# EDGAR Filing Document

**Accession Number:** 0001745032
**File Stem:** 0001104659-26-062807
**Filing Date:** 2026-5
**Character Count:** 683229
**Document Hash:** 5b564ea79ab49c001c1d00de9ac597ad
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-062807.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001104659-26-062807

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 92

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260515

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Lodging Fund REIT III, Inc.
- **CENTRAL INDEX KEY:** 0001745032
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 830556111
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56082
- **FILM NUMBER:** 26989928

**BUSINESS ADDRESS:**
- **STREET 1:** 1635 43RD STREET SOUTH, SUITE 205
- **CITY:** FARGO
- **STATE:** ND
- **ZIP:** 58103
- **BUSINESS PHONE:** (701)630-6500

**MAIL ADDRESS:**
- **STREET 1:** 1635 43RD STREET SOUTH, SUITE 205
- **CITY:** FARGO
- **STATE:** ND
- **ZIP:** 58103

?xml version='1.0' encoding='ASCII'? LODGING FUND REIT III, INC._December 31, 2025

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-K**

**(Mark One)**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the fiscal year ended December 31, 2025

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the Transition period from to

Commission file number: **000-56082**

**LODGING FUND REIT III, INC.**

(Exact Name of Registrant as Specified in Its Charter)

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| | |
|:---|:---|
| **Maryland** | **83-0556111** |
| (State or Other Jurisdiction of<br>Incorporation or Organization) | (I.R.S. Employer<br>Identification No.) |
| **1635 43rd Street South, Suite 205**<br>**Fargo, North Dakota** | **58103** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

**(701) 630-6500**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: **None**

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | N/A | N/A |

---

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates of the registrant: No established market exists for the registrant's shares of common stock. On June 1, 2018 the registrant launched its ongoing private offering of its shares of common stock, which shares are being offered at $10.00 per share, with discounts available for certain categories of purchasers. There were 10,014,043 shares of common stock held by non-affiliates as of June 30, 2025.

As of May 15, 2026, there were 10,017,042 outstanding shares of common stock of the registrant.

**DOCUMENTS INCORPORATED BY REFERENCE**

None.

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#### **Table of Contents**

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| | | |
|:---|:---|:---|
| [**Part I**](#PARTI_290386) | [**Part I**](#PARTI_290386) | [**Part I**](#PARTI_290386) |
| [Item 1.](#Item1Business_549995) | [Business](#Item1Business_549995) | 4 |
| [Item 1A.](#Item1ARiskFactors_527180) | [Risk Factors](#Item1ARiskFactors_527180) | 11 |
| [Item 1B.](#Item1BUnresolvedStaffComments_538509) | [Unresolved Staff Comments](#Item1BUnresolvedStaffComments_538509) | 37 |
| [Item 1C.](#Item1CCybersecurity_88756) | [Cybersecurity](#Item1CCybersecurity_88756) | 38 |
| [Item 2.](#Item2Properties_160010) | [Properties](#Item2Properties_160010) | 39 |
| [Item 3.](#Item3LegalProceedings_400945) | [Legal Proceedings](#Item3LegalProceedings_400945) | 40 |
| [Item 4.](#Item4MineSafetyDisclosures_667902) | [Mine Safety Disclosures](#Item4MineSafetyDisclosures_667902) | 41 |
| [**Part II**](#PARTII_827129) | [**Part II**](#PARTII_827129) | [**Part II**](#PARTII_827129) |
| [Item 5.](#Item5MarketforRegistrantsCommonEquityRel) | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#Item5MarketforRegistrantsCommonEquityRel) | 41 |
| [Item 6.](#Item6SelectedFinancialData_891788) | [\[Reserved\]](#Item6SelectedFinancialData_891788) | 47 |
| [Item 7.](#Item7ManagementsDiscussionandAnalysisofF) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#Item7ManagementsDiscussionandAnalysisofF) | 47 |
| [Item 7A.](#Item7AQuantitativeandQualitativeDisclosu) | [Quantitative and Qualitative Disclosures About Market Risk](#Item7AQuantitativeandQualitativeDisclosu) | 67 |
| [Item 8.](#Item8FinancialStatementsandSupplementary) | [Financial Statements and Supplementary Data](#Item8FinancialStatementsandSupplementary) | 67 |
| [Item 9.](#Item9ChangesinandDisagreementsWithAccoun) | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#Item9ChangesinandDisagreementsWithAccoun) | 67 |
| [Item 9A.](#Item9AControlsandProcedures_249192) | [Controls and Procedures](#Item9AControlsandProcedures_249192) | 68 |
| [Item 9B.](#Item9BOtherInformation_469445) | [Other Information](#Item9BOtherInformation_469445) | 69 |
| [Item 9C.](#Item9C_Disclosure) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspection](#Item9C_Disclosure) | 69 |
| [**Part III**](#PARTIII_812653) | [**Part III**](#PARTIII_812653) | [**Part III**](#PARTIII_812653) |
| [Item 10.](#Item10DirectorsExecutiveOfficersandCorpo) | [Directors, Executive Officers and Corporate Governance](#Item10DirectorsExecutiveOfficersandCorpo) | 70 |
| [Item 11.](#Item11ExecutiveCompensation_349825) | [Executive Compensation](#Item11ExecutiveCompensation_349825) | 74 |
| [Item 12.](#Item12SecurityOwnershipofCertainBenefici) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#Item12SecurityOwnershipofCertainBenefici) | 76 |
| [Item 13.](#Item13CertainRelationshipsandRelatedTran) | [Certain Relationships and Related Transactions, and Director Independence](#Item13CertainRelationshipsandRelatedTran) | 77 |
| [Item 14.](#Item14PrincipalAccountantFeesandServices) | [Principal Accountant Fees and Services](#Item14PrincipalAccountantFeesandServices) | 81 |
| [**Part IV**](#PARTIV_856132) | [**Part IV**](#PARTIV_856132) | [**Part IV**](#PARTIV_856132) |
| [Item 15.](#Item15ExhibitsandFinancialStatementSched) | [Exhibits and Financial Statement Schedules](#Item15ExhibitsandFinancialStatementSched) | 83 |
| [Item 16.](#Item16Form10KSummary_292171) | [Form 10-K Summary](#Item16Form10KSummary_292171) | 100 |
| [Signatures](#SIGNATURES_360277) | [Signatures](#SIGNATURES_360277) |  |
| [Index to Consolidated Financial Statements](#INDEXTOFINANCIALSTATEMENTS_765008) | [Index to Consolidated Financial Statements](#INDEXTOFINANCIALSTATEMENTS_765008) | F-1 |
| [Report of Independent Registered Public Accounting Firm](#PLACEHOLDERFORRJI2025_748943) | [Report of Independent Registered Public Accounting Firm](#PLACEHOLDERFORRJI2025_748943) | F-2 |

---

i

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#### FORWARD-LOOKING STATEMENTS
Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "should," "expect," "could," "intend," "anticipate," "plan," "estimate," "believe," "potential," "continue," "seek" or similar expressions. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

For a discussion of some of the risks and uncertainties, although not all risks and uncertainties, that could cause actual results to differ materially from those presented in our forward-looking statements, see the risks identified in "Summary Risk Factors" below and under the section entitled "Risk Factors" in Part I, Item 1A of this Annual Report on Form 10-K. All forward-looking statements should be read in light of the risks identified in "Summary Risk Factors" below and in Part I, Item 1A of this Annual Report on Form 10-K. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

**SUMMARY RISK FACTORS** 

Our business faces significant risks and uncertainties. Set forth below is a summary list of the principal risk factors as of the date of the filing of this Annual Report on Form 10-K that could materially and adversely affect our business, financial condition, results of operations and cash flows. This summary highlights certain of the risks that are discussed further in this Annual Report but does not address all of the risks that we face. You should carefully review and consider the full discussion of our risk factors in the section entitled "Risk Factors" in Part I, Item 1A of this Annual Report on Form 10-K.

#### Risks Related to Our Business
● Our business strategy depends significantly on achieving revenue and net income growth from anticipated increases in demand for hotel rooms, which will be adversely affected by weak economic conditions and other economic events, elevated interest rates and travel-related concerns. If demand does not increase or if demand weakens, our occupancy or revenues per available room may decline, making it more difficult for us to implement our business strategy and to meet any debt service obligations we have incurred and limiting our ability to pay distributions to our stockholders.

● Our advisor, Legendary Capital REIT III, LLC (the "Advisor"), its executive officers and other key personnel, the employees of Legendary Capital, LLC (the "Sponsor"), an affiliate of the Advisor as well as certain of our officers and directors, whose services are essential to the Company, may be involved in other business ventures, and will face a conflict in allocating their time and other resources between us and the other activities in which they are or may become involved. Failure of the Advisor, its executive officers and key personnel, the employees of the Sponsor, and our officers and directors to devote sufficient time or resources to our operations could result in reduced returns to our stockholders.

● We will pay certain prescribed fees and expenses to the Advisor and its affiliates regardless of the quality of services provided. These fees were not negotiated at arm's length and therefore may be higher than fees payable to unaffiliated third parties for the same or similar services. Such fees may result in conflicts of interest between the Advisor and our stockholders due to the nature of the incentive fees and management fees.

● We have paid distributions from proceeds from our ongoing private offering described below (the "Offering") and, to the extent our board of directors declares future distributions, we may continue to fund

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distributions with Offering proceeds. We have not established a limit on the amount of proceeds from our Offering that we may use to fund distributions. To the extent we fund distributions from sources other than our cash flow from operations, we will have less funds available for investment and the overall return to our stockholders may be reduced. We may fund distributions from other sources such as borrowings, which may constitute a return of capital.

● If we are unable to raise substantial funds in our securities offerings, we may not be able to acquire a large portfolio of assets, which may cause the value of an investment in us to vary more widely with the performance of certain investments and cause our general and administrative expenses to constitute a greater percentage of our revenue.

● We may be unable to identify properties that meet our investment criteria in a timely manner or on acceptable terms, and may be unable to consummate investment opportunities that we identify, which could result in reduced returns or reduce the amount available for distributions to our stockholders.

● We intend to acquire only hotel properties. As a result, we will only have limited diversification as to the type of property we own. In the event of an economic recession affecting the economies of the areas in which the properties are located or a decline in values in general, our financial performance could be materially and adversely affected, which may limit our ability to pay distributions to our stockholders.

● We and our hotel managers rely on information technology networks and systems, including the internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personally identifiable information, reservations, billing and operating data. It is possible that our safety and security measures will not be able to prevent the systems' improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information, which may subject us to liability claims or regulatory penalties and could have a material adverse effect on our business, financial condition and results of operations.

● Although our board of directors has authorized management to pursue an exit strategy and position us for a sale or merger, there is no assurance that this process will result in the approval or completion of any specific transaction or outcome. The process of exploring strategic alternatives and marketing our assets could be time consuming and disruptive to our business operations and could divert management's attention from our business, and we could incur substantial expenses associated with identifying and evaluating potential transactions. Further, any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us and the availability of financing to potential buyers on favorable terms. There can be no assurance that we will successfully implement our strategy, or that any potential transaction or other strategic alternative will result in stockholder liquidity or provide a return to stockholders that equals or exceeds our estimated value per share.

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**Risks Related to the Lodging Industry and Real Estate Industry**

● We may be unable to dispose of our properties on advantageous terms or at all due to various factors, including weakness in our properties' markets, unavailability of financing, changes in the financial condition of prospective purchasers or changes in general economic conditions, which could reduce our cash flow and limit our ability to make distributions to our stockholders.

● Demand for our properties may be affected by various factors, including an over-supply or over-building of hotel properties in our properties' markets and general economic conditions. If demand does not increase or if demand weakens, our occupancy or revenues per available room may decline, making it more difficult for us to implement our business strategy and to meet any debt service obligations we have incurred and limiting our ability to pay distributions to our stockholders.

● Adverse economic, business or real estate developments in our markets, as well as low consumer confidence, declines in corporate budgets, elevated rates of inflation, newly-enacted political policies, and decreases in personal discretionary spending levels, may adversely affect our financial performance and the value of our properties and may limit our ability to pay distributions to our stockholders.

● Competition for guests, including with other hotels, resorts and vacation rental marketplaces, may reduce our hotels' revenues and profitability.

● The hospitality industry is seasonal in nature. In addition, the hospitality industry is cyclical and demand generally follows the general economy on a lagged basis. The seasonality and cyclicality of our industry may contribute to fluctuations in our results of operations and financial condition.

● We rely on management companies to operate our hotel properties, giving us less control than if we were managing the hotels ourselves.

● Our success depends in part upon our management companies' ability to attract, motivate and retain a sufficient number of qualified employees. Qualified individuals needed to fill these positions are in increasingly short supply in some areas. The inability to recruit and retain these individuals may adversely impact hotel operations and guest satisfaction, which could harm our business.

#### Risks Related to Debt Financing
● We have incurred significant debt in connection with our property acquisitions. Our use of leverage increases the risk of an investment in us. Our mortgage loans are collateralized by our hotel properties, which will put those investments at risk of forfeiture if we are unable to repay such debts. Principal and interest payments on these loans reduce the amount of money that would otherwise be available for distribution to our stockholders.

● Our ability to acquire, rehabilitate, renovate and manage our properties may be limited if we cannot obtain satisfactory financing, refinance or extend existing financing, which will depend on debt and capital markets conditions. In addition, we have loans with variable interest rates, and may incur additional variable rate debt in the future. Volatility in these markets could negatively impact such loans. Interest rates remain elevated, and higher interest rates required by lenders on loans that we have refinanced or extended recently have resulted in higher debt service costs. There can be no assurance that we will be able to obtain financing or refinance or extend existing financing on favorable terms, or at all.

**Federal Income Tax Risks**

● Failure to qualify as a REIT would reduce our net earnings available for investment or distribution to our stockholders.

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#### PART I

#### Item 1. Business.

#### Overview
Lodging Fund REIT III, Inc. was formed on April 9, 2018, as a Maryland corporation for the primary purpose of acquiring a diversified portfolio of limited-service, select-service, full-service and extended-stay hotel properties (the "Projects") located primarily in "America's Heartland," which we define as the geographic area from North Dakota to Texas and the Appalachian Mountains to the Rocky Mountains. We have elected to be taxed as a real estate investment trust, or REIT, beginning with the taxable year ended December 31, 2018, and we intend to continue to operate in such a manner. Where applicable in this Form 10-K, "we," "our," "us," and "the Company" refers to Lodging Fund REIT III, Inc., Lodging Fund REIT III OP, LP, a Delaware limited partnership and our operating partnership (the "Operating Partnership"), and its subsidiaries except where the context otherwise requires.

