8-K: Wheeler Real Estate Investment Trust Faces Nasdaq Delisting Threat and Files for Share Registration

Wheeler Real Estate Investment Trust has received a notice from Nasdaq for failing to meet minimum publicly held shares requirements and has filed a registration statement for future share issuances.

Summary

• Wheeler Real Estate Investment Trust (WHLR) received a notification from Nasdaq on June 28, 2024, stating they are not compliant with the minimum publicly held shares rule.
• The company has until July 12, 2024, to submit a plan to regain compliance.
• The non-compliance will be indicated on Nasdaq's market data dissemination network.
• WHLR filed a registration statement on Form S-11 on July 1, 2024, to register 20,704,217 shares of common stock.
• These shares are intended for future redemptions and conversions of the Series D Cumulative Convertible Preferred Stock.
• The company updated its Frequently Asked Questions (FAQs) regarding the redemption of Series D Preferred Stock on July 1, 2024.
• Previous redemptions in December 2023, January 2024, and February 2024 were settled with unregistered common stock.

Sentiment

Score: 3

Explanation: The document contains negative news regarding Nasdaq non-compliance, but also shows steps being taken to address the issue. The overall sentiment is negative due to the delisting risk.

Positives

• The company is taking steps to address the Nasdaq compliance issue by submitting a plan by the deadline.
• The filing of the registration statement allows the company to settle future redemptions of Series D Preferred Stock with registered common stock.
• The updated FAQs provide clarity to holders of unregistered common stock on how to remove restrictions.

Negatives

• The company is currently not in compliance with Nasdaq's minimum publicly held shares requirement.
• There is a risk of delisting if the company's compliance plan is not accepted by Nasdaq.
• The company previously settled redemptions with unregistered common stock, which has restrictions.

Risks

• Failure to submit an acceptable compliance plan to Nasdaq by July 12, 2024, could lead to delisting.
• The company's share price may be negatively impacted by the non-compliance notice.
• There is uncertainty regarding the timing and effectiveness of the registration statement.

Future Outlook

The company intends to submit a compliance plan to Nasdaq by July 12, 2024, and expects to issue registered shares of common stock to settle future monthly Series D Preferred Stock redemptions once the registration statement is effective.

Management Comments

• The company is working to address the Nasdaq compliance issue.
• The company is taking steps to ensure future redemptions are settled with registered common stock.

Industry Context

This announcement highlights the challenges faced by smaller REITs in maintaining listing compliance, particularly in volatile market conditions. Other REITs may face similar issues if they do not maintain sufficient public float.

Comparison to Industry Standards

• Many REITs maintain a higher level of publicly held shares to ensure compliance with listing requirements.
• Companies like Simon Property Group (SPG) and Prologis (PLD) have significantly higher public floats and are less likely to face similar delisting risks.
• The need to register shares for redemptions is not uncommon, but the circumstances surrounding the unregistered shares from previous redemptions are unusual.

Stakeholder Impact

• Shareholders may experience volatility in the stock price due to the delisting risk.
• Holders of Series D Preferred Stock will be impacted by the redemption process and the issuance of registered common stock.
• Holders of unregistered common stock will need to follow the updated FAQs to remove restrictions.

Next Steps

• The company will submit a compliance plan to Nasdaq by July 12, 2024.
• The company will seek to have the registration statement declared effective by the SEC.
• The company will issue registered shares of common stock to settle future monthly Series D Preferred Stock redemptions.

Key Dates

Keywords

Nasdaq, delisting, compliance, publicly held shares, registration statement, common stock, preferred stock, redemption, WHLR, Wheeler Real Estate Investment Trust