SOHON Sotherly Hotels Inc

Item 3.02Unregistered Sale of Equity Securities.

Information in Item 1.01 of this Current Report on Form 8-K relating to the issuance of the Common Shares under the Agreement is incorporated herein by reference.  Concurrently with the issuance of the Company Shares, the Operating Partnership issued 620,919 limited partnership units to the Company in exchange for 75,000 of the Operating Partnership’s Series C Preferred Units.

In addition, on December 3, 2021, the Company entered into a separate, privately-negotiated share exchange agreement with a holder of its Series C Preferred Stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended.  Pursuant to that share exchange agreement, the Company exchanged 69,500 shares of its common stock for 10,000 shares of the Series C Preferred Stock together with all of the holder’s rights to receive accrued and unpaid dividends on those shares.  Closing of the transaction occurred on December 9, 2021.  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 of 1933, as amended, for securities exchanged by an issuer with an existing security holder in a transaction where no commission or other remuneration was be 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 69,500 limited partnership units to the Company in exchange for 10,000 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 Company’s 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, the Series C Preferred Stock and the Company’s 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock (collectively, the “Preferred Stock”) disclosed on the Current Report on Form 8-K, dated June 21, 2021.  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 December 13, 2021 the Company has exchanged 305,000 shares of Preferred Stock for 2,233,146 shares of Common Stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended.

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.