Business Context and Reporting Period
This Form 8-K was filed by Wheeler Real Estate Investment Trust, Inc. on November 7, 2023, reporting events occurring on November 6, 2023. The filing details the second monthly "Holder Redemption Date" for the Company's Series D Cumulative Convertible Preferred Stock and a consequential adjustment to the conversion price of its 7.00% Subordinated Convertible Notes due 2031.
Key Financial Metrics and Transaction Details
- Redemption Volume (November 2023): 90 holders redeemed 319,762 shares of Series D Preferred Stock.
- Redemption Value: The aggregate redemption price was approximately $12.1 million, calculated at $25.00 per share plus accrued dividends of approximately $37.76 per share.
- Settlement Method: The Company settled the redemption entirely in Common Stock, issuing 14,355,723 shares.
- Stock Price Reference: The volume-weighted average closing price of Common Stock for the ten trading days preceding the redemption date was approximately $0.84.
- Cumulative Redemptions: To date, 492,673 shares of Series D Preferred Stock have been redeemed, resulting in the issuance of 16,601,314 shares of Common Stock for an aggregate value of approximately $18.6 million.
- Outstanding Shares (as of Nov 7, 2023): 17,582,414 shares of Common Stock and 2,887,273 shares of Series D Preferred Stock.
Material Changes and Adjustments
The filing reports a material modification to the rights of security holders regarding the 7.00% Subordinated Convertible Notes due 2031. Due to the November redemptions where Series D Preferred Stock was converted at a price of approximately $0.84, the Conversion Price for the Notes was adjusted downward.
- Prior Conversion Price: $1.59 per share of Common Stock.
- New Conversion Price: Approximately $0.46 per share of Common Stock.
- Impact: The adjustment represents a 45% discount to the $0.84 reference price, increasing the conversion ratio to approximately 54.05 shares of Common Stock for each $25.00 of principal amount of the Notes.
Outlook and Upcoming Events
The Company has announced the schedule for the next round of Series D Preferred Stock redemptions:
- Submission Deadline: November 25, 2023.
- Next Holder Redemption Date: December 5, 2023.
- Management Commentary: The filing does not provide forward-looking financial guidance or management commentary beyond the mechanical details of the redemption process and the website link for redemption forms.
Investor Verification Checklist
- Verify the dilution impact of the 14,355,723 new Common Stock shares issued in November on existing shareholders.
- Confirm the new conversion ratio (54.05 shares per $25 principal) for the 7.00% Subordinated Convertible Notes due 2031.
- Monitor the December 5, 2023 redemption date for potential further issuance of Common Stock and additional conversion price adjustments.
- Review the remaining outstanding balance of Series D Preferred Stock (2,887,273 shares) to assess future redemption obligations.