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, 2024

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)

Nevada	84-2331507
(State or other jurisdiction of incorporation or organization)	(IRS employer identification number)
14185 Dallas Parkway
Suite 1200
Dallas
Texas	75254
(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 filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller 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 class	Trading Symbol	Name of each exchange on which registered
None	None	None

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 share	2,066,860
(Class)	Outstanding at August 9, 2024

ASHFORD INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	2
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023	4
Condensed Consolidated Statements of Equity (Deficit) for the Three and Six Months Ended June 30, 2024 and 2023	5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	7
Notes to Condensed Consolidated Financial Statements	9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	51
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	69
ITEM 4. CONTROLS AND PROCEDURES	70
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	71
ITEM 1A. RISK FACTORS	71
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	73
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	73
ITEM 4. MINE SAFETY DISCLOSURES	73
ITEM 5. OTHER INFORMATION	73
ITEM 6. EXHIBITS	75
SIGNATURES	77

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, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents ($6,573 and $7,574, respectively, attributable to VIEs)	$	56,349	$	52,054
Restricted cash	19,530		23,216
Restricted investment	143		128
Accounts receivable, net of allowance for credit losses of $3,314 and $2,090, respectively ($103 and $693, respectively, attributable to VIEs)	32,313		26,945
Due from affiliates	790		41
Due from Ashford Trust ($149 and $326, respectively, attributable to VIEs)	—		18,933
Due from Braemar ($24 and $24, respectively, attributable to VIEs)	1,644		714
Inventories ($152 and $386, respectively, attributable to VIEs)	2,535		2,481
Prepaid expenses and other assets ($533 and $530, respectively, attributable to VIEs)	18,793		16,418
Total current assets	132,097		140,930
Investments ($8,966 and $5,000, respectively, reported at fair value and attributable to VIEs)	13,396		9,265
Property and equipment, net ($474 and $707, respectively, attributable to VIEs)	59,962		56,852
Operating lease right-of-use assets	20,358		21,193
Deferred tax assets, net	3,339		4,358
Goodwill	61,013		61,013
Intangible assets, net	199,311		210,095
Other assets, net	1,354		1,101
Total assets	$	490,830	$	504,807
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses ($1,211 and $1,919, respectively, attributable to VIEs)	$	40,977	$	54,837
Dividends payable	38,240		28,508
Due to Ashford Trust	1,316		—
Deferred income ($221 and $210, respectively, attributable to VIEs)	7,524		11,963
Deferred compensation plan	454		—
Notes payable, net ($237 and $387, respectively, attributable to VIEs)	4,393		4,387
Finance lease liabilities	294		437
Operating lease liabilities	4,374		4,160
Claims liabilities and other	32,886		31,112
Total current liabilities	130,458		135,404
Deferred income ($0 and $1,192, respectively, attributable to VIEs)	7,383		6,415
Deferred tax liability, net	31,514		29,517
Deferred compensation plan	1,149		891
Notes payable, net	135,010		132,579
Finance lease liabilities	2,724		2,832
Operating lease liabilities	17,906		19,174
Other liabilities	2,446		2,590
Total liabilities	328,590		329,402
Commitments and contingencies (note 9)
MEZZANINE EQUITY
Series D Convertible Preferred Stock, $0.001 par value, 19,120,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023	478,000		478,000
Redeemable noncontrolling interests	2,215		1,972
EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized, $0.001 par value, 3,572,279 and 3,317,786 shares issued and 3,439,499 and 3,212,312 shares outstanding at June 30, 2024 and December 31, 2023, respectively	4		3
Additional paid-in capital	299,504		299,304
Accumulated deficit	(627,357)		(609,312)
Accumulated other comprehensive income (loss)	(116)		(213)
Treasury stock, at cost, 132,780 and 105,474 shares at June 30, 2024 and December 31, 2023, respectively	(1,433)		(1,354)
Total equity (deficit) of the Company	(329,398)		(311,572)
Noncontrolling interests in consolidated entities	11,423		7,005
Total equity (deficit)	(317,975)		(304,567)
Total liabilities, mezzanine equity and equity (deficit)	$	490,830	$	504,807

