DEF 14A 1 def14a_wheelerreal.htm PROXY

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________________________________________________

SCHEDULE 14A INFORMATION

____________________________________________________

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange of 1934

Filed by the Registrant

 

Filed by a Party other than the Registrant

 

Check the appropriate box:

 

Preliminary Proxy Statement.

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)).

 

Definitive Proxy Statement.

 

Definitive Additional Materials.

 

Soliciting Material Pursuant to Section 240.14a-12.

WHEELER REAL ESTATE INVESTMENT TRUST, INC.
(Name of Registrant as Specified In Its Charter)

____________________________________________________________

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

   

(1)

 

Title of each class of securities to which transaction applies:

       

 

   

(2)

 

Aggregate number of securities to which transaction applies:

       

 

   

(3)

 

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

       

 

   

(4)

 

Proposed maximum aggregate value of transaction:

       

 

   

(5)

 

Total fee paid:

       

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

   

(1)

 

Amount Previously Paid:

       

 

   

(2)

 

Form, Schedule or Registration Statement No.:

       

 

   

(3)

 

Filing Party:

       

 

   

(4)

 

Date Filed:

       

 

 

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Wheeler Real Estate Investment Trust, Inc.
2529 Virginia Beach Blvd.
Virginia Beach, VA 23452

October 4, 2021

Dear Common Stockholder:

You are cordially invited to attend the Special Meeting of Common Stockholders (the “Special Meeting”) of Wheeler Real Estate Investment Trust, Inc. (the “Company”) to be held on November 3, 2021 at 9:30 a.m., Eastern Daylight Time. The Special Meeting will be held as a virtual meeting. You will be able to attend the Special Meeting, vote and submit questions during the Special Meeting via a live webcast by visiting https://meetnow.global/MAXWQNS and entering the control number provided with your proxy materials. Prior to the Special Meeting, you will be able to authorize a proxy to vote your shares on the matters submitted for common stockholder approval at www.investorvote.com/whlr, or by telephone or mail, and we encourage you to do so. Common stockholders who wish to observe the Special Meeting (without being able to vote or submit questions) may also do so by following the instructions in this proxy statement.

The enclosed Notice of Special Meeting of Common Stockholders and Proxy Statement describe the formal business to be transacted at the Special Meeting. Directors and officers of the Company will be present to answer any questions that you and other common stockholders may have.

The Company is holding the Special Meeting for the purpose of considering and voting upon three separate proposals:

•        to amend the terms of the Company’s Series A Preferred Stock (the “Series A Preferred Stock”) to remove its cumulative dividend rights (“Proposal 1”);

•        to amend the terms of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) to remove its cumulative dividend rights (“Proposal 2”); and

•        to approve one or more adjournments of the Special Meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve any of the proposals to be considered at the Special Meeting (“Proposal 3”).

After careful consideration, the Company’s board of directors (the “Board of Directors”) determined that each of the three separate proposals is advisable and directed that they each be submitted to the holders of the Company’s common stock for their approval. Only common stockholders of record at the close of business on September 22, 2021 will be entitled to vote at the Special Meeting. The Board of Directors recommends that the holders of the Company’s common stock vote “FOR” each proposal.

Please indicate your vote by internet or telephone or by using the enclosed proxy card. Your vote is important, and it is important that we receive your vote as soon as possible.

 

Sincerely,

     
   

M. Andrew Franklin

   

Interim Chief Executive Officer

This proxy statement is expected to be first mailed to stockholders on or about October 4, 2021.

 

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Wheeler Real Estate Investment Trust, Inc.
2529 Virginia Beach Blvd.
Virginia Beach, VA 23452

NOTICE OF SPECIAL MEETING OF COMMON STOCKHOLDERS
TO BE HELD ON NOVEMBER 3, 2021

Wheeler Real Estate Investment Trust, Inc. (the “Company”) will hold its Special Meeting on November 3, 2021, at 9:30 a.m., Eastern Daylight Time, via webcast at https://meetnow.global/MAXWQNS. The purpose of the meeting is to:

•        amend the terms of the Company’s Series A Preferred Stock (the “Series A Preferred Stock”) to remove its cumulative dividend rights;

•        amend the terms of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) to remove its cumulative dividend rights;

•        approve one or more adjournments of the Special Meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve any of the proposals to be considered at the Special Meeting.

Only common stockholders of record at the close of business on September 22, 2021 will be entitled to vote at the Special Meeting.

Your vote is important. Whether or not you plan to attend the Special Meeting, please authorize a proxy to vote your shares as soon as possible. You may authorize a proxy to vote your shares on the Internet, by telephone, or by mail. Your vote will ensure your representation at the Special Meeting regardless of whether you attend via webcast on November 3, 2021.

Dated: October 4, 2021

 

By order of the Board of Directors,

     
   

Angelica Beltran

   

Corporate Secretary

 

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PRELIMINARY PROXY STATEMENT

Wheeler Real Estate Investment Trust, Inc.
2529 Virginia Beach Blvd.
Virginia Beach, VA 23452

PROXY STATEMENT

Special Meeting of Common Stockholders
November 3, 2021

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Common Stock holders to Be Held on November 3, 2021:

This Proxy Statement and the proxy card are also available to you at www.investorvote.com/whlr.

