Item 3.02 Unregistered Sale of Equity Securities.
On August 18, 2022, Sotherly Hotels Inc., a Maryland corporation (the “Company”), and the sole general partner of Sotherly Hotels LP, a Delaware limited partnership (the “Operating Partnership”), entered into a privately-negotiated share exchange agreement with a holder of its 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), and 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”) in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to that share exchange agreement, the Company exchanged 178,800 shares of its common stock, par value $0.01 per share (the “Common Stock”) for 11,000 shares of the Series B Preferred Stock, 7,100 shares of the Series C Preferred Stock, and 1,900 shares of the Series D Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those shares of Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock. Closing of the transaction occurred on August 18, 2022. Those shares of Common Stock were also issued in reliance on the exemption from registration set forth in Section 3(a)(9) of the Securities Act for securities exchanged by an issuer with an existing security holder in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such an exchange. Concurrently with the issuance of the shares of Common Stock, the Operating Partnership issued 178,800 limited partnership units to the Company in exchange for 11,000 of the Operating Partnership’s Series B Preferred Units, 7,100 of the Operating Partnership’s Series C Preferred Units, and 1,900 of the Operating Partnership's Series D Preferred Units.
On August 23, 2022, the Company entered into a privately-negotiated share exchange agreement with a holder of its Series B Preferred Stock and Series C Preferred Stock in reliance on Section 3(a)(9) of the Securities Act. Pursuant to that share exchange agreement, the Company exchanged 140,130 shares of its Common Stock for 13,000 shares of the Series B Preferred Stock and 3,200 shares of the Series C Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those shares of Series B Preferred Stock and Series C Preferred Stock. Closing of the transaction occurred on August 24, 2022. Those shares of Common Stock were also issued in reliance on the exemption from registration set forth in Section 3(a)(9) of the Securities Act for securities exchanged by an issuer with an existing security holder in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such an exchange. Concurrently with the issuance of the shares of Common Stock, the Operating Partnership issued 140,130 limited partnership units to the Company in exchange for 13,000 of the Operating Partnership’s Series B Preferred Units and 3,200 of the Operating Partnership’s Series C Preferred Units.
The share exchanges disclosed in this Current Report on Form 8-K are in addition to the exchanges of the Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock (collectively, the “Preferred Stock”) disclosed in the Current Reports on Form 8-K, dated June 21, 2021, December 13, 2021, April 5, 2022, and April 20, 2022. The Company did not receive any cash proceeds as a result of the exchanges of the Preferred Stock for Common Stock, and the shares of Preferred Stock exchanged have been retired and cancelled. Inclusive of the amounts previously reported, from June 21, 2021 through August 24, 2022 the Company has exchanged 3,039,995 shares of Common Stock for 391,300 shares of Preferred Stock in reliance on Section 3(a)(9) of the Securities Act.
This Current Report on Form 8-K does not constitute an offer to exchange any securities of the Company for the Common Stock, the Preferred Stock or other securities of the Company.