregate, 10,500,000 common shares. During the nine months ended September 30, 2017, we issued a total of 13,317 common shares pursuant to the DRSPP at a weighted-average price of $1.54 per share and we received $21 of net proceeds. As of September 30, 2017, 7,739,162 common shares, in the aggregate, remain available for issuance under the DRSPP.

Capital on Demand™ Sales Agreement (COD):

On November 21, 2012, we entered into a Capital on Demand™ Sales Agreement, or the COD sales agreement, with JonesTrading Institutional Services LLC, or JonesTrading, pursuant to which we may issue and sell up to 10,000,000 of our common shares from time to time through JonesTrading acting as agent and/or principal, subject to the terms and conditions of the COD sales agreement. Unless the COD sales agreement is earlier terminated by JonesTrading or us, the COD sales agreement automatically terminates upon the issuance and sale of all of the common shares subject to the COD sales agreement. During the nine months ended September 30, 2017, we did not issue any common shares pursuant to this agreement. As of September 30, 2017, 7,918,919 common shares, in the aggregate, remain available for issuance under the COD sales agreement.

Shareholders’ Equity Attributable to Common Shares:

As of September 30, 2017, total shareholders’ equity attributable to common shares was a deficit of $53,130.

Non-Controlling Interests

RAIT Venture VIE:

During the nine months ended September 30, 2017, the 2016 RAIT Venture VIE, which elected to be taxed as a REIT and that was formed in 2016 to hold the less than investment grade classes of notes of FL-5, issued 125 Series A Preferred Shares at a public offering. The price was $1,000 per share and the 2016 RAIT Venture VIE received $66 of net proceeds. During the three and nine months ended September 30, 2017, we paid $0 and $8 of dividends on preferred shares. Refer to Note 2: Summary of Significant Accounting Policies, (p) Income Taxes, and Note 5: Indebtedness for further discussion about this entity.

Deconsolidation of South Terrace:

On June 30, 2017, we sold our membership interest in South Terrace, a multifamily real estate property, to a subsidiary of IRT for $42,950 of cash and limited partnership units. The limited partnership units, which had a value of $1,654, were issued to our previous non-controlling interest holders in South Terrace. This transaction resulted in the distribution of $1,618 of our non-controlling interests. Refer to Note 12: Related Party Transactions for further discussion.