UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 333-217578 (1933 Act)
PROCACCIANTI HOTEL REIT, INC.
(Exact name of registrant as specified in its charter)
Maryland
81-3661609
(State or Other jurisdiction of
incorporation or organization)
(I.R.S Employer
Identification Number)
1140 Reservoir Avenue, Cranston, RI
02920-6320
(Address of Principal Executive Offices)
(Zip Code)
(401) 946-4600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in a definitive proxy or information statements incorporated by reference in Pat III of this Form 10-K or any amendment to this Form 10-K. ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
There is no established market for the registrant’s shares of common stock. The registrant is currently conducting an ongoing public offering of its shares of common stock pursuant to a Registration Statement on Form S-11. The registrant is currently offering shares at $10.00 per share of Class K common stock, $9.30 per share of Class K-I common stock, and $10.00 per share of Class K-T common stock, with discounts available for certain categories of purchasers.
As of June 30, 2018, the last business day of the registrant’s most recently completed second fiscal quarter, there were approximately 1,106,219 shares of Class K common stock, 15,000 shares of Class A common stock, and 125,000 shares of Class B common stock held by non-affiliates, for an aggregate market value of $11,084,660, assuming a market value of $10.00 per share of Class K common stock, $10.00 per share of Class A common stock, and $0.00 per share of Class B common stock.
As of March 20, 2019, there were 1,641,590 shares of the Registrant’s Class K common stock issued and outstanding, 66,517 shares of the Registrant’s Class K-I common stock issued and outstanding, 510 shares of the Registrant’s Class K-T common stock issued and outstanding, 468,410 shares of the Registrant’s Class A common stock issued and outstanding and 125,000 shares of the Registrant’s Class B common stock issued and outstanding.
Documents Incorporated by Reference:
The Registrant incorporates by reference portions of the Registrant’s Definitive Proxy Statement for the 2019 Annual Meeting of Stockholders (into Items 10, 11, 12. 13, and 14 of Part III), which is expected to be filed no later than April 30, 2019.
PROCACCIANTI HOTEL REIT, INC.
INDEX
Page
i
Cautionary Note Regarding Forward-Looking Statements
Certain statements included in this Annual Report on Form 10-K (“Annual Report”) that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.
The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:
•
the fact that we have a limited operating history;
the fact that we have had a net loss for each quarterly and annual period since inception;
our ability to raise proceeds in our Public Offering (as defined below);
our ability to effectively deploy the proceeds raised in our Public Offering;
changes in economic conditions generally and the real estate and debt markets specifically;
•
our ability to obtain financing on acceptable terms;
our levels of debt and the terms and limitations imposed on us by our debt agreements;
our ability to successfully identify and acquire properties on terms that are favorable to us;
risks inherent in the real estate business, including potential liability relating to environmental matters and the lack of liquidity of real estate investments;
changes in demand for rooms at our hotel properties;
the fact that we pay fees and expenses to our advisor and its affiliates that were not negotiated on an arm’s-length basis and the fact that the payment of these fees and expenses increases the risk that our stockholders will not earn a profit on their investment in us;
our ability to retain our executive officers and other key personnel of our advisor, our property manager and other affiliates of our advisor;
our ability to generate sufficient cash flows to pay distributions to our stockholders;
legislative or regulatory changes (including changes to the laws governing the taxation of REITs (as defined below);
the availability of capital;
changes in interest rates; and
changes to U.S. generally accepted accounting principles (“GAAP”).
ii