What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-12 compared with 2025-03-12 · 475 added, 413 removed, 1474 unchanged (38% of the section changed)

16 unchanged sentences

We have audited the accompanying consolidated balance sheets of Braemar Hotels & Resorts Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

(the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 , in conformity with accounting principles generally accepted in the United States of America.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Presentation of Commercial Mortgage-Backed Security

As described in Note 7 to the Company’s consolidated financial statements, on August 7, 2024, the Company refinanced two existing mortgage loans and a credit facility into a new $407 million mortgage loan.

The Company also purchased an investment in a tranche of Commercial Mortgage-Backed Securities (“CMBS”), which is secured by the five hotel properties which secure the $407 million mortgage loan.

The CMBS has a par value of $42.2 million and a rate of SOFR + 5.20%.

We identified the presentation of the mortgage loan, investment in the CMBS, as well as the corresponding interest expense and interest income, as a critical audit matter.

Auditing the presentation of the CMBS and related mortgage loan was especially challenging due to the inherent complexities of the agreements and relevant accounting literature.

Auditing the presentation

required an increased level of audit effort, including involvement of professionals with expertise in the relevant technical accounting literature.

The primary procedures we performed to address the critical audit matter included:

• Inspecting the underlying agreements for the CMBS and mortgage loan to understand the relevant terms.

• Utilizing personnel with expertise in the relevant technical accounting literature to evaluate the appropriate presentation of the mortgage loan, investment in the CMBS, interest expense and interest income.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involve our especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition of Hotel Rooms Revenue

As described in Note 3 to the consolidated financial statements, during the year ended December 31, 2025, the Company recognized approximately $429 million of hotel rooms revenue.

Hotel rooms revenue is recognized as services are provided over the course of the hotel stay.

We identified the auditing of the recognition of hotel rooms revenue as a critical audit matter.

Auditing hotel rooms revenue was especially challenging due to the large volume of transactions and the nature and extent of audit effort required to address this matter.

The primary procedures we performed to address this critical audit matter included the following:

• Testing the operating effectiveness of internal controls over the Company’s revenue recognition.

• Testing the existence and accuracy of the revenue recognized by selecting a sample of individual rooms revenue transactions, and (i) obtaining detailed transaction data, (ii) testing the existence and accuracy of amounts recognized by agreeing each transaction to the corresponding customer folio, and (iii) corroborating the existence and accuracy of the amounts recognized by agreeing to the customer payment support.

Measurement of Impairment of Investments in Hotel Properties

As of December 31, 2025, the Company’s consolidated investments in hotel properties, net, totaled approximately $1.6 billion.

As described in Notes 2 and 4 to the consolidated financial statements, the hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Recoverability of a hotel property is measured by comparison of the carrying amount of the hotel to its estimated future undiscounted cash flows.

If the Company’s analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, the Company recognizes an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value.

For the year ended December 31, 2025, the Company recorded impairment charges of approximately $54.5 million.

We identified the estimated fair value of the hotel properties used to measure the impairment charge for certain hotel properties as a critical audit matter.

For investments in hotel properties where the recoverability analysis indicated the carrying value of the hotels was not recoverable, an increased level of management judgment was required in the determination of certain assumptions used to estimate the fair value of such hotels, including forecasted rooms revenue, discount rates and terminal capitalization rates.

Auditing these judgments was especially challenging due to the nature and extent of audit effort required, including the use of personnel with specialized skill or knowledge.

The primary procedures we performed to address the critical audit matter utilized valuation professionals with specialized skill or knowledge, who assisted in:

• Evaluating the rooms revenue assumptions utilized in developing the fair value estimate for certain hotel properties by comparing to independent market data.

• Evaluating the discount rates and terminal capitalization rates utilized in developing the fair value estimate for certain hotel properties by comparing to independent market data.

/s/ BDO USA, P.C.

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Restricted cash 42,479 49,592

Investment in securities (amortized cost of $ 42,279 )

Investment in securities (amortized cost of $ 0 and $ 42,279 , respectively)

Accounts receivable, net of allowance of $ 113 and $ 459 , respectively

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Prepaid expenses 6,987 5,116

Deposit paid to Ashford Inc.

Deferred costs, net 75 75

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Accounts payable and accrued expenses 142,123 143,566

Redeemable preferred stock redemptions payable 30,864 —

Dividends and distributions payable 7,672 9,255

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Other liabilities 25,572 24,268

Derivative liabilities — 12

Total liabilities 1,336,611 1,413,889

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Depreciation and amortization 92,578 98,733 93,272

Impairment charges 54,492 — —

Advisory services fee 29,186 30,487 31,089

(Gain) loss on legal settlements — — ( 114 )

Corporate general and administrative 11,754 14,361 13,523

Total operating expenses 714,448 687,819 677,670

Gain (loss) on disposition of assets and hotel property

Gain (loss) on disposition of assets and hotel properties

82,797 88,165 —

OPERATING INCOME (LOSS) 72,364 128,750 61,673

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Unrealized gain (loss) on investment in securities

744 ( 744 ) —

Total other comprehensive income (loss) 744 ( 744 ) —

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(in thousands except per share amounts)

8.25 % Series D Cumulative

Preferred Stock

Accumulated Other Comprehensive Income/(loss)

Noncontrolling

Entities Total 5.50 % Series B Cumulative Convertible Preferred Stock

Series E Redeemable

Preferred Stock Series M Redeemable

Preferred Stock Redeemable Noncontrolling Interest in Operating Partnership

Common Stock Additional Paid-in Capital Accumulated Deficit

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

8.25% Series D Cumulative Preferred Stock

Common Stock 5.50% Series B Cumulative Convertible Preferred Stock

Series E Redeemable Preferred Stock Series M Redeemable Preferred Stock

Shares Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income/(loss) Noncontrolling Interests in Consolidated Entities Total Shares Amount Shares Amount Shares Amount Redeemable Noncontrolling Interest in Operating Partnership

Balance at December 31, 2022 1,600 $ 16 69,919 $ 699 $ 734,134 $ ( 324,740 ) $ — $ ( 16,346 ) $ 393,763 3,078 $ 65,426 12,657 $ 291,076 1,428 $ 35,182 $ 40,555

Purchase of common stock — — ( 3,969 ) ( 40 ) ( 19,214 ) — — — ( 19,254 ) — — — — — — —

Impact of adoption of new accounting standard — — — — ( 6,257 ) 656 — — ( 5,601 ) — — — — — — —

Equity-based compensation — — — — 3,564 — — — 3,564 — — — — — — 5,680

Issuance of common stock — — 6,000 60 34,944 — — — 35,004 — — — — — — —

Issuance of preferred stock — — — — — — — — — — — 3,931 88,448 542 13,051 —

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Forfeiture of restricted common shares — — ( 3 ) — — — — — — — — — — — — —

PSU dividend claw back upon cancellation — — — — — 7 — — 7 — — — — — — —

Dividends declared - common stock - ($ 0.20 /share)

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Distributions to noncontrolling interests — — — — — — — ( 3,724 ) ( 3,724 ) — — — — — — ( 1,444 )

Performance LTIP dividend claw back upon cancellation — — — — — — — — — — — — — — — 4

Redemption/conversion of operating partnership units — — — — — — — — — — — — — — — ( 7,162 )

Net income (loss) — — — — — ( 27,017 ) — 1,619 ( 25,398 ) — — — — — — ( 5,230 )

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Distributions to noncontrolling interests — — — — — — — ( 23,322 ) ( 23,322 ) — — — — — — ( 1,397 )

Redemption/conversion of operating partnership units — — — — — — — — — — — — — — — ( 7,162 )

Net income (loss) — — — — — ( 1,693 ) — 25,928 24,235 — — — — — — ( 4,472 )

Redemptions of preferred stock — — — — — — — — — — — ( 1,535 ) ( 36,554 ) ( 362 ) ( 9,047 ) —

Unrealized gain (loss) on investment in securities — — — — — — ( 684 ) — ( 684 ) — — — — — — ( 60 )

Redemption value adjustment - preferred stock — — — — — ( 8,958 ) — — ( 8,958 ) — — — 8,761 — 197 —

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Balance at December 31, 2024 1,600 $ 16 66,608 $ 665 $ 718,536 $ ( 477,804 ) $ ( 684 ) $ ( 3,367 ) $ 237,362 3,078 $ 65,426 14,911 $ 352,502 1,477 $ 36,916 $ 29,964

8.25% Series D Cumulative Preferred Stock

Common Stock 5.50% Series B Cumulative Convertible Preferred Stock

Series E Redeemable Preferred Stock Series M Redeemable Preferred Stock

Purchase of common stock — — ( 312 ) ( 2 ) ( 776 ) — — — ( 778 ) — — — — — — —

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Issuance of preferred stock — — — — — — — — — — — 114 2,860 6 162 —

8.25 % Series D Cumulative

Preferred Stock

Accumulated Other Comprehensive Income/(loss)

Noncontrolling

Entities Total 5.50 % Series B Cumulative Convertible Preferred Stock

Series E Redeemable

Preferred Stock Series M Redeemable

Preferred Stock Redeemable Noncontrolling Interest in Operating Partnership

Common Stock Additional Paid-in Capital Accumulated Deficit

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Issuance of restricted shares/units — — 1 — 186 — — — 186 — — — — — — 686

Forfeiture of restricted common shares — — ( 1 ) — — — — — — — — — — — — —

Dividends declared - common stock - $ 0.20 /share)

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Distributions to noncontrolling interests — — — — — — — ( 2,293 ) ( 2,293 ) — — — — — — ( 945 )

Purchase of remaining noncontrolling interest — — — — ( 20,429 ) — — 5,960 ( 14,469 ) — — — — — — —

Redemption/conversion of operating partnership units — — 1,922 19 9,280 — — — 9,299 — — — — — — ( 9,299 )

Redemption of operating partnership units for cash — — — — — — — — — — — — — — — ( 121 )

Net income (loss) — — — — — ( 22,318 ) — ( 325 ) ( 22,643 ) — — — — — — ( 5,767 )

Redemptions of preferred stock — — — — — — — — — — — ( 1,535 ) ( 36,554 ) ( 362 ) ( 9,047 ) —

Unrealized gain (loss) on investment in securities — — — — — — 684 — 684 — — — — — — 60

— — — — — — ( 684 ) — ( 684 ) — — — — — — ( 60 )

Redemptions of preferred stock — — — — — — — — — — — ( 2,998 ) ( 74,557 ) ( 89 ) ( 2,219 ) —

Reclassification of redeemable preferred stock from mezzanine equity to liability — — — — — — — — — — — ( 1,209 ) ( 30,222 ) ( 26 ) ( 642 ) —

Redemption value adjustment - preferred stock — — — — — ( 15,112 ) — — ( 15,112 ) — — — 15,112 — — —

12 unchanged sentences

Depreciation and amortization 92,578 98,733 93,272

Recognition of deferred income ( 684 ) — —

Equity-based compensation ( 446 ) 2,611 9,244

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Interest expense accretion on refundable membership club deposits 557 616 671

(Gain) loss on disposition of assets and hotel property

Realized (gain) loss on sale of securities

(Gain) loss on disposition of assets and hotel properties

( 82,797 ) ( 88,165 ) —

Impairment charges

Realized and unrealized (gain) loss on derivatives 355 ( 585 ) 663

Non-cash interest income

( 613 ) ( 207 ) —

Equity in (earnings) loss of unconsolidated entity 56 1,608 253

Deferred income tax expense (benefit) 1,059 ( 96 ) 1,329

Changes in operating assets and liabilities, exclusive of acquisitions, disposition of assets and hotel property:

Changes in operating assets and liabilities, exclusive of disposition of assets and hotel properties:

Accounts receivable and inventories ( 7,366 ) 6,260 11,264

Prepaid expenses and other assets 2,151 3,058 ( 5,758 )

Deposit paid to Ashford Inc.