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,
	2024		2023		2024		2023
REVENUES:
Advisory services fees	$	11,713	$	12,114	$	23,457	$	24,417
Hotel management fees	14,374		14,878		26,844		27,065
Design and construction fees	5,365		7,605		14,812		14,534
Audio visual	47,583		41,349		92,495		81,706
Other	19,034		11,808		35,285		20,882
Cost reimbursement revenue	113,331		104,956		227,641		209,228
Total revenues	211,400		192,710		420,534		377,832
EXPENSES:
Salaries and benefits	24,768		22,629		47,432		45,404
Cost of revenues for design and construction	1,728		3,589		3,758		6,455
Cost of revenues for audio visual	32,561		29,993		63,443		57,821
Depreciation and amortization	6,440		6,990		12,821		13,990
General and administrative	16,395		12,347		33,252		22,057
Other	11,249		5,684		20,172		11,786
Reimbursed expenses	113,352		104,956		227,729		209,154
Total expenses	206,493		186,188		408,607		366,667
OPERATING INCOME (LOSS)	4,907		6,522		11,927		11,165
Equity in earnings (loss) of unconsolidated entities	429		(388)		465		(847)
Interest expense	(4,134)		(3,422)		(8,290)		(6,259)
Amortization of loan costs	(270)		(265)		(546)		(506)
Interest income	567		440		1,259		717
Realized gain (loss) on investments	—		—		—		(80)
Other income (expense)	(254)		(159)		291		334
INCOME (LOSS) BEFORE INCOME TAXES	1,245		2,728		5,106		4,524
Income tax (expense) benefit	(2,657)		(1,227)		(5,003)		(1,847)
NET INCOME (LOSS)	(1,412)		1,501		103		2,677
Net (income) loss from consolidated entities attributable to noncontrolling interests	285		214		456		502
Net (income) loss attributable to redeemable noncontrolling interests	(46)		(133)		(138)		(288)
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(1,173)		1,582		421		2,891
Preferred dividends, declared and undeclared	(9,231)		(9,044)		(18,433)		(18,078)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(10,404)	$	(7,462)	$	(18,012)	$	(15,187)
INCOME (LOSS) PER SHARE - BASIC AND DILUTED
Basic:
Net income (loss) attributable to common stockholders	$	(3.24)	$	(2.41)	$	(5.67)	$	(5.00)
Weighted average common shares outstanding - basic	3,212		3,092		3,174		3,039
Diluted:
Net income (loss) attributable to common stockholders	$	(3.24)	$	(2.56)	$	(5.67)	$	(5.10)
Weighted average common shares outstanding - diluted	3,212		3,334		3,174		3,137

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,
	2024		2023		2024		2023
NET INCOME (LOSS)	$	(1,412)	$	1,501	$	103	$	2,677
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment	44		(45)		97		(137)
COMPREHENSIVE INCOME (LOSS)	(1,368)		1,456		200		2,540
Comprehensive (income) loss attributable to noncontrolling interests	285		214		456		502
Comprehensive (income) loss attributable to redeemable noncontrolling interests	(46)		(133)		(138)		(288)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	(1,129)	$	1,537	$	518	$	2,754

See Notes to Condensed Consolidated Financial Statements.

