8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): March 11, 2022

BRAEMAR HOTELS & RESORTS INC.

(Exact name of registrant as specified in its charter)

Maryland	001-35972	46-2488594
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS employer identification number)
14185 Dallas Parkway
Suite 1100
Dallas
Texas		75254
(Address of principal executive offices)		(Zip code)

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

Not Applicable

(Former name or former address, if changed since last report)

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

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

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

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

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

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

Emerging growth company    ☐

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BHR	New York Stock Exchange
Preferred Stock, Series B	BHR-PB	New York Stock Exchange
Preferred Stock, Series D	BHR-PD	New York Stock Exchange

ITEM 2.01    COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

On March 14, 2022, Braemar Hotels & Resorts Inc. (the “Company”) announced that on March 11, 2022, the Company and its indirect, wholly-owned subsidiary, BHR Dorado LLC (the “Purchaser”), completed the acquisition of the Ritz-Carlton Dorado Beach Hotel (the “Hotel”) in Puerto Rico and the income stream attributable to the 14 adjacent luxury residences currently participating in a rental management program (the “Residences,” and together with the Hotel, the “Property”) pursuant to a Purchase and Sale Agreement, dated December 24, 2021 (the “Purchase Agreement”), by and among the Company, the Purchaser and DBR Hotel Owner LLC (the “Seller”).

The total consideration for the acquisition consisted of (i) $104 million in cash, the assumption of the Hotel’s loan with KHRE SMA Fundings, LLC, of which $54 million is outstanding, and (ii) the issuance of 6,000,000 shares of common stock of the Company, par value $0.01 per share (“Common Stock”). The cash portion of the consideration was funded with cash on hand.

In connection with the completion of the acquisition of the Property and the issuance of the Common Stock, the Company and the Seller entered into an Investor Rights Agreement, dated March 11, 2022 (the “Investor Rights Agreement”), pursuant to which, among other items, Seller (i) is subject to a customary standstill provision, (ii) agreed to vote all shares of Common Stock owned in accordance with the recommendation of the board of directors of the Company, and (iii) is restricted from effecting certain transfers of the Common Stock unless made in an open market transaction pursuant to an effective registration statement. The Investor Rights Agreement also grants to the Company a redemption right on the Common Stock at a price per share equal to the greater of (x) five dollars ($5.00) and (y) the closing share price of the Common Stock on the day immediately prior to the redemption date.

The assumed indebtedness consists of $54 million in outstanding principal balance and bears interest at LIBOR (to which a 0.75% floor applies) plus 6%. The assumed indebtedness has a maturity date of March 4, 2024, with two one-year renewal terms, subject to certain conditions. The assumed indebtedness may be repaid by the Company at any time subject to (i) a 0.50% exit fee, and (ii) if repaid within nine months of the acquisition of the Property, payment of all interest that would have become due to the lender if the assumed indebtedness had remained outstanding until the date that is nine months following acquisition of the Property.

ITEM 3.02    UNREGISTERED SALES OF EQUITY SECURITIES.

Based in part upon the representations of the Seller in the Purchase Agreement, the offering by the Company of 6,000,000 shares of Common Stock to the Seller pursuant to the Purchase Agreement was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Seller represented that it is an accredited investor, as such term is defined in Rule 501(a)(3) of Regulation D under the Securities Act, and that it is acquiring the shares for investment purposes only and not with a view to any resale, distribution or other disposition of shares in violation of the United States federal securities laws.

ITEM 7.01    REGULATION FD DISCLOSURE.

On March 14, 2022, the Company issued a press release announcing the closing of the acquisition of the Property, as further described in this current report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 7.01 and Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01     FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements. To the extent financial statements are required to be filed with this item, such financial statements will be filed by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

(b) Pro Forma Financial Information. To the extent pro forma financial information is required to be filed by this item, such financial information will be filed by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

(d)    Exhibits

Exhibit Number         Description

99.1    Press Release of the Company, dated March 14, 2022

104    Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

SIGNATURE

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

 

	BRAEMAR HOTELS & RESORTS INC.
Dated: March 14, 2022	By:	/s/ Alex Rose
		Alex Rose
		Executive Vice President, General Counsel & Secretary

EX-99.1

NEWS RELEASE

Contact:	Deric Eubanks	Jordan Jennings	Joseph Calabrese
	Chief Financial Officer	Investor Relations	Financial Relations Board
	(972) 490-9600	(972) 778-9487	(212) 827-3772

BRAEMAR HOTELS & RESORTS COMPLETES ACQUISITION OF DORADO BEACH, A RITZ-CARLTON RESERVE

DALLAS – March 14, 2022 – Braemar Hotels & Resorts Inc. (NYSE: BHR) (“Braemar” or the “Company”) today announced that it has completed the acquisition of the 96-room Dorado Beach, a Ritz-Carlton Reserve in Dorado, Puerto Rico (the “Dorado Beach” or the “Property”), previously announced on December 27, 2021. In addition, the Company acquired the income stream attributable to fourteen luxury residential units adjacent to the Property that participate in a rental management program. The total consideration for the acquisition was approximately $193 million ($1.8 million per key, inclusive of the residential units in the rental program). The acquisition was funded with $104 million of cash, six million shares of common stock, and the assumption of a $54 million mortgage loan. For purposes of calculating total consideration for the transaction, a price of $5.84 per share was assumed.

* * * * *

Braemar Hotels & Resorts is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.

Forward-Looking Statements

Certain statements and assumptions in this press release contain or are based upon “forward-looking” information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company’s strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words “will likely result,” “may,” “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Braemar’s control.

These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: the impact of COVID-19, and the rate of adoption and

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efficacy of vaccines to prevent COVID-19, on our business and investment strategy; our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board’s decision whether to pay further dividends at levels previously disclosed or to use available cash to pay dividends; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Braemar’s filings with the Securities and Exchange Commission.

The forward-looking statements included in this press release are only made as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.

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Cover Page Cover Page	Mar. 11, 2022
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Mar. 11, 2022
Entity Registrant Name	BRAEMAR HOTELS & RESORTS INC.
Entity Incorporation, State or Country Code	MD
Entity File Number	001-35972
Entity Tax Identification Number	46-2488594
Entity Address, Address Line One	14185 Dallas Parkway
Entity Address, Address Line Two	Suite 1100
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75254
City Area Code	972
Local Phone Number	490-9600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001574085
Amendment Flag	false
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	BHR
Security Exchange Name	NYSE
Series B Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Preferred Stock, Series B
Trading Symbol	BHR-PB
Security Exchange Name	NYSE
Series D Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	Preferred Stock, Series D
Trading Symbol	BHR-PD
Security Exchange Name	NYSE