( 17,000 ) — —

Accounts payable and accrued expenses 5,528 8,454 47

9 unchanged sentences

Proceeds from property insurance 4,765 958 361

Proceeds from hotel management agreement amendment

Issuance of note receivable

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Payments for initial franchise fee — — ( 75 )

Acquisition of hotel properties, net of cash and restricted cash acquired

Proceeds from sale of investment in securities

Acquisition of land

( 5,509 ) — —

Net proceeds from sale of hotel property

Net proceeds from sale of hotel properties

247,570 155,583 —

Purchase of securities

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Purchase of common stock ( 778 ) ( 369 ) ( 19,307 )

Year Ended December 31,

2025 2024 2023

Payments for dividends and distributions ( 47,339 ) ( 51,558 ) ( 52,563 )

Net proceeds from issuance of preferred stock — — 97,862

Common stock offering costs — — ( 112 )

Contributions from noncontrolling interest in consolidated entities 306 2,961 9,517

Year Ended December 31,

2024 2023 2022

Redemption of operating partnership units ( 121 ) — ( 7,162 )

Distributions to noncontrolling interest in consolidated entities ( 2,293 ) ( 27,045 ) ( 2,693 )

Acquisition of noncontrolling interest in consolidated entities

( 14,469 ) — —

Redemption of preferred stock ( 76,776 ) ( 45,601 ) ( 9,818 )

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Dividends and distributions declared but not paid $ 7,672 $ 9,255 $ 9,158

Common stock purchases accrued but not paid — — 54

Assumption of debt in hotel acquisition — — 58,601

Assumption of debt in acquisition of land

Capital expenditures accrued but not paid 7,629 8,825 21,702

Issuance of common stock for hotel acquisition — — 35,040

Distributions declared but not paid to a noncontrolling interest in a consolidated entity — — 2,024

Accrued preferred stock offering expenses — — 23

Non-cash preferred stock dividends 3,022 3,403 3,614

Non-cash common stock dividends — — 5

Unsettled proceeds from derivatives 14 113 361

Non-cash common stock/unit dividends

Non-cash redemption of common units

Non-cash consideration for acquisition of land

Reclassification of redeemable preferred stock from mezzanine equity to liability

SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

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instead, we contractually engage hotel management companies to operate them for us under management contracts.

Remington Lodging & Hospitality, LLC (“Remington Hospitality”), a subsidiary of Ashford Inc., manages four of our 15 hotel properties.

Remington Lodging & Hospitality, LLC (“Remington Hospitality”), a subsidiary of Ashford Inc., manages five of our 13 hotel properties as of December 31, 2025.

Third-party management companies manage the remaining hotel properties.

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has an ownership interest.

These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services, mobile key technology and cash management services.

The accompanying consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of December 31, 2024, own 15 hotel properties in seven states, the District of Columbia, Puerto Rico and the U.S.

These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.

The accompanying consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of December 31, 2025, own 13 hotel properties in six states, the District of Columbia, Puerto Rico and the U.S.

Virgin Islands (“USVI”).

The portfolio includes 14 wholly-owned hotel properties and one hotel property that is owned through a partnership in which Braemar OP has a controlling interest.

These hotel properties represent 3,807 total rooms, or 3,667 net rooms, excluding those attributable to our partner.

These hotel properties represent 3,028 total rooms.

As a REIT, Braemar is required to comply with limitations imposed by the Code related to operating hotels.

As of December 31, 2024, 14 of our 15 hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively, the TRS entities are referred to as “Braemar TRS”).

As of December 31, 2025, 12 of our 13 hotel properties were leased by wholly-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively, the TRS entities are referred to as “Braemar TRS”).

One hotel property, located in the USVI, is owned by our USVI TRS.

1 unchanged sentence

Hotel operating results related to the hotel properties are included in the consolidated statements of operations.

As of December 31, 2024, 13 of the 15 hotel properties were leased by Braemar’s wholly-owned TRS, and the one hotel property majority-owned through a consolidated partnership was leased to a TRS wholly-owned by such consolidated partnership.

Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues.

Lease revenue from Braemar TRS is eliminated in consolidation.

The hotel properties are operated under management contracts with Marriott Hotel Services, LLC (“Marriott”), Hilton Management LLC (“Hilton”), Accor Management US Inc.

(“Accor”), Four Seasons Hotels Limited (“Four Seasons”), Hyatt Corporation (“Hyatt”), The Ritz-Carlton Hotel Company, L.L.C.

Lease revenue from Braemar’s TRSs is eliminated in consolidation.

The hotel properties are operated under management contracts with Marriott Hotel Services, LLC (“Marriott”), Hilton Management LLC (“Hilton”), Four Seasons Hotels Limited (“Four Seasons”), Hyatt Corporation (“Hyatt”), The Ritz-Carlton Hotel Company, L.L.C.

and its affiliates, each of which is also an affiliate of Marriott (“Ritz-Carlton”), and Remington Hospitality, which are eligible independent contractors under the Code.

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Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance.

A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of

All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly owned subsidiary, Braemar OP General Partner LLC (formerly Ashford Prime OP General Partner LLC), its general partner.

As such, we consolidate Braemar OP.

BRAEMAR HOTELS & RESORTS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the VIE or the right to receive benefits from the VIE.

As such, we consolidate Braemar OP.

The following items affect reporting comparability of our historical consolidated financial statements:

• on March 11, 2022, we acquired The Ritz-Carlton Reserve Dorado Beach hotel located in Dorado, Puerto Rico.

The operating results of the hotel property have been included in the results of operations from its acquisition date;

• on December 1, 2022, we acquired the Four Seasons Resort Scottsdale.

The operating results of the hotel property have been included in the results of operations from its acquisition date;

• On July 17, 2024, we sold the Hilton La Jolla Torrey Pines.

The operating results of the hotel property were excluded from our results of operations as of the disposition date.

• On August 7, 2025, we sold the Marriott Seattle Waterfront.

The operating results of the hotel property were excluded from our results of operations as of the disposition date.

• On November 6, 2025, we sold The Clancy.

The operating results of the hotel property were excluded from our results of operations as of the disposition date.

Use of Estimates —The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

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Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Assets Held for Sale and Discontinued Operations —We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year.

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Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Investment in Unconsolidated Entity —As of December 31, 2025, we held a 7.9 % ownership interest in OpenKey, which is accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss.

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Due to/from related parties is generally settled within a period not exceeding one year .

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Due to/from Ashford Inc.

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These receivables and payables are generally settled within a period not exceeding one year .

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Noncontrolling Interests —The redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common unit holdings throughout the period.

1 unchanged sentence

The carrying value of the noncontrolling interests in the operating partnership is based on the greater of the accumulated historical cost or the redemption value.

The noncontrolling interest in consolidated entities represents an ownership interest of 25 % in one and two hotel properties at December 31, 2024 and 2023, respectively, and is reported in equity in our consolidated balance sheets.

The noncontrolling interest in consolidated entities represents an ownership interest of 25 % in a JV at December 31, 2025, and is reported in equity in our consolidated balance sheets.

The noncontrolling interest in consolidated entities represents an ownership interest of 25 % in one hotel property at December 31, 2024, and is reported in equity in our consolidated balance sheets.

Net income/loss attributable to redeemable noncontrolling interests in operating partnership and income/loss from consolidated entities attributable to noncontrolling interests in our consolidated entities are reported as deductions/additions from/to net income/loss.

19 unchanged sentences

They are expensed as incurred.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Advertising Costs —Advertising costs are charged to expense as incurred.

2 unchanged sentences

Equity-Based Compensation —Stock/unit-based compensation for non-employees is measured at the grant date and expensed ratably over the vesting period based on the original measurement as of the grant date.

This results in the recording of expense, included in “advisory services fee,” “management fees” and “corporate general and administrative” expense, equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period.

This results in the recording of expense, included in “advisory services fee,” “management fees” and “corporate general and administrative” expense, equal to

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the ratable amount of the grant date fair value based on the requisite service period satisfied during the period.

The Company recognizes forfeitures as they occur.

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Partnerships are not subject to U.S.

federal income taxes.

Partnerships are not subject to U.S.

federal income tax on their income.

16 unchanged sentences

Diluted income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share.

Recently Issued Accounting Standards —In November 2024, the FASB issued ASU 2024-03 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses that requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the statement of operations.

In January 2025, the FASB issued ASU 2025-01 which amends the effective date of the new disaggregation of income statement expenses standard to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is still permitted.

The amendments may be applied either:

(1) prospectively to financial statements issued

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Recently Issued Accounting Standards —In December 2023, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

for reporting periods after the effective date of this ASU:

or (2) retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact this ASU will have on our disclosures.

Recently Adopted Accounting Standards —In December 2023, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025.

The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by providing the revised disclosures for all periods presented.

As of December 31, 2024, the Company has not adopted this ASU.

The adoption of this ASU is expected to only impact disclosures with respect to the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03 , Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses that requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the statement of operations.

15, 2026, and interim periods within annual reporting periods beginning after Dec.

Early adoption is still permitted.

The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact this ASU will have on our disclosures.

Recently Adopted Accounting Standards —In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

We adopted the standard effective for the year ended December 31, 2024.

As of December 31, 2025, the Company has prospectively adopted this ASU.

The adoption of this ASU only impacted disclosures with respect to the Company’s consolidated financial statements.

The following tables present our revenue disaggregated by geographical areas (in thousands):

8 unchanged sentences

Pennsylvania 1 27,295 6,403 2,821 36,519

Washington 1 30,317 5,234 3,225 38,776

Washington, D.C.

1 unchanged sentence

USVI 1 42,209 16,146 9,573 67,928

Sold hotel property

Sold hotel properties

2 50,275 6,222 4,827 61,324

Total 15 $ 428,990 $ 179,538 $ 95,487 $ 704,015

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended December 31, 2024

7 unchanged sentences

Pennsylvania 1 28,642 6,358 1,455 36,455

Washington 1 28,410 4,425 1,794 34,629

Washington, D.C.

1 unchanged sentence

USVI 1 45,042 19,476 9,857 74,375

Sold hotel property

Sold hotel properties

3 75,838 17,525 9,703 103,066

Total 16 $ 452,361 $ 181,250 $ 94,793 $ 728,404

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended December 31, 2023

7 unchanged sentences

Pennsylvania 1 26,222 5,564 1,331 33,117

Washington 1 21,445 3,619 1,321 26,385

Washington, D.C.

1 unchanged sentence

USVI 1 47,971 17,460 9,963 75,394

Sold hotel property

Sold hotel properties

3 89,912 23,423 10,762 124,097

13 unchanged sentences

Impairment Charges

For the year ended December 31, 2025, we recorded impairment charges of $ 54.5 million related to the reductions to the expected holding periods of the hotel properties.

We recorded impairment charges of $ 30.3 million at the Sofitel Chicago Magnificent Mile, $ 15.6 million at Hotel Yountville and $ 8.7 million at Bardessono Hotel & Spa as the hotel properties’ net book values exceeded their estimated fair values.

The impairment charges were based on methodologies which include the development of the discounted cash flow method of the income approach with support based on the market approach, which are considered Level 3 valuation techniques.

During the years ended December 31, 2024 and 2023, no impairment charges were recorded.

Hotel Disposition

On July 17, 2024, the Company sold the Hilton La Jolla Torrey Pines for $ 165 million in cash, subject to customary pro-rations and adjustments.

The Company owned an indirect 75 % equity interest in the hotel property.

Additionally, the Company repaid the $ 66.6 million mortgage loan secured by the hotel property.

