UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended June 30, 2021March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the transition period from ________________ to ________________

Commission file number: 001-36400

ASHFORD INC.
(Exact name of registrant as specified in its charter)
Nevada84-2331507
(State or other jurisdiction of incorporation or organization)(IRS employer identification number)
14185 Dallas Parkway
Suite 1200
Dallas
Texas75254
(Address of principal executive offices)(Zip code)

(972) 490-9600
(Registrant’s telephone number, including area code)

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common StockAINCNYSE American LLC
    
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $0.001 par value per share3,022,7563,107,560
(Class)Outstanding at August 11, 2021May 9, 2022



ASHFORD INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30,MARCH 31, 20212022

TABLE OF CONTENTS





PART I. FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS (unaudited)
ASHFORD INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
June 30, 2021December 31, 2020March 31, 2022December 31, 2021
ASSETSASSETSASSETS
Current assets:Current assets:Current assets:
Cash and cash equivalentsCash and cash equivalents$32,089 $45,270 Cash and cash equivalents$29,827 $37,571 
Restricted cashRestricted cash34,346 37,396 Restricted cash33,724 34,878 
Restricted investmentRestricted investment1,240 290 Restricted investment501 576 
Accounts receivable, netAccounts receivable, net5,269 3,458 Accounts receivable, net13,660 10,502 
Due from affiliatesDue from affiliates490 353 Due from affiliates289 165 
Due from Ashford TrustDue from Ashford Trust751 13,198 Due from Ashford Trust3,592 2,575 
Due from BraemarDue from Braemar449 2,142 Due from Braemar2,939 1,144 
InventoriesInventories1,711 1,546 Inventories1,746 1,555 
Prepaid expenses and otherPrepaid expenses and other7,818 7,629 Prepaid expenses and other6,992 9,490 
Total current assetsTotal current assets84,163 111,282 Total current assets93,270 98,456 
Investments in unconsolidated entitiesInvestments in unconsolidated entities3,701 3,687 Investments in unconsolidated entities4,171 3,581 
Property and equipment, net ($15,174 and $12,972, respectively, attributable to VIEs)86,102 88,760 
Property and equipment, netProperty and equipment, net81,042 83,566 
Operating lease right-of-use assetsOperating lease right-of-use assets28,609 30,431 Operating lease right-of-use assets26,049 26,975 
GoodwillGoodwill56,622 56,622 Goodwill56,622 56,622 
Intangible assets, net ($3,314 and $3,409, respectively, attributable to VIEs)258,659 271,432 
Intangible assets, netIntangible assets, net238,780 244,726 
Other assetsOther assets4,269 3,225 Other assets697 870 
Total assetsTotal assets$522,125 $565,439 Total assets$500,631 $514,796 
LIABILITIESLIABILITIESLIABILITIES
Current liabilities:Current liabilities:Current liabilities:
Accounts payable and accrued expensesAccounts payable and accrued expenses$28,027 $40,378 Accounts payable and accrued expenses$27,243 $39,897 
Dividends payableDividends payable25,166 16,280 Dividends payable43,947 34,574 
Due to affiliatesDue to affiliates97 1,471 Due to affiliates21 — 
Deferred incomeDeferred income7,582 12,738 Deferred income494 2,937 
Deferred compensation plan38 29 
Notes payable, net ($1,168 and $972, respectively, attributable to VIEs)24,836 5,347 
Notes payable, netNotes payable, net6,943 6,725 
Finance lease liabilitiesFinance lease liabilities872 841 Finance lease liabilities1,092 1,065 
Operating lease liabilitiesOperating lease liabilities3,692 3,691 Operating lease liabilities3,602 3,628 
Other liabilitiesOther liabilities27,752 29,905 Other liabilities28,710 25,899 
Total current liabilitiesTotal current liabilities118,062 110,680 Total current liabilities112,052 114,725 
Deferred incomeDeferred income12,081 8,621 Deferred income9,883 7,968 
Deferred tax liability, netDeferred tax liability, net35,699 37,904 Deferred tax liability, net31,509 32,848 
Deferred compensation planDeferred compensation plan4,444 1,678 Deferred compensation plan3,437 3,326 
Notes payable, net ($6,758 and $6,911, respectively, attributable to VIEs)34,168 57,349 
Notes payable, netNotes payable, net50,319 52,669 
Finance lease liabilitiesFinance lease liabilities43,956 43,143 Finance lease liabilities43,243 43,479 
Operating lease liabilitiesOperating lease liabilities25,057 26,881 Operating lease liabilities22,573 23,477 
Total liabilitiesTotal liabilities273,467 286,256 Total liabilities273,016 278,492 
Commitments and contingencies (note 8)00
Commitments and contingencies (note 9)Commitments and contingencies (note 9)00
MEZZANINE EQUITYMEZZANINE EQUITYMEZZANINE EQUITY
Series D Convertible Preferred Stock, $0.001 par value, 19,120,000 shares issued and outstanding, net of discount, as of June 30, 2021 and December 31, 2020477,574 476,947 
Series D Convertible Preferred Stock, $0.001 par value, 19,120,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021Series D Convertible Preferred Stock, $0.001 par value, 19,120,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021478,000 478,000 
Redeemable noncontrolling interestsRedeemable noncontrolling interests94 1,834 Redeemable noncontrolling interests80 69 
EQUITY (DEFICIT)EQUITY (DEFICIT)EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized, $0.001 par value, 3,022,756 and 2,868,288 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
Common stock, 100,000,000 shares authorized, $0.001 par value, 3,171,545 and 3,072,688 shares issued and 3,108,777 and 3,023,002 shares outstanding at March 31, 2022 and December 31, 2021, respectivelyCommon stock, 100,000,000 shares authorized, $0.001 par value, 3,171,545 and 3,072,688 shares issued and 3,108,777 and 3,023,002 shares outstanding at March 31, 2022 and December 31, 2021, respectively
Additional paid-in capitalAdditional paid-in capital292,534 293,597 Additional paid-in capital294,844 294,395 
Accumulated deficitAccumulated deficit(520,787)(491,483)Accumulated deficit(544,076)(534,999)
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)(429)(1,156)Accumulated other comprehensive income (loss)(798)(1,206)
Treasury stock, at cost, 48,264 and 32,031 shares at June 30, 2021 and December 31, 2020, respectively(582)(438)
Treasury stock, at cost, 62,768 and 49,686 shares at March 31, 2022 and December 31, 2021, respectivelyTreasury stock, at cost, 62,768 and 49,686 shares at March 31, 2022 and December 31, 2021, respectively(816)(596)
Total equity (deficit) of the CompanyTotal equity (deficit) of the Company(229,261)(199,477)Total equity (deficit) of the Company(250,843)(242,403)
Noncontrolling interests in consolidated entitiesNoncontrolling interests in consolidated entities251 (121)Noncontrolling interests in consolidated entities378 638 
Total equity (deficit)Total equity (deficit)(229,010)(199,598)Total equity (deficit)(250,465)(241,765)
Total liabilities and equity (deficit)Total liabilities and equity (deficit)$522,125 $565,439 Total liabilities and equity (deficit)$500,631 $514,796 
See Notes to Condensed Consolidated Financial Statements.
2


ASHFORD INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
REVENUEREVENUEREVENUE
Advisory services$10,062 $11,430 $19,989 $23,266 
Advisory services feesAdvisory services fees$11,802 $9,927 
Hotel management feesHotel management fees6,515 3,691 10,987 9,815 Hotel management fees7,178 4,472 
Design and construction feesDesign and construction fees1,867 2,052 3,409 5,990 Design and construction fees4,524 1,542 
Audio visualAudio visual9,451 970 13,062 30,644 Audio visual24,965 3,611 
OtherOther12,166 3,337 22,795 10,028 Other11,439 10,629 
Cost reimbursement revenueCost reimbursement revenue48,279 24,118 82,031 99,697 Cost reimbursement revenue74,051 32,187 
Total revenuesTotal revenues88,340 45,598 152,273 179,440 Total revenues133,959 62,368 
EXPENSESEXPENSESEXPENSES
Salaries and benefitsSalaries and benefits17,392 13,677 33,168 29,987 Salaries and benefits16,845 15,776 
Cost of revenues for design and constructionCost of revenues for design and construction1,022 878 1,780 2,329 Cost of revenues for design and construction1,910 758 
Cost of revenues for audio visualCost of revenues for audio visual6,872 2,316 11,258 22,746 Cost of revenues for audio visual17,879 4,386 
Depreciation and amortizationDepreciation and amortization8,259 10,109 16,398 20,078 Depreciation and amortization7,625 8,139 
General and administrativeGeneral and administrative6,591 4,341 11,859 10,524 General and administrative7,363 5,268 
Impairment178,213 
OtherOther5,059 1,361 8,670 5,587 Other5,467 3,611 
Reimbursed expensesReimbursed expenses48,145 24,055 81,825 99,566 Reimbursed expenses73,908 32,115 
Total expensesTotal expenses93,340 56,737 164,958 369,030 Total expenses130,997 70,053 
OPERATING INCOME (LOSS)OPERATING INCOME (LOSS)(5,000)(11,139)(12,685)(189,590)OPERATING INCOME (LOSS)2,962 (7,685)
Equity in earnings (loss) of unconsolidated entitiesEquity in earnings (loss) of unconsolidated entities(58)17 (172)253 Equity in earnings (loss) of unconsolidated entities190 (114)
Interest expenseInterest expense(1,288)(1,246)(2,555)(2,422)Interest expense(1,279)(1,267)
Amortization of loan costsAmortization of loan costs(45)(90)(131)(156)Amortization of loan costs(73)(86)
Interest incomeInterest income72 135 29 Interest income81 63 
Realized gain (loss) on investmentsRealized gain (loss) on investments(179)(11)(373)(386)Realized gain (loss) on investments(71)(194)
Other income (expense)Other income (expense)(172)66 (285)(455)Other income (expense)147 (113)
INCOME (LOSS) BEFORE INCOME TAXESINCOME (LOSS) BEFORE INCOME TAXES(6,670)(12,402)(16,066)(192,727)INCOME (LOSS) BEFORE INCOME TAXES1,957 (9,396)
Income tax (expense) benefitIncome tax (expense) benefit697 3,484 1,648 5,569 Income tax (expense) benefit(1,278)951 
NET INCOME (LOSS)NET INCOME (LOSS)(5,973)(8,918)(14,418)(187,158)NET INCOME (LOSS)679 (8,445)
(Income) loss from consolidated entities attributable to noncontrolling interests(Income) loss from consolidated entities attributable to noncontrolling interests234 278 329 438 (Income) loss from consolidated entities attributable to noncontrolling interests260 95 
Net (income) loss attributable to redeemable noncontrolling interestsNet (income) loss attributable to redeemable noncontrolling interests19 644 195 1,084 Net (income) loss attributable to redeemable noncontrolling interests176 
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANYNET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY(5,720)(7,996)(13,894)(185,636)NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY948 (8,174)
Preferred dividends, declared and undeclaredPreferred dividends, declared and undeclared(8,633)(7,940)(17,239)(15,815)Preferred dividends, declared and undeclared(9,373)(8,606)
Amortization of preferred stock discountAmortization of preferred stock discount(311)(795)(627)(1,605)Amortization of preferred stock discount— (316)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERSNET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS$(14,664)$(16,731)$(31,760)$(203,056)NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS$(8,425)$(17,096)
INCOME (LOSS) PER SHARE - BASIC AND DILUTEDINCOME (LOSS) PER SHARE - BASIC AND DILUTEDINCOME (LOSS) PER SHARE - BASIC AND DILUTED
Basic:Basic:Basic:
Net income (loss) attributable to common stockholdersNet income (loss) attributable to common stockholders$(5.31)$(7.37)$(11.66)$(90.81)Net income (loss) attributable to common stockholders$(3.00)$(6.36)
Weighted average common shares outstanding - basicWeighted average common shares outstanding - basic2,764 2,269 2,724 2,236 Weighted average common shares outstanding - basic2,809 2,686 
Diluted:Diluted:Diluted:
Net income (loss) attributable to common stockholdersNet income (loss) attributable to common stockholders$(5.31)$(7.37)$(11.66)$(90.81)Net income (loss) attributable to common stockholders$(3.00)$(6.36)
Weighted average common shares outstanding - dilutedWeighted average common shares outstanding - diluted2,764 2,269 2,724 2,236 Weighted average common shares outstanding - diluted2,809 2,686 
See Notes to Condensed Consolidated Financial Statements.
3


ASHFORD INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands)
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
NET INCOME (LOSS)NET INCOME (LOSS)$(5,973)$(8,918)$(14,418)$(187,158)NET INCOME (LOSS)$679 $(8,445)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXOTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXOTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Foreign currency translation adjustmentForeign currency translation adjustment104 147 104 586 Foreign currency translation adjustment(231)— 
Unrealized gain (loss) on restricted investmentUnrealized gain (loss) on restricted investment277 56 250 (800)Unrealized gain (loss) on restricted investment— (27)
Less reclassification for realized (gain) loss on restricted investment included in net incomeLess reclassification for realized (gain) loss on restricted investment included in net income179 11 373 386 Less reclassification for realized (gain) loss on restricted investment included in net income— 194 
COMPREHENSIVE INCOME (LOSS)COMPREHENSIVE INCOME (LOSS)(5,413)(8,704)(13,691)(186,986)COMPREHENSIVE INCOME (LOSS)448 (8,278)
Comprehensive (income) loss attributable to noncontrolling interestsComprehensive (income) loss attributable to noncontrolling interests234 278 329 438 Comprehensive (income) loss attributable to noncontrolling interests260 95 
Comprehensive (income) loss attributable to redeemable noncontrolling interestsComprehensive (income) loss attributable to redeemable noncontrolling interests19 625 195 1,014 Comprehensive (income) loss attributable to redeemable noncontrolling interests176 
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANYCOMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY$(5,160)$(7,801)$(13,167)$(185,534)COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY$717 $(8,007)
See Notes to Condensed Consolidated Financial Statements.

4


ASHFORD INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
(unaudited, in thousands)

Common StockAdditional Paid-in CapitalAccumulated
 Deficit
Accumulated Other Comprehensive Income (Loss)Treasury StockNoncontrolling Interests in Consolidated EntitiesTotalConvertible Preferred StockRedeemable Noncontrolling InterestsCommon StockAdditional Paid-in CapitalAccumulated
 Deficit
Accumulated Other Comprehensive Income (Loss)Treasury StockNoncontrolling Interests in Consolidated EntitiesTotalConvertible Preferred StockRedeemable Noncontrolling Interests
SharesAmountSharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
Balance at March 31, 20213,010 $$292,140 $(506,044)$(989)(45)$(548)$(25)$(215,463)19,120 $477,263 $37 
Balance at December 31, 2021Balance at December 31, 20213,023 $$294,395 $(534,999)$(1,206)(49)$(596)$638 $(241,765)19,120 $478,000 $69 
Equity-based compensationEquity-based compensation15 — 1,215 — — — — 1,216 — — — Equity-based compensation100 — 693 — — — — — 693 — — 
Forfeiture of restricted common sharesForfeiture of restricted common shares(1)— 15 — — (1)(15)— — — — Forfeiture of restricted common shares(1)— — — (1)(2)— — — — — 
Purchase of treasury stockPurchase of treasury stock(2)— — — — (2)(19)— (19)— — — Purchase of treasury stock(13)— — — — (13)(218)— (218)— — — 
Amortization of preferred stock discount— — — (311)— — — — (311)— 311 — 
Dividends declared and undeclared - preferred stockDividends declared and undeclared - preferred stock— — — (8,633)— — — — (8,633)— — — Dividends declared and undeclared - preferred stock— — — (9,373)— — — — (9,373)— — — 
Deferred compensation plan distribution— 19 — — — — — 19 — — — 
Employee advancesEmployee advances— — (196)— — — — — (196)— — — Employee advances— — (246)— — — — — (246)— — — 
Acquisition of noncontrolling interest in consolidated entities— — (475)(3)— — — 325 (153)— — — 
Reallocation of carrying value— — (184)— — — — 184 — — 
Redemption value adjustment— — — (76)— — — — (76)— — 76 
Foreign currency translation adjustment— — — — 104 — — — 104 — — — 
Unrealized gain (loss) on available for sale securities— — — — 277 — — — 277 — — — 
Reclassification for realized loss (gain) on available for sale securities— — — — 179 — — — 179 — — — 
Net income (loss)— — — (5,720)— — — (234)(5,954)— — (19)
Balance at June 30, 20213,023 $$292,534 $(520,787)$(429)(48)$(582)$251 $(229,010)19,120 $477,574 $94 
Redemption value adjustmentRedemption value adjustment— — — (13)— — — — (13)— — 13 
Foreign currency translation adjustmentForeign currency translation adjustment— — — — (231)— — — (231)— — — 
OtherOther— — — (639)639 — — — — — — — 
Net income (loss)Net income (loss)— — — 948 — — — (260)688 — — (9)
Balance at March 31, 2022Balance at March 31, 20223,109 $$294,844 $(544,076)$(798)(63)$(816)$378 $(250,465)19,120 $478,000 $80 

5


Common StockAdditional Paid-in CapitalAccumulated
 Deficit
Accumulated Other Comprehensive Income (Loss)Treasury StockNoncontrolling Interests in Consolidated EntitiesTotalConvertible Preferred StockRedeemable Noncontrolling Interests
SharesAmountSharesAmountSharesAmount
Balance at December 31, 20202,868 $$293,597 $(491,483)$(1,156)(32)$(438)$(121)$(199,598)19,120 $476,947 $1,834 
Equity-based compensation169 — 2,527 — — — — 2,530 — — — 
Forfeiture of restricted common shares(2)— 23 — — (2)(23)— — — — 
Purchase of treasury stock(14)— — — — (14)(121)— (121)— — — 
Amortization of preferred stock discount— — — (627)— — — — (627)— 627 — 
Dividends declared and undeclared - preferred stock— — — (17,239)— — — — (17,239)— — — 
Deferred compensation plan distribution— 26 — — — — — 26 — — — 
Employee advances— — 49 — — — — — 49 — — — 
Acquisition of noncontrolling interest in consolidated entities— — (3,315)2,559 — — — 325 (431)— — (1,648)
Reallocation of carrying value— — (373)— — — — 373 — — — 
Redemption value adjustment— — — (103)— — — — (103)— — 103 
Foreign currency translation adjustment— — — — 104 — — — 104 — — — 
Unrealized gain (loss) on available for sale securities— — — — 250 — — — 250 — — — 
Reclassification for realized loss (gain) on available for sale securities— — — — 373 — — — 373 — — — 
Net income (loss)— — — (13,894)— — — (329)(14,223)— — (195)
Balance at June 30, 20213,023 $$292,534 $(520,787)$(429)(48)$(582)$251 $(229,010)19,120 $477,574 $94 

Common StockAdditional Paid-in CapitalAccumulated
 Deficit
Accumulated Other Comprehensive Income (Loss)Treasury StockNoncontrolling Interests in Consolidated EntitiesTotalConvertible Preferred StockRedeemable Noncontrolling Interests
SharesAmountSharesAmountSharesAmount
Balance at March 31, 20202,460 $$288,114 $(430,731)$(309)(4)$(149)$529 $(142,544)19,120 $474,870 $4,120 
Equity-based compensation73 403 — — — — — 404 — — — 
Forfeiture of restricted common shares(27)— 267 — — (26)(267)— — — — 
Purchase of treasury stock(2)— — — — (1)(12)— (12)— — — 
Amortization of preferred stock discount— — — (795)— — — — (795)— 795 — 
Dividends declared and undeclared - preferred stock— — — (7,940)— — — — (7,940)— — — 
Deferred compensation plan distribution— — — — — — — — — 
Employee advances— — (14)— — — — — (14)— — — 
Redemption value adjustment— — — (187)— — — — (187)— — 187 
Foreign currency translation adjustment— — — — 128 — — — 128 — — 19 
Unrealized gain (loss) on available for sale securities— — — — 56 — — — 56 — — 
Reclassification for realized loss (gain) on available for sale securities— — — — 11 — — — 11 — — 
Net income (loss)— — — (7,996)— — — (278)(8,274)— — (644)
Balance at June 30, 20202,505 $$288,774 $(447,649)$(114)(31)$(428)$251 $(159,163)19,120 $475,665 $3,682 

6


Common StockAdditional Paid-in CapitalAccumulated
 Deficit
Accumulated Other Comprehensive Income (Loss)Treasury StockNoncontrolling Interests in Consolidated EntitiesTotalConvertible Preferred StockRedeemable Noncontrolling InterestsCommon StockAdditional Paid-in CapitalAccumulated
 Deficit
Accumulated Other Comprehensive Income (Loss)Treasury StockNoncontrolling Interests in Consolidated EntitiesTotalConvertible Preferred StockRedeemable Noncontrolling Interests
SharesAmountSharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
Balance at December 31, 20192,203 $$285,825 $(244,084)$(216)(2)$(131)$628 $42,024 19,120 $474,060 $4,131 
Balance at December 31, 2020Balance at December 31, 20202,868 $$293,597 $(491,483)$(1,156)(32)$(438)$(121)$(199,598)19,120 $476,947 $1,834 
Equity-based compensationEquity-based compensation330 2,590 — — — — 2,594 — — — Equity-based compensation154 — 1,312 — — — — 1,314 — — — 
Forfeiture of restricted common sharesForfeiture of restricted common shares(27)— 280 — — (27)(280)— — — — Forfeiture of restricted common shares(1)— — — (1)(8)— — — — — 
Purchase of treasury stockPurchase of treasury stock(2)— — — — (2)(17)— (17)— — — Purchase of treasury stock(12)— — — — (12)(102)— (102)— — — 
Amortization of preferred stock discountAmortization of preferred stock discount— — — (1,605)— — — — (1,605)— 1,605 — Amortization of preferred stock discount— — — (316)— — — — (316)— 316 — 
Dividends declared and undeclared - preferred stockDividends declared and undeclared - preferred stock— — — (15,815)— — — — (15,815)— — — Dividends declared and undeclared - preferred stock— — — (8,606)— — — — (8,606)— — — 
Deferred compensation plan distributionDeferred compensation plan distribution— — — — — — — — — Deferred compensation plan distribution— — — — — — — — — 
Employee advancesEmployee advances— — 110 — — — — — 110 — — — Employee advances— — 245 — — — — — 245 — — — 
Acquisition of noncontrolling interest in consolidated entitiesAcquisition of noncontrolling interest in consolidated entities— — (2,840)2,562 — — — — (278)— — (1,648)
Contributions from noncontrolling interests— — — — — — — 77 77 — — — 
Reallocation of carrying valueReallocation of carrying value— — (37)— — — — (19)(56)— — 56 Reallocation of carrying value— — (189)— — — — 189 — — — — 
Redemption value adjustmentRedemption value adjustment— — — (509)— — — — (509)— — 509 Redemption value adjustment— — — (27)— — — — (27)— — 27 
Foreign currency translation adjustment— — — — 516 — — — 516 — — 70 
Unrealized gain (loss) on available for sale securitiesUnrealized gain (loss) on available for sale securities— — — — (800)— — — (800)— — Unrealized gain (loss) on available for sale securities— — — — (27)— — — (27)— — — 
Reclassification for realized loss (gain) on available for sale securitiesReclassification for realized loss (gain) on available for sale securities— — — — 386 — — — 386 — — Reclassification for realized loss (gain) on available for sale securities— — — — 194 — — — 194 — — — 
Net income (loss)Net income (loss)— — — (185,636)— — — (438)(186,074)— — (1,084)Net income (loss)— — — (8,174)— — — (95)(8,269)— — (176)
Balance at June 30, 20202,505 $$288,774 $(447,649)$(114)(31)$(428)$251 $(159,163)19,120 $475,665 $3,682 
Balance at March 31, 2021Balance at March 31, 20213,010 $$292,140 $(506,044)$(989)(45)$(548)$(25)$(215,463)19,120 $477,263 $37 
See Notes to Condensed Consolidated Financial Statements.
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ASHFORD INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six Months Ended June 30,Three Months Ended March 31,
2021202020222021
Cash Flows from Operating ActivitiesCash Flows from Operating ActivitiesCash Flows from Operating Activities
Net income (loss)Net income (loss)$(14,418)$(187,158)Net income (loss)$679 $(8,445)
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:
Depreciation and amortizationDepreciation and amortization19,375 22,869 Depreciation and amortization9,127 9,615 
Change in fair value of deferred compensation planChange in fair value of deferred compensation plan2,801 (2,697)Change in fair value of deferred compensation plan111 58 
Equity-based compensationEquity-based compensation2,740 2,313 Equity-based compensation749 1,363 
Equity in (earnings) loss in unconsolidated entitiesEquity in (earnings) loss in unconsolidated entities172 (253)Equity in (earnings) loss in unconsolidated entities(190)114 
Deferred tax expense (benefit)Deferred tax expense (benefit)(2,205)(8,097)Deferred tax expense (benefit)(1,339)(607)
Change in fair value of contingent considerationChange in fair value of contingent consideration23 617 Change in fair value of contingent consideration— 23 
Impairment178,213 
(Gain) loss on disposal of assets(Gain) loss on disposal of assets1,164 33 (Gain) loss on disposal of assets769 849 
Amortization of other assetsAmortization of other assets594 652 Amortization of other assets166 306 
Amortization of loan costsAmortization of loan costs131 156 Amortization of loan costs73 86 
Realized loss on restricted investmentsRealized loss on restricted investments373 386 Realized loss on restricted investments71 194 
Write off of deferred loan costs34 62 
Other (gain) lossOther (gain) loss(155)
Changes in operating assets and liabilities, exclusive of the effect of acquisitions:Changes in operating assets and liabilities, exclusive of the effect of acquisitions:Changes in operating assets and liabilities, exclusive of the effect of acquisitions:
Accounts receivableAccounts receivable(1,802)2,785 Accounts receivable(4,592)(509)
Due from affiliatesDue from affiliates(137)50 Due from affiliates(124)180 
Due from Ashford TrustDue from Ashford Trust12,683 4,805 Due from Ashford Trust(1,017)11,452 
Due from BraemarDue from Braemar21 745 Due from Braemar(1,795)(1,442)
InventoriesInventories(622)60 Inventories(257)(652)
Prepaid expenses and otherPrepaid expenses and other(336)828 Prepaid expenses and other2,484 830 
Investment in unconsolidated entitiesInvestment in unconsolidated entities(186)Investment in unconsolidated entities— 54 
Operating lease right-of-use assetsOperating lease right-of-use assets1,822 1,932 Operating lease right-of-use assets926 909 
Other assetsOther assets(11)(58)Other assets(7)
Accounts payable and accrued expensesAccounts payable and accrued expenses(11,114)(2,149)Accounts payable and accrued expenses(12,773)(13,741)
Due to affiliatesDue to affiliates(1,374)37 Due to affiliates21 (1,389)
Due to Ashford Trust516 
Other liabilitiesOther liabilities(2,176)16,028 Other liabilities2,811 (2,889)
Operating lease liabilitiesOperating lease liabilities(1,823)(1,930)Operating lease liabilities(930)(903)
Deferred incomeDeferred income(1,586)7,041 Deferred income(524)(865)
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities4,143 37,786 Net cash provided by (used in) operating activities(5,702)(5,407)
Cash Flows from Investing ActivitiesCash Flows from Investing ActivitiesCash Flows from Investing Activities
Additions to property and equipmentAdditions to property and equipment(2,620)(2,146)Additions to property and equipment(1,282)(491)
Proceeds from sale of property and equipment, netProceeds from sale of property and equipment, net1,816 Proceeds from sale of property and equipment, net406 1,853 
Additional purchase price paid for Remington working capital adjustment(1,293)
Investment in unconsolidated entityInvestment in unconsolidated entity(400)— 
Purchase of common stock of related partiesPurchase of common stock of related parties(873)Purchase of common stock of related parties— (873)
Acquisition of assets related to REDAcquisition of assets related to RED(1,536)(548)Acquisition of assets related to RED(455)(637)
Proceeds from note receivableProceeds from note receivable1,380 — 
Issuance of note receivableIssuance of note receivable(2,881)Issuance of note receivable— (2,881)
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities(6,094)(3,983)Net cash provided by (used in) investing activities(351)(3,029)
(Continued)(Continued)
86


Six Months Ended June 30,Three Months Ended March 31,
2021202020222021
Cash Flows from Financing ActivitiesCash Flows from Financing ActivitiesCash Flows from Financing Activities
Payments for dividends on preferred stock(8,353)(8,663)
Payments on revolving credit facilitiesPayments on revolving credit facilities(620)(11,348)Payments on revolving credit facilities(746)(332)
Borrowings on revolving credit facilitiesBorrowings on revolving credit facilities8,884 Borrowings on revolving credit facilities131 — 
Proceeds from notes payableProceeds from notes payable325 44,797 Proceeds from notes payable61 325 
Payments on notes payablePayments on notes payable(5,347)(16,591)Payments on notes payable(1,555)(5,126)
Payments on finance lease liabilitiesPayments on finance lease liabilities(91)(476)Payments on finance lease liabilities(208)(61)
Payments of loan costsPayments of loan costs(290)Payments of loan costs(61)— 
Purchase of treasury stockPurchase of treasury stock(121)(17)Purchase of treasury stock(218)(102)
Employee advancesEmployee advances49 110 Employee advances(246)245 
Payment of contingent consideration(1,384)
Contributions from noncontrolling interest77 
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities(14,158)15,099 Net cash provided by (used in) financing activities(2,842)(5,051)
Effect of foreign exchange rate changes on cash and cash equivalentsEffect of foreign exchange rate changes on cash and cash equivalents(122)542 Effect of foreign exchange rate changes on cash and cash equivalents(3)(171)
Net change in cash, cash equivalents and restricted cashNet change in cash, cash equivalents and restricted cash(16,231)49,444 Net change in cash, cash equivalents and restricted cash(8,898)(13,658)
Cash, cash equivalents and restricted cash at beginning of periodCash, cash equivalents and restricted cash at beginning of period82,666 53,249 Cash, cash equivalents and restricted cash at beginning of period72,449 82,666 
Cash, cash equivalents and restricted cash at end of periodCash, cash equivalents and restricted cash at end of period$66,435 $102,693 Cash, cash equivalents and restricted cash at end of period$63,551 $69,008 
Supplemental Cash Flow InformationSupplemental Cash Flow InformationSupplemental Cash Flow Information
Interest paidInterest paid$2,304 $2,016 Interest paid$989 $1,092 
Income taxes paid (refunded), netIncome taxes paid (refunded), net1,613 (14)Income taxes paid (refunded), net(10)(1,061)
Supplemental Disclosure of Non-Cash Investing and Financing ActivitiesSupplemental Disclosure of Non-Cash Investing and Financing ActivitiesSupplemental Disclosure of Non-Cash Investing and Financing Activities
Distribution from deferred compensation planDistribution from deferred compensation plan26 Distribution from deferred compensation plan— 
Capital expenditures accrued but not paidCapital expenditures accrued but not paid149 781 Capital expenditures accrued but not paid237 299 
Finance lease additions1,864 
Acquisition of noncontrolling interest in consolidated entities2,127 
Acquisition of noncontrolling interest in consolidated entities with notes payable and common stockAcquisition of noncontrolling interest in consolidated entities with notes payable and common stock— 1,927 
Supplemental Disclosure of Cash, Cash Equivalents and Restricted CashSupplemental Disclosure of Cash, Cash Equivalents and Restricted CashSupplemental Disclosure of Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period$45,270 $35,349 Cash and cash equivalents at beginning of period$37,571 $45,270 
Restricted cash at beginning of periodRestricted cash at beginning of period37,396 17,900 Restricted cash at beginning of period34,878 37,396 
Cash, cash equivalents and restricted cash at beginning of periodCash, cash equivalents and restricted cash at beginning of period$82,666 $53,249 Cash, cash equivalents and restricted cash at beginning of period$72,449 $82,666 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$32,089 $65,518 Cash and cash equivalents at end of period$29,827 $34,020 
Restricted cash at end of periodRestricted cash at end of period34,346 37,175 Restricted cash at end of period33,724 34,988 
Cash, cash equivalents and restricted cash at end of periodCash, cash equivalents and restricted cash at end of period$66,435 $102,693 Cash, cash equivalents and restricted cash at end of period$63,551 $69,008 
See Notes to Condensed Consolidated Financial Statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


1. Organization and Description of Business
Ashford Inc. (the “Company,” “we,” “us” or “our”) is a Nevada corporation that provides products and services primarily to clients in the hospitality industry, including Ashford Hospitality Trust, Inc. (“Ashford Trust”) and Braemar Hotels & Resorts Inc. (“Braemar”). We became a public company in November 2014, and our common stock is listed on the NYSE American LLC (“NYSE American”).
We provide: (i) advisory services; (ii) asset management services; (iii) hotel management services; (iv) design and construction and architectural services; (v) event technology and creative communications solutions; (vi) mobile room keys and keyless entry solutions; (vii) watersports activities and other travel, concierge and transportation services; (viii) hypoallergenic premium room products and services; (ix) debt placement and related services; (x) real estate advisory and brokerage services; and (xi) wholesaler, dealer manager and other broker-dealer services. We conduct these activities and own substantially all of our assets primarily through Ashford Hospitality Advisors LLC (“Ashford LLC”), Ashford Hospitality Services LLC (“Ashford Services”) and their respective subsidiaries.
We are currently the advisor for Ashford Trust and Braemar. In our capacity as the advisor to Ashford Trust and Braemar, we are responsible for implementing the investment strategies and managing the day-to-day operations of Ashford Trust and Braemar and their respective hotels from an ownership perspective, in each case subject to the respective advisory agreements and the supervision and oversight of the respective boards of directors of Ashford Trust and Braemar. Ashford Trust is focused on investing in full-service hotels in the upscale and upper upscale segments in the United States that have revenue per available room (“RevPAR”) generally less than twice the U.S. national average. Braemar invests primarily in luxury hotels and resorts with RevPAR of at least twice the U.S. national average. Each of Ashford Trust and Braemar is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and the common stock of each of Ashford Trust and Braemar is traded on the New York Stock Exchange (the “NYSE”).
We provide the personnel and services that we believe are necessary for each of Ashford Trust and Braemar to conduct their respective businesses. We may also perform similar functions for new or additional platforms. In our capacity as an advisor, we are not responsible for managing the day-to-day operations of the individual hotel properties owned by either Ashford Trust or Braemar, which duties are, and will continue to be, the responsibility of the hotel management companies that operate the hotel properties owned by Ashford Trust and Braemar. Additionally, Remington Lodging & Hospitality, LLC (“Remington”), a subsidiary of the Company, operates certain hotel properties owned by Ashford Trust and Braemar.
COVID-19, Management’s Plans and Liquidity
In December 2019, COVID-19 was identified in Wuhan, China, and subsequently spread to other regions of the world, which has resulted in significant travel restrictions and extended shutdown of numerous businesses throughout the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Our clients, Ashford Trust and Braemar, have reported that the negative impact on room demand within their respective portfolios stemming from COVID-19 is significant, which has resulted and is expected to result in significantly reduced occupancy and RevPAR. Furthermore, the prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses. The hotel industry has experienced postponement or cancellation of a significant number of business conferences and similar events. Following the government mandates and health official orders, the Company dramatically reduced staffing and expenses at its products and services businesses and at its corporate office. COVID-19 has had a significant negative impact on the Company’s operations and financial results to date. In addition, one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. The Company expects that the COVID-19 pandemic will continue to have a significant negative impact on the Company’s results of operations, financial position and cash flow in 2021 and potentially beyond. As a result, in March 2020, the Company amended payment terms pursuant to certain hotel management agreements to better manage corporate working capital, reduced planned capital expenditures, significantly reduced operating expenses and reduced the cash compensation of its executive officers and other employees, including an arrangement pursuant to which Mr. Monty J. Bennett received his base salary in the form of common stock issued under the Company’s 2014 Incentive Plan, as amended. Additionally, the Company did not declare dividends which were due with respect to its Series D Convertible Preferred Stock for the second and fourth quarters of 2020 and the second quarter of 2021. As of June 30, 2021, the Company had aggregate undeclared preferred stock dividends of approximately $25.2 million, which relates to the second quarter of 2021 and the second and fourth quarters of 2020.
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ASHFORD INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

