XML 33 R23.htm IDEA: XBRL DOCUMENT v3.21.2
Equity
 9 Months Ended
Sep. 30, 2021
Equity [Abstract]  
Equity
Note 11. Equity

Earnings Per Share

The following table presents earnings per share for the three and nine months ended September 30, 2021 and September 30, 2020:

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net (loss) income$(727,758)$2,143,130 $643,567 $5,368,135 
Series A preferred stock dividend declared(3,906)(3,906)(11,718)(11,718)
Net (loss) income allocable to common stock(731,664)2,139,224 $631,849 $5,356,417 
Weighted-average shares outstanding - basic
   and diluted		19,487,460 19,487,461 19,487,460 18,586,627 
(Loss) earnings per share - basic and diluted$(0.04)$0.11 $0.03 $0.29 

Preferred Stock Classes

Preferred Stock
    
    The Company’s charter gives it authority to issue 50,000,000 shares of preferred stock, $0.01 par value per share (“Preferred Stock”). The Company’s board of directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time, into one or more classes or series of stock. As of September 30, 2021 and December 31, 2020, there were no Preferred Stock issued or outstanding.
    
Series A Preferred Stock
    
    On November 30, 2016, the Company’s board of directors classified and designated 125 shares of preferred stock as a separate class of preferred stock to be known as the 12.5% Series A Redeemable Cumulative Preferred Stock, $1,000 liquidation value per share (“Series A Preferred Stock”). In December 2016, the Company sold 125 shares of the Series A Preferred Stock for $125,000. The Series A Preferred Stock pays dividends at an annual rate of 12.5% of the liquidation preference. These dividends are cumulative and payable semi-annually in arrears on June 30 and December 31 of each year.

    The Series A Preferred Stock, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company, rank senior to common stock. The Company, at its option, may redeem the shares, with written notice, at a redemption price of $1,000 per share, plus any accrued unpaid distribution through the date of the redemption. The Series A Preferred Stock carries a redemption premium of $50 per share if redeemed prior to January 1, 2019. The Series A Preferred Stock generally has no voting rights. However, the Series A Preferred Stock holders’ voting is required if (i) authorization or issuance of any securities senior to the Series A Preferred Stock; (ii) an amendment to the Company’s charter that has a material adverse effect on the rights and preference of the Series A Preferred Stock; and (iii) any reclassification of the Series A Preferred Stock.
Common Stock

As discussed in Note 3, on March 1, 2020, TPT2 merged with and into the Company with the Company continuing as the surviving corporation. In connection with the Merger, the Company issued 2,116,785.76 shares of common stock of the Company to Terra Fund 7, the sole stockholder of TPT2, as consideration in the Merger. In addition, on March 2, 2020, the Company issued 2,457,684.59 shares of common stock of the Company in exchange for the settlement of certain participation interests in loans held by the Company and cash. As described in Note 3, Terra Fund 7 contributed the shares of the Company’s common stock received as consideration in the Merger to Terra JV and became a co-managing member of Terra JV pursuant to the JV Agreement. The JV Agreement and related stockholders agreement between Terra JV and the Company, dated March 2, 2020, provide for the joint approval of Terra Fund 5 and Terra Fund 7 with respect to certain major decisions that are taken by Terra JV and the Company. As of September 30, 2021, Terra JV owns 87.4% of the issued and outstanding shares of the Company’s common stock with the remainder held by Terra Offshore REIT, and Terra Fund 5 and Terra Fund 7 own an 87.6% and 12.4% interest, respectively, in Terra JV.    

    On September 30, 2019, the Company issued 212,691 shares of its common stock to Terra Offshore REIT at a price of $17.02 per share for total proceeds of $3.6 million. On April 29, 2020, the Company repurchased, at a price of $17.02 per share, the 212,691 shares it previously sold to Terra Offshore REIT (Note 7).

Distributions

    The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with U.S. GAAP, to its stockholders each year to comply with the REIT provisions of the Internal Revenue Code. All distributions will be made at the discretion of the Company’s board of directors and will depend upon its taxable income, financial condition, maintenance of REIT status, applicable law, and other factors as its board of directors deems relevant.
    For the three months ended September 30, 2021 and 2020, the Company made distributions to Terra JV and Terra Offshore REIT totaling $3.9 million and $4.0 million, respectively, of which $3.9 million and $1.9 million were returns of capital, respectively. For the nine months ended September 30, 2021 and 2020, the Company made distributions to Terra 5, Terra JV and Terra Offshore REIT totaling $12.2 million and $17.3 million, respectively, of which $10.7 million and $12.0 million were returns of capital, respectively. Additionally, for both the three and nine months ended September 30, 2021 and 2020, the Company made distributions to preferred stockholders of $3,906 and $11,718, respectively.