Shareholders of Condor Hospitality Trust Inc. will meet for an annual meeting May 16 to vote on certain matters, including the issuance of as much as 20% or more of outstanding shares of common stock upon conversion of its 6.25% series E cumulative convertible preferred stock and upon exercise of put rights on said stock.
With shareholder approval, 925,000 shares of the company's series E preferred stock may be converted into up to 668,111 shares of common stock, at the option of the shareholder, from Feb. 28, 2019, subject to adjustments. The conversion price was adjusted to $13.845 following the company's 6.5-to-1 reverse stock split, completed March 15. The closing bid price of $2.13 per share, as reported on the Nasdaq Stock Market immediately before the issuance of the preferred stock, was used to determine the conversion price, according to a release.
In addition, the board would like to exercise put rights on the series E preferred stock. Upon shareholder approval, holders of the preferred stock will have put rights as of March 16, 2021, and may sell their shares to Condor at 130% of the company's liquidation preference plus accrued and unpaid dividends, or $13.00 per share of the stock in the case of no accrued and unpaid dividends.
Condor would be able to use cash or common stock to satisfy the put rights. Should it use common stock, the value per share used must be at least $4.875, subject to an antidilution adjustment. As such, the company would be able issue a maximum of 2,466,666 shares of common stock to fully exercise the put rights.