During the first quarter of 2021, base salaries for the Company’s executive officers and other employees were restored to pre-reduction levels and the arrangement by which Mr. Monty J. Bennett received his base salary in the form of common stock ended. Additionally, on March 25, 2021, the Company declared $8.4 million in dividends which were due with respect to its Series D Convertible Preferred Stock for the first quarter of 2021.
When preparing financial statements, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that create substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In applying the accounting guidance, the Company considered its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and its unconditional obligations due over the next 12 months.
We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. Violations of certain debt covenants may result in the inability of our portfolio companies to borrow unused amounts under their respective lines of credit. As of June 30, 2021, our Term Loan Agreement (as defined below) was in compliance with all covenants or other requirements. Debt held by our subsidiaries was in compliance with all covenants or other requirements. Additionally, Presentation Technologies, LLC, our subsidiary doing business as JSAV (“JSAV”), executed a credit agreement amendment on December 31, 2020, which extended the maturity date of the loan and includes a fixed charge coverage ratio covenant which commences with the quarter ending March 31, 2023. As a result of the impact of COVID-19, JSAV is reliant on Ashford Inc. to make contributions to cover JSAV’s projected operating shortfall and amortization and interest payments on its outstanding debt within one year of the issuance of the financial statements. All such contributions are subject to the discretion of Ashford Inc. As such, all of JSAV’s outstanding debt balance has been classified as a current liability within our condensed consolidated balance sheet as of June 30, 2021. The classification of JSAV’s outstanding debt as a current liability has no impact on Ashford Inc.’s going concern assessment because the JSAV debt has no recourse to Ashford Inc. See note 5 for additional details.
We cannot predict when hotel operating levels at our clients, Ashford Trust and Braemar, will return to normalized levels after the effects of the pandemic subside, whether our clients’ hotels will be forced to shut down operations or whether one or more governmental entities may impose additional travel restrictions due to a resurgence of COVID-19 cases in the future. As a result of these factors resulting from the impact of the pandemic, we are unable to estimate future financial performance with certainty. However, based primarily on our assessment of the ability of our key customers, Ashford Trust and Braemar, to pay their obligations to the Company in accordance with the advisory agreements, the Company has concluded that management’s current plan alleviates the substantial doubt about its ability to continue as a going concern. Additional factors considered in our assessment include our completed loan amendments, other agreements, our current cash on hand, our forecast of future operating results for the next 12 months from the date of this report and the actions we have taken to improve our liquidity. Facts and circumstances could change in the future that are outside of management’s control, such as changes in Ashford Trust’s and Braemar’s financial position and liquidity, additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19, which could subsequently change our assessment.See notes 5 and 13.
Other Developments
On December 31, 2020, we acquired allMarch 10, 2022, the Company entered into a Limited Waiver Under Advisory Agreement (“Braemar Limited Waiver”) with Braemar, Braemar Hospitality Limited Partnership (“Braemar OP”), Braemar TRS Corporation and Ashford LLC. On March 15, 2022, the Company entered into a Limited Waiver Under Advisory Agreement (the “Ashford Trust Limited Waiver” and together with the Braemar Limited Waiver, the “Limited Waivers”) with Ashford Trust, Ashford Hospitality Limited Partnership (“Ashford Trust OP”), Ashford TRS Corporation (“Ashford Trust TRS”) and Ashford LLC. Pursuant to the Limited Waivers, the parties to the Second Amended and Restated Advisory Agreement with Ashford Trust and the Fifth Amended and Restated Advisory Agreement with Braemar waive the operation of any provision such agreement that would otherwise limit the ability of Ashford Trust or Braemar, as applicable, in its discretion, at its cost and expense, to award during the first and second fiscal quarters of calendar year 2022 (the “Waiver Period”), cash incentive compensation to employees and other representatives of the redeemable noncontrolling interest shares in JSAV for $150,000. As a result of the acquisition, our ownership in JSAV increased from approximately 88% to 100%.
During the first quarter of 2021, we paid the remainder of contingent consideration dueCompany; provided that, pursuant to the sellers of BAV Services, Inc. (“BAV”) in connection with the acquisition of BAV, including $350,000 related to the earn-out which was paid on January 11, 2021, and the final stock collar consideration paymentsAshford Trust Limited Waiver, such awarded cash incentive compensation does not exceed $8,476,000, in the amounts of $870,000 and $888,000 which were paid on February 1, 2021 and March 4, 2021, respectively.aggregate, during the Waiver Period.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

In January 2021, Remington executed 2 new hotel management contracts with a third-party hotel owner. In conjunction, Remington loaned approximately $2.9 million to the hotel owner. The loan requires interest only payments each quarter at an annual rate of 10% commencing on March 31, 2021. The principal balance and any outstanding accrued interest on the loan shall be due and payable to Remington in full on December 31, 2022. The note receivable is recorded with “other assets” in our condensed consolidated balance sheet.
On January 14, 2021, the Company entered into the Second Amended and Restated Advisory Agreement with Ashford Trust. The Second Amended and Restated Advisory Agreement amends and restates the terms of the Amended and Restated Advisory Agreement, dated June 10, 2015, as amended by the Enhanced Return Funding Program Agreement and Amendment No. 1 to the Amended and Restated Advisory Agreement, dated as of June 26, 2018 to, among other items (i) revise the term and termination rights; (ii) fix the percentage used to calculate the base fee thereunder at 0.70% per annum; (iii) update the list of peer group members; (iv) suspend the requirement that Ashford Trust maintain a minimum Consolidated Tangible Net Worth until the first fiscal quarter beginning after June 30, 2023; and (v) revise the criteria that would constitute a Company Change of Control in order to provide Ashford Trust additional flexibility to dispose of underperforming assets negatively impacted by COVID-19. In connection with the transactions contemplated by the Credit Agreement, dated as of January 15, 2021 (the “Credit Agreement”), by and among Ashford Trust, Oaktree Capital Management L.P. (“Oaktree”) and the lenders party thereto, on January 15, 2021, the Company entered into a Subordination and Non-Disturbance Agreement (the “SNDA”) with Ashford Trust and Oaktree pursuant to which the Company agreed to subordinate to the prior repayment in full of all obligations under the Credit Agreement, (1) prior to the later of (i) the second anniversary of the Credit Agreement and (ii) the date accrued interest “in kind” is paid in full, advisory fees (other than reimbursable expenses) in excess of 80% of such fees paid during the fiscal year ended December 31, 2019 (the “Advisory Fee Cap”), (2) any termination fee or liquidated damages amounts under the advisory agreement, or any amount owed under any enhanced return funding program in connection with the termination of the advisory agreement or sale or foreclosure of assets financed thereunder, and (3) any payments to Lismore Capital II LLC (formerly known as Lismore Capital LLC) (“Lismore”) in connection with the transactions contemplated by the Credit Agreement. See notes 3 and 13.
On March 9, 2021, we acquired all of the redeemable noncontrolling interests in OpenKey, Inc. (“OpenKey”) for a purchase price of approximately $1.9 million. Pursuant to the agreement, the purchase price will be paid to the seller in equal monthly installments over a seven year term and will include interest in arrears at an annualized rate of 4.0%. The purchase price is payable in Ashford Inc. common stock, including a 10% premium, or cash at our sole discretion. As a result of the acquisition, our ownership in OpenKey increased to 74.76% with the remainder held by noncontrolling interest holders, including 17.07% and 7.97% owned by Ashford Trust and Braemar, respectively, as of March 9, 2021.
On May 3, 2021, we acquired shares in RED Hospitality & Leisure LLC (“RED”) from a noncontrolling interest holder, increasing our ownership of RED from 84.21% to 97.87% effective retroactively on January 1, 2021, for a total purchase price of $200,000. The purchase price will be paid in the form of shares of the Company’s common stock, delivered quarterly in $25,000 increments, beginning on the closing date and ending November 15, 2022.
The accompanying condensed consolidated financial statements reflect the operations of our advisory and asset management business, hospitality products and services business, and entities that we consolidate. In this report, the terms the “Company,” “we,” “us” or “our” refers to Ashford Inc. and all entities included in its condensed consolidated financial statements.
2. Significant Accounting Policies
Basis0Basis of Presentation and Principles of Consolidation—The accompanying historical unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These condensed consolidated financial statements include the accounts of Ashford Inc., its majority-owned subsidiaries and entities which it controls. All significant intercompany accounts and transactions between these entities have been eliminated in these historical condensed consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the condensed consolidated financial statements and related notes should be read in
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

conjunction with the financial statements and notes thereto included in our 20202021 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16,25, 2022.
Cost reimbursement revenue and reimbursed expenses for the three months ended March 31, 2021 were restated as previously disclosed in the restated condensed consolidated statement of operations for the three months ended March 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The restatement related to Remington’s recognition of cost reimbursement revenue and reimbursed expenses for certain insurance costs and the timing of recognition of cost reimbursement revenue and reimbursed expenses for hotel management related salaries and benefits costs that are reimbursed from hotel owners, resulting in a $1.6 million decrease in cost reimbursement revenue and reimbursed expenses for the three months ended March 31, 2021. These costs are reported gross in the Company’s condensed consolidated statements of operations in cost reimbursement revenue with an offsetting amount reported in reimbursed expenses.
The condensed consolidated balance sheet and statement of equity (deficit) as of March 31, 2022, include a correction of an immaterial error which resulted in $639,000 of cumulative unrealized losses on available-for-sale common shares of Ashford Trust and Braemar held by Remington being reclassified from accumulated other comprehensive income to accumulated deficit. Beginning January 1, 2022, unrealized gains and losses on available-for-sale common shares are recorded in other income (expense) in the Company’s condensed consolidated statements of operations.
A variable interest entity (“VIE”) must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. We determine whether we are the primary beneficiary of a VIE upon our initial involvement with the VIE and we reassess whether we are the primary beneficiary of a VIE on an ongoing basis. Our determination of whether we are the primary beneficiary of a VIE is based upon the facts and circumstances for each VIE and requires significant judgment.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Noncontrolling Interests—The following tables present information about noncontrolling interests in our consolidated subsidiaries, including those related to consolidated VIEs, as of June 30, 2021March 31, 2022 and December 31, 20202021 (in thousands):
March 31, 2022
Ashford
Holdings
OpenKey(3)
Pure
Wellness
(4)
Ashford Inc. ownership interest99.87 %75.38 %70.00 %
Redeemable noncontrolling interests(1) (2)
0.13 %— %— %
Noncontrolling interests in consolidated entities— %24.62 %30.00 %
100.00 %100.00 %100.00 %
Carrying value of redeemable noncontrolling interests$80 n/an/a
Redemption value adjustment, year-to-date13 n/an/a
Redemption value adjustment, cumulative594 n/an/a
Carrying value of noncontrolling interestsn/a253 125 
Assets, available only to settle subsidiary’s obligations (5)
n/a1,571 1,324 
Liabilities (6)
n/a383 1,300 
Revolving credit facility (6)
n/a— 50 

June 30, 2021December 31, 2021
Ashford
Holdings
OpenKey(3)
Pure
Wellness
(4)
RED (5)
Ashford
Holdings
OpenKey(3)
Pure
Wellness
(4)
Ashford Inc. ownership interestAshford Inc. ownership interest99.87 %75.37 %70.00 %97.87 %Ashford Inc. ownership interest99.87 %75.38 %70.00 %
Redeemable noncontrolling interests(1) (2)
Redeemable noncontrolling interests(1) (2)
0.13 %%%%
Redeemable noncontrolling interests(1) (2)
0.13 %— %— %
Noncontrolling interests in consolidated entitiesNoncontrolling interests in consolidated entities%24.63 %30.00 %2.13 %Noncontrolling interests in consolidated entities— %24.62 %30.00 %
100.00 %100.00 %100.00 %100.00 %100.00 %100.00 %100.00 %
Carrying value of redeemable noncontrolling interestsCarrying value of redeemable noncontrolling interests$94 n/an/an/aCarrying value of redeemable noncontrolling interests$69 n/an/a
Redemption value adjustment, year-to-dateRedemption value adjustment, year-to-date102 n/an/an/aRedemption value adjustment, year-to-date96 n/an/a
Redemption value adjustment, cumulativeRedemption value adjustment, cumulative586 n/an/an/aRedemption value adjustment, cumulative581 n/an/a
Carrying value of noncontrolling interestsCarrying value of noncontrolling interestsn/a129 133 (11)Carrying value of noncontrolling interestsn/a479 159 
Assets, available only to settle subsidiary’s obligations (6)(7)(9)
n/a1,329 2,355 24,492 
Liabilities (8)(9)
n/a1,011 2,299 14,883 
Notes payable (8)
n/a7,667 
Revolving credit facility (8)
n/a100 247 
Assets, available only to settle subsidiary’s obligations (5)
Assets, available only to settle subsidiary’s obligations (5)
n/a2,533 1,779 
Liabilities (6)
Liabilities (6)
n/a424 1,643 
December 31, 2020
Ashford
Holdings
OpenKey(3)
Pure
Wellness (4)
RED (5)
Ashford Inc. ownership interest99.86 %49.04 %70.00 %84.21 %
Redeemable noncontrolling interests(1) (2)
0.14 %25.06 %%%
Noncontrolling interests in consolidated entities%25.90 %30.00 %15.79 %
100.00 %100.00 %100.00 %100.00 %
Carrying value of redeemable noncontrolling interests$35 $1,799 n/an/a
Redemption value adjustment, year-to-date371 466 n/an/a
Redemption value adjustment, cumulative486 2,563 n/an/a
Carrying value of noncontrolling interestsn/a164 89 (374)
Assets, available only to settle subsidiary’s obligations (6)(7)(9)
n/a1,287 1,677 21,204 
Liabilities (8)(9)
n/a837 1,767 13,817 
Notes payable (8)
n/a7,627 
Revolving credit facility (8)
n/a100 247 
Revolving credit facility (6)
Revolving credit facility (6)
n/a— 100 
________
(1)    Redeemable noncontrolling interests are included in the “mezzanine” section of our condensed consolidated balance sheets as they may be redeemed by the holder for cash or registered shares in certain circumstances outside of the Company’s control. The carrying value of the noncontrolling interests is based on the greater of the accumulated historical cost or the redemption value, which is generally fair value.
(2)    Redeemable noncontrolling interests in Ashford Hospitality Holdings LLC (“Ashford Holdings”) represent the members’ proportionate share of equity in earnings/losses of Ashford Holdings. Net income/loss attributable to the common unit holders is allocated based on the weighted average ownership percentage of the members’ interest.
(3)    Represents ownership interests in OpenKey, Inc. (“OpenKey”), a VIE for which we are considered the primary beneficiary and therefore we consolidate it. OpenKey is a hospitality focused mobile key platform that provides a universal smartphone app for keyless entry into hotel guest rooms. On March 9, 2021, we acquired all of the redeemable noncontrolling interests in OpenKey for a purchase price of approximately $1.9 million. See also notes 1 andnote 5.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(4)    Represents ownership interests in PRE Opco, LLC (“Pure Wellness”), a VIE for which we are considered the primary beneficiary and therefore we consolidate it. Pure Wellness provides hypoallergenic premium rooms in the hospitality and commercial office industry. See also notes 1 and 9.note 10.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(5)Represents ownership interests in RED, a VIE for which we are considered the primary beneficiary and therefore we consolidate it. On May 3, 2021, we acquired shares in RED from a noncontrolling interest holder, increasing our ownership of RED from 84.21% to 97.87%. RED is a provider of watersports activities and other travel and transportation services and includes the entity that conducts RED’s legacy U.S. Virgin Islands operations and Sebago, a provider of watersports activities and excursion services based in Key West, Florida. We are provided a preferred return on our investment in RED’s legacy U.S. Virgin Islands operations and Sebago which is accounted for in our income allocation based on the applicable partnership agreement. See also notes 1 and 9.
(6)    Total assets consist primarily of cash and cash equivalents, property and equipment, intangibles and other assets that can only be used to settle the subsidiaries’ obligations.
(7)    The assets of Sebago are not available to settle the obligations of the entity that conducts RED’s legacy U.S. Virgin Islands operations.
(8)(6)    Liabilities consist primarily of accounts payable, accrued expenses and notes payable for which creditors do not have recourse to Ashford Inc. except in the case of the term loans and line of credit held by RED’s legacy U.S. Virgin Islands operations, for which the creditor has recourse to Ashford Inc. See note 5.
(9)    See our condensed consolidated balance sheets for disclosure by line item of material assets and liabilities of the VIEs consolidated by the Company.
Investments in Unconsolidated Entities—We hold “investments in unconsolidated entities” in our condensed consolidated balance sheets, which are considered to be variable interests and voting interests in the underlying entities. Certain of our investments in variable interests are not consolidated because we have determined that we are not the primary beneficiary. Certain other investments are not consolidated as the underlying entity does not meet the definition of a VIE and we do not control more than 50% of the voting interests. We review our “investments in unconsolidated entities” for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. NaNNo such impairment was recorded during the three and six months ended June 30, 2021March 31, 2022 and 2020.2021.
We held an investment in an unconsolidated variable interest entity with a carrying value of $500,000 at June 30, 2021March 31, 2022 and December 31, 2020.2021. We account for the investment at estimated fair value based on recent observable transactions as we do not exercise significant influence over the entity. NaNNo equity in earnings (loss) of unconsolidated entities due to a change in fair value of the investment was recognized during the three and six months ended June 30, 2021March 31, 2022 and 2020.2021. In the event that the assumptions used to estimate fair value change in the future, we may be required to record an impairment charge related to this investment.
Our investment in Real Estate Advisory Holdings LLC (“REA Holdings”) is accounted for under the equity method as we have significant influence over the voting interest entity. We have an option to acquire an additional 50% of the ownership interests in REA Holdings for $12.5 million beginning on January 1, 2022. 2022, which expires on the later of (i) February 28, 2024 and (ii) 30 business days following the completion date of the Company’s preliminary audit for calendar year 2023.
The following table summarizes our carrying value and ownership interest in REA Holdings (in thousands):
June 30, 2021December 31, 2020
Carrying value of the investment in REA Holdings$2,800 2,873 
Ownership interest in REA Holdings30 %30 %
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

March 31, 2022December 31, 2021
Carrying value of the investment in REA Holdings$3,021 2,831 
Ownership interest in REA Holdings30 %30 %
The following table summarizes our equity in earnings (loss) in REA Holdings (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Equity in earnings (loss) in unconsolidated entities$96 $17 $(18)$253 
Three Months Ended March 31,
20222021
Equity in earnings (loss) in unconsolidated entities REA Holdings$190 $(114)
Use of Estimates—The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents—Cash and cash equivalents include cash on hand or held in banks and short-term investments with an initial maturity of three months or less at the date of purchase.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Restricted Cash—Restricted cash was comprised of the following (in thousands):
June 30, 2021December 31, 2020March 31, 2022December 31, 2021
REIT Advisory:REIT Advisory:REIT Advisory:
Insurance claim reserves (1)
Insurance claim reserves (1)
$26,685 $26,304 
Insurance claim reserves (1)
$27,378 $24,588 
Remington:Remington:Remington:
Managed hotel properties’ reserves (2)
Managed hotel properties’ reserves (2)
4,670 5,908 
Managed hotel properties’ reserves (2)
3,680 6,923 
Insurance claim reserves (3)
Insurance claim reserves (3)
1,074 1,532 
Insurance claim reserves (3)
611 1,312 
Total Remington restricted cashTotal Remington restricted cash5,744 7,440 Total Remington restricted cash4,291 8,235 
JSAV:
INSPIRE:INSPIRE:
Debt service related operating reserves (4)
Debt service related operating reserves (4)
928 
Debt service related operating reserves (4)
1,000 1,000 
Marietta:Marietta:Marietta:
Capital improvement reserves (5)
Capital improvement reserves (5)
189 2,852 
Capital improvement reserves (5)
255 255 
Restricted cash held in escrow (6)
Restricted cash held in escrow (6)
800 800 
Restricted cash held in escrow (6)
800 800 
Total Marietta restricted cashTotal Marietta restricted cash989 3,652 Total Marietta restricted cash1,055 1,055 
Total restricted cashTotal restricted cash$34,346 $37,396 Total restricted cash$33,724 $34,878 
________
(1)    Ashford Inc.’s Risk Management department collects funds from the Ashford Trust and Braemar properties and their respective management companies in an amount equal to the actuarial forecast of that year’s expected casualty claims and associated fees. These funds are deposited into restricted cash and used to pay casualty claims throughout the year as they are incurred. The claim liability related to the restricted cash balance is included in current “other liabilities” in our condensed consolidated balance sheets.
(2)    Cash received from hotel properties managed by Remington is used to pay certain centralized operating expenses as well as hotel employee bonuses. The liability related to the restricted cash balance for centralized billing is primarily included as a payable which is presented net within “due from Ashford Trust” and “due from Braemar” in our condensed consolidated balance sheets. The liability related to the restricted cash balance for hotel employee bonuses is included in “accounts payable and accrued expenses.”
(3)    Cash reserves for health insurance claims are collected primarily from Remington’s managed properties as well as certain of Ashford Inc.’s other subsidiaries to cover employee health insurance claims. The liability related to this restricted cash balance is included in current “other liabilities.”
(4)    Our subsidiary, Inspire Event Technologies Holdings, LLC (“INSPIRE”), provides event technology and creative communications solutions services. Cash is restricted due to operating reserves required under JSAV’sINSPIRE’s amended credit agreement to service interest expense and projected operating costs. See note 5.
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(unaudited)

(5)    Includes cash reserves for capital improvements associated with renovations at the hotel leased by our consolidated subsidiary, Marietta Leasehold L.P.LP, (“Marietta”), which holds the leasehold rights to a single hotel and convention center property in Marietta, Georgia. The liability related to the restricted cash balance for the hotel’s renovations are included in “accounts payable and accrued expenses.”
(6)    Restricted cash is held in escrow in accordance with the Marietta lease agreement. The cash held in escrow is funded from hotel cash flows and can only be used for repairs and maintenance or capital improvements at the property.
Accounts Receivable—Accounts receivable consists primarily of receivables from customers of audio visual services. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments for services. The allowance is recorded based on management’s judgment regarding our ability to collect as well as the age of the receivables. Accounts receivable are written off when they are deemed uncollectible. As of March 31, 2022 and December 31, 2021, accounts receivable also includes a note receivable due to Remington of approximately $1.5 million and $2.9 million, respectively.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Property and Equipment, net—Property and equipment, including assets acquired under finance leases, is depreciated using the straight-line method over estimated useful lives or lease terms if shorter. We record property and equipment at cost. As of June 30, 2021March 31, 2022 and December 31, 2020,2021, property and equipment, net of accumulated depreciation, included assets related to our consolidated subsidiary Marietta’s finance lease of $42.2$41.3 million and $42.8$41.6 million, ERFP assetsenhanced return funding program (“ERFP”) furniture fixture & equipment (“FF&E”) of $14.0$11.6 million and $18.3$12.4 million, audio visual equipment at JSAVINSPIRE of $9.1$6.5 million and $11.6$7.0 million and marine vessels at RED Hospitality & Leisure, LLC (“RED”) of $12.1$12.8 million and $9.9$12.8 million, respectively.
Other Liabilities—As of June 30, 2021March 31, 2022 and December 31, 2020,2021, other liabilities included reserves in the amount of $26.7$27.4 million and $26.3$24.6 million, respectively, related primarily to Ashford Trust and Braemar properties’ insurance claims and related fees. The liability for casualty insurance claims and related fees is established based upon an analysis of historical data and actuarial estimates. We record the related funds received from Ashford Trust and Braemar in “restricted cash” in our condensed consolidated balance sheets. As of June 30, 2021March 31, 2022 and December 31, 2020,2021, other liabilities also included $1.0$1.3 million and $1.5 million, respectively, ofrelating to reserves for Remington health insurance claims, and reserves of $0 and $2.1 million, respectively, for the fair value of contingent consideration due to the sellers of BAV.claims.
Revenue Recognition—See note 3.
Income Taxes—We are a taxable corporation for federal and state income tax purposes. Income tax expense includes U.S. federal and state income taxes, Mexico and Dominican Republic income taxes and U.S. Virgin Islands taxes. In accordance with authoritative accounting guidance, we account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between our consolidated financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized.
The “Income Taxes” topic of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our portfolio companies file income tax returns in the U.S. federal jurisdiction and various states and cities, beginning in 2017, in Mexico and the Dominican Republic and, beginning in 2018, in the U.S. Virgin Islands. Tax years 2017 through 20202021 remain subject to potential examination by certain federal and state taxing authorities.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law and includes certain income tax provisions relevant to theour business. The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted, which is the period ended March 31, 2020. The CARES Act did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2020. The Company filed a claim to carryback the 2018 tax net operating loss to a prior year as provided for by the CARES Act. The Company received the carryback amount of $1.0 million in March of 2021.
On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and extends several COVID-19 tax related measures passed as part of the CARES Act. Among these is the extension of the deferral period of the remittance of Social Security taxes. The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted, which is the period ended December 31, 2020. The Company hadhas deferred $2.5$1.3 million of Social Security taxes within “accounts payable and accrued expenses” in our consolidated balance sheetsheets as of March 31, 2022 and December 31, 20202021 related to the Consolidated Appropriations Act, 2021.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Recently Issued Accounting Standards—In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 sets forth an “expected credit loss” impairment model to replace the current “incurred loss” method of recognizing credit losses. The standard requires measurement and recognition of expected credit losses for most financial assets held. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) (“ASU 2019-10”). ASU 2019-10 revised the mandatory adoption date for public business entities that meet the definition of a smaller reporting company to be effective for fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating the impact ASU 2016-13 and ASU 2019-10 may have on our condensed consolidated financial statements and related disclosures.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021 is effective immediately for all entities. We are currently evaluating the impact ASU 2020-04 and 2021-01 may have on our condensed consolidated financial statements and related disclosures.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We are currently evaluating the impact that ASU 2020-06 may have on our condensed consolidated financial statements and related disclosures.
3. Revenues
Revenue Recognition—Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We determine revenue recognition through the following steps:
Identification of the contract, or contracts, with a customer
Identification of the performance obligations in the contract
Determination of the transaction price
Allocation of the transaction price to the performance obligations in the contract
Recognition of revenue when, or as, we satisfy a performance obligation
In determining the transaction price, we include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The following provides detailed information on the recognition of our revenues from contracts with customers:
Advisory Services Fees Revenue
Advisory services fees revenue is reported within our REIT Advisory segment and primarily consists of advisory fees that are recognized when services have been rendered. Advisory fees consist of base fees and incentive fees. For Ashford Trust, prior tofrom January 1, 2021 through January 14, 2021, the base fee was paid monthly and ranged from 0.50% to 0.70% per annum of the total market capitalization ranging from greater than $10.0 billion to less than $6.0 billion plus the Net Asset Fee Adjustment as(as defined in the Amended and Restated Advisory Agreement with Ashford Trust, dated June 10, 2015, as amended), subject to certain minimums. On January 14, 2021, the Company entered into the Second Amended and Restated Advisory Agreement with Ashford Trust. The Second Amended and Restated Advisory Agreement amends and restates the terms of the Amended and Restated Advisory Agreement dated June 10, 2015, as amended by the Enhanced Return Funding Program Agreement and Amendment No. 1 to the Amended and Restated Advisory Agreement, dated as of June 26, 2018 to, among other items,things, fix the percentage used to calculate the base fee thereunder at 0.70% per annum.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

