SAN DIEGO, Oct. 23, 2019 /PRNewswire/ -- Reven Housing REIT,
Inc. ("Reven" or the "Company") (Nasdaq: RVEN) announced today that
it intends to offer up to $15 million
of its newly authorized 6.0% Series A Cumulative Convertible
Redeemable Preferred Stock (the "Series A Preferred Stock") to its
stockholders who are accredited investors pursuant to Rule 506(c)
of the Securities Act of 1933, as amended (the "Securities
Act"). The closing of the offering of Series A Preferred
Stock (the "Offering") will be conditioned, among other things, on
Reven's acceptance of a minimum of $10 million in subscriptions for
the Series A Preferred Stock and is expected to occur (if at all)
as promptly as practicable following the closing of Reven's merger
(the "Merger") with an affiliate of KBS Strategic Opportunity REIT,
Inc. (the "Acquirer") under the previously announced Agreement and
Plan of Merger with certain affiliates of the Acquirer (as amended,
the "Merger Agreement").
The Series A Preferred Stock will have a liquidation preference
of $1,000 per share in the event of
any voluntary or involuntary liquidation, dissolution or winding up
of the Company and will accrue quarterly dividends from the date of
issuance at an initial rate of 6.0% of the liquidation preference
per annum (equivalent to $60.00 per
share per annum).
Beginning on the second anniversary of the issuance date, the
holders of shares of Series A Preferred Stock will have the option
to submit their shares of Series A Preferred Stock for redemption
by the Company, at a redemption price equal to (i) prior to the
third anniversary of the issuance date, $1,000 per share, plus any accrued and unpaid
dividends, and (ii) thereafter, $1,120 per share, plus any accrued and unpaid
dividends. Shares of Series A Preferred Stock will not be
redeemable at the option of the Company prior to the third
anniversary of the issuance date. Thereafter, the Company
will have the option to redeem shares of Series A Preferred Stock,
in whole or in part, at a redemption price equal to $1,120 per share, plus any accrued and unpaid
dividends.
Shares of the Series A Preferred Stock will be convertible into
shares of common stock of the Company at any time on or after the
third anniversary date of the issuance date, if, and only if,
shares of the Company's common stock are listed or traded on any
national securities exchange. Shares of Series A Preferred
Stock will be convertible into such number of shares of common
stock calculated based upon a sum of $1,120 per share, plus any accrued and unpaid
dividends, divided by the applicable conversion price. The
initial conversion price for the Series A Preferred Stock will be
equal to 110% of the Aggregate Merger Consideration (as defined and
finally determined pursuant to the Merger Agreement) paid by the
Acquirer in the Merger, divided by the number of shares of common
stock issued and outstanding immediately after the Company's
initial public offering.
Shares of Series A Preferred Stock will not have any voting
rights other than with respect to the following transactions (which
will require the approval of a majority of the then-outstanding
shares of Series A Preferred Stock): (i) the Company's loan
to value ratio exceeding 70%; (ii) any amendments to the Company's
charter (including by merger, consolidation or transfer of all or
substantially all of the Company's assets) materially and adversely
affecting the rights or preferences of the Series A Preferred
Stock; (iii) a share exchange affecting the Series A Preferred
Stock or a merger or consolidation involving the Company, unless
each share of Series A Preferred Stock either remains outstanding
without a material and adverse change to its terms and rights or is
converted into or exchanged for preferred shares of the surviving
entity having terms identical to those of the Series A Preferred
Stock; and (iv) the authorization, creation or issuance of
additional shares of Series A Preferred Stock or shares of capital
stock ranking senior to the Series A Preferred Stock in respect of
dividends and distributions of assets upon liquidation, dissolution
or winding up.
The Offering will expire at 5:00 p.m.,
Eastern Time on October 31,
2019, unless extended by the Company. Only
stockholders of record of the Company who are "accredited
investors" (as defined in Rule 501(a) of Regulation D under the
Securities Act) are eligible to participate in the
Offering. The Company proposes to consummate the
Closing on or about November 4, 2019,
promptly following the closing of the Merger. It is expected
that, upon the closing of the Merger, the Company's name will be
changed to Pacific Oak Residential Trust, Inc.
The Company intends to use the net proceeds of the Offering to
acquire additional residential assets or securities, and for
general corporate purposes.
The shares of Series A Preferred Stock to be offered for sale by
the Company have not been registered under the Securities Act or
any state securities laws, and until so registered, may not be
offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Securities Act and applicable state securities
laws.
This press release is not intended to constitute, and shall not
be construed as, an offer to sell or a solicitation of an offer to
buy any shares of Series A Preferred Stock or other securities, nor
shall there be any sale of any shares of Series A Preferred Stock
or other securities in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state or jurisdiction. Any offers of shares of Series A
Preferred Stock will be made only by means of private offering
documents.
Forward-Looking Statements:
This press release includes 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. These
forward-looking statements include, but are not limited to,
statements regarding the proposed Offering, including the minimum
and maximum amounts offered, the anticipated uses of proceeds from
the proposed offering, and the expected closing date of the
proposed offering, statements regarding the Company's proposed
Merger transactions with affiliates of the Acquirer, including the
anticipated timing and consummation of the proposed Merger, and
statements containing words such as "anticipate," "approximate,"
"believe," "plan," "estimate," "expect," "project," "could,"
"would," "should," "will," "intend," "may," "might," "potential,"
"upside," and other similar expressions. All statements in
this press release that are not historical facts are
forward-looking statements that reflect the best judgment of the
Company based upon currently available information.
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that
actual results may differ materially from the Company's
expectations as a result of a variety of factors, including,
without limitation, those discussed below. Such
forward-looking statements are based upon management's current
expectations and include known and unknown risks, uncertainties and
other factors, many of which the Company is unable to predict or
control, that may cause its actual results, performance or plans to
differ materially from any future results, performance or plans
expressed or implied by such forward-looking statements.
These statements involve risks, uncertainties and other
factors discussed below and detailed from time to time in the
Company's filings with the SEC.
Risks and uncertainties related to the proposed Merger include,
but are not limited to, potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the Merger, uncertainties as to the timing of the
Merger, adverse effects on the Company's stock price resulting from
the announcement of the Merger or the failure of the Merger to be
completed, competitive responses to the announcement of the Merger,
the risk that third-party approvals required for the consummation
of the Merger are not obtained or are obtained subject to terms and
conditions that are not anticipated, litigation relating to the
Merger, the inability to retain key personnel, and any changes in
general economic and/or industry-specific conditions.
In addition to the factors set forth above, other factors that
may affect the Company's plans, results or stock price are set
forth in its most recent Annual Report on Form 10-K and in its
subsequently filed Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
Many of these factors are beyond the Company's control.
The Company cautions investors that any forward-looking statements
made by it are not guarantees of future performance. The
Company disclaims any obligation to update any such factors or to
announce publicly the results of any revisions to any of the
forward-looking statements to reflect future events or
developments.
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SOURCE Reven Housing REIT, Inc.