We conduct substantially all our business and own substantially all real estate investments through the Operating Partnership. We are the sole general partner (the "General Partner") of the Operating Partnership. We and the Operating Partnership are advised by Legendary Capital REIT III, LLC, a Delaware limited liability company (the "Advisor") pursuant to an advisory agreement, as amended, under which the Advisor performs advisory services regarding acquisition, financing and disposition of the Projects and origination of any loans, and is responsible for managing, operating and maintaining the Projects and day-to-day management of the Company. The Advisor may, in its sole discretion, perform these duties through one or more affiliates. The Operating Partnership has issued 1,000 Series B Limited Partnership Units ("Series B LP Units") to the Advisor as part of its compensation. See Part II Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Overview" for further details of the compensation to the Advisor.

Our Advisor is wholly-owned by Corey Maple, a director of the Company, and Norman Leslie, an officer and director of the Company. To facilitate our REIT structure, the Operating Partnership formed Lodging Fund REIT III TRS, Inc., a Delaware corporation ("Master TRS"), to act as the "master" taxable REIT subsidiary ("TRS") entity. When we acquire a Project, the Master TRS forms a separate wholly-owned TRS to act as lessee of the Project (a "TRS Lessee"). That TRS Lessee will enter into a lease agreement with a wholly-owned subsidiary of the Operating Partnership to operate the Project. Through February 2025, we had engaged National Hospitality Services ("NHS") to manage nine of the Projects acquired as of that date; on February 10, 2025, the Company terminated the contract with NHS and entered into hotel management agreements with Hotel Equities Group, LLC, a third party property management agency. We have engaged other third party property management companies with the oversight and property management of the remaining properties within the portfolio. NHS is wholly-owned by Norman Leslie, a director and executive officer of the Company and a principal of the Advisor. The Advisor has no direct employees. The employees of Legendary Capital, LLC (the "Sponsor"), an affiliate of the Advisor, provide services to the Company related to the negotiations of property acquisitions and financing, asset management, accounting, legal, investor relations, and all other administrative services.

***Initial Offering***

We are currently conducting an offering (the "Offering") in shares of our common stock under a private placement to qualified purchasers who meet the definition of "accredited investors," as provided in Regulation D of the Securities Act of 1933, as amended (the "Securities Act"). The Offering commenced on June 1, 2018 in an amount of up to $100,000,000 in shares of our common stock, which amount was increased to $150,000,000 in shares of our common stock in December 2021. The Offering will continue until the earlier of (i) the date when the maximum offering amount is sold, (ii) May 31, 2025, which may be extended by our board of directors in its sole discretion, or (iii) a decision by the Company to terminate the Offering. On March 24, 2025, our board of directors extended the term of the Offering to May 31, 2026. In addition to sales of common stock for cash, the Company has adopted a dividend reinvestment plan ("DRIP"), which permits stockholders to reinvest their distributions back into the Company. Except as otherwise provided in the offering memorandum, we are currently offering the shares in the private offering at an offering price of $10.57 per share, with shares purchased in our dividend reinvestment plan at an offering price of $10.04 per share. As of December 31, 2025, the Company had issued and sold 10,303,567 shares of common stock, including 1,215,332 shares attributable to our DRIP, and received aggregate proceeds of $100.8 million. After deductions for payments of selling commissions, marketing and diligence allowances, other wholesale selling costs and expenses, we received net offering proceeds of approximately

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$83.6 million. The net offering proceeds have been used principally to fund property acquisitions and pay distributions and debt service obligations. No public market exists for the shares of our common stock and none is expected to develop.

We have adopted a share repurchase plan that may enable our stockholders to have their shares repurchased in limited circumstances. In its sole discretion, the board of directors could choose to terminate or suspend the plan or to amend its provisions without stockholder approval. The repurchase plan may be reviewed and modified by the board of directors as it deems necessary in its sole discretion. As of December 31, 2025, we have repurchased 287,525 shares, which represents an original investment of $2,858,355 for $2,794,469. See Part II Item 5 "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Share Repurchase Plan".

***GO Unit Offering***

On June 15, 2020, the Operating Partnership commenced a private offering of limited partnership units in the OP, designated as Series Growth & Opportunity Limited Partner Units ("Series GO LP Units"), which our board of directors terminated as of February 12, 2022. As of December 31, 2025, the Operating Partnership had issued and sold 3,124,503 Series GO LP Units and received aggregate proceeds of $21.5 million. After deductions for payments of selling commissions, marketing and diligence allowances, other wholesale selling costs and expenses, and other offering expenses, we received net offering proceeds of approximately $19.4 million.

***GO II Unit Offering***

On April 7, 2023, the Operating Partnership commenced a private offering of limited partnership units in the OP, designated as Series Growth & Opportunity II Limited Partner Units ("Series GO II LP Units"), with a maximum offering of $30,000,000, which could be increased to $60,000,000 in the sole discretion of the Company as the General Partner of the Operating Partnership, (the "GO II Unit Offering") to accredited investors only, pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended. The Series GO II LP Units are being offered until the earlier of (i) the sale of $30,000,000 in Series GO II LP Units (which could be increased to $60,000,000 in the Company's sole discretion), (ii) March 31, 2024, which date may be extended for two 1-year extensions until March 31, 2026 in the sole discretion of the Operating Partnership or (iii) the Operating Partnership terminates the GO II Unit Offering at an earlier date in its sole discretion. On April 17, 2024, our board of directors extended the term of the GO II Unit Offering to March 31, 2025. On March 24, 2025, our board of directors extended the term of the GO II Unit Offering to March 31, 2026. As of December 31, 2025, the Operating Partnership had issued and sold 895,520 Series GO II LP Units and received gross aggregate proceeds of $6.7 million. After deductions for payments of selling commissions, marketing and diligence allowances, other wholesale selling costs and expenses, and other offering expenses, we received net offering proceeds of approximately $6.6 million.

***Series T LP Units***

The Operating Partnership may issue Series T LP Units from time to time to persons who contribute direct or indirect interests in real estate to the Operating Partnership. The Series T LP Units will have allocations and distributions that are dictated by the Partnership Agreement of the Operating Partnership and the applicable contribution agreement for the real estate. Certain Series T LP Units may have different allocations and distributions than other Series T LP Units. The amount of the allocations and distributions will be determined by the General Partner in its sole discretion at the time of issuance of the Series T LP Units and any future distributions are dependent on the financial performance of the contributed real estate based on a mathematical formula. The Series T LP Units are eligible for conversion into Common LP Units beginning 24 or 36 months, or longer in some instances, after their issuance and will automatically convert into Common LP Units upon other events as described in the Partnership Agreement of the Operating Partnership. The conversion of Series T LP Units into Common LP Units may vary with each issuance and is generally based on a formula that applies an applicable capitalization rate to the then-current trailing twelve months net operating income of the hotel property less the loan balance outstanding as of the contribution date as assumed by the Operating Partnership, and less other amounts incurred by the Operating Partnership including but not limited to certain closing costs, loan assumption fees and defeasance costs, property improvement plan ("PIP") and capital expenditures, operating cash infused by the Operating Partnership, and any shortfall of certain minimum cumulative investment yield.

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During the quarter ended December 31, 2025, all remaining conversion anniversary dates for the outstanding Series T LP Units elapsed. The conversion formula applicable to each series of Series T LP Units calculates the number of Common LP Units to be issued based on an applicable capitalization rate applied to the trailing twelve-month net operating income of the contributed hotel property, less the outstanding loan balance at the contribution date, and less cumulative amounts incurred by the Operating Partnership including closing costs, loan assumption fees, property improvement plan expenditures, capital expenditures, operating cash infused, and any shortfall of a minimum cumulative investment yield. Upon application of this formula to each outstanding series, the General Partner determined that the cumulative deductions exceeded the capitalized net operating income for all series, resulting in no value available for conversion. Accordingly, all 5,073,506 outstanding Series T LP Units converted to zero Common LP Units and were cancelled. No gain or loss was recognized upon conversion.

The carrying amount of the Series T LP Unit noncontrolling interest of $45,475,938, which represented the fair value of the contributed hotel properties at the time of their original contribution to the Operating Partnership, net of the assumed debt and other consideration, was reclassified to additional paid-in capital within stockholders' equity in accordance with ASC 810-10-45-23. This reclassification had no impact on total equity, net loss, or cash flows. No income or loss was allocated to the Series T LP Unit holders during the holding period, consistent with the terms of the Partnership Agreement, as the holders' economic risk was borne entirely through the conversion formula. During the years ended December 31, 2025 and 2024, the Company declared distributions of $0 and $48,263, respectively, for the Series T LP Units.

***Common LP Units***

On December 3, 2021, the Operating Partnership commenced a private placement offering of its Common LP Units. As of December 31, 2025, the Operating Partnership had issued and sold 612,100 Common LP Units, with a value of $10.00 per unit at the time of issuance, in connection with two property contributions.

***Series P Preferred Units***

On December 24, 2024, the Operating Partnership commenced a private offering for the purchase of up to $50,000,000 (which may be increased to $75,000,000 in the sole discretion of the Company) in Series P Preferred Units at a purchase price equal to $10,000 per Series P Preferred Unit. The first $1,250,000 of net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be retained by the Operating Partnership. If the Operating Partnership receives more than $1,250,000 of net proceeds from the sale of the Series P Preferred Units, the next $1,047,000 of net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to (i) pay accrued interest on the Fort Collins Loans and the Courtyard Aurora Loan through December 31, 2024 at or prior to the time of refinancing such loans or (ii) after the time of such refinancing, redeem outstanding Series A Preferred Units issued in exchange for the contribution of such loans. If the Operating Partnership receives more than $2,297,000 of net proceeds from the sale of the Series P Preferred Units, the next $7,550,000 of net proceeds received by the Operating Partnership from the sale of Series P Preferred Units shall be retained by the Operating Partnership. If the Operating Partnership receives more than $9,847,000 of net proceeds from the sale of the Series P Preferred Units, (A) until March 24, 2025, 50% of such additional net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to redeem the Series A Preferred Units and the remaining 50% shall be retained by the Operating Partnership, and (B) from and after March 24, 2025, 75% of such additional net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to redeem the Series A Preferred Units and the remaining 25% shall be retained by the Operating Partnership. As of December 31, 2025, the Operating Partnership has issued and sold 155 Series P Preferred Units, resulting in the receipt of gross offering proceeds of $1.6 million as of the date of this filing.

***Series A Preferred Units***

On December 24, 2024, the Operating Partnership entered into an amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership to establish the terms of a new limited partner unit designated as Series A Preferred Units. Concurrently, the Company entered a loan contribution agreement (the "Contribution Agreement") to restructure four of its loans with Access Point Financial, LLC (the "Access Point Lender") – 1) the mortgage loan secured by the Sheraton – Northbrook ("Sheraton Northbrook Loan") with unpaid principal balance of approximately $4.0 million, 2) the loans secured by the Residence Inn - Fort Collins Loan ("Fort Collins Loans") with

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collective unpaid principal balance of approximately $13.0 million, 3) the mortgage loan secured by the Courtyard by Marriott – Aurora ("Courtyard Aurora Loan") with unpaid principal balance of approximately $14.9 million. With respect to the Sheraton Northbrook Loan, the Access Point Lender received 4,067,409 Series A Preferred Units in exchange for all of the remaining unpaid principal and interest on the Sheraton Northbrook Loan. With respect to the Fort Collins Loans and the Courtyard Aurora Loan, the Company is required to refinance each such loan within 90 days of the date of the Contribution Agreement, and to the extent there is remaining unpaid principal and interest on such loans after such refinancing, the Operating Partnership is required to enter into a contribution agreement with the Access Point Lender through which the Access Point Lender will receive Series A Preferred Units in exchange for all of such remaining unpaid principal and interest.

During the year ended December 31, 2025, the Operating Partnership issued an additional 488,330 Series A Preferred Units to the Access Point Lender in lieu of cash interest payments on the Series A Preferred Units, representing accrued distributions at the contractual rate. The issuance was recorded as interest expense with a corresponding increase to the Series A Preferred Unit noncontrolling interest balance. As of December 31, 2025 and 2024, the Operating Partnership had issued a total of 4,555,739 and 4,067,409 Series A Preferred Units, respectively.

***Exit Strategy***

On May 7, 2024, our board of directors authorized management to pursue an exit strategy and position the Company for a sale or merger of the Company as early as 2025, provided that the economic environment is conducive to such a transaction, and to prepare the Company's portfolio of hotel properties for a transaction through strategic acquisitions and dispositions with the objective of maximizing profitability at the hotel property level. There can be no assurances that we will achieve an exit strategy within the time period and in the manner anticipated. The process of exploring strategic alternatives and marketing our assets could be time consuming and disruptive to our business operations and could divert management's attention from our business, and we could incur substantial expenses associated with identifying and evaluating potential transactions. Further, any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us and the availability of financing to potential buyers on favorable terms. There can be no assurance that we will successfully implement our strategy, or that any potential transaction or other strategic alternative will result in stockholder liquidity or provide a return to stockholders that equals or exceeds our estimated value per share.

***Independent Director Compensation***

During 2022, we began compensating our independent directors with stock-based compensation as approved by and administered under the supervision of our Board of Directors. The awards are fully vested at issuance and we recognize stock-based compensation expense based on the award's fair value at the grant date. On March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024, we issued 500 shares of our common stock to each of our two independent directors and on March 31, 2025, June 30, 2025, September 30, 2025 and December 31, 2025, we issued 500 shares of our common stock to each of our two independent directors. For the years ended December 31, 2025 and 2024, we recognized stock-based compensation expense of $42,280 and $42,280. These grants were made in reliance upon an exemption from the registration requirements provided by Section 4(a)(2) of the Securities Act as the grants did not involve any public offering.

#### Our Investment Objectives and Operations
We have invested and intend to continue to invest primarily in 80 to 200 room limited-service, select-service, full-service and extended-stay hotel properties with strong mid-market brands in America's Heartland. Our overall strategy is to purchase a diverse portfolio of hotels that presents a strong opportunity for both cash flow generation and capital appreciation. We will attempt to diversify our investment portfolio by geography, brand and asset opportunity type. Our target markets are metropolitan statistical areas in America's Heartland with populations exceeding 250,000 that exhibit well-diversified business and leisure demand generators. We intend to focus mainly on well-known and established hotel brands, such as Marriott Hotels<sup>®</sup>, Hilton<sup>®</sup>, IHG and Hyatt<sup>®</sup> and their affiliated "flags", however, we may acquire lesser-known hotel brands where strategically appropriate. We will attempt to further diversify our investments based on three asset opportunity classes: "Stabilized" opportunities (steady historical performers), "Refresh" opportunities (needing

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capital expenditure or management upgrades) and "Value" opportunities (requiring significant upgrades and stabilization). We do not intend to add Value opportunities unless circumstances arise that would make it advantageous.