On January 15, 2021, Ashford Trust and Ashford Trust OP entered into a Credit Agreement (as amended, the “Credit Agreement”) with certain funds and accounts managed by Oaktree Capital Management L.P. (“Oaktree”). In connection with the transactions contemplated by the Credit Agreement, on January 15, 2021, the Company and certain of its affiliates entered into the SNDAa Subordination and Non-Disturbance Agreement (the “SNDA”) with Ashford Trust, Ashford Trust OP, Ashford Trust TRS and Oaktree pursuant to which the Company agreed to subordinate to the prior repayment in full of all obligations under the Credit Agreement, (1) prior to the later of (i) the second anniversary of the Credit Agreement and (ii) the date accrued interest “in kind” is paid in full, advisory fees (other than reimbursable expenses) in excess of 80% of such fees paid during the Advisoryfiscal year ended December 31, 2019 (the “Advisory Fee Cap,Cap”); (2) any termination fee or liquidated damages amounts under the advisory agreement,Second Amended and Restated Advisory Agreement, or any amount owed under any enhanced return funding program in connection with the termination of the advisory agreementSecond Amended and Restated Advisory Agreement or sale or foreclosure of assets financed thereunder,thereunder; and (3) any payments to Lismore Capital II LLC, an indirect consolidated subsidiary of the Company (“Lismore”), in connection with the transactions contemplated by the Credit Agreement.
UnderPrior to the fourth quarter of 2021, advisory fees under the Second Amended and Restated Advisory Agreement advisory fees earned each year from Ashford Trust in 2021 in excess of the Advisory Fee Cap arewere a form of variable consideration that iswere constrained and deferred until such fees arewere probable of not being subject to significant reversal. The Advisory Fee Cap is approximately $29.0 million each year as stated in the Credit Agreement. As a result, until the later of (i) the second anniversary of the Credit Agreement and (ii) the date accrued interest “in kind” is paid in full to Oaktree by Ashford Trust, base advisory fee revenue was recognized each month is equal to the lesser of (1) base fees calculated as described above based on Ashford Trust’s market capitalization or (2) 1/12th of $29.0 million. Any cash received from
On October 12, 2021, Ashford Trust for base advisoryand Ashford Trust OP entered into Amendment No. 1 to the Credit Agreement (“Amendment No. 1”) with Oaktree. Amendment No. 1, subject to the conditions set forth therein, among other things, suspended Ashford Trust’s obligation to subordinate fees due under the Second Amended and Restated Advisory Agreement if at any point there is no accrued interest outstanding or any accrued dividends on any of Ashford Trust’s preferred stock and Ashford Trust has sufficient unrestricted cash to repay in excessfull all outstanding loans under the Credit Agreement. In the fourth quarter of revenue recognized is deferred until no longer constrained. Any portion of deferred2021, Ashford Trust met the requirements to suspend its obligation to subordinate fees due under the Second Amended and Restated Advisory Agreement and paid the Company $7.2 million for advisory fees that becomes unconstrained duringhad been deferred in 2021 as a result of the sameAdvisory Fee Cap. The $7.2 million payment was recorded as revenue in “advisory services fees” in the fourth quarter of 2021 in our consolidated statements of operations for the year ended December 31, 2021. Based upon Ashford Trust’s ability to meet the requirements stated in Amendment No. 1, the Company has concluded that base fees from our Second Amended and Restated Advisory Agreement with Ashford Trust which exceed the Advisory Fee Cap are no longer probable of being subject to significant reversal and will be recorded within “advisory services fees” in our condensed consolidated statements of operations based upon the fees were earned will be recognized on a straight line basis over the remainder of the year with a cumulative catch-up in the interim period in which the constraint is resolved. Any portion of deferred advisory fees that becomes unconstrained in a year subsequent to the year in which the fees were earned will be recognized in the interim period in which the constraint is resolved.calculated from Ashford Trust’s market capitalization as described above.
For Braemar, the base fee is paid monthly and is fixed at 0.70% of Braemar’s total market capitalization plus the Net Asset Fee Adjustment, as defined in the advisory agreement,our Fifth Amended and Restated Advisory Agreement with Braemar, as amended, subject to certain minimums.
Incentive advisory fees are measured annually in each year that Ashford Trust’s and/or Braemar’s annual total stockholder return exceeds the average annual total stockholder return for each company’s respective peer group, subject to the Fixed Charge Coverage Ratio Condition (the “FCCR Condition”), as defined in the respective advisory agreements. Incentive advisory fees are paid over a three-year period and each payment is subject to the FCCR Condition, which relates to the ratio of adjusted EBITDA to fixed charges for Ashford Trust or Braemar, as applicable. Incentive advisory fees are a form of variable consideration and therefore must be (i) deferred until such fees are probable of not being subject to significant reversal, and (ii) tied to a performance obligation in the contract with the customer so that revenue recognition depicts the transfer of the related advisory services to the customer. Accordingly, the Company does not record incentive advisory fee revenue in interim periods prior to the fourth quarter of the year in which the incentive fee is measured. The first year installment of incentive advisory fees will generally be recognized only upon measurement in the fourth quarter of the first year of the three year period. The second and third year installments of incentive advisory fees are recognized as revenue on a pro-rata basis each quarter subject to meeting the FCCR Condition. Ashford Trust and Braemar’s annual total stockholder return did not meet the relevant incentive fee thresholds during the 2021, 2020 and 2019 measurement periods.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Hotel Management Fees Revenue
Hotel management fees revenue is reported within our Remington segment and primarily consists of base management fees and incentive management fees. Base management fees and incentive management fees are recognized when services have been rendered. For hotels owned by Ashford Trust and Braemar, Remington receives base management fees of 3% of gross hotel revenue for managing the hotel employees and daily operations of the hotels, pursuant to the amended and restatedRemington’s hotel management agreements, subject to a specified floor (which is subject to increase annually based on increases in the consumer price index). Remington additionally receives an incentive management fee for hotels owned by Ashford Trust and Braemar equal to the lesser of 1% of each hotel’s annual gross revenue or the amount by which the respective hotel’s gross operating profit exceeds the hotel’s budgeted gross operating profit. The base management fees and incentive management fees that Remington receives for third-party owned hotels vary by property.
Design and Construction Fees Revenue
Design and construction fees revenue (formerly called project management revenue) primarily consists of revenue generated withinby our subsidiary, Premier segment by providingProject Management LLC (“Premier”). Premier provides design and construction management services, capital improvements, refurbishment, project management, and other services such as purchasing, interior design, architectural services and freight management at properties. Premier receives fees for these services and recognizes revenue over time as services are provided to the customer.
Audio Visual Revenue
Audio visual revenue primarily consists of revenue generated within our JSAVINSPIRE segment by providing event technology services such as audio visual services, audio visual equipment rental, staging and meeting services and event-related communication systems as well as related technical support, to our customers in various venues including hotels and convention centers. Revenue is recognized in the period in which services are provided pursuant to the terms of the contractual arrangements with our customers. We also evaluate whether it is appropriate to present: (i) the gross amount that our customers pay for our services as revenue, and the related commissions paid to the venue as cost of revenue; or (ii) the net amount (gross revenue less the related commissions paid to the venue) as revenue. We are responsible for the delivery of the services, including providing the necessary labor and equipment to perform the services. We are generally subject to inventory risk, have latitude in establishing prices and selecting suppliers and, while in many cases the venue bills the end customer on our behalf, we bear the risk of collection from the customer. The venues’ commissions are not dependent on collections. As a result, our revenue is primarily reported on a gross basis. Cost of revenues for audio visual principally includes commissions paid to venues, direct labor costs, the cost of equipment sub-rentals, depreciation of equipment, amortization of signing bonuses, as well as other costs such as supplies, freight, travel and other overhead from our venue and customer facing operations and any losses on equipment disposal.
Other Revenue
Other revenue includes revenue provided by certain of our hospitality products and service businesses, including RED. RED’s revenue is primarily generated through the provision of watersports activities and ferry and excursion services. The revenue is recognized as services are provided based on contractual customer rates. Debt placement and related fees include revenue earned from providing placement, modifications, forbearances or refinancing of certain mortgage debt by Lismore. For certain agreements, the fees are recognized based on a stated percentage of the loan amount when services have been rendered and the subject loan is closed. For other agreements, deferred income related to the various Lismore fees will be recognized over the term of the agreement on a straight line basis as the service is rendered, only to the extent it is probable that a significant reversal of revenue will not occur. Constraints relating to variable consideration are resolved generally upon the closing of a transaction or financing event and the resulting change in the transaction price will be adjusted on a cumulative catch-up basis in the period a transaction or financing event closes.
Cost Reimbursement Revenue
Cost reimbursement revenue is recognized in the period we incur the related reimbursable costs. Under our advisory agreements, we are entitled to be reimbursed for certain costs we incur on behalf of Ashford Trust and Braemar, with no added mark-up. These costs primarily consist of expenses related to Ashford Securities (as defined below), overhead, internal audit, risk management advisory services and asset management services, including compensation, benefits and travel expense reimbursements. We record cost reimbursement revenue for equity grants of Ashford Trust and Braemar common stock and
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LTIP units awarded to our officers and employees in connection with providing advisory services equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Prior to December 31, 2020, we additionally were reimbursed by Ashford Trust for expenses incurred by Ashford Investment Management, LLC (“AIM”) for managing Ashford Trust’s excess
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cash under the Investment Management Agreement. AIM was not compensated for its services but was reimbursed for all costs and expenses. Effective December 31, 2020, the Investment Management Agreement with Ashford Trust was terminated.
Under our project management agreements and hotel management agreements, we are entitled to be reimbursed for certain costs we incur on behalf of Ashford Trust, Braemar and other hotel owners, with no added mark-up. Project managementDesign and construction costs primarily consist of costs for accounting, overhead and project manager services. Hotel management costs primarily consist of the properties’ payroll, payroll taxes and benefits related expenses at managed properties where we are the employer of the employees at the properties as provided for in our contracts with Ashford Trust, Braemar and other hotel owners.
We recognize revenue within the “cost reimbursement revenue” in our condensed consolidated statements of operations when the amounts may be billed to Ashford Trust, Braemar and other hotel owners, and we recognize expenses within “reimbursed expenses” in our condensed consolidated statements of operations as they are incurred. This pattern of recognition results in temporary timing differences between the costs incurred for centralized software programs and the related reimbursements we receive from Ashford Trust and Braemar in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively.
Certain of our consolidated entities enter into contracts with customers that contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our consolidated entities’ overall pricing objectives taking into consideration market conditions and other factors, including the customer and the nature and value of the performance obligations within the applicable contracts.
Practical Expedients and Exemptions
We do not disclose the amount of variable consideration that we expect to recognize in future periods in the following circumstances:
(1) if we recognize the revenue based on the amount invoiced or services performed;
(2) if the consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation, and the terms of the consideration relate specifically to our efforts to transfer, or to a specific outcome from transferring the service.
Deferred Income and Contract Balances
Deferred income primarily consists of customer billings in advance of revenue being recognized from our advisory agreements and other hospitality products and services contracts. Generally, deferred income that will be recognized within the next twelve months is recorded as current deferred income and the remaining portion is recorded as noncurrent. The increasechange in the deferred income balance is primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by revenue recognized that was included in the deferred income balance at the beginning of the period.
The following tables summarize our consolidated deferred income activity (in thousands):
Deferred Income
20212020
Balance as of March 31$20,519 $18,250 
Increases to deferred income4,307 4,578 
Recognition of revenue (1)
(5,163)(2,591)
Balance as of June 30$19,663 $20,237 
________
(1)    Deferred income recognized in the three months ended June 30, 2021, includes (a) $527,000 of advisory revenue primarily related to our advisory agreements with Ashford Trust and Braemar, (b) $669,000 of audio visual revenue, (c) $2.3 million of other revenue related to the Ashford Trust Agreement with Lismore (see note 13) and (d) $1.7 million of “other services” revenue earned by our hospitality products and services companies, excluding Lismore. Deferred income recognized in the three months ended June 30, 2020, includes (a) $554,000 of advisory revenue primarily related to our advisory agreements with Ashford Trust and Braemar, (b) $219,000 of audio visual revenue, (c) $1.3 million of other revenue related to the Ashford Trust Agreement and the Braemar Agreement with Lismore and (d) $483,000 of “other services” revenue earned by our hospitality products and services companies, excluding Lismore.
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Deferred Income
20212020
Balance as of January 1$21,359 $13,280 
Increases to deferred income10,218 11,656 
Recognition of revenue (1)
(11,914)(4,699)
Balance as of June 30$19,663 $20,237 
The following tables summarize our consolidated deferred income activity (in thousands):
Deferred Income
20222021
Balance as of January 1$10,905 $21,359 
Increases to deferred income3,846 5,912 
Recognition of revenue (1)
(4,374)(6,752)
Balance as of March 31$10,377 $20,519 
________
(1)    Deferred income recognized in the sixthree months ended June 30, 2021,March 31, 2022, includes (a) $1.1 million$437,000 of advisory revenue primarily related to our advisory agreements with Ashford Trust and Braemar, (b) $1.2 million$218,000 of audio visual revenue, (c) $6.6$2.3 million of other revenue primarily related to the Ashford Trust AgreementTrust’s agreement with Lismore (see note 13)14), and (d) $3.1$1.4 million of “other services” revenue earned by our hospitality products and services companies, excluding Lismore. Deferred income recognized in the sixthree months ended June 30, 2020,March 31, 2021, includes (a) $1.1 million$535,000 of advisory revenue primarily related to our advisory agreements with Ashford Trust and Braemar, (b) $1.1 million$524,000 of audio visual revenue, (c) $1.3$4.3 million of other revenue related to the Ashford Trust AgreementTrust’s and the Braemar AgreementBraemar’s agreements with Lismore (see note 14) and (d) $1.1$1.4 million of “other services” revenue earned by our hospitality products and services companies, excluding Lismore.
We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was primarily related to (i) reimbursed software costs that will be recognized evenly over the period the software is used to provide advisory services to Ashford Trust and Braemar, (ii) a $5.0 million cash payment received in June 2017 from Braemar in connection with our Fourth Amended and Restated Braemar Advisory Agreement with Braemar, which is recognized evenly over the 10-year initial contract period that we are providing Braemar advisory services, and (iii) debt placement and related fees that will be recognized over the term of the agreement on a straight line basis as the service iswas rendered, only to the extent it iswas probable that a significant reversal of revenue willwould not occur. Constraints relating to variable consideration arewere resolved generally upon the closing of a transaction or financing event and the resulting change in the transaction price will bewas adjusted on a cumulative catch-up basis in the period a transaction or financing event closes.closed. See note 13.14. Incentive advisory fees that are contingent upon future market performance are excluded as the fees are considered variable and not included in the transaction price at June 30, 2021.March 31, 2022.
The timing of revenue recognition may differ from the timing of payment by customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred income until the performance obligations are satisfied. We had receivables related to revenues from contracts with customers of $5.3$12.2 million and $3.5$7.6 million included in “accounts receivable, net” primarily related to our hospitality products and services segment, $751,000$3.6 million and $13.2$2.6 million in “due from Ashford Trust”, and $449,000$2.9 million and $2.1$1.1 million included in “due from Braemar” related to REIT advisory services at June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively. We had no significant impairments related to these receivables during the three and six months ended June 30, 2021March 31, 2022 and 2020.2021. See note 13.14.
Disaggregated Revenue
Our revenues were comprised of the following for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, respectively (in thousands):
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Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
Advisory services revenue:
Base advisory fee
$9,932 $11,130 $19,731 $22,667 
Incentive advisory fee169 339 
Advisory services fees:Advisory services fees:
Base advisory fees
Base advisory fees
$11,674 $9,799 
Other advisory revenueOther advisory revenue130 131 258 260 Other advisory revenue128 128 
Total advisory services revenue10,062 11,430 19,989 23,266 
Total advisory services fees revenueTotal advisory services fees revenue11,802 9,927 
Hotel management:
Base fee5,308 3,691 9,165 9,815 
Incentive fee1,207 1,822 
Total hotel management revenue6,515 3,691 10,987 9,815 
Hotel management fees:Hotel management fees:
Base feesBase fees6,174 3,857 
Incentive feesIncentive fees1,004 615 
Total hotel management fees revenueTotal hotel management fees revenue7,178 4,472 
Design and construction revenue1,867 2,052 3,409 5,990 
Design and construction fees revenueDesign and construction fees revenue4,524 1,542 
Audio visual revenueAudio visual revenue9,451 970 13,062 30,644 Audio visual revenue24,965 3,611 
Other revenue:Other revenue:Other revenue:
Watersports, ferry and excursion services (1)
Watersports, ferry and excursion services (1)
6,861 904 11,421 4,221 
Watersports, ferry and excursion services (1)
6,045 4,561 
Debt placement and related fees (2)
Debt placement and related fees (2)
2,290 1,335 6,578 1,463 
Debt placement and related fees (2)
2,483 4,288 
Claims management servicesClaims management services16 72 33 129 Claims management services15 17 
Other services (3)
Other services (3)
2,999 1,026 4,763 4,215 
Other services (3)
2,896 1,763 
Total other revenueTotal other revenue12,166 3,337 22,795 10,028 Total other revenue11,439 10,629 
Cost reimbursement revenueCost reimbursement revenue48,279 24,118 82,031 99,697 Cost reimbursement revenue74,051 32,187 
Total revenuesTotal revenues$88,340 $45,598 $152,273 $179,440 Total revenues$133,959 $62,368 
REVENUES BY SEGMENT (4)
REVENUES BY SEGMENT (4)
REVENUES BY SEGMENT (4)
REIT advisoryREIT advisory$16,745 $15,550 $31,813 $36,507 REIT advisory$19,393 $15,068 
RemingtonRemington47,011 22,459 79,385 92,915 Remington70,507 30,809 
PremierPremier2,430 2,744 4,374 7,896 Premier6,226 1,944 
JSAV9,451 970 13,062 30,644 
INSPIREINSPIRE25,022 3,611 
REDRED6,045 4,561 
OpenKeyOpenKey477 292 931 814 OpenKey382 454 
Corporate and otherCorporate and other12,226 3,583 22,708 10,664 Corporate and other6,384 5,921 
Total revenuesTotal revenues$88,340 $45,598 $152,273 $179,440 Total revenues$133,959 $62,368 
________
(1)    Watersports, ferry and excursion services arerevenue is earned by RED, which includes the entity that conducts RED’s legacy U.S. Virgin Islands operations, the Turks and Caicos Islands operations and Sebago, a provider of watersports activities and excursion services based in Key West, Florida.
(2)    Debt placement and related fees are earned by Lismore for providing placement, modification, forbearance or refinancing services to Ashford Trust and Braemar.
(3)     Other services revenue relates primarily to other hotel services provided by our consolidated subsidiaries OpenKey and Pure Wellness, to Ashford Trust, Braemar and third parties, and the revenue of Marietta, which holds the leasehold rights to a single hotel and convention center property in Marietta, Georgia.
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(4)    We have fivesix reportable segments: REIT Advisory, Remington, Premier, JSAVINSPIRE, RED and OpenKey. We combine the operating results of RED, Marietta and Pure Wellness Lismore and REA Holdings into an “all other” category, which we refer to as “Corporate and Other.” See note 1516 for discussion of segment reporting.
Geographic Information
Our REIT Advisory, Remington, Premier, OpenKey, and Corporate and Other reporting segments conduct their business primarily within the United States. Our JSAVINSPIRE reporting segment conducts business in the United States, Mexico, and the Dominican Republic. RED conducts business in the United States and the Turks and Caicos Islands, a territory of the United Kingdom.
The following table presents revenue from our JSAV reporting segmentINSPIRE and RED geographically for the three and six months ended June 30,March 31, 2022 and 2021, and 2020, respectively (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
United States$7,837 $887 $10,752 $22,645 
Mexico1,260 38 1,671 6,509 
Dominican Republic354 45 639 1,490 
$9,451 $970 $13,062 $30,644 

Three Months Ended March 31,
20222021
INSPIRE:
United States$19,070 $2,915 
Mexico4,618 411 
Dominican Republic1,334 285 
Total audio visual revenue$25,022 $3,611 
RED:
United States$5,265 $4,561 
United Kingdom (Turks and Caicos Islands)780 — 
Total watersports, ferry and excursion services$6,045 $4,561 
4. Goodwill and Intangible Assets, net
ImpairmentThe carrying amount of Goodwill and Intangible Assets—During the first quarter of 2020, as a result of our reduced cash flow projections and the significant decline in our market capitalization as a result of the COVID-19 pandemic, we recognized goodwill impairment charges of $170.6 million, of which $121.0 million related to our Remington segment, and $49.5 million related to our Premier segment. We engaged a third-party valuation expert to assist us in performing an interim quantitative assessment to determine whether it was more likely than not that the carrying value of goodwill in our reporting units was impaired as of March 31, 2020. The fair value estimates for all reporting units were based on a blended analysis of the present value of future cash flows and the market value approach. See note 6.2022 is as follows (in thousands):
RemingtonRED
Corporate and Other (1)
Consolidated
Balance at March 31, 2022$54,605 $1,235 $782 $56,622 
________
Based on our quantitative assessment as(1) Corporate and Other includes the goodwill from the Company’s acquisition of March 31, 2020, we determined that the fair values of Remington and Premier were less than the carrying values of these reporting units. The carrying value of Remington was reduced by a $5.5 million impairment of the Remington trademarks prior to assessing goodwill for impairment. The excess carrying value of Remington and Premier over the estimate of fair value was recorded in “impairment” on our condensed consolidated statements of operations. NaN impairment charges or any other adjustments related to goodwill were recorded for the three and six months ended June 30, 2021 or the Pure Wellness.three months ended June 30, 2020. As of June 30, 2021, our Remington segment had $54.6 million of goodwill remaining and our Premier and JSAV segments had 0 goodwill remaining.
Intangible Assets
During the first quarter of 2020, we engaged a third-party valuation expert to assist in determining the fair value of our indefinite-lived trademarks. We recognized intangible asset impairment charges of $7.6 million related to trademarks within our Remington and JSAV segments which resulted from changes in estimated future revenues based on a valuation using the relief-from-royalty method, which includes unobservable inputs including royalty rates and projected revenues. NaN impairment charges related to intangible assets were recorded for the three and six months ended June 30, 2021 or the three months ended June 30, 2020.
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(unaudited)

The carrying amount of goodwill as of June 30, 2021 is as follows (in thousands):
Remington
Corporate and Other (1)
Consolidated
Balance at June 30, 2021$54,605 $2,017 $56,622 
________
(1) Corporate and Other includes the goodwill acquired from RED’s acquisition of Sebago and the Company’s acquisition of Pure Wellness.
Intangible assets, net as of June 30, 2021March 31, 2022 and December 31, 2020,2021, are as follows (in thousands):
June 30, 2021December 31, 2020March 31, 2022December 31, 2021
Gross Carrying AmountImpairmentAccumulated AmortizationNet Carrying AmountGross Carrying AmountImpairmentAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Definite-lived intangible assets:Definite-lived intangible assets:Definite-lived intangible assets:
Remington management contractsRemington management contracts$107,600 $— $(22,259)$85,341 $107,600 $— $(16,237)$91,363 Remington management contracts$107,600 $(30,953)$76,647 $107,600 $(28,284)$79,316 
Premier management contractsPremier management contracts194,000 — (35,524)158,476 194,000 — (29,428)164,572 Premier management contracts194,000 (44,568)149,432 194,000 (41,619)152,381 
JSAV customer relationships9,319 — (3,850)5,469 9,319 — (3,291)6,028 
INSPIRE customer relationshipsINSPIRE customer relationships9,319 (4,689)4,630 9,319 (4,409)4,910 
RED boat slip rightsRED boat slip rights3,100 — (303)2,797 3,100 — (225)2,875 RED boat slip rights3,100 (419)2,681 3,100 (380)2,720 
Pure Wellness customer relationshipsPure Wellness customer relationships175 — (149)26 175 — (131)44 Pure Wellness customer relationships175 (175)— 175 (166)
Other— 47 (37)(10)
$314,194 $— $(62,085)$252,109 $314,241 $(37)$(49,322)$264,882 $314,194 $(80,804)$233,390 $314,194 $(74,858)$239,336 
Gross Carrying AmountImpairmentNet Carrying AmountGross Carrying AmountImpairmentNet Carrying AmountGross Carrying AmountGross Carrying Amount
Indefinite-lived intangible assets:Indefinite-lived intangible assets:Indefinite-lived intangible assets:
Remington trademarksRemington trademarks$4,900 $— $4,900 $10,400 $(5,500)$4,900 Remington trademarks$4,900 $4,900 
JSAV trademarks1,160 — 1,160 3,641 (2,481)1,160 
RED trademarksRED trademarks490 — 490 490 — 490 RED trademarks490 490 
$6,550 $— $6,550 $14,531 $(7,981)$6,550 $5,390 $5,390 
Amortization expense for definite-lived intangible assets was $6.4$5.9 million and $12.8$6.4 million for the three and six months ended June 30,March 31, 2022 and 2021, respectively. Amortization expense for definite-lived intangible assets was $7.0 million and $13.8 million for the three and six months ended June 30, 2020, respectively. The useful lives of our customer relationships range from 5 to 15 years. Our Remington management contracts, Premier management contracts and boat slip rights intangible assets were assigned useful lives of 22, 30, and 20 years, respectively.
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(unaudited)

5. Notes Payable, net
Notes payable—Notes payable, net consisted of the following (in thousands):
IndebtednessBorrowerMaturityInterest RateJune 30, 2021December 31, 2020
Term loan (7)
Ashford Inc.March 19, 2024
Base Rate (1) + 2.00% to2.25% or LIBOR (2) (3) +3.00% to 3.25%
$28,688 $33,688 
Note payable (10)
Ashford Inc.February 29, 20284.00%1,867 
Term loan (5) (8)
JSAVJanuary 1, 2024
Prime Rate (4) + 1.25%
20,000 20,000 
Revolving credit facility (5) (8)
JSAVJanuary 1, 2024
Prime Rate (4) + 1.25%
486 1,106 
Revolving credit facility (5) (11)
Pure WellnessOn demand
Prime Rate (4) + 1.00%
100 100 
Term loan (6) (12)
REDOctober 5, 2025
Prime Rate (4) + 1.75%
520 571 
Revolving credit facility (6) (13)
REDAugust 5, 2021
Prime Rate (4) + 1.75%
247 247 
Draw term loan (6) (14)
REDJune 5, 2027
Prime Rate (4) + 1.75%
1,328 1,375 
Term loan (6) (15)
REDFebruary 1, 2029
Prime Rate (4) + 2.00%
1,521 1,584 
Term loan (5) (16)
REDJuly 17, 2029
6.00% (14)
1,663 1,663 
Term loan (5) (17)
REDJuly 17, 20236.50%735 859 
Draw term loan (5) (18)
REDAugust 5, 2028
Prime Rate (4) + 2.00%
1,900 1,575 
Notes payable59,055 62,768 
Capitalized default interest, net (9)
359 427 
Deferred loan costs, net(410)(499)
Notes payable including capitalized default interest and deferred loan costs, net59,004 62,696 
Less current portion (19)
(24,836)(5,347)
Notes payable, net - non-current$34,168 $57,349 
IndebtednessBorrowerMaturityInterest RateMarch 31, 2022December 31, 2021
Term loan (9)
Ashford Inc.March 19, 2024
Base Rate (1) + 2.00% to 2.25% or LIBOR (2) (3) +3.00% to 3.25%
$26,589 $27,271 
Note payable (12)
Ashford Inc.February 29, 20284.00%1,684 1,746 
Term loan (5) (7) (10)
INSPIREJanuary 1, 2024
Prime Rate (4) + 2.00%
19,400 20,000 
Revolving credit facility (5) (7) (10)
INSPIREJanuary 1, 2024
Prime Rate (4) + 2.00%
1,304 1,869 
Revolving credit facility (5) (13)
Pure WellnessOn demand
Prime Rate (4) + 1.00%
50 100 
Revolving credit facility (6) (8) (14)
REDAugust 5, 2022
Prime Rate (4) + 1.75%
— — 
Term loan (5) (8) (15)
REDJuly 17, 2029
6.00% (15)
1,630 1,641 
Term loan (5) (8)
REDJuly 17, 20236.50%541 607 
Term loan (5) (8) (16)
REDAugust 5, 2029
Prime Rate (4) + 2.00%
900 888 
Term loan (5) (8)
REDAugust 5, 2029
Prime Rate (4) + 2.00%
2,100 2,143 
Term loan (6) (8)
REDAugust 5, 2029
Prime Rate (4) + 1.75%
3,266 3,357 
Draw term loan (5) (8) (17)
REDMarch 17, 2032
5.00% (17)
26 — 
Draw term loan (5) (8) (17)
REDMarch 17, 2032
5.00% (17)
22 — 
Total notes payable57,512 59,622 
Capitalized default interest, net (11)
255 290 
Deferred loan costs, net(505)(518)
Notes payable including capitalized default interest and deferred loan costs, net57,262 59,394 
Less current portion(6,943)(6,725)
Total notes payable, net - non-current$50,319 $52,669 
__________________
(1)     Base Rate, as defined in the term loan agreement, is the greater of (i) the prime ratePrime Rate set by Bank of America, or (ii) the federal funds rate plus 0.50%, or (iii) LIBOR plus 1.00%.
(2)     Ashford Inc. may elect a 1, 2, 3 or 6 month LIBOR period for each borrowing.
(3)     The one-month LIBOR rate was 0.45% and 0.10% and 0.14% at June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
(4)     Prime Rate was 3.25%3.50% and 3.25% at June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
(5)     Creditors do not have recourse to Ashford Inc.
(6)    Creditors have recourse to Ashford Inc.
(7)INSPIRE’s revolving credit facility is collateralized primarily by INSPIRE’s receivables, including accounts receivable, due from Ashford Trust and due from Braemar, with a total carrying value of $10.0 million and $5.0 million as of March 31, 2022 and December 31, 2021, respectively. INSPIRE’s term loan is collateralized by substantially all of the assets of INSPIRE.
(8)    RED’s loans are collateralized primarily by RED’s marine vessels and associated leases with a carrying value of $13.3 million and $12.5 million as of March 31, 2022 and December 31, 2021, respectively.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(9)    On March 29, 2021, the Company amended its Term Loan Agreement (the “Term Loan Agreement”) with Bank of America, N.A. (as so amended, the “Seventh Amendment”). The Seventh Amendment (a) increases the required amortization rate from 1.25% to 2.50% each quarter commencing July 1, 2021, (b) requires the Company to maintain a minimum liquidity of $15.0 million at all times, including pro forma for preferred dividends, and (c) restricts dividends and stock repurchases, other than preferred dividends, so long as there is no default under the Term Loan Agreement. Principal payment amounts are subject to maintaining a fixed charge coverage ratio below specified thresholds, which if not met, increase the principal payment due each quarter from 2.50% to 5.0% of the outstanding principal balance. Upon signing the Seventh Amendment, the Company made a $5.0 million prepayment to Bank of America, N.A. as consideration for their execution and delivery of the Seventh Amendment. The Company is also subject to certain financial covenants. See covenant compliance discussion below. The Term Loan Agreement was repaid April 1, 2022. See our discussion in note 17.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(8)(10)    On December 31, 2020, JSAVINSPIRE amended its credit agreement dated as of November 1, 2017 (the “JSAV“INSPIRE Amendment”). As a result of the JSAV amendment, the credit agreement revised theThe maximum borrowing capacity ofunder the INSPIRE Amendment for the revolving credit facility from $3.5 million tois $3.0 million. The JSAV amendment additionally replaced JSAV’s previous term loan, draw term loan and equipment loans with a $20.0 million senior secured term loan. The JSAV amendment also extendedAs of March 31, 2022, the maturity date of JSAV’s obligationsamount unused under theINSPIRE’s revolving credit facility and term loanwas $1.7 million. The INSPIRE Amendment provides INSPIRE with an option to January 1, 2024, with the potential forelect a further one-year extension at JSAV’s option subject to satisfaction of certain conditions, including a payment of a one-time, permanent principal reduction of the term loan of not less than $2.5 million and other fees as of the date of JSAV’sINSPIRE’s election to extend. Pursuant to the JSAVINSPIRE Amendment, JSAV’sINSPIRE’s obligations to comply with certain financial and other covenants waswere waived until March 31, 2023.
As a result of the JSAV Amendment, amounts Amounts borrowed under the revolving credit facility and the term loan will bear interest at the prime ratePrime Rate plus a margin of 1.25%, with the margin increasing by 0.25% beginning on July 1, 2021 and at the beginning of each successive quarter thereafter. JSAV will pay a commitment fee of 1.5% of the term loan in installments, with the possibility that the last $100,000 installment, scheduled to be paid on December 31, 2022, be forgiven if JSAV’s obligations under the JSAV Amendment have been satisfied in full in advance of that date. The JSAVINSPIRE Amendment suspended payments of principal under the term loan through December 2021. Commencing January 1, 2022, JSAV will beINSPIRE is required to make monthly payments under the term loan of $200,000 through June 2022, $250,000 through December 2022 and $300,000 thereafter. In connection with the credit agreement dated asThe INSPIRE amendment requires INSPIRE to maintain an operating reserve account of November 1, 2017, JSAV entered into$1.0 million. INSPIRE holds an interest rate cap with an initial notional amount totaling $5.0 million and a strike rate of 4.0%. The fair value of the interest rate cap at June 30, 2021March 31, 2022 and December 31, 2020,2021 was not material.
(9)(11)    On December 31, 2020, the Company determined the JSAVThe INSPIRE Amendment was considered a troubled debt restructuring due to terms that allowed for deferred interest and the forgiveness of default interest and late charges. NaN gain or loss was recognized during the year ended December 31, 2020, as the carrying amount of the original loan was not greater than the undiscounted cash flows of the modified loans. Additionally, asAs a result of the troubled debt restructuring, $427,000 of accrued default interest and late charges were capitalized into the JSAVINSPIRE term loan balance at December 31, 2020,upon commencement and are amortized over the remaining term of the loan using the effective interest method.
(10)(12)    On March 9, 2021, we acquired all of the redeemable noncontrolling interests in OpenKey for a purchase price of approximately $1.9 million. Pursuant to the agreement, the purchase price will be paid to the seller in equal monthly installments over a seven year term and will include interest in arrears at an annualized rate of 4.0%. The purchase price is payable in Ashford Inc. common stock, including a 10% premium or cash at our sole discretion.
(11)    On April 6, 2017, Pure Wellness entered into a $100,000 line of credit. On July 20, 2020, Pure Wellness increased the line of credit to $250,000.
(12)    On March 23, 2018, RED entered into a term loan of $750,000.
(13)    On August 5, 2020, RED renewed its $250,000As of March 31, 2022, the amount unused under Pure Wellness’s revolving credit facility.facility was $200,000.
(14)    On February 27, 2019, RED entered into a draw term loan inAs of March 31, 2022, the amount of $1.4 million.unused under RED’s revolving credit facility was $250,000.
(15)    On August 31, 2018, RED entered into a term loan of $1.8 million.
(16)    On July 18, 2019, in connection with the acquisition of Sebago, RED entered into a term loan of $1.7 million. The interest rate for the term loan is 6.0% for the first five years. After five years, the interest rate is equal to the Prime Rate plus 0.5% with a floor of 6.0%.
(16)    RED is not required to make any payments of principal until May 5, 2022.
(17)    On July 18, 2019,March 17, 2022, in connection with the acquisitionpurchase and construction of Sebago,marine vessels, RED entered into a2 closed-end non-revolving line of credit loans of $1.5 million each which convert to term loans once fully drawn. Each loan bears an interest rate of $1.1 million.
(18)    On March 24, 2020, RED entered into a draw term loan5.0% for the first three years. After three years, the interest rate is equal to the Prime Rate plus 0.5% with a maximum aggregate principalfloor of 5.0%. As of March 31, 2022, the amount unused under RED’s non-revolving line of $1.9 million. The draw term loan requires payment of interest only until March 5, 2021.
(19)    The current portion of “notes payable, net” as of June 30, 2021 primarily consists of JSAV’s outstanding term loancredit loans were $1.5 million and revolving credit facility which was classified as current. As a result of the impact of COVID-19, JSAV is reliant on Ashford Inc. to make contributions to cover JSAV’s projected operating shortfall and amortization and interest payments on its outstanding debt within one year of the issuance of the financial statements. All such contributions are subject to the discretion of Ashford Inc. As such, all of JSAV’s outstanding debt balance has been classified as a current liability within our condensed consolidated balance sheet as of June 30, 2021. The current portion of “notes payable, net” also includes $2.8$1.5 million, related to our Term Loan with Bank of America, N.A.respectively.
We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. Violations of certain debt covenants may result in the inability of our portfolio companies to borrow unused amounts under their respective lines of credit. As of March 31, 2022, our Term Loan Agreement was in compliance with all covenants or other requirements and debt held by our subsidiaries was in compliance with all covenants or other requirements.
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(unaudited)

June 30, 2021, our Term Loan Agreement was in compliance with all covenants or other requirements. Debt held by our subsidiaries was in compliance with all covenants or other requirements.6. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses were comprised of the following (in thousands):
March 31, 2022December 31, 2021
Accounts payable$12,956 $11,682 
Accrued payroll expense10,000 23,648 
Accrued vacation expense3,669 3,427 
Accrued interest325 259 
Other accrued expenses293 881 
Total accounts payable and accrued expenses$27,243 $39,897 
6.7. Fair Value Measurements
Fair Value Hierarchy—Our assets and liabilities measured at fair value, either on a recurring or a non-recurring basis, are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the market place as discussed below:
Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.
Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):
Quoted Market Prices (Level 1)Significant Other
Observable Inputs (Level 2)
Significant Unobservable Inputs
 (Level 3)
TotalQuoted Market Prices (Level 1)Significant Other
Observable Inputs (Level 2)
Significant Unobservable Inputs
 (Level 3)
Total
June 30, 2021
March 31, 2022March 31, 2022
AssetsAssetsAssets
Restricted Investment:Restricted Investment:Restricted Investment:
Ashford Trust common stockAshford Trust common stock$720 (1)$$$720 Ashford Trust common stock$131 (1)$— $— $131 
Braemar common stockBraemar common stock520 (1)520 Braemar common stock370 (1)— — 370 
TotalTotal$1,240 $$$1,240 Total$501 $— $— $501 
LiabilitiesLiabilitiesLiabilities
Subsidiary compensation planSubsidiary compensation plan$$(144)(1)$$(144)Subsidiary compensation plan$— $(6)(1)$— $(6)
Deferred compensation planDeferred compensation plan(4,482)(4,482)Deferred compensation plan(3,437)— — (3,437)
TotalTotal$(4,482)$(144)$$(4,626)Total$(3,437)$(6)$— $(3,443)
NetNet$(3,242)$(144)$$(3,386)Net$(2,936)$(6)$— $(2,942)
__________________
(1) The restricted investment includes shares of common stock of Ashford Trust and Braemar purchased by Remington on the open market and held for the purpose of providing compensation to certain employees. The compensation agreement liability is based on ratably accrued vested shares through June 30, 2021,March 31, 2022, which are exercisable upon vesting. The liability is the total accrued vested shares multiplied by the fair value of the quoted market price of the underlying investment.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Quoted Market Prices (Level 1)Significant Other
Observable Inputs (Level 2)
Significant Unobservable Inputs
(Level 3)
TotalQuoted Market Prices (Level 1)Significant Other
Observable Inputs (Level 2)
Significant Unobservable Inputs
(Level 3)
Total
December 31, 2020
December 31, 2021December 31, 2021
AssetsAssetsAssets
Restricted Investment:Restricted Investment:Restricted Investment:
Ashford Trust common stockAshford Trust common stock$88 (2)$$$88 Ashford Trust common stock$150 (1)$— $— $150 
Braemar common stockBraemar common stock202 (2)202 Braemar common stock426 (1)— — 426 
TotalTotal$290 $$$290 Total$576 $— $— $576 
LiabilitiesLiabilitiesLiabilities
Contingent consideration$(1,735)(1)$$$(1,735)
Subsidiary compensation planSubsidiary compensation plan(89)(2)(89)Subsidiary compensation plan— (164)(1)— (164)
Deferred compensation planDeferred compensation plan(1,707)(1,707)Deferred compensation plan(3,326)— — (3,326)
TotalTotal$(3,442)$(89)$$(3,531)Total$(3,326)$(164)$— $(3,490)
NetNet$(3,152)$(89)$$(3,241)Net$(2,750)$(164)$— $(2,914)
__________________
(1)Represents the fair value of the contingent consideration liability of $1.7 million related to the stock consideration collar associated with JSAV’s acquisition of BAV. The contingent consideration liabilities are reported as “other current liabilities” in our condensed consolidated balance sheets. See note 1.
(2) The restricted investment includes shares of common stock of Ashford Trust and Braemar purchased by Remington on the open market and held for the purpose of providing compensation to certain employees. The compensation agreement liability is based on ratably accrued vested shares through December 31, 2020,2021, which are exercisable upon vesting. The liability is the total accrued vested shares multiplied by the fair value of the quoted market price of the underlying investment.
Assets Measured at Fair Value on a Non-recurring Basis
Our non-financial assets, such as goodwill, indefinite-lived intangible assets and long-lived assets are adjusted to fair value when an impairment charge is recognized. Such fair value measurements are based predominately on Level 3 inputs.
Goodwill
During the first quarter of 2020, as a result of our reduced cash flow projections and the significant decline in our market capitalization as a result of the COVID-19 pandemic, we recognized goodwill impairment charges of $170.6 million, of which $121.0 million related to our Remington segment, and $49.5 million related to our Premier segment. We engaged a third-party valuation expert to assist us in performing an interim quantitative assessment in which we compared the fair value of the reporting units to their carrying value. The fair value estimates for all reporting units were based on a blended analysis of the present value of future cash flows and the market value approach, Level 3 inputs. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, projected cash flows and the long-term rate of growth. Our cash flow assumptions were based on the actual historical performance of the reporting unit and took into account the recent severe and continued weakening of operating results as well as the anticipated rate of recovery due to the COVID-19 pandemic. The projected cash flows were based on management’s expectation of the timing of recovery from the economic downturn under various scenarios. The significant estimates used in the market approach model included identifying public companies engaged in businesses that are considered comparable to those of the reporting unit and assessing comparable revenue and earnings multiples in estimating the fair value of the reporting unit. The excess of the reporting unit's carrying value over our estimate of the fair value was recorded as the goodwill impairment charge in the first quarter of 2020.
As of June 30, 2021, our Remington segment had $54.6 million goodwill remaining and our Premier and JSAV segments had 0 goodwill remaining. NaN impairment charges or any other adjustments related to goodwill were recorded for the three and six months ended June 30, 2021 or the three months ended June 30, 2020. Changes in circumstances due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic could result in additional impairment losses of all or a portion of our remaining goodwill and intangible asset balances. We will continue to monitor and evaluate our results and evaluate the likelihood of any potential impairment charges at our reporting units.
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(unaudited)


Indefinite-Lived Intangible Assets
As a result of the negative impact of the COVID-19 pandemic on our business, we concluded that sufficient indicators existed to require us to perform an interim quantitative assessment of intangible assets as of March 31, 2020. During the first quarter of 2020, we engaged a third-party valuation expert to assist in determining the fair value of our indefinite-lived trademarks. We recognized intangible asset impairment charges of $7.6 million related to trademarks within our Remington and JSAV segments which resulted from changes in estimated future revenues based on a valuation using the relief-from-royalty method, which includes unobservable inputs including royalty rates and projected revenues. NaN impairment charges related to intangible assets were recorded for the three and six months ended June 30, 2021 or the three months ended June 30, 2020.
Effect of Fair Value Measured Assets and Liabilities on Our Condensed Consolidated Statements of Operations
The following table summarizes the effect of fair value measured assets and liabilities on our condensed consolidated statements of operations (in thousands):
Gain (Loss) Recognized
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Assets
Restricted investment: (1)
Ashford Trust common stock$(156)$13 $(331)$(200)
Braemar common stock(23)(24)(42)(186)
Goodwill(170,572)
Intangible assets, net(7,641)
Total$(179)$(11)$(373)$(178,599)
Liabilities
Contingent consideration (2)
$$(154)$(23)$(617)
Subsidiary compensation plan (3)
(150)(37)(273)165 
Deferred compensation plan (3)
(2,743)(880)(2,801)2,697 
Total$(2,893)$(1,071)$(3,097)$2,245 
Net$(3,072)$(1,082)$(3,470)$(176,354)
Gain (Loss) Recognized
Three Months Ended March 31,
20222021
Assets
Unrealized gain (loss) on investment: (1)
Ashford Trust common stock$110 $— 
Braemar common stock57 — 
Realized gain (loss) on investment: (2)
Ashford Trust common stock(94)(175)
Braemar common stock23 (19)
Total$96 $(194)
Liabilities
Contingent consideration (3)
$— $(23)
Subsidiary compensation plan (4)
(47)118 
Deferred compensation plan (4)
(111)(58)
Total$(158)$37 
Net$(62)$(157)
__________________
(1)Represents the unrealized gain (loss) on shares of common stock of Ashford Trust and Braemar purchased by Remington on the open market and held for the purpose of providing compensation to certain employees. Reported as a component of “other income (expense)” in our condensed consolidated statements of operations.
(2)     Represents the realized gain (loss) on shares of common stock of Ashford Trust and Braemar purchased by Remington on the open market and held for the purpose of providing compensation to certain employees.
(2)(3)     Represents the changes in fair value of the contingent consideration liabilities related to the level of achievement of certain performance targets and stock consideration collars associated with the acquisition of BAV.BAV Services Inc. Changes in the fair value of contingent consideration are reported within “other” operating expense in our condensed consolidated statements of operations.
(3)(4)    Reported as a component of “salaries and benefits” in our condensed consolidated statements of operations.
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(unaudited)

Restricted Investment
The historical cost and approximate fair values, together with gross unrealized gains and losses, of securities restricted for use in our subsidiary compensation plan are as follows (in thousands):
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(unaudited)

