WILLIAMSBURG, Va. - Sotherly Hotels Inc. (NASDAQ: NASDAQ:SOHO) disclosed today that they have been notified by The Nasdaq Stock Market of non-compliance with listing rules due to a delayed quarterly report. The company missed the deadline to file its Form 10-Q for the quarter ending March 31, 2024, which led to the receipt of the notice on May 22, 2024.
The delay stems from the company's ongoing evaluation of certain accounting presentations, specifically the classification of preferred units on its balance sheet and the accounting for other items. This evaluation prevented the filing within the prescribed period without undue effort or expense.
Sotherly Hotels has been given 60 days, until July 21, 2024, to submit a plan to regain compliance. If Nasdaq accepts this plan, the company may receive an extension up to November 11, 2024, to file the overdue report and comply with the listing standards. Should the plan be rejected, Sotherly Hotels will have the opportunity to appeal before a Nasdaq hearings panel.
The current situation does not affect the trading of the company's common or preferred stock on the Nasdaq Global Market. Sotherly Hotels has stated their intent to file the Form 10-Q promptly in an effort to regain compliance.
The company's portfolio includes ten hotel properties and interests in two condominium hotels with associated rental programs. They operate under the Hilton Worldwide and Hyatt Hotels (NYSE:H) Corporation brands, as well as independent hotels.
InvestingPro Insights
In light of Sotherly Hotels Inc.'s (NASDAQ: SOHO) recent notification of non-compliance with Nasdaq listing rules, an examination of the company's financial health and market performance is pertinent. According to real-time data provided by InvestingPro, SOHO's market cap stands at a modest 27.81 million USD, reflecting the scale of its operations within the hotel industry.
The company's price-to-earnings (P/E) ratio is currently negative at -6.48, and the adjusted P/E ratio for the last twelve months as of Q1 2024 is even lower at -10.59, indicating that the company has been facing profitability challenges. This aligns with one of the InvestingPro Tips which notes that analysts do not anticipate the company will be profitable this year. Additionally, SOHO's revenue growth for the last twelve months as of Q1 2024 was 3.22%, with a higher quarterly growth rate of 7.03% in Q1 2024, suggesting some level of resilience in generating income.
From an investment perspective, two InvestingPro Tips highlight that SOHO is trading at low valuation multiples in terms of both EBITDA and revenue. This could suggest that the stock is undervalued relative to its earnings before interest, taxes, depreciation, and amortization, as well as its revenue, which may be an attractive point for value investors. Moreover, the company's liquid assets exceed its short-term obligations, indicating a degree of financial stability in meeting its immediate liabilities.
For investors looking for deeper insights and additional guidance, there are more InvestingPro Tips available, including those that shed light on the company's dividend history and share price performance over the last decade. To explore these further, investors can visit InvestingPro and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 9 InvestingPro Tips listed for SOHO, investors can gain a comprehensive understanding of the company's financial nuances and market position.
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