Our investment objectives are:

● to preserve, protect and return investor capital contributions;

● to pay regular cash distributions; and

● to realize appreciation in the value of our investments upon the ultimate sale of such investments.

There is no assurance that we will attain these objectives or that there will be any return of capital to investors. Investment results may vary substantially over time and from period to period. Our board of directors may, from time to time, change our investment objectives if it determines it is advisable and in the best interest of our stockholders.

#### Our Investment Strategy

#### Real Estate Portfolio
We acquired our first real estate property on November 30, 2018. As of December 31, 2025, our real estate portfolio consisted of fourteen Projects located in the following cities: Cedar Rapids, Iowa; Eagan, Minnesota; Lubbock, Texas; Southaven, Mississippi; Aurora, Colorado; El Paso, Texas; Houston, Texas; Northbrook, Illinois; Lakewood, Colorado; Fort Collins, Colorado; and Wichita, Kansas, referred to in this Form 10-K as the "Cedar Rapids Property," the "Eagan Property," the "Lubbock Home2 Property," the "Lubbock Fairfield Property," the "Southaven Property," the "Aurora Property," the "El Paso HI Property," the "Houston Property," the "Northbrook Property"; the "El Paso Airport Property"; the "Lakewood Property"; the "Fort Collins Property"; the "El Paso University Property"; and the "Wichita Property" respectively. We own an equity and profits interest in the parent of the entity which holds a leasehold interest in the El Paso University Property. See Part I, Item 2 "Properties" for a more detailed description of our real estate portfolio.

#### Real Estate Investments
We believe there is a significant inventory of hotel properties in our target markets that are of quality construction, in good locations with well-known brands and historical track records that meet our diversified portfolio parameters. We have targeted and plan to continue to target markets that have been historically strong from a demand and growth perspective. We also plan to focus on hotel properties that we anticipate will require relatively modest necessary capital improvements in the short term. Our intention is to build a diversified portfolio of hotel properties, complete certain property improvements and operate the individual hotel properties with a final goal of selling the entire portfolio in a single transaction.

The majority of our current hotel properties are, and we expect the majority of future hotel properties to be midscale hotels that do not provide full-service facilities to guests including the following types of franchised hotel properties:

● **Limited-Service Hotels.** Limited-service hotels offer limited facilities and amenities, typically without a full-service restaurant.

● **Select-Service Hotels.** Select-service hotels offer the fundamentals of limited-service properties together with a selection of services and amenities characteristic of full-service hotels. Generally, the additional amenities are restaurants and banquet facilities but on a less elaborate scale than one would find at full-service hotels.

● **Full-Service Hotels.** Full-service hotels offer restaurants, lounge facilities and meeting space as well as minimum service levels often including room service.

● **Extended-Stay Hotels.** Extended-stay hotels typically focus on attracting guests for extended periods. These properties quote weekly rates and blend transient and long-term bookings.

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By concentrating on top-quality institutional franchisors like Marriott Hotels<sup>®</sup>, Hilton<sup>®</sup>, IHG and Hyatt<sup>®</sup> and their affiliated "flags", we believe we can (i) command a Revenue Per Available Room, or "RevPAR", premium over sub-market competitive sets, (ii) take advantage of the brands' strong loyalty programs, (iii) utilize brand channels to deliver guests, (iv) enjoy the benefits of premier system standards, where the brands drive consistent quality, high service standards, innovative design and modern amenities across each respective flag, (v) benefit from effective brand segmentation where, through a wide range of hospitality choices within each brand family, each brand appeals to a broad range of travelers with differing levels of amenities and rates and (vi) utilize the brands' institutional character to drive faster and stronger resale, financing flexibility and investor confidence. We will attempt to enter into minimum ten-year franchise agreements for each of our franchised hotel properties.

We generally have acquired a fee interest in hotel properties directly through special purpose entities which are generally wholly owned subsidiaries of our Operating Partnership. We may also make investments in certain hotel properties through joint ventures with third-party institutions, developers, operators, investors and other third parties as well as with affiliates of the Advisor. Such joint ventures may be leveraged with debt financing or unleveraged. We invest in our hotels through a mechanism known as an Umbrella Partnership REIT ("UPREIT"), whereby the owner of the hotel property desires to exchange its hotel property for limited partnership interests in the Operating Partnership pursuant to an UPREIT contribution agreement. We have purchased hotel properties, and anticipate that we will purchase additional hotel properties, using the UPREIT model as they generally require less cash investment, while providing tax and other benefits to the property sellers, but we may also enter into purchase and sale agreements with the seller. As of the date of this filing, we acquired ten hotel properties pursuant to an UPREIT contribution agreement.

We have financed and plan to continue to finance the purchase of hotel properties with proceeds from the Offering and loans obtained from third-party lenders and Legendary A-1 Bonds, LLC, an affiliate of the Advisor. We expect to use moderate leverage to enhance the total cash flow to our stockholders. We anticipate that the aggregate loan-to-value ratio for the Company will be between 35% and 65%. We will target a loan-to-value ratio for the hotel properties of between 35% and 70%, based on the purchase price of the hotel properties; however, we may obtain financing that is less than or higher than such loan-to-value ratio for an individual hotel property at the discretion of our board of directors. As of December 31, 2025, our aggregate loan-to-value ratio, based on the aggregate purchase price of the hotel properties, was approximately 56%. We seek to obtain financing on the most favorable terms available. Loans are expected to be nonrecourse and will be secured by the applicable hotel property. In some cases, however, we have been, and in the future may be, required to enter into guarantees for the loans for certain non-recourse carve-outs.

We have obtained and may in the future obtain lines of credit or other financings, secured by one or more of the hotel properties, to provide financing for acquisitions, to fund property improvements and other capital expenditures, to make distributions, and for other purposes. In addition, we may borrow as necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes. As of December 31, 2025 and December 31, 2024, we had a $5.0 million line of credit with Western State Bank, a $20.0 million line of credit with Legendary A-1 Bonds, LLC to provide immediate capital to fund acquisitions of the hotel properties, a $0.6 million dollar Line of Credit with NHS and a $0.5 million dollar loan with Arcade Fargo. As of December 31, 2025, we had $14.9 million outstanding on the lines of credit and other corporate debt. As of December 31, 2024, we had $19.0 million outstanding on the lines of credit and other corporate debt.

As of December 31, 2025 and 2024, we had $140.0 million and $174.3 million, respectively, in outstanding mortgage debt secured by fourteen and eighteen hotel properties, respectively, with maturity dates ranging from November 2024 to December 2029 and fixed and variable interest rates ranging from 3.85% to 14.50%. As of December 31, 2025 and 2024, the weighted-average interest rate was 8.14% and 7.48% respectively. See Part II. Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Debt" for additional details.

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#### Our Disposition Strategy
**Our initial plan was to hold and manage the hotel properties and our other investments for approximately five years following the termination of the Offering, although our board of directors has discretion to extend this holding period indefinitely. Our current intention, however, is to dispose of our entire portfolio as soon as practicable when market conditions are favorable, pursuant to the exit strategy authorized by our board of directors on May 7, 2024. Circumstances may arise, however, that make it more beneficial to sell one or more hotel properties on an individual basis. The Advisor will continually evaluate each hotel property's performance based on economic and market conditions and our overall objectives to determine an appropriate time to sell the hotel properties in an effort to maximize total returns to our stockholders. The determination of when a particular hotel property should be sold or otherwise disposed of will be made by our board of directors, upon recommendation by our Advisor.**

#### Human Capital
Lodging Fund REIT III, Inc. has no direct employees. The employees of the Sponsor, as an affiliate of the Advisor, perform substantially all of the services related to our asset management, accounting, legal, investor relations, and other administrative activities. The hotel management companies we engage to operate our hotels are responsible for hiring and maintaining the labor force at each of our hotels. Although we do not manage employees at our hotels, we are still subject to the many costs and risks generally associated with the labor at our hotels.

#### Competition
Our current hotel properties compete with numerous other hotels throughout the United States in addition to alternative lodging. We believe that the markets in which our hotels are located, the proximity of our hotels to main transportation routes, hotel categories, and brand level enhanced safety protocols will provide a competitive advantage over other hotels.

The hotel business is management and marketing intensive. Our current hotel properties compete with other hotels throughout the United States for high quality management and marketing personnel. We believe that franchisors' marketing scale and ability to manage group business have improved our hotels' competitive position. However, there can be no assurance that our hotel properties will be able to continue to attract and retain employees with the requisite managerial and marketing skills.

Additionally, as a REIT, we compete for investment opportunities in the hospitality industry. As we acquire hotel properties to build our portfolio, we are in competition with other potential buyers for the same hotel properties, which may result in an increase in the amount we must pay to acquire a project or may limit the number of projects we are able to acquire. Other potential buyers may include other listed and non-listed REITs or private investors. These potential buyers may have substantially greater financial resources and experience than we do and may be able to accept more risk than we can prudently manage.

At the time we elect to dispose of our Projects, we may be in competition with sellers of similar hotel properties to locate suitable purchasers. This may result in a decrease in the amount we receive on the sale of a Project or may require us to defer the sale and increase our hold period on all or certain Projects.

#### Economic Dependency
We depend on the Advisor and its affiliates, including the Sponsor, to provide certain services essential to the Company, including asset management services, supervision of the management of the hotel properties, asset acquisition and disposition services, as well as other administrative responsibilities for the Company, including accounting services, legal, investor communications and investor relations. As a result of these relationships, we are dependent upon our Advisor and its affiliates.

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#### Governmental Regulation

#### Environmental
As an owner of real estate, we are subject to various environmental laws of federal, state, and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations, and management does not believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties we currently own, or on properties that may be acquired in the future.

*Americans with Disabilities Act*

Our hotel properties are subject to the Americans with Disabilities Act of 1990, as amended, and applicable regulations promulgated thereunder (the "ADA"). Under the ADA, "public accommodations" as defined by the ADA must meet certain federal requirements related to access and use by disabled persons. Although we believe our current hotel properties are in substantial compliance with the ADA, and we intend to acquire hotel properties that are substantially in compliance with the ADA, we may incur additional costs of complying with the ADA at the time of acquisition and from time to time in the future to remain in compliance. Also, non-compliance with the ADA may result in the imposition of fines or an award of damages to private litigants. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate.

#### Industry Segments
Our current business consists of acquiring, managing, investing in and disposing of real estate assets. We internally evaluate all of our real estate assets as one industry segment and, accordingly, we do not report segment information.

#### Seasonality
Depending on a hotel property's location and market, operations for the hotel may be seasonal in nature. This seasonality can be expected to cause fluctuations in our quarterly operating performance. Based on historic trends, for hotels located in non-resort markets, demand is generally lower in the winter months due to decreased travel and higher in the spring and summer months during the peak travel season. Accordingly, we generally would expect to have lower revenue, operating income and cash flow in the first and fourth quarters and higher revenue, operating income and cash flow in the second and third quarters.

**Internet Address**

Our website address is http://www.legendarycap.com.

#### Item 1A. Risk Factors.
In addition to the other information in this Annual Report on Form 10-K, the following risk factors should be considered carefully in evaluating our company and our business.

#### Risks Related to Owning Shares of Our Common Stock
***The offering price for our shares of common stock in the Offering has been determined by us, and we cannot guarantee that it represents an accurate estimation of our enterprise value.***

***From inception of our Offering through December 31, 2022, the offering price for our shares of common stock in the Offering was $10.00 per share (ignoring purchase price discounts for certain purchasers), which was determined primarily by our board of directors and bore no relationship to any established criteria of value such as book value or earnings per share, or any combination thereof. Further, the price of our shares of common stock was not based on our past earnings, nor does that price necessarily reflect current market value for our assets. Our board of directors approved an estimated net asset value per share ("Share NAV") of our assets as of December 31, 2022 and based on such Share NAV adjusted***

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***the offering price for our shares in the Offering to $10.57 per share, effective January 6, 2023. The Share NAV was determined by our board of directors taking into account appraisals of the Company's real estate properties and other factors deemed relevant by the board of directors. The ordinary course of our business does not entail the valuation of businesses or securities, and therefore cannot guarantee that our estimation of the Share NAV will be an accurate estimation of our enterprise value. Further, we have not determined a new Share NAV since December 31, 2022 and, as a result, the current Share NAV and Offering price per share may not reflect an accurate estimation of the Company's enterprise value.***

***Our shares of common stock have no public market, no public market is expected to develop, and consequently, it may be difficult for you to sell your shares.***

There is no public trading market for our shares of common stock and we do not expect one to develop in the foreseeable future. The absence of a public market for our shares of common stock could impair your ability to sell your shares at a fair price or at all. In addition, the transfer of shares will be subject to additional limitations. Although our board of directors has adopted a share repurchase plan, there is no guarantee that such program will remain in place in its current form, and our board of directors may suspend, modify or terminate the share repurchase plan at any time. Consequently, you may have to hold your shares for an indefinite period of time because it may be difficult for you to sell your shares.

***There are restrictions on transferring our shares of common stock, which may make your shares unattractive to prospective purchasers and may prevent you from selling them when you desire.***

Transfer of your shares is restricted by applicable federal and state securities laws as well as the charter. The offering of our shares in the Offering has not been registered under federal securities laws or the securities laws of any other state. Each investor who purchases shares must represent that it is acquiring our shares of common stock for investment and not with a view to distribution or resale and that it understands our shares of common stock are not freely transferable. You may not sell, offer for sale, or transfer your shares in the absence of either an effective registration statement under the Securities Act and under applicable state securities laws, or an opinion of counsel satisfactory to our legal counsel that such transaction is exempt from registration under the Securities Act and under applicable state securities laws. These restrictions may make your shares unattractive to prospective purchasers and may reduce the price prospective investors are willing to pay for your shares, even if transfer of these shares is allowed by state and federal securities laws. Consequently, an investment in our shares of common stock should be considered only as a long-term investment for persons of adequate financial means who do not need liquidity.

#### There is no specified or guaranteed liquidation date for our shares of common stock.
There is no specified or guaranteed liquidity event or liquidation date for our shares of common stock. Accordingly, shares must be considered solely as long-term investments.

