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 event reported): November 10, 2022
Lightstone Value Plus REIT V, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Maryland | 000-53650 | 20-8198863 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
1985 Cedar Bridge Avenue, Suite 1
Lakewood, New Jersey 08701
(Address of principal executivNew Jerseye offices)
(Zip Code)
(732) 367-0129
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since 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: None. |
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 ☐
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. ☐
| Item 8.01 | Other Events. |
Lightstone Value Plus REIT V, Inc. (the “Company,” “we,” “us,” or “our”) has a share redemption program, as amended from time to time (the “SRP”), that permits certain of its stockholders to sell their shares of common stock (the “Shares”) back to the Company, subject to significant conditions and limitations of the SRP. Our board of directors can amend the provisions of our SRP at any time without the approval of our stockholders.
Our SRP is available only for those stockholders who acquired their Shares directly from us or for the transferees mentioned in the next sentence, and is not intended to provide liquidity to any stockholder who acquired their Shares by purchase from another stockholder. In connection with a request for redemption, the stockholder or their estate, heir or beneficiary will be required to certify to us that the stockholder either (1) acquired the Shares requested to be repurchased directly from us or (2) acquired the Shares from the original subscriber by way of a bona fide gift not for value to, or for the benefit of, a member of the subscriber’s immediate or extended family (including the subscriber’s spouse, parents, siblings, children or grandchildren and including step parents, step siblings, and biological, adopted or step children and grandchildren) or through a transfer to a custodian, trustee or other fiduciary for the account of the subscriber or members of the subscriber’s immediate or extended family in connection with an estate planning transaction, including by bequest or inheritance upon death or operation of law (in each case, a “Qualifying Stockholder”).
On November 10, 2022, our board of directors adopted a Seventh Amended and Restated Share Redemption Program (the “Amended SRP”), which will become effective on January 1, 2023. Under the terms of the Amended SRP, any Qualifying Stockholder may request redemption of their Shares. Redemption requests will no longer be limited to requests upon the death of a Qualifying Stockholder, as has been the case under the Sixth Amended and Restated Share Redemption Program currently in effect through the end of this year.
Redemption Price
Under the terms of the Amended SRP, the price at which we will redeem Shares submitted for redemption by a Qualifying Stockholder will be 85% of the estimated net asset value (the “NAV”) per Share as of the date we determine to accept the request for redemption.
On November 10, 2022, pursuant to the Company’s Policy for Estimation of Common Stock Value (the “Estimated Valuation Policy”), our board of directors determined and approved the Company’s estimated NAV per Share of $14.75 as of September 30, 2022. As a result, the initial redemption price per Share under the Amended SRP will be $12.54.
Redemption Limitations
Pursuant to the terms of the Amended SRP, any Shares approved for redemption are redeemed on a periodic basis as determined by our board of directors, generally expected to be at the end of each quarterly period. However, we will not redeem, during any calendar year, more than 5% of the number of Shares outstanding on last day of the previous calendar year (the “5% Limitation”). The cash available for redemption of Shares will be set by our board of directors not less often than annually (the “Funding Limitation” and, together with the 5% Limitation, the “Redemption Limitations”). The board of directors has set the amount of cash available for redemption of Shares in 2023 at $8 million, which is generally to be allocated $2 million for each quarterly period. The Company may change the amount of the Redemption Limitations upon ten business days’ notice to its stockholders. The Company will provide notice of any change to the Redemption Limitations by including such information in (a) a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the United States Securities and Exchange Commission or (b) a separate mailing to its stockholders.
Redemption requests will be honored pro rata among all requests received subject to the Redemption Limitations and will not be honored on a first come, first served basis.
Termination, Suspension or Amendment of Our SRP
Our board of directors reserves the right in its sole discretion at any time and from time to time, subject to any notice requirements described in our SRP, to (1) reject any request for redemption of Shares, (2) change the purchase price for redemption of Shares, (3) limit the funds to be used for redemption of Shares under the SRP or otherwise change the Redemption Limitations, or (4) amend, suspend (in whole or in part) or terminate the SRP.
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| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 99.1 | Seventh Amended and Restated Share Redemption Program. |
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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.
| LIGHTSTONE VALUE PLUS REIT V, INC. | |||
| Dated: November 21, 2022 | By: | /s/ Seth Molod | |
| Seth Molod | |||
| Chief Financial Officer | |||
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Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Seventh Amended and Restated Share Redemption Program |
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Exhibit 99.1
SEVENTH AMENDED AND RESTATED
SHARE REDEMPTION PROGRAM
OF
LIGHTSTONE VALUE PLUS REIT V, INC.
Effective as of January 1, 2023
This Seventh Amended and Restated Share Redemption Program (our “Program”) is intended to provide limited interim liquidity for Qualifying Stockholders (as defined below) until a bona fide secondary market develops for our shares of common stock (the “Shares”). No such market presently exists, and we can provide no assurance that any market for the Shares will ever develop.
Prior to the time that a bona fide secondary market for our Shares has developed, Qualifying Stockholders may receive the benefit of limited liquidity by presenting for redemption all or a portion of their Shares to us in accordance with the procedures outlined herein. At that time, we may, subject to the conditions and the Redemption Limitations described below, redeem for cash such Shares.
