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Mezzanine Equity and Total Equity
 6 Months Ended
Jun. 30, 2022
Equity [Abstract]  
Mezzanine Equity and Total Equity Mezzanine Equity and Total Equity
Mezzanine Equity
Shares Subject to Repurchase
During the three months ended March 31, 2022, as part of the CIM Portfolio Acquisition, the Company issued a total of 6,450,107 shares of its Class A common stock to the Seller which had a value of $50.0 million, for accounting purposes, using the stock prices at the respective dates of issuance. The Company was required to register the resale of these shares, which it did in April 2022, and is required to subsequently maintain the effectiveness of that resale registration or the Company could be required to repurchase the securities for $53.4 million. If the Seller sells these securities pursuant to the Registration Statement or under Rule 144 under the Securities Act of 1933, as amended, or if the resale of the securities otherwise becomes qualified for exemption from registration under federal securities law, their repurchase rights terminate. If not yet sold by the Seller, the resale of all of these shares will become qualified for exemption from registration under federal securities law on August 25, 2022 (six months from the date of the final purchase) and the repurchase right would then terminate. Accordingly, as of June 30, 2022, since the ability to maintain the resale registration is not solely in the Company’s control, the securities are reflected as shares subject to repurchase outside of permanent equity until the repurchase rights terminate. Upon termination of the repurchase right, the value of these shares will be reclassified into permanent equity.
Total Equity
Common Stock
As of June 30, 2022 and December 31, 2021, the Company had 133.3 million and 123.8 million shares (including the shares subject to repurchase discussed above), respectively, of Class A common stock outstanding including restricted shares of Class A common stock (“restricted shares”) and excluding LTIP Units. LTIP Units may ultimately be convertible into shares of Class A common stock in the future if certain conditions are met.
As more fully discussed in Note 8 – Derivative Financial Instruments, the Company issued 6,450,107 shares aggregating to $53.4 million in Class A Common Stock in connection with the CIM Portfolio Acquisition during the three months ended March 31, 2022.
Distribution Reinvestment Plan
Effective on the Listing Date, an amendment and restatement of the then effective distribution reinvestment plan approved by the Company’s board of directors became effective (the “DRIP”). The DRIP allows stockholders who have elected to participate in the DRIP to have dividends payable with respect to all or a portion of their shares of Class A common stock reinvested in additional shares of Class A common stock. Shares issued pursuant to the DRIP represent shares that are, at the election of the Company, either (i) acquired directly from the Company, which would issue new shares, at a price based on the average of the high and low sales prices of Class A common stock on Nasdaq on the date of reinvestment, or (ii) acquired through open market purchases by the plan administrator at a price based on the weighted-average of the actual prices paid for all of the shares of Class A common stock purchased by the plan administrator with all participants’ reinvested dividends for the related quarter, less a per share processing fee.
Shares issued pursuant to the DRIP are recorded within stockholders’ equity in the accompanying consolidated balance sheets in the period dividends are declared. During the three and six months ended June 30, 2022 and 2021 all shares acquired by participants pursuant to the DRIP were acquired through open market purchases by the plan administrator and not acquired directly from the Company.
ATM Program — Class A Common Stock
In May 2019, the Company established an “at the market” equity offering program for Class A common stock (the “Class A Common Stock ATM Program”), pursuant to which the Company may from time to time, offer, issue and sell to the public up to $450.0 million in shares of Class A common stock, through sales agents.
The Company sold 3,618 shares of Class A common stock through its Class A Common Stock ATM Program during the three months ended June 30, 2022, which did not generate material proceeds. The Company sold 2,765,329 shares of Class A common stock through its Class A Common Stock ATM Program during the six months ended June 30, 2022, which generated $24.9 million of gross proceeds, and net proceeds of $24.5 million after commissions, fees and other offering costs incurred of $0.4 million.
The Company sold 8,634,223 shares of Class A common stock through its Class A Common Stock ATM Program during the three and six months ended June 30, 2021, which generated $78.3 million of gross proceeds, and net proceeds of $77.0 million after commissions and fees of $1.3 million.
Preferred Stock
The Company is authorized to issue up to 50,000,000 shares of preferred stock, of which it has classified and designated 12,796,000 as authorized shares of its Series A Preferred Stock, 120,000 as authorized shares of its Series B Preferred Stock, $0.01 par value per share (“Series B Preferred Stock”) and 11,536,000 as authorized shares of its Series C Preferred Stock as of June 30, 2022.
•The Company had 7,933,711 shares of Series A Preferred Stock issued and outstanding as of June 30, 2022 and December 31, 2021.
•No shares of Series B Preferred Stock were issued or outstanding as of June 30, 2022 or December 31, 2021.
•The Company had 4,595,175 and 4,594,498 shares of its Series C Preferred Stock issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.
ATM Program — Series A Preferred Stock
In May 2019, the Company established an “at the market” equity offering program for its Series A Preferred Stock (the “Series A Preferred Stock ATM Program”) pursuant to which the Company may, from time to time, offer, issue and sell to the public, through sales agents, shares of the Series A Preferred Stock having an aggregate offering price of up to $50.0 million which was subsequently increased to $100.0 million in October 2019 and was then increased again to $200.0 million in January 2021.