#### The actual value of shares that we repurchase under our share repurchase plan may be substantially less than what we pay.
Under our share repurchase plan, shares currently may be repurchased at varying prices depending on the number of years our shares of common stock have been held and whether the repurchases are sought upon a stockholder's death. The repurchase price is based on the NAV on the date of repurchase and is not based on the price at which a stockholder initially purchased its shares. Stockholders may receive less than the price that they paid for their shares upon repurchase by us pursuant to the stock repurchase plan. The maximum price that may be paid under our program was $10.00 per share through December 31, 2022 and is currently $10.57 per share, which is the current Offering price of our shares of common stock in the Offering (ignoring purchase price discounts for certain purchasers). This repurchase price is likely to differ from the price at which a stockholder could resell its shares. Thus, when we repurchase shares at $10.57 per share, the actual value of our shares of common stock that we repurchase may be less, and the repurchase will be dilutive to our remaining stockholders. Even at lower repurchase prices, the actual value of our shares of common stock may be substantially less than what we pay and the repurchase may be dilutive to our remaining stockholders.

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#### Our stockholders have limited redemption rights.
Our share repurchase plan includes numerous restrictions that severely limit our stockholders' ability to redeem their shares for cash should they require liquidity. See "Part II. Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Share Repurchase Plan" for more information about the plan.

***Our shares of common stock are being offered in reliance upon a private offering exemption under the Securities Act. If we should fail to comply with the requirements of such exemption, our stockholders would have the right to rescind their purchase of shares.***

Our shares of common stock are being offered and will be sold to investors in reliance upon a private offering exemption from registration provided in the Securities Act. If we should fail to comply with the requirements of such exemption, our stockholders would have the right to rescind their purchase of their shares if they so desired. It is possible that one or more stockholders seeking rescission would succeed. This might also occur under applicable state securities laws and regulations in states where our shares of common stock will be offered without registration or qualification pursuant to a private offering or other exemption. If a number of stockholders were successful in seeking rescission, we would face severe financial demands that would adversely affect us as a whole and, consequently, the investment in our shares of common stock by the remaining stockholders.

#### Our board of directors may create additional classes of our securities.
Our board of directors has the authority under the charter to create and issue additional classes of securities and to designate the rights, preferences and privileges thereof, such as the Interval Common Stock. Our board of directors may in the future create one or more additional classes of securities having rights, preferences and privileges that are superior to and dilutive of our shares of common stock, including additional shares of common stock, preferred stock, warrants and options. This could reduce the amount of cash available for distribution from our operations and liquidation to our stockholders and increases the risk that our stockholders will not profit from their acquisition of shares or will lose their investment entirely. Our stockholders do not have any preemptive rights with respect to any equity which the Company may issue in the future. Preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our shares of common stock.

#### Risks Related to Our Business
***Our business strategy depends significantly on achieving revenue and net income growth from anticipated increases in demand for hotel rooms, which will be adversely affected by weak economic conditions and other economic events, high rates of inflation and travel-related concerns, and risks associated with possible future pandemics and outbreaks.***

Our business strategy depends significantly on achieving revenue and net income growth from anticipated improvement in demand for hotel rooms. We cannot, however, provide any assurances that demand for hotel rooms will increase from current levels, or the time or extent of any demand growth that we do experience. If demand does not increase in the near future, or if demand weakens, our operating results and growth prospects could be adversely affected. The lodging industry has historically been closely linked to the performance of the general economy and thus, is sensitive to business and personal discretionary spending levels. Declines in consumer demand due to adverse general economic conditions can result from various events that are beyond our control, including terrorist attacks, wars, including the current conflict between Russia and Ukraine, travel-related health concerns, travel-related accidents, and unusual weather patterns and natural disasters such as tornados, hurricanes, or earthquakes, and uncertainties regarding actual and potential shifts in United States and foreign trade, economic and other policies, including treaties, tariffs, layoffs of U.S. federal workers and freezes of federal funding.

The United States has recently experienced significant inflation. Inflation could have an adverse impact on our financing costs (either through near-term borrowings on our variable rate debt, including our credit facilities, or refinancing of existing debt at higher interest rates), and general and administrative expenses and property operating expenses, as these costs could increase at a rate higher than our rental and other revenue. To the extent our exposure to increases in interest

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rates is not eliminated through interest rate caps or other protection agreements, such increases may also result in higher debt service costs, which will adversely affect our cash flows. Historically, during periods of increasing interest rates, real estate valuations have generally decreased due to rising capitalization rates, which tend to move directionally with interest rates. Consequently, prolonged periods of higher interest rates may negatively impact the valuation of our real estate assets. Although the extent of any prolonged periods of higher interest rates remains unknown at this time, negative impacts to our cost of capital may adversely affect our future business plans and growth, at least in the near term. Elevated inflation may also have an adverse effect on our operating expenses, including, but not limited to, labor, supplies, repairs and maintenance, as these costs could increase at a rate higher than our revenues. Inflation could also have an adverse effect on consumer spending, which could impact occupancy levels at our hotel properties and, in turn, our own results of operations.

If we experience a pandemic or epidemic in the future, any increases in unemployment, increasing labor costs and shortages, decreased capital spending, declines in consumer confidence, commodity and other price inflation, supply chain disruptions, or economic slowdowns or recessions that may result therefrom may cause sustained negative consumer or business sentiment and reduced demand for travel and lodging, and may cause an increase in renovation, construction and operating costs, and may limit our access to critical operating supplies, all of which would materially and adversely affect our business, financial performance and condition, operating results and cash flows.

Additionally, the management companies that operate our hotel properties may be limited in their ability to properly maintain the properties. Market fluctuations may affect our ability to obtain necessary funds for the operation of our hotels from current lenders or new borrowings. In addition, we may be unable to obtain financing for the acquisition of new hotels on satisfactory terms, or at all. Further, we have entered into agreements with lenders under our mortgage loans to provide for relief from certain obligations under the loan agreements, including deferral of payment obligations and covenant relief. If our financial condition and results of operation continue to be negatively affected beyond the terms of our existing lender accommodations, we may be unable to obtain further extensions of the payment obligations and covenant relief, and may be forced to make additional payments on the loans which could adversely affect our ability to pay distributions to our stockholders. Third-party reports relating to market studies or demographics we obtained prior to the COVID-19 virus outbreak for hotels we acquired or have identified for acquisition may no longer be accurate or complete. The occurrence of any of the foregoing events or any other related matters could materially and adversely affect our business, financial condition, results of operation and the overall value of our properties, and stockholders may lose all or a substantial portion of their investment in us.

#### We depend on the efforts and expertise of the Advisor and its officers and principals, whose continued service is not guaranteed.
We depend on the efforts and expertise of our officers, the Advisor and its principals to execute our business strategy. The loss of their services, and our inability to find suitable replacements, could have an adverse effect on our business and, in turn, any return to our stockholders.

***Our Advisor, its executive officers and other key personnel, the Sponsor's employees and certain of our officers and directors will not devote their time and energies exclusively to us.***

Our Advisor, its executive officers and other key personnel, the employees of the Sponsor, an affiliate of the Advisor, as well as certain of our officers and directors, whose services are essential to the Company, are, and will continue to be, involved in other business ventures, and will devote only such portion of their time to our affairs as they believe is appropriate to manage our affairs effectively. They will face a conflict in allocating their time and other resources between us and the other activities in which they are or may become involved. Failure of the Advisor, its executive officers and key personnel, the employees of the Sponsor, and our officers and directors to devote sufficient time or resources to our operations could result in reduced returns to our stockholders.

***There is no assurance that we will satisfy our business objectives, which could limit our ability to make distributions and decrease the value of your investment.***

There is no assurance that we will satisfy our business objectives. No assurance can be given that our stockholders will realize a substantial return, if any, on their purchase or that we will be able to make distributions to our stockholders. We

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may not be able to achieve our investment objectives, may make unwise decisions or may make decisions that are not in an investor's best interests because of conflicts of interest. No assurance can be given that the Company will be able to acquire suitable investments or that the Company's objectives will be achieved.

#### We own only hotel properties, which will limit the diversification of our investments.
As of December 31, 2025, we owned a portfolio of fourteen hotel properties, including the equity and profits interest in the parent of the entity which holds a leasehold interest in the El Paso University Property. We have no plans to acquire assets other than hotel properties, which limits the diversification of the type of properties we own. If we do not raise substantial funds in our securities offerings, we will be limited in the number and type of investments we and the Operating Partnership may make, which will result in a less diversified portfolio. We may not be able to acquire a large portfolio of assets, which may cause the value of an investment in us to experience more volatility due to the performance of certain investments and cause our general and administrative expenses to constitute a greater percentage of our revenue. In such event, the likelihood of our profitability being affected by the poor performance of any single investment will increase, which may limit our ability to pay distributions to our stockholders. A limited number of hotel properties may place a substantial portion of the funds invested in the same geographical location with the same property-related risks. In that case, the decline in a particular real estate market could substantially and adversely impact us. In the event of an economic recession affecting the economies of the areas in which the hotel properties are located, a decline in real estate values in general or the occurrence of any one of many other adverse circumstances, our financial performance could be materially and adversely affected.

#### Our investment policies are subject to revision from time to time at our board of directors' discretion, which could diminish stockholder returns below expectations.
Our investment policies may be amended or revised from time to time at the discretion of our board of directors, without a vote of our stockholders. Such changes could result in investments that may not yield returns consistent with our stockholders' expectations.

#### If we are unable to successfully manage our growth, our operating results and financial condition could be adversely affected.
Our ability to grow our business depends upon our agreements with the Operating Partnership and the Advisor, and the business acumen of the individuals managing each of these entities. If these agreements are terminated, we may not be able to hire and train sufficient personnel or develop management, information and operating systems suitable for our expected growth. If we are unable to manage any future growth effectively, our operating results and financial condition could be adversely affected.

***Our future growth and success depends on obtaining financing, and if we cannot secure financing on acceptable terms or at all, our growth may be limited.***

The success of our growth strategy depends on access to capital through the use of excess cash flow, borrowings or subsequent issuances of our common stock or other securities. We will require significant capital to acquire, renovate, rehabilitate, operate, and make periodic capital improvements at the hotel properties. We may not be able to fund acquisitions, renovations or capital improvements solely from cash provided from our operating activities. To the extent required funds are not available from operations, we will need to obtain new or additional borrowings on satisfactory terms, which will depend on capital markets conditions. There is no assurance that we will be able to obtain the required financing for our hotel properties on favorable terms, or at all.

***We may be unable to raise substantial funds in our securities offerings or to invest the proceeds of our securities offerings in a timely manner or on acceptable terms.***

We may be unable to raise substantial funds in our securities offerings, which could limit our ability to acquire a large portfolio of diverse assets. We may be unable to invest the Offering proceeds on acceptable terms, or at all, which could delay stockholders from receiving an appropriate return on their investment and reduce the amount available for distribution to our stockholders. We cannot assure you that we will be able to identify properties that meet our investment criteria, that we will successfully consummate any investment opportunities we identify or that investments we may make

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will generate income or cash flow. Our failure to find suitable hotel properties to acquire in a timely manner or on acceptable terms could result in returns that are substantially below expectations or result in losses.

***We must rely on management companies that are eligible independent contractors to operate the hotel properties in order to qualify as a REIT and, as a result, we have less control than if we were operating the hotel properties directly.***

In order for us to qualify as a REIT, management companies that are eligible independent contractors must operate the hotel properties. Each of the hotel properties will be owned by a direct subsidiary of the Operating Partnership, which will lease the hotel properties to the TRS Lessees. The TRS Lessees, in turn, will enter into management agreements with a management company to operate the hotel properties. While we expect to have some input into operating decisions for the hotel properties leased by our TRS Lessees and operated under such management agreements, we have less control than if we were managing the hotels ourselves. Even if we believe that our hotels are not being operated efficiently, we may not be able to require an operator to change the way it operates our hotels. If this is the case, we may decide to terminate the management agreement and potentially incur costs associated with the termination.

***Our management agreements could adversely affect the sale or financing of the hotel properties and, as a result, our operating results and ability to make distributions to our stockholders could suffer.***

We have entered into, and may continue to enter into, or acquire hotels subject to, management agreements that contain restrictive covenants. For example, the terms of some management agreements may restrict our ability to sell a hotel property unless, among other conditions, the purchaser is not a competitor of the operator and assumes the related management agreement. Also, the provisions of a long-term management agreement encumbering a hotel property may reduce the value of such hotel property. If we enter into or acquire hotel properties subject to any such management agreements, we may be precluded from taking actions that would otherwise be in our best interest or could cause us to incur substantial expense, which could adversely affect our operating results and our ability to make distributions to stockholders.

***Our franchisors could cause us to expend additional funds on upgraded operating standards, which may reduce cash available for distribution to stockholders.***

Our existing hotel properties are, and we expect future hotel properties will be, subject to franchise agreements, and we may become subject to the risks that result from concentrating the hotel properties in one or several hotel franchise brands. Our hotel operators will need to comply with operating standards and terms and conditions imposed by the franchisors of the hotel brands under which the hotel properties will operate. Pursuant to certain franchise agreements, certain upgrades are required every few years, and franchisors may also impose upgraded or new brand standards, which can add substantial expense for the affected hotel properties. The franchisors also may require us to make certain capital improvements to maintain the hotel properties in accordance with system standards, the cost of which can be substantial and may reduce cash available for distribution to our stockholders. Planned capital expenditures and upgrades may cost more and take longer to complete than expected as a result of increasing labor costs and shortages and other price inflation and shortages of materials due to supply chain challenges and adverse impacts of various political policies, including tariffs and immigration.

***Our franchisors may cancel or fail to renew our existing franchise licenses, which could adversely affect our operating results and our ability to make distributions to stockholders.***

Franchisors periodically inspect hotels to confirm adherence to their operating standards. We will rely on our operators to conform to the franchisors' operating standards. The failure of a hotel property to maintain standards could result in the loss or cancellation of a franchise license. In addition, when the term of a franchise expires, the franchisor has no obligation to issue a new franchise. The loss of a franchise could have a material adverse effect on the operations or the underlying value of the affected hotel property because of the loss of associated name recognition, marketing support and centralized reservation systems provided by the franchisor. The loss of a franchise or adverse developments with respect to a franchise brand under which our hotels operate could also have a material adverse effect on our financial condition, results of operations and cash available for distribution to our stockholders.

