Sotherly Hotels Inc. Faces Nasdaq Compliance Challenge

Sotherly Hotels Inc. Receives Notification from Nasdaq

Sotherly Hotels Inc. (NASDAQ: SOHO) recently disclosed it has received a notification from the Listing Qualifications Department of The Nasdaq Stock Market regarding the company's delayed filing of its Quarterly Report on Form 10-Q for the quarter that concluded on June 30, 2024. This notice indicates that Sotherly Hotels is not currently compliant with Nasdaq's continued listing requirements as outlined in Nasdaq Listing Rule 5250(c)(1).

Details About the Notification

According to the company, in its Form 12b-25 submitted to the Securities and Exchange Commission, the filing of the Form 10-Q cannot be completed within the designated time frame due to the extensive evaluation of its financial reporting, specifically about the classification of preferred units as permanent equity versus temporary equity. This ongoing assessment is necessary to ensure accurate financial reporting and compliance with applicable regulations.

Initial Exception Granted

Nasdaq previously granted Sotherly Hotels an extension until November 18, 2024, for the submission of the Initial Delinquent Filing. Therefore, any further extensions from Nasdaq will be strictly limited to a duration of up to 180 days from the Initial Filing Due Date, culminating on November 18, 2024. In line with Nasdaq's regulations, the company must present an updated compliance plan by September 4, 2024.

Efforts to Achieve Compliance

The management team at Sotherly Hotels is actively engaged in the completion of its Form 10-Q. Their goal is to file this report at the earliest possible date to ensure compliance with Nasdaq’s standards. This compliance is essential for maintaining investor confidence and the overall integrity of the company's stock listings.

Impact of the Notification

At this juncture, the notification from Nasdaq does not have an immediate adverse impact on the listing of the company's common stock or preferred stock. The company remains committed to fulfilling its reporting obligations and addressing the issues outlined in the notification.

Future Considerations and Challenges

While the company is moving forward with its compliance plans, it is important to acknowledge that there are no guarantees regarding the regaining of compliance with Nasdaq's listing requirements. Various factors can affect their ability to meet these obligations, including economic conditions, market stability, and operational performance.

About Sotherly Hotels Inc.

Sotherly Hotels Inc. operates as a self-managed and self-administered lodging real estate investment trust (REIT). The company's primary focus is the acquisition, renovation, up-branding, and repositioning of upscale to upper-upscale full-service hotels across the Southern region of the United States. Sotherly Hotels has also engaged in selective opportunistic acquisitions throughout the country.

Current Portfolio

The company currently manages a diverse portfolio consisting of ten hotel properties with a total of 2,786 rooms, alongside interests in two condominium hotels and their associated rental programs. Sotherly Hotels rises as a strategic player, owning properties under well-known brands including Hilton Worldwide and Hyatt Hotels Corporation, in addition to independent hotel operations.

Growth and Market Presence

Established in 2004, Sotherly Hotels Inc. is headquartered in Virginia and has been significant in its alignment with market trends in the hospitality industry. The company's commitment to maintaining quality service and properties positions it favorably for future growth opportunities. By continuously evaluating its strategies and operational models, Sotherly Hotels looks to enhance its competitive edge and address any market changes effectively.

Contact Information

For additional information regarding Sotherly Hotels Inc. and its operational strategies, stakeholders can refer to the company's official website.

Frequently Asked Questions

What triggered the notification from Nasdaq?

The notification was triggered by Sotherly Hotels' failure to file its Quarterly Report on Form 10-Q in a timely manner.

What is the company's plan to regain compliance?

The company is currently working on completing its Form 10-Q and plans to submit an updated compliance plan to Nasdaq by September 4, 2024.

Will this notification impact the stock listing of Sotherly Hotels?

Currently, the notification has no immediate effect on the listing of the company's common or preferred stock on the Nasdaq Global Market.

What challenges may affect compliance efforts?

Challenges could include economic fluctuations, operational performance issues, and compliance with regulatory requirements.

What is the focus of Sotherly Hotels Inc.?

Sotherly Hotels Inc. focuses on acquiring and managing upscale hotels primarily in the Southern United States.

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