In a recent Securities and Exchange Commission filing, Medalist Diversified REIT (NASDAQ:MDRR), Inc., a Maryland-based real estate investment trust, announced the results of its annual stockholders meeting held on September 12, 2024.
The company, which trades on the Nasdaq Capital Market under the symbols MDRR for its common stock and MDRRP for its 8.0% Series A Cumulative Redeemable Preferred Stock, disclosed several key decisions made by its shareholders.
During the meeting, a proposal to elect David Lunin as a Class I director for a three-year term was passed with 419,745 votes in favor and 52,454 votes withheld. A significant number of broker non-votes, totaling 492,373, were recorded for this proposal, indicating that brokers did not receive instructions on how to vote on behalf of their clients.
The compensation of the company's named executive officers was also put to an advisory, non-binding vote and was approved with 581,443 votes for, 48,076 against, and 2,407 abstentions. Similarly, the frequency of future advisory votes on executive compensation was approved to occur every year with 616,713 votes in favor, compared to 243,218 for every two years, 9,732 for every three years, and 4,390 abstentions.
Furthermore, the appointment of Cherry Bekaert LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024, was ratified with an overwhelming majority of 933,413 votes for, 24,439 against, and 6,718 abstentions.
One of the most significant outcomes from the meeting was the approval of an amendment to the company's Articles of Incorporation to effect a reverse stock split of the company’s outstanding common stock. The approved ratio ranges from 1-for-10 to 1-for-100, at the discretion of the Board, to be potentially effected within one year after the conclusion of the meeting. The proposal received 842,566 votes for, 119,619 against, and 2,387 abstentions.
Simultaneously, the company has reported changes to its Board of Directors. A. Lee Finley was appointed as a Class II director, set to serve until the 2025 Annual Meeting of Stockholders. Following this, directors Timothy O’Brien and Charles S. Pearson, Jr. resigned, resulting in the Board resizing to five directors and Francis Kavanaugh becoming Chair of the Board.
InvestingPro Insights
As Medalist Diversified REIT, Inc. navigates through its strategic decisions post the annual stockholders meeting, real-time data from InvestingPro paints a detailed financial picture of the company. With a market capitalization of $16.84 million, the company's valuation reflects its niche position in the real estate investment trust industry. The real-time data shows a negative P/E ratio of -8.4, which aligns with the InvestingPro Tip that analysts do not expect the company to be profitable this year. This tip is particularly relevant given the shareholder approval of executive compensation and the potential reverse stock split, which could be strategic moves in response to financial performance.
The company's revenue for the last twelve months as of Q2 2024 stands at $10.17 million, with a slight decline in growth of -3.78%. Despite this, the company maintains a high gross profit margin of 76.75%, suggesting effective cost management relative to revenue. Additionally, the InvestingPro Tips highlight that while the company operates with a significant debt burden and may have trouble making interest payments, its liquid assets exceed short-term obligations, indicating a level of short-term financial stability.
For investors considering the company's stock, it is noteworthy that the price has underperformed over the last decade and has fallen significantly over the last five years, with a recent price close at $12.15. The InvestingPro Fair Value estimate stands at $13.06, offering a perspective on the stock's potential value. For those seeking a deeper analysis, InvestingPro offers additional tips on MDRR, which can be explored for more nuanced investment guidance.
It's evident that the decisions made at the annual stockholders meeting are set against a backdrop of financial challenges and strategic considerations. Investors may benefit from the insights provided by InvestingPro, which include over nine additional tips for MDRR, to better understand the company's position and prospects.
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