Page 11 of 13 – SEC Filing Item 5. We will vote against the issuance of additional shares. We believe there is absolutely no need to dilute shareholders by issuing common stock – there are several tax efficient transactions that the Company could pursue without diluting shareholders. The Company’s current obligation to bond holders is significant, approximately $75 million. To meet its payment obligations without issuing additional shares and diluting shareholders potentially by over 23%, the Company has available to it: 1. The Raleigh, North Carolina office complex, purchased in November 2015 for $42.3m6 2. The Commercial Loan Portfolio of approximately $38.3m7 3. The land pipeline sales of approximately $56m8 that will be closing in the coming years 4. The approximately $8.7 million in treasury stock (subject to CTO’s share price) We believe the Company could liquidate (or, in the case of the treasury stock, sell) these assets to raise much needed cash. We believe the Company should use any excess proceeds to repay debt and begin the process of deleveraging the Company. The proceeds of the sale of the investment portfolio, which was recently liquidated at a substantial loss9, should also be used to reduce debt in preparation for the upcoming need for cash. Between now and the bonds’ 2020 conversion date, we believe there is ample opportunity for the Board to responsibly meet bond holder obligations while also addressing shareholder concerns. Wintergreen believes that potentially diluting shareholders to the tune of 23% (if the additional shares are fully issued) is NOT the preferred method for CTO to meet its obligations to bond holders. Accordingly, Wintergreen intends to vote “AGAINST” – Item 1: Against each of the seven directors nominated for one year terms
– Item 2: Against the ratification of the appointment of Grant Thornton, LLP as auditor
– Item 3: Against the advisory vote to approve executive compensation
– Item 5: Against the issuance of additional shares of CTO
Wintergreen intends to vote “FOR” – Item 4: For the hiring of an independent advisor to evaluate ways to maximize shareholder value
Liz Cohernour, COO
David J. Winters, CEO
6 Consolidated-Tomoka Land Co: 8-K, November 12, 2015. 7 Consolidated-Tomoka Land Co: 10-K, March 1, 2016. 8 Consolidated-Tomoka Land Co: Investor Presentation, March 7, 2016. 9 Consolidated-Tomoka Land Co. 8-K, March 31, 2016. Follow Cto Realty Growth Inc. (NYSE:CTO)
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Item 5. We will vote against the issuance of additional shares.
We believe there is absolutely no need to dilute shareholders by issuing common stock – there are several tax efficient transactions that the Company could pursue without diluting shareholders.
The Company’s current obligation to bond holders is significant, approximately $75 million. To meet its payment obligations without issuing additional shares and diluting shareholders potentially by over 23%, the Company has available to it:
1. The Raleigh, North Carolina office complex, purchased in November 2015 for $42.3m6
2. The Commercial Loan Portfolio of approximately $38.3m7
3. The land pipeline sales of approximately $56m8 that will be closing in the coming years
4. The approximately $8.7 million in treasury stock (subject to CTO’s share price)
We believe the Company could liquidate (or, in the case of the treasury stock, sell) these assets to raise much needed cash. We believe the Company should use any excess proceeds to repay debt and begin the process of deleveraging the Company. The proceeds of the sale of the investment portfolio, which was recently liquidated at a substantial loss9, should also be used to reduce debt in preparation for the upcoming need for cash. Between now and the bonds’ 2020 conversion date, we believe there is ample opportunity for the Board to responsibly meet bond holder obligations while also addressing shareholder concerns. Wintergreen believes that potentially diluting shareholders to the tune of 23% (if the additional shares are fully issued) is NOT the preferred method for CTO to meet its obligations to bond holders.
Accordingly, Wintergreen intends to vote “AGAINST”
| – | Item 1: Against each of the seven directors nominated for one year terms |
| – | Item 2: Against the ratification of the appointment of Grant Thornton, LLP as auditor |
| – | Item 3: Against the advisory vote to approve executive compensation |
| – | Item 5: Against the issuance of additional shares of CTO |
Wintergreen intends to vote “FOR”
| – | Item 4: For the hiring of an independent advisor to evaluate ways to maximize shareholder value |
| Liz Cohernour, COO | David J. Winters, CEO |
6 Consolidated-Tomoka Land Co: 8-K, November 12, 2015.
7 Consolidated-Tomoka Land Co: 10-K, March 1, 2016.
8 Consolidated-Tomoka Land Co: Investor Presentation, March 7, 2016.
9 Consolidated-Tomoka Land Co. 8-K, March 31, 2016.
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