Qualifying Stockholders
Our Program is available only for Qualifying Stockholders, or those stockholders who acquired their Shares directly from us or the transferees mentioned below, and is not intended to provide liquidity to any stockholder who acquired his or her Shares by purchase from another stockholder. In connection with a request for redemption, the stockholder or his or her estate, heir or beneficiary will be required to certify to us that the stockholder either (1) acquired the Shares requested to be repurchased directly from us or (2) acquired the Shares from the original purchaser by way of a bona fide gift not for value to, or for the benefit of, a member of the original purchaser’s immediate or extended family (including the subscriber’s spouse, parents, siblings, children or grandchildren and including step parents, step siblings, and biological, adopted or step children and grandchildren) or through a transfer to a custodian, trustee or other fiduciary for the account of the original purchaser or members of the original purchaser’s immediate or extended family in connection with an estate planning transaction, including by bequest or inheritance upon death or operation of law.
Redemption Price
The price at which we will redeem Shares submitted for redemption will be 85% of the estimated net value per share as of the Determination Date (as defined below).
Redemption Limitations
We will not redeem Shares that are subject to liens or other encumbrances until the stockholder presents evidence that the liens or encumbrances have been removed. If any Shares subject to a lien are inadvertently redeemed or we shall otherwise be required to pay to any other party all or any amount in respect of the value of redeemed Shares, then the recipient of amounts in respect of redemption shall repay to us the amount paid for such redemption up to the amount we are required to pay to such other party.
Any Shares approved for redemption will be redeemed on a periodic basis as determined from time to time by our Board, and no less frequently than annually. We will not redeem, during any calendar year, more than 5% of the number of Shares outstanding on last day of the previous calendar year (the “5% Limitation”). The cash available for redemption will be set by the Board not less often than annually (the “Funding Limitation” and, together with the 5% Limitation, the “Redemption Limitations”). The Company may set the Funding Limitation upon ten business days’ notice to the Company’s stockholders. The Company will provide notice of any change to the Redemption Limitations by including such information in (a) a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission or (b) a separate mailing to its stockholders.
Termination, Suspension or Amendment of Our Program
Our Board reserves the right in its sole discretion at any time and from time to time, subject to any notice requirements described in our Program, to:
| 1. | reject any request for redemption, |
| 2. | change the purchase price for redemptions, |
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| 3. | limit the funds to be used for redemptions hereunder or otherwise change the Redemption Limitation, or |
| 4. | amend, suspend (in whole or in part) or terminate the Program. |
If we suspend our Program (in whole or in part), we will not accept any requests for redemption in respect of Shares to which such suspension applies and any such requests and all pending requests that are subject to the suspension will not be honored or retained, but will be returned to the requestor. Our advisor and its affiliates will defer their own redemption requests, if any, until all other requests for redemption have been satisfied in any particular period.
General Procedures for Redemption
A Qualifying Stockholder who wishes to have Shares redeemed must mail or deliver to us a written request on a form provided by us and executed by the Qualifying Stockholder, its trustee, or authorized agent with a medallion stamp guarantee.
A request for redemption may be withdrawn in whole or in part by a Qualifying Stockholder in writing at any time before the Determination Date (as defined below). We cannot guarantee that we will accommodate all requests made in any particular redemption period.
If we do not redeem all Shares presented for redemption during any period in which we are redeeming Shares, then all Shares will be redeemed on a pro rata basis during the relevant period. Any portion of a redemption request that is not honored will be automatically treated as a request for redemption during the next period in which requests will be considered, unless the stockholder seeking redemption affirmatively asks us to withdraw that portion of the request. The stockholder will then be required to resubmit a request for redemption. We will not retain any redemption requests that are withdrawn.
In general, a Qualifying Stockholder may present to us fewer than all of the Shares then owned for redemption, except that the minimum number of Shares that must be presented for redemption must be at least 25% of the holder’s Shares. We will treat a redemption request that would cause a stockholder to own fewer than 200 Shares as a request to redeem all of the stockholder’s Shares, and we will vary from pro rata treatment of redemptions as necessary to avoid having stockholders holding fewer than 200 Shares.
The effective date of any redemption will be the date that we determine to accept the request for redemption (the “Determination Date”). As of the Determination Date, any Shares accepted for redemption will no longer be deemed outstanding and will no longer be eligible to receive distributions. Our Board will consider only properly completed redemption requests that we receive on or before the end of the period ending no later than the last day of the calendar month preceding the Determination Date. Payment for the Shares so approved for redemption will be made no later than 15 days after the Determination Date.
Neither our advisor, any member of our Board, nor any of their affiliates will receive any fee on the repurchase of Shares by us pursuant to our Program. The Shares we purchase under our Program will be cancelled, and will have the status of authorized but unissued Shares. We will not reissue repurchased Shares unless they are first registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and under appropriate state securities laws or otherwise issued in compliance with or exemption from registration under these laws.
The foregoing provisions regarding our Program in no way limit our ability to repurchase Shares by any other legally available means for any reason that our Board, in its discretion, determines to be in our best interest.
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