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement and the documents to which we refer you in this proxy statement contain “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and in Section 21F of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements involve risks, uncertainties, and assumptions that are difficult to predict. These forward-looking statements include information concerning the Company’s plans, objectives, goals, strategies, future events, future revenues, performance, capital expenditures, financing needs and other information that is not historical information. When used in this proxy statement, the words “believes,” “should,” “estimates,” “expects,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

Important factors that we think could cause our actual results to differ materially from those expressed or forecasted in the forward-looking statement are summarized below. One of the most significant factors, however, is the ongoing impact of the current outbreak of the novel coronavirus (COVID-19), on the U.S., regional and global economies, the U.S. retail market and the broader financial markets. The United States of America has been subject to significant economic disruption caused by the onset of COVID-19. Nearly every industry has been impacted directly or indirectly, and the U.S. retail market has come under severe pressure due to numerous factors, including preventative measures taken by local, state and federal authorities to alleviate the public health crisis such as mandatory business closures, quarantines, restrictions on travel and “shelter-in-place” or “stay-at-home” orders at the state and local levels. There is uncertainty as to the time, date and extent to which these restrictions will be relaxed or lifted and uncertainty as to the time, date and extent to which businesses of tenants that have closed, either voluntarily or by mandate, will reopen or partially reopen. And even where restrictions have been relaxed or lifted, there is uncertainty as to whether they will be reimposed.

New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In particular, it is difficult to fully assess the impact of COVID-19 at this time due to, among other factors, the availability, distribution, public acceptance and efficacy of one or more approved vaccines, new or mutated variants of COVID-19 (including vaccine-resistant variants) or a similar virus, the direct and indirect economic effects of the pandemic and containment measures on our tenants, uncertainty regarding the severity and duration of the outbreak domestically and internationally, uncertainty regarding the effectiveness of federal, state and local governments’ efforts to contain the spread of COVID-19 and respond to its direct and indirect impact on the U.S. economy and economic activity.

Important factors, among others, that may affect our actual results include:

•        negative impacts from continued spread of new or mutated variants of COVID-19, including on the U.S. or global economy or on our business, financial position or results of operations;

•        the efficacy of any treatment for COVID-19;

•        tenant bankruptcies;

•        the level of rental revenue we achieve from our assets;

•        the market value of our assets and the supply of, and demand for, retail real estate in which we invest;

•        the state of the U.S. economy generally, or in specific geographic regions;

•        the impact of economic conditions on our business;

•        the conditions in the local markets in which we operate and our concentration in those markets, as well as changes in national economic and market conditions;

•        consumer spending and confidence trends;

•        our ability to enter into new leases or to renew leases with existing tenants at the properties we own;

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•        our ability to anticipate changes in consumer buying practices and the space needs of tenants;

•        the competitive landscape impacting the properties we own and their tenants;

•        our relationships with our tenants and their financial condition and liquidity;

•        our ability to continue to qualify as a real estate investment trust for U.S. federal income tax (a “REIT”);

•        our use of debt as part of our financing strategy and our ability to make payments or to comply with our loan covenants;

•        the level of our operating expenses;

•        changes in interest rates that could impact the market price of our common stock and the cost of our borrowings; and

•        legislative and regulatory changes (including changes to laws governing the taxation of REITs).

The Company derives revenues primarily from rents received from tenants under leases at the Company’s properties. The Company’s operating results therefore depend materially on the ability of its tenants to make required rental payments. The extent to which the COVID-19 pandemic impacts the businesses of the Company’s tenants, and the Company’s operations and financial condition, will depend on future developments which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and such containment measures, among others. While the extent of the outbreak and its impact on the Company, its tenants and the U.S. retail market is uncertain, a prolonged crisis could result in continued disruptions in the credit and financial markets, continued high unemployment rates, low consumer confidence and consumer spending levels and overall poor global and U.S. economic conditions. The factors described above, as well as additional factors that the Company may not currently be aware of, could materially negatively impact the Company’s ability to collect rent and could lead to termination of leases by tenants, tenant bankruptcies, decreases in demand for retail space at the Company’s properties, difficulties in accessing capital, impairment of the Company’s long-lived assets and other impacts that could materially and adversely affect the Company’s business, results of operations, and financial condition.

We caution that the foregoing list of factors is not all-inclusive. Moreover, we operate in a very competitive and rapidly changing environment. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of all such factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, stockholders should not place undue reliance on forward-looking statements as a prediction of actual results. All subsequent written and oral forward-looking statements concerning us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements above. We caution not to place undue reliance upon any forward-looking statements, which speak only as of the date of this proxy statement. Furthermore, we do not intend to update any of our forward-looking statements after the date of this proxy statement to conform these statements to actual results and performance, except as may be required by applicable law.

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HOW TO OBTAIN ADDITIONAL INFORMATION

We maintain a website at www.whlr.us. On our website, we make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with the SEC. In addition, we have posted the charters of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, as well as our Code of Business Conduct and Ethics and Corporate Governance Principles, including guidelines on director independence, all under separate headings. The information contained on our website is expressly not incorporated by reference into this proxy statement.

All reports filed with the SEC may also be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E. Washington, D.C. 20549-1090. Further information regarding the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. In addition, all of our filed reports can be obtained at the SEC’s website at www.sec.gov.

If you would like additional copies of this proxy statement, or if you have questions about any of the proposals, you should contact:

Okapi Partners LLC

1212 Avenue of the Americas, 24th Floor

New York, New York 10036

+ 1 (212) 297-0720 (Main)

+ 1 (877) 629-6356 (Toll-Free)

Email: info@okapipartners.com

We have not authorized anyone to give any information or make any representation about any of the proposals that is different from, or in addition to, that contained in this proxy statement or in any of the materials that we have incorporated into this proxy statement. Therefore, if anyone gives you information of this sort, you should not rely on it.

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WHEELER REAL ESTATE INVESTMENT TRUST, INC.

SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider, and you should read the entire proxy statement before voting. The approximate date on which this proxy statement and form of proxy are first being provided to common stockholders is October 4, 2021.

Special Meeting of Common Stockholders

Date and Time: November 3, 2021 at 9:30 am, Eastern Daylight Time

Place: Via webcast, at https://meetnow.global/MAXWQNS

Record Date: September 22, 2021

Voting Matters and Board of Directors Recommendation

Items of Business

 

Board of
Directors
Recommendation

1.Approve amendments to the terms of the Series A Preferred Stock in the Charter to remove the cumulative dividend rights.