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***Fluctuations in our financial performance, capital expenditure requirements and excess cash flow could adversely affect our ability to make and maintain distributions to our stockholders.***

As a REIT, we are required to distribute at least 90% of our REIT taxable income each year to our stockholders (determined before the deduction for dividends paid and excluding any net capital gains). In the event of downturns in our operating results and financial performance or unanticipated capital improvements to the hotel properties (including capital improvements that may be required by franchisors), we may be unable to declare or pay distributions to our stockholders. The timing and amount of distributions are at the sole discretion of our board of directors, which considers, among other factors, our financial performance, debt service obligations, applicable debt covenants (if any), and capital expenditure requirements. Among the factors which could adversely affect our results of operations and distributions to stockholders are reductions in hotel revenues, increases in operating expenses at the hotels leased to our TRS Lessees and capital expenditures at the hotels, including capital expenditures required by the franchisors. We cannot assure you we will generate sufficient cash in order to continue to fund distributions.

***We have not paid, and may not in the future pay, distributions solely from our cash flow from operations. To the extent we pay distributions from sources other than our cash flow from operations, the overall return to our stockholders may be reduced and subsequent investors will experience dilution.***

We may not be able to pay distributions solely from our cash flow from operations, in which case distributions may be paid in whole or in part from other sources, including debt financing and proceeds from our Offering. There is no limit on the amount of distributions we may fund from sources other than from cash flow from operations. Distributions we paid through December 31, 2025 have been paid from proceeds from our Offering, and we expect that future distributions we may pay will not be made solely from our cash flow from operations. To the extent we fund distributions from sources other than our cash flow from operations, we will have less funds available for investment and the overall return to our stockholders may be reduced and subsequent investors will experience dilution.

***We have made, and may from time to time continue to make, distributions to our stockholders in the form of our common stock, which could result in stockholders incurring tax liability without receiving sufficient cash to pay such tax.***

***We have distributed, and we may in the future distribute, taxable dividends that are payable in cash or common stock. Taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits for federal income tax purposes. As a result, stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock.***

***We may be subject to various conflicts of interest due to the relationships among the Advisor, the Operating Partnership, NHS, One Rep Construction, LLC ("One Rep"), Legendary A-1 Bonds, LLC ("A-1 Bonds") and their respective affiliates.***

We pay certain prescribed fees and expenses to the Advisor and its affiliates regardless of the quality of services provided. These fees were not negotiated at arm's length and therefore, may be higher than fees payable to unaffiliated third parties. The Advisory Agreement may result in a conflict of interest between the Advisor and our stockholders due to the Advisor's receipt of certain incentive and management fees related to operating the Company. For example, the Advisor may earn increased management fees if a hotel property is retained, but it may be advantageous for our stockholders for such hotel property to be sold and the proceeds distributed. In addition, certain incentive fees are payable to the Advisor upon the sale or acquisition of a hotel property. This could incentivize the Advisor to acquire or dispose of hotel properties in instances where such acquisitions or dispositions are not in the best interests of our stockholders. Furthermore, NHS, the company which provides certain due diligence services related to property acquisitions and a lender under one of our loans, is an affiliate of Norman H. Leslie who is an officer of the Company and the Advisor. In addition, One Rep, the construction management company which provides construction oversight, project management and other related services, is owned by Corey Maple, Norman H. Leslie and David Ekman. In addition, A-1 Bonds a lender under one of our lines of credit and several loans secured by certain of our hotel properties, is an affiliate of Norman H. Leslie and Corey Maple. These relationships may be determined to cause conflicts of interest among the affected parties.

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***Our current hotel properties include, and our future hotel properties will likely include certain amenities for hotel guests that could increase the potential liabilities at the hotel properties.***

Our current hotel properties include, and our future hotel properties will likely include, one or more amenities, such as swimming pools, exercise rooms, laundry facilities, business centers and rentable event rooms. Certain claims could arise in the event that a personal injury, death or injury to property should occur in, on, or around any of these improvements. There can be no assurance that particular risks pertaining to these improvements that are insured will continue to be insurable on an economical basis or that current levels of coverage will continue to be available. If a loss occurs that is partially or completely uninsured, we may lose all or part of our investment in the affected hotel property. We may also be liable for uninsured or underinsured personal injury, death or property damage claims. Liability in such cases may be unlimited but stockholders will not be personally liable.

***Although we have authorized management to pursue an exit strategy and position the Company for a sale or merger, we can give no assurances regarding the consummation of any particular transaction or that we will be successful in executing such strategy or in creating additional stockholder value.***

Although our board of directors has authorized management to pursue an exit strategy and position us for a sale or merger as early as 2025, there is no assurance that this process will result in the approval or completion of any specific transaction or outcome. Further, although we have begun the process of exploring strategic alternatives and marketing for sale our assets, there is no assurance that we will achieve an exit strategy within the proposed time period or in the manner anticipated. The process of exploring strategic alternatives and marketing our assets could be time-consuming and disruptive to our business operations and could divert management's attention from our business, and we could incur substantial expenses associated with identifying and evaluating potential transactions. Further, any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us and the availability of financing to potential buyers on favorable terms. Specifically, current general economic conditions, including high interest rates in a high inflation environment, may adversely impact the valuation of our assets and make it more difficult for potential purchasers to obtain acquisition financing on acceptable terms or at all. There can be no assurance that we will successfully implement our strategy, or that any potential transaction or other strategic alternative will result in stockholder liquidity or provide a return to stockholders that equals or exceeds our estimated value per share.

#### Risks Related to the Lodging Industry
***The lodging industry has experienced significant declines and failure of the lodging industry to exhibit improvement may adversely affect our ability to execute our business strategy.***

The performance of the lodging industry has historically been closely linked to the performance of the general economy and, specifically, growth in U.S. GDP. It is also sensitive to business and personal discretionary spending levels. Declines in corporate budgets and consumer demand due to adverse general economic conditions and political policies, risks affecting or reducing travel patterns, lower consumer confidence or adverse political conditions can lower the revenues and profitability of the hotel properties and therefore, the net operating profits of our TRS Lessees. A substantial part of our business strategy is based on the anticipation that the lodging markets will experience improving economic fundamentals in the future. We cannot predict the extent to which the lodging industry will improve. In the event conditions in the industry do not improve, or if they deteriorate, our ability to execute our business strategy would be adversely affected, which could adversely affect our financial condition, results of operations and our ability to make distributions to our stockholders.

#### Competition for acquisitions may reduce the number of properties we can acquire.
We compete for hotel investment opportunities with competitors that may have a different tolerance for risk or have substantially greater financial resources than are available to us. This competition may generally limit the number of hotel properties that we are able to acquire and may also increase the bargaining power of hotel owners seeking to sell, making it more difficult for us to acquire hotel properties on attractive terms, or at all.

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#### Competition for guests may lower our hotels' revenues and profitability.
The limited-service, select-service, full-service and extended-stay segments of the hotel business are competitive. Our hotels compete on the basis of location, room rates and quality, service levels, reputation and reservation systems, among many other factors. Many competitors have substantially greater marketing and financial resources than our operators or us. New hotels create new competitors, in some cases without corresponding increases in demand for hotel rooms. The result in some cases may be lower revenue, which would result in lower cash available for distribution to stockholders.

***The seasonality of the hotel industry may cause fluctuations in our quarterly revenues which may require us to borrow money to fund distributions to stockholders.***

Some hotel properties have business that is seasonal in nature. This seasonality can be expected to cause quarterly fluctuations in revenues. Quarterly earnings may be adversely affected by factors outside our control, including weather conditions and poor economic factors. As a result, we may have to enter into short-term borrowings in order to offset these fluctuations in revenue and to make distributions to our stockholders.

#### The cyclical nature of the lodging industry may cause the return on our investments to be substantially less than we expect.
The lodging industry is cyclical in nature. Fluctuations in lodging demand and therefore, operating performance, are caused largely by general economic and local market conditions, which subsequently affects levels of business and leisure travel. Any increases in inflation may adversely affect consumer confidence, which could reduce consumer purchasing power and dampen consumer demand for lodging, and which may also increase or operating and renovation costs. In addition to general economic conditions, new hotel room supply can significantly affect the lodging industry's performance and overbuilding has the potential to further exacerbate the negative impact. Room rates and occupancy tend to increase when demand growth exceeds supply growth. Decline in lodging demand, or a continued growth in lodging supply, could result in returns that are substantially below expectations or result in losses, which could have a material adverse effect on our business, financial condition, results of operations and our ability to make distributions to our stockholders.

***The ongoing need for capital expenditures at our hotel properties may adversely affect our financial condition and limit our ability to make distributions to our stockholders.***

Hotel properties have an ongoing need for renovations and other capital improvements, including replacements, from time to time, of furniture, fixtures and equipment. The franchisors of our hotels also require periodic capital improvements as a condition of keeping the franchise licenses. These capital improvements may give rise to the following risks:

● Possible environmental problems;

● Construction cost overruns and delays, particularly in light of supply chain disruption;

● Revenues may be reduced temporarily while rooms are out of service during construction;

● Possible shortage of available cash to fund capital improvements;

● Capital improvement financing may not be available on attractive terms;

● Market demand uncertainties or a loss of market demand after capital improvements have begun; and

● Disputes with franchisors/managers regarding compliance with relevant management/franchise agreements.

We have established, and intend to continue to establish, capital reserves in amounts we believe are necessary for the hotel properties. If we have insufficient capital reserves, we will be required to obtain financing from other sources to fund our capital expenditure requirements. There can be no assurance that sufficient financing will be available or, if available, will be available on economically feasible terms or on terms acceptable to us. Additional borrowing for capital needs and capital improvements will also increase our interest expense. The costs and expenses of all these capital improvements could adversely affect our financial condition and amounts available for distribution to our stockholders.

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#### The increasing use of Internet travel intermediaries by consumers may adversely affect our profitability.
Some of our hotel rooms are booked through Internet travel intermediaries, including, but not limited to, Travelocity.com, Expedia.com and Priceline.com. As Internet bookings increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from us and our management companies. Moreover, some of these Internet travel intermediaries are attempting to offer hotel rooms as a commodity, by increasing the importance of price and general indicators of quality (such as "three-star downtown hotel") at the expense of brand identification. These intermediaries hope that consumers will eventually develop brand loyalties to their reservations system rather than to the hotel brands under which our properties are franchised. Although most of the business for our hotels is expected to be derived from traditional channels, if the amount of sales made through Internet intermediaries increases significantly, room revenues may flatten or decrease and our profitability may be adversely affected.

***We and our hotel managers and franchisors rely on information technology in our operations, and any material failure, inadequacy, interruption, cyber-attack or security failure of that technology could harm our business.***

We and our hotel managers and franchisors rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personal identifying information, reservations, billing and operating data. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential customer information, such as personally identifiable information, including information relating to financial accounts. Although we have taken steps, and plan to continue to take steps, to protect the security of our information systems and the data maintained in those systems, it is possible that our safety and security measures will not be able to prevent the systems' improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. Cyber-attacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques that circumvent controls, evade detection, and remove or obfuscate forensic evidence, which means that we and our third-party providers may be unable to detect, investigate, contain or recover from future attacks or incidents in a timely or effective manner. The rapid evolution and increased adoption of artificial intelligence technologies, by us or by third parties, may also heighten our cybersecurity risks by making cyberattacks more difficult to detect, contain and mitigate. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. In addition, cybersecurity risk has increased as a result of global remote working dynamics for our customers, employees and third-party providers that present additional opportunities for threat actors to engage in social engineering and to exploit vulnerabilities in non-corporate networks. Many of the information systems and networks used to operate our lodging properties are managed by our third-party property managers or franchisors and are not under our control. Any failure to maintain proper function, security and availability of our information systems or the information networks managed by our third-party property managers or franchisors could interrupt our operations, result in delayed sales or bookings or lost guest reservations, damage our reputation, subject us to liability claims or regulatory penalties and could have a material adverse effect on our business, financial condition and results of operations.

***Labor shortages and increased costs for labor could adversely affect our business and financial results.***

***Our success depends in part upon our management companies' ability to attract, motivate and retain a sufficient number of qualified employees. Qualified individuals needed to fill these positions are in increasingly short supply in some areas, with such supply issues increasing to historical levels in 2025 and 2024. The inability to recruit and retain these individuals may adversely impact hotel operations and guest satisfaction, which could harm our business. Additionally, competition for qualified employees has required us to pay meaningfully higher wages to attract employees, and continued tightness in labor markets could result in continued escalation of labor costs.***

#### Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.
Recent world events including increased terrorist activities and the political and military responses of the targeted countries have created an air of uncertainty concerning security and the stability of the United States economy. Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries over the past several years, often disproportionately to the effect on the overall economy. The impact that terrorist attacks in the U.S. or

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elsewhere could have on domestic and international travel and our business in particular cannot be determined but any such attacks or the threat of such attacks could have a material adverse effect on our business, our ability to finance our business, our ability to insure our properties and our results of operations and financial condition.

***Competition, including with vacation rental online marketplaces, may reduce our hotels' revenues and profitability.***

In addition to competing with other hotels, our hotel businesses compete with resorts, motels, inns and vacation rentals in their geographic markets or customer segments, including facilities owned by local interests, individuals, national and international chains, institutions, investment and pension funds and real estate investment trusts ("REITs"). Competition in this industry generally is based on the attractiveness of the facility, location, level of service, quality of accommodations, amenities, food and beverage options, public spaces and other guest services, consistency of service, room rate, brand reputation and the ability to earn and redeem loyalty program points. Our principal competitors include other branded and independent hotel operating companies, national and international hotel brands and ownership companies, and independently owned vacation rentals, such as those listed on vacation rental online marketplaces. Increased demand for vacation rental online marketplaces and reduced demand for hotels could result in lower revenue and reduced cash availability for distribution to stockholders.

***Adverse developments affecting the financial services industry may adversely affect our business, financial condition and results of operations.***

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank (now a division of First Citizens Bank) was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver, which has been followed by the collapse of Signature Bank, Silvergate Capital Corp. and First Republic Bank. Other than one account at Signature Bank for one of our hotel properties, we do not currently have direct exposure to these financial institutions. If a depository institution in which we deposit funds is adversely impacted from conditions in the financial or credit markets or otherwise, it could impact access to our cash or cash equivalents and could adversely impact our financial condition. Our cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2025. In addition, if any parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties' ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.

