Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 12 – Stockholders’ Equity

Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders, less dividends on restricted stock expected to vest plus gains on redemptions on common stock, by the weighted average number of common shares outstanding for the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the sum of the weighted average number of common shares outstanding and any potential dilutive shares for the period.  Net income (loss) attributable to common stockholders is computed by adjusting net income (loss) for the non-forfeitable dividends paid on non-vested restricted stock.

The Company considers the requirements of the two-class method when preparing earnings per share. Earnings per share is not affected by the two-class method because the Company’s Class A, B-1, B-2 and B-3 common stock and LTIP Units participate in dividends on a one-for-one basis.

The following table reconciles the components of basic and diluted net loss per common share (amounts in thousands, except share and per share amounts):

	For the Year Ended December 31,
	2015		2014
Net income (loss) from continuing operations attributable to common stockholders	$	635	$	(5,288)
Dividends on restricted stock expected to vest		(16)		(7)
Basic net income (loss) from continuing operations attributable to common stockholders	$	619	$	(5,295)
Basic net income from discontinued operations attributable to common stockholders	$	—	$	116
Weighted average common shares outstanding (1)		17,404,348		5,381,787
Potential dilutive shares (2)		12,850		-
Weighted average common shares outstanding and potential dilutive shares (3)		17,417,198		5,381,787
Income (loss) per common share, basic
Continuing operations	$	0.04	$	(0.98)
Discontinued operations	$	0.00	$	0.02
	$	0.04	$	(0.96)
Income (loss) per common share, diluted
Continuing operations	$	0.04	$	(0.98)
Discontinued operations	$	0.00	$	0.02
	$	0.04	$	(0.96)

The number of shares and per share amounts for the prior period have been retroactively restated to reflect the two reverse stock splits of the Class B common stock discussed below.

The effect of the conversion of OP Units is not reflected in the computation of basic and diluted earnings per share, as they are exchangeable for Class A Common Stock on a one-for-one basis. The income allocable to such units is allocated on this same basis and reflected as noncontrolling interests in the accompanying consolidated financial statements. As such, the assumed conversion of these units would have no net impact on the determination of diluted earnings per share.

⁽¹⁾ For 2015 and 2014, amounts relate to shares of the Company’s Class A, B-1, B-2, B-3 common stock and LTIP Units outstanding.

⁽²⁾ Excludes 5,280 shares of Class B common stock and 212,263 OP Units for the year ended December 31, 2014 related to non-vested restricted stock and OP Units, as the effect would be anti-dilutive.

⁽³⁾ For 2015 and 2014, amounts relate to shares of the Company’s Class A, B-1, B-2, B-3 common stock and LTIP Units outstanding.

Class B Common Stock

The Company raised capital in a continuous registered offering, carried out in a manner consistent with offerings of non-listed REITs, from its inception until September 9, 2013, when it terminated the continuous registered offering in connection with the Board’s consideration of strategic alternatives to maximize value to the Company’s stockholders. Through September 9, 2013, the Company had raised an aggregate of $22.6 million in gross proceeds through its continuous registered offering, including its distribution reinvestment plan.

 

On January 23, 2014, the Company's stockholders approved the second articles of amendment and restatement to the Company’s charter, (“Second Charter Amendment”), that provided, among other things, for the designation of a new share class of Class A common stock, and for the change of each existing outstanding share of its common stock into:

• 1/3 of a share of our Class B-1 common stock; plus

• 1/3 of a share of our Class B-2 common stock; plus

• 1/3 of a share of our Class B-3 common stock.

This transaction was effective upon filing the Second Charter Amendment with the State Department of Assessments and Taxation of the State of Maryland on March 26, 2014. Immediately following the filing of the Second Charter Amendment, the Company effectuated a 2.264881 to 1 reverse stock split of its outstanding shares of Class B-1 common stock, Class B-2 common stock and Class B-3 common stock, and on March 31, 2014, the Company effected an additional 1.0045878 to 1 reverse stock split of its outstanding shares of Class B-1 common stock, Class B-2 common stock and Class B-3 common stock.

