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REDEEMABLE PREFERRED STOCK | 3 Months Ended
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Mar. 31, 2024
Equity [Abstract] |
REDEEMABLE PREFERRED STOCK | 11. REDEEMABLE PREFERRED STOCK The table below provides information regarding the issuances, reclassifications and redemptions of each class of the Company’s preferred stock in permanent equity during the three months ended March 31, 2024 and 2023 (dollar amounts in thousands):
| Preferred Stock |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Series A1 |  | Series A |  | Series D |  |  |  | Total |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  | Shares |  | Amount |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balances, December 31, 2022 | 5,956,147 |  |  | $ | 147,514 |  |  | 7,565,349 |  |  | $ | 189,048 |  |  | 48,857 |  |  | $ | 1,200 |  |  |  |  |  |  | 13,570,353 |  |  | $ | 337,762 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issuance of Series A1 Preferred Stock | 1,032,433 |  |  | 25,569 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 1,032,433 |  |  | 25,569 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Redemption of Series A1 Preferred Stock | (12,870) |  |  | (319) |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | (12,870) |  |  | (319) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reclassification of Series A Preferred stock to permanent equity | — |  |  | — |  |  | 389,325 |  |  | 9,699 |  |  | — |  |  | — |  |  |  |  |  |  | 389,325 |  |  | 9,699 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Redemption of Series A Preferred Stock | — |  |  | — |  |  | (189,753) |  |  | (4,723) |  |  | — |  |  | — |  |  |  |  |  |  | (189,753) |  |  | (4,723) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balances, March 31, 2023 | 6,975,710 |  |  | $ | 172,764 |  |  | 7,764,921 |  |  | $ | 194,024 |  |  | 48,857 |  |  | $ | 1,200 |  |  |  |  |  |  | 14,789,488 |  |  | $ | 367,988 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balances, December 31, 2023 | 10,378,343 |  |  | $ | 256,935 |  |  | 7,431,839 |  |  | $ | 185,704 |  |  | 48,447 |  |  | $ | 1,190 |  |  |  |  |  |  | 17,858,629 |  |  | $ | 443,829 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issuance of Series A1 Preferred Stock | 853,879 |  |  | 21,246 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 853,879 |  |  | 21,246 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Redemption of Series A1 Preferred Stock | (24,046) |  |  | (595) |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | (24,046) |  |  | (595) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Redemption of Series A Preferred Stock | — |  |  | — |  |  | (389,506) |  |  | (9,698) |  |  | — |  |  | — |  |  |  |  |  |  | (389,506) |  |  | (9,698) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balances, March 31, 2024 | 11,208,176 |  |  | $ | 277,586 |  |  | 7,042,333 |  |  | $ | 176,006 |  |  | 48,447 |  |  | $ | 1,190 |  |  |  |  |  |  | 18,298,956 |  |  | $ | 454,782 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Series A1 Preferred Stock—Commencing in June 2022, the Company conducted a public offering with respect to shares of its Series A1 Preferred Stock, par value $0.001 per share with an initial stated value of $25.00 per share, subject to adjustment. The Company has filed a Registration Statement on Form S-11 in respect of such offering and anticipates continuing the offering upon effectiveness of such Registration Statement on Form S-11. Nothing contained in this Quarterly Report on Form 10-Q is or shall be deemed to be an offer to sell any securities of the Company, or the solicitation of any offer to buy any securities of the Company, in any jurisdiction, which may only be made pursuant to appropriate offering documentation. Shares of Series A1 Preferred Stock are recorded in permanent equity at the time of their issuance. As of March 31, 2024, the Company had issued in registered public offerings 11,127,248 shares of the Series A1 Preferred Stock and received gross proceeds of $275.5 million, and additionally had issued 200,000 shares of Series A1 Preferred Stock as payment for services to the CIM Service Provider, LLC (the “Administrator”), for which no cash proceeds were received. In connection with the issuance of shares of Series A1 Preferred Stock, $20.3 million of costs specifically identifiable to the offering of Series A1 Preferred Stock was allocated to the Series A1 Preferred Stock. Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $10.9 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of March 31, 2024, the Company had reclassified and allocated $4.0 million from deferred charges to Series A1 Preferred Stock as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering. As of March 31, 2024, there were 11,208,176 shares of Series A1 Preferred Stock outstanding and 119,072 shares of Series A1 Preferred Stock had been redeemed. Series A Preferred Stock—The Company conducted a continuous public offering of Series A Preferred Stock (with each issued share of Series A Preferred Stock, initially accompanied by one warrant (“Series A Preferred Warrant”) to purchase 0.25 of a share of Common Stock, subject to adjustment) from October 2016 through January 2020. Proceeds and expenses from the sale were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance. From February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of the Company’s Series A Preferred Stock, which, since February 2020, was no longer being issued as a unit with an accompanying Series A Preferred Warrant. In June 2022, the Company concluded the offering of Series A Preferred Stock. As of March 31, 2024, the Company had issued in registered public offerings 8,251,657 shares of Series A Preferred Stock and 4,603,287 Series A Preferred Warrants and received gross proceeds of $205.4 million and $761,000, respectively, and additionally, had issued 568,681 shares of Series A Preferred Stock as payment for services to the Administrator, for which no cash proceeds were received. In connection with the cumulative issuance of Series A Preferred Stock and Series A Preferred Warrants, $17.0 million and $142,000 of costs specifically identifiable to the offering of the Series A Preferred Stock and Series A Preferred Warrants, respectively, were allocated to the Series A Preferred Stock and Series A Preferred Warrants, respectively. Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $10.9 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of March 31, 2024, the Company had reclassified and allocated $1.9 million and $5,000 from deferred charges to Series A Preferred Stock and Series A Preferred Warrants, respectively, as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering. Net proceeds from the issuance of shares of Series A Preferred Stock were initially recorded in temporary equity at an amount equal to the gross proceeds allocated to such shares of Series A Preferred Stock minus the costs specifically identifiable to the issuance of such shares and the non-issuance specific offering costs allocated to such shares. If the net proceeds from the issuance of shares of Series A Preferred Stock were less than the redemption value of such shares at the time they were issued, or if the redemption value of such shares subsequently becomes greater than the carrying value of such shares, an adjustment was recorded to increase the carrying amount of such shares to their redemption value as of the balance sheet date. Such adjustment was considered a deemed dividend for purposes of calculating basic and diluted EPS. During the three months ended March 31, 2024 and March 31, 2023, the Company recorded no redeemable preferred stock deemed dividends related to such adjustments. On the first anniversary of the issuance of a particular share of Series A Preferred Stock, the Company reclassifies such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date. As of March 31, 2024, the Company had reclassified an aggregate of $199.6 million in net proceeds from temporary equity to permanent equity. As of March 31, 2024, there were 7,042,333 shares of Series A Preferred Stock outstanding and 1,778,005 shares of Series A Preferred Stock had been redeemed. Series D Preferred Stock—From February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of its Series D Preferred Stock, par value $0.001 per share, subject to adjustment. The selling price of the Series D Preferred Stock was $25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and $24.50 per share thereafter. Shares of Series D Preferred Stock were recorded in permanent equity at the time of their issuance. In June 2022, the Company concluded the offering of its Series D Preferred Stock. As of March 31, 2024, the Company had issued in registered public offerings 56,857 shares of Series D Preferred Stock and received gross proceeds of $1.4 million. In connection with such issuance, $35,000 of costs specifically identifiable to the offering of Series D Preferred Stock were allocated to the Series D Preferred Stock. Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $10.9 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of March 31, 2024, the Company had reclassified and allocated $13,000 from deferred charges to Series D Preferred Stock as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering. As of March 31, 2024, there were 48,447 shares of Series D Preferred Stock outstanding and 8,410 shares of Series D Preferred Stock had been redeemed. Series L Preferred Stock—On November 21, 2017, the Company issued 8,080,740 shares of Series L Preferred Stock having an initial stated value of $28.37 per share (“Series L Preferred Stock Stated Value”), subject to adjustment. The Company received gross proceeds of $229.3 million from the sale of the Series L Preferred Stock, which was reduced by issuance-specific offering costs. On September 15, 2022, the Company repurchased 2,435,284 shares of its Series L Preferred Stock in a privately negotiated transaction (the “Series L Repurchase”). The shares were repurchased at a purchase price