#### General Risks Related to the Real Estate Industry

#### The hotel properties are subject to various risks associated with an investment in real estate.
The economic success of an investment in the Company will depend upon the results of the operations of the hotel properties, which are subject to those risks typically associated with an investment in real estate. Fluctuations in land values, occupancy levels, revenue and operating expenses can adversely affect operating results or render the sale or refinancing of the hotel properties difficult or unattractive. No assurance can be given that certain assumptions as to the future levels of occupancy of the hotel properties or future costs of operating the hotel properties will be accurate because such matters will depend on events and factors beyond our control. Such factors include, among others, occupancy levels, revenue and sales levels in the local areas where the hotel properties are located, adverse changes in local population trends, market conditions, neighborhood values, local economic and social conditions, supply and demand for property such as the hotel properties, competition from similar projects, interest rates, real estate tax rates, governmental rules,

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regulations and fiscal policies, including the effects of inflation and enactment of unfavorable real estate, environmental or zoning laws, hazardous material laws, uninsured losses and other risks.

#### Illiquidity of real estate investments could significantly impede our ability to liquidate our portfolio on advantageous terms or within any given period of time.
Because real estate investments are relatively illiquid and difficult to sell quickly, we have limited ability to vary our portfolio in response changes in economic and other conditions. Return of capital and realization of gains, if any, from an investment generally will occur upon disposition or refinance of the underlying hotel property. We may be unable to realize our investment objectives by sale, other disposition or refinance at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy. In particular, these risks could arise from weakness in or even the lack of an established market for a hotel property, availability of financing, capitalization rates, changes in the financial condition or prospects of prospective purchasers, changes in national or international economic conditions, and changes in laws, regulations or fiscal policies of jurisdictions in which the hotel property is located. Further, we may be required to expend funds to correct defects or to make improvements before a hotel property can be sold. We cannot assure you that we will have funds available to correct those defects or to make those improvements. In addition, we may agree to lock-out provisions when acquiring a hotel property that materially restrict us from selling that hotel property for a period of time or impose other restrictions. Our inability to sell the hotel properties at the time and on the terms we desire could reduce our cash flow and limit our ability to make distributions to our stockholders.

#### Uninsured and underinsured losses could adversely affect our operating results and our ability to make distributions to our stockholders.
We maintain comprehensive insurance on each of our current hotel properties, and anticipate maintaining comprehensive insurance on future hotel properties, including liability, terrorism, fire and extended coverage, of the type and amount customarily obtained for or by hotel property owners. There can be no assurance that such coverage will continue to be available at reasonable rates, or at all. Various types of catastrophic losses, like earthquakes and floods and losses from toxic mold, terrorist activities and pandemic outbreaks may not be insurable or may not be insurable on reasonable economic terms. Lenders may require such insurance and failure to obtain such insurance could constitute a default under the loan agreements. Depending on our access to capital, liquidity and the value of the properties securing the affected loan in relation to the balance of the loan, a default could have a material adverse effect on our results of operations and ability to obtain future financing.

In the event of a substantial loss, insurance coverage may not be sufficient to cover the full current market value or replacement cost of the hotel property. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we invested in a hotel property, as well as the anticipated future revenue from that particular hotel property. In that event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the hotel property. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace, rehabilitate or renovate a hotel after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed hotel property.

#### Noncompliance with environmental laws and governmental regulations could adversely affect our operating results and our ability to make distributions to stockholders.
Federal, state and local laws impose liability on a landowner for the release or the otherwise improper presence on the premises of hazardous materials or hazardous substances. This liability is without regard to fault for, or knowledge of, the presence of such materials or substances, subject to certain defenses. A landowner may be held liable for hazardous materials or substances brought onto the property before it acquired title and for hazardous materials or substances that are not discovered until after it sells the property. In addition, a landowner may be held liable for hazardous materials or substances that migrate from the property onto or beneath adjacent sites, as well as hazardous materials or substances from unknown or unidentified sources that may migrate from adjacent sites onto or beneath the property. Similar liability may occur under applicable state law. If any hazardous materials or substances are found within the real property underlying any of the hotel properties at any time, we could be held liable for cleanup costs, fines, penalties and other costs, and we may have little or no recourse against the sellers of the hotel properties. Furthermore, various court decisions have

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established that third parties may recover damages for injury caused by release of hazardous substances and for property contamination. Although we will attempt to obtain current environmental site assessments for the hotel properties prior to acquisition, we may not obtain such information. If losses arise from hazardous substance contamination that cannot be recovered from responsible parties, the financial viability of the hotel properties may be materially and adversely affected.

***Compliance with the Americans with Disabilities Act of 1990, as amended, and applicable regulations promulgated thereunder ("ADA") and other changes in governmental rules and regulations could substantially increase our cost of doing business and adversely affect our operating results and our ability to make distributions to our stockholders.***

Our hotel properties are subject to the ADA. Under the ADA, "public accommodations" as defined by the ADA must meet certain federal requirements related to access and use by disabled persons. Although we believe our current hotel properties are in substantial compliance with the ADA, and we intend to acquire future hotel properties that are substantially in compliance with the ADA, we may incur additional costs of complying with the ADA at the time of acquisition and from time-to-time in the future to remain in compliance. A number of additional federal, state and local laws exist that also may require modifications to the hotel properties or restrict certain renovations with respect to access by disabled persons. A violation of the ADA could result in the imposition of fines by the federal government or an award of damages to private litigants, and attorneys' fees may be awarded to a plaintiff claiming ADA violations. State and federal laws in this area are constantly evolving and could place a greater cost or burden on us. If we were required to expend unbudgeted funds to comply with the ADA or other applicable rules and regulations, our financial condition, results of operations, the market price of our shares of common stock and our ability to make distributions to our stockholders could be adversely affected. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate.

***The hotel properties are subject to property taxes that may increase in the future, which could adversely affect our ability to make distributions to our stockholders.***

The hotel properties are subject to real and personal property taxes. These taxes may increase as tax rates change and as the hotel properties are assessed or reassessed by taxing authorities, including upon acquisition. If property taxes increase, our financial condition, results of operations and our ability to make distributions to our stockholders could be materially and adversely affected. As the owner of the hotel properties, we are ultimately responsible for payment of the taxes to the applicable government authorities. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the hotel property, and the hotel property could become subject to a tax sale.

#### The hotel properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.
Litigation and concern about indoor exposure to certain types of toxic molds have been increasing as the public becomes aware that exposure to mold can cause a variety of health effects and symptoms, including allergic reactions and respiratory problems. Toxic molds can be found almost anywhere; they can grow on virtually any organic substance, as long as moisture and oxygen are present. There are molds that can grow on wood, paper, carpet, foods and insulation. When excessive moisture accumulates in buildings or on building materials, mold growth will often occur, particularly if the moisture problem remains undiscovered or unaddressed. It is impossible to eliminate all molds and mold spores in the indoor environment. In warm or humid climates, the likelihood of toxic mold can be exacerbated by the necessity of indoor air conditioning year-round. The difficulty in discovering indoor toxic mold growth could lead to an increased risk of lawsuits by affected persons, and the risk that the cost to remediate toxic mold will exceed the value of the property. Because of attempts to exclude investigations, abatement and damage costs caused by toxic mold growth from certain liability provisions in insurance policies, there is no guarantee that insurance coverage for toxic mold will be available now or in the future.

#### Future changes in laws and regulations may adversely affect the resale value of real estate.
Future changes in land use and environmental laws and regulations, whether federal, state or local, may impose new restrictions on the development or use, and therefore the value, of real estate. The resale of real estate by us may be adversely affected by such regulations. In addition, cities and other municipalities may have different rules and regulations which may change from time to time, including retrofit ordinances, which may affect the capital needs of the hotel

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properties. Any such changes would need to be addressed by us, which would reduce our net income and the amount of cash available for distributions to our stockholders.

***Certain sellers of hotel properties have made, and future sellers may only make, limited or no representations and warranties regarding the condition of the properties.***

We have acquired, and may in the future acquire real estate from sellers who make only limited or no representations and warranties regarding the condition of such real estate, the presence of hazardous materials or hazardous substances within such real estate, the status of governmental approvals and entitlements for such real estate or other matters adversely affecting such real estate. We may not be able to pursue a claim for damages against such sellers except in limited circumstances. The extent of damages that we may incur as a result of such matters cannot be predicted but potentially could result in a significant adverse effect on the value of such real estate.

#### We may acquire hotel properties from affiliates of the Advisor.
We may acquire hotel properties from affiliates of the Advisor. Accordingly, notwithstanding that the purchase price will be based on a third-party appraisal, the purchase agreements for such hotel properties will not be negotiated on a third-party arm's length basis. Some of the terms of the purchase agreements with affiliates of the Advisor may not be on market terms. The stockholders will not have approval rights with respect to the acquisition of hotel properties from affiliates.

#### We may not obtain audited results of operations for the hotel properties prior to acquiring the hotel properties.
We may not obtain audited operating statements regarding the prior operations of the hotel properties prior to acquiring the hotel properties. We may rely on unaudited financial information provided by the sellers of the hotel properties. Thus, it is possible that information we relied on with respect to the acquisition of the hotel properties may not be accurate.

#### We may not obtain independent third-party appraisals or valuations of a hotel property before acquiring it and our valuation may not be accurate.
We have obtained independent third-party appraisals or valuations or other reports for some, but not all, of our current hotel properties before purchasing them and may not obtain independent third-party appraisals or valuations of a future hotel property, or other reports with respect to a future hotel property, before we invest in such hotel property. If we do not obtain such third-party appraisals or valuations, there can be no assurance that our valuation of a hotel property will be accurate or that a hotel property's value will exceed its cost to us or that any sale or other disposition of such hotel property will result in a profit for us. Third-party appraisals and other reports may be prepared for lenders, in which case we typically will try to obtain a copy of such appraisals and reports for review, as well as reliance letters from the third-party preparers to allow us to rely on such appraisals and reports. To the extent we do not obtain such other reports or reliance letters before investing in a hotel property, the risk of investing in such hotel property may be increased.

***If capitalization rates increase, the value of our assets may decrease and we may not be able to sell our assets at anticipated prices.***

The value of commercial real estate is generally based on capitalization rates. Capitalization rates generally trend with interest rates. Consequently, if interest rates go up, so do capitalization rates. If interest rates rise in the future, it is likely that capitalization rates will also rise and, as a result, the value of real estate will decrease. If capitalization rates continue to increase, the hotel properties will likely achieve lower sales prices than anticipated, resulting in reduced returns.

***Certain of the hotel properties in our current portfolio are, and future hotel properties may be, located in areas with increased risk of tornados, floods and other natural disasters and face risks associated with the direct and indirect physical effects of climate change, and we do not intend to obtain insurance to cover these natural disasters unless required by a lender.***

Some of the hotel properties in our current portfolio are, and future hotel properties may be, located in areas in the United States that have increased risk of tornados, floods, earthquakes, hurricanes, high winds or wildfires. A tornado, flood, earthquake, hurricane, high winds or wildfire could cause structural damage to or destroy a hotel property. Over time, our

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hotels located in coastal markets and other areas that may be impacted by climate change are expected to experience increases in storm intensity and rising sea-levels, which may cause damage to our hotel properties. As a result, we could become subject to significant losses and/or repair costs. Other markets may experience prolonged variations in temperature or precipitation that may limit access to the water needed to operate our hotel properties or significantly increase energy costs, which may subject those properties to additional regulatory burdens, such as limitations on water usage or stricter energy efficiency standards. We do not intend to obtain wind, flood or earthquake insurance for the hotel properties unless required by a lender. We have obtained flood insurance for one of our hotels. It is possible that any such insurance, if obtained, will not be sufficient to pay for damage to any hotel property. Further, to the extent we do obtain insurance for such hotels, weather events and climate change may increase the cost of, or make unavailable, such property insurance, on terms we find acceptable in areas most vulnerable to such events.

#### We may not have control of hotel properties we acquire through joint ventures.
We may make some of our investments through joint ventures between the Company and both affiliated and non-affiliated parties. It is anticipated that, with respect to any such investment, we and the joint venture partner will have joint control over the management and operation of the hotel property. Thus, we will be dependent on the decisions made by our joint venture partner. Such joint venture partner may have objectives which are different than those of the Company.

#### The presence of construction defects in newly or recently constructed hotel properties could adversely affect the financial performance of a hotel property.
Some of our current hotel properties are, and future hotel properties may be, newly or recently constructed. Newly constructed properties are sometimes subject to construction defects that only reveal themselves over time. If any of the hotel properties should become subject to any construction defect issues, we may have remedies under state law as well as under any warranties from the contractors for the construction work, provided that the warranties were assigned to such owner. If the warranties do not cover all the expenses associated with any construction defects that may arise, we could be liable for the expenses associated with correcting the construction defect. If work is required to cure any construction defects, reserves may not be sufficient to pay for such work. Accordingly, the presence of construction defects could adversely affect the financial performance of the hotel properties, we may be required to pay for all or part of the repair of such construction defects, which will reduce the cash flow from the hotel properties, and the return to our stockholders may be reduced.

***Construction and rehabilitation at the hotel properties entails risks that are beyond our and any general contractor's control, and the costs may exceed the funds available to us.***

We have rehabilitated, renovated and made capital improvement at some of the hotel properties in our current portfolio, and expect to do so with future hotel properties. Hotel properties have an ongoing need for capital improvements and the franchisors of our hotels also require periodic capital improvements as a condition of keeping the franchise licenses. The construction of commercial real property is cyclical and is significantly affected by changes in national and local economic and other conditions, such as employment levels, availability of financing, interest rates and demand for commercial properties. Such uncertainties could adversely affect our performance. In addition, construction entails risks that are beyond our or any general contractor's control. Completion of new construction, rehabilitation or redevelopment may be delayed or prevented, and costs of such capital improvements may be increased, by factors such as adverse weather, strikes or energy shortages, shortages or increased costs of labor and material for construction, delays in construction schedules, cost overruns, inflation, environmental, zoning, title or other legal matters and unknown contingencies, including any such factors caused by supply chain disruptions. Changes in construction plans and specifications, delays due to compliance with governmental requirements, increases in real estate taxes and other local government fees or imposition of fees not yet levied, or other delays could cause construction costs to exceed the amounts available from the Offering proceeds and any loans. In the event that construction costs exceed funds available, our ability to complete the work to be done on a development hotel property will depend upon our ability to supply additional funds. There can be no assurance that we will have adequate funds available for that purpose. Any delays in construction may have an adverse impact on our cash flow and long-term success.

