STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 10 - STOCKHOLDERS’ EQUITY

Private Placements of Common Stock

On May 16, 2012, the Company completed a private offering in which the Company sold 1,500,000 shares of common stock to the Manager at a price of $1.00 per share and sold 25,000,000 shares to XL Investments Ltd., at a price of $1.00 per share. The net proceeds to the Company from this private offering were $26,177,089 after payment of $322,911 in direct costs of the offering. The Company did not pay any underwriting discounts or commissions in connection with the private offering.

Immediately prior to the IPO described below, the Company completed a one-for-16 reverse stock split of the 26,500,000 issued and outstanding shares of common stock, thereby reducing the amount of issued and outstanding shares of common stock to 1,656,250 prior to the IPO.

Concurrently with the IPO, XL Investments Ltd. purchased 1,666,667 shares of common stock at the IPO price of $15 per share in an aggregate amount of $25,000,000 as a private placement.

Ownership and Warrants

As a result of the May 2012 and March 2013 private offerings of common stock described above, XL Investments Ltd., an indirectly wholly owned subsidiary of XL Group plc, owns a significant minority investment in the Company. Pursuant to the terms of the May 2012 private offering, the Company agreed to issue to XL Investments Ltd. warrants to purchase two shares of the Company’s common stock for each share of common stock that they own. The warrants were subsequently issued, effective as of September 29, 2012, and they will become exercisable in the amount of 3,125,000 shares 120 days after the closing of the IPO at an exercise price equal to 105% of the IPO price. XL Global, Inc., a subsidiary of XL Group plc, holds a minority stake in the Manager.
 

Initial Public Offering of Common Stock

On March 27, 2013, the Company issued 4,033,333 shares of common stock for $15.00 per share for an aggregate offering price of $60,500,000. Net proceeds to the Company were $59,000,000, net of issuance costs of $1,500,000 million.

The Manager paid the underwriters at closing of the IPO $0.60 per share for each share sold in the IPO, representing the full underwriting discount payable with respect to the shares sold in the IPO. The underwriters did not receive any discount on the shares purchased in the concurrent private placement by XL Investments Ltd.

The Company has also granted the underwriters the right to purchase up to an additional 604,999 shares of common stock from the Company at the IPO price of $15 per share within 30 days after the issuance date of the IPO. The underwriters did not exercise their right to purchase any additional shares of common stock from the Company.
 

Preferred Stock

On January 22, 2013, the Company issued 100 shares of 12.5% Cumulative Non-Voting Redeemable Preferred Stock (“preferred stock”), to 100 investors at $1,000 per share in connection with the Company’s REIT qualification under the Internal Revenue Code. The net proceeds to the Company from this issuance were $67,500 after the deduction of initial set-up, funding and administration fees. The preferred stock was not convertible into common stock and was subject to redemption at any time by the Company at $1,100 per share (plus all accrued and unpaid dividends), provided that the preferred stock is redeemed prior to December 31, 2014. Dividends accrue on a daily basis at 12.5% per annum, and dividends cannot be paid on the Company’s common stock until all accrued and unpaid dividends on the preferred stock have been fully paid.

The preferred stock was fully redeemed on March 28, 2013 by the Company at $1,100 per share, or $110,000 in aggregate, and paid $2,326 in accrued dividends through the date of redemption. 
 

Distributions to stockholders

For the 2013 taxable year, the Company has declared dividends to common stockholders totaling $3,765,063, or $0.78 per share. The following table presents cash dividends declared by the Company on its common stock for the six months ended June 30, 2013:

Declaration Date	Record Date	Payment Date	Dividend Amount		Cash Dividend Per Share
February 15, 2013	February 15, 2013	February 27, 2013	$	219,950	$	0.04530
March 12, 2013	March 12, 2013	March 28, 2013	$	219,950	$	0.04530
April 22, 2013	April 22, 2013	April 29, 2013	$	960,603	$	0.19785
April 22, 2013	May 15, 2013	May 30, 2013	$	1,182,280	$	0.24350
April 22, 2013	June 14, 2013	June 27, 2013	$	1,182,280	$	0.24350

For the 2013 taxable year, the Company has declared dividends to preferred stockholders totaling $2,326, or $23.26 per share.