Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
 3 Months Ended
Mar. 31, 2014
Equity [Abstract]  
Stockholders' Equity

NOTE 6. STOCKHOLDERS’ EQUITY

The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2014:

 

     Common Stock             Distributions
in Excess of
Earnings 		    Total
Stockholders’
Equity 		 
     Number
of Shares 		     Par Value      Additional
Paid-in Capital		       

Balance at December 31, 2013

      6,530,264       $ 6,530       $ 51,326,262       $ (2,820,800 )    $ 48,511,992   

Net income

      —           —           —           20,918        20,918   

Distributions

      —           —           —           (587,724 )      (587,724 ) 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Balance at March 31, 2014

      6,530,264       $ 6,530       $ 51,326,262       $ (3,387,606 )    $ 47,945,186   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

2013 Initial Public Offering

On January 28, 2013, we priced our initial public offering (“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. Including the underwriters’ option to cover over-allotments, which was exercised on February 19, 2013, we issued a total of 3,780,264 shares, resulting in gross proceeds of $56.7 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $51.3 million. As of March 31, 2014, $37.9 million of these proceeds have been invested in new property acquisitions, and an additional $1.7 million has been expended or accrued for capital improvements on existing properties. In addition, as of March 31, 2014, $10.3 million has been used to pay distributions to our stockholders, and a portion was used for other general corporate purposes. As of March 31, 2014, there were no significant uninvested proceeds remaining from our IPO.

 

Distributions

Our Board of Directors declared and paid the following monthly distributions to common stockholders during the three months ended March 31, 2014 and 2013:

 

For the Three Months

Ended March 31,

    Distributions per
Common Share		  

2014

    $ 0.09   

2013

      0.08   

A portion of the distributions paid during the three months ended March 31, 2013, related to the $9.6 million of accumulated earnings and profits from prior years we had to pay out by the end of the year for which we elect to be taxed as a REIT, as explained further below. We will provide information related to the federal income tax characterization of our 2014 distributions in an IRS Form 1099-DIV, which will be issued to our stockholders in January 2015.

Registration Statement

We filed a registration statement on Form S-3 (File No. 333-194539) with the SEC on March 13, 2014, which the SEC declared effective on April 2, 2014. The registration statement permits us to issue up to an aggregate of $300.0 million in securities, consisting of common stock, senior common stock, preferred stock, subscription rights, debt securities and warrants to purchase common stock, including through a combined offering of two or more of such securities.

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 when we file our 2013 federal income tax return later this year. 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 prior years.

The amount of accumulated earnings and profits of $9.6 million from prior years included approximately $4.0 million of earnings and profits associated with deferred intercompany gains, described elsewhere in this Form 10-Q, that, upon our expected REIT election later this year, we will recognize effective as of December 31, 2012, for federal income tax purposes. Accordingly, the resulting federal income tax from such gain recognition will be due at the time of our expected REIT election later this year.