8-K - PRXA - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest eventreported): April 7, 2020

PROCACCIANTI HOTEL REIT, INC.

(Exact Name of Registrant as Specifiedin Its Charter)

Maryland	333-217578	81-3661609
(State or other jurisdiction ofincorporation or organization)	(CommissionFile Number)	(I.R.S. EmployerIdentification No.)

1140 Reservoir Avenue

Cranston, Rhode Island 02920-6320

(Address of principal executive offices)

(401) 946-4600

(Registrant’s telephone number,including area code)

N/A

(Former name or former address, if changedsince last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	x
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.	x
Item 7.01.	Regulation FD Disclosure.
---	---

On April 7, 2020, Procaccianti Hotel REIT, Inc. (the “Company”) distributed a letter to the Company’s stockholders and a letter to the broker-dealers participating in the Company’s continuous public offering (the “Offering”) regarding the suspension of (i) the sale of shares of the Company’s common stock (the “Shares”) in the Offering and (ii) the Company’s distribution reinvestment plan (the “DRIP”), each as described under Item 8.01 below. Copies of forms of the letter to the Company’s stockholders and the letter to participating broker-dealers are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and incorporated into this Item 7.01 by reference.

The information furnished under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any filings made by the Company pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01.	Other Events.

On April 7, 2020, the Company’s board of directors (the “Board”) unanimously approved the temporary suspension of (i) the sale of Shares in the Offering, effective as of April 7, 2020 and (ii) the operation of the DRIP, effective as of April 17, 2020. Sales of shares in the Offering and pursuant to the DRIP will each remain suspended until such time as the Board approves their resumption.

The Board made this difficult decision because it does not believe it is appropriate for the Company to continue to sell shares of common stock until it has determined an updated net asset value (“NAV”) per share. The Company expects to release an updated NAV per share of all classes of its capital stock calculated as of March 31, 2020 when available, which it expects to be lower than the current NAV per share.

Item 9.01.	Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Procaccianti Hotel REIT, Inc. Letter to Stockholders
---	---
99.2	Procaccianti Hotel REIT, Inc. Letter to Participating Broker-Dealers

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PROCACCIANTI HOTEL REIT, INC.
Date: April 7, 2020	By:	/s/ Gregory Vickowski
		Gregory Vickowski
		Chief Financial Officer

Exhibit 99.1

April 7, 2020

Dear Stockholder:

I am writing you to provide an important update regarding Procaccianti Hotel REIT, Inc. (the “Company”). On April 7, 2020, in response to the rapidly evolving novel coronavirus (COVID-19) pandemic, the board of directors of the Company (the “Board”) unanimously approved the following actions:

•	the temporary suspension of the sale of shares of the Company’s common stock in the Company’s ongoing public offering, effective as of April 7, 2020; and
•	the temporary suspension of the Company’s distribution reinvestment plan (the “DRIP”), effective as of April 17, 2020.
---	---

The Company is taking the ongoing COVID-19 pandemic extremely seriously and is proactively taking steps to attempt to address the corresponding operational threats to the Company’s hotel properties in an effort to minimize the impact of COVID-19 on the Company’s financial results and position the Company to rebound as quickly as possible once the situation has stabilized. While it is impossible to predict when the Company will be able to return to normal operations during these uncertain times, the Board and the Company’s management will continue to evaluate the Company's financial condition and the overall economic environment in order to determine an appropriate time to recommence sales of shares in the Company’s offering and pursuant to the DRIP and fully reinstate the share repurchase program. As previously noted in a prior letter to stockholders, the Company limited its share repurchase program to repurchases upon death and the Board will make determinations as to the payment of distributions on a quarter by quarter basis.

Thank you for your continued trust and support as the Company navigates this unprecedented challenge. The Board and the Company’s management are fully committed to preserving the value of your investment in the Company.

Should you have any questions, please contact your financial adviser.

Sincerely,

/s/ James A. Procaccianti

James A. Procaccianti

Chief Executive Officer and President

Procaccianti Hotel REIT, Inc.

Exhibit 99.2

April 7, 2020

Dear Broker-Dealer/Representative:

I am writing to provide an important update regarding Procaccianti Hotel REIT, Inc. (referred to herein as “we,” “us”, “our” and the “Company”).

The Company is taking the ongoing coronavirus (“COVID-19”) pandemic extremely seriously and is proactively taking steps to attempt to address the corresponding operational threats to the Company’s hotel properties in an effort to minimize the impact of COVID-19 on the Company’s financial results and position the Company to rebound as quickly as possible once the situation has stabilized. Although reasonable projections of a ‘V’ or ‘U’ shaped economic recovery might be anticipated following this crisis, presently there are no clear indications as to the depth, severity or duration of the COVID-19 pandemic in the United States. The Company intends to release an updated net asset value (“NAV”) per share of all classes of its capital stock calculated as of March 31, 2020 when available, which it expects to be lower than the current NAV per share.

In response to the global pandemic of COVID-19, on April 7, 2020, the board of directors of the Company (the “Board”), in addition to the actions they previously took on March 20, 2020, which are described below, unanimously approved the following actions:

•	the temporary suspension of the sale of shares of the Company’s common stock in the Company’s ongoing public offering, effective as of April 7, 2020; and
•	the temporary suspension of the Company’s distribution reinvestment plan (the “DRIP”), effective as of April 17, 2020.
---	---

The Board made this difficult decision because it does not believe it is appropriate for the Company to continue to sell shares of common stock until it has determined an updated NAV per share. In addition, the Company previously announced the following information relating to distributions and share repurchases in a Current Report on Form 8-K filed on March 20, 2020:

Distributions

We intend to pay quarterly distributions with respect to the quarter ended March 31, 2020, with operating cash flow, consistent with prior distributions. Our board of directors will make determinations as to the payment of future distributions on a quarter by quarter basis; however, distributionswill continue to accrue pursuant to our charter.

Repurchases

Our board of directors decided to temporarily suspend repurchases under our share repurchase program effective with repurchase requests that would otherwise be processed in April 2020 due to the negative impact of the coronavirus (COVID-19) pandemic on our portfolio to date; provided, however, we will continue to processrepurchases due to death in accordance with the terms of our share repurchase program. We will announce any updates concerning our share repurchase program in a Current Report on Form 8-K. Any unprocessed requests will automatically roll over to be considered for repurchase when we fully reopen our share repurchase program, unless a stockholder withdraws the request for repurchase five business days prior to the next repurchase date.

We also note that Procaccianti Hotel Advisor, LLC (the “Advisor”) does not receive its asset management fees unless the stated distribution is fully covered. While it is impossible to predict when the Company will be able to return to normal operations during these uncertain times, the Board and the Company’s management will continue to evaluate the Company's financial condition and the overall economic environment in order to determine an appropriate time to recommence sales of shares in the Company’s offering and pursuant to the DRIP and fully reinstate the share repurchase program.

Should you have any questions, please contact S2K Financial at (877) 227-4141 or email info@s2kco.com.

Sincerely,

/s/ James A. Procaccianti

James A. Procaccianti

Chief Executive Officer and President