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***We will be required to obtain the approval of various governmental authorities when rehabilitating and improving the hotel properties, which may result in delays and increased costs.***

In rehabilitating and improving the hotel properties, we will be required to obtain the approval of various government authorities regulating such matters as permitted land uses and levels of density and the installation of utility services such as water and waste disposal. Governmental authorities have imposed impact fees as a means of defraying the cost of providing certain governmental services to developing areas and the amount of these fees has increased significantly during recent years. Many state laws require the use of specific construction materials which reduce the need for energy consuming heating and cooling systems. Local governments also, at times, declare moratoriums on the issuance of building permits and impose other restrictions in areas where sewage treatment facilities and other public facilities do not reach minimum standards. We will also be subject to a variety of federal, state and local statutes, ordinances, rules and regulations concerning protection of health and the environment. Such governmental regulation may result in delays, cause us to incur substantial compliance and other costs and prohibit or severely restrict development in certain regions or areas, which could have an adverse effect on our business and results of operations.

#### We may not discover defects in the hotel properties prior to acquisition.
Although we intend to perform due diligence on the hotel properties before we acquire them, there can be no assurance that all defects (including physical defects, title issues and financial issues) will be discovered prior to acquisition. In the event that a significant issue is not discovered with respect to a particular hotel property, our performance may be negatively impacted.

#### The hotel properties could become subject to condemnation actions.
The hotel properties or a portion of the hotel properties could become subject to an eminent domain or inverse condemnation action. Any such action could have a material adverse effect on the marketability of a hotel property or the amount of return on investment for our stockholders.

#### We may sustain losses resulting from litigation that is not completely covered by insurance.
We anticipate that litigation will occur in the ordinary course of our business. We intend to maintain adequate general liability insurance to cover such potential litigation which stems from the ordinary course of owning and operating the hotel properties; however, there can be no assurance that all losses will be covered. If a loss occurs that is partially or completely uninsured, we may lose all or part of our investment.

**Risks Related to Debt Financing**

***We have obtained, and in the future likely will obtain, mortgage indebtedness and other borrowings, which increases our risk of loss due to potential foreclosures.***

We have obtained, and expect in the future to obtain, loans to acquire the hotel properties and thus, the hotel properties will be leveraged. We may also obtain mortgage debt on hotel properties that we already own in order to obtain funds to acquire additional hotel properties, to fund property improvements and other capital expenditures, to make distributions and for other purposes. In addition, we may borrow as necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90% of our annual REIT taxable income (computed without regard to the dividends-paid deduction and excluding net capital gain) to our stockholders. We anticipate that the aggregate loan-to-value ratio for the Company will be between 35% and 65%. We target a loan-to-value ratio for the hotel properties of between 35% and 70%, based on the purchase price of the hotel properties, however, we may obtain financing that is less than or higher than such loan-to-value ratio for an individual hotel property at the discretion of our board of directors. As of December 31, 2025, our aggregate loan-to-value ratio, based on the aggregate purchase price of the hotel properties, was approximately 56%. No assurance can be given that future cash flow will be sufficient to make the debt service payments on any loans and to cover all operating expenses. If the hotel properties' revenues are insufficient to pay debt service and operating costs, we may be required to seek additional working capital. There can be no assurance that such additional funds will be available. In the event

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additional funds are not available, the lenders may foreclose on the hotel properties and our stockholders could lose their investment. In addition, the degree to which we are leveraged could have an adverse impact on us, including (i) increased vulnerability to adverse general economic and market conditions, (ii) impaired ability to expand and to respond to increased competition, (iii) impaired ability to obtain additional financing for future working capital, capital expenditures, general corporate or other purposes and (iv) requiring that a significant portion of cash provided by operating activities be used for the payment of debt obligations, thereby reducing funds available for distributions, operations and future business opportunities.

***Restrictions on the availability of real estate financing, high interest rates and the cost of loans has increased our debt service payments and may make it difficult for us to finance or refinance the hotel properties on terms acceptable to us or at all.***

Market fluctuations in real estate loans may affect the availability and cost of loans needed to acquire or refinance the hotel properties. Lenders of several loans that we have refinanced or extended recently have required higher interest rates than the original loans. There is no assurance that we will be able to obtain the required financing to acquire or refinance the hotel properties. Restrictions on the availability of real estate financing or high interest rates on real estate loans may also adversely affect our ability to sell the hotel properties. Interest rates have increased and may continue to rise, though the timing and amount of any such future interest rate increases are uncertain. As a result, the interest rates available for future real estate loans and refinancings may be higher than the current interest rates for such loans, which may have a material and adverse impact on the hotel properties and us.

***Some of our financing arrangements involve interest only loans and balloon payment obligations and an inability to prepay until shortly before maturity. These may, in the future, adversely affect our ability to make distributions.***

Debt on some of our existing hotel properties require us, and debt on future hotel properties may also require us, to make interest only payments with a lump-sum or "balloon" payment at maturity. Our ability to make a balloon payment at maturity is uncertain and may depend upon our ability to obtain additional financing or to sell the hotel property. At the time the balloon payment is due, we may or may not be able to refinance the balloon payment on terms as favorable as the original loan or sell the hotel property at a price sufficient to make the balloon payment. Several of the loans obtained to acquire our existing hotel properties do not allow for prepayment until shortly before maturity and provide that any prepayment may require the payment of a prepayment fee. Consequently, we may not be able to take advantage of favorable changes in interest rates. The effect of a refinancing or sale could affect the rate of return to our stockholders and the projected time of disposition of the hotel properties. In addition, payments of principal and interest made to service our debts may leave us with insufficient cash to pay the distributions that we are required to pay to maintain our qualification as a REIT and/or avoid federal income tax.

***Elevated interest rates have increased our interest costs, and future increases in interest rates could further increase our interest costs and reduce our cash flows.***

As of the date of this filing, we had a total of $26.4 million of variable rate notes payable, including our existing line of credit with Western State Bank, and it is anticipated that the loans we obtain in the future may have variable interest rates. Any increase in interest rates would increase our interest costs, which would reduce our cash flows and our ability to make distributions to our stockholders. An increase in interest rates could also affect our ability to refinance or extend existing financing on favorable terms, or at all. Lenders of several loans that we have refinanced or extended recently have required higher interest rates that the original loans. Given the challenges affecting the U.S. real estate industry and the elevated interest rate environment, in order to refinance or extend loans, we expect our interest expense to increase in the future as a result of recent extensions and as we continue to refinance our maturing debt. In the event that the interest rate on any loan increases significantly, we may not have sufficient funds to pay the required interest payments. In such event, the continued ownership of the applicable hotel property may be threatened. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments at times or on terms that may not permit realization of the maximum return on such investments. Increases in interest rates may cause our operations to suffer and the amount of distributions our stockholders receive and their overall return on investment may decline.

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***We have incurred, and may in the future incur, recourse debt or be liable for nonrecourse carve-outs and springing recourse events under the loans for the hotel properties, which may permit the lenders to proceed against our assets.***

Although we attempt to obtain loans for the hotel properties that will be nonrecourse as to principal and interest, we have obtained and may in the future obtain recourse debt to finance our acquisitions. Further, lenders have required and may in the future require us to be personally liable for certain carve-outs and springing recourse events. In circumstances where personal liability attaches, the lender could proceed against our assets. If a lender successfully forecloses upon any of our assets, our ability to pay cash distributions to our stockholders will be reduced and our stockholders may lose part of their investment.

***If we violate any restrictions on transfer imposed by lenders, the lender could have the right to declare the entire amount of the loan to be immediately due and payable.***

Loans on our existing hotel properties restrict, and we anticipate that loans on future hotel properties will, restrict our ability to sell our interests in the hotel properties. The lenders may also impose restrictions on the transferability of our shares of common stock. Upon violation of the restrictions on transfer or encumbrance, a lender will have the right to declare the entire amount of the loan, including principal, interest, prepayment premiums and other charges, to be immediately due and payable. If the lender declares the loan to be immediately due and payable, we will have the obligation to immediately pay the loan in full, including applicable prepayment charges. If replacement financing is not found or the loan is not immediately paid in full, the lender may invoke its other remedies under the loan, which may include proceeding with a foreclosure that would cause us to lose our entire interest in the applicable hotel property.

***If we default on a loan, it could result in foreclosure of the hotel property, which could result the loss of all or a substantial portion of the investment we made in the hotel property.***

Loans on our existing hotel properties include, and we anticipate that future loans will include, various actions by us that will cause an event of default under such loans, including, among others, the failure to pay required payments under the loan, the failure to pay taxes, the failure to maintain insurance, the assignment by an owner of a hotel property of an interest in such hotel property to a creditor, the bankruptcy of an owner of a hotel property, the filing of an action for partition or the transfer of an interest in a hotel property without lender's consent. Additional events of default may be applicable to some or all of the loans. If we default under a loan for any reason, the lender may declare a default under the applicable loan, which could result in foreclosure by the lender on the applicable hotel property and the loss of all or a substantial portion of the investment we made in such hotel property.

***The derivative financial instruments we use to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on our stockholders' investment.***

We are exposed to the effects of interest rate changes as a result of borrowings we use to maintain liquidity and to fund the acquisition, expansion and refinancing of the hotel properties and our operations. Our profitability and the value of our investment portfolio may be adversely affected during any period as a result of interest rate changes. We may choose to manage interest rate risk by maintaining a ratio of fixed rate, long-term debt such that floating rate exposure is kept at an acceptable level. We may utilize a variety of derivative financial instruments, including interest rate caps, floors and swap agreements, in order to hedge exposures and limit the effects of changes in interest rates on our operations, but no hedging strategy can protect us completely. When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, we may be subject to certain risks, including the risk that counterparties may fail to honor their obligations under these arrangements, these arrangements may not be effective in reducing our exposure to interest rate changes, and losses on a hedge position will reduce the funds available for the payment of distributions to our stockholders, and the losses may exceed the amount we invested in the instruments. These hedging agreements involve risks. We cannot assure you that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that its hedging transactions will not result in losses. In addition, the use of such instruments may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT gross income tests.

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#### Certain of the hotel properties and our other assets are cross-collateralized.
We have obtained a line of credit, and may obtain other debt financing, which require that our assets be cross-collateralized. No assurance can be given that future cash flow will be sufficient to make the debt service payments on our loans and to cover all operating expenses.

#### Risks Related to Our Organization and Structure
***Our TRS Lessee structure subjects us to the risk of increased hotel operating expenses that could adversely affect our operating results and our ability to make distributions to our stockholders.***

Our leases with our TRS Lessees require our TRS Lessees to pay the owners of the hotel properties (which are wholly-owned subsidiaries of the Operating Partnership) rent based, in part, on revenues from the hotel properties. Our operating risks include decreases in hotel property revenues and increases in operating expenses, which would adversely affect our TRS Lessees' ability to pay rent due under the leases, including, but not limited to, increases in wage and benefit costs, repair and maintenance expenses, energy costs, property taxes, insurance costs and other operating expenses. As these rent payments will be a primary source of our revenue, any inability of our TRS Lessees to make such rent payments would likely have a significant adverse impact on our financial condition, results of operations and our ability to make distributions to our stockholders.

#### Our TRS structure increases our overall tax liability.
Our TRS Lessees are subject to federal, state and local income tax on their taxable income, which consists of the revenues from the hotel properties, net of the operating expenses for the hotel properties and rent payments to the Operating Partnership. Accordingly, although ownership of our TRS Lessees allows us to participate in the operating income from the hotel properties in addition to receiving rent, that operating income is fully subject to corporate income tax. The after-tax net income of our TRS Lessees will be available for distribution to us.

***Our ownership of our TRSs is limited and our transactions with our TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm's-length terms.***

A REIT may own up to 100% of the stock of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross operating income from hotels that are operated by eligible independent contractors pursuant to management agreements. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT's gross assets may consist of stock or securities of one or more TRSs. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm's-length basis. Our TRS entities are subject to federal, state and local income tax on their taxable income, and their after-tax net income is available for distribution, but is not required to be distributed to us. There can be no assurance that we will be able to comply with the 20% limitation or to avoid application of the 100% excise tax.

***If our leases with our TRS Lessees are not respected as true leases for federal income tax purposes, we would not qualify as a REIT.***

To qualify as a REIT, we are required to satisfy two gross income tests pursuant to which specified percentages of our gross income must be passive income, such as rent. For the rent paid pursuant to the leases with our TRS Lessees, which should constitute substantially all of our gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for federal income tax purposes and must not be treated as service contracts, joint ventures or some other type of arrangement. We plan to structure our leases so that they will be respected as true leases for federal income tax purposes, but there can be no assurance that the Internal Revenue Service ("IRS") will agree with this characterization or will not challenge this treatment, or that a court would not sustain such a challenge. If the leases were

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not respected as true leases for federal income tax purposes, we would not be able to satisfy either of the two gross income tests applicable to REITs and likely would fail to qualify for REIT status.

#### If our hotel operators do not qualify as "eligible independent contractors," we would not qualify as a REIT.
Rent paid by a lessee that is a "related party tenant" of a REIT will not be qualifying income for purposes of the two gross income tests applicable to REITs. We lease all of the hotel properties to our TRS Lessees. A TRS Lessee will not be treated as a "related party tenant," and will not be treated as directly operating the hotel properties to the extent the hotel properties are operated by an "eligible independent contractor." If our hotel property operators do not qualify as "eligible independent contractors," we would not qualify as a REIT. Each of the management companies that enters into a management agreement with our TRS Lessees must qualify as an "eligible independent contractor" under the REIT rules in order for the rent paid to us by our TRS Lessees to be qualifying income for our REIT income test requirements. In order to qualify as an eligible independent contractor, an operator must not own more than 35% of our outstanding shares (by value). In addition, if the operator is a corporation, not more than 35% of the total combined voting power of whose stock (or 35% of the total shares of all classes of whose stock), or, if the operator is not a corporation, not more than 35% of the interest in whose assets or net profits is owned, directly or indirectly, by one or more persons owning 35% or more of our shares of common stock. Complex ownership attribution rules apply for purposes of these 35% thresholds. Although we intend to monitor ownership of our shares of common stock by our hotel property operators and their owners, there can be no assurance that these ownership levels will not be exceeded.

#### The lease of the hotel properties to a TRS is subject to special requirements.
We may lease certain "qualified lodging facilities" to a TRS (or a limited liability company of which a TRS is a member). The TRS in turn will contract with a management company to operate the lodging facility operations at the hotels. The rents paid by a TRS in this structure would be treated as qualifying rents from real property for purposes of the REIT requirements only if (i) they are paid pursuant to an arm's-length lease of a qualified lodging facility property and (ii) the operator qualifies as an "eligible independent contractor" with respect to the property. An operator will qualify as an eligible independent contractor if it meets certain ownership tests with respect to us, and if, at the time the operator enters into the management agreement, the operator is actively engaged in the trade or business of operating qualified lodging facility properties for any person who is not a related person to us or our TRSs. If any of the above conditions are not satisfied, then the rents will not be considered income from a qualifying source for purposes of the REIT rules, which could cause us to incur penalty taxes or to fail to qualify as a REIT.