The following table presents our hotel property measured at fair value as a result of the aforementioned impairment charges aggregated by the level in the fair value hierarchy within which measurements fall on a non-recurring basis at December 31, 2025, and the related impairment charge recorded (in thousands):

Fair Value as of December 31, 2025

Year Ended December 31, 2025

Level 1 Level 2 Level 3 Total Impairment Charges

Sofitel Chicago Magnificent Mile

$ — $ — $ 79,100 $ 79,100 $ 30,256 (1)

Hotel Yountville

— — 70,300 70,300 15,564 (1)

Bardessono Hotel & Spa (2)

— — 74,000 74,000 8,672 (1)

_____________________________

(1) The impairment charges were based on the estimated fair value of each applicable hotel property and were recorded during the year ended December 31, 2025.

(2) Inclusive of “right-of-use asset.”

BRAEMAR HOTELS & RESORTS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The sale resulted in a gain of approximately $ 88.1 million for the year ended December 31, 2024 and is included in “gain (loss) on disposition of assets and hotel property” in our consolidated statements of operations.

Since the sale of the hotel property did not represent a strategic shift that has (or will have) a major effect on our operations or financial results, its results of operations were not reported as discontinued operations in our consolidated financial statements.

We included the results of operations for this hotel property through the date of disposition in net income (loss) as shown in our consolidated statements of operations for the year ended December 31, 2024, 2023 and 2022 , respectively .

The following table includes the consolidated financial information from this hotel property (in thousands):

Land Acquisition

On April 4, 2025, the Company acquired an eight acre parcel of land with an estimated fair value of $ 12.6 million.

The consideration consisted of cash of approximately $ 5.5 million and a 25 % equity interest in the acquiring entity (“CR JV”) with an estimated fair value of $ 1.8 million.

CR JV also assumed a mortgage loan for the land with an estimated fair value of $ 5.4 million.

We accounted for this acquisition as an asset acquisition because substantially all of the fair value of the gross assets acquired was concentrated in a group of similar identifiable assets.

The cost of the acquisition including transaction costs was allocated to the individual asset acquired and liabilities assumed on a relative fair value basis, which is considered a Level 3 valuation technique.

Hotel Dispositions

On July 17, 2024, the Company sold the Hilton La Jolla Torrey Pines for $ 165 million in cash, subject to customary pro-rations and adjustments.

The Company owned an indirect 75 % equity interest in the hotel property.

Additionally, the Company repaid the $ 66.6 million mortgage loan secured by the hotel property.

The sale resulted in a gain of approximately $ 88.1 million for the year ended December 31, 2024, and is included in “gain (loss) on disposition of assets and hotel properties” in our consolidated statements of operations.

On August 7, 2025, the Company sold the Marriott Seattle Waterfront for $ 145 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid approximately $ 88.4 million on the mortgage loan that was partially secured by the hotel property.

The sale resulted in a gain of approximately $ 41.1 million for the year ended December 31, 2025, and is included in “gain (loss) on disposition of assets and hotel properties” in our consolidated statements of operations.

On November 6, 2025, the Company sold The Clancy for $ 115 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid approximately $ 64.7 million on the mortgage loan that was partially secured by the hotel property.

The sale resulted in a gain of approximately $ 41.7 million for the year ended December 31, 2025, and is included in “gain (loss) on disposition of assets and hotel properties” in our consolidated statements of operations.

We included the results of operations for these hotel properties through the dates of disposition in net income (loss) as shown in our consolidated statements of operations for the year ended December 31, 2025, 2024 and 2023, respectively.

The following table includes the consolidated financial information from the disposed hotel properties (in thousands):

Year Ended December 31,

4 unchanged sentences

Depreciation and amortization ( 9,193 ) ( 18,292 ) ( 21,213 )

Gain (loss) on disposition of assets and hotel property

Gain (loss) on disposition of assets and hotel properties

82,870 88,115 —

Operating income (loss) 91,714 98,075 17,541

2 unchanged sentences

Write-off of loan costs and exit fees ( 263 ) ( 107 ) ( 18 )

Gain (loss) on extinguishment of debt ( 2,687 ) — —

Income (loss) before income taxes 81,051 81,213 ( 3,438 )

4 unchanged sentences

OpenKey, Inc.

(“OpenKey”), which is controlled and consolidated by Ashford Inc., is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms.

As of December 31, 2024, the Company has made equity investments in OpenKey totaling $ 2.9 million.

All investments were recommended by our Related Party Transactions Committee and unanimously approved by the independent members of our board of directors.

Our investment is recorded as “investment in unconsolidated entity” in our consolidated balance sheets and is accounted for under the equity method of accounting as we have significant influence over the entity under the applicable accounting guidance.

The following table summarizes our carrying value and ownership interest in OpenKey:

December 31, 2024 December 31, 2023

Carrying value of the investment in OpenKey (in thousands) $ — $ 1,416

Ownership interest in OpenKey 7.9 % 7.9 %

(“OpenKey”) is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of December 31, 2025 and December 31, 2024, the Company had made equity investments in OpenKey totaling $ 2.9 million resulting in an ownership interest of 7.9 %.

Our investment is accounted for under the equity method of accounting as we have significant influence over the entity under the applicable accounting guidance.

During the fourth quarter of 2024, we determined that the estimated fair value of the investment in OpenKey was less than our carrying amount and fully impaired our investment to $ 0 as of December 31, 2024.

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

2 unchanged sentences

Equity in earnings (loss) of unconsolidated entity $ — $ ( 297 ) $ ( 273 )

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

On February 2, 2023, the Company entered into a loan funding agreement with Ashford Inc.

Per the agreement, Ashford Inc.

and the Company will provide OpenKey with a maximum loan amount of $ 5.0 million to be allocated on a pro-rata basis based on current ownership interests and funded quarterly.

and the Company would provide OpenKey with a maximum loan amount of $ 5.0 million to be allocated on a pro-rata basis based on current ownership interests and funded quarterly.

On February 27, 2024, the Company approved additional funding, together with Ashford Inc., up to $ 1.0 million in aggregate to OpenKey, allocated pro rata among them.

The loan bears interest at an annual rate of 15 %.

Additionally, repayment of the loan principal and all accrued interest is due upon certain events.

On February 27, 2024, the Company approved additional funding, together with Ashford Inc., up to $ 1.0 million in aggregate to OpenKey, allocated pro rata among them.

As of December 31, 2024, funding of $ 79,000 has been made pursuant to the 2024 funding agreement.

As of December 31, 2024, the Company has funded a total amount of approximately $ 317,000 .

During the fourth quarter of 2024, we determined that the full amount of the note receivable was not collectible, the note receivable was impaired and the recognition of interest income ceased.

The following table summarizes our note receivable from OpenKey (in thousands):

8 unchanged sentences

Any impairment is recorded in equity in earnings (loss) of unconsolidated entity.

As of December 31, 2024, we determined that the estimated fair value of the investment in OpenKey was less than our carrying amount.

During the year ended December 31, 2024, we recorded an impairment charge of $ 1.1 million associated with the equity investment in OpenKey and an impairment charge of $ 232,000 associated with the note receivable from OpenKey.

The impairment charges are included in “equity in earnings (loss) of unconsolidated entity” in our consolidated statements of operations.

There were no impairment charges recorded for the years ended December 31, 2023 and 2022.

There were no impairment charges recorded for the year ended December 31, 2023.

As of December 31, 2024, we determined that the estimated fair value of the note receivable in OpenKey was less than our carrying amount.

During the year ended December 31, 2024, we recorded an impairment charge of $ 232,000 associated with the note receivable from OpenKey.

The impairment charges were included in “equity in earnings (loss) of unconsolidated entity” in our consolidated statements of operations.

During the fourth quarter of 2025, Ashford Inc., Ashford Trust and Braemar entered into a purchase and sale agreement to sell OpenKey.

The transaction closed in January 2026.

As of December 31, 2025, we determined that the estimated proceeds from the sale was less than the carrying amount.

During the year ended December 31, 2025, we recorded an impairment charge of $ 56,000 associated with the note receivable from OpenKey.

The impairment charge is included in “equity in earnings (loss) of unconsolidated entity” in our consolidated statements of operations.

Subsequent to December 31, 2025, the Company received proceeds of approximately $ 58,000 related to the note receivable with OpenKey.

BRAEMAR HOTELS & RESORTS INC.

8 unchanged sentences

Mortgage loan (2) (3)

Cameo Beverly Hills August 2024 August 2024 SOFR (1) + 3.66 %

$ — — $ 30,000 71,196

Mortgage loan (4)

Hilton La Jolla Torrey Pines August 2024 August 2024 9.00 % — — 66,600 66,947

Mortgage loan (5)

The Ritz-Carlton Lake Tahoe January 2025 January 2026 SOFR (1) + 3.60 %

53,413 135,287 53,413 132,467

Mortgage loan (6)

Park Hyatt Beaver Creek Resort & Spa February 2025 February 2027 SOFR (1) + 2.86 %

70,500 144,707 70,500 140,966

Mortgage loan (7)

The Notary Hotel June 2025 June 2025 SOFR (1) + 2.66 %

3 unchanged sentences

Mortgage loan (4)

The Ritz-Carlton St.

Thomas August 2025 August 2026 SOFR (1) + 4.35 %

— — 42,500 114,224

Mortgage loan (9)(10)

Pier House Resort & Spa September 2025 September 2026 SOFR (1) + 3.60 %

Park Hyatt Beaver Creek Resort & Spa February 2026 February 2027 SOFR (1) + 2.86 %

70,500 155,792 70,500 144,707

2 unchanged sentences

— — 62,000 186,539

Term Loan (5)

Land March 2026 March 2026 WSJ Prime Rate (1)

5,360 12,786 — —

Convertible Senior Notes Equity June 2026 June 2026 4.50 % 86,250 — 86,250 —

BAML Credit Facility (9)(12)

Bardessono Hotel & Spa July 2026 July 2027 Base Rate (2) + 1.25 % to 2.00 % or SOFR (1) + 2.35 % to 3.10 %

Mortgage loan (6)

The Ritz-Carlton Lake Tahoe July 2026 July 2026 SOFR (1) + 3.25 %

43,413 132,595 53,413 135,287

Hotel Yountville

The Ritz-Carlton Sarasota

Mortgage loan (7)

6 unchanged sentences

Mortgage loan (8)

Four Seasons Resort Scottsdale December 2026 December 2028 SOFR (1) + 3.75 %

Capital Hilton December 2026 December 2028 SOFR (1) + 3.75 %

110,600 123,347 110,600 134,013

Mortgage loan (3) (9)

Capital Hilton December 2026 December 2028 SOFR (1) + 3.75 %

The Notary Hotel March 2027 March 2030 SOFR (1) + 2.83 %

209,902 327,759 — —

Sofitel Chicago Magnificent Mile

The Ritz-Carlton Reserve Dorado Beach

Mortgage loan (10)

Four Seasons Resort Scottsdale August 2028 August 2030 SOFR (1) + 3.00 %

180,000 248,923 140,000 255,631

Capitalized default interest and late charges, net — 120

1,113,025 $ 1,470,125 1,222,943 $ 1,707,293

Deferred loan costs, net ( 9,291 ) ( 11,985 )

3 unchanged sentences

(1) SOFR rates were 3.69% and 4.33% at December 31, 2025 and December 31, 2024, respectively.

(2) Base Rate, as defined in the secured credit facility agreement, is the greater of (i) the prime rate set by Bank of America, (ii) federal funds rate + 0.50 %, (iii) Term SOFR + 1.00 %, or (iv) 1.00 %.

(3) This mortgage loan had a SOFR floor of 1.50 %.

On April 9, 2024, we repaid this mortgage loan.

(4) On February 5, 2024, we amended this mortgage loan.

Terms of the amendment included extending the maturity date by six months from February 2024 to August 2024, and converting the interest rate from a variable rate of SOFR + 1.70 % to a fixed rate of 9.00 %.

This mortgage loan was secured by the Hilton La Jolla Torrey Pines.

On July 17, 2024, we sold this property for $ 165.0 million and repaid the mortgage loan.