Historical CostGross Unrealized GainsGross Unrealized LossesFair ValueHistorical CostGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-sale securities:Available-for-sale securities:Available-for-sale securities:
June 30, 2021
March 31, 2022March 31, 2022
Equity securities (1)
Equity securities (1)
$1,449 $$(209)$1,240 
Equity securities (1)
$825 $— $(324)$501 
__________________
(1)     DistributionDistributions of $845,000$359,000 of available-for-sale securities occurred in the sixthree months ended June 30, 2021. Unrealized gains and losses associated with available-for-sale securities are included within “accumulated other comprehensive income” in our condensed consolidated balance sheets.March 31, 2022.
Historical CostGross Unrealized GainsGross Unrealized LossesFair ValueHistorical CostGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-sale securities:Available-for-sale securities:Available-for-sale securities:
December 31, 2020
December 31, 2021December 31, 2021
Equity securities (1)
Equity securities (1)
$1,169 $$(879)$290 
Equity securities (1)
$1,068 $— $(492)$576 
__________________
(1)     DistributionDistributions of $195,000$855,000 of available-for-sale securities had occurred as of December 31, 2020. Unrealized losses associated with available-for-sale securities are included within “accumulated other comprehensive income” in our condensed consolidated balance sheets.2021.
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(unaudited)

7.8. Summary of Fair Value of Financial Instruments
Certain of our financial instruments are not measured at fair value on a recurring basis. The estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled. The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):
June 30, 2021December 31, 2020March 31, 2022December 31, 2021
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Financial assets measured at fair value:Financial assets measured at fair value:Financial assets measured at fair value:
Restricted investmentRestricted investment$1,240 $1,240 $290 $290 Restricted investment$501 $501 $576 $576 
Financial liabilities measured at fair value:Financial liabilities measured at fair value:Financial liabilities measured at fair value:
Deferred compensation planDeferred compensation plan$4,482 $4,482 $1,707 $1,707 Deferred compensation plan$3,437 $3,437 $3,326 $3,326 
Contingent consideration1,735 1,735 
Financial assets not measured at fair value:Financial assets not measured at fair value:Financial assets not measured at fair value:
Cash and cash equivalentsCash and cash equivalents$32,089 $32,089 $45,270 $45,270 Cash and cash equivalents$29,827 $29,827 $37,571 $37,571 
Restricted cashRestricted cash34,346 34,346 37,396 37,396 Restricted cash33,724 33,724 34,878 34,878 
Accounts receivable, netAccounts receivable, net5,269 5,269 3,458 3,458 Accounts receivable, net12,160 12,160 7,622 7,622 
Note receivable2,881 2,881 
Notes receivableNotes receivable1,500 1,500 2,880 2,880 
Due from affiliatesDue from affiliates490 490 353 353 Due from affiliates289 289 165 165 
Due from Ashford TrustDue from Ashford Trust751 751 13,198 13,198 Due from Ashford Trust3,592 3,592 2,575 2,575 
Due from BraemarDue from Braemar449 449 2,142 2,142 Due from Braemar2,939 2,939 1,144 1,144 
Investments in unconsolidated entitiesInvestments in unconsolidated entities3,701 3,701 3,687 3,687 Investments in unconsolidated entities4,171 4,171 3,581 3,581 
Financial liabilities not measured at fair value:Financial liabilities not measured at fair value:Financial liabilities not measured at fair value:
Accounts payable and accrued expensesAccounts payable and accrued expenses$28,027 $28,027 $40,378 $40,378 Accounts payable and accrued expenses$27,243 $27,243 $39,897 $39,897 
Dividends payableDividends payable25,166 25,166 16,280 16,280 Dividends payable43,947 43,947 34,574 34,574 
Due to affiliatesDue to affiliates97 97 1,471 1,471 Due to affiliates21 21 — — 
Other liabilitiesOther liabilities27,752 27,752 28,170 28,170 Other liabilities28,710 28,710 25,899 25,899 
Notes payableNotes payable59,055 56,103 to 62,00862,768 59,629 to 65,906Notes payable57,512 54,636 to 60,38859,622 56,641 to 62,603
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
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Restricted investment. These financial assets are carried at fair value based on quoted market prices of the underlying investments. This is considered a Level 1 valuation technique.
Deferred compensation plan. The liability resulting from the deferred compensation plan is carried at fair value based on the closing prices of the underlying investments. This is considered a Level 1 valuation technique.
Contingent consideration. The liability associated with JSAV’s acquisition of BAV was carried at fair value based on the terms of the acquisition agreements and any changes to fair value are recorded in “other” operating expenses in our condensed consolidated statements of operations. This is considered a Level 1 valuation technique. See note 6.
Cash, cash equivalents and restricted cash. These financial assets bear interest at market rates and have maturities of less than 90 days. The carrying values approximate fair value due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique.
Accounts receivable, net, due from affiliates, due from Ashford Trust, due from Braemar, notenotes receivable, accounts payable and accrued expenses, dividends payable, due to affiliates and other liabilities. The carrying values of these financial instruments approximate their fair values due primarily to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique.
Investments in unconsolidated entities. The carrying value of the assetassets resulting from investment in unconsolidated entities approximates fair value based on recent observable transactions. This is considered a level 2 valuation technique. See note 2.
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Notes payable. The fair value of notes payable is based on credit spreads on observable transactions of a similar nature and is considered a Level 2 valuation technique.
8.9. Commitments and Contingencies
Purchase CommitmentAs of June 30, 2021,March 31, 2022, we had approximately $11.4 million of remaining purchase commitments related to our Ashford Trust ERFP Agreement which, under the Extension Agreement with Ashford Trust, must be fulfilled by December 31, 2022. See note 14 for further discussion of our ERFP Agreement with Ashford Trust.
LitigationIn June 2020, each of the Company, Braemar, Ashford Trust, and Lismore, a subsidiary of the Company (collectively with the Company, Braemar, Ashford Trust and Lismore, the “Ashford Companies”), received an administrative subpoena from the SEC. The Company’s administrative subpoena requires the production of documents and other information since January 1, 2018 relating to, among other things, (i) related party transactions among the Ashford Companies (including the Ashford Trust Agreement and the Braemar Agreement pursuant to which each of Ashford Trust and Braemar engaged Lismore to negotiate the refinancing, modification or forbearance of certain mortgage debt) or between any of the Ashford Companies and any officer, director or owner of the Ashford Companies or any entity controlled by any such person, and (ii) the Company’s accounting policies, procedures and internal controls related to such related party transactions. In addition, in October 2020, Mr. Monty J. Bennett, the Chairman of our Board and our Chief Executive Officer, received an administrative subpoena from the SEC requesting testimony and the production of documents and other information substantially similar to the requests in the subpoenas received by the Ashford Companies. The Company and Mr. Monty J. Bennett are responding to the administrative subpoenas.
On December 20, 2016, a class action lawsuit was filed against one of the Company’s subsidiaries in The Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws. The court has entered an order granting class certification with respect to: (i) a statewide class of non-exempt employees who were allegedly deprived of rest breaks as a result of the subsidiary’s previous written policy requiring employees to stay on premises during rest breaks; and (ii) a derivative class of non-exempt former employees who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class, however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe that any potential loss to the Company is reasonably estimable at this time. As of June 30, 2021, 0March 31, 2022, no amounts have been accrued.
We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters, matters relating to compliance with applicable law (for example, the ADA and similar state laws), and other general matters. The likelihood of loss for these legal proceedings is based on definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Legal costs associated with loss contingencies are expensed as incurred. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.
9.10. Equity (Deficit)
Noncontrolling Interests in Consolidated Entities—See note 2 for details regarding ownership interests, carrying values and allocations related to noncontrolling interests in our consolidated subsidiaries.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The following table summarizes the (income) loss allocated to noncontrolling interests for each of our consolidated entities (in thousands):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
(Income) loss allocated to noncontrolling interests:(Income) loss allocated to noncontrolling interests:(Income) loss allocated to noncontrolling interests:
OpenKeyOpenKey$208 $120 $411 $239 OpenKey$226 $203 
REDRED59 165 (38)155 RED— (97)
Pure WellnessPure Wellness(33)(12)(44)23 Pure Wellness34 (11)
Other21 
Total net (income) loss allocated to noncontrolling interestsTotal net (income) loss allocated to noncontrolling interests$234 $278 $329 $438 Total net (income) loss allocated to noncontrolling interests$260 $95 

10.11. Mezzanine Equity
Redeemable Noncontrolling InterestsRedeemable noncontrolling interests are included in the mezzanine section of our condensed consolidated balance sheets as the ownership interests are redeemable for cash or registered shares outside of the Company’s control. See note 2 for tables summarizing the redeemable noncontrolling ownership interests and carrying values.
The following table summarizes the net (income) loss allocated to our redeemable noncontrolling interests (in thousands):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
Net (income) loss allocated to redeemable noncontrolling interests:Net (income) loss allocated to redeemable noncontrolling interests:Net (income) loss allocated to redeemable noncontrolling interests:
Ashford HoldingsAshford Holdings$19 $25 $43 $361 Ashford Holdings$$24 
JSAV497 478 
OpenKeyOpenKey122 152 245 OpenKey— 152 
Total net (income) loss allocated to redeemable noncontrolling interestsTotal net (income) loss allocated to redeemable noncontrolling interests$19 $644 $195 $1,084 Total net (income) loss allocated to redeemable noncontrolling interests$$176 
Convertible Preferred Stock—Our convertible preferred stock is included in the mezzanine section of our condensed consolidated balance sheets as the ownership interests are redeemable for cash or registered shares outside of the Company’s control.
Each share of Series D Convertible Preferred Stock: (i) has a liquidation value of $25 per share; (ii) accrues cumulative dividends at the rate of: (a) 6.59% per annum until November 6, 2020; (b) 6.99% per annum from November 6, 2020 until November 6, 2021; and (c) 7.28% per annum thereafter:thereafter; (iii) participates in any dividend or distribution on the common stock in addition to the preferred dividends; (iv) is convertible into voting common stock at $117.50 per share; and (v) provides for customary anti-dilution protections. In the event the Company fails to pay the dividends on the Series D Convertible Preferred Stock for two consecutive quarterly periods (a “Preferred Stock Breach”), then until such arrearage is paid in cash in full: (A) the dividend rate on the Series D Convertible Preferred Stock will increase to 10.00% per annum until no Preferred Stock Breach exists; (B) no dividends on the Company’s common stock may be declared or paid, and no other distributions or redemptions may be made, on the Company’s common stock; and (C) the Board will be increased by two seats and the holders of 55% of the outstanding Series D Convertible Preferred Stock will be entitled to fill such newly created seats. The Series D Convertible Preferred Stock is held primarily by Mr. Monty J. Bennett, the Chairman of our Board and our Chief Executive Officer, Mr. Archie Bennett, Jr., who is Mr. Monty J. Bennett’s father, one of our other executive officers and several other individuals.
To the extent not paid on April 15, July 15, October 15 and January 15 of each calendar year in respect of the quarterly periods ending on March 31, June 30, September 30 and December 31, respectively (each such date, a “Dividend Payment Date”), all accrued dividends on any share shall accumulate and compound on the applicable Dividend Payment Date whether
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or not declared by the Board and whether or not funds are legally available for the payment thereof. All accrued dividends shall remain accumulated, compounding dividends until paid in cash pursuant hereto or converted to common shares.
The Series D Convertible Preferred Stock is entitled to vote alongside our voting common stock on an as-converted basis, subject to applicable voting limitations.
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So long as any shares of Series D Convertible Preferred Stock are outstanding, the Company is prohibited from taking specified actions without the consent of the holders of 55% of the outstanding Series D Convertible Preferred Stock, including: (i) modifying the terms, rights, preferences, privileges or voting powers of the Series D Convertible Preferred Stock; (ii) altering the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series D Convertible Preferred Stock; (iii) issuing any security senior to the Series D Convertible Preferred Stock, or any shares of Series D Convertible Preferred Stock other than pursuant to the Combination Agreement dated May 31, 2019 between us, the Bennetts, Remington Holdings, L.P. and certain other parties, as amended (the “Combination Agreement”); (iv) entering into any agreement that expressly prohibits or restricts the payment of dividends on the Series D Convertible Preferred Stock or the common stock of the Company or the exercise of the Change of Control Put Option (as defined in the Combination Agreement); or (v) other than the payment of dividends on the Series D Convertible Preferred Stock or payments to purchase any of the Series D Convertible Preferred Stock, transferring all or a substantial portion of the Company’s or its subsidiaries’ cash balances or other assets to a person other than the Company or its subsidiaries, other than by means of a dividend payable by the Company pro rata to the holders of the Company common stock (together with a corresponding dividend payable to the holders of the Series D Convertible Preferred Stock).
After June 30, 2026, we will have the option to purchase all or any portion of the Series D Convertible Preferred Stock, in $25.0 million increments, on a pro rata basis among all holders of the Series D Convertible Preferred Stock (subject to the ability of the holders to provide for an alternative allocation amongst themselves), at a price per share equal to: (i) $25.125; plus (ii) all accrued and unpaid dividends (provided any holder of Series D Convertible Preferred Stock shall be entitled to exercise its right to convert its shares of Series D Convertible Preferred Stock into common stock not fewer than five business days before such purchase is scheduled to close).
Under the applicable authoritative accounting guidance, the increasing dividend rate feature of the Series D Convertible Preferred Stock results in a discount that must be reflected in the fair value of the preferred stock, which was reflected in “Series D Convertible Preferred Stock, net of discount” on our condensed consolidated balance sheets. For the three and six months ended June 30,March 31, 2022 and 2021, we recorded $311,000$0 and $627,000, respectively, of amortization related to preferred stock discounts. For the three and six months ended June 30, 2020, we recorded $795,000 and $1.6 million,$316,000, respectively, of amortization related to preferred stock discounts.
On March 25, 2021, theThe Company declared dividends which were due with respect to its Series D Convertible Preferred Stock of $8.4 million for each of the first and third quarters of 2021 which were paid on April 15, 2021 and October 15, 2021, respectively. On March 9, 2022, the Company declared a dividend of $8.7 million with respect to its Series D Convertible Preferred Stock for the first quarter of 2021. The declared $8.4 million of dividends were paid on April 15, 2021.2022. The Company did 0tnot declare dividends with respect to its Series D Convertible Preferred Stock for the second quarterand fourth quarters of 2020 and the second and fourth quarters of 2021. As of June 30, 2021,March 31, 2022, the Company had aggregate undeclared preferred stock dividends of approximately $25.2$35.2 million, which relates to the second quarterand fourth quarters of 20212020 and the second and fourth quarters of 2020.2021. All dividends, declared and undeclared, are recorded as a reduction in net income (loss) attributable to common stockholders in the period incurred in our condensed consolidated statements of operations. All accrued dividends accumulate and compound until paid in cash or converted into common stock of the Company pursuant to the Certificate of Designation for the Series D Convertible Preferred Stock. Unpaid dividends, declared and undeclared, totaling $25.2$43.9 million and $34.6 million at June 30,March 31, 2022 and December 31, 2021, respectively, are recorded as a liability in our condensed consolidated balance sheets as “dividends payable.” See note 17.
Declared convertible preferred stock cumulative dividends for all issued and outstanding shares were as follows (in thousands, except per share amounts):
Three Months Ended March 31,
20222021
Preferred dividends - declared$8,700 $8,353 
Preferred dividends per share - declared$0.4550 $0.4369 
Aggregate undeclared convertible preferred stock cumulative dividends (in thousands, except per share amounts):
March 31, 2022December 31, 2021
Aggregate preferred dividends - undeclared$35,248 $34,574 
Aggregate preferred dividends - undeclared per share$1.8435 $1.8083 
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Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Preferred dividends - declared$$4,002 $8,353 $7,940 
Preferred dividends per share - declared$$0.2093 $0.4369 $0.4153 
Aggregate undeclared convertible preferred stock cumulative dividends (in thousands, except per share amounts):
June 30, 2021December 31, 2020
Aggregate preferred dividends - undeclared$25,166 $16,280 
Aggregate preferred dividends - undeclared per share$1.3162 $0.8515 
11.12. Equity-Based Compensation
Equity-based compensation expense is primarily recorded in “salaries and benefits expense” and REIT equity-based compensation expense is primarily recorded in “reimbursed expenses” in our condensed consolidated statements of operations. The components of equity-based compensation expense for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 are presented below by award type (in thousands):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
Equity-based compensationEquity-based compensationEquity-based compensation
Stock option amortization (1)
$543 $(397)$1,549 $1,692 
Class 2 LTIP Units and stock option amortization (1)
Class 2 LTIP Units and stock option amortization (1)
$354 $1,006 
Employee equity grant expense (2)
Employee equity grant expense (2)
309 247 541 352 
Employee equity grant expense (2)
341 232 
Director and other non-employee equity grants expense (3)
Director and other non-employee equity grants expense (3)
525 414 650 269 
Director and other non-employee equity grants expense (3)
54 125 
Total equity-based compensationTotal equity-based compensation$1,377 $264 $2,740 $2,313 Total equity-based compensation$749 $1,363 
Other equity-based compensationOther equity-based compensationOther equity-based compensation
REIT equity-based compensation (4)
REIT equity-based compensation (4)
$4,840 $2,309 $8,177 $9,200 
REIT equity-based compensation (4)
$4,329 $3,337 
$6,217 $2,573 $10,917 $11,513 $5,078 $4,700 
________
(1)    As of June 30, 2021,March 31, 2022, the Company had approximately $1.5 million$384,000 of total unrecognized compensation expense related to stock optionsClass 2 Long-Term Incentive Partnership Units (the “Class 2 LTIP Units”) that will be recognized over a weighted average period of 0.73.0 years. The benefit recorded in the three months ended June 30, 2020, is primarily due to the forfeiture of 98,603 options from the voluntary resignation of Douglas A. Kessler, Senior Managing Director of the Company, in May of 2020.
(2)    As of June 30, 2021,March 31, 2022, the Company had approximately $2.6$3.8 million of total unrecognized compensation expense related to restricted shares and LTIP units that will be recognized over a weighted average period of 2.22.1 years. See note 1.In March 2022, approximately 39,000 Long-Term Incentive Plan units (the “LTIP units”) with a fair value of approximately $627,000 were issued to one of our executive officers as compensation. The LTIP units have a vesting period of three years. Each LTIP unit once vested can be converted by the holder into 1 common limited partnership unit of Ashford Holdings which can then be redeemed for cash or, at our election, settled in our common stock.
(3)    Grants of stock, restricted stock and stock units to independent directors and other non-employees are recorded at fair value based on the market price of our shares at grant date, and this amount is expensed in “general and administrative” expense.
(4)    REIT equity-based compensation expense is primarily recorded in “reimbursed expenses” and is associated with equity grants of Ashford Trust’s and Braemar’s common stock and LTIP units awarded to our officers and employees.
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12.13. Deferred Compensation Plan
We administer a non-qualified deferred compensation plan (“DCP”) for certain executive officers. The plan allowed participants to defer up to 100% of their base salary and bonus and select an investment fund for measurement of the deferred compensation obligation. For the periods the DCP was administered by Ashford Trust, the participants elected Ashford Trust common stock as their investment option. In accordance with the applicable authoritative accounting guidance, the deferred amounts and any dividends earned received equity treatment and were included in additional paid-in capital. In connection with our spin-off and the assumption of the DCP obligation by the Company, the DCP was modified to give the participants various investment options, including Ashford Inc. common stock, for measurement that can be changed by the participant at any time. These modifications resulted in the DCP obligation being recorded as a liability in accordance with the applicable authoritative accounting guidance. Distributions under the DCP are made in cash, unless the participant has elected Ashford Inc. common stock as the investment option, in which case any such distributions would be made in Ashford Inc. common stock. Additionally, the DCP obligation is carried at fair value with changes in fair value reflected in “salaries and benefits” in our condensed consolidated statements of operations and comprehensive income (loss).
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The following table summarizes the DCP activity (in thousands):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
Change in fair valueChange in fair valueChange in fair value
Unrealized gain (loss)Unrealized gain (loss)$(2,743)$(880)$(2,801)$2,697 Unrealized gain (loss)$(94)$(58)
DistributionsDistributionsDistributions
Fair value (1)
Fair value (1)
$19 $$26 $
Fair value (1)
$— $
Shares (1)
Shares (1)
Shares (1)
— 
________
(1)    Distributions made to one participant.
As of June 30, 2021March 31, 2022 and December 31, 2020,2021, the carrying value of the DCP liability was $4.5$3.4 million and $1.7$3.3 million, respectively.
13.14. Related Party Transactions
As an asset manager providing advisory services to Ashford Trust and Braemar, as well as holding an ownership interest in other businesses providing products and services to the hospitality industry, including Ashford Trust and Braemar, related party transactions are inherent in our business. Details of our related party transactions are presented below.
Ashford TrustWe are a party to an amended and restated advisory agreement, as amended, with Ashford Trust and its operating subsidiary, Ashford Hospitality Limited Partnership (“Ashford Trust OP”). On January 14, 2021, the Company entered into the Second Amended and Restated Advisory Agreement with Ashford Trust. TheSee note 3 for a description of the Second Amended and Restated Advisory Agreement amends and restates the terms of the Amended and Restated Advisory Agreement, dated June 10, 2015, as amended by the Enhanced Return Funding Program Agreement and Amendment No. 1 to the Amended and Restated Advisory Agreement, dated as of June 26, 2018 to, among other items (i) revise the term and termination rights; (ii) fix the percentage used to calculate the base fee thereunder at 0.70% per annum; (iii) update the list of peer group members; (iv) suspend the requirement that Ashford Trust maintain a minimum Consolidated Tangible Net Worth until the first fiscal quarter beginning after June 30, 2023; and (v) revise the criteria that would constitute a Company Change of Control in order to provide Ashford Trust additional flexibility to dispose of underperforming assets negatively impacted by COVID-19. In connection with the transactions contemplated by the Credit Agreement, the Company entered into the SNDA with Ashford Trust and Oaktree pursuant to which the Company agreed to subordinate to the prior repayment in full of all obligations under the Credit Agreement, (1) prior to the later of (i) the second anniversary of the Credit Agreement and (ii) the date accrued interest “in kind” is paid in full, advisory fees (other than reimbursable expenses) in excess of the Advisory Fee Cap, (2) any termination fee or liquidated damages amounts under the advisory agreement, or any amount owed under any enhanced return funding program in connection with the termination of the advisory agreement or sale or foreclosure of assets financed thereunder, and (3) any payments to Lismore in connection with the transactions contemplated by the Credit Agreement. See note 3 for discussion of the advisory services revenue recognition policy.
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Premier is party to a master project management agreement with Ashford Trust OP and Ashford Trust TRS, Corporation, a subsidiary of Ashford Trust OP, and certain of its affiliates (collectively, “Ashford Trust TRS”) to provide comprehensive and cost-effective design, development, architectural, and project management services and a related mutual exclusivity agreement with Ashford Trust and Ashford Trust OP. On March 20, 2020, we amended the master project management agreement to provide that Premier’s fees shall be paid by Ashford Trust to Premier upon the completion of any work provided by third party vendors to Ashford Trust.
Remington is party to thea master hotel management agreement with Ashford Trust Master Hotel Management Agreement with Ashford Trust.and certain of its affiliates to provide hotel management services. Ashford Trust pays the Company a monthly hotel management fee equal to the greater of $14,000$15,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenue (the “base fee”) as well as annual incentive hotel management fees, if certain operational criteria are met, and other general and administrative expense reimbursements. Under the original terms of the Ashford Trust Master Hotel Management Agreement, Ashford Trust paid us on the fifth day of each month for the base fees in the preceding month. On March 13, 2020, Ashford Trust entered into the Ashford Trust Hotel Management Letter Agreement with the Company. In order to allow the Company to better manage our corporate working capital and to ensure the continued efficient operation of the Ashford Trust hotels managed by Remington, Ashford Trust agreed to paypays the base fee and to reimbursereimburses all expenses for Remington-managed hotels on a weekly basis for the preceding week, rather than on a monthly basis. The Ashford Trust Hotel Management Letter Agreement went into effect on March 13, 2020 and will continue until terminated by Ashford Trust.
On March 20, 2020, Lismore, a wholly owned subsidiary of the Company, entered into the Ashford Trust Agreement. Pursuant to the Ashford Trust Agreement, Lismore shall, during the term of the agreement (which commenced on March 20, 2020 and shall end on the date that is twelve months following the commencement date, or upon it being terminated by Ashford Trust on not less than thirty days written notice) negotiate the refinancing, modification or forbearance of the existing mortgage debt on Ashford Trust’s hotels. For the purposes of the Ashford Trust Agreement, financing shall include, without limitation, senior or subordinate loan financing, provided in any single transaction or a combination of transactions, including, mortgage loan financing, mezzanine loan financing, or subordinate loan financing encumbering the applicable hotel or unsecured loan financing.week.
On July 1, 2020, Lismore and Ashford Trust amended and restated the Ashford Trust Agreement with an effective date of April 6, 2020. Pursuant2020 to negotiate the amended and restated agreement, the termrefinancing, modification or forbearance of the agreement was extended to 24 months following the commencement date. In connection with the services to be provided by Lismore under the amendedexisting mortgage and restated agreement, Lismore received a fee of $2.6 million in 3 equal installments of $857,000 per month beginning July 20, 2020, and endingmezzanine debt on September 20, 2020. Lismore is also entitled to receive a fee that is calculated and payable as follows: (i) a fee equal to 25 basis points (0.25%Ashford Trust’s hotels (the “Ashford Trust Agreement”) of the amount of a loan, payable upon the acceptance by the applicable lender of any forbearance or extension of such loan, or in the case where a third-party agent or contractor engaged by. The Ashford Trust has secured an extension of the maturity date equal to or greater than 12 months of any such loan, then the amount payable to Lismore shall be reduced to 10 basis points (0.10%); (ii) a fee equal to 75 basis points (0.75%) of the amount of any principal reduction of a loan upon the acceptance by any lender of any principal reduction of such loan; and (iii) a fee equal to 150 basis points (1.50%) of the implied conversion value (but in any case, no less than 50% of the face value of such loan or loans) of a loan upon the acceptance by any lender of any debt to equity conversion of such loan.
At the time of amendment, Lismore had been paid approximately $8.3 million, in the aggregate, pursuant to the original agreement. Under the amended and restated agreement, Ashford Trust is still entitled, in the event that Ashford Trust does not complete, for any reason, extensions or forbearances during the term of the agreement equal to or greater than approximately $4.1 billion, to offset, against any fees Ashford Trust or its affiliates owe pursuant to the advisory agreement, a portion of the fee previously paid by Ashford Trust to Lismore equal to the product of (x) approximately $4.1 billion minus the amount of extensions or forbearances completed during the term of the agreement multiplied by (y) 0.125%.Agreement terminated effective April 6, 2022. For the three and six months ended June 30,March 31, 2022 and 2021, the Company recognized revenue of $2.3 million and $5.7$3.4 million, respectively. For both theThe three and six months ended June 30, 2020, the Company recognized revenue of $689,000. As of June 30, 2021 and December 30, 2020, the Company recorded $7.0 million and $7.3 million, respectively, as deferred income. Additionally, the independent members of the Board accelerated approximately $506,000 in claw back credit due to Ashford Trust which, absent a waiver, would occur after the expiration of the Ashford Trust Agreement. Such claw back credit was due to Ashford Trust in connection with certain properties Ashford Trust no longer owns. This amount was offset against base advisory fees. Approximately $156,000 may be offset against fees under the agreement that are eligible for claw back under the agreement. The six month period ended June 30,March 31, 2021 includes a $1.1 million cumulative catch-up adjustment to revenue which was previously considered constrained. As of March 31, 2022 and December 31, 2021, the Company recorded $0 and $2.4 million, respectively, as deferred income. The deferred income related to the various Lismore fees described above are beingwas recognized over the 24 month term of the agreement on a straight line basis as the service iswas rendered, only to the extent it iswas probable that a significant reversal of
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revenue willwould not occur. Constraints relating to variable consideration arewere resolved generally upon the closing of a transaction or financing event and the resulting change in the transaction price will bewas adjusted on a cumulative catch-up basis in the period a transaction or financing event closes.closed. See the table below for details of the revenue recognized by the Company and note 3 for additional discussion of the related deferred income.
On January 4, 2021, the independent members of the Board agreed to: (i) defer Ashford Trust’s payment of the base advisory fees that were previously deferred for the months of October 2020, November 2020 and December 2020; (ii) defer approximately $2.8 million in base advisory fees with respect to the month of January 2021; (iii) defer Ashford Trust’s payment of Lismore success fees that were previously deferred for the months of October 2020, November 2020 and December 2020; and (iv) defer payment of Ashford Trust’s Lismore success fees for the month of January 2021. As a result, the foregoing payments became due on January 11, 2021. Additionally, the independent members of the board of directors of Ashford Inc. waived any claim against Ashford Trust and Ashford Trust’s affiliates and each of their officers and directors for breach of the advisory agreement and Ashford Trust Agreement or any damages that may have arisen in absence of such fee deferrals.
On January 11, 2021, the independent members of the Board provided Ashford Trust an additional deferral of the base advisory fees and any Lismore success fees for the months of October 2020, November 2020, December 2020 and January 2021 that were previously deferred such that all such fees would be due and payable on the earlier of (x) January 18, 2021 and (y) immediately prior to the closing of Credit Agreement between Ashford Trust and Oaktree. Additionally, the Board waived any claim against Ashford Trust and Ashford Trust’s affiliates and each of their officers and directors for breach of the advisory agreement and Ashford Trust Agreement or any damages that may have arisen in absence of such fee deferral. In accordance with the terms of the previously disclosed deferrals, Ashford Trust paid the Company $14.4 million on January 15, 2021.
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The following table summarizes the revenues and expenses related to Ashford Trust (in thousands):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
REVENUES BY TYPEREVENUES BY TYPEREVENUES BY TYPE
Advisory services revenue:
Base advisory fee (1)
$7,254 $8,557 $14,508 $17,474 
Advisory services fees:Advisory services fees:
Base advisory fees (1)
Base advisory fees (1)
$8,735 $7,254 
Hotel management:
Hotel management fees:Hotel management fees:
Base management feesBase management fees4,473 3,504 7,850 9,197 Base management fees5,002 3,377 
Incentive management feesIncentive management fees1,065 1,601 Incentive management fees783 536 
Total hotel management revenue (2)
5,538 3,504 9,451 9,197 
Total hotel management fees revenue (2)
Total hotel management fees revenue (2)
5,785 3,913 
Design and construction revenue (3)
634 838 1,037 3,920 
Audio visual revenue (4)
Design and construction fees revenue (3)
Design and construction fees revenue (3)
2,472 403 
Other revenueOther revenueOther revenue
Watersports, ferry and excursion services (5)
Watersports, ferry and excursion services (5)
43 — 
Debt placement and related fees (5)(6)
Debt placement and related fees (5)(6)
2,290 689 5,725 817 
Debt placement and related fees (5)(6)
2,293 3,435 
Claims management services (6)(7)
Claims management services (6)(7)
14 27 30 46 
Claims management services (6)(7)
14 16 
Other services (7)(8)
Other services (7)(8)
433 336 792 786 
Other services (7)(8)
348 359 
Total other revenueTotal other revenue2,737 1,052 6,547 1,649 Total other revenue2,698 3,810 
Cost reimbursement revenueCost reimbursement revenue38,747 19,947 66,122 88,020 Cost reimbursement revenue58,306 25,988 
Total revenuesTotal revenues$54,910 $33,898 $97,665 $120,260 Total revenues$77,996 $41,368 
REVENUES BY SEGMENT (8)(9)
REVENUES BY SEGMENT (8)(9)
REVENUES BY SEGMENT (8)(9)
REIT advisoryREIT advisory$11,204 $10,354 $21,758 $25,962 REIT advisory$13,006 $10,554 
RemingtonRemington39,987 20,739 67,746 86,274 Remington58,129 26,372 
PremierPremier995 1,319 1,643 5,261 Premier3,606 648 
INSPIREINSPIRE38 — 
REDRED43 — 
OpenKeyOpenKey30 30 60 129 OpenKey34 30 
Corporate and otherCorporate and other2,694 1,456 6,458 2,634 Corporate and other3,140 3,764 
Total revenuesTotal revenues$54,910 $33,898 $97,665 $120,260 Total revenues$77,996 $41,368 
COST OF REVENUESCOST OF REVENUESCOST OF REVENUES
Cost of audio visual revenues (4)
$560 $$696 $2,014 
Cost of revenues for audio visual (4)
Cost of revenues for audio visual (4)
$1,448 $136 
SUPPLEMENTAL REVENUE INFORMATIONSUPPLEMENTAL REVENUE INFORMATIONSUPPLEMENTAL REVENUE INFORMATION
Audio visual revenue from guests at REIT properties (4)
Audio visual revenue from guests at REIT properties (4)
$1,270 $$1,573 $4,604 
Audio visual revenue from guests at REIT properties (4)
$3,350 $303 
________
(1)    Advisory fees earned from Ashford Trust during the three and six months ended June 30, 2021 quarter excluded $1.7$1.5 million and $3.2 million, respectively, of advisory fees that were constrained and deferred as a result of the $29.0 million annual Advisory Fee Cap. The deferred fees are included in deferred income in our condensed consolidated balance sheet. See note 3 for discussion of the advisory services revenue recognition policy.
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(2)    Hotel management fees revenue is reported within our Remington segment. Base management fees and incentive management fees are recognized when services have been rendered. Remington receives base management fees of 3% of gross hotel revenue for managing the hotel employees and daily operations of the hotels, subject to a specified floor (which is subject to increase annually based on increases in the consumer price index). Remington receives an incentive management fee equal to the lessor of 1% of each hotel’s annual gross revenues or the amount by which the respective hotel’s gross operating profit exceeds the hotel’s budgeted gross operating profit. See note 3 for discussion of the hotel management fees revenue recognition policy.
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(unaudited)

