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SHAREHOLDERS' EQUITY
 6 Months Ended
Jun. 30, 2025
Equity [Abstract]  
SHAREHOLDERS' EQUITY SHAREHOLDERS’ EQUITY
Series A Preferred Stock
As of June 30, 2025 and December 31, 2024, the Company authorized 10,000 preferred shares and previously issued 125 of the preferred shares designated as 12.0% Series A Cumulative Non-Voting Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”). As of June 30, 2025 and December 31, 2024, there were zero shares of Series A Preferred Stock issued and outstanding, respectively.
The Series A Preferred Stock entitles the holders thereof to receive cumulative cash dividends at a rate per annum of 12.0% of the liquidation preference of $1,000 per share plus all accumulated and unpaid dividends thereon. The Company generally may not declare or pay, or set apart for payment, any dividend or other distribution on any shares of the Company’s stock ranking junior to the Series A Preferred Stock as to dividends, including the Company’s common stock, or redeem, repurchase or otherwise make payments on any such shares, unless full, cumulative dividends on all outstanding
shares of Series A Preferred Stock have been declared and paid or set apart for payment for all past dividend periods. The holders of the Series A Preferred Stock generally have no voting rights except in limited circumstances, including certain amendments to the Company’s charter and the authorization or issuance of equity securities senior to or on parity with the Series A Preferred Stock. The Series A Preferred Stock is not convertible into shares of any other class or series of our stock. The Series A Preferred Stock is senior to all other classes and series of shares of the Company’s stock as to dividend and redemption rights and rights upon the Company’s liquidation, dissolution and winding up.
Upon written notice to each record holder of the Series A Preferred Stock as to the effective date of redemption, the Company may redeem the shares of the outstanding Series A Preferred Stock at the Company’s option, in whole or in part, at any time for cash at a redemption price equal to $1,000 per share, plus all accrued and unpaid dividends thereon up to and including the date fixed for redemption. Shares of the Series A Preferred Stock that are redeemed shall no longer be deemed outstanding shares of the Company and all rights of the holders of such shares will terminate.
In June 2024, the Company redeemed all 125 outstanding shares of its Series A Preferred Stock. The Series A Preferred Stock was redeemed at a price of $1,000 per share, plus all accrued and unpaid dividends thereon to and including the date fixed for redemption. There were no accrued and unpaid dividends at the time of redemption.
Common Stock
As of June 30, 2025 and December 31, 2024, the Company authorized 50,000,000 shares of common stock at $0.01 par value per share, pursuant to the Articles of Amendment, dated March 10, 2022 (“Common Stock”). As of June 30, 2025 and December 31, 2024, 22,595,111 and 22,332,927 shares of Common Stock were issued and outstanding, respectively.
During the three and six months ended June 30, 2025 and the year ended December 31, 2024, the Company did not issue any shares of its common stock, other than shares of common stock sold under the ATM Program (hereinafter defined) and restricted stock awards granted under the 2020 Plan.
Shelf Registration Statement
On April 5, 2022, the Company filed a shelf registration statement on Form S-3 (File No. 333-264144) (the “Prior Shelf Registration Statement”), which was declared effective on April 18, 2022. Under the Prior Shelf Registration Statement, the Company was able, from time to time, issue and sell up to $1.0 billion of the Company’s common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of the Company’s common stock or preferred stock. The Prior Shelf Registration Statement expired on April 18, 2025.
On April 17, 2025, the Company filed a shelf registration statement on Form S-3 (File No. 333-286604) (the “Shelf Registration Statement”), which was declared effective on April 25, 2025. Under the Shelf Registration Statement, the Company may, from time to time, issue and sell up to $1.0 billion of the Company’s common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of the Company’s common stock or preferred stock.
At-the-Market Offering Program (“ATM Program”)
On April 5, 2022, the Company entered into an Open Market Sales Agreement (the “Sales Agreement”) with Jefferies LLC and Citizens JMP Securities LLC, as 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 three and six months ended June 30, 2025, the Company did not sell any shares of the Company’s common stock under the Sales Agreement. At the time of termination, the Company’s remaining authorization under the Sales Agreement was approximately $47.4 million. As of June 30, 2025, the ATM Program was no longer in effect.