 

FOR

2.Approve amendments to the terms of the Series B Convertible Preferred Stock in the Charter to remove the cumulative dividend rights.

 

FOR

3.Approve one or more adjournments of the Special Meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve any of the proposals to be considered at the Special Meeting.

 

FOR

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WHEELER REAL ESTATE INVESTMENT TRUST, INC.

PROXY STATEMENT

FOR THE SPECIAL MEETING OF COMMON STOCKHOLDERS

TO BE HELD NOVEMBER 3, 2021

The Board of Directors of Wheeler Real Estate Investment Trust, Inc. (the “Company” or “we” or “us”) is soliciting proxies to be used at the Special Meeting of Common Stockholders (the “Special Meeting”). Beginning on or about October 4, 2021, we will send proxy materials by mail to common stockholders entitled to notice of the Special Meeting.

ABOUT THE SPECIAL MEETING

Who Can Vote

Record holders of common stock of the Company, par value $0.01 per share (the “Common Stock”), at the close of business on September 22, 2021 (the “Record Date”) may vote at the Special Meeting. On the Record Date, 9,713,787 shares of Common Stock were outstanding. Each share is entitled to cast one vote. Holders of the Company’s Series A Preferred Stock (the “Series A Preferred Stock”) and the Series B Convertible Preferred Stock (the “Series B Preferred Stock”) are not entitled to vote at the Special Meeting, but will be mailed notices in conformity with Maryland law substantially in the form attached to this proxy statement as Annex B and Annex C, respectively.

How You Can Attend the Special Meeting

The Special Meeting will be a virtual meeting of common stockholders held via live webcast, which will be accessible at https://meetnow.global/MAXWQNS at the date and time given above. The live webcast will provide common stockholders with the opportunity to vote and ask questions.

The process for attending the Special Meeting depends on how your Common Stock is held. Generally, you may hold Common Stock in your name as a “record holder” or in an account with a bank, broker, or other nominee (i.e., in “street name”).

If you are a record holder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the Special Meeting virtually on the internet. Record holders should follow the instructions provided on their notice and in their proxy materials.

If you hold your shares in “street name,” you must register in advance to attend and vote at the virtual Special Meeting webcast.    If you hold your shares in “street name” and do not register, you may still listen to the Special Meeting webcast by visiting https://meetnow.global/MAXWQNS, but you will not be able to participate or vote in the meeting. To register, you must obtain a “legal proxy” from the bank, broker or other nominee of your shares and submit the legal proxy to Computershare in order to be entitled to vote those shares electronically. Please note that obtaining a legal proxy may take several days. Requests must be received no later than 5:00 p.m. Eastern Daylight Time on October 29, 2021. You will receive a confirmation of your registration by email. Meeting registration requests must include your legal proxy (an image of the legal proxy or a forward of the email from your broker including the legal proxy are acceptable) and be sent by email to legalproxy@computershare.com with the subject “Legal Proxy” or by mail to Computershare, Wheeler Real Estate Investment Trust, Inc. Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001. If you wish to observe the Special Meeting (without being able to vote or submit questions) you may do so by visiting the above website and using your name and email address.

Please note that you may vote by proxy prior to November 3, 2021 and still attend the Special Meeting. Even if you currently plan to attend the Special Meeting webcast, we strongly recommend that you also submit your proxy as described above so that your vote will be counted if you later decide not to attend the Special Meeting. If you hold your shares in street name, we urge you to submit your proxy in advance as described below.

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How You Can Vote in Advance

The process for voting your Common Stock depends on how your Common Stock is held.

If you are a record holder, you can vote your shares by going to www.investorvote.com/whlr, or by calling the toll-free number (for residents of the United States and Canada) listed on your proxy card, using the 16-digit control number on your proxy card. If you chose to receive proxy materials by mail, you can also complete, sign and date the enclosed proxy card and mail it in the enclosed postage-paid envelope. If you vote online or by phone, there is no need to return a proxy card by mail. The proxy you submit will be voted in accordance with your instructions.

If you hold your shares in “street name,” you must follow the voting instructions provided by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting.

Please note voting in advance by telephone and Internet will not be available after 11:59 p.m., Eastern Daylight Time, on November 2, 2021.

If a proxy is executed and returned but no instructions are given, the shares will be voted according to the recommendation of the Board of Directors.

The Board of Directors recommends a vote FOR Proposal 1 (defined below), recommends a vote FOR Proposal 2 (defined below), and recommends a vote FOR Proposal 3 (defined below).

How You Can Vote Electronically at the Special Meeting

If you are a record holder, in order to vote and/or submit a question during the Special Meeting, you will need to follow the instructions posted at https://meetnow.global/MAXWQNS and will need the control number included in the Notice sent to you.

If you hold your shares in street name, you must obtain a “legal proxy” from the bank, broker or other nominee of your shares and send the “legal proxy” to Computershare as described above.

Revocation of Proxies

If you submit your proxy over the Internet, by telephone or by mail, you may change your voting instructions by subsequently properly submitting a new proxy. Only your most recent proxy will be exercised and all others will be disregarded, regardless of the method by which the proxies were authorized. You may also revoke your earlier proxy by voting in person at the Special Meeting. Your attendance at the Special Meeting will not cause your previously granted proxy to be revoked unless you specifically so request. If you hold your shares in “street name,” you should follow the instructions provided by your bank, broker or other nominee to revoke your proxy.

Notices of revocation of proxies delivered by mail must be delivered by November 2, 2021 to the Company’s principal offices at 2529 Virginia Beach Blvd., Virginia Beach, VA 23452, Attention: Angelica Beltran, Corporate Secretary.

What am I voting on?

You will be voting on the following:

(1)    amending the terms of the Company’s Series A Preferred Stock (the “Series A Preferred Stock”) to remove the cumulative dividend rights (“Proposal 1”);

(2)    amending the terms of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) to remove the cumulative dividend rights (“Proposal 2”); and

(3)    approving one or more adjournments of the Special Meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve any of the proposals to be considered at the Special Meeting (“Proposal 3”).

