Sotherly Hotels Inc. (the Company) completed a merger on February 12, 2026, with Merger Sub, a wholly-owned subsidiary of KW Kingfisher LLC (Parent), making the Company the surviving entity. As a result of the merger, Parent now holds all issued and outstanding shares of the Company's Common Stock. The merger constitutes a Change of Control, triggering a conversion right for holders of the Company's 8.0% Series B, 7.875% Series C, and 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock. Preferred stockholders can elect to convert some or all of their shares into a cash payment, subject to the terms and conditions of the Articles Supplementary and a Share Cap. The cash consideration for Common Stock in the merger was $2.25 per share. The conversion consideration for Series B Preferred Stock is $18.656708 per share. The conversion consideration for Series C Preferred Stock is $19.132650 per share. The conversion consideration for Series D Preferred Stock is $16.642013 per share. The deadline for preferred stockholders to exercise their conversion right is 5:00 p.m., Eastern Time, on March 20, 2026. Shares not converted will remain outstanding and are expected to be listed on the OTCQB Venture Market of the OTCMarkets following the election period.