The ATM Program and related Sales Agreement expired in April 2025, in connection with the expiration of the Company’s Prior Shelf Registration Statement. The Company does not currently have an ATM program, but may enter into a new ATM program and related sales agreement in the future pursuant to which sales may be made under the Shelf Registration Statement.
Stock Incentive Plan
The Company has established a stock incentive compensation plan (the “2020 Plan”). The 2020 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 or units of common stock. The 2020 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 granted, and currently intends to continue to grant, stock options and restricted stock awards to participants in the 2020 Plan, but it may also grant any other type of award available under the 2020 Plan in the future. Persons eligible to receive awards under the 2020 Plan include officers or employees of the Company or any of its subsidiaries, directors of the Company, employees of the Manager and certain directors, consultants and other service providers to the Company or any of its subsidiaries.
During the six months ended June 30, 2025, the Company’s Board of Directors approved grants of an aggregate of 271,497 shares of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager and its affiliates. The restricted stock awards granted during the six months ended June 30, 2025 under the 2020 Plan are subject to vesting periods that vary from immediately vested, one-year vesting and to vesting over a three-year period, with approximately 33% vesting on each of the first, second and third anniversaries of the vesting commencement date.
As of June 30, 2025, there were 2,860,379 shares of common stock granted under the 2020 Plan, underlying 2,148,885 options and 711,494 shares of restricted stock.
As of June 30, 2025, the maximum number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2020 Plan (the “Share Limit”) equaled 3,609,722 shares, of which 749,343 shares remained available for future issuance under the 2020 Plan. The Share Limit is consistent with the Share Limit as of March 31, 2025. Shares that are subject to or underlie awards that expire or, for any reason, are cancelled, terminated, forfeited, fail to vest or are not paid or delivered under the 2020 Plan will not be counted against the Share Limit and will again be available for subsequent awards under the 2020 Plan.
Modification of Stock Options and Restricted Stock Outstanding at Spin-Off
Stock Options
On July 9, 2024, the Company completed the separation of its CRE portfolio through the Spin-Off of SUNS. As a result, the strike price for the outstanding stock options of the Company were adjusted to give effect to the Spin-Off. All adjustments were made with the intent to preserve the intrinsic value of each award immediately before and after the Spin-Off. The Company accounted for the modification as Type I modification (probable to probable). The number of awards remained constant, while the strike prices were modified to preserve the intrinsic value of each award. The modified stock option awards otherwise retained substantially the same terms and conditions, including term and vesting provisions. The fair value of such unvested stock option awards remained constant pre- and post-Spin-Off, resulting in no incremental compensation cost. The Company will recognize the remaining unrecognized compensation cost of the original stock option awards over the remaining vesting period.
The Company used the Black-Scholes option pricing model to value stock options in determining the stock-based compensation expense. The Company has elected to recognize forfeitures as they occur. Previously recognized compensation expense related to forfeitures are reversed in the period the nonvested awards are forfeited. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. The expected dividend yield was based on the Company’s expected dividend yield at the grant date. Expected volatility is based on the estimated average volatility of similar companies due to the lack of historical volatilities of the Company’s common stock. The expected term for each award is based on the contractual term for all awards granted thus far under the 2020 Plan. Restricted stock grant expense is based on the Company’s stock price at the time of the grant and amortized over the vesting period.
The weighted-average exercise price of stock options have been retroactively adjusted to give effect to the Spin-Off for all periods presented.
The following table presents the assumptions used in the Black-Scholes pricing model of options granted under the 2020 Plan during the three and six months ended June 30, 2025 and 2024:
Assumptions:Range
Expected term
7.0 years
Expected volatility
40% - 50%
Expected dividend yield
10% - 20%
Risk-free interest rate
0.5% - 2.0%
Expected forfeiture rate
0%
The modification date fair value of the stock options was determined using the Binomial-Lattice Model with the following assumptions on July 9, 2024:
Assumptions:
Range
Expected term
3.1 - 4.5 years
Expected volatility
31.24% - 32.41%
Expected dividend yield
15.65%
Risk-free interest rate
4.16% - 4.25%
Expected forfeiture rate
0%
As additional Company history and information is available, the Company determined the use of the Binomial-Lattice Model to be appropriate compared to the closed-form Black-Scholes model. The risk-free interest rate is based on the continuously compounded rates from the U.S. Treasury yield curve in effect at the date of Spin-Off. The expected term is based on the remaining contractual term of each option’s life as of the date of Spin-Off. The expected dividend yield was based on the Company’s most recent quarterly dividend, annualized, divided by the three-month average stock price as of the Spin-Off date. Expected volatility is based on the remaining contractual term-matched historical volatility. In cases where the look back period exceeds the trading history of the Company’s Common Stock, the Company’s entire trading history was used.
