SOHONHIGH SIGNALMANAGEMENT10-K

Sotherly Hotels completed a merger transaction on February 12, 2026, where the company was acquired by KW Kingfisher LLC through a merger subsidiary structure.

The merger represents a complete change in ownership and control of the company, fundamentally altering the investment proposition for existing shareholders. The dramatic reduction in outstanding shares from over 20 million to just 100 shares confirms this was likely a cash-out merger that eliminated the public float.

Comparing 2026-04-15 vs 2025-03-31View on EDGAR →
FINANCIAL ANALYSIS

The company's operating performance deteriorated significantly during the merger period, with operating cash flow declining substantially and operating income falling by nearly 40% to $12.7M. Stockholders' equity dropped meaningfully to $28.3M while share buybacks increased to $3.7M, reflecting the financial impact of the merger process and the company's transition from public to private ownership.

FINANCIAL STATEMENT CHANGES
Share Buybacks
Cash Flow
+79.9%
$2.1M→$3.7M

Share repurchases increased 79.9% — management returning capital, signals confidence in intrinsic value.

Operating Cash Flow
Cash Flow
-60.2%
$25.9M→$10.3M

Operating cash flow fell 60.2% — earnings quality concerns; investigate working capital changes and non-cash items.

Operating Income
P&L
-38.5%
$20.6M→$12.7M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Stockholders Equity
Balance Sheet
-34.4%
$43.1M→$28.3M

Equity declined sharply — large losses, buybacks, or write-downs reducing book value significantly.

LANGUAGE CHANGES
NEW — 2026-04-15
PRIOR — 2025-03-31
ADDED
as of June 30, 2025, the last business day of Sotherly Hotels Inc.
As of April 1, 2026, there were 100 shares of Sotherly Hotels Inc.
Auditor Firm ID: 677 Auditor Name: Cherry Bekaert LLP Auditor Location: Richmond, Virginia Auditor Firm ID: 686 Auditor Name: Forvis Mazars, LLP Auditor Location: Jacksonville, Florida 2 SOTHERLY HOTELS INC.
On February 12, 2026, the Company, KW Kingfisher LLC, a Delaware limited liability company ( Parent ), and Sparrows Nest LLC, a Maryland limited liability company ( Merger Sub ), completed the transactions (the Merger ) contemplated by the Agreement and Plan of Merger (the Merger Agreement ), dated as of October 24, 2025, by and among the Company, Parent and Merger Sub.
Defined terms used herein but not defined shall have the meaning set forth in the Merger Agreement.
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REMOVED
Common Stock, $0.01 par value SOHO The NASDAQ Stock Market LLC Sotherly Hotels Inc.
as of June 30, 2024, the last business day of Sotherly Hotels Inc.
As of March 15, 2025, there were 20,126,415 shares of Sotherly Hotels Inc.
s proxy statement for its 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this report (or information will be provided by amendment to this Form 10-K).
Auditor Firm Id: 686 Auditor Name: Forvis Mazars, LLP Auditor Location: Jacksonville, Florida 2 SOTHERLY HOTELS INC.
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