8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 23, 2022

Preferred Apartment Communities, Inc.

(Exact Name of Registrant as Specified in its Charter)

Maryland                001-34995                27-1712193

(State or other jurisdiction             (Commission File Number)    (IRS Employer Identification No.)                                                                

of incorporation)

3284 Northside Parkway NW, Suite 150, Atlanta, GA 30327

(Address of Principal Executive Offices) (Zip code)

Registrant's telephone number, including area code: (770) 818-4100

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

_______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))    

[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class            Trading Symbol        Name of each exchange on which registered

Common Stock, par value $.01 per share         APTS                 NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 1.01. Entry into a Material Definitive Agreement

On February 16, 2022, Preferred Apartment Communities, Inc., a Maryland corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Preferred Apartment Communities Operating Partnership, L.P., a Delaware limited partnership, PAC Operations, LLC, a Delaware limited liability company, Pike Parent LLC, a Delaware limited liability company, Pike Merger Sub I LLC, a Delaware limited liability company (“Merger Sub I”), Pike Merger Sub II LLC, a Delaware limited liability company, and Pike Merger Sub III LLC, a Delaware limited liability company, which provides for, among other things, the merger (the “Merger”) of the Company with and into Merger Sub I, with Merger Sub I surviving the Merger, subject to the terms and conditions set forth in the Merger Agreement. Pursuant to the terms of the Merger Agreement, the Company and Computershare Inc., a Delaware corporation (“Computershare”), and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, collectively as warrant agent (together with Computershare and their respective successors and assigns, the “Warrant Agent”), entered into an amendment, dated as of May 23, 2022 (such amendment, the “Amendment”), to the Warrant Agreement dated as of February 23, 2017 between the Company and the Warrant Agent (the “Warrant Agreement”). The Amendment provides that, conditioned upon the occurrence of the closing of the Merger pursuant to the Merger Agreement, each holder of a warrant (each, a “Warrant”) to purchase shares of common stock of the Company, par value $0.01 per share (each, a “Share”), that is exercised prior to the Expiration Date (as defined in the Warrant Agreement) and either (i) at or after the effective time of the Merger (the “Effective Time”) or (ii) prior to the Effective Time but for which Shares have not been issued or otherwise delivered therefor prior to the Effective Time, shall be entitled, upon exercise, to receive only cash in the amount such holder would have been entitled to receive pursuant to the Merger Agreement in respect of the Shares that would have been issued in respect of such exercise, less the applicable Exercise Price (as defined in the Warrant Agreement) for such Warrant, in each case as though the Shares in respect of such exercise had been issued and delivered immediately prior to the Effective Time.

The foregoing description of the Amendment is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 4.1 hereto and incorporated by reference into this Item 1.01.

Item 8.01 Other Events

On May 23, 2022, the Company issued a press release announcing that, in connection with the Merger, the Company will suspend (i) voluntary redemptions of shares of Series A Redeemable Preferred Stock of the Company, $0.01 par value per share, Series A1 Redeemable Preferred Stock of the Company, $0.01 par value per share, Series M Redeemable Preferred Stock of the Company, $0.01 par value per share, and Series M1 Redeemable Preferred Stock of the Company, $0.01 par value per share, in each case, after June 2, 2022, and (ii) exercises of Warrants after June 2, 2022.

The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits.

4.1    Amendment to Warrant Agreement dated as of May 23, 2022.

99.1    Press Release, dated May 23, 2022.

104    Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PREFERRED APARTMENT COMMUNITIES, INC.

(Registrant)

Date: May 24, 2022	By:	/s/ Jeffrey R. Sprain
		Jeffrey R. Sprain
		Executive Vice President, General Counsel and Corporate Secretary

EX-4.1

Execution Version

AMENDMENT TO WARRANT AGREEMENT

    This Amendment, dated as of May 23, 2022 (this “Amendment”), to that certain Warrant Agreement, dated as of February 23, 2017 (the “Warrant Agreement”), between Preferred Apartment Communities, Inc., a Maryland corporation (the “Company”), and Computershare Inc., a Delaware corporation (“Computershare”), and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, collectively as warrant agent (together with Computershare and their respective successors and assigns, the “Warrant Agent”), is made by and between the Company and the Warrant Agent. Capitalized terms used and not defined herein shall have the meaning ascribed thereto in the Warrant Agreement.