(3)    Design and construction fees revenue primarily consists of revenue generated within our Premier segment by providing design, development, architectural, and project management services for which Premier receives fees. See note 3 for discussion of the design and construction fees revenue recognition policy.
(4)    JSAVINSPIRE and RED primarily contractscontract directly with customers to whom it provides audio visualthey provide services. JSAV recognizesINSPIRE and RED recognize the gross revenue collected from their customers by the hosting hotel or venue. Commissions retained by the hotel or venue, including Ashford Trust, for INSPIRE and RED are recognized in “cost of revenues for audio visual” and “other” operating expense, respectively, in our condensed consolidated statements of operations. See note 3 for discussion of the audio visual revenue recognition policy.
(5)Watersports, ferry and excursion services revenue includes revenue that is earned by RED for providing services directly to Ashford Trust rather than contracting with third-party customers.
(6)    Debt placement and related fees are earned by Lismore for providing debt placement, modification, forbearance and refinancing services.
(6)(7)    Claims management services include revenue earned from providing insurance claim assessment and administration services.
(7)(8)    Other services revenue is primarily associated with other hotel products and services, such as mobile key applications and hypoallergenic premium rooms, provided to Ashford Trust by our consolidated subsidiaries, OpenKey and Pure Wellness.
(8)(9)    See note 1516 for discussion of segment reporting.
BraemarWe are also a party to an amended and restated advisory agreement with Braemar and its operating subsidiary Braemar OP.
Premier is party to a master project management agreement with Braemar OP and Braemar TRS Yountville LLC, a limited liability company existing under the laws of the state of Delaware and wholly-ownedwholly owned subsidiary of Braemar OP, (“Braemar TRS”) to provide comprehensive and cost-effective design, development, architectural, and project management services and a related mutual exclusivity agreement with Braemar and Braemar OP. On March 20, 2020, we amended the project management agreement to provide that Premier’s fees shall be paid by Braemar to Premier upon the completion of any work provided by third party vendors to Braemar.
Remington is party to thea master hotel management agreement with Braemar Master Hotel Management Agreement with Braemar.and certain of its affiliates to provide hotel management services. Braemar pays the Company a monthly hotel management fee equal to the greater of $14,000$15,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenue (the “base fee”) as well as annual incentive hotel management fees, if certain operational criteria are met and other general and administrative expense reimbursements. Under the original terms of the Braemar master hotel management agreement, Braemar paid us on the fifth day of each month for the base fees in the preceding month. On March 13, 2020, Braemar entered into the Braemar Hotel Management Letter Agreement with the Company. In order to allow the Company to better manage its corporate working capital and to ensure the continued efficient operation of the Braemar hotels managed by Remington, Braemar agreed to paypays the base fee and to reimbursereimburses all expenses for Remington-managed hotels on a weekly basis for the preceding week, rather than on a monthly basis. The Braemar Hotel Management Letter Agreement went into effect on March 13, 2020 and will continue until terminated by Braemar.week.
On March 20, 2020, Lismore entered into an agreement with Braemar to negotiate the refinancing, modification or forbearance of the existing mortgage and mezzanine debt on Braemar’s hotels (the “Braemar Agreement”). The Braemar Agreement was terminated effective March 20, 2021. Upon entering into the Braemar Agreement, Braemar made an initial payment of approximately $1.4 million. Braemar also paid the Company a total of $1.4 million in 6 equal installments beginning April 20, 2020 and ending September 20, 2020, of which $681,000 was subject to claw back and was set off against the cash payment of Braemar’s base advisory fees upon the termination of the Braemar Agreement in March 2021. Braemar additionally paid the Company approximately $1.4 million in success fees in connection with signed forbearance or other agreements, of which no amounts were available for claw back. In total, Braemar paid approximately $4.1 million under the Braemar Agreement. For the three and six months ended June 30,March 31, 2022 and 2021, the Company recognized revenue of $0 and $853,000, respectively, related to the Braemar Agreement. For both the three and six months ended June 30, 2020, the Company recognized revenue of $646,000 related to the Braemar Agreement.
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The following table summarizes the revenues and expenses related to Braemar (in thousands):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
REVENUES BY TYPEREVENUES BY TYPEREVENUES BY TYPE
Advisory services revenue:
Base advisory fee$2,678 $2,573 $5,223 $5,193 
Advisory services fees:Advisory services fees:
Base advisory feesBase advisory fees$2,939 $2,545 
Incentive advisory fee (1)
169 339 
Other advisory revenue (2)(1)
Other advisory revenue (2)(1)
130 131 258 260 
Other advisory revenue (2)(1)
128 128 
Total advisory services revenue2,808 2,873 5,481 5,792 
Total advisory services fees revenueTotal advisory services fees revenue3,067 2,673 
Hotel management:
Hotel management fees:Hotel management fees:
Base management feesBase management fees584 154 915 509 Base management fees700 331 
Incentive management feesIncentive management fees142 221 Incentive management fees202 79 
Total hotel management revenue (3)
726 154 1,136 509 
Total hotel management fees revenue (2)
Total hotel management fees revenue (2)
902 410 
Design and construction revenue (4)
350 712 621 1,455 
Audio visual revenue (5)
Design and construction fees revenue (3)
Design and construction fees revenue (3)
1,320 271 
Other revenueOther revenueOther revenue
Watersports, ferry and excursion services (6)(5)
Watersports, ferry and excursion services (6)(5)
695 20 1,227 356 
Watersports, ferry and excursion services (6)(5)
583 532 
Debt placement and related fees (7)(6)
Debt placement and related fees (7)(6)
646 853 646 
Debt placement and related fees (7)(6)
190 853 
Claims management services (8)(7)
Claims management services (8)(7)
45 83 
Claims management services (8)(7)
Other services (9)(8)
Other services (9)(8)
36 33 87 119 
Other services (9)(8)
42 51 
Total other revenueTotal other revenue733 744 2,170 1,204 Total other revenue816 1,437 
Cost reimbursement revenueCost reimbursement revenue7,404 3,490 12,200 10,360 Cost reimbursement revenue11,045 4,504 
Total revenuesTotal revenues$12,021 $7,973 $21,608 $19,320 Total revenues$17,150 $9,295 
REVENUES BY SEGMENT (10)
REVENUES BY SEGMENT (9)
REVENUES BY SEGMENT (9)
REIT advisoryREIT advisory$5,545 $5,184 $10,059 $10,530 REIT advisory$6,388 $4,514 
RemingtonRemington4,682 1,032 7,614 5,249 Remington7,062 2,640 
PremierPremier511 897 873 1,990 Premier1,831 362 
INSPIREINSPIRE19 — 
REDRED583 532 
OpenKeyOpenKey11 19 71 OpenKey10 
Corporate and otherCorporate and other1,274 849 3,043 1,480 Corporate and other1,258 1,237 
Total revenuesTotal revenues$12,021 $7,973 $21,608 $19,320 Total revenues$17,150 $9,295 
COST OF REVENUESCOST OF REVENUESCOST OF REVENUES
Cost of audio visual revenues (5)
$76 $$99 $447 
Cost of revenues for audio visual (4)
Cost of revenues for audio visual (4)
$701 $23 
Other (5)
Other (5)
86 85 



SUPPLEMENTAL REVENUE INFORMATIONSUPPLEMENTAL REVENUE INFORMATIONSUPPLEMENTAL REVENUE INFORMATION
Audio visual revenues from guests at REIT properties (5)
Audio visual revenues from guests at REIT properties (5)
$161 $$213 $1,005 
Audio visual revenues from guests at REIT properties (5)
$1,671 $52 
Watersports, ferry and excursion services from guests at REIT properties (5)
Watersports, ferry and excursion services from guests at REIT properties (5)
612 257 
________
(1)    Incentive advisory fee for the three and six months ended June 30, 2020, includes the pro-rata portion of the third year installment of the 2018 incentive advisory fee. Incentive fee payments are subject to meeting the December 31 FCCR Condition each year, as defined in the Braemar advisory agreement. Braemar’s annual total stockholder return did not meet the relevant incentive fee thresholds during the 2021, 2020 and 2019 measurement periods. See note 3.
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(2)(1)    In connection with our Fourth Amended and Restated Braemar Advisory Agreement, a $5.0 million cash payment was made by Braemar upon approval by Braemar’s stockholders, which is recognized over the 10-year initial term.
(3)(2)    Hotel management fees revenue is reported within our Remington segment. Base management fees and incentive management fees are recognized when services have been rendered. Remington receives base management fees of 3% of gross hotel revenue for managing the hotel employees and daily operations of the hotels, subject to a specified floor (which is subject to increase annually based on increases in the consumer price index). Remington receives an incentive management fee equal to the lessor of 1% of each hotel’s annual gross revenues or the amount by which the respective hotel’s gross operating profit exceeds the hotel’s budgeted gross operating profit. See note 3 for discussion of the hotel management fees revenue recognition policy.
(4)(3)    Design and construction fees revenue primarily consists of revenue generated within our Premier segment by providing design, development, architectural, and project management services for which Premier receives fees. See note 3 for discussion of the design and construction fees revenue recognition policy.
(5)(4)    JSAVINSPIRE and RED primarily contractscontract directly with third-party customers to whom it provides audio visualthey provide services. JSAV recognizesINSPIRE and RED recognize the gross revenue collected from their customers by the hosting hotel or venue. Commissions retained by the hotel or venue, including Braemar, for INSPIRE and RED are recognized in “cost of revenues for audio visual” and “other” operating expense, respectively, in our condensed consolidated statements of operations. See note 3 for discussion of the audio visual revenue recognition policy.
(6)(5)    Watersports, ferry and excursion services arerevenue includes revenue that is earned by RED which includes the entity that conducts RED’s legacy U.S. Virgin Islands operations and Sebago, a provider of watersports activities and excursionfor providing services based in Key West, Florida.directly to Braemar rather than contracting with third-party customers.
(7)(6)    Debt placement and related fees are earned by Lismore for providing debt placement, modification, forbearance and refinancing services.
(8)(7)    Claims management services include revenue earned from providing insurance claim assessment and administration services.
(9)(8)    Other services revenue is primarily associated with other hotel products and services, such as mobile key applications and hypoallergenic premium rooms, provided to Braemar by our consolidated subsidiaries, OpenKey and Pure Wellness.
(10)(9)    See note 1516 for discussion of segment reporting.

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ERFP CommitmentsOn June 26, 2018, the Company entered into the Ashford Trust ERFP Agreement with Ashford Trust. The independent members of the board of directors of each of the Company and Ashford Trust, with the assistance of separate and independent legal counsel, engaged to negotiate the Ashford Trust ERFP Agreement on behalf of the Company and Ashford Trust, respectively. On January 15, 2019, the Company entered into the Braemar ERFP Agreement (collectively with the Ashford Trust ERFP Agreement, the “ERFP Agreements”) with Braemar. The independent members of the board of directors of each of the Company and Braemar, with the assistance of separate and independent legal counsel, engaged to negotiate the Braemar ERFP Agreement on behalf of the Company and Braemar, respectively. Under the ERFP Agreements, the Company agreed to provide $50 million (each, an “Aggregate ERFP Amount” and collectively, the “Aggregate ERFP Amounts”) to each of Ashford Trust and Braemar (collectively, the “REITs”), respectively, in connection with each such REIT’s acquisition of hotels recommended by us, with the option to increase each Aggregate ERFP Amount to up to $100 million upon mutual agreement by the parties to the respective ERFP Agreement. Under each of the ERFP Agreements, the Company will paypaid each REIT 10% of each acquired hotel’s purchase price in exchange for furniture, fixtures and equipment (“FF&E”) at a property owned by such REIT, which will bewere subsequently leased by us to such REIT rent-free. Each of the REITs must provide reasonable advance notice to the Company to request ERFP funds in accordance with the respective ERFP Agreement. The ERFP Agreements requirerequired that the Company acquire the related FF&E either at the time of the property acquisition or at any time generally within two years of the respective REITs’ acquisition of the hotel property. The Company recognizesrecognized the related depreciation tax deduction at the time such FF&E iswas purchased by the Company and placed into service at the respective REIT’s hotel properties. However, the timing of the FF&E being purchased and placed into service iswas subject to uncertainties outside of the Company’s control that could delay the realization of any tax benefit associated with the purchase of FF&E.
On March 13, 2020,In the first quarter of 2021, Ashford Trust purchased FF&E from the Company entered intoat the Extension Agreement relatedfair market value of $82,000 upon expiration of the underlying leases of the FF&E under the Ashford Trust ERFP Agreement. The Company recorded a loss on sale of the FF&E of $107,000 which is included within “other” operating expense in our condensed consolidated statements of operations. Additionally, on January 20, 2021, Ashford Trust sold the Le Meridien hotel in Minneapolis, Minnesota. The hotel contained FF&E with a net book value of $399,000 which was owned by the Company and leased to Ashford Trust rent-free pursuant to the Ashford Trust ERFP Agreement. UnderThe Company recorded a loss on disposal of FF&E of $271,000 within “other” operating expense in our condensed consolidated statements of operations. Pursuant to the terms of the Extension Agreement, the deadline to fund the remaining ERFP commitment under theagreement, Ashford Trust ERFP Agreement of $11.4 million, was extended from January 22, 2021provided replacement FF&E to December 31, 2022. As of June 30, 2021, the Company has 0 remaining ERFP commitment to Braemar under the Braemar ERFP Agreement. See note 8.
On November 25, 2020, the independent members of the Ashford Trust board of directors granted the Company in its sole and absolute discretion, the right to set-off against the remaining ERFP commitmentthird quarter of $11.4 million, the fees pursuant2021 equal to the advisory agreement andfair market value of the sold FF&E with a fair market value of $128,000, which was subsequently leased back to Ashford Trust Agreement that have been or may be deferred by Ashford Inc.rent-free.
On April 20, 2021, the Company received written notice from Ashford Trust of Ashford Trust’s intention not to renew the Ashford Trust ERFP Agreement. As a result, the Ashford Trust ERFP Agreement terminated in accordance with its terms on June 26, 2021. The expiration of the Ashford Trust ERFP Agreement will havehas no impact on the Extension Agreement, which continues in full force and effect in accordance with its terms. See note 9.
On November 8, 2021, the Company delivered written notice to Braemar of the Company’s intention not to renew the Braemar ERFP Agreement. As a result, the Braemar ERFP Agreement terminated in accordance with its terms on January 15, 2022.
In the first quarter of 2021,2022, Ashford Trust purchased FF&E with a net book value of $1.1 million from the Company at the fair market value of $108,000$406,000 upon expiration of the underlying leases of the FF&E under the Ashford Trust ERFP Agreement.Agreement (which continue to survive following the termination of such agreement). The Company recorded a loss on sale of the FF&E of $81,000$706,000 which is included within “other” operating expense in our condensed consolidated statementsstatement of operations and an asset of $108,000 in “due from Ashford Trust” on our condensed consolidated balance sheets. Additionally, on January 20, 2021, Ashford Trust sold Le Meridian. The hotel contained FF&E with a net book value of $399,000 which was owned byfor the Company and leased to Ashford Trust rent-free pursuant to the Ashford Trust ERFP Agreement. Upon sale of the hotel, Ashford Trust is required to provide replacement FF&E to the Company at the fair market value amount of the sold FF&E, pursuant to the agreement. As a result, the Company recorded an asset of $128,000 in “due from Ashford Trust” on our condensed consolidated balance sheets, related to the fair market value of replacement assets, and a loss on disposal of FF&E of $271,000 within “other” operating expense in our condensed consolidated statements of operations.
During the second quarter of 2021, the Company purchased $1.6 million of FF&E from Braemar. The Company set-off the purchased FF&E against a $1.6 million outstanding receivable previously incurred by Braemar which was recorded in “due from Braemar” on our condensed consolidated balance sheets as ofthree months ended March 31, 2021. The FF&E purchased by the Company was subsequently leased back to Braemar rent-free.
In the second quarter of 2021, Braemar purchased FF&E from the Company at the fair market value of $144,000 upon expiration of the underlying leases of the FF&E under the Braemar ERFP Agreement. The Company recorded a loss on sale of the FF&E of $267,000 which is included within “other” operating expense in our condensed consolidated statements of operations and an asset of $144,000 in "due from Braemar" on our condensed consolidated balance sheets.2022.
Ashford SecuritiesOn September 25, 2019, the Company announced the formation of Ashford Securities LLC (“Ashford Securities”) to raise capital in order to grow the Company’s existing and future advised platforms. In conjunction with the formation of
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Ashford Securities, Ashford Trust and Braemar entered into a contribution agreement (the “Initial Contribution Agreement”) with Ashford Inc. pursuant to which Ashford Trust and Braemar agreed to a combined contribution of up to $15.0 million to fund the operations of Ashford Securities. These costs were allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raisedor other debt or equity offerings through Ashford Securities or June 10, 2023, there will be a true up (the “Initial True-upTrue-Up Date”) between Ashford Trust and Braemar whereby the actual expense reimbursements paid by each company will be based on the actual amount of capital raised by Ashford Trust and Braemar, respectively.
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On December 31, 2020, an Amended and Restated Contribution Agreement (the “Amended and Restated Contribution Agreement”) was entered into by the Company, Ashford Trust and Braemar with respect to expenses to be reimbursed by Ashford Securities. The Initial True-Up Date did not occur, and beginning on the effective date of the Amended and Restated Contribution Agreement, costs will be allocated based upon an allocation percentage of 50% to the Company, 50% to Braemar and 0% to Ashford Trust. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raisedor other debt or equity offerings through Ashford Securities or June 10, 2023, there will be an Amendedamended and Restatedrestated true up (the “Amended and Restated True-upTrue-Up Date”) among the Company, Ashford Trust and Braemar whereby the actual expense reimbursement paid by each company will be based on the actual amount of capital raised by the Company, Ashford Trust and Braemar, respectively.respectively, through Ashford Securities. After the Amended and Restated True-Up Date, the expense reimbursements will be allocated among the Company, Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Additionally, Braemar’s aggregate capital contributions underOn January 27, 2022, the Initial Contribution Agreement and theCompany entered into a Second Amended and Restated Contribution Agreement shall not exceed $3.8with Ashford Trust and Braemar which provided for an additional $18 million unless otherwise agreedin expenses to in writing bybe reimbursed with all expenses allocated 10% to the Company, 45% to Ashford Trust, and 45% to Braemar.
As of June 30, 2021,March 31, 2022, Ashford Trust and Braemar have funded approximately $3.0$4.0 million and $1.9$4.1 million, respectively. The Company recognized $462,000$527,000 and $1.2 million$0 of cost reimbursement revenue from Ashford Trust for the three and six months ended June 30, 2020,March 31, 2022 and 2021, respectively, in our condensed consolidated statements of operations. The Company recognized $553,000$1.0 million and $897,000$344,000 of cost reimbursement revenue from Braemar for the three and six months ended June 30,March 31, 2022 and 2021, respectively, and $159,000 and $430,000 of cost reimbursement revenue from Braemar for the three and six months ended June 30, 2020, respectively, in our condensed consolidated statements of operations. Cost reimbursement revenue for the three months ended March 31, 2022 includes $405,000 of dealer manager fees earned by Ashford Securities for the placement of Braemar’s non-listed preferred equity offerings.
Other Related Party TransactionsThe Company leases office space from Remington Hotel Corporation (“RHC”), an affiliate owned by the Bennetts, at our corporate headquarters in Dallas, Texas. For the three months ended March 31, 2022 and 2021, we recorded $839,000 and $837,000, respectively, in rent expense related to our corporate office lease with RHC.
Ashford Inc.’s Risk Management department collects funds from the Ashford Trust and Braemar properties and their respective management companies in an amount equal to the actuarial forecast of that year’s expected casualty claims and associated fees. These funds are deposited into restricted cash and used to pay casualty claims throughout the year as they are incurred. The claim liability related to the restricted cash balance is included in current “other liabilities” in our condensed consolidated balance sheets. See note 2.
The Company or its affiliates provide to the Bennetts or their permitted designees certain services, including, but not limited to, accounting, taxAshford Trust held a 16.65% noncontrolling interest in OpenKey as of March 31, 2022 and administrative services pursuant to that certain Transition Cost Sharing Agreement entered into on November 6, 2019December 31, 2021, and Braemar held a 7.77% noncontrolling interest in connection with Company’s acquisitionOpenKey as of Remington from the Bennetts. The gross amount of expensesMarch 31, 2022 and reimbursements for these transition services for the three and six months ended June 30, 2021 was $94,000 and $201,000, respectively. The gross amount of expenses and reimbursements for these transition services for the three and six months ended June 30, 2020 was $97,000 and $153,000, respectively.December 31, 2021.

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14.15. Income (Loss) Per Share
The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
Net income (loss) attributable to common stockholders – basic and diluted:Net income (loss) attributable to common stockholders – basic and diluted:Net income (loss) attributable to common stockholders – basic and diluted:
Net income (loss) attributable to the CompanyNet income (loss) attributable to the Company$(5,720)$(7,996)$(13,894)$(185,636)Net income (loss) attributable to the Company$948 $(8,174)
Less: Dividends on preferred stock, declared and undeclared (1)
Less: Dividends on preferred stock, declared and undeclared (1)
(8,633)(7,940)(17,239)(15,815)
Less: Dividends on preferred stock, declared and undeclared (1)
(9,373)(8,606)
Less: Amortization of preferred stock discountLess: Amortization of preferred stock discount(311)(795)(627)(1,605)Less: Amortization of preferred stock discount— (316)
Undistributed net income (loss) allocated to common stockholdersUndistributed net income (loss) allocated to common stockholders(14,664)(16,731)(31,760)(203,056)Undistributed net income (loss) allocated to common stockholders(8,425)(17,096)
Distributed and undistributed net income (loss) - basicDistributed and undistributed net income (loss) - basic$(14,664)$(16,731)$(31,760)$(203,056)Distributed and undistributed net income (loss) - basic$(8,425)$(17,096)
Distributed and undistributed net income (loss) - dilutedDistributed and undistributed net income (loss) - diluted$(14,664)$(16,731)$(31,760)$(203,056)Distributed and undistributed net income (loss) - diluted$(8,425)$(17,096)
Weighted average common shares outstanding:Weighted average common shares outstanding:Weighted average common shares outstanding:
Weighted average common shares outstanding – basicWeighted average common shares outstanding – basic2,764 2,269 2,724 2,236 Weighted average common shares outstanding – basic2,809 2,686 
Weighted average common shares outstanding – dilutedWeighted average common shares outstanding – diluted2,764 2,269 2,724 2,236 Weighted average common shares outstanding – diluted2,809 2,686 
Income (loss) per share – basic:Income (loss) per share – basic:Income (loss) per share – basic:
Net income (loss) allocated to common stockholders per shareNet income (loss) allocated to common stockholders per share$(5.31)$(7.37)$(11.66)$(90.81)Net income (loss) allocated to common stockholders per share$(3.00)$(6.36)
Income (loss) per share – diluted:Income (loss) per share – diluted:Income (loss) per share – diluted:
Net income (loss) allocated to common stockholders per shareNet income (loss) allocated to common stockholders per share$(5.31)$(7.37)$(11.66)$(90.81)Net income (loss) allocated to common stockholders per share$(3.00)$(6.36)
________
(1)    Undeclared dividends were deducted to arrive at net income (loss) attributable to common stockholders. See note 10.11.
Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
Net income (loss) allocated to common stockholders is not adjusted for:Net income (loss) allocated to common stockholders is not adjusted for:Net income (loss) allocated to common stockholders is not adjusted for:
Net income (loss) attributable to redeemable noncontrolling interests in Ashford HoldingsNet income (loss) attributable to redeemable noncontrolling interests in Ashford Holdings$(19)$(25)$(43)$(361)Net income (loss) attributable to redeemable noncontrolling interests in Ashford Holdings$(9)$(24)
Net income (loss) attributable to redeemable noncontrolling interests in subsidiary common stockNet income (loss) attributable to redeemable noncontrolling interests in subsidiary common stock(619)(152)(723)Net income (loss) attributable to redeemable noncontrolling interests in subsidiary common stock— (152)
Dividends on preferred stock, declared and undeclaredDividends on preferred stock, declared and undeclared8,633 7,940 17,239 15,815 Dividends on preferred stock, declared and undeclared9,373 8,606 
Amortization of preferred stock discountAmortization of preferred stock discount311 795 627 1,605 Amortization of preferred stock discount— 316 
TotalTotal$8,925 $8,091 $17,671 $16,336 Total$9,364 $8,746 
Weighted average diluted shares are not adjusted for:Weighted average diluted shares are not adjusted for:Weighted average diluted shares are not adjusted for:
Effect of unvested restricted sharesEffect of unvested restricted shares121 15 71 34 Effect of unvested restricted shares97 22 
Effect of assumed conversion of Ashford Holdings unitsEffect of assumed conversion of Ashford Holdings unitsEffect of assumed conversion of Ashford Holdings units
Effect of incremental subsidiary sharesEffect of incremental subsidiary shares97 561 159 481 Effect of incremental subsidiary shares104 221 
Effect of assumed conversion of preferred stockEffect of assumed conversion of preferred stock4,246 4,068 4,227 4,068 Effect of assumed conversion of preferred stock4,365 4,208 
TotalTotal4,468 4,648 4,461 4,587 Total4,574 4,455 
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15.16. Segment Reporting
Our operating segments include: (a) REIT Advisory, which provides asset management and advisory services to other entities,entities; (b) Remington, which provides hotel management services,services; (c) Premier, which provides comprehensive and cost-effective design, development, architectural, and project management services,services; (d) JSAV,INSPIRE, which provides event technology and creative communications solutions services,services; (e) OpenKey, a hospitality focused mobile key platform that provides a universal smartphone app for keyless entry into hotel guest rooms,rooms; (f) RED, a provider of watersports activities and other travel and transportation services,services; (g) Marietta, which holds the leasehold rights to a single hotel and convention center property in Marietta, Georgia,Georgia; and (h) Pure Wellness, which provides hypoallergenic premium rooms in the hospitality and commercial office industry, and (i) Lismore and REA Holdings, which provide debt placement and related services, real estate advisory services and brokerage services.industry. For 2021,2022, OpenKey, RED, Marietta and Pure Wellness and Lismore and REA Holdings do not meet the aggregation criteria or the quantitative thresholds to individually qualify as reportable segments. However, we have elected to disclose RED and OpenKey as a reportable segment.segments. Accordingly, we have fivesix reportable segments: REIT Advisory, Remington, Premier, JSAVINSPIRE, RED and OpenKey. We combine the operating results of RED, Marietta and Pure Wellness and Lismore and REA Holdings into an “all other” 6th7th reportable segment, which we refer to as “Corporate and Other.” See footnote 3 for details of our segments’ material revenue generating activities.
Our chief operating decision makermaker’s (“CODM”) uses multiple measures of segment profitability for assessing performance of our business. Our reportedprimary measure of segment profitability is net income, although the CODM also focuses on adjusted EBITDA and adjusted net income, which exclude certain gains, losses and charges, to assess performance and allocate resources.income. Our CODM currently reviews assets at the corporate (consolidated)consolidated level and does not currently review segment assets to make key decisions on resource allocations.
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(unaudited)

Since such asset information by segment is not reviewed by our CODM, segment assets are not available for disclosure.
Certain information concerning our segments for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 are presented in the following tables (in thousands). Consolidated subsidiaries are reflected as of their respective acquisition dates or as of the date we were determined to be the primary beneficiary of variable interest entities.
Three Months Ended June 30, 2021Three Months Ended March 31, 2022
REIT AdvisoryRemingtonPremierJSAVOpenKeyCorporate and OtherAshford Inc. ConsolidatedREIT AdvisoryRemingtonPremierINSPIREREDOpenKeyCorporate and OtherAshford Inc. Consolidated
REVENUEREVENUEREVENUE
Advisory services$10,062 $$$$$$10,062 
Hotel management6,515 6,515 
Advisory services feesAdvisory services fees$11,802 $— $— $— $— $— $— $11,802 
Hotel management feesHotel management fees— 7,178 — — — — — 7,178 
Design and construction feesDesign and construction fees1,867 1,867 Design and construction fees— — 4,524 — — — — 4,524 
Audio visualAudio visual9,451 9,451 Audio visual— — — 24,965 — — — 24,965 
OtherOther16 477 11,673 12,166 Other15 181 — — 6,045 378 4,820 11,439 
Cost reimbursement revenue (1)
Cost reimbursement revenue (1)
6,667 40,496 563 553 48,279 
Cost reimbursement revenue (1)
7,576 63,148 1,702 57 — 1,564 74,051 
Total revenuesTotal revenues16,745 47,011 2,430 9,451 477 12,226 88,340 Total revenues19,393 70,507 6,226 25,022 6,045 382 6,384 133,959 
EXPENSESEXPENSESEXPENSES
Depreciation and amortizationDepreciation and amortization1,084 3,034 3,057 470 610 8,259 Depreciation and amortization853 2,696 2,962 468 112 530 7,625 
Other operating expenses (2)
Other operating expenses (2)
267 3,333 2,274 10,027 1,314 19,721 36,936 
Other operating expenses (2)
706 4,308 2,995 22,371 5,069 1,295 12,720 49,464 
Reimbursed expenses (1)
Reimbursed expenses (1)
6,533 40,496 563 553 48,145 
Reimbursed expenses (1)
7,433 63,148 1,702 57 — 1,564 73,908 
Total operating expensesTotal operating expenses7,884 46,863 5,894 10,497 1,318 20,884 93,340 Total operating expenses8,992 70,152 7,659 22,896 5,181 1,303 14,814 130,997 
OPERATING INCOME (LOSS)OPERATING INCOME (LOSS)8,861 148 (3,464)(1,046)(841)(8,658)(5,000)OPERATING INCOME (LOSS)10,401 355 (1,433)2,126 864 (921)(8,430)2,962 
Equity in earnings (loss) of unconsolidated entitiesEquity in earnings (loss) of unconsolidated entities(154)96 (58)Equity in earnings (loss) of unconsolidated entities— — — — — — 190 190 
Interest expenseInterest expense(210)(1,078)(1,288)Interest expense— — — (240)(159)— (880)(1,279)
Amortization of loan costsAmortization of loan costs(15)(30)(45)Amortization of loan costs— — — (35)(16)— (22)(73)
Interest incomeInterest income72 72 Interest income— 70 — — — — 11 81 
Realized gain (loss) on investmentsRealized gain (loss) on investments(179)(179)Realized gain (loss) on investments— (71)— — — — — (71)
Other income (expense)Other income (expense)14 (187)(172)Other income (expense)— 167 — 14 (37)— 147 
INCOME (LOSS) BEFORE INCOME TAXESINCOME (LOSS) BEFORE INCOME TAXES8,861 (112)(3,464)(1,257)(841)(9,857)(6,670)INCOME (LOSS) BEFORE INCOME TAXES10,401 521 (1,433)1,865 652 (921)(9,128)1,957 
Income tax (expense) benefitIncome tax (expense) benefit(2,179)(400)552 257 2,467 697 Income tax (expense) benefit(2,451)(133)341 (994)(341)— 2,300 (1,278)
NET INCOME (LOSS)NET INCOME (LOSS)$6,682 $(512)$(2,912)$(1,000)$(841)$(7,390)$(5,973)NET INCOME (LOSS)$7,950 $388 $(1,092)$871 $311 $(921)$(6,828)$679 
________
(1)    Our segments are reported net of eliminations upon consolidation. Approximately $2.1$2.9 million of hotel management fees revenue, cost reimbursement revenue and reimbursed expenses were eliminated in consolidation primarily for overhead expenses reimbursed to Remington including rent, payroll, office supplies, travel and accounting.
(2)    Other operating expenses includes salaries and benefits, costs of revenues for design and construction, cost of revenues for audio visual, general and administrative expenses and other expenses.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Six Months Ended June 30, 2021Three Months Ended March 31, 2021
REIT AdvisoryRemingtonPremierJSAVOpenKeyCorporate and OtherAshford Inc. ConsolidatedREIT AdvisoryRemingtonPremierINSPIREREDOpenKeyCorporate and OtherAshford Inc. Consolidated
REVENUEREVENUEREVENUE
Advisory services$19,989 $$$$$$19,989 
Advisory services feesAdvisory services fees$9,927 $— $— $— $— $— $— $9,927 
Hotel management feesHotel management fees10,987 10,987 Hotel management fees— 4,472 — — — — — 4,472 
Design and construction feesDesign and construction fees3,409 3,409 Design and construction fees— — 1,542 — — — — 1,542 
Audio visualAudio visual13,062 13,062 Audio visual— — — 3,611 — — — 3,611 
OtherOther33 20 931 21,811 22,795 Other17 20 — — 4,561 454 5,577 10,629 
Cost reimbursement revenue (1)
Cost reimbursement revenue (1)
11,791 68,378 965 897 82,031 
Cost reimbursement revenue (1)
5,124 26,317 402 — — — 344 32,187 
Total revenuesTotal revenues31,813 79,385 4,374 13,062 931 22,708 152,273 Total revenues15,068 30,809 1,944 3,611 4,561 454 5,921 62,368 
EXPENSESEXPENSESEXPENSES
Depreciation and amortizationDepreciation and amortization2,073 6,068 6,113 937 1,199 16,398 Depreciation and amortization989 3,034 3,056 467 92 497 8,139 
Other operating expenses (2)
Other operating expenses (2)
619 6,622 3,953 16,845 2,561 36,135 66,735 
Other operating expenses (2)
352 3,289 1,679 6,818 3,546 1,247 12,868 29,799 
Reimbursed expenses (1)
Reimbursed expenses (1)
11,585 68,378 965 897 81,825 
Reimbursed expenses (1)
5,052 26,317 402 — — — 344 32,115 
Total operating expensesTotal operating expenses14,277 81,068 11,031 17,782 2,569 38,231 164,958 Total operating expenses6,393 32,640 5,137 7,285 3,638 1,251 13,709 70,053 
OPERATING INCOME (LOSS)OPERATING INCOME (LOSS)17,536 (1,683)(6,657)(4,720)(1,638)(15,523)(12,685)OPERATING INCOME (LOSS)8,675 (1,831)(3,193)(3,674)923 (797)(7,788)(7,685)
Equity in earnings (loss) of unconsolidated entitiesEquity in earnings (loss) of unconsolidated entities(154)(18)(172)Equity in earnings (loss) of unconsolidated entities— — — — — — (114)(114)
Interest expenseInterest expense(413)(2,142)(2,555)Interest expense— — — (203)(154)— (910)(1,267)
Amortization of loan costsAmortization of loan costs(44)(87)(131)Amortization of loan costs— — — (29)(3)— (54)(86)
Interest incomeInterest income133 135 Interest income— 61 — — — — 63 
Realized gain (loss) on investmentsRealized gain (loss) on investments(373)(373)Realized gain (loss) on investments— (194)— — — — — (194)
Other income (expense)Other income (expense)(107)(1)(178)(285)Other income (expense)— — — (121)(1)(113)
INCOME (LOSS) BEFORE INCOME TAXESINCOME (LOSS) BEFORE INCOME TAXES17,536 (2,076)(6,657)(5,284)(1,639)(17,946)(16,066)INCOME (LOSS) BEFORE INCOME TAXES8,675 (1,964)(3,193)(4,027)767 (798)(8,856)(9,396)
Income tax (expense) benefitIncome tax (expense) benefit(4,133)(663)1,320 1,077 4,047 1,648 Income tax (expense) benefit(1,954)(263)768 820 (260)— 1,840 951 
NET INCOME (LOSS)NET INCOME (LOSS)$13,403 $(2,739)$(5,337)$(4,207)$(1,639)$(13,899)$(14,418)NET INCOME (LOSS)$6,721 $(2,227)$(2,425)$(3,207)$507 $(798)$(7,016)$(8,445)
________
(1)    Our segments are reported net of eliminations upon consolidation. Approximately $4.1$2.0 million of hotel management fees revenue, cost reimbursement revenue and reimbursed expenses were eliminated in consolidation primarily for overhead expenses reimbursed to Remington including rent, payroll, office supplies, travel and accounting.
(2)    Other operating expenses includes salaries and benefits, costs of revenues for design and construction, cost of revenues for audio visual, general and administrative expenses and other expenses.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

