Annual report pursuant to Section 13 and 15(d)

STOCKHOLDERS' EQUITY AND RELATED PARTY TRANSACTION

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STOCKHOLDERS' EQUITY AND RELATED PARTY TRANSACTION
 12 Months Ended
Dec. 31, 2016
Equity [Abstract]  
STOCKHOLDERS' EQUITY AND RELATED PARTY TRANSACTION
STOCKHOLDERS' EQUITY AND RELATED PARTY TRANSACTION

On August 15, 2016, the Company announced a $5 million rights offering. A registration statement on Form S-3 relating to these securities was declared effective by the U.S. Securities and Exchange Commission on October 6, 2016. The rights offering commenced on October 7, 2016 and the Company distributed, at no charge, non-transferable subscription rights to the holders of the Company's common stock as of August 25, 2016.

The Company closed on its rights offering on November 10, 2016. The Company received a total of $5 million of gross proceeds (or $4.64 million of net proceeds after offering costs) from the rights offering through the issuance of 3,846,154 shares of common stock at a price of $1.30 per share. The net proceeds from the rights offering are intended to be used to partially fund certain capital expenditure growth projects at our existing properties, as well as for general corporate purposes.

Of the 3,846,154 shares issued in connection with the rights offering, Daniel R. Lee, Chief Executive Officer, President and a director of the Company, purchased 1,000,000 shares as the standby purchaser in connection with the standby purchase agreement that the Company entered into with Mr. Lee on October 7, 2016. Mr. Lee (i) agreed to hold such shares for a minimum period, (ii) received reimbursement of his legal fees, (iii) received a priority right to purchase the first 1,000,000 shares that remained after shareholders exercised their basic subscription rights, and (iv) received registration rights from the Company with respect to such purchased shares. Mr. Lee received no fee for providing the standby purchase agreement.