Equity

9 Months Ended

Sep. 30, 2024

Equity Distribution Agreements

The Company has equity distribution agreements with three sales agents to sell up to $40,000,000 of its common stock from time-to-time in an at-the-market offering. During the three and nine months ended September 30, 2024 and 2023, the Company did not sell any shares.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $0.25 per share, payable on October 2, 2024 to stockholders of record on September 24, 2024.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5% from the market price for the common stock (as such price is calculated pursuant to the DRP). The discount from the market price is currently 3%. During the three and nine months ended September 30, 2024, 56,879 and 165,731 shares were issued in lieu of cash dividends of $951,000 and $2,829,000 respectively. During the three and nine months ended September 30, 2023, 35,470 and 111,322 shares were issued in lieu of cash dividends of $684,000 and $2,117,000, respectively.

Stock Based Compensation

In June 2024, the Company's stockholders approved the 2024 Incentive Plan (the "2024 Plan"). This plan permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of September 30, 2024, 784,675 shares are available for issuance pursuant to awards under the 2024 Plan. Awards to acquire 1,602,722 shares of common stock are outstanding under the 2024 Plan, the 2022 Amended and Restated Incentive Plan (the "2022 Plan"), the 2020 Amended and Restated Incentive Plan (the "2020 Plan"), and the 2018 Amended and Restated Incentive Plan (the "2018 Plan; and together with the 2020 Plan and the 2022 Plan, the "Prior Plans"). No further awards may be granted pursuant to the Prior Plans.

Restricted Stock Units

In July 2024, the Company issued restricted stock units (the "RSUs") to acquire up to 215,325 shares of common stock pursuant to the 2024 Plan. As of September 30, 2024, an aggregate of 640,493 of unvested restricted stock units are outstanding pursuant to the 2024 Plan and the Prior Plans. Generally, the RSUs entitle the recipients, subject to continued service through the three-year vesting period to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends that would have been paid during the three-year performance period with respect to the shares of common stock underlying the RSUs if, when, and to the extent, the related RSUs vest. The shares underlying the RSUs are not participating securities but are contingently issuable shares.

Expense is recognized on the RSUs which the Company expects to vest over the applicable vesting period. For the three months ended September 30, 2024 and 2023, the Company recorded $303,000 and $651,000, respectively, and for the nine months ended September 30, 2024 and 2023, the Company recorded $1,006,000 and $1,534,000, respectively of compensation expense related to the amortization of unearned compensation with respect to the RSUs. At September 30, 2024 and December 31, 2023, $2,125,000 and $1,999,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

Restricted Stock

As of September 30, 2024, an aggregate of 962,229 shares of unvested restricted stock are outstanding. The shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but is included in the earnings per share computation.

For the three months ended September 30, 2024 and 2023, the Company recorded $886,000 and $822,000, respectively and for the nine months ended September 30, 2024 and 2023, the Company recorded $2,615,000 and $2,542,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At September 30, 2024 and December 31, 2023, $7,958,000 and $7,484,000, respectively has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these restricted stock awards is 2.2 years.

Share Repurchase

Pursuant to the Company’s repurchase program, as amended from time to time, the Company is authorized to repurchase shares of its common stock through open-market transactions, privately negotiated transactions, or otherwise.

During the three months ended September 30, 2024, the Company repurchased 6,563 shares of common stock at an average price per share of $17.55 for an aggregate cost of $115,000. During the nine months ended September 30, 2024, the Company repurchased 183,243 shares of common stock at an average price of $18.08 for an aggregate cost of $3,312,000. As of September 30, 2024, the Company is authorized to repurchase up to $6,271,000 of shares through December 31, 2025.

During the three months ended September 30, 2023 the Company repurchased 264,165 shares of common stock at an average price per share of $18.74 for an aggregate cost of $4,950,000. During the nine months ended September 30, 2023, the Company repurchased 573,318 shares of common stock at an average price per share of $18.81 for an aggregate cost of $10,786,000.

Per Share Data

Basic earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. The RSUs are excluded from the basic earnings per share calculation as they are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.

In calculating diluted earnings per share, the Company includes only those shares underlying the RSUs that it anticipates

will vest based on management's estimates as of the end of the most recent quarter. The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive. The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator for basic and diluted earnings per share:
Net (loss) income	$	(2,167)	$	(1,460)	$	(7,612)	$	5,716
Deduct net income attributable to non-controlling interests	(38)		(34)		(109)		(106)
Deduct loss (income) allocated to unvested restricted stock	113		73		398		(268)
Net (loss) income available for common stockholders: basic and diluted	$	(2,092)	$	(1,421)	$	(7,323)	$	5,342

Denominator for basic earnings per share:
Weighted average number of common shares outstanding	17,796,206		17,851,715		17,720,024		18,022,975
Effect of dilutive securities:
RSUs	—		—		—		22,792
Denominator for diluted earnings per share:
Weighted average number of shares	17,796,206		17,851,715		17,720,024		18,045,767

(Loss) earnings per common share, basic	$	(0.12)	$	(0.08)	$	(0.41)	$	0.30
(Loss) earnings per common share, diluted	$	(0.12)	$	(0.08)	$	(0.41)	$	0.27