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Who is soliciting my vote?

The Board of Directors, on behalf of the Company, is soliciting your proxy to vote your shares of our Common Stock on all matters scheduled to come before the Special Meeting, whether or not you attend virtually. Additionally, Okapi Partners LLC, on behalf of the Company, is soliciting your proxy to vote your shares of our Common Stock on all matters scheduled to come before the Special Meeting, whether or not you attend virtually.

The Company will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. The Company will pay Okapi Partners LLC a fee of up to $40,000, plus disbursements, reimburse Okapi Partners LLC for its reasonable out-of-pocket expenses and indemnify Okapi Partners LLC and its affiliates against certain claims, liabilities, losses, damages and expenses for their services as our proxy solicitor. We will reimburse brokerage firms and other custodians for their reasonable out-of-pocket expenses for forwarding the proxy materials to our stockholders. Directors, officers and employees of the Company who solicit proxies will not be paid any additional compensation for soliciting proxies.

By submitting your proxy and voting instructions by telephone or via the Internet, or if you have chosen to receive your proxy materials by mail, by completing, signing, dating and returning the proxy card or voting instruction form, you are authorizing the persons named as proxies to vote your shares of our Common Stock at the Special Meeting as you have instructed.

Vote Required

The presence, in person (by attending the Special Meeting virtually) or by proxy, of holders of record of a majority of all issued and outstanding shares of Common Stock that are entitled to vote at the Special Meeting will constitute a quorum for transacting business at the Special Meeting. As of September 22, 2021, the record date for the Special Meeting, there were 9,713,787 shares of Common Stock issued and outstanding and entitled to vote at the Special Meeting.

If you or your broker have properly signed and returned a proxy card by mail or voted by internet or phone, you will be considered part of the quorum, and the persons named on the proxy card will vote your shares as you have instructed.

Abstentions and broker non-votes will be considered present for the purpose of determining the presence of a quorum. A “broker non-vote” occurs when the broker holding shares for a beneficial owner has not received voting instructions from the beneficial owner and does not have discretionary authority to vote the shares. If you own your shares in “street name” through a broker and do not provide voting instructions to your broker, then your broker will not have the authority to vote your shares on any proposal presented at the Special Meeting unless it has discretionary authority with respect to that proposal. In that case, your shares will be considered to be broker non-votes, and will not be voted on that proposal. Whether a broker has discretionary authority depends on your agreement with your broker and the rules of the various regional and national exchanges of which your nominee is a member. Accordingly, it is very important that you instruct your broker on how to vote shares that you hold in street name.

If you received multiple proxy cards, this indicates that your shares are held in more than one account, such as two brokerage accounts, and are registered in different names. You should vote each of the proxy cards to ensure that all your shares are voted.

Amendments to Terms of Series A Preferred Stock (Proposal 1).    The affirmative “FOR” vote of the holders of record of a majority of the shares of Common Stock that are outstanding and entitled to vote on Proposal 1 is required to approve that proposal. You may vote “FOR,” “AGAINST,” or “ABSTAIN.” For purposes of this vote, an abstention and a broker non-vote will each have the same effect as a vote “AGAINST” Proposal 1.

Amendments to Terms of Series B Preferred Stock (Proposal 2).    The affirmative “FOR” vote of the holders of record of a majority of the shares of Common Stock that are outstanding and entitled to vote on Proposal 2 is required to approve that proposal. You may vote “FOR,” “AGAINST,” or “ABSTAIN.” For purposes of this vote, an abstention and a broker non-vote will each have the same effect as a vote “AGAINST” Proposal 2.

Adjournments of the Special Meeting (Proposal 3).    The approval of the adjournments of the Special Meeting, as described in Proposal 3, requires the affirmative “FOR” vote of a majority of all shares of Common Stock voted on that proposal. For purposes of this vote, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote for Proposal 3.

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Other Matters to be Acted Upon at the Special Meeting

We do not know of any other matters to be validly presented or acted upon at the Special Meeting. If any other matter is presented at the Special Meeting on which a vote may be properly taken, the shares represented by proxies will be voted in accordance with the judgment of the person or persons voting those shares.

Expenses of Solicitation

The Company is making this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes. Some of our directors, officers and employees may solicit proxies personally, without any additional compensation, by telephone or mail.

Available Information

Our internet website address is www.whlr.us. We make available free of charge through our website our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the U.S. Securities and Exchange Commission (the “SEC”). In addition, we have posted the charters of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, as well as our Code of Business Conduct and Ethics and Corporate Governance Principles, including guidelines on director independence, all under separate headings. These documents are not incorporated in this instrument by reference. We will also provide a copy of these documents free of charge to stockholders upon written request.

Multiple Stockholders Sharing the Same Address

The SEC rules allow for the delivery of a single copy of an annual report and proxy statement to any household at which two or more stockholders reside, if it is believed the stockholders are members of the same family. Duplicate account mailings will be eliminated by allowing stockholders to consent to such elimination, or through implied consent if a stockholder does not request continuation of duplicate mailings (“Householding”). Depending upon the practices of your broker, bank or other nominee, you may need to contact them directly to continue duplicate mailings to your household. If you wish to revoke your consent to Householding, you must contact your broker, bank or other nominee.

If you hold shares of Common Stock in your own name as a holder of record, Householding will not apply to your shares.

If you wish to request extra copies free of charge of any annual report, proxy statement or information statement, please send your request to Wheeler Real Estate Investment Trust, Inc., Attention: Angelica Beltran, Corporate Secretary, 2529 Virginia Beach Blvd., Virginia Beach, VA 23452.