WSJ Prime Rate was 6.75% at December 31, 2025.

(2) This mortgage loan had five one-year extension options, subject to satisfaction of certain conditions, of which the fifth was exercised in June 2024.

(3) On March 7, 2025, we refinanced two mortgage loans into a new $ 363.0 million mortgage loan.

The new mortgage loan is interest only and bears interest at a rate of SOFR + 2.57 %, has a two-year initial term, and has three one-year extension options, subject to the satisfaction of certain conditions.

(4) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in February 2026.

(5) On April 4, 2025, we assumed a $ 5.4 million term loan secured by an eight acre parcel of land.

The assumed term loan is interest only, bears interest at WSJ Prime Rate, and matures in March 2026.

This term loan has a floor of 4.99 %.

(6) On January 14, 2025, we amended this mortgage loan.

Terms of the amendment included a $ 10.0 million principal pay-down, current maturity date extension to July 2025, interest rate reduction to SOFR + 3.25 %, and one six-month extension option subject to satisfaction of certain conditions.

(6) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the second was exercised February 2025.

(7) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the fifth was exercised in June 2024.

(8) On January 29, 2024, we amended this mortgage loan.

Terms of the amendment included extending the current maturity date one year to August 2025, and the variable rate increased from SOFR + 4.04 % to SOFR 4.35 %.

This amended mortgage loan had one one-year extension option, subject to satisfaction of certain conditions.

This mortgage loan had a SOFR floor of 4.00 %.

(9) On August 7, 2024, we refinanced this mortgage loan and credit facility into a new $ 407.0 million mortgage loan.

The new mortgage loan is interest only and bears interest at a rate of SOFR + 3.24 %, has a two-year initial term, and has three one-year extension options, subject to satisfaction of certain conditions.

Braemar holds a tranche of Commercial Mortgage-Backed Securities (“CMBS”), which is secured by the five hotel properties that serve as collateral for the new mortgage loan and has a par value of $ 42.2 million and a rate of SOFR + 5.20 %.

The CMBS is reported as “investment in securities” on the consolidated balance sheet.

(10) On January 3, 2024, we amended this mortgage loan.

Terms of the amendment included extending the current maturity date one year to September 2025, and the variable rate increased from SOFR + 1.95 % to SOFR + 3.60 %.

This mortgage loan had one one-year extension option, subject to satisfaction of certain conditions.

(11) On March 7, 2024, we entered into a new $ 62.0 million mortgage loan.

The new mortgage loan is interest only and bears interest at a rate of SOFR + 4.75 %.

(12) This secured credit facility has one one-year extension option, subject to satisfaction of certain conditions.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(13) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.

This mortgage loan has a SOFR floor of 1.00 %.

On July 25, 2025, we amended this mortgage loan.

Terms of the amendment extended the maturity date to July 2026.

(7) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.

Braemar held a tranche of Commercial Mortgage-Backed Securities (“CMBS”), which was secured by the five hotel properties that serve as collateral for the mortgage loan and had a par value of $ 42.2 million and a rate of SOFR + 5.20 % at December 31, 2024, and was reported as “investment in securities” on the consolidated balance sheet.

The CMBS was sold in 2025.

(8) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.

This mortgage loan has a SOFR floor of 2.00 %.

(9) On August 7, 2025, this mortgage loan was paid down $ 88.4 million in conjunction with the sale of the Marriott Seattle Waterfront.

On November 6, 2025, this mortgage loan was paid down $ 64.7 million in conjunction with the sale of The Clancy.

(10) On August 15, 2025, we amended this mortgage loan.

Terms of the amendment included increasing the principal balance to $ 180.0 million, reducing the interest rate to SOFR + 3.00 %, extending the maturity to August 2028, and adding two , one-year extension options, subject to the satisfaction of certain conditions.

(11) The final maturity date assumes all available extension options will be exercised.

On January 18, 2023, the Company repaid its $ 54.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which resulted in a gain on extinguishment of debt of $ 2.3 million for the year ended December 31, 2023.

The gain was primarily attributable to the premium that was recorded upon the assumption of the mortgage loan when the hotel was acquired.

Convertible Senior Notes

3 unchanged sentences

Bank National Association, as trustee.

The Convertible Senior Notes bear interest at a rate of 4.50 % per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021.

The Convertible Senior Notes bear interest at a rate of 4.50 % per annum, payable semi-annually in arrears on June 1

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

and December 1 of each year, beginning on December 1, 2021.

The Convertible Senior Notes will mature on June 1, 2026.

2 unchanged sentences

The Convertible Senior Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the election of the Company, based on an initial conversion rate of 157.7909 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $ 6.34 per share of common stock), subject to adjustment of the conversion rate under certain circumstances.

As of December 31, 2024, the conversion rate is 182.1014 shares.

As of December 31, 2025, the conversion rate is 199.2360 shares (equivalent to a conversion price of approximately $ 5.02 per share of common stock).

In addition, following the occurrence of certain corporate events, if the Company provides notice of redemption or if it exercises its option to convert the Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate for a holder that converts its Convertible Senior Notes in connection with such corporate event, such notice of redemption, or such issuer conversion option, as the case may be.

6 unchanged sentences

As of December 31, 2025, we were in compliance with all covenants.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note Receivable

1 unchanged sentence

(“Ashford Trust”) and Ashford Inc.

(collectively with the Company, Ashford Trust and each of Ashford Inc.’s, the Company’s and Ashford Trust’s respective affiliates (including Stirling Hotels & Resorts, Inc.) and any entity advised by Ashford Inc., the “Company Group”) entered into a Cooperation Agreement (the “Agreement”) with Blackwells Capital LLC, Blackwells Onshore I LLC, Blackwells Holding Co.

(collectively with the Company, Ashford Trust and each of Ashford Inc.’s, the Company’s and Ashford Trust’s respective affiliates and any entity advised by Ashford Inc., the “Company Group”) entered into a Cooperation Agreement (the “Agreement”) with Blackwells Capital LLC, Blackwells Onshore I LLC, Blackwells Holding Co.

LLC, Vandewater Capital Holdings, LLC, Blackwells Asset Management LLC, BW Coinvest Management I LLC and Jason Aintabi (collectively, the “Blackwells Parties”) regarding the withdrawal of the Blackwells Parties’ proxy campaign, dismissal of pending litigation involving the parties and certain other matters.

Pursuant to the Agreement, the Blackwells Parties have agreed to withdraw (i) the notice delivered to the Company on March 10, 2024 purporting to nominate four director candidates to the Company’s board of directors (the “Board”) and make certain other proposals and (ii) the definitive proxy statement filed with the SEC on April 3, 2024 to solicit proxies from stockholders of the Company to vote in favor of the Blackwells Parties’ director nominees and proposals.

The Blackwells Parties have also agreed to specified standstill restrictions with respect to the Company Group, which will expire on July 2, 2034.

During the standstill period, the Blackwells Parties are required to (i) appear in person or by proxy at each meeting of stockholders of the members of the Company Group in which they beneficially own shares of stock and vote any Blackwells Parties’ shares then beneficially owned by them in accordance with the recommendation of the board of directors of such member of the Company Group on any proposals considered at such meeting and (ii) deliver consents or consent revocations in any action by written consent by stockholders of any member of the Company Group in which they beneficially own shares in accordance with the recommendation of the board of directors of such member of the Company Group.

The Agreement also provides for the voluntary dismissal, with prejudice, of the consolidated action previously pending in the U.S.

District Court for the Northern District of Texas to which the Company, Blackwells Capital LLC and certain of their respective related parties were parties (the “Consolidated Litigation”).

Pursuant to the Agreement, the Consolidated Litigation was voluntarily dismissed, with prejudice, on July 3, 2024.

The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties’ reasonable attorneys’ fees and expenses incurred in connection with the Consolidated Litigation and related matters.

The Agreement contains various other obligations and provisions applicable to the Company Group and the Blackwells Parties, including a mutual release of claims and mutual non-disparagement.

Concurrently and in connection with the Agreement, certain of the parties thereto have also entered into a Share Ownership Agreement (the “Share Ownership Agreement”) and a Loan Agreement (the “Loan Agreement”), pursuant to which agreements the Company will provide to BW Coinvest I, LLC (“Borrower”) an unsecured loan (the “Loan”).

The proceeds from the Loan will be used to reimburse Borrower for 70 % of the amount expended by Borrower to purchase on the open market a total of 3,500,000 shares of the Company’s common stock (the “Purchased Shares”) within six months of the date of Loan Agreement, at a price per Purchased Share not to exceed $ 10 and subject to the other limitations set forth therein.

The Loan has a term of five years (the “Term”), is guaranteed by Jason Aintabi, Vandewater Capital Holdings, LLC, Blackwells Holding Co.

LLC, and Blackwells Asset Management LLC and shall bear payment-in-kind interest during the Term at a rate equal to the sum of (a) Term SOFR (as defined in the Loan Agreement) and (b) 3.00 % (three hundred basis points) per annum.

The Loan has a term of

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

five years (the “Term”), is guaranteed by Jason Aintabi, Vandewater Capital Holdings, LLC, Blackwells Holding Co.

LLC, and Blackwells Asset Management LLC and shall bear payment-in-kind interest during the Term at a rate equal to the sum of:

(a) Term SOFR (as defined in the Loan Agreement) and (b) 3.00 % (three hundred basis points) per annum.

The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties’ reasonable due diligence expenses incurred on or prior to the date of the Share Ownership Agreement.

As of December 31, 2025, the Company has advanced approximately $ 8.1 million that has been used to purchase 3.5 million shares of Braemar common stock.

Note receivable is summarized in the table below (dollars in thousands):

The note receivable is summarized in the table below (dollars in thousands):

Interest Rate

1 unchanged sentence

Note receivable SOFR + 3.00 %

$ 8,896 $ 8,283

We recognized interest income as presented in the table below (in thousands):

3 unchanged sentences

$ 613 $ 207 $ —

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

We review receivables for impairment each reporting period.

Under the model, the Company estimates credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument and is required to record a credit loss expense (or reversal) in each reporting period.

Our assessment of impairment is based on considerable management judgment and assumptions.

No impairment charges were recorded for the year ended December 31, 2024.

We review receivables for expected credit losses each reporting period.

Under the model, the Company estimates credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument and is required to record an allowance for expected credit losses (or reversals) in each reporting period.

Our assessment of expected credit losses is based on considerable management judgment and assumptions.

No allowance for credit losses or related expenses were recorded for the year ended December 31, 2025 and 2024.

Derivative Instruments

10 unchanged sentences

Strike rate high end of range 6.50 % 8.00 % 5.25 %

Effective date range January 2024 - December 2024

Effective date range January 2025 - December 2025 January 2024 - December 2024

January 2023 - December 2023

February 2022 - December 2022

Termination date range January 2025 - August 2026 January 2024 - January 2026

May 2023 - January 2025

Termination date range February 2026 - August 2027

January 2025 - August 2026

January 2024 - January 2026

Total cost of interest rate caps (in thousands) $ 670 $ 1,592 $ 5,051

8 unchanged sentences

Termination date range January 2026 - August 2027

June 2024- January 2025

January 2025 - August 2026

Aggregate principal balance on corresponding mortgage loans (in thousands) $ 1,021,415 $ 1,074,693

1 unchanged sentence

(1) No instruments were designated as cash flow hedges.

Warrants —On August 5, 2021, as part of the consideration paid to acquire the Cameo Beverly Hills (formerly known as the Mr.

C Beverly Hills Hotel) and five adjacent luxury residences, the Company issued 500,000 warrants for the purchase of Braemar common stock with a $ 6.00 strike price on or after August 5, 2021 until August 5, 2024.

The warrants expired worthless on August 5, 2024.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value Measurements

6 unchanged sentences

The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The fair value of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rose above the strike rates of the caps.