of $27.40 per share (a 3.4% discount to the stated value of $28.37 per share) plus $1.12 per share of accrued and unpaid dividends (or $2.7 million accrued and unpaid dividends in the aggregate). The total cost to complete the Series L Repurchase, including transactions costs of $700,000 (or $0.29 per share), was $70.1 million. In December 2022, the Company announced the redemption of all remaining outstanding shares of its Series L Preferred Stock. In January 2023, the Company completed such previously-announced redemption of all outstanding shares of its Series L Preferred Stock in cash at its stated value of $28.37 per share (plus accrued and unpaid dividends of $1.56 per share, or $4.6 million in the aggregate). The total cost to complete the Series L Redemption, including transaction costs of $93,000 (or $0.03 per share), was $83.8 million. Dividends—With respect to the payment of dividends or the distribution of amounts upon liquidation, dissolution or winding-up, the Series A1 Preferred Stock, the Series A Preferred Stock and Series D Preferred Stock rank on parity with respect to each other and senior to the Common Stock. Holders of Series A1 Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends (the “Series A1 Dividend”) on each share of Series A1 Preferred Stock at the greater of (i) an annual rate of 6.0% of the Series A1 Preferred Stock Stated Value (i.e., the equivalent of $0.3750 per share per quarter) and (ii) the Federal Funds (Effective) Rate for such quarter and plus 2.5% of the Series A1 Preferred Stock Stated Value divided by four, up to a maximum of 2.5% of the Series A1 Preferred Stock Stated Value per quarter. Holders of Series A Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of 5.50% of the Series A Preferred Stock Stated Value (i.e., the equivalent of $0.34375 per share per quarter) (the “Series A Dividend”). Holders of Series D Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series D Preferred Stock at an annual rate of 5.65% of the Series D Preferred Stock Stated Value (i.e., the equivalent of $0.35313 per share per quarter) (the “Series D Dividend”). Dividends on each share of Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock begin accruing on, and are cumulative from, the date of issuance. The Company expects to pay the Series A1 Dividend, Series A Dividend and Series D Dividend in arrears on a monthly basis in accordance with the foregoing provisions, unless the Company’s results of operations, general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so. The timing and amount of the Series A1 Dividend, Series A Dividend and the Series D Dividend will be determined by the Company’s Board of Directors, in its sole discretion, and may vary from time to time. During the three months ended March 31, 2024, the Company paid $5.1 million, $2.5 million, and $17,000 of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock, respectively. During the three months ended March 31, 2023, the Company paid $2.4 million, $2.8 million, $17,000 and $4.6 million of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively. Redemptions—The Company’s Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock are redeemable at the option of the holder or the Company. The redemption schedule of the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock allows redemptions at the option of the holder of Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock from the date of original issuance of any such shares at the Series A1 Preferred Stock Stated Value, Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, less a redemption fee applicable prior to the fifth anniversary of the issuance of such shares, plus accrued and unpaid dividends. The Company has the right to redeem the Series A1 Preferred Stock after the date that is twenty-four months following the original issuance of such shares of Series A1 Preferred Stock at the Series A1 Preferred Stock Stated Value, plus accrued and unpaid dividends. The Company has the right to redeem the Series A Preferred Stock or Series D Preferred Stock after the fifth anniversary of the date of original issuance of such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, plus accrued and unpaid dividends. With respect to redemptions of the Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock, at the Company’s discretion, the redemption price will be paid in cash and/or in Common Stock based on the volume weighted average price of the Company’s Common Stock for the 20 trading days prior to the redemption; provided that the redemption price of any shares of Series A Preferred Stock redeemed prior to the first anniversary of the date of original issuance of such shares must be paid in cash.

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- Definition The entire disclosure for terms, amounts, nature of changes, rights and privileges, dividends, and other matters related to preferred stock. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//505/tableOfContent + Details
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