•The Company did not sell any shares of Series A Preferred Stock during the three and six months ended June 30, 2022.
•The Company did not sell any shares of Series A Preferred Stock during the three months ended June 30, 2021. During the six months ended June 30, 2021, the Company sold 91,703 shares of Series A Preferred Stock through the Series A Preferred Stock ATM Program for gross proceeds of $2.3 million and net proceeds of $2.2 million, after commissions, fees, and other costs incurred of approximately $0.1 million.
ATM Program — Series C Preferred Stock
In January 2021, the Company established an “at the market” equity offering program for its Series C Preferred Stock (the “Series C Preferred Stock ATM Program”) pursuant to which the Company may, from time to time, offer, issue and sell to the public, through sales agents, shares of the Series C Preferred Stock having an aggregate offering price of up to $200.0 million.
•The Company sold 677 shares of Series C Preferred Stock under the Series C Preferred Stock ATM Program during the three and six months ended June 30, 2022, which did not generate material proceeds.
•During the three months ended June 30, 2021, the Company sold 494,697 shares of Series C Preferred Stock under the Series C Preferred Stock ATM Program for gross proceeds of $12.3 million and net proceeds of $11.7 million, after commissions and fees paid of approximately $0.6 million. During the six months ended June 30, 2021, the Company
sold 1,058,798 shares of Series C Preferred Stock under the Series C Preferred Stock ATM Program for gross proceeds of $26.5 million and net proceeds of $25.6 million, after commissions and fees paid of approximately $0.9 million.
Stockholder Rights Plan
In April 2020, the Company announced that its board of directors approved a stockholder rights plan (the “Plan”) to protect the long-term interests of the Company. The Company adopted the Plan due to the substantial volatility in the trading of the Company’s Class A common stock that has resulted from the ongoing COVID-19 pandemic. The adoption of the Plan is intended to allow the Company to realize the long-term value of the Company’s assets by protecting the Company from the actions of third parties that the Company’s board of directors determines are not in the best interest of the Company. The Company’s Plan is designed to reduce the likelihood that any person or group (including a group of persons that are acting in concert with each other) would gain control of the Company through open market accumulation of stock by imposing significant penalties upon any person or group that acquires 4.9% or more of the outstanding shares of Class A common stock without the approval of the Company’s board of directors. In connection with the adoption of the Plan, the Company’s board of directors authorized a dividend of one preferred share purchase right for each outstanding share of Class A common stock to stockholders of record on April 23, 2020 to purchase from the Company one one-thousandth of a share of Series B Preferred Stock for an exercise price of $35.00 per one-thousandth of a share, once the rights become exercisable, subject to adjustment as provided in the related rights agreement. By the terms of the Plan, the rights will initially trade with Class A common stock and will generally only become exercisable on the 10th business day after the Company’s board of directors becomes aware that a person or entity has become the owner of 4.9% or more of the shares of Class A common stock or the commencement of a tender or exchange offer which would result in the offeror becoming an owner of 4.9% or more of the Class A common stock. In February 2021, the expiration date of these rights was extended to April 12, 2024 unless earlier exercised, exchanged, amended, redeemed or terminated.
Non-Controlling Interest
Non-controlling interests resulted from the issuance of OP Units in conjunction with the merger with American Realty Capital-Retail Centers of America, Inc. (“RCA”) in February 2017 (the “Merger”) and were recognized at fair value as of the effective time of the Merger on February 16, 2017. In addition, under the 2021 OPP, the OP issued LTIP Units, which are also reflected as part of non-controlling interest as of June 30, 2022 and December 31, 2021. See Note 13 — Equity Based Compensation - Multi-Year Outperformance Agreement for more information regarding the LTIP Units and related accounting.
On May 4, 2021, the Company’s independent directors, acting as a group, authorized the issuance of a new award of LTIP Units pursuant to the 2021 OPP to the Advisor after the performance period under the 2018 OPP expired on July 19, 2021. Accordingly, these new LTIP Units are reflected in non-controlling interest on the Company’s balance sheet or statement of equity as of June 30, 2022. For additional information, see Note 13 — Equity-Based Compensation relating to the accounting impacts of (i) the end of the performance period under the 2018 OPP and the forfeiture of all LTIP Units awarded thereunder, and (ii) the beginning of the performance period under the 2021 OPP and the grant of an award of LTIP Units thereunder.
As of June 30, 2022 and December 31, 2021, non-controlling interest was comprised of the following components:
(In thousands)June 30, 2022December 31, 2021
Non-controlling interest attributable to LTIP Units$14,720 $8,368 
Non-controlling interest attributable to Class A Units2,123 2,056 
   Total non-controlling interest$16,843 $10,424 
Following the end of the performance period under the 2018 OPP on July 19, 2021, the compensation committee of the board of directors of the Company determined that none of the 4,496,796 of the LTIP Units subject to the 2018 OPP had been earned, and these LTIP Units were thus automatically forfeited. On that date, the Company reclassified $34.8 million of amounts reflected in non-controlling interest for these LTIP Units to additional paid in capital on its consolidated balance sheet and consolidated statement of changes in equity.