0001604738falsetrue00016047382022-12-162022-12-160001604738us-gaap:CommonStockMember2022-12-162022-12-160001604738ainc:PreferredStockPurchaseRightMember2022-12-162022-12-16
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): December 16,
2022
ASHFORD INC.
(Exact name of registrant as specified in its charter)
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Nevada |
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001-36400 |
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84-2331507 |
(State or other jurisdiction of incorporation
or organization) |
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(Commission
File Number) |
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(IRS employer
identification number) |
14185 Dallas Parkway |
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Suite 1200 |
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Dallas |
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Texas |
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75254 |
(Address of principal executive offices) |
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(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 if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
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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.
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
Common Stock |
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AINC |
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NYSE American LLC |
Preferred Stock Purchase Rights |
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NYSE American LLC |
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE
AGREEMENT
As previously disclosed, Ashford Inc. (“AINC”
or the “Company”),
Ashford Hospitality Trust, Inc. (“Ashford
Trust”),
Ashford Hospitality Limited Partnership (the “Operating
Partnership”),
Ashford TRS Corporation (“TRS”),
and Ashford Hospitality Advisors LLC (“Ashford
LLC”
and together with AINC, the “Advisor”)
previously entered into the Enhanced Return Funding Program
Agreement and Amendment No. 1 to the Amended and Restated Advisory
Agreement, dated effective as of June 26, 2018 (the
“ERFP
Agreement”).
Although the ERFP Agreement terminated in accordance with its terms
on June 26, 2021, the Advisor remained obligated to provide TRS
with approximately $11,400,000 related to Ashford Trust’s
acquisition of the Embassy Suites Manhattan hotel (the
“ES
Manhattan ERFP Balance”),
which such hotel constituted an Enhanced Return Hotel Asset (as
defined in the ERFP Agreement).
Side Letter
On December 16, 2022, the Advisor entered into a Side Letter (the
“Side
Letter”)
with the Operating Partnership, TRS and Ashford Trust, pursuant to
which the parties agreed that on or before December 16, 2022, the
Advisor will transfer to Ashford Trust all right, title and
interest held by the Advisor and its subsidiaries in the Hilton
Atlanta/Marietta Hotel and Conference Center (the
“Marietta
Hotel”)
and, in exchange therefor, Ashford Trust will forgive, cancel and
discharge in full the outstanding ES Manhattan ERFP
Balance.
The Side Letter and the Purchase Agreement (as defined below) were
approved by the independent directors of the Company.
Purchase Agreement
On December 16, 2022, the Operating Partnership, a subsidiary of
Ashford Trust, entered into an Agreement of Purchase and Sale (the
“Purchase
Agreement”)
with Ashford LLC, pursuant to which, effective as of December 16,
2022, the Operating Partnership acquired one hundred percent (100%)
of the equity interests in (i) Marietta Leasehold LP (the
“Ground
Lessee”),
the ground lessee of the Marietta Hotel, and (ii) Marietta
Leasehold GP LLC, the sole general partner of the Ground Lessee
(collectively, the “Equity
Interests”)
and, in exchange therefor, Ashford Trust forgave, cancelled and
discharged in full the outstanding ES Manhattan ERFP
Balance.
The Purchase Agreement contains customary representations and
warranties of Ashford LLC, including related to, among other items,
the Equity Interests, compliance with laws, litigation and labor
and employment matters. The Purchase Agreement also contains
customary indemnification obligations of Ashford LLC, including
with respect to representations and warranties, covenants and
Ashford LLC’s operation of the Marietta Hotel prior to the closing,
including related to liquor licenses. The representations and
warranties, covenants and indemnities of Ashford LLC survive for
one year after the closing. Ashford LLC’s aggregate liability for
claims under the Purchase Agreement is $500,000;
provided,
that Ashford LLC shall not be liable for any claims except to the
extent claims exceed $25,000 in the aggregate.
The Operating Partnership also made customary representations and
warranties, including related to, among other items, organization,
litigation and authority to enter into the Purchase
Agreement.
All closing costs, including taxes and title transfer costs, were
split equally between Ashford LLC and the Operating
Partnership.
The foregoing description of the Side Letter, the Purchase
Agreement and the transactions contemplated thereby does not
purport to be complete and is subject to, and qualified in its
entirety by, the full text of the Side Letter and the Purchase
Agreement, copies of which are attached hereto as Exhibit 10.1 and
Exhibit 10.2, respectively, and are incorporated by reference
herein.
ITEM 2.01 COMPLETION OF ACQUISITION OR
DISPOSITION OF ASSETS
The information set forth in Item 1.01 is incorporated by reference
herein.
ITEM 9.01 FINANCIAL STATEMENTS AND
EXHIBITS
(b) Pro
Forma Financial Information
The following unaudited pro forma consolidated financial statements
reflecting the Equity Interests are filed as Exhibit 99.1 to this
Form 8-K and are incorporated by reference herein:
•the
Company’s unaudited pro forma consolidated statement of operations
for the year ended December 31, 2021;
•the
Company’s unaudited pro forma consolidated statement of operations
for the nine months ended September 30, 2022; and
•the
Company's unaudited pro forma consolidated balance sheet as of
September 30, 2022.
(d) Exhibits
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Exhibit
No. |
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Description |
10.1 |
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10.2 |
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99.1 |
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104 |
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Cover Page Interactive Data File (formatted in Inline XBRL and
contained in Exhibit 101) |
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 hereunto duly
authorized.
ASHFORD INC.
By: /s/
Alex
Rose
Alex
Rose
Executive
Vice President, General Counsel & Secretary
Date: December 21, 2022
Ashford (AMEX:AINC)
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Ashford (AMEX:AINC)
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