Ashford Hospitality Trust, Inc. (NYSE:AHT) stock is trading lower in the pre-market session after the company filed an 8-K this morning.
Major Trigger:
Item 1.01- Entry into a Material Definitive Agreement.
Key Highlights:
- On June 18, 2021, Ashford Hospitality Trust, Inc. (the “Company”) and Seven Knots, LLC (“Seven Knots”), entered into a common stock purchase agreement (the “Purchase Agreement”), which provides that subject to the terms and conditions set forth therein, the Company may sell to Seven Knots up to 40,093,080 shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”), from time to time during the term of the Purchase Agreement.
- Additionally, on June 18, 2021, the Company and Seven Knots entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the Securities and Exchange Commission (“SEC”) covering the resale of shares of Common Stock that are issued to Seven Knots under the Purchase Agreement.
- Under the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement, the Company has the right, but not the obligation, to sell to Seven Knots, and Seven Knots is obligated to purchase, up to 40,093,080 shares of Common Stock. Such sales of Common Stock by the Company, if any, will be subject to certain limitations as set forth in the Purchase Agreement, and may occur from time to time, at the Company’s sole discretion, over a 24-month period commencing on the date that all of the conditions to the Company’s right to commence such sales are satisfied, including that the registration statement referred to above is declared effective by the SEC and a final form of the prospectus included therein is filed with the SEC (the “Commencement Date”).
- Seven Knots has no right to require the Company to sell any Common Stock to Seven Knots, but Seven Knots is obligated to make purchases as the Company directs, subject to satisfaction of the conditions set forth in the Purchase Agreement.
Market Reaction
As of 8:18, AHT stock fell by 9.63% to $4.6 So far more than 1.84 million shares have exchanged hands.
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