| Stockholders' Equity | Stockholders’ Equity General Under the Charter, the total number of shares of capital stock authorized for issuance is 1,300,000,000 , consisting of 1,200,000,000 shares of common stock, $0.01 par value per share, of which 480,000,000 shares are classified as Class A common stock, 240,000,000 shares are classified as Class R common stock and 480,000,000 shares are classified as Class T common stock, and 100,000,000 shares of preferred stock, $0.01 par value per share. The Company’s board of directors may amend the Charter from time to time to increase or decrease the aggregate number of shares of capital stock or the number of shares of capital stock of any class or series that it has authority to issue. Common Stock The shares of the Company’s common stock entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the MGCL and to all rights of a stockholder pursuant to the Maryland General Corporation Law. The common stock has no preferences or preemptive, conversion or exchange rights. On August 24, 2015, the Company issued 8,000 shares of Class A common stock for $200,000 to the Advisor. The following table reflects information regarding shares of common stock sold in the Public Offering from inception through September 30, 2019 : September 30, 2019 Class A Class R Class T Total Shares of common stock issued - Primary Offering 3,371,785 465,907 4,427,053 8,264,745 Shares of common stock issued - DRP 157,012 13,622 227,925 398,559 Total shares of common stock issued - Public Offering 3,528,797 479,529 4,654,978 8,663,304 Gross offering proceeds - Primary Offering $ 83,142,845 $ 10,482,148 $ 105,408,116 $ 199,033,109 Gross offering proceeds - DRP 3,691,826 306,640 5,150,991 9,149,457 Total offering proceeds - Public Offering $ 86,834,671 $ 10,788,788 $ 110,559,107 $ 208,182,566 Offering costs, before distribution and shareholder servicing fees (27,624,273 ) Offering proceeds, net of offering costs $ 180,558,293 On August 9, 2018 , the Company granted 1,000 shares of restricted Class A common stock to each of its three independent directors pursuant to the Company’s independent directors’ compensation plan at a fair value of $25.00 per share in connection with their re-election to the board of directors at the Company’s 2018 annual meeting of stockholders. The shares of restricted common stock vest and become non-forfeitable in four equal annual installments, beginning on the date of grant and ending on the third anniversary of the date of grant; provided, however, that the shares of restricted common stock will become fully vested on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability or (2) a change in control of the Company. The issuance and vesting activity for the nine months ended September 30, 2019 , and year ended December 31, 2018 , for the restricted common stock issued to the Company’s independent directors pursuant to the independent directors’ compensation plan is as follows: Nine Months Ended September 30, 2019 Year Ended December 31, 2018 Nonvested shares at the beginning of the period 5,250 5,250 Granted shares — 3,000 Vested shares (3,000 ) (3,000 ) Nonvested shares at the end of the period 2,250 5,250 Included in general and administrative expenses is $9,379 and $42,249 for the three and nine months ended September 30, 2019 , and $35,613 and $63,539 for the three and nine months ended September 30, 2018 , respectively, for compensation expense related to the issuance of restricted common stock. As of September 30, 2019 , the compensation expense related to the issuance of the restricted common stock not yet recognized was $50,762 . The weighted average remaining term of the restricted common stock was 1.19 years as of September 30, 2019 . As of September 30, 2019 , no shares of restricted common stock issued to the independent directors had been forfeited. Preferred Stock The Charter also provides the Company’s board of directors with the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such shares of preferred stock, the board of directors shall have the power from time to time to classify or reclassify, in one or more series, any unissued shares and designate the preferences, rights and privileges of such shares of preferred stock. The Company’s board of directors is authorized to amend the Charter without the approval of the stockholders to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. As of September 30, 2019 and December 31, 2018 , no shares of the Company’s preferred stock were issued and outstanding. Distribution