Medalist REIT Faces Nasdaq Delisting, Reports Equity Sales

TL;DR

Nasdaq's kicking MDRI off the exchange, stock might be toast.

AI Summary

Medalist Diversified REIT, Inc. announced on December 11, 2024, that it received a notice of delisting from the Nasdaq Capital Market due to failure to meet continued listing requirements. The company is also reporting on unregistered sales of equity securities and entering into a material definitive agreement.

Why It Matters

This filing indicates potential financial distress for Medalist Diversified REIT, Inc., as it faces delisting from a major stock exchange, which could significantly impact its stock liquidity and investor confidence.

Risk Assessment

Risk Level: high — The company has received a notice of delisting from the Nasdaq Capital Market, indicating significant financial or operational issues.

Key Players & Entities

• Medalist Diversified REIT, Inc. (company) — Registrant
• Nasdaq Capital Market (company) — Stock Exchange
• December 11, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.01 — ed Trading Symbol(s) Common Stock, $0.01 par value Nasdaq Capital Market MDR
• $3,145,000 — tion for the Dan Tibbs Road Property is $3,145,000 (the " Dan Tibbs Road Consideration "),
• $25.00 — in the Operating Partnership valued at $25.00 per Series B Preferred Unit; and (ii) C
• $12.50 — in the Operating Partnership valued at $12.50 per Common Unit. The Operating Partners
• $15,000.00 — red to make an earnest money deposit of $15,000.00 (" Dan Tibbs Road Deposit ") within 15
• $27.50 — eferred Units (liquidation preference $27.50 per unit) (the " Series B Preferred Uni

Filing Documents

• mdrr-20241211x8k.htm (8-K) — 76KB
• mdrr-20241211xex10d1.htm (EX-10.1) — 579KB
• mdrr-20241211xex10d2.htm (EX-10.2) — 569KB
• mdrr-20241211xex10d3.htm (EX-10.3) — 70KB
• mdrr-20241211xex10d4.htm (EX-10.4) — 65KB
• mdrr-20241211xex10d5.htm (EX-10.5) — 7KB
• mdrr-20241211xex10d6.htm (EX-10.6) — 10KB
• 0001558370-24-016327.txt ( ) — 1727KB
• mdrr-20241211.xsd (EX-101.SCH) — 5KB
• mdrr-20241211_def.xml (EX-101.DEF) — 14KB
• mdrr-20241211_lab.xml (EX-101.LAB) — 14KB
• mdrr-20241211_pre.xml (EX-101.PRE) — 14KB
• mdrr-20241211x8k_htm.xml (XML) — 7KB

01

Item 1.01 Entry into a Material Definitive Agreement. On December 14, 2024 (the " Dan Tibbs Road Effective Date "), Medalist Diversified Holdings, L.P. (the " Operating Partnership "), the operating partnership of Medalist Diversified REIT, Inc. (the " Company "), entered into a Contribution Agreement (the " Dan Tibbs Road Contribution Agreement "), a copy of which is filed as Exhibit 10.1 hereto, with Dionysus Investments, LLC, a California limited liability company (the " Dan Tibbs Road Contributor "), whereby the Operating Partnership agreed to acquire (the " Dan Tibbs Road Acquisition ") that certain tract of real property located at 376 Dan Tibbs Road NW, Huntsville, Madison County, Alabama 35806, and more particularly described in Exhibit A to the Dan Tibbs Road Contribution Agreement (the " Dan Tibbs Road Property "). The Dan Tibbs Road Contributor is a related party to the Company in that the Dan Tibbs Road Contributor's manager is Frank Kavanaugh (" Mr. Kavanaugh "), the Company's Chief Executive Officer and a member of the Company's Board of Directors (the " Board "). The total consideration for the Dan Tibbs Road Property is $3,145,000 (the " Dan Tibbs Road Consideration "), subject to the prorations and adjustments described in the Dan Tibbs Road Contribution Agreement. The Dan Tibbs Road Consideration is to be paid by the Company to the Dan Tibbs Road Contributor at Closing (as that term is defined in the Dan Tibbs Road Contribution Agreement) in a combination of (i) Series B Preferred Units (as defined below) in the Operating Partnership valued at $25.00 per Series B Preferred Unit; and (ii) Common Units (as that term is defined in the Dan Tibbs Road Contribution Agreement) in the Operating Partnership valued at $12.50 per Common Unit. The Operating Partnership is required to make an earnest money deposit of $15,000.00 (" Dan Tibbs Road Deposit ") within 15 days of the Dan Tibbs Road Effective Date. The Dan Tibbs Road Contribution Agreement conta