Restricted Stock
Restricted stock awards originally granted under the 2020 Plan include awards granted to employees of the Manager that perform shared functions pre- and post-Spin-Off. In connection with the Spin-Off transaction and as a result of the related modification, approximately 33% of the remaining unrecognized compensation cost of unvested restricted stock awards will be recognized over the remaining vesting period of the Company’s former wholly-owned subsidiary, SUNS. The Company will recognize the remaining 67% of unrecognized compensation cost of unvested restricted stock awards over the remaining vesting period.
Stock Compensation
The following table summarizes the stock-based compensation expense incurred by the Company for the three and six months ended June 30, 2025 and 2024:
Three months ended
June 30,		Six months ended
June 30,
2025202420252024
Stock-based compensation$484,502 $369,343 $1,038,251 $912,565 
Stock Options
The following table summarizes the (i) non-vested options granted, (ii) vested options granted, (iii) exercised and (iv) forfeited options granted for the Company’s directors and officers and employees of the Manager and its affiliates as of June 30, 2025 and December 31, 2024:
As of
June 30, 2025		As of
December 31, 2024
Non-vested129,862 149,133 
Vested2,244,770 2,225,499 
Exercised(5,511)(5,511)
Forfeited(221,136)(200,669)
Balance2,147,985 2,168,452 
The following tables summarize stock option activity as of and during the six months ended June 30, 2025:
Number of optionsWeighted-average
exercise price		Weighted-average remaining contractual termAggregate intrinsic value
Outstanding as of December 31, 20242,168,452 $11.46 
Granted— — 
Exercised— — 
Forfeited(20,467)11.65 
Outstanding as of June 30, 20252,147,985 $11.46 2.77 years$— 
Exercisable as of June 30, 20252,137,314 $11.45 2.76 years$— 
Unvested as of June 30, 202510,671 $12.99 3.53 years$— 
The Company did not grant any options during the six months ended June 30, 2025 and 2024. No options were exercised during the six months ended June 30, 2025 and 2024.
As of June 30, 2025, there was approximately $6.2 thousand of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 0.53 years.
Restricted Stock
The following table summarizes restricted stock (i) granted, (ii) vested and (iii) forfeited for the Company’s directors and officers and employees of the Manager and its affiliates as of June 30, 2025 and December 31, 2024:
As of
June 30, 2025		As of
December 31, 2024
Granted754,741 483,244 
Vested(230,724)(102,780)
Forfeited(43,247)(33,934)
Balance480,770 346,530 
The fair value of the Company’s restricted stock awards is based on the Company’s stock price on the date of grant. The following table summarizes the restricted stock activity as of and during the six months ended June 30, 2025:
Number of shares of restricted stock
Weighted-average
grant date fair value
Balance as of December 31, 2024346,530 $8.72 
Granted271,497 8.37 
Vested(127,944)8.68 
Forfeited(9,313)8.80 
Balance as of June 30, 2025480,770 $8.53 
There were no shares of restricted stock granted during the three months ended June 30, 2025 and 2024. The total fair value of shares vested during the three months ended June 30, 2025 and 2024, was zero and $14.5 thousand, respectively. During the three months ended June 30, 2024, 1,159 shares of restricted stock vested with a weighted-average grant date fair value of $12.94 per share.
During the six months ended June 30, 2024, 209,397 shares of restricted stock were granted with a weighted-average grant date fair value of $11.70 per share. During the six months ended June 30, 2024, 62,338 shares of restricted stock vested with a weighted-average grant date fair value of $14.50 per share. The total fair value of shares vested during the six months ended June 30, 2025 and 2024, was approximately $1.1 million and $0.7 million, respectively.
As of June 30, 2025, there was approximately $3.3 million of total unrecognized compensation cost related to non-vested restricted stock. That cost is expected to be recognized over a weighted-average period of 2.16 years.