Note 6 - Common Stock and Warrants of ROIC

3 Months Ended

Jun. 30, 2013

Stockholders' Equity Note Disclosure [Text Block]

Stockholders' Equity Note Disclosure [Text Block]

6.   Common Stock and Warrants of ROIC

On June 23, 2011, ROIC entered into an ATM Equity OfferingSM Sales Agreement ("sales agreement") with Merrill Lynch, Pierce, Fenner & Smith Incorporated to sell shares of ROIC’s common stock par value $0.0001 per share, having aggregate sales proceeds of $50.0 million from time to time, through an "at the market" equity offering program under which Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as sales (“agent”) and/or principal agent.  During the six months ended June 30, 2013, ROIC did not sell any shares under the sales agreement. As of June 30, 2013, ROIC had sold since the inception of the plan a total of 3,183,245 shares under the sales agreement, which resulted in gross proceeds of approximately $39.3 million and commissions of approximately $687,600 paid to the agent.

Simultaneously with the consummation of the IPO, the Sponsor purchased 8,000,000 Private Placement Warrants at a purchase price of $1.00 per warrant.  The Private Placement Warrants were identical to the Public Warrants except that the Private Placement Warrants were exercisable on a cashless basis as long as they were still held by the Sponsor or its members, members of its members’ immediate family or their controlled affiliates.  The purchase price of the Private Placement Warrants approximated the fair value of such warrants at the purchase date.

During the six months ended June 30, 2013, the Sponsor exercised the outstanding 8,000,000 Private Placement Warrants on a cashless basis pursuant to which ROIC issued 688,500 shares to the Sponsor.

ROIC has the right to redeem all of the warrants it issued in the IPO, at a price of $0.01 per warrant upon 30 days' notice while the warrants are exercisable, only in the event that the last sale price of the common stock is at least a specified price.  The terms of the warrants are as follows:

·   The exercise price of the warrants is $12.00.

·   The expiration date of the warrants is October 23, 2014.

·   The price at which ROIC’s common stock must trade before ROIC is able to redeem the warrants it issued in the IPO is $18.75.

·   To provide that a warrantholder's ability to exercise warrants is limited to ensure that such holder's "Beneficial Ownership" or "Constructive Ownership," each as defined in ROIC’s charter, does not exceed the restrictions contained in the charter limiting the ownership of shares of ROIC’s common stock.

ROIC has reserved 53,400,000 shares for the exercise of the Public Warrants and the Private Placement Warrants, and issuance of shares under the ROIC’s 2009 Equity Incentive Plan (the "2009 Plan").  During the three and six months ended June 30, 2013, the third-party warrant holders exercised a total of 5,408,496 and 18,364,281 Public Warrants, respectively, during the period, resulting in a total of $64.9 million and $220.4 million proceeds, respectively.

Warrant Repurchase

In May 2010, ROIC’s board of directors authorized a warrant repurchase program to repurchase up to a maximum of $40.0 million of ROIC’s warrants.  During the three months ended June 30, 2013, ROIC repurchased 3,734,000 warrants under the program in privately negotiated transactions for approximately $11.3 million.  During the six months ended June 30, 2013, ROIC repurchased 11,484,000 warrants under the program in privately negotiated transactions for approximately $22.0 million, at a weighted average cost per warrant of approximately $1.91.

As of June 30, 2013, 11,550,719 of the 41,400,000 original Public Warrants remain outstanding and no Private Placement Warrants are outstanding.