4

ASHFORD INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(unaudited, in thousands)

	Common Stock			Additional Paid-in Capital		Accumulated  Deficit		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Noncontrolling Interests in Consolidated Entities		Total		Convertible Preferred Stock			Redeemable Noncontrolling Interests
	Shares	Amount								Shares	Amount						Shares	Amount
Balance at March 31, 2024	3,431	$	4	$	298,764	$	(616,927)	$	(160)	(129)	$	(1,411)	$	10,745	$	(308,985)	19,120	$	478,000	$	1,999
Equity-based compensation	12	—		516		—		—		—	—		—		516		—	—		82
Issuance of subsidiary stock to noncontrolling interests	—	—		(174)		—		—		—	—		174		—		—	—		—
Forfeiture of restricted common shares	(4)	—		22		—		—		(4)	(22)		—		—		—	—		—
Dividends declared and undeclared - preferred stock	—	—		—		(9,231)		—		—	—		—		(9,231)		—	—		—
Contributions from noncontrolling interests	—	—		376		—		—		—	—		789		1,165		—	—		62
Redemption value adjustment	—	—		—		(26)		—		—	—		—		(26)		—	—		26
Foreign currency translation adjustment	—	—		—		—		44		—	—		—		44		—	—		—
Net income (loss)	—	—		—		(1,173)		—		—	—		(285)		(1,458)		—	—		46
Balance at June 30, 2024	3,439	$	4	$	299,504	$	(627,357)	$	(116)	(133)	$	(1,433)	$	11,423	$	(317,975)	19,120	$	478,000	$	2,215

	Common Stock			Additional Paid-in Capital		Accumulated  Deficit		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Noncontrolling Interests in Consolidated Entities		Total		Convertible Preferred Stock			Redeemable Noncontrolling Interests
	Shares	Amount								Shares	Amount						Shares	Amount
Balance at December 31, 2023	3,212	$	3	$	299,304	$	(609,312)	$	(213)	(105)	$	(1,354)	$	7,005	$	(304,567)	19,120	$	478,000	$	1,972
Equity-based compensation	255	1		874		—		—		—	—		—		875		—	—		182
Issuance of subsidiary stock to noncontrolling interests	—	—		(354)		—		—		—	—		354		—		—	—		—
Forfeiture of restricted common shares	(4)	—		28		—		—		(4)	(28)		—		—		—	—		—
Purchase of treasury stock	(24)	—		—		—		—		(24)	(51)		—		(51)		—	—		—
Dividends declared and undeclared - preferred stock	—	—		—		(18,433)		—		—	—		—		(18,433)		—	—		—
Acquisition of noncontrolling interest in consolidated entities	—	—		(342)		—		—		—	—		128		(214)		—	—		—
Contributions from noncontrolling interests, net of issuance costs	—	—		(6)		—		—		—	—		4,392		4,386		—	—		62
Redemption value adjustment	—	—		—		(33)		—		—	—		—		(33)		—	—		33
Distributions to noncontrolling interests	—	—		—		—		—		—	—		—		—		—	—		(172)
Foreign currency translation adjustment	—	—		—		—		97		—	—		—		97		—	—		—
Net income (loss)	—	—		—		421		—		—	—		(456)		(35)		—	—		138
Balance at June 30, 2024	3,439	$	4	$	299,504	$	(627,357)	$	(116)	(133)	$	(1,433)	$	11,423	$	(317,975)	19,120	$	478,000	$	2,215

5

	Common Stock			Additional Paid-in Capital		Accumulated  Deficit		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Noncontrolling Interests in Consolidated Entities		Total		Convertible Preferred Stock			Redeemable Noncontrolling Interests
	Shares	Amount								Shares	Amount						Shares	Amount
Balance at March 31, 2023	3,197	$	3	$	298,118	$	(576,212)	$	(14)	(100)	$	(1,299)	$	(121)	$	(279,525)	19,120	$	478,000	$	1,669
Equity-based compensation	20	—		911		—		—		—	—		(1)		910		—	—		97
Forfeiture of restricted common shares	—	—		7		—		—		—	(7)		—		—		—	—		—
Purchase of treasury stock	(3)	—		—		—		—		(3)	(18)		—		(18)		—	—		—
Dividends declared and undeclared - preferred stock	—	—		—		(9,044)		—		—	—		—		(9,044)		—	—		—
Employee advances	—	—		3		—		—		—	—		—		3		—	—		—