EQUITY

6 Months Ended

Jun. 30, 2022

EQUITY

EQUITY

NOTE 11. EQUITY 

SHELF REGISTRATION

On December 1, 2020, the Company filed a shelf registration statement on Form S-3, relating to the registration and potential issuance of its common stock, preferred stock, warrants, rights, and units with a maximum aggregate offering price of up to $350.0 million. The Securities and Exchange Commission declared the Form S-3 effective on December 11, 2020.

ATM PROGRAM

On December 14, 2020, the Company implemented a $100.0 million “at-the-market” equity offering program (the “2020 ATM Program”) pursuant to which the Company may sell, from time to time, shares of the Company’s common stock. During the three months ended June 30, 2022, the Company sold 87,112 shares under the 2020 ATM Program for gross proceeds of $1.7 million at a weighted average price of $19.09 per share, generating net proceeds of $1.6 million after deducting transaction fees totaling $0.02 million. During the six months ended June 30, 2022, the Company sold 401,783 shares under the 2020 ATM Program for gross proceeds of $7.8 million at a weighted average price of $19.53 per share, generating net proceeds of $7.7 million after deducting transaction fees totaling $0.1 million. During the three months ended June 30, 2021, the Company sold 176,028 shares under the 2020 ATM Program for gross proceeds of $3.2 million at a weighted average price of $18.06 per share, generating net proceeds of $3.1 million after deducting transaction fees totaling $0.05 million. During the six months ended June 30, 2021, the Company sold 610,229 shares under the 2020 ATM Program for gross proceeds of $11.1 million at a weighted average price of $18.19 per share, generating net proceeds of $10.9 million after deducting transaction fees totaling $0.2 million.

FOLLOW-ON PUBLIC OFFERING

In June 2021, the Company completed a follow-on public offering of 3,220,000 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 420,000 shares of common stock. Upon closing, the Company issued 3,220,000 shares and received net proceeds of $54.3 million, after deducting the underwriting discount and expenses.

NONCONTROLLING INTEREST

As of June 30, 2022, CTO holds, directly and indirectly, a 9.1% noncontrolling ownership interest in the Operating Partnership as a result of 1,223,854 OP Units issued to CTO at the time of the Company’s Formation Transactions, as further described in Note 1, “Business and Organization.” An additional 3.5% noncontrolling ownership interest is held by an unrelated third party in connection with the issuance of 479,640 OP Units valued at $9.0 million in the aggregate, or $18.85 per unit. The issuance of 479,640 OP Units includes (i) 424,951 OP Units issued as consideration for the portfolio of nine net lease properties acquired on June 30, 2021 and (ii) 54,689 OP Units issued as consideration for the acquisition of one net lease property on July 12, 2021.

DIVIDENDS

The Company has elected to be taxed as a REIT for U.S. federal income tax purposes under the Code. To qualify as a REIT, the Company must annually distribute, at a minimum, an amount equal to 90% of its taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, and must distribute 100% of its taxable income (including net capital gains) to eliminate corporate federal income taxes payable by the Company. Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and other items), in certain circumstances, the Company may generate operating cash flow in excess of its dividends, or alternatively, may need to make dividend payments in excess of operating cash flows. During the three months ended June 30, 2022 and 2021, the Company declared and paid cash dividends on its common stock and OP Units of $0.27 per share and $0.25 per share, respectively. During the six months ended June 30, 2022 and 2021, the Company declared and paid cash dividends on its common stock and OP Units of $0.54 per share and $0.49 per share, respectively.