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 September 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	1,738,597
(Class)	Outstanding at November 11, 2024

ASHFORD INC.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	2
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023	4
Condensed Consolidated Statements of Equity (Deficit) for the Three and Nine Months Ended September 30, 2024 and 2023	5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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	53
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	73
ITEM 4. CONTROLS AND PROCEDURES	74
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	75
ITEM 1A. RISK FACTORS	75
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	77
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	77
ITEM 4. MINE SAFETY DISCLOSURES	77
ITEM 5. OTHER INFORMATION	78
ITEM 6. EXHIBITS	79
SIGNATURES	81

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)

	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents ($9,126 and $7,574, respectively, attributable to VIEs)	$	63,636	$	52,054
Restricted cash	16,233		23,216
Restricted investment	170		128
Accounts receivable, net of allowance for credit losses of $3,684 and $2,090, respectively ($57 and $693, respectively, attributable to VIEs)	24,075		26,945
Due from affiliates	468		41
Due from Ashford Trust ($108 and $326, respectively, attributable to VIEs)	723		18,933
Due from Braemar ($13 and $24, respectively, attributable to VIEs)	3,552		714
Inventories ($145 and $386, respectively, attributable to VIEs)	2,593		2,481
Prepaid expenses and other assets ($559 and $530, respectively, attributable to VIEs)	16,852		16,418
Total current assets	128,302		140,930
Investments ($10,011 and $5,000, respectively, reported at fair value and attributable to VIEs)	14,397		9,265
Property and equipment, net ($435 and $707, respectively, attributable to VIEs)	62,100		56,852
Operating lease right-of-use assets	19,665		21,193
Deferred tax assets, net	3,231		4,358
Goodwill	61,013		61,013
Intangible assets, net	193,780		210,095
Other assets, net	1,359		1,101
Total assets	$	483,847	$	504,807
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses ($1,421 and $1,919, respectively, attributable to VIEs)	$	44,302	$	54,837
Dividends payable	47,794		28,508
Deferred income ($201 and $210, respectively, attributable to VIEs)	4,781		11,963
Deferred compensation plan	454		—
Notes payable, net ($316 and $387, respectively, attributable to VIEs)	4,575		4,387
Finance lease liabilities	285		437
Operating lease liabilities	4,348		4,160
Claims liabilities and other	34,388		31,112
Total current liabilities	140,927		135,404
Deferred income ($0 and $1,192, respectively, attributable to VIEs)	9,142		6,415
Deferred tax liability, net	30,987		29,517
Deferred compensation plan	1,185		891
Notes payable, net	135,142		132,579
Finance lease liabilities	2,786		2,832
Operating lease liabilities	17,146		19,174
Other liabilities	1,482		2,590
Total liabilities	338,797		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 September 30, 2024 and December 31, 2023	478,000		478,000
Redeemable noncontrolling interests	2,128		1,972
EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized, $0.001 par value, 2,109,799 and 3,317,786 shares issued and 2,109,799 and 3,212,312 shares outstanding at September 30, 2024 and December 31, 2023, respectively	2		3
Additional paid-in capital	291,817		299,304
Accumulated deficit	(640,506)		(609,312)
Accumulated other comprehensive income (loss)	(247)		(213)
Treasury stock, at cost, 0 and 105,474 shares at September 30, 2024 and December 31, 2023, respectively	—		(1,354)
Total equity (deficit) of the Company	(348,934)		(311,572)
Noncontrolling interests in consolidated entities	13,856		7,005
Total equity (deficit)	(335,078)		(304,567)
Total liabilities, mezzanine equity and equity (deficit)	$	483,847	$	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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
REVENUES:
Advisory services fees	$	12,010	$	11,712	$	35,467	$	36,129
Hotel management fees	12,350		12,391		39,194		39,456
Design and construction fees	6,191		7,430		21,003		21,964
Audio visual	34,360		30,641		126,855		112,347
Other	15,491		11,175		50,776		32,057
Cost reimbursement revenue	110,710		107,866		338,351		317,094
Total revenues	191,112		181,215		611,646		559,047
EXPENSES:
Salaries and benefits	23,459		22,728		70,891		68,132
Cost of revenues for design and construction	2,152		2,975		5,910		9,430
Cost of revenues for audio visual	25,946		23,876		89,389		81,697
Depreciation and amortization	6,494		7,084		19,315		21,074
General and administrative	14,139		10,702		47,391		32,759
Other	7,597		5,377		27,769		17,163
Reimbursed expenses	110,753		107,869		338,482		317,023
Total expenses	190,540		180,611		599,147		547,278
OPERATING INCOME (LOSS)	572		604		12,499		11,769
Equity in earnings (loss) of unconsolidated entities	(43)		(327)		422		(1,174)
Interest expense	(4,226)		(3,650)		(12,516)		(9,909)
Amortization of loan costs	(277)		(269)		(823)		(775)
Interest income	719		522		1,978		1,239
Realized gain (loss) on investments	—		(80)		—		(160)
Other income (expense)	1,102		(75)		1,393		259
INCOME (LOSS) BEFORE INCOME TAXES	(2,153)		(3,275)		2,953		1,249
Income tax (expense) benefit	(1,615)		205		(6,618)		(1,642)
NET INCOME (LOSS)	(3,768)		(3,070)		(3,665)		(393)
Net (income) loss from consolidated entities attributable to noncontrolling interests	(25)		190		431		692
Net (income) loss attributable to redeemable noncontrolling interests	42		(111)		(96)		(399)
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(3,751)		(2,991)		(3,330)		(100)
Preferred dividends, declared and undeclared	(9,382)		(9,054)		(27,815)		(27,132)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(13,133)	$	(12,045)	$	(31,145)	$	(27,232)
INCOME (LOSS) PER SHARE - BASIC AND DILUTED
Basic:
Net income (loss) attributable to common stockholders	$	(5.71)	$	(3.87)	$	(10.84)	$	(8.88)
Weighted average common shares outstanding - basic	2,301		3,116		2,873		3,065
Diluted:
Net income (loss) attributable to common stockholders	$	(5.71)	$	(3.87)	$	(10.84)	$	(9.18)
Weighted average common shares outstanding - diluted	2,301		3,116		2,873		3,130

