Sotherly Hotels (SOHO) investor relations material

Executive summary

• A special meeting is scheduled for January 22, 2026, to vote on a merger where shareholders will receive $2.25 per common share in cash, representing a significant premium over recent trading prices.

• The merger involves Sparrows Nest LLC (a subsidiary of KW Kingfisher LLC) merging into the company, with the company surviving as a wholly owned subsidiary of the parent.

• The board, following a special committee's recommendation, unanimously approved the merger as fair and in the best interests of shareholders.

• The merger is contingent on approval by a majority of outstanding common shares; preferred shareholders and OP unit holders do not vote on the proposals.

Voting matters and shareholder proposals

• Shareholders will vote on three proposals: approval of the merger, a non-binding advisory vote on executive compensation related to the merger, and approval of any adjournment of the meeting if needed.

• The board recommends voting FOR all three proposals.

• Failure to vote or abstentions on the merger proposal count as votes against; for the other two proposals, they have no effect.

• The record date for voting is December 5, 2025.

Board of directors and corporate governance

• A special committee of three independent directors managed the process, engaged advisors, and conducted a market check for alternative transactions.

• The board and special committee considered multiple bids and alternatives, ultimately determining the merger was the best available option.

• The board and special committee considered the fairness opinion of Piper Sandler, which found the merger consideration fair from a financial point of view.

• The board and special committee negotiated protections such as an escrow agreement and a $25 million revolving credit facility to support operations during the merger process.