Reinvestment Plan The Company’s board of directors approved the DRP through which common stockholders could elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares of the Company’s common stock in lieu of receiving cash distributions. The purchase price per Class A, Class R and Class T share of common stock under the DRP was initially $23.75 , $22.50 and $22.62 , respectively. On October 9, 2018, the Company’s board of directors approved a price per Class A, Class R and Class T share of common stock for the DRP of $22.54 , effective November 1, 2018. The Company’s board of directors elected to suspend the DRP with respect to distributions that accrue after February 1, 2019. As a result, all distributions beginning with distributions that accrued in February 2019 are paid in cash. The Company’s board of directors may, from time to time in its sole discretion, reinstate the DRP, although there is no assurance as to if or when this will happen. No sales commissions or dealer manager fees were payable on shares sold through the DRP. The Company’s board of directors may amend, suspend or terminate the DRP at its discretion at any time upon ten days ’ notice to the Company’s stockholders. Share Repurchase Program and Redeemable Common Stock The Company’s share repurchase program may provide an opportunity for stockholders to have their shares of common stock repurchased by the Company, subject to certain restrictions and limitations. No shares can be repurchased under the Company’s share repurchase program until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period shall not apply to repurchases requested within 270 days after the death or disability of a stockholder. Prior to the date the Company announced an estimated value per share of its common stock, the purchase price for shares repurchased under the Company’s share repurchase program was as follows: Share Purchase Anniversary Repurchase Price on Repurchase Date (1) Less than 1 year No Repurchase Allowed 1 year 92.5% of Purchase Price 2 years 95.0% of Purchase Price 3 years 97.5% of Purchase Price 4 years 100.0% of Purchase Price In the event of a stockholder’s death or disability Average Issue Price for Shares (2) _______________ (1) As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees. (2) The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares. The required one -year holding period does not apply to repurchases requested within 270 days after the death or disability of a stockholder. Beginning October 12, 2018, the date the Company first published its estimated value per share of its common stock, the purchase price for shares repurchased under the Company’s share repurchase program is as follows: Share Purchase Anniversary Repurchase Price (1)(2) Less than 1 year No Repurchase Allowed 1 year 92.5% of the Lesser of Purchase Price or Estimated Value per Share 2 years 95.0% of the Lesser of Purchase Price or Estimated Value per Share 3 years 97.5% of the Lesser of Purchase Price or Estimated Value per Share 4 years 100.0% of the Lesser of Purchase Price or Estimated Value per Share In the event of a stockholder’s death or disability Average Issue Price for Shares (3) _______________ (1) As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees. (2) For purposes of the share repurchase program, the “Estimated Value per Share” equals the most recent publicly disclosed estimated value per share determined by the Company’s board of directors. On October 12, 2018, the Company publicly disclosed an estimated value per share of $22.54 for each class of shares of its common stock based on valuations by independent third-party appraisers or qualified valuation experts. (3) The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares. The required one -year holding period does not apply to repurchases requested within 270 days after the death or disability of a stockholder. The purchase price per share for shares repurchased pursuant to the Company’s share repurchase program will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to the Company’s stockholders prior to the repurchase date as a result of the sale of one or more of the Company’s assets that constitutes a return of capital distribution as a result of such sales. Repurchases of shares of the Company’s common stock will be made quarterly upon written request to the Company at least 15 days prior to the end of the applicable quarter. Repurchase requests will be honored approximately 30 days following the end of the applicable quarter (the “Repurchase