Questions

If you have questions about any of the proposals, you should contact the Company’s proxy solicitation agent:

Okapi Partners LLC

1212 Avenue of the Americas, 24th Floor

New York, New York 10036

+ 1 (212) 297-0720 (Main)

+ 1 (877) 629-6356 (Toll-Free)

Email: info@okapipartners.com

PLEASE VOTE — YOUR VOTE IS IMPORTANT

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth certain information regarding the beneficial ownership of shares of our common stock as of the record date of September 22, 2021 for:

•        each person who is the beneficial owner of 5% or more of our outstanding common stock,

•        each of our directors and named executive officers, and

•        all of our directors and executive officers as a group.

Each person or entity named in the tables has sole voting and investment power with respect to all of the shares of our common stock shown as beneficially owned by such person, except as otherwise set forth in the notes to the tables.

Unless otherwise indicated, the address of each named person is c/o Wheeler Real Estate Investment Trust, Inc., 2529 Virginia Beach Blvd., Virginia Beach, VA 23452.

 

Number of Shares Beneficially Owned

 

Percentage of
Class Beneficially
Owned
(1)

M. Andrew Franklin

 

8,632

(2)

 

*

 

Crystal Plum

 

7,022

 

 

*

 

Michelle D. Bergman

 

 

 

 

E.J. Borrack

 

 

 

 

Kerry G. Campbell

 

116,000

(3)

 

1.2

%

Stefani Carter

 

1,800

 

 

*

 

Saverio M. Flemma

 

 

 

 

Paula J. Poskon

 

75,300

(4)

 

*

 

Joseph D. Stilwell

 

5,181,316

(5)

 

37.8

%

All directors and executive officers as a group (9 persons)

 

5,390,070

 

 

39.2

%

____________

*        Less than 1.0%

(1)      Based upon 9,713,787 shares of Common Stock outstanding on September 22, 2021. In addition, amounts assume that all convertible securities held by the stockholder are converted into Common Stock.

(2)      Includes (i) 4,356 shares of Common Stock and (ii) 7.00% Senior Subordinated Convertible Notes Due 2031 (“Notes”) convertible into 4,276 shares of Common Stock.

(3)      Includes (i) 100,000 shares of Common Stock and (ii) Notes convertible into 16,000 shares of Common Stock.

(4)      Includes (i) 50,200 shares of Common Stock and (ii) Notes convertible into 25,100 shares of Common Stock.

(5)      Includes (i) 1,181,336 shares of Common Stock and (ii) Notes convertible into 3,999,980 shares of Common Stock. Stilwell Activist Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Value LLC, Stilwell Value Partners VII, L.P. and Joseph Stilwell each possess shared voting and investment power over 5,181,316 shares of Common Stock (assuming conversion of the Notes into Common Stock). Mr. Stilwell is the managing member and owner of Stilwell Value LLC, which is the general partner of Stilwell Value Partners VII, L.P., Stilwell Activist Fund, L.P. and Stilwell Activist Investments, L.P.

9

Table of Contents

Based upon our records and the information reported in filings with the SEC, the following were beneficial owners of more than 5% of our shares of Common Stock as of the record date of September 22, 2021 (in addition to those noted above).

Name and Address of Beneficial Owner

 

Number of Shares Beneficially Owned

 

Percentage of
Class 
Beneficially
Owned
(1)

Magnetar Financial LLC(2) 
1603 Orrington Avenue, 13th Floor
Evanston, IL 60201

 

1,761,839

 

15.4

%

Daniel Khoshaba(3) 
c/o Alexander Palm Road
Boca Raton, FL 33432

 

1,105,924

 

11.4

%

Richard S. Strong(4) 
c/o Godfrey & Kahn, S.C.
833 East Michigan Street, Suite 3800
Milwaukee, WI 53202

 

945,000

 

9.7

%

Steamboat Capital Partners, LLC(5) 
31 Old Wagon Road
Old Greenwich, CT 065870

 

792,356

 

7.5

%

Eidelman Virant Capital, Inc.(6) 
8000 Maryland Avenue, Suite 600
St. Louis, MO 63105

 

686,687

 

7.1

%

FMR LLC(7) 
245 Summer Street
Boston, MA 02210

 

522,276

 

5.4

%

____________

(1)      Based upon 9,713,787 shares of Common Stock outstanding on September 22, 2021. In addition, amounts assume that all convertible securities held by the stockholder are converted into Common Stock. All beneficial ownership identified on this table is held by the beneficial owners with sole voting power and sole investment power unless otherwise indicated.

(2)      Based solely upon the Schedule 13G filed with the SEC by the beneficial owner on September 10, 2021, reporting beneficial ownership as of August 13, 2021. Magnetar Financial LLC (“Magnetar”) possesses shared voting power and shared investment power over (i) Common Stock Purchase Warrants that are exercisable for 998,547 shares of Common Stock, (ii) Notes convertible into 347,292 shares of Common Stock and (iii) Purchase Rights to purchase up to $3.0 million in additional Notes convertible into 416,000 shares of Common Stock. Includes the shares reported by Magnetar Capital Partners LP, Supernova Management LLC and Alec N. Litowitz. Mr. Litowitz is the manager of Supernova Management LLC, which is the general partner of Magnetar Capital Partners LP. Magnetar Capital Partners LP is the sole member of Magnetar.

(3)      Based solely upon the Schedule 13D/A filed with the SEC by the beneficial owner on August 23, 2021, reporting beneficial ownership of 1,105,924 shares of Common Stock as of August 23, 2021.

(4)      Based solely upon the Schedule 13G/A filed with the SEC by the beneficial owner on February 8, 2021, reporting beneficial ownership as of December 31, 2020. Mr. Strong possesses shared voting power and shared investment power over 945,000 shares with Calm Waters Partnership, of which he is the managing member.

(5)      Based solely upon the Schedule 13D filed with the SEC by the beneficial owner on June 1, 2021, reporting beneficial ownership as of May 21, 2021. Steamboat Capital Partners, LLC possesses shared voting power over 232,123 shares of Series B Preferred Stock and 439,132 shares of Series D Preferred Stock, which are convertible into 145,076 and 647,280 shares of Common Stock, respectively.

