Related Party Transaction

9 Months Ended

Oct. 31, 2020

Related Party Transactions [Abstract]

Related Party Transaction

Related Party Transaction

On October 7, 2016, the Company entered into an equity distribution agreement with Ladenburg Thalmann & Co. Inc. (the “Agent”). On December 18, 2019, the Company and Agent entered into an Amended and Restated equity distribution agreement (the “1st Equity Distribution Agreement”). Pursuant to the 1st Equity Distribution Agreement, the Company may sell up to 500,000 shares of 9.00% Series A Cumulative Preferred Stock (the “Preferred Stock”), par value $1.00 per share through an at-the-market (the “1st ATM”) offering program administered by the Agent. The Co-Chief Executive Officer and Co-President of the Agent is the Non-Executive Chairman of the Board. Under the 1st Equity Distribution Agreement, the Agent was entitled to compensation of up to 2.0% of the gross proceeds from the sale of Preferred Stock under the 1st ATM offering program. As of January 31, 2020, we had issued 994,046 shares which represent 100% of the Series A Preferred Stock available for sale through the 1st Equity Distribution Agreement. For the three and nine months ended October 31, 2019, the Company issued 70,282 and 86,938 shares of Preferred Stock under the 1st ATM offering program, respectively. Gross proceeds from these sales for the three and nine months ended October 31, 2019 were approximately $1.7 million and $2.1 million, respectively, and the Agent received compensation of approximately $34,000 and $42,000, respectively. The Non-Executive Chairman of the Board received no portion of this compensation.

In September 2020 we entered into a new equity distribution agreement (the “2nd Equity Distribution Agreement”) with the Agent with economic terms essentially identical to the initial agreement. Pursuant to the 2nd Equity Distribution Agreement, the Company may sell up to 500,000 shares of Preferred Stock and 5,000,000 shares of $0.01 par value common stock (“Common Stock”) through a new at-the-market (the “2nd ATM”) offering program. During the three months ended October 31, 2020 the Company sold 676,283 shares of Common Stock under the ATM program, resulting in net proceeds to the Company of approximately $1.3 million. Compensation to the Agent during this period was approximately $30,500, none of which was received by the Non-Executive Chairman of the Board.