Equity

6 Months Ended

Jun. 30, 2022

Equity Distribution Agreements

Effective as of March 18, 2022, the Company (i) terminated the equity distribution agreements dated November 26, 2019, as amended March 31, 2021 and (ii) entered into separate equity distribution agreements with two sales agents to sell an aggregate sales price of up to $40,000,000 of its common stock from time-to-time in an at-the-market offering. During the three and six months ended June 30, 2022, the Company sold 137,477 and 273,756 shares for an aggregate sales price of $3,127,000 and $6,209,000 before commissions and fees of $39,087 and $83,166 respectively. During the three and six months ended June 30, 2021, the Company sold 410,221 shares for an aggregate sales price of $7,462,000 before commissions and fees of $112,000, respectively.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $0.25 per share, payable on July 8, 2022 to stockholders of record on June 30, 2022.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5% from the market price for the common stock (as such price is calculated pursuant to the DRP). The discount from the market price is currently 3%. The DRP is effective with the dividend paid on July 8, 2022.

Stock Based Compensation

During the six months ended June 30, 2022, the Company's board of directors adopted, and the stockholders' approved, the 2022 Incentive Plan (the "2022 Plan"). This plan permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of June 30, 2022, 787,531 shares are available for issuance pursuant to awards under the 2022 Plan. Awards to acquire 934,092 shares of common stock are outstanding under the 2020 Incentive Plan and the 2018 Incentive Plan (collectively the "Prior Plans") and no further awards may be made pursuant to the Prior Plans.

Restricted Stock Units

In June 2022 and 2021, the Company issued restricted stock units (the "RSUs") to acquire up to 212,469 and 210,375 shares of common stock pursuant to the 2022 Plan and the 2020 Incentive Plan, respectively. Generally, the RSUs entitle the recipients, subject to continued service through the three year vesting period to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends that would have been paid from the grant date through the vesting date with respect to the shares of common stock underlying the RSUs if, when, and to the extent, the related RSUs vest. The shares underlying the RSUs are not participating securities but are contingently issuable shares.

Expense is recognized over the applicable vesting period on the RSUs which the Company expects to vest. For the three months ended June 30, 2022 and 2021, the Company recorded $250,000 and $34,000, respectively, and for the six months ended June 30, 2022 and 2021, the Company recorded $500,000 and $71,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the RSUs issued under the 2020 Incentive Plan. At June 30, 2022 and December 31, 2021, $1,747,000 and $2,248,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

Restricted Stock

In January 2022, the Company granted 158,973 shares, of restricted stock pursuant to the 2020 Plan. As of June 30, 2022, an aggregate of 934,092 shares of unvested restricted stock are outstanding pursuant to the 2020 Incentive Plan and the 2018 Incentive Plan (the "2018 Plan"). The shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but is included in the earnings per share computation.

For the three months ended June 30, 2022 and 2021, the Company recorded $751,000 and $535,000 respectively, and for the six months ended June 30, 2022 and 2021, respectively, the Company recorded $1,475,000 and $1,036,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At June 30, 2022 and December 31, 2021, $9,231,000 and $7,332,000, respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these shares of restricted stock is 2.8 years.

Stock Buyback

On September 13, 2021, the Board of Directors approved a stock repurchase plan authorizing the Company, effective as of October 1, 2021, to repurchase up to $5,000,000 of shares of common stock through December 31, 2023. During the three and six months ended June 30, 2022, and June 30, 2021, the Company did not repurchase any shares of common stock.

Per Share Data

Basic earnings (loss) per share is determined by dividing net income (loss) applicable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. The RSUs are excluded from the basic earnings per share calculation as they are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.

In calculating diluted earnings per share, the Company includes only those shares underlying the RSUs that it anticipates will vest based on management's current estimates. The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive.

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator for basic and diluted earnings per share:
Net Income	$	35,643	$	6,060	$	47,187	$	2,329
Deduct net income attributable to non-controlling interests	(36)		(33)		(72)		(67)
Deduct earnings allocated to unvested restricted stock	(1,787)		(295)		(2,354)		(371)
Net income available for common stockholders: basic and diluted	$	33,820	$	5,732	$	44,761	$	1,891

Denominator for basic earnings per share:
Weighted average number of common shares outstanding	17,671,073		17,720,488		17,616,740		17,520,963
Effect of dilutive securities:
RSUs	55,270		—		73,861		—
Denominator for diluted earnings per share:
Weighted average number of shares	17,726,343		17,720,488		17,690,601		17,520,963

Earnings per common share, basic	$	1.91	$	0.34	$	2.54	$	0.13
Earnings per common share, diluted	$	1.91	$	0.34	$	2.53	$	0.13