17. Subsequent Events
On April 1, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) with Mustang Lodging Funding LLC, as administrative agent, and the lenders from time to time party thereto. The Credit Agreement evidences a senior secured term loan facility (the “Credit Facility”) in the amount of $100 million, including a $50 million term loan funded on the closing date of the Credit Facility (the “Closing Date”) and commitments to fund up to an additional $50 million of term loans in up to 5 separate borrowings within 24 months after the Closing Date, subject to certain conditions. The Company used a portion of the proceeds from the Credit Agreement to pay off the remaining $26.6 million balance of the Company’s existing Term Loan Agreement as of March 31, 2022 and pay dividends to the holders of the Series D Convertible Preferred Stock as stated below. On April 18, 2022, the Company drew an additional $20.0 million on the Credit Facility. The Credit Facility is a five-year interest-only facility with all outstanding principal due at maturity, with 3 successive one-year extension options subject to an increase in the interest rate during each extension period. Borrowings under the Credit Agreement will bear interest, at the Company’s option, at either the Eurodollar Rate (defined as LIBOR or a comparable or successor rate, with a floor of 0.25%) plus an applicable margin, or the base rate (defined as the highest of the federal funds rate plus 0.50%, the prime rate or the Eurodollar Rate plus 1.00%, with a floor of 1.25%) plus an applicable margin. The applicable margin for borrowings under the Credit Agreement for Eurodollar loans will be 7.35% per annum and the applicable margin for base rate loans will be 6.35% per annum, with increases to both applicable margins of 0.50%, 0.75% and 1.00% per annum during each of the 3 extension periods, respectively. The remaining undrawn balance of the Credit Facility is subject to an unused fee of 1.0%.
The Credit Facility does not require the maintenance of financial covenants, but if the ratio (the “Leverage Ratio”) of consolidated funded indebtedness that is recourse to the Company or any guarantor (less unrestricted cash) to consolidated EBITDA of the Company and its subsidiaries is greater than 4.00 to 1.00 as of the end of any fiscal quarter during the term of the loan, including any extension period, then the Company is required to apply 100% of the excess cash flow generated during such fiscal quarter to prepay the term loans. During any extension period, the Company is also required to apply 100% of the excess cash flow generated during such period to prepay the term loans. The Company may not pay dividends on the Company’s shares of common stock or preferred stock if the Leverage Ratio is greater than 3.00 to 1.00 after giving effect to the payment of such dividends. The Credit Agreement is guaranteed by the Company, Ashford LLC, and certain subsidiaries of the Company, and secured by, among other things, all of the assets of Ashford LLC and each guarantor and a pledge of the equity interests in Ashford LLC and each guarantor.
On April 10, 2022, the Company’s board of directors (the “Board”) declared a cash dividend on the Company’s Series D Convertible Preferred Stock for accrued and unpaid dividends for the quarters ending June 30, 2020 and December 31, 2020 to stockholders of record as of April 11, 2022. The Company paid the dividend of approximately $17.8 million, or $0.932 per share of Series D Convertible Preferred Stock, on April 15, 2022. Dividends for the Series D Convertible Preferred Stock remain in arrears for the quarters ending June 30, 2021 and December 31, 2021. On April 15, 2022, the Company additionally paid $8.7 million of dividends previously declared by the Board with respect to the Company’s Series D Convertible Preferred Stock for the first quarter of 2022.
On April 15, 2022, the Company acquired privately held Chesapeake Hospitality (“Chesapeake”), a premier third-party hotel management company. The Company paid to the seller $6.3 million in cash, subject to certain adjustments, and issued to the seller 378,000 Series CHP Convertible Preferred Units of Ashford Holdings (the “Series CHP Units”) at $25 per Unit, for a total value of $9.45 million. The seller also has the ability to earn up to $10.25 million of additional consideration based on its base management fee contribution for the trailing twelve month periods ending March 2024 and March 2025, respectively, for a total potential consideration of $26 million, subject to certain adjustments. The first $6.3 million of such additional consideration is payable in cash and any amounts payable in excess of such $6.3 million may be satisfied by the issuance of shares of common stock of the Company, common units of Ashford Holdings or additional Series CHP Units, as determined by the Company in its sole discretion. Each Series CHP Unit will (i) have a liquidation value of $25 per share, (ii) be entitled to cumulative dividends at the rate of 7.28% per annum, payable quarterly in arrears, (iii) participate in any dividend or distribution on the common stock of the Company in addition to the preferred dividends, (iv) be convertible into common units of Ashford Holdings at $117.50 per unit, which common units of Ashford Holdings will then be exchangeable into common stock of the Company on a 1:1 ratio and (v) provide for customary anti-dilution protections. In the event the Company fails to pay the required dividends on the Series CHP Units for two consecutive quarterly periods (a “Preferred Unit Breach”), then until such arrearage is paid in cash in full, the dividend rate on the Series CHP Units will increase to 10.00% per annum until no Preferred Unit Breach exists. Except with respect to certain protective provisions, no holder of Series CHP Units will have voting rights in its capacity as such. As long as any Series CHP Units are outstanding, the Company is prohibited from taking specified actions without the consent of at least 50% of the holders of Series CHP Units, including (i) modifying the terms,
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ASHFORD INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Three Months Ended June 30, 2020
REIT AdvisoryRemingtonPremierJSAVOpenKeyCorporate and OtherAshford Inc. Consolidated
REVENUE
Advisory services$11,430 $$$$$$11,430 
Hotel management3,691 3,691 
Design and construction fees2,052 2,052 
Audio visual970 970 
Other83 292 2,962 3,337 
Cost reimbursement revenue (1)
4,037 18,768 692 621 24,118 
Total revenues15,550 22,459 2,744 970 292 3,583 45,598 
EXPENSES
Depreciation and amortization2,437 3,534 3,157 488 489 10,109 
Other operating expenses (2)
3,357 1,823 5,059 734 11,600 22,573 
Reimbursed expenses (1)
3,974 18,768 692 621 24,055 
Total operating expenses6,411 25,659 5,672 5,547 738 12,710 56,737 
OPERATING INCOME (LOSS)9,139 (3,200)(2,928)(4,577)(446)(9,127)(11,139)
Equity in earnings (loss) of unconsolidated entities17 17 
Interest expense(184)(1,062)(1,246)
Amortization of loan costs(14)(76)(90)
Interest income
Realized gain (loss) on investments(11)(11)
Other income (expense)14 141 (16)(73)66 
INCOME (LOSS) BEFORE INCOME TAXES9,139 (3,197)(2,928)(4,634)(462)(10,320)(12,402)
Income tax (expense) benefit(2,170)525 559 1,171 3,399 3,484 
NET INCOME (LOSS)$6,969 $(2,672)$(2,369)$(3,463)$(462)$(6,921)$(8,918)
________
(1)    Our segments are reported netrights, preferences, privileges or voting powers of eliminations upon consolidation. Approximately $2.4 millionthe Series CHP Units or (ii) altering the rights, preferences or privileges of hotel management revenue, cost reimbursement revenue and reimbursed expenses were eliminated in consolidation primarily for overhead expenses reimbursedany Units of Ashford Holdings so as to Remington including rent, payroll, office supplies, travel and accounting.
(2)    Other operating expenses includes salaries and benefits, costs of revenues for design and construction, cost of revenues for audio visual, general and administrative expenses and other expenses.
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ASHFORD INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Six Months Ended June 30, 2020
REIT AdvisoryRemingtonPremierJSAVOpenKeyCorporate and OtherAshford Inc. Consolidated
REVENUE
Advisory services$23,266 $$$$$$23,266 
Hotel management9,815 9,815 
Design and construction fees5,990 5,990 
Audio visual30,644 30,644 
Other140 814 9,074 10,028 
Cost reimbursement revenue (1)
13,101 83,100 1,906 1,590 99,697 
Total revenues36,507 92,915 7,896 30,644 814 10,664 179,440 
EXPENSES
Depreciation and amortization4,876 6,911 6,314 992 10 975 20,078 
Impairment126,548 49,524 2,141 178,213 
Other operating expenses (2)
7,652 4,887 31,445 1,722 25,467 71,173 
Reimbursed expenses (1)
12,970 83,100 1,906 1,590 99,566 
Total operating expenses17,846 224,211 62,631 34,578 1,732 28,032 369,030 
OPERATING INCOME (LOSS)18,661 (131,296)(54,735)(3,934)(918)(17,368)(189,590)
Equity in earnings (loss) of unconsolidated entities253 253 
Interest expense(441)(1,981)(2,422)
Amortization of loan costs(28)(128)(156)
Interest income29 29 
Realized gain (loss) on investments(386)(386)
Other income (expense)26 (314)(6)(161)(455)
INCOME (LOSS) BEFORE INCOME TAXES18,661 (131,656)(54,735)(4,717)(924)(19,356)(192,727)
Income tax (expense) benefit(4,423)1,714 727 1,037 6,514 5,569 
NET INCOME (LOSS)$14,238 $(129,942)$(54,008)$(3,680)$(924)$(12,842)$(187,158)
________
(1)    Our segments are reported net of eliminations upon consolidation. Approximately $5.8 million of hotel management revenue, cost reimbursement revenue and reimbursed expenses were eliminated in consolidation primarily for overhead expenses reimbursed to Remington including rent, payroll, office supplies, travel and accounting.
(2)    Other operating expenses includes salaries and benefits, costs of revenues for design and construction, cost of revenues for audio visual, general and administrative expenses and other expenses.
16. Subsequent Eventsadversely affect the Series CHP Units.
On April 15, 2022, the Company and Ashford Services agreed with Jeremy Welter, the Chief Operating Officer of the Company, that, effective July 12, 2021,15, 2022 (the “Resignation Date”), Mr. Welter would terminate employment with and service to the Company, Ashford Services and their affiliates. Mr. Welter is also the Chief Operating Officer of Ashford Trust and Braemar invested $250,000 and $117,000, respectively, in OpenKey.
On July 23, 2021, RED entered into a new term loan agreement with a maximum principal amountaccordingly his service as Chief Operating Officer of $900,000 at an interest rate equal toeach of Ashford Trust and Braemar will also end effective as of the Prime Rate plus 2.00%. The term loan matures August 5, 2029, and RED will not be required to make any payments of principal until May 5, 2022. The term loan does not have recourse to the Company.
On July 23, 2021, RED consolidated the draw term loan previously maturing August 2028 and RED’s outstanding line of credit previously maturing August 2021 into a new term loan with an outstanding principal balance of $2.2 million at an interest rate equal to the Prime Rate plus 2.00%. The new term loan matures on August 5, 2029, and RED will be required to pay monthly installments of principal and interest commencing September 5, 2021 until the maturity date. The term loan does not have recourse to the Company.
On July 23, 2021, RED consolidated the draw term loan previously maturing June 2027 and two term loans previously maturing October 2025 and February 2029 into a new term loan with an outstanding principal balance of $3.5 million at an interest rate equal to the Prime Rate plus 1.75%. The new term loan matures on August 5, 2029, and RED will be required to pay monthly installments of principal and interest commencing September 5, 2021 until the maturity date. The term loan has recourse to the Company.Resignation Date.
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ASHFORD INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

On August 16, 2021, the Company entered into Amendment No. 2 to the Fifth Amended and Restated Advisory Agreement with Braemar (“Amendment No. 2”). The Fifth Amended and Restated Advisory Agreement was amended to delete Section 6.7 in its entirety in order to remove the requirement that the Company disclose in each Quarterly Report on Form 10-Q and each Annual Report on Form 10-K that it files under the Exchange Act the incremental expenses incurred by the Company in connection with providing services to Braemar under the Amended and Restated Advisory Agreement (the “Incremental Expenses”) and to provide to the audit committee of the board of directors of Braemar a report of an accounting firm that the Company’s determination of such Incremental Expenses is reasonable.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

As used in this Quarterly Report on Form 10-Q, unless the context otherwise indicates, the references to “we,” “us,” “our,” and the “Company” refer to Ashford Inc., a Nevada corporation, and, as the context may require, its consolidated subsidiaries, including Ashford Hospitality Advisors LLC, a Delaware limited liability company, which we refer to as “Ashford LLC” or “our operating company”; Ashford Hospitality Holdings LLC, a Delaware limited liability company, which we refer to as “Ashford Holdings”; Ashford Hospitality Services LLC, a Delaware limited liability company, which we refer to as “Ashford Services”; Premier Project Management LLC, a Maryland limited liability company, which we refer to as “Premier Project Management,” or “Premier”; and Remington Lodging & Hospitality, LLC, a Delaware limited liability company, which we refer to as “Remington”; and Marietta Leasehold, L.P. (“Marietta”).“Remington.”“Braemar” refers to Braemar Hotels & Resorts Inc., a Maryland corporation, and, as the context may require, its consolidated subsidiaries, including Braemar Hospitality Limited Partnership, a Delaware limited partnership, which we refer to as “Braemar OP.” “Ashford Trust” or “AHT” refers to Ashford Hospitality Trust, Inc., a Maryland corporation, and, as the context may require, its consolidated subsidiaries, including Ashford Hospitality Limited Partnership, a Delaware limited partnership and Ashford Trust’s operating partnership, which we refer to as “Ashford Trust OP.”
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains certain forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature: 
the impact of the ongoing COVID-19 pandemic, including the resurgence of cases relating to the spread of the Delta, Omicron or other potential variants, on our business, financial condition, liquidity and results of operations;
the impact of numerous governmental travel restrictions and other orders related to COVID-19 on our clients’ and our business, including one or more possible recurrences of COVID-19 case surges that could cause state and local governments to reinstate travel restrictions;
our business and investment strategy;
our projected operating results;
our ability to obtain future financing arrangements;
our ability to maintain compliance with the NYSE American LLC (the “NYSE American”) continued listing standards;
our understanding of our competition;
market trends;
the future success of recent acquisitions, including the 2018 acquisition of Premier and the 2019 acquisition of Remington;
the future success of recent business initiatives with Ashford Trust and Braemar;
projected capital expenditures; and
the impact of technology on our operations and business.
Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward-looking information. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, taking into account all information currently available to us, our actual results and performance could differ materially from those set forth in our forward-looking statements. Factors that could have a material adverse effect on our forward-looking statements include, but are not limited to:
the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020,2021, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2021,25, 2022, including under the sections captioned “Item 1. Business,” “Item 1A. Risk Factors,” “Item 3. Legal Proceedings,” and “Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations;Operations, as supplemented by our subsequent Quarterly Reports on Form 10-Q and other filings under the Exchange Act;
adverse effects of the COVID-19 pandemic, including a significant reduction in business and personal travel and potential travel restrictions in regions where our clients’ hotels are located, and one or more possible recurrences of
44


COVID-19 case surges causing a further reduction in business and personal travel and potential reinstatement of travel restrictions by state or local governments;
extreme weather conditions may cause property damage or interrupt business;
actions by our clients’ lenders to accelerate loan balances and foreclose on our clients’ hotel properties that are security for our clients’ loans that are in default;
53


uncertainty associated with the ability of the Company to remain in compliance with all covenants in our Term LoanCredit Agreement (as defined below) and our subsidiaries to remain in compliance with the covenants of their debt and related agreements;
general volatility of the capital markets, the general economy or the hospitality industry, whether the result of market events or otherwise, and the market price of our common stock;
availability, terms and deployment of capital;
changes in our industry and the market in which we operate, interest rates or the general economy;
the degree and nature of our competition;
actual and potential conflicts of interest with or between Ashford Trust and Braemar, our executive officers and our non-independent directors;
availability of qualified personnel;
changes in governmental regulations, accounting rules, tax rates and similar matters;
our ability to implement effective internal controls to address the material weakness identified in this report;
legislative and regulatory changes;
the timing and outcome of the SEC investigation;
the possibility that we may not realize any or all of the anticipated benefits from transactions to acquire businesses, including the 2018 acquisition of Premier and the 2019 acquisition of Remington, and the possibility we will be required to record additional goodwill impairments relating to Remington as a result of the impact of the COVID-19 pandemic on our clients’, and our business;
the possibility that the lodging industry may not fully recover to pre-pandemic levels as a result of the acceptance of “work-from-home” business practices and potentially lasting increased adoption of remote meeting and collaboration technologies;
the possibility that we may not realize any or all of the anticipated benefits from our business initiatives, including the ERFP Agreement with Braemar;initiatives;
the failure to make full dividend payments on our Series D Convertible Preferred Stock in consecutive quarters, which would result in a higher interest rate and the right of Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. to each have the right to appoint one member to the Board until such arrearages are paid in full;
disruptions relating to the acquisition or integration of Premier, Remington or any other business we invest in or acquire, which may harm relationships with customers, employees and regulators; and
unexpected costs of further goodwill impairments relating to the acquisition or integration of Remington or any other business we invest in or acquire.
When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements under “Item 1A. Risk Factors” of our Annual Report and this Quarterly Report, the discussion in this Management’s Discussion and Analysis of Financial Conditions and Results of Operations, and elsewhere which could cause our actual results and performance to differ significantly from those contained in our forward-looking statements. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 outbreak and the numerous government travel restrictions imposed in response thereto. The extent to which COVID-19 impacts us will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Accordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Form 10-Q. Furthermore, we do not intend to update any of our forward-looking statements after the date of this Form 10-Q to conform these statements to actual results and performance, except as may be required by applicable law.
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Overview
Ashford Inc. is a Nevada corporation that provides products and services primarily to clients in the hospitality industry, including Ashford Trust and Braemar. We became a public company in November 2014, and our common stock is listed on the NYSE American. As of August 11, 2021,May 9, 2022, Mr. Monty J. Bennett, Ashford Inc.’s Chairman and Chief Executive Officer and the Chairman of Ashford Trust and Braemar, and his father, Mr. Archie Bennett, Jr., Chairman Emeritus of Ashford Trust, owned approximately 608,578610,246 shares of our common stock, which represented an approximately 20.1%19.6% ownership interest in Ashford Inc., and owned 18,758,600 shares of our Series D Convertible Preferred Stock (the “Series D Convertible Preferred Stock”), which is exercisable (at an exerciseconvertible at a price of $117.50 per share)share into an additional approximate 3,991,191 shares of Ashford Inc. common stock, which if exercised as of August 11, 2021May 9, 2022 would have increased Mr. Monty J. Bennett and Mr. Archie Bennett, Jr.’s ownership interest in Ashford Inc. to 65.6%approximately 64.8%.
We provide: (i) advisory services; (ii) asset management services; (iii) hotel management services; (iv) design and construction and architectural services; (v) event technology and creative communications solutions; (vi) mobile room keys and keyless entry solutions; (vii) watersports activities and other travel, concierge and transportation services; (viii) hypoallergenic premium room products and services; (ix) debt placement and related services; (x) real estate advisory and brokerage services; and (xi) wholesaler, dealer manager and other broker-dealer services. We conduct these activities and own substantially all of our assets primarily through Ashford LLC, Ashford Services and their respective subsidiaries.
We seek to grow through the implementation of two primary strategies: (i) increasing our assets under management; and (ii) pursuing third-party business to grow our other products and services businesses.
We are currently the advisor for Ashford Trust and Braemar. In our capacity as the advisor to Ashford Trust and Braemar, we are responsible for implementing the investment strategies and managing the day-to-day operations of Ashford Trust and Braemar and their respective hotels from an ownership perspective, in each case subject to the respective advisory agreements and the supervision and oversight of the respective boards of directors of Ashford Trust and Braemar. Ashford Trust is focused on investing in full-service hotels in the upscale and upper upscale segments in the United States that have RevPAR generally less than twice the U.S. national average. Braemar invests primarily in luxury hotels and resorts with RevPAR of at least twice the U.S. national average. Each of Ashford Trust and Braemar is a REIT as defined in the Internal Revenue Code, and the common stock of each of Ashford Trust and Braemar is traded on the NYSE.
Recent Developments
COVID-19, Management’s PlansOn March 10, 2022, the Company entered into a Limited Waiver Under Advisory Agreement (“Braemar Limited Waiver”) with Braemar, Braemar Hospitality Limited Partnership (“Braemar OP”), Braemar TRS Corporation and Liquidity
In December 2019, COVID-19 was identified in Wuhan, China,Ashford LLC. On March 15, 2022, the Company entered into a Limited Waiver Under Advisory Agreement (the “Ashford Trust Limited Waiver” and subsequently spreadtogether with the Braemar Limited Waiver, the “Limited Waivers”) with Ashford Trust, Ashford Hospitality Limited Partnership (“Ashford Trust OP”), Ashford TRS Corporation (“Ashford Trust TRS”) and Ashford LLC. Pursuant to other regions of the world, which has resulted in significant travel restrictionsLimited Waivers, the parties to the Second Amended and extended shutdown of numerous businesses throughout the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Our clients,Restated Advisory Agreement with Ashford Trust and the Fifth Amended and Restated Advisory Agreement with Braemar have reportedwaive the operation of any provision such agreement that would otherwise limit the negative impact on room demand within their respective portfolios stemming from COVID-19 is significant, which has resultedability of Ashford Trust or Braemar, as applicable, in its discretion, at its cost and is expectedexpense, to result in significantly reduced occupancyaward during the first and RevPAR. Furthermore, second fiscal quarters of calendar year 2022 (the prolonged presence“Waiver Period”), cash incentive compensation to employees and other representatives of the virus has resultedCompany; provided that, pursuant to the Ashford Trust Limited Waiver, such awarded cash incentive compensation does not exceed $8,476,000, in health and other government authorities imposing widespread restrictions on travel and other businesses. The hotel industry has experienced postponement or cancellationthe aggregate, during the Waiver Period.
As of a significant number of business conferences and similar events. Following the government mandates and health official orders,March 31, 2022, the Company dramatically reduced staffing and expenses at its products and services businesses and at its corporate office. COVID-19 has had a significant negative impact on the Company’s operations and financial resultsaggregate undeclared preferred stock dividends of approximately $35.2 million, which relates to date. In addition, one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. The Company expects that the COVID-19 pandemic will continue to have a significant negative impact on the Company’s results of operations, financial position and cash flow in 2021 and potentially beyond. As a result, in March 2020, the Company amended payment terms pursuant to certain hotel management agreements to better manage corporate working capital, reduced planned capital expenditures, significantly reduced operating expenses and reduced the cash compensation of its executive officers and other employees, including an arrangement pursuant to which Mr. Monty J. Bennett received his base salary in the form of common stock issued under the Company’s 2014 Incentive Plan, as amended. Additionally, the Company did not declare dividends which were due with respect to its Series D Convertible Preferred Stock for the second and fourth quarters of 2020 and the second quarter of 2021. As of June 30, 2021, the Company had aggregate undeclared preferred stock dividends of approximately $25.2 million, which relates to the second quarter of 2021 and the second and fourth quarters of 2020.
During2021. On April 10, 2022, the first quarter of 2021, base salariesBoard declared a cash dividend on the Company’s Series D Convertible Preferred Stock for accrued and unpaid dividends for the Company’s executive officersquarters ending June 30, 2020 and other employees were restoredDecember 31, 2020 to pre-reduction levelsstockholders of record as of April 11, 2022. The Company paid the dividend of approximately $17.8 million, or $0.932 per share of Series D Convertible Preferred Stock, on April 15, 2022. Dividends for the Series D Convertible Preferred Stock remain in arrears for the quarters ending June 30, 2021 and the arrangement by which Mr. Monty J. Bennett received his base salary in the form of common stock ended. Additionally, on March 25, 2021,December 31, 2021. On April 15, 2022, the Company additionally paid $8.7 million of dividends previously declared $8.4 million in dividends which were dueby the Board with respect to itsthe Company’s Series D Convertible Preferred Stock for the first quarter of 2021.2022.
On April 1, 2022, the Company entered into the Credit Agreement with Mustang Lodging Funding LLC, as administrative agent, and the lenders from time to time party thereto. The Credit Agreement evidences the Credit Facility in the amount of $100 million, including a $50 million term loan funded upon closing and commitments to fund up to an additional $50 million of term loans in up to five separate borrowings within 24 months after the Closing Date, subject to certain conditions. The Company used a portion of the proceeds from the Credit Agreement to pay off the remaining $26.6 million balance of the Company’s existing Term Loan Agreement as of March 31, 2022 and pay dividends to the holders of the Series D Convertible Preferred Stock as stated above. On April 18, 2022, the Company drew an additional $20.0 million on the Credit Facility.
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When preparing financial statements,On April 15, 2022, the Company acquired privately held Chesapeake Hospitality (“Chesapeake”), a premier third-party hotel management company. The Company paid to the seller $6.3 million in cash, subject to certain adjustments, and issued to the seller 378,000 Series CHP Convertible Preferred Units of Ashford Holdings (the “Series CHP Units”) at $25 per Unit, for a total value of $9.45 million. The seller also has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that create substantial doubt about the Company’s ability to continue as a going concern within one year afterearn up to $10.25 million of additional consideration based on its base management fee contribution for the date that the financial statements are issued. In applying the accounting guidance, the Company considered its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and its unconditional obligations due over the next 12 months.
We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. Violations of certain debt covenants may result in the inability of our portfolio companies to borrow unused amounts under their respective lines of credit. As of June 30, 2021, our Term Loan Agreement (as defined below) was in compliance with all covenants or other requirements. Debt held by our subsidiaries was in compliance with all covenants or other requirements. Additionally, Presentation Technologies, LLC, our subsidiary doing business as JSAV (“JSAV”), executed a credit agreement amendment on December 31, 2020, which extended the maturity date of the loan and includes a fixed charge coverage ratio covenant which commences with the quartertrailing twelve month periods ending March 31, 2023. As2024 and March 2025, respectively, for a resulttotal potential consideration of the impact$26 million, subject to certain adjustments. The first $6.3 million of COVID-19, JSAVsuch additional consideration is reliant on Ashford Inc. to make contributions to cover JSAV’s projected operating shortfallpayable in cash and amortization and interest payments on its outstanding debt within one yearany amounts payable in excess of such $6.3 million may be satisfied by the issuance of shares of common stock of the financial statements. All such contributions are subjectCompany, common units of Ashford Holdings or additional Series CHP Units, as determined by the Company in its sole discretion. Each Series CHP Unit will (i) have a liquidation value of $25 per share, (ii) be entitled to cumulative dividends at the rate of 7.28% per annum, payable quarterly in arrears, (iii) participate in any dividend or distribution on the common stock of the Company in addition to the discretionpreferred dividends, (iv) be convertible into common units of Ashford Inc.Holdings at $117.50 per unit, which common units of Ashford Holdings will then be exchangeable into common stock of the Company on a 1:1 ratio and (v) provide for customary anti-dilution protections. In the event the Company fails to pay the required dividends on the Series CHP Units for two consecutive quarterly periods (a “Preferred Unit Breach”), then until such arrearage is paid in cash in full, the dividend rate on the Series CHP Units will increase to 10.00% per annum until no Preferred Unit Breach exists. Except with respect to certain protective provisions, no holder of Series CHP Units will have voting rights in its capacity as such. As such, alllong as any Series CHP Units are outstanding, the Company is prohibited from taking specified actions without the consent of JSAV’s outstanding debt balance has been classifiedat least 50% of the holders of Series CHP Units, including (i) modifying the terms, rights, preferences, privileges or voting powers of the Series CHP Units or (ii) altering the rights, preferences or privileges of any Units of Ashford Holdings so as a current liability within our condensed consolidated balance sheetto adversely affect the Series CHP Units.
On April 15, 2022, the Company and Ashford Services agreed with Jeremy Welter, the Chief Operating Officer of the Company, that, effective July 15, 2022 (the “Resignation Date”), Mr. Welter would terminate employment with and service to the Company, Ashford Services and their affiliates. Mr. Welter is also the Chief Operating Officer of Ashford Trust and Braemar and accordingly his service as Chief Operating Officer of June 30, 2021. The classificationeach of JSAV’s outstanding debt as a current liability has no impact on Ashford Inc.’s going concern assessment because the JSAV debt has no recourse to Ashford Inc.
We cannot predict when hotel operating levels at our clients, Ashford Trust and Braemar will return to normalized levels after the effectsalso end effective as of the pandemic subside, whether our clients’ hotels will be forced to shut down operations or whether one or more governmental entities may impose additional travel restrictions due to a resurgence of COVID-19 cases in the future. As a result of these factors resulting from the impact of the pandemic, we are unable to estimate future financial performance with certainty. However, based primarily on our assessment of the ability of our key customers, Ashford Trust and Braemar, to pay their obligations to the Company in accordance with the advisory agreements, the Company has concluded that management’s current plan alleviates the substantial doubt about its ability to continue as a going concern. Additional factors considered in our assessment include our completed loan amendments, other agreements, our current cash on hand, our forecast of future operating results for the next 12 months from the date of this report and the actions we have taken to improve our liquidity. Facts and circumstances could change in the future that are outside of management’s control, such as changes in Ashford Trust’s and Braemar’s financial position and liquidity, additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19, which could subsequently change our assessment. See notes 5 and 13 to our condensed consolidated financial statements.Resignation Date.
Other Developments
On May 3, 2021, we acquired shares in RED Hospitality & Leisure LLC (“RED”) from a noncontrolling interest holder, increasing our ownership of RED from 84.21% to 97.87% effective retroactively on January 1, 2021, for a total purchase price of $200,000. The purchase price will be paid in the form of shares of the Company’s common stock, delivered quarterly in $25,000 increments, beginning on the closing date and ending November 15, 2022.
On August 10, 2021, the Company issued a press release announcing that on August 9, 2021 it had received a notification letter from the NYSE American that the Company has regained compliance with all of the NYSE American continued listing standards set forth in Part 10, Section 1003 of the NYSE American Company Guide (the “Company Guide”). The Company previously received a notification letter (the “Letter”) from the NYSE American on August 26, 2020, which indicated that the Company was not in compliance with the standards of Sections 1003(a)(i) and 1003(a)(ii) of the Company Guide. Pursuant to these Sections, the NYSE American will normally consider suspending dealings in, or removing from the list, securities of a listed company whose stockholders’ equity is less than (i) $2.0 million if it has reported losses from continuing operations or net losses in two of its three most recent fiscal years and (ii) $4.0 million if it has reported losses from continuing operations or net losses in three of its four most recent fiscal years (together, the “Stockholders’ Equity Standards”). However, Section 1003(a) of the Company Guide also states that the NYSE American will not normally consider suspending dealings in, or removing from the list, the securities of a listed company that falls below the Stockholders’ Equity Standards if the listed company is in compliance with the following two standards: (1) total value of market capitalization of at least $50 million or total assets and revenue of $50 million each in its last fiscal year, or in two of its last three fiscal years (the “First Standard”), and (2) the listed company has at least 1.1 million shares publicly held, a market value of publicly held shares of at least $15.0 million and 400 round lot shareholders (the “Second Standard”).
When the Company received the Letter, it was not in compliance with the Stockholders’ Equity Standards, but it was in compliance with the First Standard because it had total assets and total revenue of at least $50 million in its last fiscal year and
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was in compliance with the Second Standard, except that the current market value of publicly held shares was below $15.0 million. On September 24, 2020, the Company submitted to the NYSE American a compliance plan which detailed how it intended to regain compliance with Section 1003(a) by increasing the current market value of the publicly held shares above $15.0 million while maintaining compliance with all other requirements of the First and Second Standards. As of June 30, 2021, the Company did not meet the requisite Stockholders’ Equity Standards. However, as a result of management’s efforts, the Company has come into compliance with the First and Second Standards, and the NYSE American has informed the Company that it has cured the previously cited deficiencies and is in full compliance with the continued listing standards set forth in Part 10, Section 1003 of the Company Guide. Effective at the start of trading on August 10, 2021, the “.BC” designation, signifying noncompliance with the NYSE American’s listing standards, was removed from the “AINC” trading symbol.
On August 16, 2021, the Company entered into Amendment No. 2 to the Fifth Amended and Restated Advisory Agreement with Braemar (“Amendment No. 2”). The Fifth Amended and Restated Advisory Agreement was amended to delete Section 6.7 in its entirety in order to remove the requirement that the Company disclose in each Quarterly Report on Form 10-Q and each Annual Report on Form 10-K that it files under the Exchange Act the incremental expenses incurred by the Company in connection with providing services to Braemar under the Amended and Restated Advisory Agreement (the “Incremental Expenses”) and to provide to the audit committee of the board of directors of Braemar a report of an accounting firm that the Company’s determination of such Incremental Expenses is reasonable.
Discussion of Presentation
The discussion below relates to the financial condition and results of operations of Ashford Inc. and entities which it controls. The historical financial information is not necessarily indicative of our future results of operations, financial position and cash flows.
5747