17 unchanged sentences

December 31, 2025

$ — $ 41,535 $ — $ 41,535 (1)

Derivative assets:

1 unchanged sentence

Total $ — $ 56 $ — $ 56

BRAEMAR HOTELS & RESORTS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Quoted Market Prices (Level 1) Significant Other

3 unchanged sentences

December 31, 2024

$ — $ 41,535 $ — $ 41,535 (1)

Derivative assets:

1 unchanged sentence

$ — $ 41,891 $ — $ 41,891

Derivative liabilities:

Warrants $ — $ ( 12 ) $ — $ ( 12 ) (3)

Net $ — $ 2,835 $ — $ 2,835

__________________

1 unchanged sentence

(2) Reported as “derivative assets” in our consolidated balance sheets.

(3) Reported as “derivative liabilities” in our consolidated balance sheets

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Effect of Fair Value Measured Assets and Liabilities on Consolidated Statements of Operations

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Interest rate derivatives - caps $ ( 355 ) $ 573 $ ( 935 )

Total derivative assets $ ( 355 ) $ 573 $ ( 935 )

Non-derivative assets:

Investment in securities

$ ( 1,572 ) $ — $ —

Total $ ( 1,927 ) $ 573 $ ( 935 )

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$ ( 4,071 ) (1)

$ ( 8,413 ) (1)

Realized gain (loss) on interest rate caps 616 (1) (2)

4,656 (1) (2)

7,750 (1) (2)

Realized gain (loss) on investment in securities

( 1,572 ) (3) — —

Net $ ( 1,927 ) $ 585 $ ( 663 )

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(2) Represents settled and unsettled payments from counterparties on interest rate caps.

At December 31, 2024, the amortized cost of the CMBS was $ 42.3 million.

The unrealized gain (loss) that was recognized as a change in other comprehensive income (loss) was $( 744,000 ) for the year ended December 31, 2024.

(3) Reported in “other income (expense)” in our consolidated statements of operations.

During the year ended December 31, 2025, the Company sold the investment in CMBS.

The amortized cost of the CMBS at December 31, 2025 and December 31, 2024, was $ 0 and $ 42.3 million, respectively.

The unrealized gain (loss) recognized as a change in other comprehensive income (loss) for the years ended December 31, 2025 and December 31, 2024 was $ 744,000 and $( 744,000 ), respectively.

The CMBS had a par value of $ 42.2 million resulting in a realized loss of approximately $ 1.6 million included in “other income (expense)” on the consolidated statements of operations.

As a result of the sales, $ 70,000 of unrealized gain was reclassified to realized loss during the year ended December 31, 2025.

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Summary of Fair Value of Financial Instruments

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Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled.

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The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

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Derivative assets 56 56 356 356

Financial liabilities measured at fair value:

Derivative liabilities $ — $ — $ 12 $ 12

Financial assets not measured at fair value:

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142,123 142,123 143,566 143,566

Redeemable preferred stock redemptions payable 30,864 30,864 — —

Dividends and distributions payable 7,672 7,672 9,255 9,255

Due to Ashford Inc.

Due to Ashford Inc., net

5,148 5,148 4,267 4,267

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This is considered a Level 1 valuation technique.

Accounts receivable, net, due to/from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Inc and due to/from third-party hotel managers .

Accounts receivable, net, due to/from related parties, net, accounts payable and accrued expenses, redeemable preferred stock redemptions payable, dividends and distributions payable, due to Ashford Inc.

and due to/from third-party hotel managers .

The carrying values of these financial instruments approximate their fair values due to the short-term nature of these financial instruments.

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The carrying amount of note receivable approximates its fair value.

We estimate the fair value of the note receivable to approximate the carrying value of $ 8.3 million at December 31, 2024.

This is considered a Level 2 valuation technique.

Derivative assets and derivative liabilities .

See notes 9 and 10 for a complete description of the methodology and assumptions utilized in determining fair values.

Derivative assets .

See note 10 for a complete description of the methodology and assumptions utilized in determining fair values.

Indebtedness, net.

Fair value of indebtedness is determined using future cash flows discounted at current replacement rates for these instruments.

Cash flows are determined using a forward interest rate yield curve.

The current replacement rates are determined by using the U.S.

Treasury yield curve or the index to which these financial instruments are tied, and adjusted for the credit spreads.

Credit spreads take into consideration general market conditions, maturity and collateral.

We estimated the fair value of the total indebtedness to be approximately 98.8 % of the carrying value of $ 1.2 billion at December 31, 2024, and approximately 96.0 % of the carrying value of $ 1.2 billion at December 31, 2023.

Fair value of indebtedness is determined using the loan terms, collateral value and financial data such as loan-to-value ratios, debt service coverage ratios, and interest rates for comparable loans.

We estimated the fair value of the total indebtedness to be approximately 100.0 % of the carrying value of $ 1.1 billion as of December 31, 2025, and approximately 98.8 % of the carrying value of $ 1.2 billion as of December 31, 2024.

These fair value estimates are considered a Level 2 valuation technique.

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dividends on unvested performance stock units 153 ( 99 ) ( 226 )

claw back of dividends on cancelled performance stock units — — 7

dividends on unvested restricted shares — — ( 33 )

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Distributed and undistributed net income (loss) - basic and diluted $ ( 72,550 ) $ ( 51,045 ) $ ( 74,299 )

$ ( 51,045 ) $ ( 74,299 ) $ ( 10,763 )

Weighted average common shares outstanding:

Weighted average common shares outstanding – basic and diluted 67,621 66,500 65,989

66,500 65,989 69,687

Income (loss) per share - basic and diluted:

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Effect of assumed conversion of preferred stock - Series B 4,116 4,116 4,116

Effect of contingently issuable shares — — 1

Effect of assumed conversion of Convertible Senior Notes 16,732 15,184 13,609

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Total 161,237 191,861 165,060

Redeemable Noncontrolling Interests in Operating Partnership

Redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Braemar OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and units issued under our Long-Term Incentive Plan (the “LTIP units”) that are vested.

Each common unit may be redeemed, by the holder, for either cash or, at our

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

sole discretion, up to one share of our REIT common stock, which is either:

Redeemable Noncontrolling Interests in Operating Partnership

Each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either:

(i) issued pursuant to an effective registration statement;

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or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership.

The compensation committee of the board of directors of the Company may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time.

The compensation committee of our board of directors may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time.

The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Braemar OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date.

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The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

During the year ended 2024, Performance LTIPs granted in 2022, vested at 174 % of target based on the performance conditions met over the performance period.

As of December 31, 2024, there were approximately 353,000 unvested Performance LTIP units, representing 200 % of the target, outstanding.

As of December 31, 2024, we have issued a total of approximately 1.8 million LTIP and Performance LTIP units, net of Performance LTIP cancellations.

All LTIP and Performance LTIP units, other than approximately 623,000 LTIP units and 353,000 Performance LTIP units issued from March 2015 to December 2024, had reached full economic parity with, and are convertible into, common units.

During the year ended December 31, 2025, approximately 353,000 Performance LTIPs were cancelled as a result of the performance conditions not being met over the performance period.

As a result there was a claw back of the previously declared distributions.

As of December 31, 2025, there are approximately 77,000 issued and outstanding LTIP and Performance LTIP units.

All LTIP and Performance LTIP units had reached full economic parity with, and are convertible into, common units.

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

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Adjustments to redeemable noncontrolling interests (1) (in thousands)

$ 5,830 $ 1,324

Ownership percentage of operating partnership 6.91 % 8.05 %

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Distributions declared to holders of common units, LTIP units and Performance LTIP units 945 1,397 1,444

Performance LTIP dividend claw back upon cancellation — — ( 4 )

BRAEMAR HOTELS & RESORTS INC.

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Total $ ( 137 ) $ 2,208 $ 5,680

The unamortized cost of the unvested Performance LTIP units of approximately $ 77,000 at December 31, 2024 will be expensed over a period of 1.0 year with a weighted average period of 1.0 year.

A summary of the activity of the units in our operating partnership is as follows (in thousands):

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Units redeemed for shares of common stock ( 1,922 ) — —

Units redeemed for cash ( 46 ) — ( 1,456 )

Performance LTIP units cancelled ( 353 ) ( 155 ) —

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Units convertible/redeemable at end of year 5,052 6,244 4,292

In June 2025, the Company exchanged approximately 1.5 million LTIP and Performance LTIP units for fully vested shares of the Company's common stock which resulted in no adjustments to equity-based compensation expense because the estimated fair value of the units immediately before the exchange was equal to the estimated fair value of the common stock immediately after the exchange.

The exchange was accounted for in the same manner as a redemption by the holder of common units that was settled by the Company in shares of the Company's common stock, in which the greater of the historical cost or fair value of the underlying LTIP or Performance LTIP units as of the exchange date was reclassified from mezzanine equity to permanent equity.

The following table presents the common units redeemed/exchanged for common stock (in thousands):

Year Ended December 31,

2025 2024 2023

Units redeemed/exchanged

Fair value of common units redeemed (1)

$ 4,897 $ — $ —

____________________________________

(1) The redemption value is the greater of historical cost or fair value.

The historical cost of the converted units for the year ended December 31, 2025 was $ 9.3 million.

The following table presents the common units redeemed for cash (in thousands):

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Units redeemed

Cash value of common units redeemed

Fair value of common units redeemed

$ 121 $ — $ 7,162 (1)

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Bennett’s 1.4 million common units redeemed for cash of approximately $ 7.0 million during February 2023.

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Common Stock Dividends —The following table summarizes the common stock dividends declared during the period (in thousands):

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Each share of Series D cumulative preferred stock is convertible into a maximum 5.12295 shares of our common stock.

The actual number is based on a formula as defined in the Series D cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series D cumulative preferred shares for cash, for a limited period upon a

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change in control).

The necessary conditions to convert the Series D cumulative preferred stock to common stock have not been met as of period end.

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federal income tax obligations in connection with vesting of equity grants issued under our stock-based compensation plan.

Noncontrolling Interest in Consolidated Entities —A partner has a noncontrolling ownership interest of 25 % in one hotel property with a total carrying value of $( 3.4 ) million and two hotel properties with a total carrying value of $( 8.9 ) million at December 31, 2024 and 2023, respectively.

Noncontrolling Interest in Consolidated Entities — One noncontrolling interest partner held a 25 % ownership interest in an entity that owns one hotel property until November 25, 2025, when the Company purchased the remaining 25 % ownership interest in the entity.

Additionally, another noncontrolling interest entity partner held an ownership interest of 25 % in a JV.

The table below summarizes the total carrying value (in thousands), which is reported in equity in the consolidated balance sheet:

Carrying value of noncontrolling interests $ 2,095 $ ( 3,367 )

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the (income) loss allocated to the noncontrolling interest in consolidated entities (in thousands):

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Additionally, the Series B Convertible Preferred Stock contains cash redemption features that consist of:

1) an optional redemption in which on or after June 11, 2020, the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends;

1) an optional redemption in which the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends;

2) a special optional redemption, in which on or prior to the occurrence of a Change of Control (as defined in the Articles Supplementary), the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $ 25.00 per share;

and 3) a “REIT Termination Event” and “Listing Event Redemption,” in which at any time (i) a REIT Termination Event (as defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each, a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to

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redeem any or all shares of Series B Convertible Preferred Stock at 103 % of the liquidation preference ($ 25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.

A “REIT Termination Event,” shall mean the earliest of:

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(v) determination within the meaning of Section 1313(a) of the Code to cease to be qualified as a REIT.

On December 4, 2019, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our Series B Convertible Preferred Stock having an aggregate offering price of up to $ 40.0 million.

Sales of shares of our Series B Convertible Preferred Stock may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on the NYSE, the existing trading market for our Series B Convertible Preferred Stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network.

We will pay each of the sales agents a commission, which in each case shall not be more than 2.0 % of the gross sales price of the shares of our Series B Convertible Preferred Stock sold through such sales agents.

