Sotherly Hotels to Delist Preferred Stock from Nasdaq, Completes $58.8M Preferred Share Conversion

summarizeSummary

Sotherly Hotels Inc. is voluntarily delisting its preferred stock from Nasdaq and moving to an OTC platform, following a $58.8 million cash payout for preferred share conversions related to a recent merger.

check_boxKey Events

• Voluntary Delisting of Preferred Stock from Nasdaq

  Sotherly Hotels Inc. provided notice to Nasdaq for the voluntary withdrawal of its 8.0% Series B, 7.875% Series C, and 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock. The company expects to file Form 25 around April 7, 2026, with the last day of trading on Nasdaq anticipated around April 17, 2026. The company intends to list on an OTC market platform and continue SEC reporting.

• Completion of $58.8 Million Preferred Share Conversion

  Following a change of control event from a merger, holders of 1,188,042 Series B, 1,202,415 Series C, and 820,066 Series D Preferred Stock exercised their conversion rights. On March 25, 2026, the company cancelled these shares in exchange for cash payments totaling approximately $58.8 million ($22.16M for Series B, $23.01M for Series C, and $13.65M for Series D).

• New Consulting Agreement with Affiliate

  Sotherly Hotels LP entered into a consulting agreement with KWC Management, LLC, an affiliate, effective February 12, 2026. KWC will provide asset management services for 10 hotel properties, with an initial annual fee of $650,000, payable monthly.

auto_awesomeAnalysis

Sotherly Hotels Inc. announced the voluntary delisting of its Series B, C, and D Preferred Stock (including SOHOB) from Nasdaq, with an expected move to an OTC market platform. This action follows a recent merger where the company's common stock was acquired, and over 80% of preferred stockholders opted for cash conversion. The company completed the conversion of 3.2 million preferred shares, resulting in a significant cash payout of approximately $58.8 million. While the delisting is voluntary and the company intends to continue SEC reporting, the move from Nasdaq to an OTC platform typically reduces liquidity and visibility for investors in the affected preferred shares. The substantial cash outflow for the conversion represents a material change in the company's capital structure.