The Company refers to Class B-1 common stock, Class B-2 common stock and Class B-3 common stock collectively as “Class B” common stock. The Company listed its Class A common stock on the NYSE MKT on March 28, 2014. The Class B common stock is identical to the Class A common stock, except that (i) the Company does not intend to list the Class B common stock on a national securities exchange, and (ii) shares of the Class B common stock will convert automatically into shares of Class A common stock at specified times, as follows:

• March 23, 2015, in the case of the Class B-1 common stock;

• September 19, 2015, in the case of the Class B-2 common stock; and

• March 17, 2016, in the case of the Class B-3 common stock.

On March 23, 2015, 353,630 shares of Class B-1 common stock converted into Class A common stock and on September 19, 2015, 353,630 shares of Class B-2 common stock converted into Class A common stock in accordance with the above. No Class B-1 or Class B-2 common stock remains outstanding.

 

Follow-On Equity Offerings

On January 20, 2015, the Company closed its January 2015 Follow-On Offering of 4,600,000 shares of its Class A common stock, par value $0.01 per share, inclusive of shares sold pursuant to the full exercise of the overallotment option by the underwriters. The shares were registered with the SEC pursuant to a registration statement on Form S-3 (File No. 333-200359) filed with the SEC on November 19, 2014 and declared effective on December 19, 2014. The public offering price of $12.50 per share was announced on January 14, 2015. Net proceeds of the January 2015 Follow-On Offering were approximately $53.7 million after deducting underwriting discounts and commissions and estimated offering expenses.

 

On May 22, 2015, the Company completed an underwritten shelf takedown offering (the “May 2015 Follow-On Offering”) of 6,348,000 shares of Class A common stock, par value $0.01 per share, inclusive of shares sold pursuant to the full exercise of the overallotment option by the underwriters. The shares were registered with the SEC pursuant to a registration statement on Form S-3 (File No. 333-200359) filed with the SEC on November 19, 2014 and declared effective on December 19, 2014. The public offering price of $13.00 per share was announced on May 19, 2015. Net proceeds of the May 2015 Follow-On Offering were approximately $77.6 million after deducting underwriting discounts and commissions and offering costs.

 

On October 21, 2015, the Company completed an underwritten shelf takedown offering (the “October 2015 Preferred Stock Offering”) of 2,875,000 shares of 8.250% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share, liquidation preference $25.00 per share, inclusive of shares sold pursuant to the full exercise of the overallotment option by the underwriters. The shares were registered with the SEC pursuant to a registration statement on Form S-3 (File No. 333-200359) filed with the SEC on November 19, 2014 and declared effective on December 19, 2014. The public offering price of $25.00 per share was announced on October 16, 2015. Net proceeds of the October 2015 Preferred Stock Offering were approximately $69.2 million after deducting underwriting discounts and commissions and estimated offering costs.

On December 17, 2015, the Company filed a prospectus supplement to the December 2014 Shelf Registration Statement offering a maximum of 150,000 Units (the “Original Units”) consisting of 150,000 shares of Series B redeemable preferred stock (the “Original Series B Preferred Stock”) and warrants (the “Original Warrants”) to purchase 3,000,000 shares of Class A common stock (liquidation preference $1,000 per share of Original Series B Preferred Stock). As of December 31, 2015, we were continuing to organize our sales activities for the Original Series B Preferred Stock and no Original Units had been sold.

Operating Partnership and Long-Term Incentive Plan Units

On April 2, 2014, concurrently with the completion of the IPO, the Company entered into the Second Amended and Restated Agreement of Limited Partnership of its Operating Partnership, Bluerock Residential Holdings, L.P. Pursuant to the amendment, the Company is the sole general partner of the Operating Partnership and may not be removed as general partner by the limited partners with or without cause. The limited partners of the Operating Partnership include Bluerock REIT Holdings, LLC, BR-NPT Springing Entity, LLC (“NPT”), Bluerock Property Management, LLC (“BPM”), our Manager and Bluerock Multifamily Advisor, LLC (“Former Advisor”), all of which are affiliates of the Company.

Prior to the completion of the IPO, the Company owned, directly and indirectly, 100% of the limited partnership units in the Operating Partnership. Effective as of the completion of the IPO, limited partners other than the Company owned approximately 9.87% of the Operating Partnership (282,759 OP Units, or 4.59%, were held by OP Unit holders, and 325,578 LTIP Units, or 5.28%, were held by LTIP Unit holders.) As of December 31, 2015, limited partners other than the Company owned approximately 5.95% of the Operating Partnership (305,568 OP Units, or 1.47%, is held by OP Unit holders, and 932,394 LTIP Units, or 4.48%, is held by LTIP Unit holders.)