As of December 31, 2024, we have sold approximately 65,000 shares of our Series B Convertible Preferred Stock and received proceeds of approximately $ 1.2 million under this program.

Series B Convertible Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside our control.

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On April 2, 2021, the Company entered into equity distribution agreements with certain sales agents to sell, from time to time, shares of the Series E Redeemable Preferred Stock (the “Series E Preferred Stock”).

Pursuant to such equity distribution agreements, the Company offered a maximum of 20,000,000 shares of Series E Preferred Stock in a primary offering at a price of $ 25.00 per share.

Pursuant to such equity distribution agreements, the Company offered a maximum of 20,000,000 shares of Series E Preferred Stock in a primary offering at a price

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of $ 25.00 per share.

On February 21, 2023, the Company announced the closing of its Series E Preferred Stock offering.

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If and whenever dividends on any shares of the Series E Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive, the number of directors then constituting the board shall be increased by two and the holders of such shares of Series E Preferred Stock (voting together as a single class with all other classes or series of capital stock ranking on a parity with the Series E Preferred Stock) shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

Each share is redeemable at any time, at the option of the holder, at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee.

Each share is redeemable at any time, at the option of the holder, at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee, subject to the limitations as stated in the Articles Supplementary.

Starting on the second anniversary, each share is redeemable at any time, at the option of the Company, at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends (with no redemption fee).

The Series E Preferred Stock is also subject to conversion upon certain events constituting

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a change of control.

The Series E Preferred Stock is also subject to conversion upon certain events constituting a change of control.

Upon such change of control events, holders have the option to convert their shares of Series E Preferred Stock into a maximum of 5.69476 shares of our common stock.

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The Company has a DRIP that allows participating holders to have their Series E Preferred Stock dividend distributions automatically reinvested in additional shares of the Series E Preferred Stock at a price of $ 25.00 per share.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The issuance activity of the Series E Preferred Stock is summarized below (in thousands):

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Series E Preferred Stock shares issued (1)

— 3,798 10,914

Net proceeds (1)

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The Series E Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside of the Company’s control.

As such, the Series E Preferred Stock is classified outside of permanent equity.

As such, the Series E Preferred Stock is classified outside of permanent equity either in mezzanine equity or as a liability.

The Company evaluates the classification of redeemable preferred stock each reporting period based on the substance of holder redemption rights, redemption activity, contractual redemption limits, dividend payment conditions, liquidity, and other relevant factors.

When redemption of any portion of a redeemable preferred stock series is considered mandatorily redeemable and not within the Company’s control, such portion is classified as a liability, while the remaining portion continues to be classified in mezzanine equity.

As of December 31, 2025, the Company determined that a portion of the outstanding Series E Preferred Stock met the criteria for mandatory redemption based on certain holders initiating redemption requests that exceeded the limitations set forth in the Articles Supplementary.

As of December 31, 2025, the Company has received $ 30.2 million in investor-initiated Series E Preferred Stock redemption requests representing approximately 1,208,850 shares, that have not been completed and are included in “redeemable preferred stock redemptions payable” in our consolidated balance sheet.

At the date of issuance, the carrying amount of the Series E Preferred Stock was less than the redemption value.

As a result of the Company’s determination that redemption is probable, the carrying value will be adjusted to the redemption amount each reporting period.

The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):

The redemption value adjustment of Series E Preferred Stock classified as mezzanine equity is summarized below (in thousands):

December 31, 2025 December 31, 2024

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(1) Reflects the excess of the redemption value over the accumulated carrying value.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes dividends declared (in thousands):

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The Company is also offering a maximum of 8,000,000 shares of Series M Preferred Stock pursuant to the DRIP at $ 25.00 per share.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Series M Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.

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If and whenever dividends on any shares of Series M Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive, the number of directors then constituting the board shall be increased by two and the holders of such shares of Series M Preferred Stock (voting together as a single class with all other classes or series of capital stock ranking on a parity with the Series M Preferred Stock) shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

Each share is redeemable at any time, at the option of the holder, at a redemption price of $ 25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee.

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provided, however, that the dividend rate for any share of Series M Preferred Stock shall not exceed 8.7 % per annum of the Stated Value.

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Dividends are payable on a monthly basis and in arrears on the 15th day of each month (or, if such payment date is not a business day, on the next succeeding business day) to holders of record at the close of business on the last business day of each month immediately preceding the applicable dividend payment date.

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(1) Exclusive of shares issued under the DRIP.

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Series M Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside the Company’s control.

As such, the Series M Preferred Stock is classified outside of permanent equity.

As such, the Series M Preferred Stock is classified outside of permanent equity either in mezzanine equity or as a liability.

As of December 31, 2025, the Company determined that a portion of the outstanding Series M Preferred Stock met the criteria for mandatory redemption based on certain holders initiating redemption requests that exceeded the limitations set forth in the Articles Supplementary.

As of December 31, 2025, the Company has received $ 642,000 in investor-initiated Series M Preferred Stock redemption requests representing approximately 25,689 shares, that have not been completed and are included in “redeemable preferred stock redemptions payable” in our consolidated balance sheet.

At the date of issuance, the carrying amount of the Series M Preferred Stock was less than the redemption value.

As a result of the Company’s determination that redemption is probable, the carrying value will be adjusted to the redemption amount each reporting period.

The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):

The redemption value adjustment of Series M Preferred Stock classified as mezzanine equity is summarized below (in thousands):

December 31, 2025 December 31, 2024

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Stock-Based Compensation

Under the 2013 Equity Incentive Plan, as amended, we are authorized to grant 8.2 million restricted stock or performance stock units of our common stock as incentive stock awards.

At December 31, 2024, approximately 920,000 shares were available for future issuance under the 2013 Equity Incentive Plan.

At December 31, 2025, the Company does not have an equity incentive plan.

Restricted Stock —We incur stock-based compensation expense in connection with restricted stock awarded to certain employees of Ashford LLC and its affiliates.

We also issue common stock to certain of our independent directors, which vests immediately upon issuance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the stock-based compensation expense for restricted stock (in thousands):

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$ — $ 376 $ 1,456

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

A summary of our restricted stock activity is as follows (shares in thousands):

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Outstanding at end of year — $ — — $ — 167 $ 7.02

The fair value of restricted stock vested during the years ended December 31, 2024, 2023 and 2022 was approximately $ 452,000 , $ 1.3 million and $ 3.1 million, respectively.

The fair value of restricted stock vested during the years ended December 31, 2025, 2024 and 2023 was approximately $ 0 , $ 452,000 and $ 1.3 million, respectively.

Performance Stock Units —The compensation committee of the board of directors of the Company may authorize the issuance of grants of performance stock units (“PSUs”) to certain executive officers and directors from time to time.

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The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the corresponding measurement date fair value of the award, which may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

During the year ended December 31, 2025, approximately 383,000 PSUs granted in 2023, were cancelled as a result of the performance conditions not being met over the performance period.

As a result there was a claw back of the previously declared dividends.

During the year ended December 31, 2024, PSUs granted in 2022, vested at 174 % of target based on the performance conditions met over the performance period.

During the year ended December 31, 2023, PSUs granted in 2021, vested at 200 % of target based on the performance conditions met over the performance period.

During the year ended December 31, 2022, 225,000 PSUs granted in 2020, were canceled due to the market condition criteria not being met.

As a result there was a claw back of the previously declared dividends in the amount of $ 7,000 .

The following table summarizes the compensation expense for PSUs (in thousands):

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Advisory services fee $ ( 309 ) $ 27 2,108

At December 31, 2024, the unamortized cost of unvested PSUs was $ 168,000 , which is expected to be recognized over a period of 1.0 year with a weighted average period of 1.0 year.

BRAEMAR HOTELS & RESORTS INC.

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Pursuant to the Advisory Agreement Limited Waiver, the Company, the Operating Partnership, TRS and the Advisor waive the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during calendar year 2024, cash incentive compensation to employees and other representatives of the Advisor.

Pursuant to the Company’s hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage.

Under the advisory agreement, Ashford Inc.

secures casualty insurance policies to cover Ashford Trust, Braemar, Stirling OP, their hotel managers, as needed, and Ashford Inc.

The total loss estimates included in such policies are based on the collective pool of risk exposures from each party.

has managed the casualty insurance program and beginning in December 2023, Warwick Insurance Company (“Warwick”), a subsidiary of Ashford Inc., provides and manages the general liability, workers’ compensation and business automobile insurance policies within the casualty insurance program.

On March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc.

and Ashford LLC (collectively, the “Advisory Agreement Limited Waivers”).

Pursuant to the Advisory Agreement Limited Waivers, the Company, the Operating Partnership, TRS and the Advisor waive the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during calendar year 2025, cash incentive compensation to employees and other representatives of the Advisor.

Pursuant to the Company’s hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage which includes workers’ compensation, general liability and auto liability coverages.

The hotel management companies procure workers’ compensation insurance, the expenses of which are passed through to the Company.

Under the advisory agreement and hotel management agreements, Ashford Inc.

secures general liability and auto liability policies to cover Ashford Trust, Braemar, their hotel managers, as needed, and Ashford Inc.

The total cost estimates covered by such policies are based on the collective pool of risk exposures from each party.

delegates the management of the casualty insurance program to Warwick Insurance Company, LLC (“Warwick”), a subsidiary of Ashford Inc.

which issues policies covering general liability, workers’ compensation and auto liability losses.

Each year Ashford Inc.

collects funds from Ashford Trust, Braemar, Stirling OP and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis .

collects funds from Ashford Trust, Braemar and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.

On August 26, 2025, Braemar entered into a Letter Agreement with Ashford Inc.

to explore a potential sale of Braemar.

Pursuant to the Letter Agreement, Braemar and Ashford Inc.

agreed that the termination fee payable to Ashford Inc.

under the advisory agreement is $ 574.8 million (exclusive of accrued fees).

However, Braemar and Ashford Inc.

have agreed to the payment of a discounted aggregate amount of $ 480.0 million plus accrued fees (the “Company Sale Fee”).

received a $ 17.0 million payment upon execution of the agreement.

The $ 17.0 million payment will be credited against other amounts due to Ashford Inc.

from Braemar if the sale of the Company does not occur before July 1, 2028.

The $ 17.0 million payment is presented in “deposit paid to Ashford Inc.” on the consolidated balance sheet.

On December 22, 2025, Braemar entered into an amendment to the Letter Agreement.

The Amendment was entered into in order to eliminate unintended ambiguity regarding the circumstances under which the termination fees become due and payable to Ashford Inc.

and the timing of payment in order to more fully reflect the parties’ original intent under the Letter Agreement and ensure consistency across potential transaction structures in how the proceeds from a Company Sale Transaction (as defined in the Letter Agreement) are applied.

Specifically, the Amendment revises the definition of “Company Sale Transaction” to clarify that it is a Company Change of Control (as defined in the advisory agreement).

Pursuant to the Amendment, Braemar and Ashford Inc.

further agreed that the Company Sale Fee (as defined in the Letter Agreement) will be paid directly to Ashford Inc.

from Net Sale Proceeds (as defined in the Amendment) of a Company Sale Transaction (as defined in the Amendment), after payment of any Master Agreement Termination Fee (as defined in the Amendment), but before any other payments, dividends or distributions are made.

In the event that Braemar’s assets are sold in more than one Company Sale Transaction and the Net Sale Proceeds from a particular Company Sale Transaction is insufficient to pay the Company Sale Fee and accrued fees in full, the Amendment provides that the Net Sale Proceeds from subsequent sales or dispositions of assets will be applied towards the payment of the Company Sale Fee until the Company Sale Fee is paid in full.

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Amendment further provides that upon the complete satisfaction and discharge of the Company Sale Fee, and the Master Agreement Termination Fee (if applicable), each of the Company and Ashford Inc.

may terminate the advisory agreement upon providing 60 days’ prior written notice to the other.

