NOTE 3 - ACQUISITIONS

We acquired five hotels during 2011. We purchased the Homewood Suites in Ridgeland, MS on April 15, 2011 for approximately $7.3 million, the Staybridge Suites in Glendale, CO on April 27, 2011 for approximately $10.0 million, the Holiday Inn in Duluth, GA on April 27, 2011 for approximately $7.0 million, and the Hilton Garden Inn in Duluth, GA for approximately $13.4 million on May 25, 2011. We purchased the Courtyard by Marriott in El Paso, TX on July 28, 2011 for approximately $12.4 million. The purchases were financed with borrowings under our revolving credit facility. We did not acquire any intangibles or assume any debt related to these five acquisitions.

We have acquired three hotels during the first quarter of 2012. We purchased the Courtyard by Marriott in Atlanta, GA on January 12, 2012 for approximately $28.5 million, the Hilton Garden Inn in Birmingham, AL for approximately $11.5 million on February 28, 2012, and another Hilton Garden Inn in Birmingham, AL for approximately $8.6 million on February 28, 2012. We assumed debt of approximately $19.0 million on the Atlanta, GA acquisition.

We have acquired three hotels during the second quarter of 2012. We purchased the Hilton Garden Inn in Smyrna, TN on May 16, 2012 for approximately $11.5 million, the Hampton Inn & Suites in Smyrna, TN on June 21, 2012 for approximately $8.0 million, and the Courtyard by Marriott in Arlington, TX on May 16, 2012 for approximately $15.0 million. We assumed debt of approximately $14.1 million on the two hotel acquisitions in Smyrna, TN.

The following table illustrates our initial allocation of the aggregated purchase prices for the hotel acquisitions discussed above during 2011 and 2012:

	2012		2011
	(in thousands)		(in thousands)

Land	$	8,197	$	7,254
Hotel buildings and improvements		71,603		41,368
Furniture, fixtures and equipment		3,725		1,428
Other assets		338		365
Total assets acquired	$	83,863	$	50,415
Other liabilities		235		398
Debt acquired		33,103		-
Total liabilities acquired		33,338		398
Net assets acquired	$	50,525	$	50,017

Total revenues and net income (loss) for the three and six months ended June 30, 2012 of hotels acquired during the six months ended June 30, 2012 and the year ended December 31, 2011, which are included in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2012 and 2011, were as follows (in thousands):

	For the three months ended				For the six months ended
2012 acquisitions	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Revenue	$	3,866	$	-	$	5,649	$	-
Net income	$	475	$	-	$	607	$	-


	For the three months ended				For the six months ended
2011 acquisitions	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Revenue	$	4,186	$	2,200	$	8,158	$	2,200
Net income	$	721	$	561	$	1,322	$	561

The following unaudited condensed pro forma financial information presents the results of operations as if the 2012 and 2011 acquisitions had taken place on January 1, 2011. The condensed pro forma financial information excludes discontinued operations and is not necessarily indicative of what actual results of operations of the Company would have been assuming the acquisitions had taken place on January 1, 2011, nor does it purport to represent the results of operations for future periods. The unaudited condensed pro forma financial information, excluding discontinued operations, is as follows (in thousands, except per share data):

	For the three months ended					For the six months ended
	June 30, 2012			June 30, 2011		June 30, 2012			June 30, 2011
Revenue	$	48,605		$	43,563	$	91,934		$	83,241
Net income (loss)	$	(335	)	$	1,080	$	(2,843	)	$	(6,584	)
Net income (loss) per share
attributable to common
shareholders - basic and diluted	$	(0.01	)	$	0.03	$	(0.08	)	$	(0.18	)