 

The Partnership Agreement, as amended, provides, among other things, that the Operating Partnership initially has two classes of limited partnership interests, which are units of limited partnership interest (“OP Units”), and the Operating Partnership’s long-term incentive plan units (“LTIP Units”). In calculating the percentage interests of the partners in the Operating Partnership, LTIP Units are treated as OP Units. In general, LTIP Units will receive the same per-unit distributions as the OP Units. Initially, each LTIP Unit will have a capital account balance of zero and, therefore, will not have full parity with OP Units with respect to any liquidating distributions. However, the Partnership Agreement, as amended provides that “book gain,” or economic appreciation, in the Company’s assets realized by the Operating Partnership as a result of the actual sale of all or substantially all of the Operating Partnership’s assets, or the revaluation of the Operating Partnership’s assets as provided by applicable U.S. Department of Treasury regulations, will be allocated first to the holders of LTIP Units until their capital account per unit is equal to the average capital account per-unit of the Company’s OP Unit holders in the Operating Partnership. We expect that the Operating Partnership will issue OP Units to limited partners, and the Company, in exchange for capital contributions of cash or property, and will issue LTIP Units pursuant to the Company’s 2014 Equity Incentive Plan for Individuals and 2014 Equity Incentive Plan for Entities (collectively the “Incentive Plans”), to persons who provide services to the Company, including the Company’s officers, directors and employees.

Pursuant to the Partnership Agreement, as amended, any holders of OP Units, other than the Company or its subsidiaries, will receive redemption rights which, subject to certain restrictions and limitations, will enable them to cause the Operating Partnership to redeem their OP Units in exchange for cash or, at the Company’s option, shares of the Company’s Class A common stock, on a one-for-one basis. The Company has agreed to file, not earlier than one year after the closing of the IPO, one or more registration statements registering the issuance or resale of shares of its Class A common stock issuable upon redemption of the OP Units, including those issued upon conversion of LTIP Units to the Manager and the Former Advisor. Subject to certain exceptions, the Operating Partnership will pay all expenses in connection with the exercise of registration rights under the Partnership Agreement. Subsequent to December 31, 2015, the Company has filed a registration statement to provide for their issuance or resale.

Equity Incentive Plans

Prior to the Company’s IPO on April 2, 2014, the Company’s independent directors received an automatic grant of 5,000 shares of restricted stock on the initial effective date of the continuous registered offering and received an automatic grant of 2,500 shares of restricted stock when such directors were re-elected at each annual meeting of the Company’s stockholders thereafter through the 2013 annual meeting held on August 5, 2013. The restricted stock vested 20% at the time of the grant and 20% on each anniversary thereafter over four years from the date of the grant. All shares of restricted stock granted to the independent directors receive distributions, whether vested or unvested. The value of the restricted stock granted was determined at the date of grant. Commencing with the Company’s IPO, the Directors will no longer receive automatic grants upon appointment or reelection at each annual meeting of the Company’s stockholders.

On March 24, 2015, in accordance with the Company’s 2014 Equity Incentive Plan for Individuals (the “2014 Individuals Plan”), the Board authorized and each of the Company’s independent directors received two grants of 2,500 restricted shares of the Company’s Class A common stock. The first grant of 2,500 restricted shares related to services rendered in 2014 (each, a “2014 Restricted Stock Award”), while the second grant of 2,500 restricted shares relates to services rendered or to be rendered in 2015 (each, a “2015 Restricted Stock Award”). The vesting schedule for each 2014 Restricted Stock Award is as follows: (i) 834 shares as of March 24, 2015, (ii) 833 shares on March 24, 2016, and (iii) 833 shares on March 24, 2017. The vesting schedule for each 2015 Restricted Stock Award is as follows: (i) 834 shares as of March 24, 2016, (ii) 833 shares on March 24, 2017, and (iii) 833 shares on March 24, 2018. 

 

On May 28, 2015, the Company’s stockholders approved the amendment and restatement of the 2014 Individuals Plan, (the “Amended Individuals Plan), and the 2014 Entities Plan, (the “Amended Entities Plan” and together with the Amended Individuals Plan, the “Amended 2014 Incentive Plans”). The Amended 2014 Incentive Plans allow for the issuance of up to 475,000 shares of Class A common stock. The Amended 2014 Incentive Plans provide for the grant of options to purchase shares of the Company’s common stock, stock awards, stock appreciation rights, performance units, incentive awards and other equity-based awards.