01

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing On December 11, 2024, the Company received a letter (the " Nasdaq Letter ") from the Listing Qualification Department of The Nasdaq Stock Market LLC (" Nasdaq ") notifying the Company that, based on the Company's Current Report on Form 8-K filed on October 23, 2024, its 8.0% Series A Cumulative Redeemable Preferred Stock (the " Preferred Stock ") no longer meets the minimum 100,000 publicly held shares requirement of Nasdaq Listing Rule 5555(a)(3) for continued listing on The Nasdaq Capital Market. The Nasdaq Letter has no immediate effect on the listing of the Preferred Stock, which will continue to trade under the symbol "MDRRP," subject to the Company's compliance with the other continued listing requirements of Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(2)(C), the Company has been provided a period of 45 calendar days, or until January 27, 2025, to provide Nasdaq with a specific plan to achieve and sustain compliance with the foregoing listing requirement (the " Compliance Plan "). Upon a showing of good cause, Nasdaq may extend the deadline up to an additional 5 calendar days. After Nasdaq reviews the Compliance Plan, it will provide written notice to the Company as to whether it accepts the Compliance Plan. If Nasdaq does not accept the Compliance Plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearing Panel. A hearing request will stay the suspension and delisting of the Preferred Stock pending the Nasdaq Hearing Panel's decision. As previously announced on December 10, 2024, the Company provided notice to the holders of the 60,000 outstanding shares of its Preferred Stock (the " Redeemed Shares ") of its intent to redeem such Redeemed Shares on January 10, 2025. Upon the completion of the redemption of the Redeemed Shares, the Preferred Stock will be fully redeemed and no shares of the Preferred

02

Item 3.02 Unregistered Sales of Equity Securities. On December 13, 2024, the Company entered into a series of Subscription Agreements (the " Subscription Agreements ") with certain investors, including the Company's Chief Financial Officer, for the issuance and sale of 230,000 shares of the Company's common stock, par value $0.01 per share (the " Common Shares "), in a private placement (the " Private Placement "), at a purchase price of $12.50 per share. The Private Placement was exempt from the registration requirements of the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Rule 506(b) under Regulation D of the Securities Act. The Common Shares were offered without any general solicitation by the Company or its representatives. The Common Shares issued and sold in the Private Placement are not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements. The foregoing description of the Subscription Agreements is qualified in its entirety by reference to the Subscription Agreements, the form of which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated by reference in this Item 3.02 and Item 1.01. The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.

01

Item 8.01 Other Events On December 13, 2024, the Board granted a waiver of the ownership limitations in Article VI of the Company's Articles of Incorporation to permit certain of the investors participating in the Private Placement to own up to 7.50% in the aggregate of the outstanding shares of capital stock of the Company, as set forth in, and subject to the terms and conditions in, those certain letters, dated December 13, 2024, from each such investor to the Board, the forms of which are attached to this Current Report on Form 8-K as Exhibit 10.5 and Exhibit 10.6 and incorporated herein by reference.

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 10.1 Contribution Agreement, dated as of December 14, 2024, by and between Dionysus Investments, LLC and Medalist Diversified Holdings, L.P. 10.2 Contribution Agreement, dated as of December 14, 2024, by and between CWS BET Seattle, L.P. and Medalist Diversified Holdings, L.P. 10.3 Second Amendment to Agreement of Limited Partnership of Medalist Diversified Holdings, L.P. 10.4 Form of Subscription Agreement 10.5 Letter, dated December 13, 2024, from Marc Carlson to the Board relating to waiver of share ownership limits, including representations and agreements of Marc Carlson 10.6 Letter, dated December 13, 2024, from Kory Kramer to the Board relating to waiver of share ownership limits, including representations and agreements of Kory Kramer 104 Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL Document SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MEDALIST DIVERSIFIED REIT, INC. Dated: December 17, 2024 By: /s/ C. Brent Winn, Jr. C. Brent Winn, Jr. Chief Financial Officer

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View this 8-K filing on SEC EDGAR