Sotherly Hotels Inc. 20 Huling Avenue Memphis, TN 38103 (Form 8-K)

Sotherly Hotels Inc.

20 Huling Avenue

Memphis, TN 38103

February 27, 2026

Dear Holder of Series B Preferred Stock (CUSIP: 83600C301):

As has been previously disclosed, pursuant to the Agreement and Plan of Merger dated October 24, 2025 among Sotherly Hotels, Inc. (the "Company"), KW Kingfisher LLC ("Parent"), and Parent's wholly-owned subsidiary, Sparrows Nest LLC ("Merger Sub"), on February 12, 2026, Merger Sub merged with and into the Company, with the Company being the surviving entity (the "Merger"). As a result of the Merger, Parent now holds all issued and outstanding shares of the Company's Common Stock. You are receiving this notice as a holder of record of shares of the Company's 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock (the "Preferred Stock").

Under the Articles Supplementary that established the rights and preferences of the Preferred Stock (the "Articles"),¹ the Merger constitutes a Change of Control (as that term is defined in the Articles). As a result of the Change of Control, each holder of shares of Preferred Stock has the right to elect to convert some or all of the shares of Preferred Stock held by such holder into a cash payment, subject to the terms and conditions set forth in the Articles.

Under the Articles and subject to the Share Cap (as defined therein), each share of Preferred Stock may be converted into the right to receive $18.656708 in cash (the "Conversion Consideration"). For purposes of the Change of Control Conversion Right described in the Articles, because the consideration payable to holders of Common Stock in the Merger consisted solely of cash, the "Common Stock Price" used to determine the Conversion Consideration equals the cash consideration per share of Common Stock payable in the Merger, which was $2.25 per share.

If, prior to the Change in Control Conversion Date, the Company elects to redeem any shares of Series B Preferred Stock pursuant to the applicable redemption provisions of the Articles, holders of such shares will not be entitled to convert such shares and will instead be redeemed on the related redemption date.

In order to exercise your right to convert, you must comply with the protocols and procedures established by your brokerage firm and the Depositary Trust Company on or before 5:00 p.m., Eastern Time on March 20, 2026 (the "Change in Control Conversion Date" and such period, the "Election Period").

If you have any questions about responding to this notice, please email the Company at [email protected].

Promptly following the end of the Election Period, Conversion Consideration to all holders that properly and timely elected to convert will be promptly distributed. If you do not wish to convert your shares of Preferred Stock for any reason, simply disregard this Notice. No action is required if you do not wish to convert any portion of your shares. Any shares of Preferred Stock that the holder does not elect to convert into the Conversion Consideration will remain outstanding and subject to the terms of the Articles, and such holder will not receive any other consideration for those shares as a result of the Merger. Following the Election Period and in the event not all shares of Preferred Stock are converted, the Company expects to list the remaining shares of Preferred Stock on the OTCQB^® Venture Market of the OTCMarkets.

Additional information regarding the Merger and the Company can be found on the "SEC Filings" page of the Company's website at https://investors.sotherlyhotels.com/financial-info/sec-filings/, including (1) the Proxy Statement dated December 12, 2025 for the special meeting of stockholders held to consider and vote upon the Merger, (2) the Current Report on Form 8-K dated February 18, 2026 that discloses the closing of the Merger and certain related events, and (3) any filings made by the Company with the U.S. Securities and Exchange Commission ("SEC") on or after February 19, 2026, each of which is important to consider when making a decision whether to convert your shares of Preferred Stock into cash.

THIS NOTICE IS NOT AN OFFER TO PURCHASE ANY SHARES OF PREFERRED STOCK OR ANY OTHER SECURITIES. THE COMPANY MAKES NO RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO CONVERT OR REFRAIN FROM CONVERTING SHARES OF PREFERRED STOCK. STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO CONVERT AND, IF SO, THE PORTION OF SHARES TO CONVERT. THE COMPANY MAKES NO REPRESENTATION AND GIVES NO ASSURANCE REGARDING THE ADEQUACY OF THE CONVERSION CONSIDERATION, THE CURRENT OR FUTURE VALUE OF THE COMPANY OR ANY SHARES OF PREFERRED STOCK, OR ANY TAX CONSEQUENCES OR IMPLICATIONS (WHETHER UNDER FEDERAL, STATE, LOCAL OR NON-U.S. TAX LAWS) OF ANY DECISION TO CONVERT OR REFRAIN FROM CONVERTING SHARES OF PREFERRED STOCK. YOU ARE STRONGLY URGED TO CONSULT YOUR OWN LEGAL, FINANCIAL AND TAX ADVISORS IN MAKING A DECISION WHETHER TO CONVERT.