 

A summary of the status of the Company’s non-vested shares as of December 31, 2015, and 2014, is as follows (dollars in thousands): 

Non-Vested shares	Shares  (1)		Weighted average grant-date fair value  (1)
Balance at January 1, 2014		6,593	$	150
Granted		—		—
Vested		(2,637)		(60)
Forfeited		—		—
Balance at December 31, 2014		3,956		90
Granted		15,000		197
Vested		(4,480)		(78)
Forfeited		—		—
Balance at December 31, 2015		14,476	$	209

⁽¹⁾ The number of shares and per share amounts for the prior period have been retroactively restated to reflect the two reverse stock splits of the Class B common stock discussed above.

At December 31, 2015, there was $142,000 of total unrecognized compensation cost related to unvested restricted stocks granted under the independent director compensation plan. The original cost is expected to be recognized over a period of 2.2 years.

 

The Company currently uses authorized and unissued shares to satisfy share award grants.

Equity Incentive Plans - LTIP Grants

On July 2, 2015, the Company issued a grant of LTIP Units under the Amended 2014 Incentive Plans to the Manager. The equity grant consisted of 283,390 LTIP Units. The LTIP Units will vest ratably over a three year period that began in July 2015, subject to certain terms and conditions. The LTIP Units may be convertible into OP Units under certain conditions and then may be settled in shares of the Company’s Class A common stock. The LTIP Units provide for the payment of distribution equivalents at the same time distributions are paid to holders of the Company’s Class A common stock. LTIP expense of $1.0 million was recorded as part of general and administrative expenses for the year ended December 31, 2015, related to these LTIP Units. The expense recognized during 2015 was based on a price of $11.85 per LTIP Unit, which represents the closing share price for the Company’s Class A common stock on December 31, 2015. 

Distributions

On December 27, 2013, the Board authorized, and the Company declared, distributions on its common stock for the month of January 2014 at a rate of $0.05945211 per share to stockholders of record at the close of business on January 31, 2014. Distributions payable to each stockholder of record were paid in cash on February 3, 2014.

On March 13, 2014, the Board authorized, and the Company declared, distributions on its common stock for the month of February 2014 at a rate of $0.05369868 per share for stockholders of record at the end of business on February 28, 2014. Distributions payable to each stockholder of record were paid in cash on or before the 15th day of the following month.

On April 8, 2014, the Board declared monthly dividends for the second quarter of 2014 equal to a quarterly rate of $0.29 per share on both the Company’s Class A common stock and Class B common stock, payable to the stockholders of record as of April 25, 2014, May 25, 2014 and June 25, 2014, which were paid in cash on May 5, 2014, June 5, 2014 and July 5, 2014, respectively.

The declared dividends equal a monthly dividend on the Class A common stock and Class B common stock as follows: $0.096666 per share for the distributions paid to stockholders of record as of April 25, 2014, and $0.096667 per share for the distributions paid to stockholders of record as of May 25, 2014 and June 25, 2014.

On July 10, 2014, the Board declared monthly dividends for the third quarter of 2014 equal to a quarterly rate of $0.29 per share on both the Company’s Class A common stock and Class B common stock, payable to the stockholders of record as of July 25, 2014, August 25, 2014 and September 25, 2014, which were paid in cash on August 5, 2014, September 5, 2014 and October 5, 2014, respectively. 

On October 10, 2014, the Board declared monthly dividends for the fourth quarter of 2014 equal to a quarterly rate of $0.29 per share on both the Company’s Class A common stock and Class B common stock, payable to the stockholders of record as of October 25, 2014, November 25, 2014 and December 25, 2014, which was paid in cash on November 5, 2014, December 5, 2014 and January 5, 2015, respectively. 

The declared dividends equal a monthly dividend on the Class A common stock and Class B common stock as follows: $0.096666 per share for the dividend paid to stockholders of record as of October 25, 2014, and $0.096667 per share for the dividend paid to stockholders of record as of November 25, 2014, and December 25, 2014.