The Amendment further provides that in the case of a sale or disposition of assets representing 50 % or more of the Gross Asset Value (as defined in the advisory agreement and calculated as of January 1, 2025) of all of Braemar’s assets, the buyer must pay directly to Ashford Inc.

the cash proceeds from such sale or disposition transaction necessary to satisfy the Master Agreement Termination Fee, and the related master agreements will terminate upon closing of such transaction.

If proceeds are insufficient to pay the Master Agreement Termination Fee, proceeds from subsequent sales will be applied until the fee is paid in full.

Additionally, upon the approval of a plan of liquidation by Braemar’s stockholders, the master agreements will terminate, subject to payment of the Master Agreement Termination Fee.

We engage Lismore or its subsidiaries to provide debt placement services and assist with loan modifications or refinancings on our behalf and brokerage services.

For the year ended December 31, 2024, 2023 and 2022, we incurred fees from Lismore or its subsidiaries of $ 2.8 million, $ 2.4 million and $ 1.4 million, respectively.

For the years ended December 31, 2025, 2024 and 2023, we incurred fees from Lismore or its subsidiaries of $ 1.7 million, $ 2.8 million and $ 2.4 million respectively.

Ashford Securities

6 unchanged sentences

On February 1, 2023, Braemar entered into a Third Amended and Restated Contribution Agreement, which provided that after the Amended and Restated True-Up Date, capital contributions for the remainder of fiscal year 2023 would be divided between each Party based on the Initial True-Up Ratio, there would be a true up reflecting amounts raised by Ashford Securities since June 10, 2019, and thereafter, the capital contributions would be divided among each Party in accordance with the cumulative ratio of capital raised by the Parties.

During the first quarter of 2024, there was a true-up of the capital contributions in accordance with the Third Amended and Restated Contribution Agreement made through December 31, 2023, which resulted in a payment of $ 3.5 million from Ashford Inc.

Effective January 1, 2024, Braemar entered into a Fourth Amended and Restated Contribution Agreement with Ashford Inc.

and Ashford Trust, which states that, notwithstanding anything in the prior contribution agreements:

(1) the Parties equally

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

split responsibility for all aggregate contributions made by them to Ashford Securities through September 30, 2021;

(1) the Parties equally split responsibility for all aggregate contributions made by them to Ashford Securities through September 30, 2021;

and (2) thereafter, their contributions for each quarter will be based on the ratio of the amounts raised by each Party through Ashford Securities in the prior quarter compared to the total aggregate amount raised by the Parties through Ashford Securities for the prior quarter.

1 unchanged sentence

During the first quarter of 2024, the funding requirement was revised based on the aggregate capital raised through Ashford Securities.

This resulted in Braemar receiving a payment of approximately $ 5.9 million from Ashford Inc., which resulted in net credit to expense of approximately $ 4.5 million that is included in “corporate general and administrative” on the consolidated statements of operations for the year ended December 31, 2024.

As of December 31, 2023, Braemar had funded approximately $ 20.9 million and had a pre-funded balance of approximately $ 693,000 included in “other assets” and a receivable of approximately $ 3.5 million included in “due to Ashford Inc., net” on the consolidated balance sheet.

During the first quarter of 2024, there was also a true-up of the capital contributions in accordance with the Third Amended and Restated Contribution Agreement made through December 31, 2023, which resulted in a payment of $ 3.5 million from Ashford Inc.

As of December 31, 2024, Braemar has funded approximately $ 12.9 million and has a pre-funded balance of $ 797,000 that is included in “other assets” on the consolidated balance sheet.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

This resulted in Braemar receiving a payment of approximately $ 5.9 million from Ashford Inc., which resulted in a net credit to expense of approximately $ 4.5 million that is included in “corporate general and administrative” on the consolidated statements of operations for the year ended December 31, 2024.

Effective December 9, 2025, the Parties entered into the Wind‑Down and Investor Servicing Cost Sharing Agreement providing for the orderly wind‑down of Ashford Securities as a FINRA member and SEC‑registered broker‑dealer and allocating all related wind‑down and investor servicing costs among the Parties based on each Party’s proportion of outstanding shares in applicable investment products as of each quarterly measurement date.

The agreement supersedes prior cost‑allocation terms solely with respect to these wind‑down and servicing obligations and remains in effect until completion of the wind‑down and the end of all related servicing requirements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of December 31, 2025, Braemar has funded approximately $ 12.9 million and has a payable of approximately $ 652,000 that is included in “due to Ashford Inc.” on the consolidated balance sheet .

As of December 31, 2024, Braemar had funded approximately $ 12.9 million and had a pre-funded balance of $ 797,000 that is included in “other assets” on the consolidated balance sheet.

The table below summarizes amounts expensed related to operating expenses of Ashford Securities reimbursed by Braemar (in thousands):

Year Ended December 31,

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Hotel Management Services

At December 31, 2024, Remington Hospitality managed four of our 15 hotel properties.

As of December 31, 2025, Remington Hospitality managed five of our 13 hotel properties.

We pay monthly hotel management fees equal to the greater of approximately $ 18,000 per hotel (increased annually based on consumer price index adjustments) or 3 % of gross revenues, as well as annual incentive management fees, if certain operational criteria were met, and other general and administrative expense reimbursements primarily related to accounting services.

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Other Assets (3)

Preferred Stock (4)

Other Hotel Revenue Other Hotel Expenses Management fees Property Taxes, Insurance and Other Advisory Services Fee Corporate General and Administrative Write-off of Premiums, Loan Costs and Exit Fees

Other Hotel Revenue Other Hotel Expenses Management fees Property Taxes, Insurance and Other Advisory Services Fee Interest Income Corporate General and Administrative Write-off of Premiums, Loan Costs and Exit Fees

Ashford LLC Insurance claims services $ 2 $ — $ — $ — $ — $ — $ — $ 2 $ — $ — $ — $ —

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RED Leisure Watersports activities and travel/transportation services 1,119 — — — 336 713 — — — — 70 —

Warwick Insurance 1,291 — — — — 50 — 1,241 — — — —

Ashford LLC Cash management services 91 — — — — — — — — ( 91 ) — —

Remington Hospitality Hotel management services (5)

3 unchanged sentences

Indebtedness, net (2)

Other Hotel Revenue Other Hotel Expenses Management fees Preferred Stock (4)

Property Taxes, Insurance and Other Advisory Services Fee Corporate General and Administrative

Other Assets (3)

Preferred Stock (4)

Other Hotel Revenue Other Hotel Expenses Management fees Property Taxes, Insurance and Other Advisory Services Fee Corporate General and Administrative Write-off of Premiums, Loan Costs and Exit Fees

Ashford LLC Insurance claims services 3 $ — $ — $ — $ — $ — $ — $ — $ 3 $ — $ — $ —

Ashford Securities Broker/Dealer 6,385 — — — 1,972 — — — — — 4,413 —

Ashford Securities Dealer Manager Fees 5,766 — — — — — 5,766 — — —

INSPIRE Audio visual services 4,371 — — — — 4,268 — — — — 103 —

Lismore Capital Debt placement and related services 2,426 — 987 150 — — — — — — — 1,289

Lismore Capital Broker Services 637 — 637 — — — — — — —

OpenKey Mobile key app 41 — — — — — 41 — — — — —

2 unchanged sentences

RED Leisure Watersports activities and travel/transportation services 1,043 — — — — 308 692 — — — 43 —

Remington Hospitality

Hotel management services (5)

Remington Hospitality Hotel management services (5)

3,913 — — — — — 1,394 2,519 — — — —

1 unchanged sentence

(2) Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement.

(3) Represents nonrefundable work fees.

(4) Recorded as a reduction of Series E and Series M Redeemable Preferred Stock proceeds.

(5) Other hotel expenses include incentive hotel management fees and other hotel management costs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(3) Represents nonrefundable work fees.

(4) Recorded as a reduction of Series E and Series M Redeemable Preferred Stock proceeds.

(5) Other hotel expenses include incentive hotel management fees and other hotel management costs.

The following table summarizes the components of due to Ashford Inc.

4 unchanged sentences

Casualty insurance 1,357 1,044

Ashford LLC Insurance claims services — 1

INSPIRE Audio visual services 1,012 501

OpenKey Mobile key app — 5

Ashford Securities

Contribution Agreement

Ashford Securities

Capital raise services 10 19

Broker/Dealer 58 10

Premier Design and construction services 660 968

1 unchanged sentence

$ 5,148 $ 4,267

As of December 31, 2024, due to related parties, net included a net payable to Remington Hospitality of $ 1.1 million.

As of December 31, 2023, due from related parties, net included a net payable to Remington Hospitality of $ 603,000 .

As of December 31, 2025, due to related parties, net included a net payable to Remington Hospitality of $ 257,000 .

As of December 31, 2024, due from related parties, net included a net payable to Remington Hospitality of $ 1.1 million.

These amounts are primarily related to advances made by Braemar, accrued base and incentive management fees and casualty insurance premiums.

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In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 3 % to 5 % of gross revenues for capital improvements.

Franchise Fees —We currently have one hotel property that operates under a franchise agreement with a 25-year term.

Franchise Fees —We currently have two hotel properties that operate under franchise agreements.

The Cameo Beverly Hills franchise agreement has a 25-year term.

The term begins upon the completion of conversion of the Cameo Beverly Hills.

Under the terms of the agreement, we will pay (i) 3 % of gross rooms revenue for the preceding calendar month during the first three years of the agreement;

Under the terms of the agreement, we will pay:

(i) 3 % of gross rooms revenue for the preceding calendar month during the first three years of the agreement;

(ii) 4 % of gross rooms revenue for the preceding calendar month during year four;

and (iii) 5 % of the gross rooms revenue for the preceding calendar month for the remainder of the term.

As of December 31, 2024, we are currently paying 3 % of gross revenues.

As of December 31, 2025, we are currently paying 2 % of gross revenues for the Cameo Beverly Hills.

Under the franchise agreement for the Sofitel Chicago Magnificent Mile, we pay franchisor royalty fees of 4.4 % of gross rooms revenue.

Additionally, we pay a marketing fee of 1.5 % of gross rooms revenue.

This franchise agreement expires in 2041, with extension options.

The table below summarizes the franchise fees incurred (in thousands):

10 unchanged sentences

The court has entered an order granting class certification with respect to:

(i) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks;

(i) a statewide class of non-exempt employees of our manager who

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks;

and (ii) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment.

3 unchanged sentences

The opt-out period has been extended until such time that discovery has concluded.

In May 2023, the trial court requested additional briefing from the parties to

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

determine whether the case should be maintained, dismissed, or the class de-certified.

In May 2023, the trial court requested additional briefing from the parties to determine whether the case should be maintained, dismissed, or the class de-certified.

After submission of the briefs, the court requested that the parties submit stipulations for the court to rule upon.

On February 13, 2024, the judge ordered the parties to submit additional briefing related to on-site breaks.

A tentative settlement has been reached subject to the respective parties obtaining various approvals.

As of December 31, 2024, the estimated settlement liability amount has been accrued.

A tentative settlement in the amount of $ 850,000 was reached on February 14, 2025.

Final court approval was obtained on September 12, 2025.

Braemar’s portion of the settlement is 11.7 %.

The case is now in the settlement administration phase.

As of December 31, 2025, the settlement liability amount has been accrued.

On June 8, 2022, a lawsuit was filed against various Hilton entities on behalf of a class of all hourly employees at all Hilton-branded managed properties in California, including Hilton La Jolla Torrey Pines.

3 unchanged sentences

The allocation to Hilton La Jolla Torrey Pines is approximately $ 401,000 , which was accrued as of December 31, 2025.

The Court granted a motion for preliminary approval of the settlement on October 27, 2025, and a hearing on the motion for final approval is set for April 20, 2026.

