Stockholders' Equity

12 Months Ended

Dec. 31, 2024

Equity [Abstract]

Stockholders' Equity

6. STOCKHOLDERS’ EQUITY:

Preferred Stock:

The Company is authorized to issue 10,000,000 shares of preferred stock, $.0001 par value per share. Voting and other rights and preferences may be determined from time to time by the Board of Directors of the Company. The Company has designated 500,000 shares of preferred stock as Series A preferred stock, $.0001 par value per share. In addition, the Company has designated 6,500,000 shares of preferred stock as Series B preferred stock, $.0001 par value per share. There are no voting rights associated with the Series B preferred stock. There was no Series A preferred stock or Series B preferred stock outstanding as of December 31, 2024 and December 31, 2023.

Common Stock:

The Company is authorized to issue 100,000,000 shares of common stock, $.0001 par value per share. As of December 31, 2024, and 2023, the Company had a total of 13,345,980 and 13,326,965 shares of common stock issued and outstanding, respectively.

On June 26, 2024, the Company withheld 30,797 shares of common stock pursuant to its 2017 Incentive Award Plan (the "2017 Plan") from certain officers of the Company and a member of the Board at a price of $22.50 per share for a total consideration of approximately $0.7 million to satisfy tax withholding obligations payable upon the vesting of restricted stock.

On June 5, 2024, the Company purchased 76,628 shares of common stock pursuant to its share redemption program at a purchase price of $26.10 per share for a total consideration of approximately $2.0 million.

On November 9, 2023, the Company purchased 6,944 shares of common stock pursuant to a certain Order dated September 19, 2023 of the United States Bankruptcy Court for the Eastern District of New York at a purchase price of $9.65 per share for a total consideration of approximately $67,010 from the Chapter 7 estate of a stockholder.

On June 2, 2023, the Company purchased 95,011 shares of common stock pursuant to its share redemption program at a purchase price of $21.05 per share for a total consideration of approximately $2.0 million.

Dividend Distributions:

The following table presents dividends declared by the Company on its common stock during 2024 and 2023:

	Record	Payment	Dividend
Declaration Date	Date	Date	Per Share
March 14, 2023	March 31, 2023	April 14, 2023	$	0.33	(1)
March 14, 2023	March 31, 2023	April 17, 2023	$	0.10
June 8, 2023	June 30, 2023	July 14, 2023	$	0.10
August 1, 2023	September 30, 2023	October 16, 2023	$	0.10
November 7, 2023	December 31, 2023	January 12, 2024	$	0.10
March 12, 2024	March 31, 2024	April 12, 2024	$	0.66	(2)
March 12, 2024	March 31, 2024	April 15, 2024	$	0.12
June 13, 2024	June 30, 2024	July 12, 2024	$	0.12
August 6, 2024	September 30, 2024	October 11, 2024	$	0.12
November 4, 2024	December 31, 2024	January 10, 2025	$	0.12

(1)Represents a supplemental 2022 dividend.

(2)Represents a supplemental 2023 dividend.

In order to qualify as a REIT, the Company must distribute at least 90% of its taxable income and must distribute 100% of its taxable income in order not to be subject to corporate federal income taxes on retained income. The Company anticipates it will distribute all of its taxable income to its stockholders. Because taxable income differs from cash flow from operations due to non-cash revenues or expenses (such as depreciation) and timing differences for the recognition of income and the deduction of expenses, in certain circumstances, the Company may generate operating cash flow in excess of its distributions or, alternatively, may be required to borrow to make sufficient distribution payments.

Noncontrolling Interest:

On September 19, 2023, the Operating Partnership, pursuant to a certain Order dated September 19, 2023 of the United States Bankruptcy Court for the Eastern District of New York, purchased 15,202 Common and Class B limited partner units of the Operating Partnership for cash consideration of $32,214,363 from the Chapter 7 estate of a limited partner.

Stock-Based Compensation:

On June 11, 2007, the Board of Directors approved the Company’s 2007 Incentive Award Plan (the “2007 Plan”). The 2007 Plan covered directors, officers, key employees and consultants of the Company. The purposes of the 2007 Plan was to further the growth, development, and financial success of the Company and to obtain and retain the services of the individuals considered

essential to the long-term success of the Company. The 2007 Plan provided for awards in the form of restricted shares, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may have been awarded under the 2007 Plan was 1,000,000 shares. The 2007 Plan expired by its terms on June 11, 2017.

The 2017 Incentive Award Plan (the “2017 Plan”) was adopted by the Board and became effective on April 24, 2017, subject to the approval of the Company’s stockholders which was obtained on June 8, 2017. The 2017 Plan has intended purposes to further the growth, development, and financial success of the Company and to obtain and retain the services of those individuals considered essential to the long-term success of the Company. The 2017 Plan provides for awards in the form of stock, stock units, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may be awarded under the 2017 Plan is 2,000,000 shares. On July 25, 2020, the Board approved an amendment to the 2017 Plan to permit the transfer of awards that have been exercised, or the shares of common stock underlying such awards which have been issued, and all restrictions applicable to such shares of common stock have lapsed. As of December 31, 2024, the Company had 904,451 shares available for future issuance under the 2017 Plan. Dividends paid on restricted shares are recorded as dividends on shares of the Company’s common stock whether or not they are vested. In accordance with ASC 718-10-35, the Company measures the compensation costs for these shares as of the date of the grant and the expense is recognized in earnings, at the grant date (for the portion that vests immediately) and then ratably over the respective vesting periods.

