HOUSTON — June 16, 2025 — Silver Star Properties REIT, Inc. (the “Company”) a Houston based real estate investment trust announced that the Board of Directors (the “Board”) has acted decisively to protect its business plan and the majority of its shareholders against efforts by a group to derail its future. As a result, most shareholders will triple the number of shares of their Company Common Stock at no additional cost.
Effective November 8, 2024, the Company implemented the Amended and Restated Rights Agreement (the “Rights Agreement”), between the Company and VISTRA USA, LLC, as Rights Agent (the “Rights Agent”) to protect its business plans and shareholders from a group of dissidents acting against their interests. The Board has now determined that certain shareholders have become Acquiring Persons, causing a Flip-In Event, and has set June 16, 2025 as the date of exchange under Section 24 of the Rights Agreement.
The Rights Agreement also provides that if any Person becomes an Acquiring Person (the first occurrence of such event being referred to as the Flip-In Event), then pursuant to Section 24 of the Rights Agreement, the Board may, at its option, at any time after the Flip-In Event, exchange all or part of the then outstanding Rights (which shall not include Rights that have become void pursuant to the provisions the Rights Agreement) for shares of Common Stock at an exchange ratio of two shares of Common Stock per Right (the “Exchange Ratio”).
The Board of Directors has ordered by resolution that the Company act pursuant to Section 24 of the Rights Agreement and exchange each Right which has not become void for two shares of Common Stock which will result in the issuance of up to 121,450,278 shares of Common Stock in the aggregate. Accordingly, shareholders other than the Acquiring Persons will receive two shares of Common Stock in addition to each share of Common Stock that they owned as of the Distribution Date at no additional cost and with no action on their part, tripling the number of shares owned in the Company, provided the issuance of such shares will be suspended for certain shareholders. Shareholders will receive a letter from the Rights Agent with more information.
The exchange of Common Stock for Rights may constitute a taxable event to shareholders. Each shareholder should seek his or her own advice as to tax and related matters concerning the distribution and exchange and his or her ownership of stock in the Company. The Company may provide further guidance on the tax effect of the exchange of Common Stock for Rights described in future communications to shareholders or in future public periodic filings with the Securities Exchange Commission.
General Information
The rights, terms and conditions set forth in the Rights Agreement described herein are not complete and are qualified in their entirety by the Rights Agreement. A copy of the Rights Agreement can be obtained at https://www.sec.gov/Archives/edgar/data/1446687/000144668723000046/rightsagreementbetweensilv.htm. A PDF copy of the Rights Agreement can be requested by contacting Investor Relations at [email protected]. All capitalized terms not otherwise defined herein shall have the meaning in the Rights Agreement.
If you have any questions, please contact Investor Relations at 877-734-8876 or by email at [email protected].
ADDITIONAL INFORMATION AND WHERE TO FIND IT
The Company has filed with the SEC a definitive proxy statement on Schedule 14A on May 29, 2025, containing relevant documents with respect to its solicitation of proxies for the Company’s 2025 Annual Meeting. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) FILED BY THE COMPANY AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY SOLICITATION. Investors and security holders may obtain copies of these documents and other documents filed with the SEC by the Company free of charge through the website maintained by the SEC at www.sec.gov. Copies of the documents filed by the Company are also available free of charge by accessing the Company website at www.silverstarreit.com.
Participants in the Solicitation
Silver Star and its directors and executive officers may be deemed to be participants in the solicitation of proxies with respect to the 2025 Annual Meeting. Information regarding Silver Star’s directors and executive officers is contained in the definitive proxy statement. As of May 29, 2025, the Silver Star Executive Committee, current directors, other than Allen Hartman, and executive officers beneficially owned approximately 1,172,436 shares, or 1.74%, of Silver Star common stock. Allen Hartman beneficially owned approximately 5,006,412 shares, or 7.43%, of Silver Star common stock. Additional information regarding the interests of such participants is included in the definitive proxy statement and is available free of charge at the SEC’s website at www.sec.gov.
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Forward-Looking Statements: This message contains a number of forward-looking statements. Because such statements include a number of risks, uncertainties, and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements, and investors should not place undue reliance on any such statements. Forward-looking statements can often be identified by words such as “continues,” “can,” expect,” “intend,” “will,” “anticipate,” “estimate,” “may,” “plan,” “believe” and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the Company’s search for a new auditor and its hope that a new auditor can be engaged in the near future and that its annual report on Form 10-K can be completed and publicly filed; the continuation of the examination of the current operations of Southern Star; the Company’s intent to consider various alternatives, including the possible sale of Southern Star, the sale of specific assets within individual DSTs and dissolution of the respective trusts, and/or the outsourcing of various aspects of Southern Star’s operations; the Company’s plan to update investors with respect to the status of Southern Star as appropriate; the Company’s expectations and beliefs regarding the Hartman litigation; the timing and ultimate resolution of the various litigation, fight for corporate control and other matters involving Hartman; the continued execution of the Company’s strategy of pivoting into the self-storage space; the Company’s continual evaluation of its legacy assets in order to maximize shareholder value; the Company’s policy to not dispose of any asset for less than its maximum determinable value and to maximize earnings and value; the implications to the Company of the assignment of an OTC trading symbol for its common stock; whether the Company may be subject to certain FINRA rules; any actions the Company may need to take to comply with any FINRA rules; the Company’s continual evaluation of various options to provide greater shareholder liquidity, including its intention to seek listing of its common stock on a securities exchange or admission to over-the-counter trading, a public offering, a listing of the common stock on an exchange or admission to OTC trading without a public offering, and merger and/or acquisition opportunities; the Company’s belief that further legal action could ensue to unwind the issuance of common shares under the Rights Plan if Hartman prevails in his efforts to set aside or invalidate the Rights Plan or to cause the dilutive issuance of additional common shares to Hartman, as well as any further action Hartman may take to prevent other Company shareholders from receiving benefits under the Rights Plan. None of the foregoing is a guarantee or assurance of future outcomes or results, and all are subject to numerous risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. A number of important factors could cause actual results to differ materially from the forward-looking statements contained in this material. Forward-looking statements in this press release speak only as of the date on which such statements were made, and the Company undertakes no obligation to update any such statements that may become untrue because of subsequent events. Such forward-looking statements are subject to the safe harbor protection for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.