EQUITY

Ownership and Warrants

Pursuant to the terms of the May 2012 private offering, the Company agreed to issue to XL Investments Ltd warrants to purchase the Company’s common stock. The warrants were subsequently issued, effective as of September 29, 2012, and following adjustment in December 31, 2016, entitled XL Investments Ltd, to purchase an aggregate of 3,753,492 shares of the Company’s common stock at a per share exercise price equal to $13.11. XL Global, Inc., an indirect subsidiary of AXA SA, held a minority stake in the previous manager. Pursuant to an agreement dated January 18, 2018, XL Investments agreed to terminate all of it previously held warrants to purchase 3,753,492 shares of common stock held by it.

Common Stock

The Company has 450,000,000 authorized shares of common stock, par value $0.01 per share, with 23,687,664 and 22,143,758 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively.

On June 16, 2017, the Company issued 4,600,000 shares of common stock, including the concurrent exercise of the underwriters' overallotment option, for $4.60 per share. Net proceeds to the Company were $19.8 million.

On January 18, 2018, the Company issued 1,539,406 shares of common stock to an affiliate of the Manager in a private placement at a purchase price of $4.77 per share resulting in aggregate net proceeds of $7.3 million.

Stock Repurchase Program

On December 15, 2015, the Company’s board of directors authorized a stock repurchase program (or the “Repurchase Program”), to repurchase up to $10 million of the Company’s outstanding common stock. Shares of the Company’s common stock may be purchased in the open market, including through block purchases, or through privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b 18(b)(1) of the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any repurchases will be determined at the Company’s discretion and the program may be suspended, terminated or modified at any time for any reason. Among other factors, the Company intends to only consider repurchasing shares of the Company’s common stock when the purchase price is less than the Company’s estimate of the Company’s current net asset value per common share. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of the Company’s common stock. Through December 31, 2017, the Company had repurchased 126,856 shares of common stock at a weighted average share price of $5.09. No share repurchases were made during the year ended December 31, 2018. As of December 31, 2018, $9.4 million of common stock remained authorized for future share repurchase under the Repurchase Program.

Preferred Stock

The Company has 50,000,000 authorized shares of preferred stock, par value $0.01 per share, with 1,610,000 shares of 8.75% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”), par value of $0.01 per share and liquidation preference of $25.00 per share, issued and outstanding as of both December 31, 2018 and December 31, 2017. The Series A Preferred Stock is entitled to receive a dividend rate of 8.75% per year on the $25 liquidation preference and is senior to the common stock with respect to distributions upon liquidation, dissolution or winding up. The Company declares quarterly and pays monthly dividends on the shares of the Series A Preferred Stock, in arrears, on the 27th day of each month to holders of record at the close of business on the 15th day of each month. As of December 27, 2018, the dividend rate changed to an annual rate equal to the sum of (a) Three-Month LIBOR as calculated on each applicable date of determination and (b) 7.151%, based on the $25.00 per share liquidation preference per annum; provided that such rate shall not be less than 8.75%. No dividends may be paid on the Company’s common stock unless full cumulative dividends have been paid on the preferred stock. The Company has paid full cumulative dividends on its preferred stock on a monthly basis since it was first issued in December 2013.

Distributions to stockholders

For the 2018 taxable year to date, the Company has declared dividends to common stockholders totaling $6,578,196, or $0.28 per share. The following table presents cash dividends declared by the Company on its common stock for the year ended December 31, 2018:



Declaration Date	Record Date	Payment Date	Dividend Amount		Cash Dividend Per Weighted Average Share
January 5, 2018	January 16, 2018	January 30, 2018	$	737,388	$	0.03123
January 5, 2018	February 15, 2018	February 27, 2018	$	788,649	$	0.03340
January 5, 2018	March 15, 2018	March 29, 2018	$	788,649	$	0.03340
March 16, 2018	April 16, 2018	April 27, 2018	$	473,663	$	0.02006
March 16, 2018	May 15, 2018	May 30, 2018	$	473,663	$	0.02006
March 16, 2018	June 15, 2018	June 29, 2018	$	473,663	$	0.02006
September 10, 2018	September 28, 2018	October 15, 2018	$	1,421,260	$	0.06019
December 7, 2018	December 31, 2018	January 15, 2019	$	1,421,260	$	0.06019

The following table presents cash dividends declared by the Company on its Series A Preferred Stock for the year ended December 31, 2018:



Declaration Date	Record Date	Payment Date	Dividend Amount		Cash Dividend Per Weighted Average Share
January 5, 2018	January 16, 2018	January 26, 2018	$	293,503	$	0.18230
January 5, 2018	February 15, 2018	February 27, 2018	$	293,503	$	0.18230
January 5, 2018	March 15, 2018	March 27, 2018	$	293,503	$	0.18230
March 16, 2018	April 16, 2018	April 27, 2018	$	293,503	$	0.18230
March 16, 2018	May 15, 2018	May 29, 2018	$	293,503	$	0.18230
March 16, 2018	June 15, 2018	June 27, 2018	$	293,503	$	0.18230
July 3, 2018	July 16, 2018	July 27, 2018	$	293,503	$	0.18230
July 3, 2018	August 15, 2018	August 27, 2018	$	293,503	$	0.18230
July 3, 2018	September 17, 2018	September 27, 2018	$	293,503	$	0.18230
September 10, 2018	October 15, 2018	October 26, 2018	$	293,503	$	0.18230
September 10, 2018	November 15, 2018	November 27, 2018	$	293,503	$	0.18230
September 10, 2018	December 17, 2018	December 27, 2018	$	293,503	$	0.18230

Non-controlling interests

On November 29, 2018, Hunt Commercial Mortgage Trust (“HCMT”), an indirect wholly-owned subsidiary of the Company that has elected to be taxed as a REIT issued 125 shares of Series A Preferred Shares (“HCMT Preferred Shares”). Net proceeds to HCMT were $99,500 representing $125,000 in equity raised, less $25,500 in expenses and is reflected as “Non-controlling interests” in the Company’s consolidated balance sheets. Dividends on the HCMT Preferred Shares are cumulative annual in an amount equal to 12% of the initial purchase price plus any accrued by unpaid dividends. The HCMT Preferred Shares are redeemable at any time by HCMT. Redemption price through December 31, 2020 is 1.1x the initial purchase price plus all accrued and unpaid dividends, and the initial purchase price plus all accrued and unpaid dividends thereafter. The holders of the HCMT Preferred Shares have limited voting rights, which do not entitle the holders to participate or otherwise direct the management of HCMT or the Company. The HCMT Preferred Shares are not convertible into or exchangeable for any other property or securities HCMT or the Company. Dividends on the HCMT Preferred Shares, which amounted to $1,333 for the year ended December 31, 2018 are reflected in “Dividends to preferred stockholders” in the Company’s consolidated statements of operations.