Sotherly Hotels (SOHO) investors receive $2.25 cash in merger deal

Rhea-AI Filing Summary

Sotherly Hotels Inc. completed a merger in which Sparrows Nest LLC merged into the company, making it a subsidiary of KW Kingfisher LLC. At the February 12, 2026 effective time, each share of common stock was automatically converted into the right to receive $2.25 in cash per share without interest.

As a result, Chairman and director Andrew Sims and related entities disposed of all direct and indirect common stock holdings and now report zero common shares. All outstanding restricted stock units were canceled and converted into equivalent cash rights based on the same $2.25 per share consideration. Sims continues to hold directly 1,500 shares each of the 8.0% Series B, 7.875% Series C, and 8.25% Series D cumulative redeemable perpetual preferred stock.

Insights

M&A and corporate actions analyst

Sotherly Hotels’ merger cashes out common shareholders at $2.25 per share while preferred stakes remain.

The disclosure shows Sotherly Hotels becoming a subsidiary of KW Kingfisher LLC through a merger effective February 12, 2026. Each common share converts into a fixed $2.25 cash payment, so existing common equity is effectively replaced by cash for holders, including entities associated with Chairman Andrew Sims.

All restricted stock units are canceled and settled for cash using the same $2.25 per-share value, simplifying the equity structure. Sims continues to hold 1,500 shares each of three series of cumulative redeemable perpetual preferred stock, indicating those preferred securities remain outstanding for him after the merger. Overall, the filing documents completion of the transaction and the resulting shift from common equity to cash consideration.

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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X

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

Check this box to indicate that a transaction was made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). See Instruction 10.

1. Name and Address of Reporting Person^*

Sims Andrew

(Last) (First) (Middle)

306 S. HENRY STREET

SUITE 100

(Street)

WILLIAMSBURG VA 23185

(City) (State) (Zip)

2. Issuer Name and Ticker or Trading Symbol
Sotherly Hotels Inc. [ SOHO ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director		10% Owner
X	Officer (give title below)		Other (specify below)
	Chairman

3. Date of Earliest Transaction (Month/Day/Year)
02/12/2026

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	02/12/2026		D		826,909	D	$2.25(1)(2)	0	D
Common Stock	02/12/2026		D		793,937	D	$2.25(1)	0	I	By AMS Family Partnership, R.L.L.LP.
Common Stock	02/12/2026		D		107,490	D	$2.25(1)	0	I	By ESOP(3)
8.0% Series B Preferred Stock(4)								1,500	D
7.875% Series C Preferred Stock(5)								1,500	D
8.25% Series D Preferred Stock(6)								1,500	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

Explanation of Responses:

1. Pursuant to the terms of that certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of October 24, 2025, by and among Sotherly Hotels Inc., a Maryland corporation (the "Company"), KW Kingfisher LLC, a Delaware limited liability company ("Parent"), and Sparrows Nest LLC, a Maryland limited liability company ("Merger Sub"), at the effective time on February 12, 2026 (the "Effective Time"), Merger Sub merged with and into the Company, with the Company surviving such merger (the "Merger") as a subsidiary of Parent. In connection with the Merger, each share of Company common stock, par value $.01 per share ("Common Stock"), was automatically converted into the right to receive $2.25 in cash per share without interest (the "Merger Consideration"). The disposition of the securities by the Reporting Person in the Merger was approved by the Company's board of directors in the manner contemplated by Rule 16b-3 under the Securities Exchange Act of 1934, as amended.

2. Pursuant to the Merger Agreement, each restricted stock unit (a "RSU") that was outstanding immediately prior to the Effective Time was canceled as of the Effective Time and converted into a right to receive a cash payment with respect to an aggregate amount, without interest, equal in value to (x) the number of shares of Common Stock subject to such RSU immediately prior to the Effective Time, multiplied by (y) the Merger Consideration.

3. Reflects allocations under the issuer's Employee Stock Ownership Plan. Includes additional allocations as of December 31, 2025.

4. The full security title is 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock.

5. The full security title is 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock.

6. The full security title is 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock.

	/s/ Andrew M. Sims	02/12/2026
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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FAQ

What did Sotherly Hotels (SOHO) disclose in this Form 4 filing?

The filing shows completion of a merger where each Sotherly Hotels common share was converted into a right to receive $2.25 in cash. It documents Chairman Andrew Sims and related entities disposing of all common stock holdings through this merger-driven cash-out.

What are the merger terms affecting Sotherly Hotels (SOHO) common shareholders?

At the February 12, 2026 effective time, each Sotherly Hotels common share automatically converted into the right to receive $2.25 in cash without interest. The company became a subsidiary of KW Kingfisher LLC, and common stockholders received this fixed cash consideration per share.

How many Sotherly Hotels (SOHO) shares were disposed of by entities linked to Andrew Sims?

The Form 4 reports dispositions at $2.25 per share of 826,909 common shares held directly, 793,937 common shares held through AMS Family Partnership, R.L.L.LP., and 107,490 common shares held through an ESOP. All these positions went to zero following the merger cash-out.

What happened to Sotherly Hotels (SOHO) restricted stock units in the merger?

Each restricted stock unit outstanding immediately before the effective time was canceled and converted into a cash right. The cash amount equals the number of underlying common shares multiplied by the $2.25 per-share merger consideration, paid without interest under the Merger Agreement terms.

What preferred stock does Andrew Sims hold in Sotherly Hotels (SOHO) after the merger?

Following the merger, Andrew Sims directly holds 1,500 shares of 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, 1,500 shares of 7.875% Series C, and 1,500 shares of 8.25% Series D. These preferred stakes remain reported as directly owned derivative securities.

Who acquired Sotherly Hotels (SOHO) in the reported merger?

The merger combines Sotherly Hotels with Sparrows Nest LLC, leaving Sotherly as a subsidiary of KW Kingfisher LLC. Merger Sub, Sparrows Nest LLC, merged into the company, and Sotherly Hotels survived the merger as a wholly owned subsidiary of KW Kingfisher LLC under the Merger Agreement.