SOHON Sotherly Hotels Inc

Item 3.02Unregistered Sale of Equity Securities.

On April 11, 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”), and 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share (the “Series C 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 116,640 shares of its common stock, par value $0.01 per share (the “Common Stock”) for 4,000 shares of the Series B Preferred Stock and 8,000 shares of the Series C Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those shares of Series B Preferred Stock and Series C Preferred Stock.  Closing of the transaction occurred on April 12, 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 116,640 limited partnership units to the Company in exchange for 4,000 of the Operating Partnership’s Series B Preferred Units and 8,000 of the Operating Partnership’s Series C Preferred Units.

On April 19, 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 153,504 shares of its Common Stock for 5,000 shares of the Series B Preferred Stock and 10,600 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 April 19, 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 153,504 limited partnership units to the Company in exchange for 5,000 of the Operating Partnership’s Series B Preferred Units and 10,600 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 Company’s 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock (collectively, the “Preferred Stock”) disclosed on the Current Reports on Form 8-K, dated June 21, 2021, December 13, 2021, and April 5, 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 April 20, 2022 the Company has exchanged 2,721,065 shares of Common Stock for 355,100 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.