On August 4, 2020, a lawsuit, Benjamin Zermeno v.

6 unchanged sentences

A private mediation was held on December 27, 2024 to globally resolve the three outstanding matters.

A tentative settlement was reached subject to the parties finalizing the agreement and court approval.

As of December 31, 2024, the estimated settlement liability amount has been accrued.

The Court approved the settlement of all matters on January 16, 2026.

The aggregate settlement is $ 2.5 million.

Braemar’s portion of the settlement is approximately $ 679,000 .

As of December 31, 2025, the settlement liability amount has been accrued.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated.

4 unchanged sentences

Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations or cash flow.

During the quarter ended September 30, 2023, we had a cyber incident that resulted in the potential exposure of certain personal information.

We have completed an investigation and have identified certain information that may have been exposed and notified potentially impacted individuals pursuant to applicable state guidelines.

All systems have been restored.

In February of 2024, two class action lawsuits were filed, one in the U.S.

District Court for the Northern District of Texas and a second in the 68th District Court for Dallas County related to the cyber incident.

The lawsuit filed in the 68th District Court was subsequently dismissed and refiled in the U.S.

District Court for the Northern District of Texas.

On March 12, 2024, the court ordered the two cases be consolidated.

The consolidated case is currently pending in the U.S.

District Court for the Northern District of Texas.

The parties have reached an agreement, subject to final Court approval, to resolve the class action suit.

The amount of the class settlement is approximately $ 485,000 .

The hearing for final Court approval of the settlement is scheduled for August 27, 2025.

Our assessment may change depending upon the development of any current or future legal proceedings, and the final results of such legal proceedings cannot be predicted with certainty.

6 unchanged sentences

Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years.

The exercise of lease renewal options is at our sole discretion.

Some leases have variable payments, however, if variable payments are contingent, they are not included in the ROU assets and liabilities.

We have no finance leases as of December 31, 2025.

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

exercise of lease renewal options is at our sole discretion.

Some leases have variable payments, however, if variable payments are contingent, they are not included in the ROU assets and liabilities.

We have no finance leases as of December 31, 2024.

The discount rate used to calculate the lease liability and ROU asset related to our ground leases is based on our incremental borrowing rate (“IBR”), as the rate implicit in each lease is not readily determinable.

9 unchanged sentences

Hotel operating expenses - other $ 2,308 $ 4,505 $ 6,757

Operating lease asset impairment

Impairment charges

_______________________________________

(1) For the years ended December 31, 2024, 2023 and 2022, operating lease cost includes approximately $ 934,000 , $ 2.3 million and $ 2.2 million, respectively, of variable lease cost associated with the ground leases.

(1) For the years ended December 31, 2025, 2024 and 2023, operating lease cost includes approximately $ 416,000 , $ 934,000 and $ 2.3 million, respectively, of variable lease cost associated with the ground leases.

Additionally, we recorded $( 21,000 ), $ 451,000 and $ 474,000 , respectively, of amortization costs related to the intangible assets that were reclassified to “operating lease right-of-use assets” upon adoption of ASC 842.

35 unchanged sentences

The TRS entities recognized net book income (loss) before income taxes of $ 2.8 million, $ 9.6 million and $ 17.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The following table reconciles the income tax expense of the TRS entities at applicable statutory rates to the actual income tax expense recorded (in thousands):

We have prospectively adopted the disclosure requirements as required after the adoption of ASU 2023-09.

The following table reconciles the income tax expense of the Company at applicable statutory rates to the actual income tax expense recorded (in thousands):

Year Ended December 31, 2025

Income tax (expense) benefit at federal statutory rate of 21%

$ 5,551 21.00 %

State and local income tax, net of federal (national) income tax effect (1)

( 287 ) ( 1.09 ) %

Foreign tax effects:

Benefit of USVI Economic Development Commission credit

USVI - Nontaxable or nondeductible items

Benefit of Puerto Rico tax incentives

Puerto Rico - nontaxable or nondeductible items

( 167 ) ( 0.63 ) %

Changes in valuation allowance

( 742 ) ( 2.81 ) %

Nontaxable or nondeductible items ( 275 ) ( 1.04 ) %

Redeemable noncontrolling interests in operating partnership ( 616 ) ( 2.33 ) %

Tax impact of REIT election ( 6,793 ) ( 25.70 ) %

Other 23 0.09 %

Effective tax rate

$ ( 1,979 ) ( 7.49 ) %

__________________

(1) State taxes in Texas, Philadelphia and California make up the majority (greater than 50% percent) of the tax effect in this category.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the following table reconciles the income tax expense of the TRS entities at applicable statutory rates to the actual income tax expense recorded (in thousands):

Year Ended December 31,

Income tax (expense) benefit of the TRS entities at federal statutory income tax rate of 21%

11 unchanged sentences

Total income tax (expense) benefit $ ( 842 ) $ ( 2,689 )

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of income tax expense are as follows (in thousands):

9 unchanged sentences

Total income tax (expense) benefit $ ( 1,979 ) $ ( 842 ) $ ( 2,689 )

We have prospectively adopted the disclosure requirements as required after the adoption of ASU 2023-09.

The following table presents the disaggregated cash paid for income taxes, net of refunds (in thousands):

Year Ended December 31, 2025

Total cash paid (refunded) during the period for income taxes (1)

___________________

(1) Individual jurisdictions equaling 5% or more of the total income taxes paid (net of refunds) for the year ended December 31, 2025 include Puerto Rico at $ 463,000 , federal at $ 230,000 , USVI at $ 119,000 , Philadelphia at $ 76,000 , Florida at $( 247,000 ) and Arizona at $( 61,000 ).

The following table presents the U.S.

and foreign earnings (losses) from continuing operations before income taxes (in thousands):

and foreign earnings (losses) from continuing operations (in thousands):

Year Ended December 31,

3 unchanged sentences

$ ( 26,431 ) $ 20,605 $ ( 27,939 )

For the years ended December 31, 2025, 2024 and 2023, income tax expense included interest and penalties paid to/(received from) taxing authorities of $ 17,000 , $ 4,000 and $( 11,000 ), respectively.

At December 31, 2025 and 2024, we determined that there were no amounts to accrue for interest and penalties due to taxing authorities.

BRAEMAR HOTELS & RESORTS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

For the years ended December 31, 2024, 2023 and 2022, income tax expense included interest and penalties paid to/(received from) taxing authorities of $ 4,000 , $( 11,000 ) and $ 1,000 , respectively.

At December 31, 2024 and 2023, we determined that there were no amounts to accrue for interest and penalties due to taxing authorities.

At December 31, 2025 and 2024, our deferred tax asset (liability) and related valuation allowance consisted of the following (in thousands):

12 unchanged sentences

Deferred tax liabilities:

Deferred income

$ ( 11 ) $ ( 11 )

1 unchanged sentence

( 7,710 ) ( 6,160 )

Prepaid expenses ( 5 ) —

Total deferred tax liability

7 unchanged sentences

$ 43.4 million of net operating loss carryforwards are attributable to acquired subsidiaries and are subject to substantial limitation on their use.

At December 31, 2025, we had state net operating loss carryforwards of $ 137.3 million, which begin to expire in 2033.

The Company also has indefinite-lived state net operating losses (“NOLs”).

At December 31, 2025, Braemar Hotels & Resorts Inc., our REIT, had net operating loss carryforwards for U.S.

13 unchanged sentences

The tax holiday is conditional upon our meeting certain employment and investment thresholds.

The impact of this tax holiday decreased current foreign taxes by $ 2.0 million, $ 2.7 million and $ 3.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The benefit of the tax holiday on

The impact of this tax holiday decreased current foreign taxes by $ 2.0 million and $ 2.7 million for the years ended December 31, 2024 and 2023, respectively.

There was no current foreign tax for the U.S.

Virgin Islands for the year ended December 31, 2025.

The benefit of the tax holiday on net income (loss) per share was approximately, $ 0.00 , $ 0.03 and $ 0.04 for the years ended December 31, 2025, 2024 and 2023, respectively.

BRAEMAR HOTELS & RESORTS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

net income (loss) per share was approximately, $ 0.03 , $ 0.04 and $ 0.05 for the years ended December 31, 2024, 2023 and 2022, respectively.

In 2022, we acquired The Ritz-Carlton Reserve Dorado Beach in Dorado, Puerto Rico.

19 unchanged sentences

and its territories.

For the year ended December 31, 2024, The Ritz-Carlton St.

Thomas, The Ritz-Carlton Sarasota and The Ritz-Carlton Reserve Dorado Beach generated revenues in excess of 10% of total hotel revenue amounting to approximately 33 % of total hotel revenue.

For the year ended December 31, 2025, The Ritz-Carlton Sarasota, The Ritz-Carlton Reserve Dorado Beach and Four Seasons Resort Scottsdale generated revenues of 13.3 %, 12.4 %, and 11.3 %, respectively, of total hotel revenue amounting to approximately 37.0 % of total hotel revenue.

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents.

9 unchanged sentences

(iii) are designed and operated to appeal to similar individuals, groups, leisure, and business customers;

and (iv) third-party hotel managers utilize the same methods (direct hotel sales and various online booking portals) to distribute the Company’s products and services.

As of December 31, 2024 and

and (iv) have third-party hotel managers that utilize the same methods (direct hotel sales and various online booking portals) to distribute the Company’s products and services.

As of December 31, 2025, 2024 and 2023, all of our hotel properties were in the U.S.

and its territories.

The Company’s chief operating decision maker (“CODM”) is its President and Chief Executive Officer.

BRAEMAR HOTELS & RESORTS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2023, all of our hotel properties were in the U.S.

and its territories.

The Company’s chief operating decision maker (“CODM”) is its President and Chief Executive Officer.

Each hotel property derives revenue primarily from guestroom sales, food and beverage sales, and revenues from other lodging services and amenities.

5 unchanged sentences

The adjustments include gains and losses on hotel dispositions, impairment charges, pre-opening costs associated with extensive renovation projects, property-level legal settlements, restructuring, severance, and management transition costs, and other expenses identified by management to be non-recurring.

The CODM does not regularly review asset information by segment.

BRAEMAR HOTELS & RESORTS INC.

8 unchanged sentences

Total hotel revenue $ 704,015 $ 728,404 $ 739,342

Hotel expenses:

Rooms $ 104,367 $ 106,465 $ 105,439

14 unchanged sentences

Insurance 14,068 16,766 14,489

540,267 532,903 469,080

Total expenses 520,279 540,267 532,903

Hotel adjusted EBITDA $ 183,736 $ 188,137 $ 206,439

$ 188,137 $ 206,439 $ 200,505

Reconciliation of hotel operating income (loss) to net income (loss)

Year Ended December 31,

5 unchanged sentences

Depreciation and amortization ( 92,578 ) ( 98,733 ) ( 93,272 )

Impairment charges ( 54,492 ) — —

Advisory services fee ( 29,186 ) ( 30,487 ) ( 31,089 )

Gain (loss) on legal settlements — — 114

Corporate, general and administrative ( 11,754 ) ( 14,361 ) ( 13,523 )

9 unchanged sentences

Net income (loss) $ ( 28,410 ) $ 19,763 $ ( 30,628 )

The CODM does not receive asset information by segment.

BRAEMAR HOTELS & RESORTS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Subsequent Events

On March 7, 2025, the Company refinanced its $ 293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66 % and a final maturity date in June of 2025 and its $ 62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75 % and a final maturity date in March of 2026.

The new $ 363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52 % and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions.

The mortgage loan is secured by five hotels:

The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach.

On March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc.

and Ashford LLC (the “2025 Advisory Agreement Limited Waiver”).

Pursuant to the 2025 Advisory Agreement Limited Waiver, the Company, the Operating Partnership, TRS and the Advisor waive the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during the first and second fiscal quarters of calendar year 2025, cash incentive compensation to employees and other representatives of the Advisor.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data