The Company’s charter authorizes the issuance of 10,000 shares of preferred stock, par value $0.001 per share. As of December 31, 2018 and 2017, there were 3,105 shares issued and outstanding.

 

On September 15, 2017, the Company closed on the issuance of 3,105 shares of its Series A Cumulative Redeemable Preferred Stock, $0.001 par value per share, with an initial liquidation preference of $25 per share (“Series A Preferred Stock”), inclusive of 405 shares issued in connection with the underwriters’ exercise of their over-allotment option. The Company may, at its option, redeem the Series A Preferred Stock for cash in whole or in part, from time to time, at any time on or after September 15, 2022, at a cash redemption price of $25 per share. The Series A Preferred Stock has no voting rights, except for limited voting rights if the Company fails to pay dividends for six quarterly periods. The issuance resulted in aggregate gross proceeds of $77,625. After deducting underwriting discounts and advisory fees of $2,445, and expenses paid by the Company that were directly attributable to the offering of $221 (which are both treated as a reduction of the “Preferred Stock” balance on the accompanying Consolidated Balance Sheets), the Company’s preferred stock balance as of December 31, 2018 and 2017 was $74,959. The net proceeds received from the transaction were primarily used to repay borrowings on the Company’s Revolving Credit Facility. The Company assessed the characteristics of the Series A Preferred Stock in accordance with the provisions of ASC Topic 480 – “Distinguishing Liabilities from Equity,” and concluded that the Series A Preferred Stock be classified as permanent equity.

 

Dividend activity on our preferred stock during the years ended December 31, 2018 and 2017 is summarized in the following table:

 

 

 

The holders of the Series A Preferred Stock are entitled to receive dividend payments only when, as and if declared by the Board (or a duly authorized committee of the Board). Dividends will accrue or be payable in cash from the original issue date, on a cumulative basis, quarterly in arrears on each dividend payment date at a fixed rate per annum equal to 7.50% of the liquidation preference of $25 per share (equivalent to $1.875 per share on an annual basis). Dividends on the Series A Preferred Stock will be cumulative and will accrue whether or not (i) funds are legally available for the payment of those dividends, (ii) the Company has earnings or (iii) those dividends are declared by the Board. The quarterly dividend payment dates on the Series A Preferred Stock are January 31, April 30, July 31 and October 31 of each year, which commenced on October 31, 2017. During the years ended December 31, 2018 and 2017, the Company paid preferred dividends of $5,821 and $745, respectively.

The Company has 500,000 of authorized shares of common stock, $0.001 par value. As of December 31, 2018 and 2017, there were 25,944 and 21,631 outstanding shares of common stock, respectively.

 

The Company is authorized to issue 1,000 shares of common stock to stockholders under its Dividend Reinvestment and Stock Purchase Plan. As of December 31, 2018, the Company had not issued any shares under the plan.

Since January 1, 2017, our Board has declared cash dividends on our common stock as summarized in the following table:

 

 

 

During the year ended December 31, 2018, the Company paid total dividends on its common stock, LTIP Units and OP Units in the amount of $18,918, consisting of the dividends declared for the fourth quarter of 2017 through the third quarter of 2018. Additionally, during the year ended December 31, 2017, the Company paid total dividends on its common stock, LTIP Units and OP Units in the amount of $15,231, consisting of the dividends declared for the fourth quarter of 2016 through the third quarter of 2017.

 

As of December 31, 2018 and 2017, the Company had an accrued dividend balance of $316 and $117 for dividends payable on the aggregate annual and long-term LTIP Units that are subject to retroactive receipt of dividends on the amount of LTIP Units ultimately earned. During the year ended December 31, 2018, $245 of dividends were accrued and $46 of dividends were paid related to these units. During the year ended December 31, 2017, $117 of dividends were accrued and no dividends related to these units were paid.

 

The amount of the dividends paid to the Company’s stockholders is determined by the Company’s Board and is dependent on a number of factors, including funds available for payment of dividends, the Company’s financial condition and capital expenditure requirements except that, in accordance with the Company’s organizational documents and Maryland law, the Company may not make dividend distributions that would: (i) cause it to be unable to pay its debts as they become due in the usual course of business; (ii) cause its total assets to be less than the sum of its total liabilities plus senior liquidation preferences; or (iii) jeopardize its ability to maintain its qualification as a REIT.