The following table presents shares issued by the Company under the 2007 Plan and the 2017 Plan:

Shares Issued Under the 2007 Plan
Grant	Total		Value		Approximate
Date	Shares Issued		Per Share		Value of Shares		Vesting Period
April 30, 2012		55,149	$	6.80	$	375,000	3 Years	(2)
June 7, 2012		5,884	$	6.80	$	40,000	Immediately	(1)
March 21, 2013		46,876	$	6.40	$	300,000	3 Years	(2)
March 21, 2013		3,126	$	6.40	$	20,000	Immediately	(1)
June 6, 2013		9,378	$	6.40	$	60,000	Immediately	(1)
June 4, 2014		44,704	$	6.80	$	304,000	5 years	(2)
June 19, 2014		8,820	$	6.80	$	60,000	Immediately	(1)
March 26, 2015		43,010	$	9.30	$	400,000	5 years	(2)
June 19, 2015		16,436	$	10.65	$	175,000	Immediately	(1)
March 24, 2016		47,043	$	10.40	$	489,000	5 years	(2)
June 9, 2016		14,424	$	10.40	$	150,000	Immediately	(1)
May 22, 2017		34,482	$	11.60	$	400,000	9 years	(2)
May 31, 2017		7,929	$	11.60	$	92,000	Immediately	(3)
June 8, 2017		15,516	$	11.60	$	180,000	Immediately	(1)
Shares Issued Under the 2017 Plan
Grant	Total		Value		Approximate
Date	Shares Issued		Per Share		Value of Shares		Vesting Period
June 7, 2018		42,918	$	11.65	$	500,000	9 Years	(2)
June 7, 2018		15,020	$	11.65	$	175,000	Immediately	(1)
June 5, 2019		64,654	$	11.60	$	750,000	9 Years	(2)
June 5, 2019		15,085	$	11.60	$	175,000	Immediately	(1)
June 4, 2020		72,834	$	12.70	$	925,000	9 Years	(2)
June 4, 2020		16,530	$	12.70	$	210,000	Immediately	(1)
June 10, 2021		123,947	$	11.90	$	1,475,000	9 Years	(2)
June 10, 2021		22,686	$	11.90	$	270,000	Immediately	(1)
June 9, 2022		85,398	$	18.15	$	1,550,000	9 Years	(2)
June 9, 2022		14,874	$	18.15	$	270,000	Immediately	(1)
June 8, 2023		78,548	$	16.55	$	1,300,000	9 Years	(2)
June 8, 2023		16,615	$	16.55	$	275,000	Immediately	(1)
June 13, 2024		111,776	$	22.50	$	2,515,000	9 Years	(2)
June 13, 2024		14,664	$	22.50	$	330,000	Immediately	(1)

(1)Shares issued to non-management members of the Board of Directors.

(2)Shares issued to certain executives of the Company.

(3)Shares issued to current and former executives of the Company in connection with the exercise of previously issued options.

On November 8, 2016, 200,000 non-qualified stock options were granted to key officers of the Company under the 2007 Plan and had a three-year vesting period. For this grant, the exercise price was $10.40 per share and was equal to the value per share based upon a valuation of the shares conducted by an independent third party for the purpose of valuing shares of the Company’s common stock. The fair value of these stock options was based upon the Black-Scholes option pricing model, calculated at the grant date.

On July 1, 2022, 400,000 non-qualified stock options were granted to key officers of the Company and had a three-year vesting period. For this grant, the exercise price was $18.15 per share and was equal to the value per share based upon a valuation of the shares conducted by an independent third party for the purpose of valuing shares of the Company’s common stock. The fair value of these stock options was based upon the Black-Scholes option pricing model, calculated at the grant date. The input assumptions used in this model were the Company's share value of $18.15 described above at December 31, 2021, the expected life (6.5 years), risk-free rate (3.0325%), volatility (23.06%) and dividend yield (3.967%).

All options expire ten years from the date of grant. There was $0.4 million of stock compensation expense relating to these options for both the years ended December 31, 2024 and December 31, 2023.

The Board of Directors has determined the value of a share of common stock at December 31, 2024 to be $21.75 based on a valuation completed with the assistance of an independent third party for purposes of valuing shares of the Company’s common stock pursuant to the 2017 Plan.

For the years ended December 31, 2024 and 2023, the Company’s total stock-based compensation in the statement of equity was approximately $2,297,000 and $1,914,000, respectively. As of December 31, 2024, there was approximately $3,353,000 of unamortized stock compensation related to restricted stock. The cost is expected to be recognized over a weighted average period of 2.3 years.

At December 31, 2024, 600,000 stock options were outstanding, of which 200,000 were vested and 400,000 were non-vested, and 1,107,539 shares of restricted stock were outstanding, 921,572 of which were vested.

The following is a summary of restricted stock activity:

				Weighted Average
				Grant Date Fair
	Shares			Value
Non-vested shares outstanding as of December 31, 2023		161,945		$	14.91
New shares issued through December 31, 2024		126,440			22.50
Vested		(102,418	)		19.64
Non-vested shares outstanding as of December 31, 2024		185,967		$	18.03

The following is a vesting schedule of the non-vested shares of restricted stock outstanding as of December 31, 2024:

	Number of Shares
2025		59,429
2026		42,995
2027		31,100
2028		21,875
2029		14,461
2030		8,760
Thereafter		7,347
Total Non-vested Shares		185,967