MacKenzie Realty Capital, Inc. 10-K

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information On April 29, 2024, our common stock became eligible for trading on the OTCQX Best Market under the ticker symbol MKZR. The OTCQX Best Market is the highest market tier of OTC Markets on which 10,000 U.S. and global securities trade. Trading on OTCQX will enhance the visibility and accessibility of our common stock to U.S. investors. We have also secured Depository Trust Company (“DTC”) eligibility for our common shares. Trading through DTC allows for cost-effective clearing and guaranteed settlement, simplifying and accelerating the settlement process of daily trades. In addition, on August 26, 2024, we entered into a letter agreement with Maxim to provide general financial advisory and investment banking services to the Company in connection with, among other things, strategic planning, potential uplisting to a U.S. exchange (NASDAQ, New York Stock Exchange), and potential rights offering, equity issuance or other mechanisms to enhance corporate and shareholder value. The timing of any up-list process will be dependent on a multitude of factors including, but not limited to, overall market conditions. Holders As of September 27, 2024, we had 13,435,656.80 shares of our common stock, 765,429.60 shares of our Series A preferred stock, 63,909.52 shares of our Series B preferred stock outstanding, held by a total of 1,857 common stockholders, 403 Series A preferred stockholders and 35 Series B preferred stockholders, respectively. Distributions to Stockholders We pay quarterly distributions to stockholders to the extent that we have income from operations available. Our quarterly distributions, if any, will be determined by our Board of Directors after a review and distributed pro-rata to holders of our shares; we declare distributions on a monthly basis, but pay each quarter. Any distributions to our stockholders will be declared out of assets legally available for distribution. In no event are we permitted to borrow money to make distributions if the amount of such distribution would exceed our annual accrued and received revenues, less operating costs. Distributions in kind are not permitted, except as provided in our Charter. We have elected to be treated as a REIT under the Code. As a REIT, we are not subject to federal income taxes on amounts that we distribute to the stockholders, provided that, on an annual basis, we generally distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meet certain other conditions. To the extent that we satisfy the annual distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed REIT taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. We have a DRIP that provides for reinvestment of our dividends and other distributions on behalf of stockholders for any individual stockholder who elects to participate in the DRIP, provided that the DRIP is permitted by the state in which the stockholders reside. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions. On March 4, 2024, the Board of Directors suspended the common stock share repurchase program and DRIP in connection with trading of its common stock on the OTCQX Best Market. Since our common stock became eligible for trading on OTC Markets in April 2024, the share repurchase program automatically terminated, and the Board of Directors will decide whether, and when, to reinstate the DRIP. 28 Table of Contents The following tables reflect the dividends per share that we have declared during the years ended June 30, 2024 and 2023: Dividends Common Stock Series A Preferred Stock Series B Preferred Stock During the Quarter Ended Per Share Amount Per Share Amount Per Share Amount September 30, 2023 $ 0.125 $ 1,652,688 $ 0.375 $ 268,383 $ - $ - December 31, 2023 0.125 1,652,367 0.375 276,600 0.750 2,222 March 31, 2024 0.125 1,660,225 0.375 281,770 0.750 8,078 June 30, 2024 0.125 1,662,826 0.375 284,737 0.750 31,696 $ 0.500 $ 6,628,106 $ 1.500 $ 1,111,490 $ 2.250 $ 41,996 * * Of the total dividends declared for Series B during the year ended June 30, 2024, $31,497 was an increase in liquidation preference and $10,451 was the cash dividend. Dividends Common Stock Series A Preferred Stock During the Quarter Ended Per Share Amount Per Share Amount September 30, 2022 $ 0.105 $ 1,390,290 $ 0.375 $ 87,884 December 31, 2022 0.110 1,456,391 0.375 155,909 March 31, 2023 0.115 1,520,985 0.375 209,620 June 30, 2023 0.120 1,586,863 0.375 242,188 $ 0.450 $ 5,954,529 $ 1.500 $ 695,601 During the years ended June 30, 2024 and 2023, we issued 185,819.74 and 189,289.44 shares of our common stock, respectively, in connection with the DRIP. During the years ended June 30, 2024 and 2023, we issued 7,741.20 and 3,350.16 shares of our Series A preferred stock, respectively, in connection with the DRIP. During the year ended June 30, 2024, we issued 2.11 shares of our Series B preferred stock, in connection with the DRIP. Recent Sale of Unregistered Securities During the year ended June 30, 2024, we issued 3,011.35 common shares at $10.25 per share to the Class A unit holders of the Operating Partnership who exercised their option to convert their Class A units to our common shares. During the year ended June 30, 2024, we issued 85,688.31 of Series A preferred shares with total gross proceeds of $2,140,949, 49,562.45 of Series B preferred shares with total gross proceeds of $1,227,950. We also issued 7,741.20 Series A preferred shares with total gross proceeds of $174,179 under the DRIP related to the Series A preferred, and 2.11 Series B preferred shares with total gross proceeds of $48 under the DRIP related to the Series B preferred. All such issuances were pursuant to our Regulation A Series A and Series B preferred stock offering. During the year ended June 30, 2023, we issued 549,973.38 Series A preferred shares with total gross proceeds of $13,408,089, as well as 3,350.16 Series A preferred shares with total gross proceeds of $75,379 under the DRIP related to the Series A preferred, pursuant to the Company’s Regulation A Series A preferred stock offering. These private placements of our common and preferred shares were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 3(b)(2) and Regulation A thereunder (in the case of our Regulation A offering of preferred shares) or Section 4(a)(2) and Regulation D thereunder (in the case of Operating Partnership unit conversions). On August 26, 2024, in connection with our agreement with Maxim, the Company has issued in a private placement an aggregate amount of 133,000 shares of common stock to Maxim’s affiliate, approximately of 1% of the Company’s outstanding stock. The private placement is exempt from registration under the Section 4(a)(2) of the Securities Act, and Regulation D thereunder. The Company is relying, in part, upon representations of the Maxim that it is an accredited investor as defined in Regulation D under the Securities Act. The common stock does not have any conversion rights. 29 Table of Contents Issuer Purchases of Equity Securities The following table presents information with respect to our purchases of our common stock and preferred stock during the years ended June 30, 2024 and 2023: Execution Date Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans During the year ended June 30, 2024 Common stock September 1, 2023 through September 30, 2023 64,092.00 $ 7.38 64,092.00 - December 1, 2023 through December 31, 2023 64,497.30 7.38 64,497.30 - June 1, 2024 through June 30, 2024 948.76 5.50 948.76 * - 129,538.06 129,538.06 - Series A Preferred stock December 1, 2023 through December 31, 2023 400.00 $ 22.75 400.00 - March 1, 2024 through March 31, 2024 2,000.00 22.00 2,000.00 - June 1, 2024 through June 30, 2024 999.50 22.75 999.50 - 3,399.50 3,399.50 - *Cash in-lieu of fractional shares payout. During the year ended June 30, 2023 Common stock September 1, 2022 through September 30, 2022 40,817.06 $ 9.47 40,817.06 - December 1, 2022 through December 31, 2022 44,048.79 9.44 44,048.79 - March 1, 2023 through March 31, 2023 58,896.00 7.38 58,896.00 - June 1, 2023 through June 30, 2023 60,298.00 60,298.00 - 204,059.85 204,059.85 - - Series A Preferred stock - April 1, 2023 through April 30, 2023 1,400.00 $ 22.75 1,400.00 - 30 Table of Contents Item 6. [RESERVED]