Stockholders’ Equity

12 Months Ended

Dec. 31, 2024

Stockholders’ Equity [Abstract]

STOCKHOLDERS’ EQUITY

11. STOCKHOLDERS’ EQUITY

Registered Direct Offering

On February 15, 2023, the Company completed a registered direct offering of 395,779 shares of common stock at a price of $15.16 per share, raising net proceeds of approximately $6.0 million. The Company sold shares of common stock directly, without the use of underwriters or placement agents, to institutional investors registered pursuant to its effective shelf registration statement.

At-the-Market Offering Program (“ATM” Program”)

On June 20, 2023, the Company entered into an At-the-Market Sales Agreement (the “Sales Agreement”) with BTIG, LLC, Compass Point Research & Trading, LLC and Oppenheimer & Co. Inc. (each a “Sales Agent” and together the “Sales Agents”) under which the Company may, from time to time, offer and sell shares of common stock, having an aggregate offering price of up to $75.0 million. Under the terms of the Sales Agreement, the Company has agreed to pay the Sales Agents a commission of up to 3.0% of the gross proceeds from each sale of common stock sold through the Sales Agents. Sales of common stock, if any, may be made in transactions that are deemed to be “at-the-market” offerings, as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

During the years ended December 31, 2024 and 2023, the Company sold an aggregate of 2,489,290 and 79,862 shares of the Company’s common stock under the Sales Agreement, respectively, which generated proceeds, net of commissions and offering expenses, of approximately $38.4 million and $1.2 million, during the comparable periods. The weighted average price for sales of our common stock in connection with the ATM program was $15.90 and $15.78 for the year ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the shares of common stock sold pursuant to the registered direct offering in February 2023 and under the ATM Program are the only offerings that have been initiated under the Shelf Registration Statement.

Equity Incentive Plan

Concurrent with our IPO, the Company established an equity incentive compensation plan (the “2021 Plan”) which is administered by the Compensation Committee of the Board. The 2021 Plan authorizes stock options, stock appreciation rights, restricted stock, stock bonuses, stock units, and other forms of awards granted or denominated in the Company’s common stock. The 2021 Plan retains flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Any award may be structured to be paid or settled in cash. The Company has, and currently intends to continue to grant restricted stock awards to participants in the 2021 Plan, but it may also grant any other type of award available under the 2021 Plan in the future. Persons eligible to receive awards under the 2021 Plan include the Company’s officers and employees of the Manager and its affiliates or officers and employees of the Company’s subsidiaries, if any, the members of the Board, and certain consultants and other service providers.

As of December 31, 2024 and 2023, the maximum number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2021 Plan (the “Share Limit”) equals 8.50% of the issued and outstanding shares of the Company’s common stock on a fully-diluted basis following the completion of the IPO. Shares that are subject to or underlie awards that expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under the 2021 Plan will not be counted against the Share Limit and will again be available for subsequent awards under the 2021 Plan.

During the year ended December 31, 2023, restricted stock award grants of 323,452 shares of common stock were granted under to employees of the Manager under the 2021 Plan. Pursuant to each respective award agreement, the restricted stock awards (“RSA’s”) vest annually in equal installments over a three-year period beginning on the first anniversary of the date of the grant. Upon vesting, the vested RSA's are exchanged for an equal number of shares of the Company’s common stock.

During the year ended December 31, 2024, RSA grants of 187,335 shares of common stock were granted to employees of our Manager and independent members of the Board. Pursuant to the respective award agreements, 163,280 RSA's granted to employees of the Manager vest annually in equal installments over a three-year period beginning on the first anniversary of the date of the grant. The remaining 24,055 RSA's granted to independent members of the Board vest annually over a one year period. Upon vesting, the vested restricted stock awards are exchanged for an equal number of shares of the Company’s common stock.

Forfeitures are recognized as they occur. There were 0 and 2,190 shares forfeited during the years ended December 31, 2024 and 2023, respectively. As individual awards and options become fully vested, stock-based compensation expense is adjusted to recognize actual forfeitures.

Shares that are exchanged by a participant or withheld by the Company as full or partial payment in connection with any award granted under the 2021 Plan, as well as any shares exchanged by a participant or withheld by the Company to satisfy tax withholding obligations related to any award granted under the 2021 Plan, will not be counted against the Share Limit and will again be available for subsequent awards under the 2021 Plan. To the extent that an award is settled in cash or a form other than shares, the shares that would have been delivered had there been no such cash or other settlement will not be counted against the Share Limit and will again be available for subsequent awards under the 2021 Plan.

Based on the closing market price of our common stock on December 31, 2024 and 2023, the aggregate intrinsic value of our restricted stock awards was as follows:

	As of December 31, 2024				As of December 31, 2023
	Outstanding		Vested		Outstanding		Vested
Aggregate intrinsic value	$	6,342,292	$	3,182,441	$	5,525,370	$	937,068

The following table summarizes the restricted stock activity for the Company’s directors and officers and employees of the Manager during the years ended December 31, 2024 and 2023, and the balance of unvested restricted stock as of such dates.

	Unvested Restricted Stock			Weighted Average Grant Date Fair Value per Share
Balance at January 1, 2023		80,984		$	15.71
Granted		323,452			14.75
Vested		(35,599	)		15.78
Forfeited		(2,190	)		16.00
Balance at December 31, 2023		366,647		$	14.86
Granted		187,335			15.59
Vested		(142,679	)		15.00
Forfeited		-			-
Balance at December 31, 2024		411,303		$	15.14

Restricted stock compensation expense is based on the Company’s stock price at the date of the grant and is amortized over the vesting period. The share-based compensation expense for the Company was $3.1 million and $1.5 million for the years ended December 31, 2024 and 2023, respectively. The unamortized share-based compensation expense for the Company was approximately $4.4 million as of December 31, 2024, which the Company expects to recognize over the remaining weighted-average term of 1.8 years.