Company: BHR-PD
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001574085-25-000092
Chunk: 25

Company: Braemar Hotels & Resorts Inc.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 25
---
wells Parties’ reasonable due diligence expenses incurred on or prior to the date of the Share Ownership Agreement. As of June 30, 2025, the Company has advanced approximately $8.1 million that has been used to purchase 3.5 million shares of Braemar common stock.The note receivable is summarized in the table below (dollars in thousands):Line ItemInterest RateJune 30, 2025December 31, 2024Note receivableSOFR + 3.00%$8,590 $8,283 We recognized interest income as presented in the table below (in thousands):Three Months Ended June 30,Six Months Ended June 30,Line Item2025202420252024Interest income$155 $— $307 $— 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 three and six months ended June 30, 2025.

8. Fair Value Measurements

Fair Value Hierarchy—Our financial instruments measured at fair value either on a recurring or a non-recurring basis are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the marketplace as discussed below:•Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.•Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.•Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.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