 

On December 14, 2018, the Company closed an underwritten public offering of its common stock and on December 26, 2018 the Company closed on part of the over-allotment option granted to the underwriters. These transactions resulted in an aggregate of 3,651 shares of the Company’s common stock being issued at a public offering price of $9.00 per share, resulting in aggregate gross proceeds of $32,863. After deducting underwriting discounts and advisory fees of $1,149, and expenses paid by the Company that were directly attributable to the offering of $174 (both of which are treated as a reduction of the Company’s additional paid-in capital balance), the Company received net proceeds from the transactions of $31,540. The Company incurred an additional $53 of costs that were netted against additional paid-in capital that was unpaid and accrued at December 31, 2018.

 

On August 17, 2018, the Company, its Advisor, and the Operating Partnership entered into a Sales Agreement with a number of financial institutions, pursuant to which the Company may offer and sell, from time to time, up to $50 million of its common stock (the “ATM Program”), inclusive of any amounts sold under its prior sales agreement. During the year ended December 31, 2018, pursuant to the ATM Program, the Company sold and issued 662 shares of its common stock at an average share price of $9.41 receiving net proceeds of $5,767, which represented gross proceeds of $6,235 net of commissions of $122 and $346 in costs that the Company paid that were directly attributable to the offering under the ATM Program.

 

On June 30, 2017, the Company closed an underwritten public offering of its common stock and on July 20, 2017 the Company closed on the over-allotment option granted to the underwriters. These transactions resulted in an aggregate of 4,025 shares of its common stock being issued at a public offering price of $9.00 per share, resulting in aggregate gross proceeds of $36,225. After deducting underwriting discounts and advisory fees of $1,987, and expenses paid by the Company that were directly attributable to the offering of $443 (both of which are treated as a reduction of the Company’s additional paid-in capital balance), the Company received net proceeds from the transactions of $33,795.

 

On July 1, 2016, the Company closed its initial public offering and issued 13,043 shares of its common stock at a price of $10.00 per share resulting in gross proceeds of $130,435. After deducting underwriting discounts and commissions, advisory fees, and other offering expenses, the Company received net proceeds from the offering of $120,774. Additionally, on July 11, 2016, the underwriters exercised their over-allotment option in full, resulting in the issuance by the Company of an additional 1,957 shares of the Company’s common stock at a price of $10.00 per share for gross proceeds of $19,565. After deducting underwriting discounts and expenses, advisory fees, and other offering expenses, the Company received net proceeds from the over-allotment option shares of $18,195. Total shares issued by the Company in the initial public offering, including over-allotment option shares, were 15,000 shares and the total net proceeds received were $137,288, which represented gross proceeds received of $138,969 net of $1,681 in costs directly attributable to the initial public offering that were deferred and paid.

 

In order to help the Company qualify as a REIT, among other purposes, the Company’s charter, subject to certain exceptions, restricts the number of shares of the Company’s common stock that a person may beneficially or constructively own. The Company’s charter provides that, subject to certain exceptions, no person may beneficially or constructively own more than 9.8%, in value or in number of shares, whichever is more restrictive, of the outstanding shares of any class or series of the Company’s capital stock. On June 27, 2016, the Board approved a waiver of the 9.8% ownership limit in the Company’s charter allowing ZH USA, LLC to own up to 16.9% of the Company’s outstanding shares of common stock.

During the year ended December 31, 2018, the Company issued an aggregate of 1,899 OP Units with a value of $16,363 in connection with three facility acquisitions. During the year ended December 31, 2017, the Company issued an aggregate of 1,246 OP Units with a value of $11,532 primarily in connection with two facility acquisitions. As of December 31, 2018 and 2017, there were 3,145 and 1,246 OP Units issued, respectively, with an aggregate value of $27,894 and $11,532, respectively. The OP Unit value is based on the Company’s closing share price on the date of the respective transaction and is included as a component of noncontrolling interest equity in the Company’s Consolidated Balance Sheets as of December 31, 2018 and 2017.