    WHEREAS, the Company and the Warrant Agent previously entered into the Warrant Agreement;

    WHEREAS, the Company previously entered into that certain Agreement and Plan of Merger, dated as of February 16, 2022 (as it may be amended or supplemented from time to time, the “Merger Agreement”), between Pike Parent LLC, a Delaware limited liability company (“Parent”), Pike Merger Sub I LLC, a wholly owned subsidiary of Parent and a Delaware limited liability company (“Merger Sub I”), Pike Merger Sub II LLC, a Delaware limited liability company, Pike Merger Sub III LLC, a Delaware limited liability company, the Company, Preferred Apartment Communities Operating Partnership, L.P., a Delaware limited partnership, and PAC Operations, LLC, a Delaware limited liability company, which provides for the merger (the “Company Merger”) of the Company with and into Merger Sub I, with Merger Sub I surviving the Company Merger, subject to the terms and conditions set forth in the Merger Agreement;

    WHEREAS, pursuant to, and subject to the terms and conditions set forth in the Merger Agreement, each share of common stock, par value $0.01 per share, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the effective time of the Company Merger (the “Company Merger Effective Time”), other than shares of Company Common Stock owned by the Company, Parent or any subsidiaries of Parent or the Company, shall be automatically converted into the right to receive $25.00 in cash, without interest, as may be adjusted pursuant to the Merger Agreement; and

    WHEREAS, in accordance with Section 17 of the Warrant Agreement, the Company and the Warrant Agent desire to amend the Warrant Agreement as set forth herein to clarify the operation of the provisions of the Warrant Agreement at and following the Company Merger Effective Time.

    NOW, THEREFORE, in consideration of the covenants and agreements contained

herein and for other good and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the parties agree as follows:

1.Amendment to the Warrant Agreement. Conditioned upon the occurrence of the closing of the Company Merger pursuant to the Merger Agreement, the following is hereby added as a new paragraph (d) of Section 7 of the Warrant Agreement:

(d)    Notwithstanding any provision of this Agreement or the Global Warrant Certificate to the contrary, if any Warrant is exercised prior to the Expiration Date and (A) at or after the effective time (the “Company MergerEffective Time”) of the merger of the Company with and into Pike Merger Sub I LLC, a Delaware limited liability company (“Merger Sub I”), pursuant to the

Agreement and Plan of Merger, dated as of February 16, 2022, by and among the Company, Pike Parent LLC, a Delaware limited liability company, Merger Sub I, Pike Merger Sub II LLC, a Delaware limited liability company, Pike Merger Sub III LLC, a Delaware limited liability company, Preferred Apartment Communities Operating Partnership, L.P., a Delaware limited partnership, and PAC Operations, LLC, as it may be amended or supplemented from time to time (the “Merger Agreement”), or (B) prior to the Company Merger Effective Time but shares of Company Common Stock have not been issued or otherwise delivered therefor prior to the Company Merger Effective Time, then, in each case, the holder of such Warrant shall be entitled to receive only cash in the amount of the Common Stock Consideration (as defined in the Merger Agreement) which, if such Warrant had been so exercised by such holder and the Company Common Stock in respect of such exercise had been issued and delivered, in each case immediately prior to the Company Merger Effective Time, such holder would have been entitled to receive pursuant to the Merger Agreement in respect of the shares of Company Common Stock that would have been issued in respect of such exercise, less the applicable Exercise Price for such Warrant. For the avoidance of doubt, in no event shall any shares of Company Common Stock be issued or issuable pursuant to this Agreement or any Global Warrant Certificate at or after the Company Merger Effective Time.

2.Notice. No further notice to the Warrant Agent is required pursuant to the Warrant Agreement in connection with this Amendment.

3.Miscellaneous. Except to the extent specifically modified hereby, all terms of the Warrant Agreement shall remain unchanged and in full force and effect, and, to the extent applicable, such terms shall apply to this Amendment as if it formed a part of the Warrant Agreement. This Amendment may be executed in counterparts, each of which shall be an original, with the same effect as if the signatures were upon the same instrument, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered (by telecopy, electronic delivery or otherwise) to the other parties. This Amendment, and all claims or causes of action that may be based upon, arise out of or relate to this Amendment, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

[The rest of this page intentionally left blank.]

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first above written.

COMPUTERSHARE TRUST COMPANY, N.A. and COMPUTERSHARE INC.

By:    /s/ Thomas Borbely            
    Name: Thomas Borbely
    Title: Senior Manager, Corporate Actions

[Signature Page to Warrant Amendment]

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first above written.

