8-K: MacKenzie Realty Capital Suspends Share Repurchase and Dividend Reinvestment Programs Amid Exchange Listing Pursuit

MacKenzie Realty Capital has temporarily suspended its Share Repurchase and Dividend Reinvestment Programs as it pursues a listing on the OTCQX and potentially the NYSE-American.

Summary

• MacKenzie Realty Capital, Inc. has suspended its Share Repurchase and Dividend Reinvestment Programs.
• This suspension is in connection with the company's efforts to list its common stock on a securities exchange.
• The company intends to pursue a listing on the OTCQX market first.
• Following the OTCQX listing, the company may attempt a listing on the NYSE-American, depending on trading activity and public float.
• The Share Repurchase Program will automatically terminate if a listing occurs.
• The Board will decide whether and when to reinstate the Dividend Reinvestment Program after a listing.
• The company will not issue an updated net asset value as of December 31, 2023, due to the listing pursuit.
• The company is not providing any guidance on potential post-listing share price or the timing of a listing, and there is no guarantee that a listing will occur.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the suspension of programs is a negative for current investors, the pursuit of a listing is a positive long-term move. The lack of guidance on share price and timing introduces uncertainty.

Positives

• The pursuit of a listing on a securities exchange could increase the company's visibility and potentially improve liquidity for shareholders.
• A listing on the NYSE-American could provide access to a broader range of investors.

Negatives

• The suspension of the Share Repurchase Program means shareholders cannot sell their shares back to the company at this time.
• The suspension of the Dividend Reinvestment Program means shareholders cannot reinvest their dividends.
• There is no guarantee that a listing will occur.
• The company is not providing any guidance on potential post-listing share price.

Risks

• The listing process may not be successful.
• The company's share price may not perform as expected after a listing.
• The company may not be able to meet the requirements for a listing on the NYSE-American.
• The company's trading activity and public float may not be sufficient to support a listing on the NYSE-American.

Future Outlook

The company intends to pursue a listing on the OTCQX first, followed by a potential listing on the NYSE-American, but provides no guarantees or guidance on timing or share price.

Management Comments

• The Board decided that it is in the best interests of the Company's shareholders to suspend these programs temporarily while the Listing application is prepared, submitted and processed.
• We intend to pursue a Listing first on the OTCQX.
• Thereafter, depending upon trading activity and public float, we may attempt a Listing on the NYSE-American.

Industry Context

This announcement reflects a strategic move by MacKenzie Realty Capital to potentially enhance its market presence and access to capital through a public listing, a common strategy for non-traded REITs seeking to provide liquidity to their investors.

Comparison to Industry Standards

• Many non-traded REITs eventually seek a public listing to provide liquidity to their investors, this is a common strategy.
• Companies like Blackstone Real Estate Income Trust (BREIT) and Starwood Real Estate Income Trust (SREIT) are examples of large non-traded REITs that have faced similar pressures to provide liquidity options.
• The decision to pursue an OTCQX listing first is a common step for companies that may not immediately meet the requirements for a major exchange like the NYSE-American.
• The suspension of share repurchase and dividend reinvestment programs is a typical measure taken by companies preparing for a listing to manage their capital structure.

Stakeholder Impact

• Shareholders will be impacted by the suspension of the Share Repurchase and Dividend Reinvestment Programs.
• Shareholders may benefit from increased liquidity and potential share price appreciation if a listing is successful.
• Employees may be impacted by the changes in the company's strategy.

Next Steps

• The company will prepare, submit, and process the listing application for the OTCQX.
• The company will monitor trading activity and public float to determine if a listing on the NYSE-American is feasible.
• The Board will decide whether and when to reinstate the Dividend Reinvestment Program after a listing.

Key Dates

Keywords

listing, share repurchase program, dividend reinvestment program, OTCQX, NYSE-American, securities exchange, public float, net asset value