(6)      Based solely upon the Schedule 13G filed with the SEC by the beneficial owner on January 27, 2021, reporting beneficial ownership as of January 26, 2021 of 686,687 shares of Common Stock.

(7)      Based solely upon the Schedule 13G/A filed with the SEC by the beneficial owner on April 12, 2021, reporting beneficial ownership as of April 9, 2021 of 522,276 shares of Common Stock. Includes the shares reported by Abigail P. Johnson.

10

Table of Contents

PROPOSAL 1 — series a amendment proposal

General

The Board of Directors proposes and recommends that the Company’s common stockholders approve amendments to the terms of the Series A Preferred Stock that remove its cumulative dividend rights, as provided in the Company’s charter (the “Charter”). These amendments are included in the proposed amendments (the “Proposed Amendments”) that are attached as Annex A to this Proxy Statement.

After careful consideration, the Board of Directors has unanimously adopted resolutions approving Proposal 1, determining that Proposal 1 is advisable and directing that it be submitted to the common stockholders for approval. Proposal 1 materially changes the terms of the Series A Preferred Stock by removing any cumulative dividend rights of holders of the Series A Preferred Stock. If Proposal 1 is approved, then a holder of the Series A Preferred Stock will only be entitled to receive, if authorized and declared by the Board of Directors, cash dividends at the rate of 9% per annum of the $1,000 liquidation preference per share of the Series A Preferred Stock (equivalent to the fixed annual amount of $90.00 per share of the Series A Preferred Stock), which dividends shall be payable quarterly in arrears and shall not accrue or accumulate under any circumstances. Currently, pursuant to the Charter, dividends on the Series A Preferred Stock accrue and cumulate on a quarterly basis even if not declared by the Board of Directors.

Elimination of Cumulative Dividend Rights

This Proposal 1 is part of the Company’s ongoing efforts to improve the Company’s capital structure. These amendments would improve Basic Earnings per Share, Funds From Operations (“FFO”), the Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends, and significantly reduce the Company’s large and growing financial obligation to its preferred stockholders, which the Company believes impedes the potential growth and strategic opportunities available to it.

Dividend Entitlement of Series A Preferred Stock

As of June 30, 2021, the Company had an aggregate of $139,095 of accrued but unpaid dividends on the Series A Preferred Stock.

The following provides a summary of the future dividends scheduled to accumulate on the outstanding Series A Preferred as of June 30, 2021 over the next five years assuming no cash dividend payments are made thereunder after the date of this proxy statement:

 

2021

 

2022

 

2023

 

2024

 

2025

Balance, January 1

 

$

113,805

 

$

164,385

 

$

214,965

 

$

265,545

 

$

316,125

Unpaid dividends earned by
stockholders

 

$

50,580

 

$

50,580

 

$

50,580

 

$

50,580

 

$

50,580

Balance, December 31

 

$

164,385

 

$

214,965

 

$

265,545

 

$

316,125

 

$

366,705

If Proposal 1 is approved, all accumulated and unpaid dividends on the Series A Preferred Stock will be eliminated, and no further dividends on the Series A Preferred Stock will accumulate.

Impact on Basic Earnings per Share Ratio on Income Statement

Eliminating the cumulative dividend rights would improve Basic Earnings per Share on the Company’s Income Statement.

Basic Earnings per Share for the Company’s common stockholders is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the Company’s weighted-average shares of Common Stock outstanding during the period.

11

Table of Contents

The following tables for the six months ended June 30, 2021 and the year ended December 31, 2020, show an increase in Basic Earnings per Share of $0.003 and $0.005, respectively.

in thousands, except share and per share data

 

Six Months Ended June 30, 2021

 

Removal of Cumulative Nature of Series A Dividends

 

Proforma Six Months Ended June 30, 2021

Net Loss

 

$

(7,101

)

 

$

 

 

$

(7,101

)

Less: Net income attributable to noncontrolling interests

 

 

15

 

 

 

 

 

 

15

 

Net Loss Attributable to Wheeler REIT

 

 

(7,116

)

 

 

 

 

(7,116

)

Preferred Stock dividends – undeclared

 

 

(6,592

)

 

 

25

 

 

(6,567

)

Deemed contribution related to preferred stock redemption

 

 

5,040

 

 

 

 

 

 

5,040

 

Net Loss Attributable to Wheeler REIT Common Stockholders

 

$

(8,668

)

 

$

25

 

$

(8,643

)

   

 

 

 

 

 

   

 

 

 

Weighted-average number of shares

 

 

9,706,183

 

 

 

   

 

9,706,183

 

   

 

 

 

 

 

   

 

 

 

Basic Earnings per share

 

$

(0.893

)

 

 

   

$

(0.890

)

   

 

 

 

 

 

   

 

 

 

Increase in Basic Earnings per share

 

 

 

 

 

 

   

$

0.003

 

in thousands, except share and per share data

 

Year Ended December, 31 2020

 

Removal of Cumulative Nature of Series A Dividends

 

Proforma
Year Ended
December, 31
2020

Net Income

 

$

287

 

 

$

 

 

$

287

 

Less: Net income attributable to noncontrolling interests

 

 

42

 

 

 

 

 

 

42

 

Net Income Attributable to Wheeler REIT

 

 

245

 

 

 

 

 

245

 

Preferred Stock dividends – undeclared

 

 

(14,528

)

 

 

51

 

 

(14,477

)

Deemed contribution related to preferred stock redemption

 

 

726

 

 

 

 

 

 

726

 

Net Loss Attributable to Wheeler REIT Common Stockholders

 

$

(13,557

)

 

$

51

 

$

(13,506

)

   

 

 

 

 

 

   

 

 

 

Weighted-average number of shares

 

 

9,698,274

 

 

 

   

 

9,698,274

 

   

 

 

 

 

 

   

 

 

 

Basic Earnings per share

 

$

(1.398

)

 

 

   

$

(1.393

)

   

 

 

 

 

 

   

 

 

 

Increase in Basic Earnings per share

 

 

 

 

 

 

   

$

0.005

 

Impact on Funds from Operations (FFO)

Eliminating the cumulative dividend rights would improve FFO.

