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Stockholders' Equity
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Dec. 31, 2013
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| Stockholders' Equity |
NOTE 6. STOCKHOLDERS’ EQUITY Initial Public Offering On January 28, 2013, we priced our IPO of 3,333,334 shares of our common stock at a public offering price of $15.00 per share, which closed on January 31, 2013. Gross proceeds totaled $50.0 million, and net proceeds, after deducting underwriting discounts and offering expenses borne by us, were approximately $45.1 million. In connection with the offering, the underwriters exercised their option to purchase an additional 446,930 shares at the IPO price to cover over-allotments, which resulted in additional gross proceeds of $6.7 million and net proceeds, after deducting underwriting discounts, of $6.2 million. As of December 31, 2013, $37.9 million of these proceeds have been invested in new property acquisitions, and an additional $1.1 million has been expended or accrued for capital improvements on existing properties. In addition, a portion of the proceeds were also used to pay distributions to our stockholders, as well as for other general corporate purposes.
Distributions Our Board of Directors declared and paid the following distributions to common stockholders during the years ended December 31, 2013, 2012 and 2011:
During the year ended December 31, 2013, we paid distributions to stockholders of $9.7 million, a portion of which relates to the $9.6 million of accumulated earnings and profits from prior years that must be paid out by the end of the first year in which we elect to be taxed as a REIT, which we intend to be our taxable year ended December 31, 2013. For federal income tax characterization purposes, distributions paid to stockholders may be characterized as ordinary income, capital gains, return of capital or a combination thereof. For the year ended December 31, 2013, 100% of the distributions will be taxable as ordinary income; however, the portion relating to the purge of prior-year accumulated earnings and profits will be taxed at the reduced Qualified Dividend rates. For the year ended December 31, 2013, 98.53746% of the distributions will be classified as a Qualified Dividend. No distributions were declared or paid during the year ended December 31, 2012. For the year ended December 31, 2011, 100% of the distributions were characterized as ordinary income. REIT Election and Accumulated Earnings and Profits We intend to elect to be taxed as a REIT for federal income tax purposes for the year ended December 31, 2013, which election will be made in connection with the filing of our 2013 federal income tax return. To qualify as a REIT for 2013, we were required to distribute our non-REIT accumulated earnings and profits by December 31, 2013. We believe that our non-REIT accumulated earnings and profits were approximately $9.6 million as of December 31, 2013, before taking into account any stockholder distributions during 2013. By paying out $9.7 million in distributions to stockholders during 2013, we believe that we have fully distributed all accumulated earnings and profits from all prior years. The amount of accumulated earnings and profits from prior years of $9.6 million includes approximately $4.0 million of net earnings and profits associated with a deferred intercompany gain resulting from land transfers, described elsewhere in this Form 10-K, that, for federal income tax purposes, will be triggered and become due immediately prior to the beginning of the initial taxable year for which we elect to be taxed as a REIT (i.e., January 1, 2013). |
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