Date”). Stockholders may withdraw their repurchase request at any time up to three business days prior to the Repurchase Date. The following table reflects repurchase activity for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Class A Class R Class T Total Class A Class R Class T Total Repurchase requests (in shares) — — 2,688 2,688 39,851 713 23,386 63,950 Repurchase requests (value) $ — $ — $ 64,000 $ 64,000 $ 857,505 $ 14,841 $ 519,115 $ 1,391,461 Repurchases fulfilled (in shares) 20,230 — 11,012 31,242 66,030 713 20,698 87,441 Repurchase requests fulfilled (value) $ 427,529 $ — $ 240,358 $ 667,887 $ 1,453,327 $ 14,841 $ 455,115 $ 1,923,283 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Class A Class R Class T Total Class A Class R Class T Total Repurchase requests (in shares) 3,557 — 1,211 4,768 17,152 3,608 2,528 23,288 Repurchase requests (value) $ 75,724 $ — $ 25,734 $ 101,458 $ 392,278 $ 75,097 $ 57,003 $ 524,378 Repurchases fulfilled (in shares) 2,543 — 420 2,963 17,143 3,608 1,737 22,488 Repurchase requests fulfilled (value) $ 57,971 $ — $ 9,250 $ 67,221 $ 398,445 $ 75,097 $ 40,519 $ 514,061 In connection with the proposed Merger, on August 5, 2019, the board of directors approved the Amended and Restated Share Repurchase Plan (the “Amended & Restated SRP”), which became effective September 5, 2019, and applied with repurchases made on repurchase dates (as defined in the Amended & Restated SRP) subsequent to the effective date of the Amended & Restated SRP. Under the Amended & Restated SRP, the Company will only repurchase shares of common stock in connection with the death or qualifying disability (as defined in the Amended & Restated SRP) of a stockholder, subject to certain terms and conditions specified in the Amended & Restated SRP. The Company is not obligated to repurchase shares of its common stock under the share repurchase program. The share repurchase program limits the number of shares to be repurchased in any calendar year to the lesser of (1) 5% of the weighted average number of shares of common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the DRP in the prior calendar year, plus such additional funds as may be reserved for that purpose by the Company’s board of directors. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to stockholders or purchases of real estate assets. There is no fee in connection with a repurchase of shares of the Company’s common stock pursuant to the Company’s share repurchase program. As of September 30, 2019 and 2018 , the Company had outstanding and unfulfilled repurchase requests of 2,688 (pursuant to the Amended & Restated SRP) and 3,857 shares of common stock and recorded $64,000 and $81,708 in accounts payable and accrued liabilities on the accompanying consolidated balance sheets related to these unfulfilled repurchase requests, all of which were repurchased on the October 31, 2019 and 2018 repurchase dates, respectively. The Company cannot guarantee that the funds set aside for the share repurchase program will be sufficient to accommodate all repurchase requests made in any quarter. In the event that the Company does not have sufficient funds available to repurchase all of the shares of the Company’s common stock for which repurchase requests have been submitted in any quarter, such outstanding repurchase requests will automatically roll over to the subsequent quarter and priority will be given to redemption requests in the case of the death or disability of a stockholder. If the Company repurchases less than all of the shares subject to a repurchase request in any quarter, with respect to any shares which have not been repurchased, a stockholder can withdraw the stockholder’s request for repurchase. Pending requests will be honored among all requests for redemptions in any given repurchase period as follows: first, pro rata as to repurchases sought upon a stockholder’s death or disability; and, next, pro rata as to other repurchase requests. Shares repurchased under the share repurchase program to satisfy the required minimum distribution requirements under the Internal Revenue Code applicable to retirement benefit plans and IRAs will be repurchased on or after the first anniversary of the date of purchase of such shares at 100% of the purchase price or at 100% of the estimated value per share, as applicable. The Company’s board of directors may, in its sole discretion, amend, suspend or terminate the share repurchase program at any time upon 30 days’ notice to its stockholders if it determines that the funds