We use FFO, a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999, April 2002 and December 2018). As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs), plus impairment of real estate related long-lived assets and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe

12

Table of Contents

FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results. To arrive at FFO available to common stockholders and common unitholders, FFO is then reduced by amounts attributable to preferred stockholders.

The following tables for the six months ended June 30, 2021 and the year ended December 31, 2020, show an increase in FFO of $25,000 and $51,000, respectively.

in thousands

 

Six Months Ended June 30, 2021

 

Removal of Cumulative Nature of Series A Dividends

 

Proforma Six Months Ended June 30, 2021

Net Loss

 

$

(7,101

)

 

$

   

$

(7,101

)

Depreciation and amortization of real estate assets

 

 

7,355

 

 

 

   

 

7,355

 

Impairment of assets held for sale

 

 

2,200

 

 

 

   

 

2,200

 

Gain on disposal of properties

 

 

(176

)

 

 

 

 

 

(176

)

FFO

 

 

2,278

 

 

 

 

 

2,278

 

Preferred stock dividends – undeclared

 

 

(6,592

)

 

 

25

 

 

(6,567

)

Preferred stock accretion adjustments

 

 

309

 

 

 

 

 

 

309

 

FFO available to common stockholders and common unitholders

 

$

(4,005

)

 

$

25

 

$

(3,980

)

in thousands

 

Year Ended December, 31 2020

 

Removal of Cumulative Nature of Series A Dividends

 

Proforma
Year Ended
December, 31
2020

Net Income

 

$

287

 

 

$

   

$

287

 

Depreciation and amortization of real estate assets

 

 

17,291

 

 

 

   

 

17,291

 

Impairment of assets held for sale

 

 

600

 

 

 

   

 

600

 

Gain on disposal of properties

 

 

(23

)

 

 

 

 

 

(23

)

FFO

 

 

18,155

 

 

 

 

 

18,155

 

Preferred stock dividends – undeclared

 

 

(14,528

)

 

 

51

 

 

(14,477

)

Preferred stock redemption

 

 

96

 

 

 

   

 

96

 

Preferred stock accretion adjustments

 

 

677

 

 

 

 

 

 

677

 

FFO available to common stockholders and common unitholders

 

$

4,400

 

 

$

51

 

$

4,451

 

Impact on Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends

Eliminating the cumulative dividend rights would improve the Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.

The Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends is calculated by dividing earnings equaling net income (loss) adjusted for noncontrolling interest, and fixed charges equaling interest expense, and amortization of deferred loan costs related to mortgage indebtedness by the sum of fixed charges and amounts attributable to preferred stockholders.

The following tables for the six months ended June 30, 2021 and the year ended December 31, 2020, show a Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends of 0.340 and 0.549, respectively.

13

Table of Contents

Earnings (in thousands)

 

Six Months Ended June 30, 2021

 

Removal of Cumulative Nature of Series A Dividends

 

Proforma Six Months Ended June 30, 2021

Net Loss

 

$

(7,101

)

 

$

 

 

 

$

(7,101

)

Add: Fixed Charges

 

 

14,176

 

 

 

 

 

 

 

14,176

 

Less: Net income attributable to non-controlling interests

 

 

(15

)

 

 

 

 

 

 

(15

)

Total Earnings

 

$

7,060

 

 

$

 

 

$

7,060

 

   

 

 

 

 

 

 

 

 

 

 

 

Fixed charges (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

9,860

 

 

$

 

 

 

$

9,860

 

Amortization of deferred loan costs related to mortgage indebtedness

 

 

4,316

 

 

 

 

 

 

 

4,316

 

Total fixed charges

 

$

14,176

 

 

$

 

 

$

14,176

 

Preferred dividends

 

 

6,592

 

 

 

(25

)

 

 

6,567

 

Total combined fixed charges and preferred stock dividends

 

$

20,768

 

 

 

 

 

 

$

20,743

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

0.340

(A)

 

 

 

 

 

 

0.340

(B)

____________

(A)     The computation of our ratios of earnings to combined fixed charges and preferred stock dividends indicates that earnings were inadequate to cover combined fixed charges and preferred stock dividends by approximately $13.71 million for the six months ended June 30, 2021.

(B)     The computation of our ratios of earnings to combined fixed charges and preferred stock dividends indicates that earnings were inadequate to cover combined fixed charges and preferred stock dividends by approximately $13.68 million for the six months ended June 30, 2021, on a proforma basis.

Earnings (in thousands)

 

Year Ended December, 31 2020

 

Removal of Cumulative Nature of Series A Dividends

 

Proforma
Year Ended
December, 31
2020

Net Income

 

$

287

 

 

$

 

 

 

$

287

 

Add: Fixed Charges

 

 

17,092

 

 

 

 

 

 

 

17,092

 

Less: Net income attributable to non-controlling interests

 

 

(42

)

 

 

 

 

 

 

(42

)

Total Earnings

 

$

17,337

 

 

$

 

 

$

17,337

 

   

 

 

 

 

 

 

 

 

 

 

 

Fixed charges (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

15,994

 

 

$

 

 

 

$

15,994

 

Amortization of deferred loan costs related to mortgage indebtedness

 

 

1,098

 

 

 

 

 

 

 

1,098

 

Total fixed charges

 

$

17,092

 

 

$

 

 

$

17,092

 

Preferred dividends

 

 

14,528

 

 

 

(51

)

 

 

14,477

 

Total combined fixed charges and preferred stock dividends

 

$

31,620

 

 

 

 

 

 

$

31,569

 

Ratio of earnings to combined fixed charges and preferred stock dividends

 

 

0.548

(A)

 

 

 

 

 

 

0.549

(B)

____________

(A)     The computation of our ratios of earnings to combined fixed charges and preferred stock dividends indicates that earnings were inadequate to cover combined fixed charges and preferred stock dividends by approximately $14.28 million for the year ended December 31, 2020.