RESULTS OF OPERATIONS
Cost reimbursement revenue and reimbursed expenses for the three months ended March 31, 2021, were restated as previously disclosed in the restated condensed consolidated statement of operations for the three months ended March 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. See discussion in note 2 to our condensed consolidated financial statements.
Three Months Ended June 30, 2021March 31, 2022 Compared to Three Months Ended June 30, 2020March 31, 2021
The following table summarizes the changes in key line items from our condensed consolidated statements of operations for the three months ended June 30,March 31, 2022 and 2021 and 2020 (in thousands):
Three Months Ended June 30,Favorable (Unfavorable)
20212020$ Change% Change
REVENUE
Advisory services$10,062 $11,430 $(1,368)(12.0)%
Hotel management fees6,515 3,691 2,824 76.5 %
Design and construction fees1,867 2,052 (185)(9.0)%
Audio visual9,451 970 8,481 874.3 %
Other12,166 3,337 8,829 264.6 %
Cost reimbursement revenue48,279 24,118 24,161 100.2 %
Total revenues88,340 45,598 42,742 93.7 %
EXPENSES  
Salaries and benefits17,392 13,677 (3,715)(27.2)%
Cost of revenues for design and construction1,022 878 (144)(16.4)%
Cost of revenues for audio visual6,872 2,316 (4,556)(196.7)%
Depreciation and amortization8,259 10,109 1,850 18.3 %
General and administrative6,591 4,341 (2,250)(51.8)%
Other5,059 1,361 (3,698)(271.7)%
Reimbursed expenses48,145 24,055 (24,090)(100.1)%
Total expenses93,340 56,737 (36,603)(64.5)%
OPERATING INCOME (LOSS)(5,000)(11,139)6,139 55.1 %
Equity in earnings (loss) of unconsolidated entities(58)17 (75)(441.2)%
Interest expense(1,288)(1,246)(42)(3.4)%
Amortization of loan costs(45)(90)45 50.0 %
Interest income72 71 7,100.0 %
Realized gain (loss) on investments(179)(11)(168)(1,527.3)%
Other income (expense)(172)66 (238)(360.6)%
INCOME (LOSS) BEFORE INCOME TAXES(6,670)(12,402)5,732 46.2 %
Income tax (expense) benefit697 3,484 (2,787)(80.0)%
NET INCOME (LOSS)(5,973)(8,918)2,945 33.0 %
(Income) loss from consolidated entities attributable to noncontrolling interests234 278 (44)(15.8)%
Net (income) loss attributable to redeemable noncontrolling interests19 644 (625)(97.0)%
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY(5,720)(7,996)2,276 28.5 %
Preferred dividends, declared and undeclared(8,633)(7,940)(693)(8.7)%
Amortization of preferred stock discount(311)(795)484 60.9 %
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS$(14,664)$(16,731)$2,067 12.4 %
Net Income (Loss) Attributable to Common Stockholders. Net income (loss) attributable to common stockholders changed $2.1 million, or 12.4%, to a $14.7 million loss for the three months ended June 30, 2021 (“the 2021 quarter”) compared to the three months ended June 30, 2020 (“the 2020 quarter”) as a result of the factors discussed below.
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Total Revenues. Total revenues increased $42.7 million, or 93.7%, to $88.3 million for the 2021 quarter compared to the 2020 quarter due to the following (in thousands):
Three Months Ended June 30,Favorable (Unfavorable)
20212020$ Change% Change
Advisory services revenue:
Base advisory fee (1)
$9,932 $11,130 $(1,198)(10.8)%
Incentive advisory fee (2)
— 169 (169)(100.0)%
Other advisory revenue (3)
130 131 (1)(0.8)%
Total advisory services revenue10,062 11,430 (1,368)(12.0)%
Hotel management:
Base management fees5,308 3,691 1,617 43.8 %
Incentive management fees1,207 — 1,207 
Total hotel management revenue (4)
6,515 3,691 2,824 76.5 %
Design and construction revenue (5)
1,867 2,052 (185)(9.0)%
Audio visual revenue (6)
9,451 970 8,481 874.3 %
Other revenue:
Watersports, ferry and excursion services (7)
6,861 904 5,957 659.0 %
Debt placement and related fees (8)
2,290 1,335 955 71.5 %
Claims management services (9)
16 72 (56)(77.8)%
Other services (10)
2,999 1,026 1,973 192.3 %
Total other revenue12,166 3,337 8,829 264.6 %
Cost reimbursement revenue (11)
48,279 24,118 24,161 100.2 %
Total revenues$88,340 $45,598 $42,742 93.7 %
REVENUES BY SEGMENT (12)
REIT advisory$16,745 $15,550 $1,195 7.7 %
Remington47,011 22,459 24,552 109.3 %
Premier2,430 2,744 (314)(11.4)%
JSAV9,451 970 8,481 874.3 %
OpenKey477 292 185 63.4 %
Corporate and other12,226 3,583 8,643 241.2 %
Total revenues$88,340 $45,598 $42,742 93.7 %
________
(1)The decrease in base advisory fee is primarily due to lower revenue of $1.3 million from Ashford Trust partially offset by higher revenue of $105,000 from Braemar. Advisory fees earned from Ashford Trust excluded $1.7 million of advisory fees that were constrained and deferred as a result of the $29.0 million annual Advisory Fee Cap. The deferred fees are included in deferred income in our condensed consolidated balance sheet. See note 3 of our condensed consolidated financial statements for discussion of the advisory services revenue recognition policy.
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(2)    The incentive advisory fee for the 2020 quarter includes the pro-rata portion of the third year installment of the Braemar 2018 incentive advisory fee in the amount of $169,000. Incentive fee payments are subject to meeting the December 31 FCCR Condition each year, as defined in our advisory agreements. Ashford Trust’s annual total stockholder return did not meet the relevant incentive fee thresholds subsequent to the 2016 measurement period. Braemar’s annual total stockholder return did not meet the relevant incentive fee thresholds during the 2020 and 2019 measurement periods.
(3)     Other advisory revenue remained steady. Other advisory revenue from Braemar is a result of the $5.0 million cash payment received upon stockholder approval of the Fourth Amended and Restated Braemar Advisory Agreement in June 2017. The payment is included in “deferred income” on our condensed consolidated balance sheet and is being recognized on a quarterly basis over the initial ten-year term of the agreement.
(4)     The increase in hotel management revenue is due to higher base management fees from Ashford Trust and Braemar of $969,000 and $430,000, respectively, and incentive management fees of $1.1 million and $142,000 from Ashford Trust and Braemar, respectively, due to increased room demand within their respective portfolios compared to the 2020 quarter as the industry recovers from COVID-19.
(5)     The decrease in design and construction revenue is due to lower revenue from Ashford Trust and Braemar of $204,000 and $362,000, respectively, due to reduced capital expenditures by our clients as a result of COVID-19, offset by an increase in design and construction revenue from third parties of $381,000.
(6)     The $8.5 million increase in audio visual revenue is due to increased demand for event technology services at hotels and convention centers as the U.S. travel and hospitality industry continues to recover from COVID-19.
(7)     The $6.0 million increase in watersports, ferry and excursion services is due to increased demand for RED’s recreational services in the U.S. Virgin Islands and Key West, Florida, as the U.S. travel and hospitality industry continues to recover from COVID-19.
(8)     The increase in debt placement and related fee revenue is due to higher revenue of $1.6 million from Ashford Trust offset by lower revenue of $646,000 from Braemar. Debt placement and related fees are earned by Lismore for providing debt placement, modification, forbearance and refinancing services. The increase is primarily due to Lismore’s agreement with Ashford Trust for providing modifications, forbearances or refinancing of Ashford Trust’s loans as a result of the financial impact from COVID-19. Lismore’s agreement with Braemar expired in March 2021.
(9)     Claims management services include revenue earned from providing insurance claim assessment and administration services to Ashford Trust and Braemar.
(10)     The increase in other services revenue is primarily due to higher revenue from Marietta of $1.4 million due to increased room demand. Other services revenue primarily relates to other hotel services provided by our consolidated subsidiaries; OpenKey, PRE Opco LLC (“Pure Wellness”) and Marietta, to Ashford Trust, Braemar and other third parties.
(11)     The increase in cost reimbursement revenue is primarily due to increased cost reimbursement revenue in the 2021 quarter of $21.7 million from Remington due to increased room demand within the hotel industry compared to the 2020 quarter and increased cost reimbursement revenue of $2.6 million from our REIT Advisory segment related to reimbursable advisory expenses for Ashford Trust and Braemar compared to the 2020 quarter.
(12)     See note 15 to our condensed consolidated financial statements for discussion of segment reporting.
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Salaries and Benefits Expense. Salaries and benefits expense increased $3.7 million, or 27.2%, to $17.4 million for the 2021 quarter compared to the 2020 quarter. The change in salaries and benefits expense consisted of the following (in thousands):
Three Months Ended June 30,
20212020$ Change
Cash salaries and benefits:
Salary expense$9,118 $7,903 $1,215 
Bonus expense3,560 3,978 (418)
Benefits related expenses1,120 1,066 54 
Total cash salaries and benefits (1)
13,798 12,947 851 
Non-cash equity-based compensation:
Stock option grants (2)
543 (397)940 
Employee equity grant expense308 247 61 
Total non-cash equity-based compensation851 (150)1,001 
Non-cash (gain) loss in deferred compensation plan (3)
2,743 880 1,863 
Total salaries and benefits$17,392 $13,677 $3,715 
________
(1)The change in cash salaries and benefits expense is primarily due to fluctuations in the number of employees, salary and bonus awards, group insurance costs, payroll taxes and employee participation in the benefits offered which were reduced as a result of cost control efforts in the 2020 quarter due to COVID-19.
(2)The increase in stock option grant related expense in the 2021 quarter primarily relates to the forfeiture of 98,603 options in the 2020 quarter from the voluntary resignation of Douglas A. Kessler, Senior Managing Director of the Company, in May of 2020.
(3)    The DCP obligation is recorded as a liability at fair value with changes in fair value reflected in earnings. The loss in both the 2021 quarter and the 2020 quarter are primarily attributable to an increase in the fair value of the DCP obligation. See note 12 to our condensed consolidated financial statements.
Cost of Revenues for Design and Construction.Cost of revenues for design and construction increased $144,000, or 16.4%, to $1.0 million during the 2021 quarter compared to $878,000 for the 2020 quarter.
Cost of Revenues for Audio Visual.Cost of revenues for audio visual increased $4.6 million, or 196.7%, to $6.9 million during the 2021 quarter compared to $2.3 million for the 2020 quarter, primarily due to increased demand for event technology services at hotels and convention centers as the U.S. travel and hospitality industry continues to recover from COVID-19.
Depreciation and Amortization Expense.Depreciation and amortization expense decreased $1.9 million, or 18.3%, to $8.3 million for the 2021 quarter compared to the 2020 quarter, primarily due to the write-off of $6.4 million of furniture, fixtures and equipment (“FF&E”) in the third quarter of 2020 related to FF&E formerly leased to Ashford Trust under the Ashford Trust ERFP Agreement upon Ashford Trust’s sale of the Embassy Suites New York Manhattan Times Square and the sale of FF&E in the fourth quarter of 2020 to Braemar for FF&E formerly leased to Braemar under the Braemar ERFP Agreement at the expiration of the lease. Depreciation and amortization expense for the 2021 quarter and the 2020 quarter excludes depreciation expense related to audio visual equipment of $1.2 million and $1.2 million, respectively, which is included in “cost of revenues for audio visual”, and also excludes depreciation expense for the 2021 quarter and the 2020 quarter related to marine vessels in the amount of $247,000 and $195,000, respectively, which are included in “other” operating expense.
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General and Administrative Expense. General and administrative expenses increased $2.3 million, or 51.8%, to $6.6 million for the 2021 quarter compared to the 2020 quarter. The change in general and administrative expense consisted of the following (in thousands):
Three Months Ended June 30,
20212020$ Change
Professional fees (1)
$2,234 $1,022 $1,212 
Office expense2,028 1,438 590 
Public company costs246 100 146 
Director costs827 618 209 
Travel and other expense1,211 1,125 86 
Non-capitalizable - software costs45 38 
Total general and administrative$6,591 $4,341 $2,250 
________
(1)    The increase in professional fees in the 2021 quarter is primarily due to $577,000 of expenses related to Ashford Securities to raise capital in order to grow the Company’s existing and future platforms. Expenses are allocated to the Company per the Amended and Restated Contribution Agreement entered into on December 31, 2020. See note 13 in our condensed consolidated financial statements.
Other.Other operating expense increased $3.7 million, or 271.7%, to $5.1 million for the 2021 quarter compared to the 2020 quarter. The increase was primarily driven by an increase in operating expenses from RED of $2.7 million compared to the 2020 quarter due to increased demand for RED’s recreational services in the U.S. Virgin Islands and Key West, Florida. Other operating expense includes cost of goods sold, royalties and operating expenses associated with OpenKey, RED, Pure Wellness and Marietta.
Reimbursed Expenses. Reimbursed expenses increased $24.1 million to $48.1 million during the 2021 quarter compared to $24.1 million for the 2020 quarter primarily due to increased hotel management expenses incurred by Remington due to the increase in hotel room demand.
Reimbursed expenses recorded may vary from cost reimbursement revenue recognized in the period due to timing differences between the costs we incur for centralized software programs and the related reimbursements we receive from Ashford Trust and Braemar. Over the long term, these timing differences are not designed to impact our economics, either positively or negatively. The timing differences consisted of the following (in thousands):
Three Months Ended June 30,
20212020$ Change
Cost reimbursement revenue$48,279 $24,118 $24,161 
Reimbursed expenses48,145 24,055 24,090 
Net total$134 $63 $71 
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in earnings (loss) of unconsolidated entities changed $75,000 for the 2021 quarter. See notes 1 and 2to our condensed consolidated financial statements.
Interest Expense. Interest expense was $1.3 million and $1.2 million for the 2021 quarter and the 2020 quarter, respectively. The increase is related to increases in balances outstanding on our Term Loan Agreement and notes payable, lines of credit and finance leases held by our consolidated subsidiaries. See notes 2 and 5 to our condensed consolidated financial statements.
Amortization of Loan Costs. Amortization of loan costs was $45,000 and $90,000 for the 2021 quarter and the 2020 quarter, respectively, related to the notes payable and lines of credit held by our consolidated subsidiaries. See notes 2 and 5 to our condensed consolidated financial statements.
Interest Income.Interest income was $72,000 and $1,000 for the 2021 quarter and the 2020 quarter, respectively. The increase in the 2021 quarter is primarily due to interest income from Remington’s note receivable from a third party hotel owner. See note 1 to our condensed consolidated financial statements.
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Realized Gain (Loss) on Investments. Realized loss on investments was $179,000 and $11,000 for the 2021 quarter and the 2020 quarter, respectively. The realized loss on investments relates to losses on shares of common stock of Ashford Trust and Braemar purchased by Remington on the open market and held for the purpose of providing compensation to certain employees.
Other Income (Expense). Other income (expense) was $172,000 of expense in the 2021 quarter and $66,000 of income in the 2020 quarter.
Income Tax (Expense) Benefit. Income tax (expense) benefit changed by $2.8 million, from a benefit of $3.5 million in the 2020 quarter to a benefit of $697,000 in the 2021 quarter. Current income tax expense changed by $398,000, from $1.3 million of expense in the 2020 quarter to $898,000 of expense in the 2021 quarter. Deferred income tax benefit changed by $3.2 million from a $4.8 million benefit in the 2020 quarter to a $1.6 million benefit in the 2021 quarter. The difference in income tax (expense) benefit is related to a change in accrued liabilities and an increase in operations.
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. The noncontrolling interests in consolidated entities were allocated a loss of $234,000 in the 2021 quarter and a loss of $278,000 in the 2020 quarter. See notes 2, 9 and 13 to our condensed consolidated financial statements for more details regarding ownership interests, carrying values and allocations.
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests. The redeemable noncontrolling interests were allocated a loss of $19,000 in the 2021 quarter and a loss of $644,000 in the 2020 quarter. Redeemable noncontrolling interests represented ownership interests in Ashford Holdings and certain of our consolidated subsidiaries. See note 1 to our condensed consolidated financial statements. For a summary of ownership interests, carrying values and allocations, see notes 2, 10, and 13 to our condensed consolidated financial statements.
Preferred Dividends, Declared and Undeclared. Preferred dividends increased $693,000, or 8.7%, to $8.6 million during the 2021 quarter compared to $7.9 million for the 2020 quarter, primarily due to the increase in the dividend rate of the Series D Convertible Preferred Stock on November 6, 2020, from 6.59% to 6.99% and due to $280,000 of accumulating and compounding dividends related to the undeclared preferred stock dividends for the second and fourth quarters of 2020.
Amortization of Preferred Stock Discount. The amortization of preferred stock discount decreased $484,000, or 60.9%, to $311,000 during the 2021 quarter compared to $795,000 for the 2020 quarter, primarily due to the increase in the dividend rate of the Series D Convertible Preferred Stock on November 6, 2020, from 6.59% to 6.99%. See note 10 to our condensed consolidated financial statements.
Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020
The following table summarizes the changes in key line items from our condensed consolidated statements of operations for the six months ended June 30, 2021 and 2020 (in thousands):
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Six Months Ended June 30,Favorable (Unfavorable)Three Months Ended March 31,Favorable (Unfavorable)
20212020$ Change% Change20222021$ Change% Change
REVENUEREVENUEREVENUE
Advisory services$19,989 $23,266 $(3,277)(14.1)%
Advisory services feesAdvisory services fees$11,802 $9,927 $1,875 18.9 %
Hotel management feesHotel management fees10,987 9,815 1,172 11.9 %Hotel management fees7,178 4,472 2,706 60.5 %
Design and construction feesDesign and construction fees3,409 5,990 (2,581)(43.1)%Design and construction fees4,524 1,542 2,982 193.4 %
Audio visualAudio visual13,062 30,644 (17,582)(57.4)%Audio visual24,965 3,611 21,354 591.4 %
OtherOther22,795 10,028 12,767 127.3 %Other11,439 10,629 810 7.6 %
Cost reimbursement revenueCost reimbursement revenue82,031 99,697 (17,666)(17.7)%Cost reimbursement revenue74,051 32,187 41,864 130.1 %
Total revenuesTotal revenues152,273 179,440 (27,167)(15.1)%Total revenues133,959 62,368 71,591 114.8 %
EXPENSESEXPENSES  EXPENSES  
Salaries and benefitsSalaries and benefits33,168 29,987 (3,181)(10.6)%Salaries and benefits16,845 15,776 (1,069)(6.8)%
Cost of revenues for design and constructionCost of revenues for design and construction1,780 2,329 549 23.6 %Cost of revenues for design and construction1,910 758 (1,152)(152.0)%
Cost of revenues for audio visualCost of revenues for audio visual11,258 22,746 11,488 50.5 %Cost of revenues for audio visual17,879 4,386 (13,493)(307.6)%
Depreciation and amortizationDepreciation and amortization16,398 20,078 3,680 18.3 %Depreciation and amortization7,625 8,139 514 6.3 %
General and administrativeGeneral and administrative11,859 10,524 (1,335)(12.7)%General and administrative7,363 5,268 (2,095)(39.8)%
Impairment— 178,213 178,213 100.0 %
OtherOther8,670 5,587 (3,083)(55.2)%Other5,467 3,611 (1,856)(51.4)%
Reimbursed expensesReimbursed expenses81,825 99,566 17,741 17.8 %Reimbursed expenses73,908 32,115 (41,793)(130.1)%
Total expensesTotal expenses164,958 369,030 204,072 55.3 %Total expenses130,997 70,053 (60,944)(87.0)%
OPERATING INCOME (LOSS)OPERATING INCOME (LOSS)(12,685)(189,590)176,905 93.3 %OPERATING INCOME (LOSS)2,962 (7,685)10,647 138.5 %
Equity in earnings (loss) of unconsolidated entitiesEquity in earnings (loss) of unconsolidated entities(172)253 (425)(168.0)%Equity in earnings (loss) of unconsolidated entities190 (114)304 266.7 %
Interest expenseInterest expense(2,555)(2,422)(133)(5.5)%Interest expense(1,279)(1,267)(12)(0.9)%
Amortization of loan costsAmortization of loan costs(131)(156)25 16.0 %Amortization of loan costs(73)(86)13 15.1 %
Interest incomeInterest income135 29 106 365.5 %Interest income81 63 18 28.6 %
Realized gain (loss) on investmentsRealized gain (loss) on investments(373)(386)13 3.4 %Realized gain (loss) on investments(71)(194)123 63.4 %
Other income (expense)Other income (expense)(285)(455)170 37.4 %Other income (expense)147 (113)260 230.1 %
INCOME (LOSS) BEFORE INCOME TAXESINCOME (LOSS) BEFORE INCOME TAXES(16,066)(192,727)176,661 91.7 %INCOME (LOSS) BEFORE INCOME TAXES1,957 (9,396)11,353 120.8 %
Income tax (expense) benefitIncome tax (expense) benefit1,648 5,569 (3,921)(70.4)%Income tax (expense) benefit(1,278)951 (2,229)(234.4)%
NET INCOME (LOSS)NET INCOME (LOSS)(14,418)(187,158)172,740 92.3 %NET INCOME (LOSS)679 (8,445)9,124 108.0 %
(Income) loss from consolidated entities attributable to noncontrolling interests(Income) loss from consolidated entities attributable to noncontrolling interests329 438 (109)(24.9)%(Income) loss from consolidated entities attributable to noncontrolling interests260 95 165 173.7 %
Net (income) loss attributable to redeemable noncontrolling interestsNet (income) loss attributable to redeemable noncontrolling interests195 1,084 (889)(82.0)%Net (income) loss attributable to redeemable noncontrolling interests176 (167)(94.9)%
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANYNET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY(13,894)(185,636)171,742 92.5 %NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY948 (8,174)9,122 111.6 %
Preferred dividends, declared and undeclaredPreferred dividends, declared and undeclared(17,239)(15,815)(1,424)(9.0)%Preferred dividends, declared and undeclared(9,373)(8,606)(767)(8.9)%
Amortization of preferred stock discountAmortization of preferred stock discount(627)(1,605)978 60.9 %Amortization of preferred stock discount— (316)316 100.0 %
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERSNET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS$(31,760)$(203,056)$171,296 84.4 %NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS$(8,425)$(17,096)$8,671 50.7 %
Net Income (Loss) Attributable to Common Stockholders. Net loss attributable to common stockholders decreased $171.3$8.7 million to a $31.8$8.4 million loss for the sixthree months ended June 30,March 31, 2022 (“the 2022 quarter”) compared to the three months ended March 31, 2021 (“the 2021 period”) compared to the six months ended June 30, 2020 (“the 2020 period”quarter”) as a result of the factors discussed below.
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Total Revenues. Total revenues decreasedincreased by $27.2$71.6 million, or 15.1%114.8%, to $152.3$134.0 million for the 2021 period2022 quarter compared to the 2020 period2021 quarter due to the following (in thousands):
Six Months Ended June 30,Favorable (Unfavorable)Three Months Ended March 31,Favorable (Unfavorable)
20212020$ Change% Change20222021$ Change% Change
Advisory services revenue:
Base advisory fee (1)
$19,731 $22,667 $(2,936)(13.0)%
Incentive advisory fee (2)
— 339 (339)(100.0)%
Advisory services fees:Advisory services fees:
Base advisory fees (1)
Base advisory fees (1)
$11,674 $9,799 $1,875 19.1 %
Other advisory revenue (3)(2)
Other advisory revenue (3)(2)
258 260 (2)(0.8)%
Other advisory revenue (3)(2)
128 128 — — %
Total advisory services revenue19,989 23,266 (3,277)(14.1)%
Total advisory services fees revenueTotal advisory services fees revenue11,802 9,927 1,875 18.9 %
Hotel management:
Hotel management fees:Hotel management fees:
Base management feesBase management fees9,165 9,815 (650)(6.6)%Base management fees6,174 3,857 2,317 60.1 %
Incentive management feesIncentive management fees1,822 — 1,822 Incentive management fees1,004 615 389 63.3 %
Total hotel management revenue (4)
10,987 9,815 1,172 11.9 %
Total hotel management fees revenue (3)
Total hotel management fees revenue (3)
7,178 4,472 2,706 60.5 %
Design and construction revenue (5)
3,409 5,990 (2,581)(43.1)%
Design and construction fees revenue (4)
Design and construction fees revenue (4)
4,524 1,542 2,982 193.4 %
Audio visual revenue (6)(5)
Audio visual revenue (6)(5)
13,062 30,644 (17,582)(57.4)%
Audio visual revenue (6)(5)
24,965 3,611 21,354 591.4 %
Other revenue:Other revenue:Other revenue:
Watersports, ferry and excursion services (7)(6)
Watersports, ferry and excursion services (7)(6)
11,421 4,221 7,200 170.6 %
Watersports, ferry and excursion services (7)(6)
6,045 4,561 1,484 32.5 %
Debt placement and related fees (8)(7)
Debt placement and related fees (8)(7)
6,578 1,463 5,115 349.6 %
Debt placement and related fees (8)(7)
2,483 4,288 (1,805)(42.1)%
Claims management services (9)(8)
Claims management services (9)(8)
33 129 (96)(74.4)%
Claims management services (9)(8)
15 17 (2)(11.8)%
Other services (10)
4,763 4,215 548 13.0 %
Other services (9)
Other services (9)
2,896 1,763 1,133 64.3 %
Total other revenueTotal other revenue22,795 10,028 12,767 127.3 %Total other revenue11,439 10,629 810 7.6 %
Cost reimbursement revenue (11)
82,031 99,697 (17,666)(17.7)%
Cost reimbursement revenue (10)
Cost reimbursement revenue (10)
74,051 32,187 41,864 130.1 %
Total revenuesTotal revenues$152,273 $179,440 $(27,167)(15.1)%Total revenues$133,959 $62,368 $71,591 114.8 %
REVENUES BY SEGMENT (12)
REVENUES BY SEGMENT (11)
REVENUES BY SEGMENT (11)
REIT advisoryREIT advisory$31,813 $36,507 $(4,694)(12.9)%REIT advisory$19,393 $15,068 $4,325 28.7 %
RemingtonRemington79,385 92,915 (13,530)(14.6)%Remington70,507 30,809 39,698 128.9 %
PremierPremier4,374 7,896 (3,522)(44.6)%Premier6,226 1,944 4,282 220.3 %
JSAV13,062 30,644 (17,582)(57.4)%
INSPIREINSPIRE25,022 3,611 21,411 592.9 %
REDRED6,045 4,561 1,484 32.5 %
OpenKeyOpenKey931 814 117 14.4 %OpenKey382 454 (72)(15.9)%
Corporate and otherCorporate and other22,708 10,664 12,044 112.9 %Corporate and other6,384 5,921 463 7.8 %
Total revenuesTotal revenues$152,273 $179,440 $(27,167)(15.1)%Total revenues$133,959 $62,368 $71,591 114.8 %
________
(1)The decreaseincrease in base advisory feefees is primarily due to lowerhigher revenue of $3.0$1.5 million from Ashford Trust offset byand higher revenue of $30,000$394,000 from Braemar. Advisory fees earned from Ashford Trust during the 2021 quarter excluded $3.2$1.5 million of advisory fees that were constrained and deferred as a result of the $29.0 million annual Advisory Fee Cap. The deferred fees are included in deferred income in our condensed consolidated balance sheet. See note 3 of our condensed consolidated financial statements for discussion of the advisory services revenue recognition policy.
(2)    The incentive advisory fee for the 2020 period includes the pro-rata portion of the third year installment of the Braemar 2018 incentive advisory fee in the amount of $339,000. Incentive fee payments are subject to meeting the December 31 FCCR Condition each year, as defined in our advisory agreements. Ashford Trust’s annual total stockholder return has not met the incentive fee threshold in any of the annual measurement periods subsequent to the 2016 measurement period. Braemar’s annual total stockholder return did not meet the relevant incentive fee thresholds during the 2020 and 2019
65


measurement periods.
(3)     Other advisory revenue remained steady. Other advisory revenue from Braemar is a result of the $5.0 million cash payment received upon stockholder approval of the Fourth Amended and Restated Braemar Advisory Agreement in June 2017. The payment is included in “deferred income” on our condensed consolidated balance sheet and is being recognized evenly over the initial ten-year term of the agreement.
(4)(3)     The increase in hotel management fees revenue is primarily due to increases in incentive management fees of $1.6 million$247,000 and $221,000$123,000 from Ashford Trust and Braemar, respectively, partially offset by lowerand higher base management fees from Ashford Trust, of $1.3 million.Braemar
49

(5)
and third parties of $1.6 million and $369,000 and $323,000, respectively, due to increased demand compared to the 2021 quarter as the industry recovers from COVID-19.
(4)     The decreaseincrease in design and construction fees revenue is due to lowerhigher revenue from Ashford Trust and Braemar of $2.9$2.1 million and $834,000,$1.0 million, respectively, due to reducedincreased capital expenditures by our clients as a result of COVID-19, offset by an increase in design and construction revenuethe industry continues to recover from third parties of $1.1 million.COVID-19.
(6)(5)     The $17.6$21.4 million decreaseincrease in audio visual revenue is due to the timing of the arrival of COVID-19 in March 2020 partially offset by a recovery in operations inas the second quarter of 2021 compared to the second quarter of 2020.industry recovers from COVID-19.
(7)(6)     The $7.2$1.5 million increase in watersports, ferry and excursion services revenue is due to $780,000 in revenue from RED’s expansion in the Turks and Caicos Islands in the third quarter of 2021 and increased demand for RED’s recreational services in the U.S. Virgin Islands and Key West, Florida as the U.S. travel and hospitality industry continues to recover from COVID-19.
(8)(7)     The increasedecrease in debt placement and related fee revenue is due to higherlower revenue of $4.9$1.1 million from Ashford Trust and higherlower revenue of $207,000$663,000 from Braemar. Debt placement and related fees are earned by Lismore for providing debt placement, modification, forbearance and refinancing services. The increase is primarily due to Lismore’s agreement2022 quarter does not include revenue from the Braemar Agreement with Ashford Trust for providing modifications, forbearances or refinancing of Ashford Trust’s loans due to the financial impact from COVID-19. Lismore’s agreement with BraemarLismore which expired in March 2021.
(9)(8)    Claims management services include revenue earned from providing insurance claim assessment and administration services to Ashford Trust and Braemar.
(10)(9)     The increase in other services revenue is primarily due to higher revenue of $439,000$1.1 million in the 2022 quarter from Marietta due to a recovery in the 2022 quarter compared to the 2021 period from Pure Wellness.quarter. Other services revenue primarily relates to other hotel services provided by our consolidated subsidiaries;subsidiaries, OpenKey and Pure Wellness, and Marietta, to Ashford Trust, Braemar and other third parties.parties and also includes Marietta.
(11)(10)     The decreaseincrease in cost reimbursement revenue is primarily due to a decreasean increase in Remington’s cost reimbursement revenue of $14.7$36.8 million in the 2021 period2022 quarter due a recovery in operations in the 2022 quarter compared to the timing2021 quarter and an increase of the decline in hotel operations from COVID-19 in March of 2020 and a decrease of $1.3$2.5 million in cost reimbursement revenue in the 2021 period2022 quarter related to reimbursable advisory expenses for Ashford Trust and Braemar.
(12)(11)     See note 1516 to our condensed consolidated financial statements for discussion of segment reporting.
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Salaries and Benefits Expense. Salaries and benefits expense increased by $3.2$1.1 million, or 10.6%6.8%, to $33.2$16.8 million for the 2021 period2022 quarter compared to the 2020 period.2021 quarter. The change in salaries and benefits expense consisted of the following (in thousands):
Six Months Ended June 30,Three Months Ended March 31,
20212020$ Change20222021$ Change
Cash salaries and benefits:
Salaries and benefits:Salaries and benefits:
Salary expense(1)Salary expense(1)$17,824 $19,290 $(1,466)Salary expense(1)$9,628 $8,706 $922 
Bonus expenseBonus expense7,831 7,578 253 Bonus expense4,244 4,271 (27)
Benefits related expensesBenefits related expenses2,623 3,772 (1,149)Benefits related expenses2,163 1,503 660 
Total cash salaries and benefits (1)
28,278 30,640 (2,362)
Total salaries and benefitsTotal salaries and benefits16,035 14,480 1,555 
Non-cash equity-based compensation:Non-cash equity-based compensation:Non-cash equity-based compensation:
Stock option grants (2)
Stock option grants (2)
1,549 1,692 (143)
Stock option grants (2)
354 1,006 (652)
Employee equity grant expenseEmployee equity grant expense540 352 188 Employee equity grant expense345 232 113 
Total non-cash equity-based compensation2,089 2,044 45 
Total equity-based compensationTotal equity-based compensation699 1,238 (539)
Non-cash (gain) loss in deferred compensation plan (3)
Non-cash (gain) loss in deferred compensation plan (3)
2,801 (2,697)5,498 
Non-cash (gain) loss in deferred compensation plan (3)
111 58 53 
Total salaries and benefitsTotal salaries and benefits$33,168 $29,987 $3,181 Total salaries and benefits$16,845 $15,776 $1,069 
________
(1)The decreaseincrease in cash salaries and benefits in the 2021 periodsalary expense is primarily due to management significantly reducingan increase in corporate employees at both the Company’s corporate office and our subsidiaries’ corporate offices compared to the 2021 quarter as the industry continues to recover from COVID-19. The increase is additionally due to an increase in RED’s corporate employees compared to 2021 as RED began operating expenses in response to COVID-19Turks and Caicos in Marchthe third quarter of 2020.2021.
(2)The decrease in stock option grant related expense in the 2021 period2022 quarter primarily relates to the forfeiture of 98,603 options from the voluntary resignation of Douglas A. Kessler, Senior Managing Director of the Company, in May of 2020 and due to the Company not issuing any stock option grants during fiscal yearbeginning in 2020 (when the Company began to issue restricted stock in lieu of stock options under its equity incentive program).
(3)    The DCP obligation is recorded as a liability at fair value with changes in fair value reflected in earnings. The loss in the 2021 period
50