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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
NET INCOME (LOSS)	$	(3,768)	$	(3,070)	$	(3,665)	$	(393)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment	(131)		29		(34)		(108)
COMPREHENSIVE INCOME (LOSS)	(3,899)		(3,041)		(3,699)		(501)
Comprehensive (income) loss attributable to noncontrolling interests	(25)		190		431		692
Comprehensive (income) loss attributable to redeemable noncontrolling interests	42		(111)		(96)		(399)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	(3,882)	$	(2,962)	$	(3,364)	$	(208)

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 June 30, 2024	3,439	$	4	$	299,504	$	(627,357)	$	(116)	(133)	$	(1,433)	$	11,423	$	(317,975)	19,120	$	478,000	$	2,215
Repurchases and retirement of common stock	(1,372)	(1)		(6,850)		—		—		—	—		—		(6,851)		—	—		—
Retirement of treasury stock	—	—		(1,435)		—		—		133	1,435		—		—		—	—		—
Equity-based compensation	43	(1)		641		—		—		—	—		—		640		—	—		111
Forfeiture of restricted common stock	—	—		3		—		—		—	(3)		—		—		—	—		—
Withholding of restricted common stock upon vestings	—	—		—		—		—		—	1		—		1		—	—		—
Dividends declared and undeclared - preferred stock	—	—		—		(9,382)		—		—	—		—		(9,382)		—	—		—
Acquisition of noncontrolling interest in consolidated entities	—	—		—		—		—		—	—		44		44		—	—		—
Contributions from noncontrolling interests	—	—		(46)		—		—		—	—		2,364		2,318		—	—		—
Redemption value adjustment	—	—		—		(16)		—		—	—		—		(16)		—	—		16
Distributions to noncontrolling interests	—	—		—		—		—		—	—		—		—		—	—		(172)
Foreign currency translation adjustment	—	—		—		—		(131)		—	—		—		(131)		—	—		—
Net income (loss)	—	—		—		(3,751)		—		—	—		25		(3,726)		—	—		(42)
Balance at September 30, 2024	2,110	$	2	$	291,817	$	(640,506)	$	(247)	—	$	—	$	13,856	$	(335,078)	19,120	$	478,000	$	2,128

	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
Repurchases and retirement of common stock	(1,372)	(1)		(6,850)		—		—		—	—		—		(6,851)		—	—		—
Retirement of treasury stock	—	—		(1,435)		—		—		133	1,435		—		—		—	—		—
Equity-based compensation	298	—		1,515		—		—		—	—		—		1,515		—	—		293
Issuance of subsidiary stock to noncontrolling interests	—	—		(354)		—		—		—	—		354		—		—	—		—
Forfeiture of restricted common stock	(4)	—		31		—		—		(4)	(31)		—		—		—	—		—
Withholding of restricted common stock upon vestings	(24)	—		—		—		—		(24)	(50)		—		(50)		—	—		—
Dividends declared and undeclared - preferred stock	—	—		—		(27,815)		—		—	—		—		(27,815)		—	—		—
Acquisition of noncontrolling interest in consolidated entities	—	—		(342)		—		—		—	—		172		(170)		—	—		—
Contributions from noncontrolling interests, net of issuance costs	—	—		(52)		—		—		—	—		6,756		6,704		—	—		62
Redemption value adjustment	—	—		—		(49)		—		—	—		—		(49)		—	—		49
Distributions to noncontrolling interests	—	—		—		—		—		—	—		—		—		—	—		(344)
Foreign currency translation adjustment	—	—		—		—		(34)		—	—		—		(34)		—	—		—
Net income (loss)	—	—		—		(3,330)		—		—	—		(431)		(3,761)		—	—		96
Balance at September 30, 2024	2,110	$	2	$	291,817	$	(640,506)	$	(247)	—	$	—	$	13,856	$	(335,078)	19,120	$	478,000	$	2,128

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 June 30, 2023	3,214	$	3	$	299,039	$	(583,673)	$	(59)	(103)	$	(1,324)	$	(336)	$	(286,350)	19,120	$	478,000	$	1,726
Equity-based compensation	—	—		365		—		—		—	—		—		365		—	—		100