SOHOOHIGH SIGNALMANAGEMENT10-K

Sotherly Hotels completed a merger transaction on February 12, 2026, with KW Kingfisher LLC acquiring the company through a subsidiary merger structure.

The merger represents a complete change in ownership and control of the company, with the outstanding share count dramatically reducing from over 20 million to just 100 shares, indicating the company is now privately held. This fundamental corporate restructuring explains the compressed financial metrics and represents a significant liquidity event for former shareholders.

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

The company's operating performance deteriorated meaningfully, with operating cash flow declining substantially and operating income falling by nearly 40% year-over-year. Share buybacks increased notably to $3.7M, while stockholders' equity contracted by over one-third to $28.3M. These financial changes likely reflect both operational challenges and the impact of the merger transaction on the company's capital structure.

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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