available to fund the share repurchase program are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase program is in the best interest of the Company’s stockholders. Therefore, a stockholder may not have the opportunity to make a repurchase request prior to any potential termination of the Company’s share repurchase program. The share repurchase program will terminate in the event that a secondary market develops for the Company’s shares of common stock. For the three and nine months ended September 30, 2019 , the Company reclassified $667,887 and $2,951,937 , net of $667,887 and $1,923,283 of fulfilled repurchase requests pursuant to the share repurchase program from temporary equity to permanent equity, which are included as additional paid-in capital in the accompanying consolidated balance sheets. Pursuant to the share repurchase program for the three and nine months ended September 30, 2018 , the Company reclassified $1,241,466 and $2,804,736 , net of $67,221 and $514,061 of fulfilled repurchase requests, respectively, from permanent equity to temporary equity, which are included as redeemable common stock on the accompanying consolidated balance sheets. Distributions The Company’s long-term policy is to pay distributions solely from cash flow from operations. Further, because the Company may receive income from interest or rents at various times during the Company’s fiscal year and because the Company may need cash flow from operations during a particular period to fund capital expenditures and other expenses, the Company’s expectation during its operational stage is that it will continue to declare distributions in anticipation of cash flow that the Company expects to receive during a later period, and the Company expects to pay these distributions in advance of its actual receipt of these funds. In these instances, the Company’s board of directors has the authority under its organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings, offering proceeds or advances and the deferral of fees and expense reimbursements by the Advisor, in its sole discretion. If the Company pays distributions from sources other than cash flow from operations, the Company will have fewer funds available for investments and stockholders’ overall return on their investment in the Company may be reduced. The Company elected to be taxed as, and qualifies as, a REIT for federal income tax purposes commencing with the taxable year ended December 31, 2016. To qualify as a REIT, the Company must make aggregate annual distributions to its stockholders of at least 90% of the Company’s REIT taxable income (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). If the Company meets the REIT qualification requirements, the Company generally will not be subject to federal income tax on the income that the Company distributes to its stockholders each year. Distributions Declared and Paid The following table reflects per share daily distribution rates and annualized distribution rates for the first , second and third fiscal quarters of 2019 and 2018 : 2019 (1) 2018 (1) 1st Quarter 2nd Quarter 3rd Quarter 1st Quarter 2nd Quarter 3rd Quarter Daily Distribution per Class A share (2) $ 0.004110 $ 0.004110 $ 0.004110 $ 0.004110 $ 0.004110 $ 0.004110 Daily Distribution per Class R share (2)(3) $ 0.004110 $ 0.004110 $ 0.004110 $ 0.00394521 $ 0.00394521 $ 0.00394521 Daily Distribution per Class T share (2)(4) $ 0.004110 $ 0.004110 $ 0.004110 $ 0.003376 $ 0.003376 $ 0.003376 Annualized Rate Based on Purchase Price: Per Class A share 6.00 % 6.00 % 6.00 % 6.00 % 6.00 % 6.00 % Per Class R share 6.67 % 6.67 % 6.67 % 6.40 % 6.40 % 6.40 % Per Class T share 6.30 % 6.30 % 6.30 % 5.17 % 5.17 % 5.17 % _________________ (1) The Company’s board of directors approved a cash distribution that accrued at the above rates per day for each share of the Company’s Class A common stock, Class R common stock and Class T common stock, which if paid each day over a 365-day period is equivalent to the per share annualized rates reflected above based on a purchase price of $25.00 per share of Class A common stock, $22.50 per share of Class R common stock and $23.81 per share of Class T common stock. (2) The distributions declared accrue daily to stockholders of record as of the close of business on each day and are payable in cumulative amounts on or before the third day of each calendar month with respect to the prior month. There is no guarantee that the Company will continue to pay distributions at these rates or at all. (3) Distributions