Quarterly report pursuant to sections 13 or 15(d)


9 Months Ended
Sep. 30, 2012
6. Equity

Equity currently consists of partnership interests in the Company’s five properties (see Note 1). The Company has authority to issue 15,500,000 of stock, consisting of 15,000,000 shares of $0.01 par value Common Stock and 500,000 shares of Series A Convertible Preferred Stock. The Board of Directors (once formed), with the approval of a majority of the entire Board and without an action by the stockholders of the Company, may amend the charter to increase or decrease the aggregate number of common shares available. Additionally, the Company’s Board may authorize the issuance of shares of its stock of any class or securities convertible into shares of its stock of any class. During the nine months ended September 30, 2012, the Company issued 123,500 shares of Series A Convertible Preferred Stock at $4.00 per share generating $494,000 in proceeds to cover anticipated offering expenses to be incurred prior to closing. All outstanding preferred stock shares were converted into shares of common stock upon completion of the offering at a conversion rate of $4.00 divided by 66.66% of the offering price.

Contemporaneously with executing the offering and formation transactions, the prior investors received cash or common units in exchange for their interests in the ownership entities. The value of the consideration paid to each of the prior investors in the formation transactions was based upon the terms of the applicable contribution agreement among the Operating Partnership and the prior investor(s), and was determined based on a relative equity valuation analysis of all of the properties included in the Company’s portfolio and the property management business. The common units issued in exchange for each property’s ownership interest will be convertible into common stock 180 days after the offering prospectus became effective.