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Non-Tech : Income Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jerrymac who wrote (47073)

12/13/2021 7:06:19 PM

From: E_K_S

3 Recommendations

Recommended By
brehm233
Jerrymac
MRothaus1

Respond to of 52143

Re: Broken preferred; SOHON/SOHOB & OTRKP

It looks like they got 8.278 common shares (620,919/75,000) for each of their SOHOO preferred shares. The common shares traded around $2.20/share. That comes out to $18.21/share for each of their preferred. The SOHOO preferred traded around $16.30 (12/2/2021) which makes the suspended div amount at $1.91/share.

The annual div for the SOHOO is $1.97/year. So it appears that they got 1 years suspended dividend in common shares.

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Then they exchanged 69,500 common shares for 10K preferred shares (which included the 1 year suspended div).

My take away is this large investor (Palogic Value Fund, L.P) did this transaction so they could book the suspended dividend ($1.97/share) in 2021 books, reduce their SOHOO preferred position by 87% and possibly sell their common shares to book an end of year tax loss.

They continue to be investors in both the common and the preferred. They own 13.3% of their previous preferred position (10K/75K) and have a bunch of common shares now perhaps they will sell to book a tax loss (and maybe buy back next year in 31 days).

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So the only benefit for such a transaction is to the large investor as there is not enough liquidity in the preferred to do such a large end of year transaction in the open market w/o significantly tanking the SOHOO preferred share price.

To rebalance back into a 13.3% preferred position is positive IMO since they expect to receive the suspended div on the preferred in the future (perhaps 2022).
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About Palogic Value Management Fund

13G SOHO / Sotherly Hotels Inc

1,129,518 shares owned 7/1/2021

This transaction makes them a 10% common shareholder

The size of the common share transaction represents 3.7% of the outstanding shares. 5.4% of the SOHOO outstanding preferreds shares were reduced and paid off in common shares (ie 60K/1200K).

The reduction in those preferred shares were not done at PAR but rather at/near $18.21/share.

Seems like a fair deal for both parties
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Total Preferred Debt Outstanding

$27 million value in SOHON, $42.2 million in the SOHOB and $33.75 million left to pay off the SOHOO or about $75.95 million to payoff all the outstanding preferred debt.

Do they sell more properties, refinance, or just sell the company?

To: Jerrymac who wrote (47073)	2/4/2022 9:13:34 AM
From: E_K_S	1 Recommendation Recommended By tom2025 Respond to of 52143

Re: Broken preferred; SOHON/SOHOB & OTRKP Ontrak Declares Quarterly Dividend on 9.50% Non-Convertible Series A Preferred Stock The sixth quarterly cash dividend equals $0.593750 per share, at 9.50% per annum of liquidation preference of $25.00 per share. The Series A Preferred Stock dividend will be payable on February 28, 2022 to holders of record as of the close of business on February 15, 2022,