during the three and nine months ended September 30, 2018 , were based on daily record dates and calculated at a rate of $0.00394521 per share of Class R common stock per day for Class R common stock subject to an annual distribution and shareholder servicing fee of 0.27% . In some instances during the three and nine months ended September 30, 2018 , the Company paid distributions at a rate of $0.00369863 per share of Class R common stock per day for Class R common stock subject to an annual distribution and shareholder servicing fee of 0.67% . (4) Distributions during the three and nine months ended September 30, 2018 , were based on daily record dates and calculated at a rate of $0.003457 per share of Class T common stock per day for Class T common stock subject to an annual distribution and shareholder servicing fee of 1.0% . In some instances during the three and nine months ended September 30, 2018 , the Company paid distributions at a rate of $0.003376 per share of Class T common stock per day for Class T common stock subject to an annual distribution and shareholder fee of 1.125% . The following tables reflect distributions declared and paid to Class A common stockholders, Class R common stockholders and Class T common stockholders for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Class A Class R Class T Total Class A Class R Class T Total DRP distributions declared (in shares) — — — — 7,715 909 14,754 23,378 DRP distributions declared (value) $ — $ — $ — $ — $ 173,894 $ 20,497 $ 332,562 $ 526,953 Cash distributions declared 1,313,225 179,679 1,752,258 3,245,162 3,744,962 512,916 4,875,715 9,133,593 Total distributions declared $ 1,313,225 $ 179,679 $ 1,752,258 $ 3,245,162 $ 3,918,856 $ 533,413 $ 5,208,277 $ 9,660,546 DRP distributions paid (in shares) — — — — 15,487 1,845 31,246 48,578 DRP distributions paid (value) $ — $ — $ — $ — $ 349,083 $ 41,587 $ 704,286 $ 1,094,956 Cash distributions paid 1,315,719 179,679 1,753,616 3,249,014 3,590,399 495,557 4,592,456 8,678,412 Total distributions paid $ 1,315,719 $ 179,679 $ 1,753,616 $ 3,249,014 $ 3,939,482 $ 537,144 $ 5,296,742 $ 9,773,368 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2019 Class A Class R Class T Total Class A Class R Class T Total DRP distributions declared (in shares) 21,257 2,304 35,041 58,602 59,385 6,014 94,730 160,129 DRP distributions declared (value) $ 504,844 $ 51,845 $ 792,617 $ 1,349,306 $ 1,410,378 $ 135,315 $ 2,142,798 $ 3,688,491 Cash distributions declared 780,204 107,813 586,129 1,474,146 2,165,573 282,840 1,579,050 4,027,463 Total distributions declared $ 1,285,048 $ 159,658 $ 1,378,746 $ 2,823,452 $ 3,575,951 $ 418,155 $ 3,721,848 $ 7,715,954 DRP distributions paid (in shares) 20,611 2,189 34,039 56,839 58,405 5,708 91,734 155,847 DRP distributions paid (value) $ 489,496 $ 49,225 $ 769,966 $ 1,308,687 $ 1,387,118 $ 128,418 $ 2,075,018 $ 3,590,554 Cash distributions paid 763,808 102,915 563,745 1,430,468 2,122,328 270,739 1,526,010 3,919,077 Total distributions paid $ 1,253,304 $ 152,140 $ 1,333,711 $ 2,739,155 $ 3,509,446 $ 399,157 $ 3,601,028 $ 7,509,631 As of September 30, 2019 , $1,056,993 of distributions declared were payable and are included in distributions payable in the accompanying consolidated balance sheets, which included $427,412 , $58,591 and $570,990 of Class A common stock, Class R common stock and Class T common stock, respectively, all of which were payable in cash. As of December 31, 2018 , $1,169,815 of distributions declared were payable and included in distributions payable in the accompanying consolidated balance sheets, which included $448,039 , $62,322 and $659,454 of Class A common stock, Class R common stock and Class T common stock, respectively, of which $175,189 , $21,090 and $371,724 , or 7,772 , 936 and 16,492 shares of Class A common stock, Class R common stock and Class T common stock, are attributable to the DRP, respectively. As reflected in the table above, for the three and nine months ended September 30, 2019 , the Company paid total distributions of $3,249,014 and $9,773,368 , which related to distributions declared for each day in the period from June 1, 2019 through August 31, 2019 and December 1, 2018 through August 31, 2019 , respectively. For the three and nine months ended September 30, 2018 , the Company paid total distributions of $2,739,155 and $7,509,631 , which related to distributions declared for each day in the period from June 1, 2018 through August 31, 2018 and December 31, 2017 through August 31, 2018 , respectively. |