2022 quarter and the gain in the 2020 period2021 quarter are primarily attributable to increases and decreases in the fair value of the DCP obligation respectively.which is based on the Company’s common stock price. See note 1213 to our condensed consolidated financial statements.
Cost of Revenues for Design and Construction. Cost of revenues for design and construction decreased $549,000,increased $1.2 million, or 23.6%152.0% to $1.8$1.9 million during the 2021 period2022 quarter compared to $2.3 million$758,000 for the 2020 period2021 quarter due to reducedincreased capital expenditures by our clients as a result ofthe industry recovers from COVID-19.
Cost of Revenues for Audio Visual. Cost of revenues for audio visual decreased $11.5increased $13.5 million, or 50.5%307.6%, to $11.3$17.9 million during the 2021 period2022 quarter compared to $22.7$4.4 million for the 2020 period,2021 quarter, primarily due to a significant decline in business and cost control initiatives implemented by JSAV inincreased operations as the United States, Mexico and the Dominican Republic as a result ofindustry recovers from COVID-19.
Depreciation and Amortization Expense. Depreciation and amortization expense decreased by $3.7 million,$514,000, or 18.3%6.3%, to $16.4$7.6 million for the 2021 period2022 quarter compared to the 2020 period,2021 quarter, primarily due to the write-off of $6.4 million ofa decrease in FF&E in the third quarter of 2020 related to FF&E formerly leased tothe respective ERFP agreements with Ashford Trust underand Braemar compared to the Ashford Trust ERFP Agreement upon Ashford Trust’s sale of the Embassy Suites New York Manhattan Times Square and the sale of FF&E in the fourth quarter of 2020 to Braemar for FF&E formerly leased to Braemar under the Braemar ERFP Agreement at the expiration of the lease.2021 quarter. Depreciation and amortization expense for the 2021 period2022 quarter and the 2020 period2021 quarter excludes depreciation expense related to audio visual equipment of $2.5$1.2 million and $2.4$1.3 million, respectively, which is included in “cost of revenues for audio visual” and also excludes depreciation expense for the 2021 period2022 quarter and the 2020 period2021 quarter related to marine vessels in the amount of $466,000$286,000 and $386,000,$220,000, respectively, which are included in “other” operating expense.
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General and Administrative Expense. General and administrative expenses increased by $1.3$2.1 million, or 12.7%39.8%, to $11.9$7.4 million for the 2021 period2022 quarter compared to the 2020 period.2021 quarter. The change in general and administrative expense consisted of the following (in thousands):
Six Months Ended June 30,Three Months Ended March 31,
20212020$ Change20222021$ Change
Professional fees (1)
Professional fees (1)
$4,012 $2,364 $1,648 
Professional fees (1)
$2,097 $1,778 $319 
Office expense(1)Office expense(1)3,862 3,908 (46)Office expense(1)2,441 1,834 607 
Public company costsPublic company costs416 202 214 Public company costs227 170 57 
Director costsDirector costs1,274 727 547 Director costs397 447 (50)
Travel and other expense (2)
Travel and other expense (2)
2,172 3,190 (1,018)
Travel and other expense (2)
1,986 961 1,025 
Non-capitalizable - software costsNon-capitalizable - software costs123 133 (10)Non-capitalizable - software costs215 78 137 
Total general and administrativeTotal general and administrative$11,859 $10,524 $1,335 Total general and administrative$7,363 $5,268 $2,095 
________
(1)    The increase in professional feesoffice expenses in the 2021 period2022 quarter is primarily due to $1.0 million of expensesincreases within INSPIRE related to Ashford Securities to raise capital in order to grow the Company’s existing and future platforms. Expenses are allocatedindustry’s recovery from COVID-19 compared to the Company per the Amended and Restated Contribution Agreement entered into on December 31, 2020. See note 13 in our condensed consolidated financial statements.2021 quarter.
(2) The decreaseincrease in travel and other expense is primarily due to increases in the Company’s business travel in the 2022 quarter as the Company’s subsidiaries’ operations accelerated compared to the 2021 periodquarter. The increase is primarily from decreased travelalso due to COVID-19.
Impairment.In the first quarter of 2020, as a result of our reduced cash flow projections and the significant declinean increase in our market capitalization as a result of the COVID-19 pandemic, we concluded that sufficient indicators existedadvertising expense at INSPIRE associated with their strategic rebranding from JSAV to require us to perform an interim quantitative assessment of goodwill and intangible assets. As a result, we recorded goodwill impairment charges of $170.6 million and intangible asset impairment charges of $7.6 million. In total, there were $178.2 million in impairment charges for the 2020 period. No impairment charges were recorded during the 2021 period. See notes 4 and 6 to our condensed consolidated financial statements.INSPIRE.
Other. Other operating expense increased $3.1$1.9 million, or 55.2%51.4%, to $8.7$5.5 million for the 2021 period2022 quarter compared to the 2020 period.2021 quarter. The increase was primarily drivencaused by an increase in operating expenses fromassociated with RED of $3.1 million compared to the 2020 periodand Marietta as their operations increased due to increased demand for RED’s recreational services in the U.S. Virgin Islands and Key West, Florida.their respective recoveries from COVID-19’s impact on their operations. Other operating expenses for the 2022 quarter also includes a loss on sale of FF&E previously leased to Ashford Trust of $706,000. Other operating expense also includes cost of goods sold, royalties and operating expenses associated with OpenKey RED,and Pure Wellness and Marietta.Wellness.
Reimbursed Expenses. Reimbursed expenses decreased $17.7increased $41.8 million to $81.8$73.9 million during the 2021 period2022 quarter compared to $99.6$32.1 million for the 2020 period2021 quarter primarily due to a decreasean increase in hotel management reimbursed expenses incurred by Remington due to management’s curtailing expenses and declinesa recovery in hotel operations in responsethe 2022 quarter compared to COVID-19.the 2021 quarter.
Reimbursed expenses recorded may vary from cost reimbursement revenue recognized in the period due to timing differences between the costs we incur for centralized software programs and the related reimbursements we receive from Ashford Trust and Braemar.our clients. Over the long term, these timing differences are not designed to impact our economics, either positively or negatively. The timing differences consisted of the following shown below (in thousands):
Six Months Ended June 30,
20212020$ Change
Cost reimbursement revenue$82,031 $99,697 $(17,666)
Reimbursed expenses81,825 99,566 (17,741)
Net total$206 $131 $75 
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Three Months Ended March 31,
20222021$ Change
Cost reimbursement revenue$74,051 $32,187 $41,864 
Reimbursed expenses73,908 32,115 41,793 
Net total$143 $72 $71 
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in earnings (loss) of unconsolidated entities waswere earnings of $190,000 and a loss of $172,000 and earnings of $253,000$114,000 for the 2021 period2022 quarter and the 2020 period,2021 quarter, respectively. Equity in earnings (loss) of unconsolidated entities primarily represents earnings (loss) in our equity method investment in REA Holdings. See note 2 to our condensed consolidated financial statements.
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Interest Expense. Interest expense increased to $2.6 million from $2.4 millionremained steady for the 2022 quarter compared to the 2021 period and the 2020 period, respectively, relatedquarter. Interest expense relates to increases in our Term Loan Agreement and notes payable, lines of credit and finance leases held by our consolidated subsidiaries. See notes 2 and 5 to our condensed consolidated financial statements.
Amortization of Loan Costs. Amortization of loan costs was $131,000$73,000 and $156,000$86,000 for the 2021 period2022 quarter and the 2020 period,2021 quarter, respectively, related to our Term Loan Agreement and notes payable held by our consolidated subsidiaries. See notes 2 and 5 to our condensed consolidated financial statements.
Interest Income. Interest income was $135,000$81,000 and $29,000$63,000 for the 2021 period2022 quarter and the 2020 period,2021 quarter, respectively. The increase in the 2021 period is primarily due to interest income from Remington’s note receivable from a third party hotel owner. See note 12 to our condensed consolidated financial statements.
Realized Gain (Loss) on Investments. Realized loss on investments was $373,000$71,000 and $386,000$194,000 for the 2021 period2022 quarter and the 2020 period,2021 quarter, respectively. The realized loss on investments relatesfor the 2022 quarter and the 2021 quarter primarily relate to realized losses on shares of common stock of Ashford Trust and Braemar purchased by Remington on the open market and held for the purpose of providing compensation to certain employees. See note 7 to our condensed consolidated financial statements.
Other Income (Expense). Other expenseincome (expense) was income of $147,000 and expense of $285,000 and $455,000$113,000 in the 2021 period2022 quarter and the 2020 period,2021 quarter, respectively.
Income Tax (Expense) Benefit. Income tax (expense) benefit changed by $3.9$2.2 million from a $5.6 million benefit in the 2020 period to a $1.6 million$951,000 benefit in the 2021 period.quarter to $1.3 million of expense in the 2022 quarter due to an increase in operations. Current income tax expense changed by $1.9$2.9 million from $2.5a $343,000 benefit in the 2021 quarter to $2.6 million in expense in the 2020 period to $589,000 in expense in the 2021 period.2022 quarter. Deferred income tax benefit changed by $5.9 million$731,000 from a $8.1$607,000 benefit in the 2021 quarter to a $1.3 million benefit in the 2020 period to a $2.2 million benefit in the 2021 period. The difference in income tax (expense) benefit is related to a change in accrued liabilities and a decrease in non-deductible GAAP items, primarily impairment.2022 quarter.
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. The noncontrolling interests in consolidated entities were allocated a loss of $329,000$260,000 in the 2021 period2022 quarter and a loss of $438,000$95,000 in the 2020 period.2021 quarter. See notes 2 and 910 to our condensed consolidated financial statements for more details regarding ownership interests, carrying values and allocations.
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests. The redeemable noncontrolling interests were allocated a loss of $195,000$9,000 in the 2022 quarter and loss of $176,000 in the 2021 period and loss of $1.1 millionquarter. The change in the 2020 period.2022 quarter compared to the 2021 quarter is due primarily to the Company’s acquisition of all of the redeemable noncontrolling interests in OpenKey in the 2021 quarter. Redeemable noncontrolling interests representedrepresents ownership interests in Ashford Holdings and, certain of our consolidated subsidiaries.in the 2021 quarter, OpenKey. For a summary of ownership interests, carrying values and allocations, see notes 2 and 1011 to our condensed consolidated financial statements.
Preferred Dividends, Declared and Undeclared. Preferred dividends, declared and undeclared, increased $1.4 million$767,000 to $17.2$9.4 million during the 2021 period2022 quarter compared to $15.8$8.6 million for the 2020 period, primarily2021 quarter due to the increase in the dividend rate of the Series D Convertible Preferred Stock which occurred on November 6, 2020, from 6.59% to 6.99%2021 and due to $533,000 of accumulating and compounding dividends related to the undeclared preferred stock dividends for the second and fourth quarters of 2020.dividends. See note 1011 to our condensed consolidated financial statements.
Amortization of Preferred Stock Discount. The amortization of preferred stock discount decreased $978,000$316,000 to $627,000$0 during the 2021 period2022 quarter compared to $1.6 million$316,000 from the 2020 period, primarily2021 quarter due to the increase inending of the amortization period on the dividend rate of the Series D Convertible Preferred Stock on November 6, 2020, from 6.59% to 6.99%.2021. See note 1011 to our condensed consolidated financial statements.
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LIQUIDITY AND CAPITAL RESOURCES
COVID-19, Management’s Plans and Liquidity
In December 2019, COVID-19 was identified in Wuhan, China, and subsequently spread to other regions of the world, which has resulted in significant travel restrictions and extended shutdown of numerous businesses throughout the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Our clients, Ashford Trust and Braemar, have reported that the negative impact on room demand within their respective portfolios stemming from COVID-19 is significant, which has resulted and is expected to result in significantly reduced occupancy and RevPAR. Furthermore, theThe prolonged presence of COVID-19 has continued to impact the virus has resulted in healthCompany’s operating results and other government authorities imposing widespread restrictions on travel and other businesses. The hotel industry has experienced postponement or cancellation of a significant number of business conferences and similar events. Following the government mandates and health official orders,cash flows. However, the Company dramatically reduced staffinghas taken significant steps to improve its operating results and expenses at its products and services businesses and at its corporate office. COVID-19 has had a significant negative impact on the Company’s operations and financial results to date. In addition, one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. The Company expects that the COVID-19 pandemic willliquidity. We continue to have a significant negative impact on the Company’s results of operations, financial position and cash flow in 2021 and potentially beyond. As a result, in March 2020, the Company amended payment terms pursuant to certain hotel management agreements to better manage corporate working capital, reduced planned capital expenditures, significantly reduced operating expenses and reduced the cash compensation of its executive officers and other employees, including an arrangement pursuant to which Mr. Monty J. Bennett received his base salarysee improvement in the formoperations of common stock issued under the Company’s 2014 Incentive Plan, as amended. Additionally, the Company did not declare dividends which were due with respect to its Series D Convertible Preferred Stock for the second and fourth quarters of 2020 and the second quarter of 2021. As of June 30, 2021, the Company had aggregate undeclared preferred stock dividends of approximately $25.2 million, which relates to the second quarter of 2021 and the second and fourth quarters of 2020.
During the first quarter of 2021, base salaries for the Company’s executive officers and other employees were restored to pre-reduction levels and the arrangement by which Mr. Monty J. Bennett received his base salary in the form of common stock ended. Additionally, on March 25, 2021, the Company declared $8.4 million in dividends which were due with respect to its Series D Convertible Preferred Stock for the first quarter of 2021.
When preparing financial statements, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that create substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In applying the accounting guidance, the Company considered its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and its unconditional obligations due over the next 12 months.
We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. Violations of certain debt covenants may result in the inability of our portfolio companies to borrow unused amounts under their respective lines of credit. As of June 30, 2021, our Term Loan Agreement was in compliance with all covenants or other requirements. Debt held by our subsidiaries was in compliance with all covenants or other requirements. Additionally, Presentation Technologies, LLC, our subsidiary doing business as JSAV (“JSAV”), executed a credit agreement amendment on December 31, 2020, which extended the maturity date of the loan and includes a fixed charge coverage ratio covenant which commences with the quarter ending March 31, 2023. As a result of the impact of COVID-19, JSAV is reliant on Ashford Inc. to make contributions to cover JSAV’s projected operating shortfall and amortization and interest payments on its outstanding debt within one year of the issuance of the financial statements. All such contributions are subject to the discretion of Ashford Inc. As such, all of JSAV’s outstanding debt balance has been classified as a current liability within our condensed consolidated balance sheet as of June 30, 2021. The classification of JSAV’s outstanding debt as a current liability has no impact on Ashford Inc.’s going concern assessment because the JSAV debt has no recourse to Ashford Inc.
We cannot predict when hotel operating levels at our clients, Ashford Trust and Braemar, will returnand our subsidiaries as the industry continues to normalized levels after the effects of the pandemic subside, whether our clients’ hotels will be forced to shut down operations or whether one or more governmental entities may impose additional travel restrictions due to a resurgence of COVID-19 cases in the future. As a result of these factors resultingrecover from the impact of the pandemic, we are unable to estimate future financial performance with certainty. However, based primarily on our assessment of the ability of our key customers,COVID-19. Ashford Trust andpreviously disclosed that it expects to achieve pre-pandemic hotel operating levels by 2024. Additionally, Braemar has previously disclosed that it expects to pay their obligations to the Company in accordance with the advisory agreements, the Company has concluded that management’s current plan alleviates the substantial doubt about its ability to continue as a going concern. Additional factors considered in our assessment include our completed loan amendments, other agreements, our current cash on hand, our forecast of futureachieve pre-pandemic hotel operating results for the next 12 months from the date of this report and the actions we have taken to improve our liquidity.
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levels by 2023. Facts and circumstances related to COVID-19 could change in the future that are outside of management’s control, such as changes in Ashford Trust’s and Braemar’s financial position and liquidity, additional government mandates, health official orders, travel restrictionsthat could impact future operating results, future cash flows and extended business shutdowns dueour ability to COVID-19, which could subsequently change our assessment. See notes 5 and 13 to our condensed consolidated financial statements.pay dividends on the Series D Convertible Preferred Stock.
Loan AgreementsOn March 29, 2021,April 1, 2022, the Company amended itsentered into the Credit Agreement with Mustang Lodging Funding LLC, as administrative agent, and the lenders from time to time party thereto. The Credit Agreement evidences the Credit Facility in the amount of $100 million, including a $50 million term loan funded upon closing and commitments to fund up to an additional $50 million of term loans in up to five separate borrowings within 24 months after the Closing Date, subject to certain conditions. The Company used a portion of the proceeds from the Credit Agreement to pay off the remaining $26.6 million balance of the Company’s existing Term Loan Agreement (the “Term Loan Agreement”) with Bankas of America, N.A. (as so amended,March 31, 2022 and pay dividends to the “Seventh Amendment”). The Seventh Amendment (a) increasesholders of the required amortization rate from 1.25% to 2.50% each quarter commencing July 1, 2021, (b) requiresSeries D Convertible Preferred Stock as stated below. On April 18, 2022, the Company drew an additional $20.0 million on the Credit Facility. The Credit Facility is a five-year interest-only facility with all outstanding principal due at maturity, with three successive one-year extension options subject to maintain a minimum liquidity of $15.0 million at all times, including pro forma for preferred dividends, and (c) restricts dividends and stock repurchases, other than preferred dividends, so long as there is no defaultan increase in the interest rate during each extension period. Borrowings under the Term Loan Agreement. Principal payment amounts areCredit Agreement will bear interest, at the Company’s option, at either the Eurodollar Rate (defined as LIBOR or a comparable or successor rate, with a floor of 0.25%) plus an applicable margin, or the base rate (defined as the highest of the federal funds rate plus 0.50%, the prime rate or the Eurodollar Rate plus 1.00%, with a floor of 1.25%) plus an applicable margin. The applicable margin for borrowings under the Credit Agreement for Eurodollar loans will be 7.35% per annum and the applicable margin for base rate loans will be 6.35% per annum, with increases to both applicable margins of 0.50%, 0.75% and 1.00% per annum during each of the three extension periods, respectively. The remaining undrawn balance of the Credit Facility is subject to maintaining a fixed charge coveragean unused fee of 1.0%.
The Credit Facility does not require the maintenance of financial covenants, but if the ratio below specified thresholds, which if not met, increase(the “Leverage Ratio”) of consolidated funded indebtedness that is recourse to the principal payment due each quarter from 2.50%Company or any guarantor (less unrestricted cash) to 5.0%consolidated EBITDA of the outstanding principal balance. Upon signingCompany and its subsidiaries is greater than 4.00 to 1.00 as of the Seventh Amendment,end of any fiscal quarter during the term of the loan, including any extension period, then the Company made a $5.0 million prepaymentis required to Bank of America, N.A. as consideration for their execution and deliveryapply 100% of the Seventh Amendment. Theexcess cash flow generated during such fiscal quarter to prepay the term loans. During any extension period, the Company is also subjectrequired to apply 100% of the excess cash flow generated during such period to prepay the term loans. The Company may not pay dividends on the Company’s shares of common stock or preferred stock if the Leverage Ratio is greater than 3.00 to 1.00 after giving effect to the payment of such dividends. The Credit Agreement is guaranteed by the Company, Ashford LLC, and certain financial covenants.subsidiaries of the Company, and secured by, among other things, all of the assets of Ashford LLC and each guarantor and a pledge of the equity interests in Ashford LLC and each guarantor. As of June 30, 2021,March 31, 2022, our Term LoanCredit Agreement was in compliance with all covenants or other requirements. Debtrequirements and debt held by our subsidiaries was in compliance with all covenants or other requirements. The Company does not expect our Term LoanCredit Agreement and debt held by our subsidiaries to violate any loan covenants within one year of the issuance of the financial statements, outside of our consideration of JSAV. See discussion regarding JSAV’s outstanding debt in “COVID-19, Management’s Plans and Liquidity” above.statements.
Certain segments of our business are capital intensive and may require additional financing from time to time. Any additional financings, if and when pursued, may not be available on favorable terms or at all, which could have a negative impact on our liquidity and capital resources. Aggregate portfolio companies’ notes payable, net was $28.5were $29.2 million and $29.1$30.6 million as of June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively. For further discussion see notesnote 5 and 16 to our condensed consolidated financial statements.
Preferred stock dividendsOn March 25, 2021, the Company declared dividends which were due with respect to its Series D Convertible Preferred Stock for the first quarter of 2021. The declared $8.4 million of dividends were paid on April 15, 2021. As of June 30, 2021, the Company had aggregate undeclared preferred stock dividends of approximately $25.2 million, which relates to the second quarter of 2021 and the second and fourth quarters of 2020. All dividends, declared and undeclared, are recorded as a reduction in net income (loss) in the period incurred in our condensed consolidated statements of operations. All accrued dividends accumulate and compound until paid in cash or converted into common stock of the Company pursuant to the Certificate of Designation for the Series D Convertible Preferred Stock. Unpaid dividends, declared and undeclared, totaling $25.2 million at June 30, 2021, are recorded as a liability in our condensed consolidated balance sheets as “dividends payable.”
The independent members of the Board plan to revisit the dividend payment policy with respect to the Series D Convertible Preferred Stock on an ongoing basis. The independent members of the Board believe that the deferral of certain preferred dividends will provide the Company with additional funds to meet its ongoing liquidity needs.
As of March 31, 2022, the Company had aggregate undeclared preferred stock dividends of approximately $35.2 million, which relates to the second and fourth quarters of 2020 and the second and fourth quarters of 2021. On April 10, 2022, the Board declared a cash dividend on the Company’s Series D Convertible Preferred Stock for accrued and unpaid dividends for the quarters ending June 30, 2020 and December 31, 2020 to stockholders of record as of April 11, 2022. The Company paid the dividend of approximately $17.8 million, or $0.932 per share of Series D Convertible Preferred Stock, on April 15, 2022. Dividends for the Series D Convertible Preferred Stock remain in arrears for the quarters ending June 30, 2021 and December 31, 2021. On April 15, 2022, the Company additionally paid $8.7 million of dividends previously declared by the Board with respect to the Company’s Series D Convertible Preferred Stock for the first quarter of 2022.
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Each share of Series D Convertible Preferred Stock: (i) has a liquidation value of $25 per share; (ii) accrues cumulative dividends at the rate of: (a) 6.59% per annum until November 6, 2020; (b) 6.99% per annum from November 6, 2020 until November 6, 2021; and (c) 7.28% per annum thereafter:thereafter; (iii) participates in any dividend or distribution on the common stock in addition to the preferred dividends; (iv) is convertible into voting common stock at $117.50 per share; and (v) provides for customary anti-dilution protections. In the event the Company fails to pay the dividends on the Series D Convertible Preferred Stock for two consecutive quarterly periods (a “Preferred Stock Breach”), then until such arrearage is paid in cash in full: (A) the dividend rate on the Series D Convertible Preferred Stock will increase to 10.00% per annum until no Preferred Stock Breach exists; (B) no dividends on the Company’s common stock may be declared or paid, and no other distributions or redemptions may be made, on the Company’s common stock; and (C) the Board will be increased by two seats and the holders of 55% of the outstanding Series D Convertible Preferred Stock will be entitled to fill such newly created seats. The Series D Convertible Preferred Stock is held primarily by Mr. Monty J. Bennett, the Chairman of our Board and our Chief Executive Officer, Mr. Archie Bennett, Jr., who is Mr. Monty J. Bennett’s father, one of our other executive officers and several other individuals.
To the extent not paid on April 15, July 15, October 15 and January 15 of each calendar year in respect of the quarterly periods ending on March 31, June 30, September 30 and December 31, respectively (each such date, a “Dividend Payment Date”), all accrued dividends on any share shall accumulate and compound on the applicable Dividend Payment Date whether or not declared by the Board and whether or not funds are legally available for the payment thereof. All accrued dividends shall remain accumulated, compounding dividends until paid in cash pursuant hereto or converted to common shares. See also note 1011 to our condensed consolidated financial statements.
ERFP CommitmentsOn June 26, 2018, the Company entered into the Ashford Trust ERFP Agreement with Ashford
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Trust. The independent members of the board of directors of each of the Company and Ashford Trust, with the assistance of separate and independent legal counsel, engaged to negotiate the Ashford Trust ERFP Agreement on behalf of the Company and Ashford Trust, respectively. On January 15, 2019, the Company entered into the Braemar ERFP Agreement (collectively with the Ashford Trust ERFP Agreement, the “ERFP Agreements”) with Braemar. The independent members of the board of directors of each of the Company and Braemar, with the assistance of separate and independent legal counsel, engaged to negotiate the Braemar ERFP Agreement on behalf of the Company and Braemar, respectively. Under the ERFP Agreements, the Company agreed to provide $50 million (each, an “Aggregate ERFP Amount” and collectively, the “Aggregate ERFP Amounts”) to each of Ashford Trust and Braemar (collectively, the “REITs”), respectively, in connection with each such REIT’s acquisition of hotels recommended by us, with the option to increase each Aggregate ERFP Amount to up to $100 million upon mutual agreement by the parties to the respective ERFP Agreement. Under each of the ERFP Agreements, the Company will paypaid each REIT 10% of each acquired hotel’s purchase price in exchange for FF&E at a property owned by such REIT, which will bewere subsequently leased by us to such REIT rent-free. Each of the REITs must provide reasonable advance notice to the Company to request ERFP funds in accordance with the respective ERFP Agreement. The ERFP Agreements requirerequired that the Company acquire the related FF&E either at the time of the property acquisition or at any time generally within two years of the respective REITs’ acquisition of the hotel property. The Company recognizesrecognized the related depreciation tax deduction at the time such FF&E iswas purchased by the Company and placed into service at the respective REIT’s hotel properties. However, the timing of the FF&E being purchased and placed into service iswas subject to uncertainties outside of the Company’s control that could delay the realization of any tax benefit associated with the purchase of FF&E.
On March 13, 2020, the Company entered into thean Extension Agreement related to the Ashford Trust ERFP Agreement. Under the terms of the Extension Agreement, the deadline to fund the remaining ERFP commitment under the Ashford Trust ERFP Agreement of $11.4 million, was extended from January 22, 2021 to December 31, 2022. As of June 30, 2021,March 31, 2022, the Company has no remaining ERFP commitment to Braemar under the Braemar ERFP Agreement. See note 89 to our condensed consolidated financial statements.
On April 20, 2021, the Company received written notice from Ashford Trust of Ashford Trust’s intention not to renew the Ashford Trust ERFP Agreement. As a result, the Ashford Trust ERFP Agreement terminated in accordance with its terms on June 26, 2021. The expiration of the Ashford Trust ERFP Agreement will havehas no impact on the Extension Agreement, which continues in full force and effect in accordance with its terms.
On November 8, 2021, the Company delivered written notice to Braemar of the Company’s intention not to renew the Braemar ERFP Agreement. As a result, the Braemar ERFP Agreement terminated in accordance with its terms on January 15, 2022.
Other liquidity considerationsOn December 5, 2017, the Board approved a stock repurchase program pursuant to which the Board granted a repurchase authorization to acquire shares of the Company’s common stock, having an aggregate value of up to $20 million. No shares were repurchased under the stock repurchase program during the sixthree months ended June 30, 2021.March 31, 2022.
During
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Our deferred compensation plan currently has only one participant, Mr. Monty J. Bennett, our Chairman and Chief Executive Officer. Mr. Monty J. Bennett has elected to invest his deferred compensation account in our common stock. As a result, we have an obligation to issue approximately 196,000 shares of our common stock to Mr. Monty J. Bennett in quarterly installments over five years beginning in 2024. Mr. Monty J. Bennett may postpone all or a portion of the first quarterdistributions, for a minimum of 2021, we paid the remainder of contingent consideration due to the sellers of BAV Services, Inc. (“BAV”) in connection with the acquisition of BAV, including $350,000 related to the earn-out which was paid on January 11, 2021, and the final stock collar consideration payments in the amounts of $870,000 and $888,000 which were paid on February 1, 2021 and March 4, 2021, respectively.
In connection with the transactions contemplated by the Credit Agreement,5 years, if he notifies the Company entered into the SNDA with Ashford Trust and Oaktree pursuant to which the Company agreed to subordinate to the prior repayment in full of all obligations under the Credit Agreement, (1)12 months prior to the laterscheduled distributions. As of (i)March 31, 2022, the second anniversaryfair value of the Credit AgreementDCP liability was $3.4 million.
The Company has commitments related to cash compensation for the departure of one of our executive officers which include a cash payment of $750,000 on July 15, 2022, and (ii) the date accrued interest “in kind” is paidmonthly cash payments of approximately $267,000 per month payable in full, advisory fees (other than reimbursable expenses)equal monthly installments over a 24 month period beginning in excessAugust of the Advisory Fee Cap, (2) any termination fee or liquidated damages amounts under the advisory agreement, or any amount owed under any enhanced return funding program in connection with the termination of the advisory agreement or sale or foreclosure of assets financed thereunder, and (3) any payments to Lismore Capital II LLC (formerly known as Lismore Capital LLC) (“Lismore”) in connection with the transactions contemplated by the Credit Agreement. See additional discussion in notes 3 and 13 to our condensed consolidated financial statements.2022.
Additional information pertaining to other liquidity considerations of the Company can be found in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Recent Developments.”
Sources and Uses of Cash
As of June 30, 2021March 31, 2022 and December 31, 2020,2021, we had $32.1$29.8 million and $45.3$37.6 million of cash and cash equivalents, respectively, and $34.3$33.7 million and $37.4$34.9 million of restricted cash, respectively. Our principal sources of funds to meet our cash requirements include: net cash provided by operations and existing cash balances, which include borrowings from our existing lending agreements. Additionally, our principal uses of funds are expected to include possible operating shortfalls, capital expenditures, preferred dividends, and debt interest and principal payments. Items that impacted our cash flow and liquidity during the periods indicated are summarized as follows:
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Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided byused in operating activities were $4.1$5.7 million for the sixthree months ended June 30, 2021March 31, 2022 compared to net cash flows provided byused in operating activities of $37.8$5.4 million for the sixthree months ended June 30, 2020. The decrease in cash flows from operating activities in the six months ended June 30, 2021 was primarily due to a $16.0 million increase in current “other liabilities” in the six months ended June 30, 2020 as a result of the transfer of cash from Ashford Trust into a Company escrow account for insurance claims and increased cash payments received in the six months ended June 30, 2020 due to Ashford Trust and Braemar’s respective agreements with Lismore to seek modifications, forbearances or refinancing.March 31, 2021. The decrease in cash flows from operating activities was alsoprimarily due to the timing of payment of accounts payable and accrued expenses partially offset by the timing of receipt of our receivables from Ashford Trust and third parties. These decreases in cash flows provided by operating activities were offset by an increase in earnings.earnings due to a recovery in the Company’s operations in the three months ended March 31, 2022 from the effects of the COVID-19 pandemic.
Net Cash Flows Provided by (Used in) Investing Activities. For the sixthree months ended June 30,March 31, 2022, net cash flows used in investing activities were $351,000. These cash flows consisted of capital expenditures primarily of FF&E and audio visual equipment totaling $1.3 million, capital expenditures of $455,000 for RED’s marine vessels, and an investment in an unconsolidated entity of $400,000. These were offset by cash inflows of $406,000 in proceeds received from the sale of FF&E to Ashford Trust and proceeds from a note receivable of $1.4 million.
For the three months ended March 31, 2021, net cash flows used in investing activities were $6.1$3.0 million. These cash flows consisted of the receiptissuance of a note receivable of $2.9 million, from a third party hotel owner, purchases of Ashford Trust and Braemar common stock related to Remington’s employee compensation plan of $873,000, capital expenditures of $1.5 million$637,000 for RED’s marine vessels and capital expenditures of FF&E of $2.6$491,000, offset by cash inflows of $1.9 million including $1.8 million FF&E purchasedprimarily from Braemar. Net cash flows usedproceeds received in investing activities were offset by2021 from the sale of FF&E to Braemar in the fourth quarter of $1.8 million to Braemar.
For the six months ended June 30, 2020, net cash flows used in investing activities were $4.0 million. These cash flows consisted of capital expenditures of $2.1 million primarily for audio visual equipment, a $1.3 million working capital payment to the sellers of Remington related to the acquisition in November of 2019 and $548,000 for RED’s legacy U.S. Virgin Islands marine vessels.2020.
Net Cash Flows Provided by (Used in) Financing Activities. For the sixthree months ended June 30,March 31, 2022, net cash flows used in financing activities were $2.8 million. These cash flows consisted of $1.6 million of payments on notes payable, $208,000 of payments on finance leases, purchases of $218,000 of treasury stock, $61,000 of loan cost payments, $615,000 of net payments on our revolving credit facilities, and net repayments in advances to employees of $246,000 associated with tax withholdings for restricted stock vesting. These were offset by $61,000 of proceeds from borrowings on notes payable.
For the three months ended March 31, 2021, net cash flows used in financing activities were $14.2$5.1 million. These cash flows consisted of $8.4 million of payments for dividends on preferred stock, $5.3$5.1 million of payments on notes payable, $620,000$332,000 of payments on our revolving credit facilities, purchases of $121,000$102,000 of treasury stock and $91,000$61,000 of payments on finance leases. These were offset by $325,000 of proceeds from borrowings on notes payable and employee advances of $49,000$245,000 associated with tax withholdings for restricted stock vesting.
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For the six months ended June 30, 2020, net cash flows provided by financing activities were $15.1 million. These cash flows consisted of $44.8 million of proceeds from borrowings on notes payable, employee advances of $110,000 associated with tax withholdings for restricted stock vesting and $77,000 of contributions from noncontrolling interests in a consolidated entity. These were offset by $16.6 million of payments on notes payable, $8.7 million of payments for dividends on our preferred stock, $2.5 million of net payments on our revolving credit facilities, $1.4 million of contingent consideration paid to the sellers of BAV, $476,000 of payments on finance leases, and $290,000 of loan cost payments.
Seasonality
Quarterly revenues may be adversely affected by events beyond our control, such as the COVID-19 pandemic and government-issued travel restrictions in response, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel and hospitality products and services. To the extent that cash flows from operations are insufficient during any quarter due to temporary or seasonal fluctuations in revenues, we expect to utilize cash on hand or borrowings to fund operations.
Off-Balance Sheet Arrangements
In the normal course of business, we may form or invest in partnerships or joint ventures. We evaluate each partnership and joint venture to determine whether the entity is a VIE. If the entity is determined to be a VIE, we assess whether we are the primary beneficiary and need to consolidate the entity. For further discussion, see note 2 to our condensed consolidated financial statements.
Long-term liability of our subsidiary compensation plan
We do not record on the balance sheet the long-term liability portion of the Ashford Trust and Braemar shares purchased by Remington Lodging on the open market and held for the purpose of providing compensation to certain employees as granted under our subsidiary compensation plan. The long-term liability was $1.4 million and $134,000 as of June 30, 2021 and December 31, 2020, respectively.
Contractual Obligations and Commitments
There have been no material changes since December 31, 2020,2021, outside the ordinary course of business, to contractual obligations and commitments included in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 20202021 Form 10-K.
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10-K, other than items as described in Liquidity and Capital Resources.
Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our accounting policies that are critical or most important to understanding our financial condition and results of operations and that require management to make the most difficult judgments are described in our 20202021 Form 10-K. There have been no material changes in these critical accounting policies.
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Our primary market risk exposures consist of changes in interest rates on borrowings under our debt instruments that bear interest at variable rates that fluctuate with market interest rates as well as foreign currency exchange rate risk.
Interest Rate Risk—At June 30, 2021,March 31, 2022, our total indebtedness of $59.1$57.5 million included $54.8$53.6 million of variable-rate debt. The impact on our results of operations of a 100 basis point change in interest rate on the outstanding balance of variable-rate debt at June 30, 2021,March 31, 2022, would be approximately $548,000$536,000 annually. Interest rate changes have no impact on the remaining $4.3$3.9 million of fixed rate debt.
The amount above was determined based on the impact of a hypothetical interest rate on our borrowings and assumes no changes in our capital structure. As the information presented above includes only those exposures that existed at June 30, 2021,March 31, 2022, it does not consider exposures or positions that could arise after that date. Accordingly, the information presented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on exposures that arise during the period, the hedging strategies at the time, and the related interest rates.
Foreign Exchange Risk—The majority of our revenues, expenses and capital purchases are transacted in U.S. dollars. JSAVINSPIRE has operations in Mexico and the Dominican Republic, and therefore, we have exposure with respect to exchange rate fluctuations. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred. We have chosen not to hedge foreign exchange risks related to our foreign currency denominated earnings and cash flows through the use of financial instruments. RED’s operations outside of the U.S. are primarily transacted in U.S. dollars, which is the official currency of the Turks and Caicos Islands.
ITEM 4.CONTROLS AND PROCEDURES
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2021.March 31, 2022 (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the evaluation date,Evaluation Date, our disclosure controls and procedures arewere not effective (i) to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECSEC’s rules and forms;forms and (ii) to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
ChangesAs disclosed in Internal Controlour Annual Form 10-K for the year ended December 31, 2021, as part of the Company’s fourth quarter of 2021 financial statement close process and preparation of the 2021 Form 10-K, we identified a material weakness related to management’s review controls over Financial ReportingRemington’s cost reimbursement revenue and reimbursed expenses. To remediate this
There were no
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material weakness, during the first quarter of 2022, we provided additional training to our associates and added procedures to our review controls related to the accounting for cost reimbursement revenue and reimbursed expenses to ensure that our consolidated financial statements as of and for the three months ended March 31, 2022 are prepared in accordance with U.S. GAAP. The material weakness will not be considered remediated until management’s newly designed and implemented controls have been in place and operated for a sufficient period of time, and management has concluded, through testing, that these controls are effective.
Given the short time frame between the filing of our Form 10-K for the year ended December 31, 2021 on March 25, 2022 and the Company’s first quarter of 2022 financial statement close process and preparation of the related Form 10-Q, we are unable to conclude that the material weakness has been remediated as of March 31, 2022.
Our management has evaluated, with the participation of our principal executive and principal financial officers, whether any changes in our internal controls over financial reporting that occurred during the fiscal quarter ended June 30, 2021, thatMarch 31, 2022 have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. Based on the evaluation we conducted, other than progress made towards the remediation of the material weakness identified and discussed above, our management has concluded that no such changes have occurred.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In June 2020, each of the Company, Braemar, Ashford Trust, and Lismore, a subsidiary of the Company (collectively with the Company, Braemar, Ashford Trust and Lismore, the “Ashford Companies”), received an administrative subpoena from the SEC. The Company’s administrative subpoena requires the production of documents and other information since January 1, 2018 relating to, among other things, (i) related party transactions among the Ashford Companies (including the Ashford Trust Agreement and the Braemar Agreement pursuant to which each of Ashford Trust and Braemar engaged Lismore to negotiate the refinancing, modification or forbearance of certain mortgage debt) or between any of the Ashford Companies and any officer, director or owner of the Ashford Companies or any entity controlled by any such person, and (ii) the Company’s accounting policies, procedures and internal controls related to such related party transactions. In addition, in October 2020, Mr. Monty J. Bennett, the Chairman of our Board and our Chief Executive Officer, received an administrative subpoena from the SEC requesting testimony and the production of documents and other information substantially similar to the requests in the subpoenas received by the Ashford Companies. The Company and Mr. Monty J. Bennett are responding to the administrative subpoenas.Item 3. Legal Proceedings
On December 20, 2016, a class action lawsuit was filed against one of the Company’s subsidiaries in The Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws. The court has entered an order granting class certification with respect to: (i) a statewide class of non-exempt employees who were allegedly deprived of rest breaks as a result of the subsidiary’s previous written policy requiring employees to stay on premises during rest breaks; and (ii) a derivative class of non-exempt former employees who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class, however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe that any potential loss to the Company is reasonably estimable at this time. As of June 30, 2021,March 31, 2022, no amounts have been accrued.
We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters, matters relating to compliance with applicable law (for example, the ADA and similar state laws), and other general matters. The likelihood of loss for these legal proceedings is based on definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Legal costs associated with loss contingencies are expensed as incurred. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.
ITEM 1A.RISK FACTORS
The discussion of our business and operations should be read together with the risk factors contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020,2021, filed with the SEC, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies, or prospects in a material and adverse manner.
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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities by the Issuer
The following table provides the information with respect to purchases and forfeitures of shares of our common stock during each of the months in the secondfirst quarter of 2021:2022:
PeriodPeriodTotal Number of Shares PurchasedAverage Price Paid Per Share
Total Number of Shares Purchased as Part of a Publicly Announced Plan (1)
Maximum Dollar Value of Shares That May Yet Be Purchased Under the PlanPeriodTotal Number of Shares PurchasedAverage Price Paid Per Share
Total Number of Shares Purchased as Part of a Publicly Announced Plan (1)
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan
Common stock:Common stock:Common stock:
April 1 to April 30618 $— (3)— $20,000,000 
May 1 to May 312,025 (2)$12.00 (3)— $20,000,000 
June 1 to June 30543 $— (3)— $20,000,000 
January 1 to January 31January 1 to January 3172 $— (3)— $20,000,000 
February 1 to February 28February 1 to February 28— $— — $20,000,000 
March 1 to March 31March 1 to March 3113,010 (2)$16.96 (3)— $20,000,000 
TotalTotal3,186 $12.00 — Total13,082 $16.96 

— 
________
(1) On December 5, 2017, the Board approved a stock repurchase program pursuant to which the Board granted a repurchase authorization to acquire shares of the Company’s common stock, having an aggregate value of up to $20 million. No shares were repurchased under the stock repurchase program during the three months ended June 30, 2021, pursuant to this authorization.March 31, 2022.
(2) Includes 1,62312,846 shares that were withheld to cover tax-withholding requirements in MayMarch related to the vesting of restricted shares of our common stock issued to employees pursuant to the Company’s stockholder-approved stock incentive plan.
(3) There is no cost associated with the forfeiture of 618, 402,72 and 543164 restricted shares of our common stock in April, MayJanuary and June,March, respectively.
ITEM 3.DEFAULT UPON SENIOR SECURITIES
As of June 30, 2021,March 31, 2022, the Company had aggregate undeclared preferred stock dividends of approximately $25.2$35.2 million, which relates to the second quarterand fourth quarters of 20212020 and the second and fourth quarters of 2020.2021. All dividends, declared and undeclared, are recorded as a reduction in net income (loss) attributable to common stockholders in the period incurred in our condensed consolidated statements of operations. All accrued dividends accumulate and compound until paid in cash or converted into common stock of the Company pursuant to the Certificate of Designation for the Series D Convertible Preferred Stock. Unpaid dividends, declared and undeclared, totaling $25.2$43.9 million and $34.6 million at June 30,March 31, 2022 and December 31, 2021, respectively, are recorded as a liability in our condensed consolidated balance sheets as “dividends payable.” As previously disclosed, each share of Series D Convertible Preferred Stock (i) accrues cumulative preferred dividends at the rate of (a) 6.59% per annum until November 6, 2020; (b) 6.99% per annum from the November 6, 2020 until November 6, 2021; and (c) 7.28% per annum thereafter and (ii) will participate in any dividend or distribution on the common stock in addition to the preferred dividends. 
On April 10, 2022, the Board declared a cash dividend on the Company’s Series D Convertible Preferred Stock for accrued and unpaid dividends for the quarters ending June 30, 2020 and December 31, 2020 to stockholders of record as of April 11, 2022. The Company paid the dividend of approximately $17.8 million, or $0.932 per share of Series D Convertible Preferred Stock, on April 15, 2022. Dividends for the Series D Convertible Preferred Stock remain in arrears for the quarters ending June 30, 2021 and December 31, 2021. On April 15, 2022, the Company additionally paid $8.7 million of dividends previously declared by the Board with respect to the Company’s Series D Convertible Preferred Stock for the first quarter of 2022.
See note 10notes 11 and 17 in our condensed consolidated financial statements for a full description of all material terms of the Series D Cumulative Convertible Preferred Stock. The Series D Convertible Preferred Stock is held primarily by Mr. Monty J. Bennett, the Chairman of our Board and our Chief Executive Officer, Mr. Archie Bennett, Jr., who is Mr. Monty J. Bennett’s father, and one of our other executive officers and several other individuals.officers.
ITEM 4.MINE SAFETY DISCLOSURES
None.
ITEM 5.OTHER INFORMATION
On August 16, 2021, the Company entered into Amendment No. 2 to the Fifth Amended and Restated Advisory Agreement with Braemar (“Amendment No. 2”). The Fifth Amended and Restated Advisory Agreement was amended to delete Section 6.7 in its entirety in order to remove the requirement that the Company disclose in each Quarterly Report on Form 10-Q and each Annual Report on Form 10-K that it files under the Exchange Act the incremental expenses incurred by the Company in connection with providing services to Braemar under the Amended and Restated Advisory Agreement (the “Incremental Expenses”) and to provide to the audit committee of the board of directors of Braemar a report of an accounting firm that the Company’s determination of such Incremental Expenses is reasonable.None.
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ITEM 6.EXHIBITS
ExhibitDescription
2.1*
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
10.1†*10.1
10.2†*
10.3*
10.4*
10.5*
10.2
10.3
10.4
10.5†
31.1**
31.2**
32.1***
32.2***
The following materials from the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2021,March 31, 2022, are formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) Condensed Consolidated Statements of Equity (Deficit); (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements. In accordance with Rule 402 of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema DocumentSubmitted electronically with this report.
101.CALInline XBRL Taxonomy Calculation Linkbase DocumentSubmitted electronically with this report.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentSubmitted electronically with this report.
101.LABInline XBRL Taxonomy Label Linkbase Document.Submitted electronically with this report.
101.PREInline XBRL Taxonomy Presentation Linkbase Document.Submitted electronically with this report.
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104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
___________________________________
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*Filed herewith. Schedules and exhibits have been omitted pursuant to Item 601(b)(2)(ii) of Regulation S-K. The Company agrees to furnish supplementally a copy of such schedules and exhibits, or any section thereof, to the SEC upon request.
** Filed herewith.
***Furnished herewith.
† Management contract or compensatory plan or arrangement.

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SIGNATURES
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 thereunto duly authorized.
ASHFORD INC.
Date:August 16, 2021May 11, 2022By:
/s/ MONTY J. BENNETT
Monty J. Bennett
Chief Executive Officer
Date:August 16, 2021May 11, 2022By:
/s/ DERIC S. EUBANKS
Deric S. Eubanks
Chief Financial Officer

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