Business Context and Reporting Period
This Form 8-K Current Report was filed by Healthcare Trust of America, Inc. (HTA) on August 1, 2011. The filing reports on corporate governance actions taken by the Board of Directors regarding the company's Distribution Reinvestment Plan (DRIP) and the authorization of cash distributions for the third quarter of 2011.
Key Financial Metrics and Agreements
- Distribution Rate: The Board authorized distributions for August, September, and October 2011 at a rate of $0.00198630 per share per day.
- Annualized Yield: The daily rate equates to a 7.25% annualized rate based on a share price of $10.00.
- DRIP Pricing: The purchase price for shares under the Amended DRIP is set at $9.50 per share for up to 18 months following the close of the last public offering (February 28, 2011).
- Valuation Timeline: HTA anticipates establishing a per-share estimated valuation by August 28, 2012, to comply with FINRA regulations.
Material Changes
The primary material change reported is the adoption of the Amended and Restated Distribution Reinvestment Plan. The Board extended the period during which shares are offered at the fixed price of $9.50 from 12 months to 18 months. This extension provides additional time to calculate the estimated share value required by FINRA before a potential listing on a national securities exchange. Additionally, the Board formally authorized the distribution payments for the upcoming three months.
Outlook, Risks, and Management Commentary
- Future Distributions: The Board retains discretion to reduce the distribution rate. Future payments depend on funds available, financial condition, capital expenditure requirements, and REIT status maintenance.
- DRIP Termination: The Board may terminate the DRIP or a participant's enrollment at any time without consent if continued participation jeopardizes the company's REIT status under the Internal Revenue Code.
- Post-Listing Pricing: Once shares are listed on a national exchange, DRIP participants will acquire shares at 100% of the average daily open and close price on the distribution payment date.
Investor Verification Checklist
- Verify the exact date the 18-month fixed pricing period for the DRIP concludes (anticipated August 28, 2012).
- Confirm the company's ability to maintain REIT status, which dictates the necessity of distribution payments.
- Monitor the establishment of the FINRA-compliant per-share estimated valuation prior to the expiration of the fixed pricing period.
- Review the attached Amended DRIP (Exhibit 10.1) for specific terms regarding withdrawal rights and amendment procedures.