Wheeler REIT converts more preferreds into stock, struggles to have enough registered shares

By Wendy Van Sickle

Columbus, Ohio, Dec. 6 – Wheeler Real Estate Investment Trust Inc. said it processed requests from 35 holders of its series D cumulative convertible preferred stock (Nasdaq: WHLRD) to redeem 371,563 shares of their preferreds for a price of $38.02 per share, which was settled in common stock on Dec. 5, according to an update filed with the Securities and Exchange Commission.

This was the third monthly holder redemption date for the preferreds. The redemption price reflected $25 per share plus accrued dividends.

The company issued 36,194,825 shares of common stock as settlement of a total redemption price of about $14.1 million.

The volume weighted average of the closing sales price, as reported on the Nasdaq Capital Market, per share of common stock for the 10 consecutive trading days immediately preceding the redemption date, was approximately $0.39.

To date, the company said it has processed 17 redemption requests, collectively redeeming 864,070 shares of the preferreds, which it has settled with the issuance of 52,788,687 shares of its common stock for a total redemption price of about $32.7 million.

At Dec. 6, the company had 53,769,787 shares of common stock and 2,515,876 shares of series D preferreds outstanding.

Wheeler said “significant declines and ongoing material fluctuations” in its common stock price coupled with the unpredictable volume of monthly series D preferred stock redemption requests have made it challenging to plan for sufficient registered shares of common stock to meet the ongoing monthly redemption requests.

Accordingly, Wheeler said it plans to issue unregistered shares of common stock to meet the monthly redemption requests until it has registered a sufficient number of common shares to provide registered shares to cover the entirety of the remaining issue of series D preferreds. Efforts to register the necessary amount are underway, Wheeler reported.

The deadline for the next monthly round of redemptions is Dec. 25, and the next redemption date will be Jan. 5.

Conversion price change

The conversion price of the company’s 7% subordinated convertible notes due 2031 was lowered to $0.21 per share of common stock following the December preferred redemptions, for which the lowest price at which any preferred was converted was $0.39.

The convertible’s new conversion price is a 45% discount to the $0.39 lowest conversion figure for the preferreds and amount to about 116.46 shares of common stock for each $25 principal about of convertibles being converted.

At Nov. 6, the conversion price for the convertibles was $0.46 per share of common stock, or a 54.05 shares per $25 principal amount of notes being converted.

Wheeler is based in Virginia Beach.

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