Creative Media & Community Trust amends charter, stockholders vote

Dallas-based real estate investment trust, Creative Media & Community Trust Corp. (NASDAQ:CMCT), announced the results of several key proposals voted on by stockholders during its annual meeting on August 1, 2024. The proposals, detailed in the company's recent 8-K filing with the Securities and Exchange Commission, included amendments to the company's charter related to dividend payments and the election of directors.

Stockholders approved amendments to the charter that affect the company's Series A1 Preferred Stock. Notably, the amendments implement a fixed monthly dividend period with a record date set for the last day of each month and specify that dividends are payable on the 15th day of the following month. Furthermore, dividends on shares of Series A1 Preferred Stock issued after the amendment's effective date will now accrue from the first day of the dividend period in which the share is issued.

Another amendment that received approval was the setting of the Original Issuance Date for redemptions of Series A1 Preferred Stock issued during the same calendar quarter. Additionally, for Series A1 Preferred Stock issued under the Dividend Reinvestment Plan, the Original Issuance Date will align with that of the underlying shares from which the DRIP shares are derived.

The election of directors saw all seven nominees confirmed to continue in their roles, with Douglas Bech, John Hope Bryant, Marcie Edwards, Shaul Kuba, Richard Ressler, Avraham Shemesh, and Elaine Wong securing their positions on the board.

Stockholders also gave a non-binding approval to executive compensation and ratified the appointment of Deloitte & Touche, LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024.

The meeting had a strong turnout with 76.45% of shares entitled to vote being represented in person or by proxy. The newly approved amendments reflect the company's ongoing adjustments to its governance and financial practices. Creative Media & Community Trust Corp., previously known as CIM Commercial Trust Corp and before that as PMC Commercial Trust /TX, is incorporated in Maryland and operates out of Dallas, TX.

In other recent news, Creative Media & Community Trust Corp (CMCT) has reported a 9% year-over-year increase in same-store office net operating income for the first quarter of 2024, largely attributable to the performance of its Beverly Hills property. Despite encountering cash flow difficulties due to high short-term interest rates, the company has indicated plans to explore asset sales and debt reduction strategies.

The company's segment net operating income saw an increase of approximately $600,000, driven by the office and multifamily segments. However, CMCT's funds from operations (FFO) and core FFO were in the negative, primarily due to rising interest expenses and increased preferred stock dividends.

In other developments, CMCT has revised its dealer manager agreement with CIM Service Provider, LLC and CCO Capital, LLC, reducing the dealer manager fee from 3.00% to 2.00%, while maintaining selling commissions at up to 7.00% of the aggregate selling price of the Series A1 Preferred Stock. This agreement is part of an ongoing exclusive partnership for the offering of the company's Series A1 Preferred Stock, with a maximum aggregate offering amount of $400 million.

In light of these recent developments, CMCT is demonstrating a commitment to improving its financial stability and market position. The company's efforts to enhance cash flow and reduce credit obligations through asset sales, particularly in the office portfolio, reflect this commitment.

InvestingPro Insights

As Creative Media & Community Trust Corp. (CMCT) navigates through its governance and financial practice adjustments, real-time data and insights from InvestingPro provide a snapshot of the company's current market position. According to InvestingPro, CMCT's market capitalization stands at $47.17 million, indicating the size of the company in the competitive real estate investment trust market. Despite a challenging period, CMCT maintains a significant dividend yield of 16.43%, a testament to its commitment to returning value to shareholders, particularly relevant given the recent charter amendments related to dividend payments.

InvestingPro Tips highlight that CMCT's stock is currently in oversold territory based on the RSI, suggesting that the stock may be undervalued by the market. Additionally, the company's liquid assets have been noted to exceed its short-term obligations, which could provide some financial stability in the short run. These factors may be of interest to potential investors looking for dividend-paying stocks or those considering the company's financial health. For a deeper dive into the company's prospects and additional InvestingPro Tips, there are 10 more tips available on the InvestingPro platform for CMCT.

While the company is not expected to be profitable this year, as analysts anticipate, the focus on financial governance and shareholder value could position CMCT for a potential turnaround. The recent amendments and the strong turnout at the annual meeting underscore the active engagement of CMCT's shareholders and the company's responsiveness to their interests.

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