 

On January 9, 2015, the Board declared monthly dividends for the first quarter of 2015 equal to a quarterly rate of $0.29 per share on both the Company’s Class A common stock and Class B common stock, payable monthly to the stockholders of record as of January 25, 2015, February 25, 2015 and March 25, 2015, which was paid in cash on February 5, 2015, March 5, 2015 and April 5, 2015, respectively. 

The declared dividends equal a monthly dividend on the Class A common stock and Class B common stock as follows: $0.096666 per share for the dividend paid to stockholders of record as of January 25, 2015, and $0.096667 per share for the dividend paid to stockholders of record as of February 25, 2015, and March 25, 2015.

On April 10, 2015, the Board declared monthly dividends for the second quarter of 2015 equal to a quarterly rate of $0.29 per share on both the Company’s Class A common stock and Class B common stock, payable monthly to the stockholders of record as of April 25, 2015, May 25, 2015 and June 25, 2015, which was paid in cash on May 5, 2015, June 5, 2015 and July 2, 2015, respectively. 

The declared dividends equal a monthly dividend on the Class A common stock and Class B common stock as follows: $0.096666 per share for the dividend paid to stockholders of record as of April 25, 2015, and $0.096667 per share for the dividend paid to stockholders of record as of May 25, 2015, and June 25, 2015.

On July 10, 2015, the Board declared monthly dividends for the third quarter of 2015 equal to a quarterly rate of $0.29 per share on both the Company’s Class A common stock and Class B common stock, payable monthly to the stockholders of record as of July 25, 2015, August 25, 2015 and September 25, 2015, which was paid in cash on August 5, 2015, September 4, 2015 and October 5, 2015, respectively. 

The declared dividends equal a monthly dividend on the Class A common stock and Class B common stock as follows: $0.096667 per share for the dividend paid to stockholders of record as of July 25, 2015, and as of August 25, 2015, and $0.096666 per share for the dividend paid to stockholders of record as of September 25, 2015.

 

On October 7, 2015, the Board declared monthly dividends for the fourth quarter of 2015 equal to a quarterly rate of $0.29 per share on both the Company’s Class A common stock and Class B common stock, payable monthly to the stockholders of record as of October 25, 2015, November 25, 2015 and December 25, 2015, which was paid in cash on November 5, 2015, December 4, 2015 and January 5, 2016, respectively. 

The declared dividends equal a monthly dividend on the Class A common stock and Class B common stock as follows: $0.096666 per share for the dividend paid to stockholders of record as of October 25, 2015, and $0.096667 per share for the dividend paid to stockholders of record as of November 25, 2015 and December 25, 2015.

On December 14, 2015, the Board declared a dividend for the fourth quarter of 2015 equal to $0.4010 per share of Series A Preferred Stock for shareholders of record as of December 24, 2015, which was paid in cash on January 5, 2016.

A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that the Company will continue to declare dividends or at this rate.

Holders of OP and LTIP Units are entitled to receive "distribution equivalents" at the same time as dividends are paid to holders of the Company's Class A common stock.

The Company has a dividend reinvestment plan that allows for participating stockholders to have their dividend distributions automatically invested in additional Class A common shares based on the average price of the shares on the investment date. The Company plans to issue Class A common shares to cover shares required for investment.

Distributions paid for the year ended December 31, 2015 were as follows (amounts in thousands):

	Distributions
2015	Declared		Paid
First Quarter
Class A Common Stock	$	3,554	$	3,073
Class B-1 Common Stock		68		103
Class B-2 Common Stock		103		103
Class B-3 Common Stock		103		103
OP Units		82		82
LTIP Units		96		96
Total first quarter	$	4,006	$	3,560
Second Quarter
Class A Common Stock	$	4,852	$	4,236
Class B-2 Common Stock		103		103
Class B-3 Common Stock		103		103
OP Units		82		82
LTIP Units		110		104
Total second quarter	$	5,250	$	4,628
Third Quarter
Class A Common Stock	$	5,500	$	5,465
Class B-2 Common Stock		68		103
Class B-3 Common Stock		103		103
OP Units		82		82
LTIP Units		221		178
Total third quarter	$	5,974	$	5,931
Fourth Quarter
Class A Common Stock	$	5,568	$	5,568
Class B-3 Common Stock		103		103
Series A Preferred Stock		1,153		-
OP Units		84		82
LTIP Units		263		255
Total fourth quarter	$	7,171	$	6,008
Total year	$	22,401	$	20,127