(B)     The computation of our ratios of earnings to combined fixed charges and preferred stock dividends indicates that earnings were inadequate to cover combined fixed charges and preferred stock dividends by approximately $14.23 million for the year ended December 31, 2020, on a proforma basis.

14

Table of Contents

If Proposal 1 is approved by the common stockholders and the charter amendments are effected, then the cumulative dividends of the Series A Preferred Stock will no longer accrue or accumulate under any circumstances and will not be payable to the holders of the Series A Preferred Stock. In the event that Proposal 1 is not approved by common stockholders, the current terms of the Series A Preferred Stock will remain in effect and the Charter’s terms concerning the dividends on the Series A Preferred Stock will not be amended.

This general description of the amendments to the terms of the Series A Preferred Stock provided in the Proposed Amendments provided herein is qualified in its entirety by reference to the text of the Proposed Amendments, a copy of which is attached as Annex A to this Proxy Statement and is incorporated by reference herein. Additions to the existing Charter that are contemplated by the Proposed Amendments are indicated by underlining, and deletions to the existing Charter that are contemplated by the Proposed Amendments are indicated by strike-outs.

No Appraisal Rights

No stockholder of the Company will have appraisal rights with respect to any matter to be acted upon at the Special Meeting, and the Company will not independently provide stockholders with such rights.

Vote Required

The affirmative “FOR” vote of the holders of record of a majority of the shares of Common Stock that are outstanding and entitled to vote on Proposal 1 is required to approve that proposal.

For purposes of this vote, an abstention and a broker non-vote will each have the same effect as a vote “AGAINST” Proposal 1.

Board of Directors Recommendation

After careful consideration, the Board of Directors determined that Proposal 1 is advisable and directed that it be submitted to the holders of the Company’s Common Stock for their approval. The Board of Directors recommends that the holders of the Company’s Common Stock vote “FOR” Proposal 1.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
“FOR”
PROPOSAL 1

15

Table of Contents

PROPOSAL 2 — SERIES B AMENDMENT PROPOSAL

General

The Board of Directors proposes and recommends that the Company’s common stockholders approve amendments to the terms of the Series B Preferred Stock that remove its cumulative dividend rights, as provided in the Company’s Charter. These amendments are included in the Proposed Amendments that are attached as Annex A to this Proxy Statement.

After careful consideration, the Board of Directors has unanimously adopted resolutions approving Proposal 2, determining that Proposal 2 is advisable and directing that it be submitted to the common stockholders for approval. Proposal 2 materially changes the terms of the Series B Preferred Stock by removing any cumulative dividend rights of holders of the Series B Preferred Stock. If Proposal 2 is approved, then a holder of the Series B Preferred Stock will only be entitled to receive, if authorized and declared by the Board of Directors, cash dividends at the rate of 9% per annum of the $25 liquidation preference per share of the Series B Preferred Stock (equivalent to the fixed annual amount of $2.25 per share of the Series B Preferred Stock), which dividends shall be payable quarterly in arrears and shall not accrue or accumulate under any circumstances. Currently, pursuant to the Charter, dividends on the Series B Preferred Stock accrue and cumulate on a quarterly basis even if not declared by the Board of Directors.

Elimination of Cumulative Dividend Rights

This Proposal 2 is part of the Company’s ongoing efforts to improve the Company’s capital structure. These amendments would improve Basic Earnings per Share, Funds From Operations (“FFO”), the Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends, and significantly reduce the Company’s large and growing financial obligation to its preferred stockholders, which the Company believes impedes the potential growth and strategic opportunities available to it.

Dividend Entitlement of Series B Preferred Stock

As of June 30, 2021, the Company had an aggregate of $11,606,191 of accrued but unpaid dividends on the Series B Preferred Stock.

The following provides a summary of the future dividends scheduled to accumulate on the outstanding Series B Preferred as of June 30, 2021 over the next five years assuming no cash dividend payments are made thereunder after the date of this proxy statement:

 

2021

 

2022

 

2023

 

2024

 

2025

Balance, January 1

 

$

9,495,974

 

$

13,716,407

 

$

17,936,840

 

$

22,157,273

 

$

26,377,706

Unpaid dividends earned by stockholders

 

$

4,220,433

 

$

4,220,433

 

$

4,220,433

 

$

4,220,433

 

$

4,220,433

Balance, December 31

 

$

13,716,407

 

$

17,936,840

 

$

22,157,273

 

$

26,377,706

 

$

30,598,139

If Proposal 2 is approved, all accumulated and unpaid dividends on the Series B Preferred Stock will be eliminated, and no further dividends on the Series B Preferred Stock will accumulate.

Impact on Basic Earnings per Share Ratio on Income Statement

Eliminating the cumulative dividend rights would improve Basic Earnings per Share on the Company’s Income Statement.

Basic earnings per share for the Company’s common stockholders is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the Company’s weighted-average shares of Common Stock outstanding during the period.

16

Table of Contents

The following tables for the six months ended June 30, 2021 and the year ended December 31, 2020, show an increase in Basic Earnings per Share of $0.217 and $0.435, respectively.

in thousands, except share and per share data

 

Six Months Ended June 30, 2021

 

Removal of
Cumulative Nature of Series B Dividends

 

Proforma
Six Months
Ended June 30,
2021

Net Loss

 

$

(7,101

)

 

$

   

$

(7,101

)

Less: Net income attributable to noncontrolling interests

 

 

15

 

 

 

 

 

 

15

 

Net Loss Attributable to Wheeler REIT

 

 

(7,116

)

 

 

 

 

(7,116

)

Preferred Stock dividends – undeclared