PREFERRED APARTMENT COMMUNITIES, INC.

By:    /s/ Jeffrey R. Sprain                
Name: Jeffrey R. Sprain
Title: Executive Vice President, General Counsel and Secretary

[Signature Page to Warrant Amendment]

EX-99.1

Preferred Apartment Communities, Inc. Announces Suspension of Preferred Stock Redemptions and Warrant Exercises

Atlanta, GA – May 23, 2022 -- Preferred Apartment Communities, Inc. (NYSE: APTS) (“PAC” or the “Company”) today announced that, in connection with its previously announced acquisition by Blackstone Real Estate Income Trust, Inc. (“BREIT”), which, subject to PAC stockholder approval at the upcoming special meeting and satisfaction of other customary conditions, is expected to close on or about June 9, 2022, PAC will:

•suspend voluntary redemptions of shares of Series A Redeemable Preferred Stock of the Company, $0.01 par value per share, Series A1 Redeemable Preferred Stock of the Company, $0.01 par value per share, Series M Redeemable Preferred Stock of the Company, $0.01 par value per share, and Series M1 Redeemable Preferred Stock of the Company, $0.01 par value per share (collectively, the “Company Preferred Shares”), in each case, after June 2, 2022; and

•suspend exercises of warrants (collectively, the “Company Warrants”) to purchase shares of Common Stock of the Company (the “Company Common Stock”) after June 2, 2022.

Suspending the voluntary redemption of the Company Preferred Shares and exercises of the Company Warrants will enable PAC to obtain an accurate count of securities and will facilitate payment of the consideration due to the holders of the Company Preferred Shares and the Company Common Stock pursuant to the terms of the previously announced merger agreement between, among others, PAC and Pike Parent LLC, an affiliate of BREIT.

The Company will be suspending voluntary redemptions of Company Preferred Shares after June 2, 2022. Any voluntary redemptions submitted on or prior to June 2, 2022 will be paid in cash in accordance with the standard redemption schedule by approximately June 6, 2022. On or about the closing date of the transaction, holders of outstanding Company Preferred Shares will receive the merger consideration of par ($1,000 per share with no redemption penalties) plus accrued but unpaid dividends through and including the closing date, less any applicable withholding taxes.

Additionally, the Company will be suspending the exercise of all Company Warrants after June 2, 2022. On and from the closing date, the holders of the Company Warrants may exercise their Company Warrants in accordance with their terms pursuant to a cashless exercise, whereupon they shall receive a cash payment of $25.00 per share of Company Common Stock underlying the exercised Company Warrants (without interest and less any applicable withholding taxes), less the applicable exercise price set forth in such Company Warrants. Any Company Warrant exercises submitted on or prior to the June 2, 2022 cut-off will be processed in accordance with the standard exercise schedule by approximately June 6, 2022.

About Preferred Apartment Communities, Inc.

Preferred Apartment Communities, Inc. (NYSE: APTS) is a real estate investment trust engaged primarily in the ownership and operation of Class A multifamily properties, with select investments in grocery-anchored shopping centers. Preferred Apartment Communities’ investment objective is to generate attractive, stable returns for stockholders by investing in income-producing properties and acquiring or originating real estate loans. As of March 31, 2022, the Company owned or was invested in 113 properties in 13 states, predominantly in the Southeast region of the United States. Learn more at www.pacapts.com.

SOURCE: Preferred Apartment Communities, Inc.

Preferred Apartment Communities, Inc.

John A. Isakson 770-818-4109

Chief Financial Officer

Email: jisakson@pacapts.com

Preferred Apartment Communities, Inc.

Paul Cullen 770-818-4144

Executive Vice President-Investor Relations

Email: Investorrelations@pacapts.com

XML

Cover	May 23, 2022
Document Information [Line Items]
Document Type	8-K
Document Period End Date	May 23, 2022
Entity Registrant Name	Preferred Apartment Communities, Inc.
Entity File Number	001-34995
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	27-1712193
Entity Address, Address Line One	3284 Northside Parkway NW, Suite 150,
Entity Address, City or Town	Atlanta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30327
City Area Code	(770)
Local Phone Number	818-4100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Central Index Key	0001481832
Amendment Flag	false
Trading Symbol	APTS
Entity Emerging Growth Company	false
Security Exchange Name	NYSE
Common Class A [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $.01 per share