S-11: Wheeler REIT Seeks to Register Shares for Preferred Stock Redemption and Conversion

Wheeler Real Estate Investment Trust aims to register over 20 million common shares for potential issuance upon redemption and conversion of its Series D Preferred Stock.

Summary

• Wheeler Real Estate Investment Trust (WHLR) is filing a registration statement to register 20,704,217 shares of its common stock.
• These shares are primarily intended for issuance upon the redemption and conversion of the company's Series D Cumulative Convertible Preferred Stock.
• The registration includes 20,000,000 shares for potential redemption, 695,051 shares already registered under a prior statement, and 9,166 shares for conversion.
• The company will not receive any proceeds from the issuance of these shares, as they are used to settle existing obligations to preferred stockholders.
• The company has implemented reverse stock splits to regain Nasdaq compliance and potentially improve marketability.
• The company's stock is listed on the Nasdaq Capital Market under the symbol WHLR.
• The company owns a portfolio of seventy-five retail shopping centers totaling 8,142,077 leasable square feet which is 93.5% leased and seven undeveloped properties totaling approximately 66 acres as of March 31, 2024.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the company is addressing its preferred stock obligations, it faces challenges related to stock dilution, Nasdaq compliance, and market competition. The reverse stock splits and potential for further dilution are concerning.

Positives

• The company has regained compliance with the Nasdaq minimum bid price rule.
• The company's portfolio is 93.5% leased as of March 31, 2024.
• The company has a plan to improve its capital structure.

Negatives

• The issuance of Common Stock as a result of Redemption has already caused substantial dilution of our Common Stock.
• The company is not in compliance with Nasdaq Listing Rule 5550(a)(4), which requires the Company to have a minimum of 500,000 Publicly Held Shares.
• The company has effected reverse stock splits with a cumulative ratio of more than 250 shares to one over the two-year period ending on June 27, 2024.

Risks

• The company may be unable to comply with continued listing requirements of the Nasdaq Capital Market.
• The reverse stock splits may decrease the liquidity of the shares of our Common Stock and could lead to a decrease in our overall market capitalization.
• The issuance of a substantial amount of our Common Stock as a result of the Redemption has already caused and is expected to continue causing substantial dilution of Common Stock and a steep decline in its stock price.
• The company's portfolio is geographically concentrated in the Mid-Atlantic, Southeast and Northeast, which may cause us to be more susceptible to adverse developments in those markets than if we owned a more geographically diverse portfolio.
• The majority of our properties are retail shopping centers and depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants.

Future Outlook

The company intends to continue settling redemptions of Series D Preferred Stock in shares of Common Stock and expects that the issuance of Common Stock as a result of such Redemption will continue causing substantial dilution to its existing Common Stock holders and steep decline in the price of our Common Stock.

Industry Context

The document highlights the competitive landscape in the retail real estate market, including competition from online retailers and other real estate companies.

Legal Proceedings

• Shareholder litigation in connection with the Cedar Acquisition and as recently filed by one of the Companys shareholders, Daniel Khoshaba, may result in significant costs of defense, indemnification and liability, and divert managements attention away from running our business.

Stakeholder Impact

• Existing common stockholders face potential dilution and a decline in stock price.
• Preferred stockholders may have their shares redeemed.
• The company's ability to execute its business strategy could be affected.

Next Steps

• The company has until July 12, 2024 to submit to Nasdaq a specific plan to achieve and sustain compliance with Nasdaq Listing Rule 5550(a)(4).
• The company intends to continue settling redemptions of Series D Preferred Stock in shares of Common Stock.

Key Dates

Keywords

common stock, series D preferred stock, redemption, conversion, reit, wheeler reit, registration statement, reverse stock split, dilution, nasdaq