#### The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders.
Our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders.

#### The ability of our board of directors to change our major policies may not be in your best interest.
Our board of directors determines our major policies, including policies and guidelines relating to our acquisitions, leverage, financing, growth, operations and distributions to stockholders and our continued qualification as a REIT. Our board of directors may amend or revise these and other policies and guidelines from time to time without the vote or consent of our stockholders. Accordingly, our stockholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our shares of common stock and our ability to make distributions to our stockholders.

***We have not established a minimum distribution payment level and we may be unable to generate sufficient cash flows from our operations to make distributions to our stockholders at any time in the future.***

We are generally required to distribute to our stockholders at least 90% of our REIT taxable income each year for us to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), which requirement we currently

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intend to satisfy. To the extent we satisfy the 90% distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. We have not established a minimum distribution payment level, and our ability to make distributions to our stockholders may be adversely affected by the risk factors described herein. Subject to satisfying the requirements for REIT qualification, in general, we intend over time to make regular monthly distributions to our stockholders. Our board of directors has the sole discretion to determine the timing, form and amount of any distributions to our stockholders. Our board of directors makes determinations regarding distributions based upon factors that it deems relevant.

Among the factors that could impair our ability to make distributions to our stockholders are:

● our inability to realize attractive returns on our investments;

● unanticipated expenses that reduce our cash flow or non-cash earnings;

● decreases in the value of the underlying assets; and

● the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.

As a result, no assurance can be given that we will be able to continue to make distributions to our stockholders or that the level of any distributions we do make to our stockholders will achieve a market yield or increase or even be maintained over time. Distributions could be dilutive to our financial results and may constitute a return of capital to our investors, which would have the effect of reducing each stockholder's basis in its shares.

#### If we are deemed to be an investment company under the Investment Company Act of 1940, our stockholders' investment return may be reduced.
The Investment Company Act of 1940, as amended (the "Investment Company Act") requires that any issuer that is beneficially owned by 100 or more persons and that owns certain securities be registered as required under the Investment Company Act. Pursuant to the Operating Partnership Agreement, we are solely responsible for the management and operation of the Operating Partnership and, as a result, our interest in the Operating Partnership has significant incidents of a true general partnership interest and does not fall within the definition of a "security" for purposes of the Investment Company Act. If our interest in the Operating Partnership is deemed to be a security or if the Operating Partnership fails to qualify for an exemption or exclusions from the Investment Company Act, we will be required to register under the Investment Company Act. In the event we are required to register under the Investment Company Act, the returns to our stockholders will likely be significantly reduced.

#### We will be subject to certain risks relating to the Operating Partnership's acceptance of contributed property in exchange for limited partnership interests.
We intend to own all of our assets through the Operating Partnership. The Operating Partnership has accepted, and may in the future accept, contributions of property from certain persons in exchange for limited partnership interests in the Operating Partnership. The acceptance of persons as limited partners in the Operating Partnership involves certain risks including (i) entering into certain indemnification agreements with the contributing limited partners that would cause us to indemnify such persons for tax liability that may be incurred by the contributing limited partners related to the sale of the contributed property, (ii) the fact that the contributing limited partners will have certain voting rights with respect to the Operating Partnership and (iii) the need for the Operating Partnership to allocate debt to contributing limited partners.

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#### We may need to modify our investment portfolio in the future in order to qualify as a REIT, which may adversely affect our performance.
If the market value or income potential of our qualifying real estate assets changes as compared to the market value or income potential of our non-qualifying assets, or if the market value or income potential of our assets that are considered "real estate-related assets" under the Investment Company Act or REIT qualification tests changes as compared to the market value or income potential of our assets that are not considered "real estate-related assets" under the Investment Company Act or REIT qualification tests, whether as a result of increased interest rates, prepayment rates or other factors, we may need to modify our investment portfolio in order to qualify as a REIT or maintain our exclusion from the definition of an investment company. If the decline in asset values or income occurs quickly, this may be especially difficult, if not impossible, to accomplish. This difficulty may be exacerbated by the illiquid nature of many of the assets that we intend to own. We may have to make investment decisions that we otherwise would not make absent REIT and Investment Company Act considerations.

***Under Maryland law, our directors have limited liability if they perform their duties in good faith, in a manner he or she reasonably believes to be in our best interests, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. We are required to indemnify our directors and officers to the maximum extent permitted under Maryland law.***

Maryland law provides that a director will not have any liability in that capacity so long as he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter provides that to the maximum extent permitted by Maryland law, none of our present or former officers or directors will be liable to us or our stockholders for money damages. In addition, the charter and the bylaws require us to indemnify (including advancement of expenses) our directors and officers for actions taken by them in those capacities to the maximum extent permitted by Maryland law. As a result, we and our stockholders may have more limited rights against these persons than might otherwise exist under common law.

***Maryland law prohibits business combinations with certain interested stockholder and their affiliates unless otherwise approved by our board of directors, which could inhibit a change in control.***

Certain provisions of the Maryland General Corporation Law applicable to us prohibit business combinations with (i) any person who beneficially owns, directly or indirectly, 10% or more of the voting power of our outstanding voting stock, which is referred to as an "interested stockholder," (ii) an affiliate or associate of the Company who, at any time within the two-year period prior to the date in question, beneficially owned, directly or indirectly, 10% or more of the voting power of our then outstanding stock, which is also referred to as an interested stockholder or (iii) an affiliate of an interested stockholder. These prohibitions last for five years after the most recent date on which the interested stockholder became an interested stockholder. Thereafter, any business combination with the interested stockholder must be recommended by our board of directors and approved by the affirmative vote of at least 80% of the votes entitled to be cast by holders of our outstanding voting stock and two-thirds of the votes entitled to be cast by holders of shares of our voting stock other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. These requirements could have the effect of inhibiting a change in control even if a change in control were in our stockholders' interest. These provisions of Maryland law do not apply, however, to business combinations that are approved or exempted by our board of directors prior to the time that someone becomes an interested stockholder.

***Provisions contained in Maryland law that are reflected in our charter and bylaws may have anti-takeover effects, potentially preventing investors from receiving a "control premium" for their shares.***

Provisions contained in our charter and bylaws, as well as Maryland corporate law, may have anti-takeover effects that delay, defer or prevent a takeover attempt, which may prevent our stockholder from receiving a "control premium" for their shares. For example, these provisions may defer or prevent tender offers for our common stock or purchases of large blocks of our common stock, thereby limiting the opportunities for our stockholders to receive a premium for their shares over then-prevailing market prices. These provisions include the following:

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● **Ownership limit**. The ownership limit in our charter limits related investors including, among other things, any voting group, from acquiring no more than 9.8% of the value or number of the aggregate, whichever is more restrictive, of our then outstanding shares of common stock, and no more than 9.8% of the value of our then outstanding capital stock (which includes all of our common stock and preferred stock), without the consent of our board of directors.

● **Preferred stock**. Our charter authorizes our board of directors to issue preferred stock in one or more classes and to establish the preferences and rights of any class of preferred stock issued. These actions can be taken without soliciting stockholder approval.

● **Maryland control share acquisition statute**. Maryland law limits the voting rights of "control shares" of a corporation in the event of a "control share acquisition."

#### Federal Income Tax Risks
***If we sell a built-in gain asset within five years of the effective date of our REIT election, we may be subject to corporate-level tax on the built-in gain component.***

Upon our conversion from an entity taxable as a corporation to a REIT, each asset held directly, or indirectly through a partnership, that had a fair market value in excess of its adjusted basis generally will be considered a "built-in gain asset." This built-in gain component will be fixed as of the date of conversion to REIT status. If we sell a built-in gain asset within five years of the effective date of our REIT election, we will (subject to certain exceptions) be subject to a corporate-level tax on the built-in gain component. To the extent that we are required to pay federal, state and local taxes, we will have less cash available for distributions.

#### Failure to qualify as a REIT would reduce our net earnings available for investment or distribution.
Our qualification as a REIT will depend upon our ability to meet requirements regarding our organization and ownership, distributions of our income, the nature and diversification of our gross income (an annual test) and assets (tested as of the end of each calendar quarter) and other tests imposed by the Code. If we fail to qualify as a REIT for any taxable year after electing REIT status, we will be subject to federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status. Losing our REIT status would reduce our net earnings available for investment or distributions to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends-paid deduction and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.

***Generally, ordinary dividends payable by REITs do not qualify for reduced U.S. federal income tax rates.***

Currently, the maximum tax rate applicable to qualified dividend income payable to certain non-corporate U.S. stockholders, is 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rates. REIT dividends that are not designated as qualified dividend income or capital gain dividends are taxable as ordinary income. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividend income could cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends. Commencing with taxable years beginning on or after January 1, 2018 and continuing through 2025, non-corporate U.S. taxpayers may be entitled to claim a deduction in determining their taxable income of up to 20% of qualified REIT dividends (dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us). In addition, Treasury Regulations impose a minimum holding period for the 20% deduction that was not set forth in the Code. Under the Treasury Regulations, in order for a REIT dividend with respect to a share of REIT stock to be treated as a qualified REIT dividend, the U.S. stockholder (i) must have held the share for more than 45 days during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend and (ii) cannot have been under an obligation to make related payments with respect to positions in substantially similar or related property, e.g., pursuant to a short sale. Prospective investors are urged to consult with their tax advisors regarding the effect of this change on their effective tax rate with respect to REIT dividends.

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***Even if we qualify as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to our stockholders.***

Even if we qualify as a REIT for federal income tax purposes, we may still be subject to some federal, state and local taxes on our income or property. For example:

● In order to qualify as a REIT, we must distribute annually at least 90% of our taxable income to our stockholders (which is determined without regard to the dividends-paid deduction or net capital gain). To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on the undistributed income. We intend to make distributions to our stockholders to comply with the REIT requirements of the Code.

● We will be subject to a 4.0% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

● If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.

● If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% "prohibited transaction" tax unless such sale were made by one of our taxable REIT subsidiaries or we qualified for a "safe harbor" under the Code.

● If we hold or acquire assets when we are taxable as a corporation prior to our qualification as a REIT, such assets when held by us as a REIT may be subject to tax if sold in the five-year period following the acquisition of such assets.

***The ownership limits that apply to REITs, as prescribed by the Code and by the charter, may inhibit market activity in our shares of common stock and restrict our business combination opportunities.***

In order for us to qualify as a REIT, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year after the first year for which we elect to qualify as a REIT. Additionally, at least 100 persons must beneficially own our capital stock during at least 335 days of a taxable year (other than the first taxable year for which we elect to be taxed as a REIT). The charter, with certain exceptions, authorizes our board of directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. The charter also provides that, unless exempted by the Board, no person may own more than 9.8% by value or number of shares, whichever is more restrictive, of our outstanding shares of common stock, or 9.8% by value or number of shares, whichever is more restrictive, of our outstanding capital stock. Our board of directors may, in its sole discretion, subject to such conditions as it may determine and the receipt of certain representations and undertakings, prospectively or retroactively, waive the ownership limit or establish a different limit on ownership, or excepted holder limit, for a particular stockholder if the stockholder's ownership in excess of the ownership limit would not result in our being "closely held" under Code Section 856(h) or otherwise failing to qualify as a REIT. These ownership limits could delay or prevent a transaction or a change in control of the Company that might involve a premium price for our shares of common stock or otherwise be in the best interest of our stockholders.

#### REIT distribution requirements could adversely affect our ability to execute our business plan.
To qualify as a REIT, we must distribute to our stockholders each year 90% of our REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gain). Further, we must distribute 100% of our REIT taxable income in order to avoid a corporate level tax. From time to time, we may generate taxable income greater than our income for financial reporting purposes, or our taxable income may be greater than our cash flow available for distribution to our stockholders (for example, where a borrower defers the payment of interest in cash pursuant to a contractual right or otherwise). If we do not have other funds available in these situations, we could be required to borrow funds, sell investments at disadvantageous prices or find another alternative source of funds to make distributions sufficient

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to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4.0% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

#### Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our shares of common stock. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance. In particular, we must ensure that at the end of each calendar quarter, at least 75% of the value of our gross assets consists of cash, cash items, government securities and qualified real estate assets. The remainder of our investment in securities (other than government securities, securities that constitute qualified real estate assets and securities of our TRSs) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our gross assets (other than government securities, securities that constitute qualified real estate assets and securities of our TRSs) can consist of the securities of any one issuer, and no more than 20% of the value of our total gross assets can be represented by the securities of one or more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

#### The tax on prohibited transactions will limit our ability to engage in transactions that would be treated as sales for federal income tax purposes.
A REIT's net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of assets, other than foreclosure property, deemed held primarily for sale to customers in the ordinary course of business (subject to a safe harbor under the Code for certain sales). It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through taxable REIT subsidiaries. However, to the extent that we engage in such activities through taxable REIT subsidiaries, the income associated with such activities may be subject to full corporate income tax.

***Non-United States investors may be subject to FIRPTA on the sale of its shares if we are unable to qualify as a "domestically controlled" REIT.***

A non-United States person disposing of a United States real property interest, including shares of a United States corporation whose assets consist principally of United States real property interests, is generally subject to a tax under the Foreign Investment in Real Property Tax Act, known as FIRPTA, on the gain recognized on the disposition of such interest. Note that "qualified foreign pension funds" and certain other qualified foreign stockholders may be generally exempt from FIRPTA. In addition, FIRPTA does not apply, however, to the disposition of shares in a REIT if the REIT is a "domestically controlled" REIT. A REIT is a domestically controlled REIT if, at all times during a specified testing period (the continuous five-year period ending on the date of disposition or, if shorter, the entire period of the REIT's existence), less than 50% in value of its shares is held directly or indirectly by non-United States holders. We cannot assure you that we will qualify as a domestically controlled REIT. Final Treasury regulations effective April 25, 2024 (the "Final Regulations") modify the existing prior tax guidance relating to the manner in which we determine whether we are a domestically controlled REIT. These regulations provide a look through rule for our stockholders that are non-publicly traded partnerships, non-public REITs, non-public regulated investment companies, or domestic "C" corporations owned 50% or more directly or indirectly by foreign persons ("foreign-controlled domestic corporations") and treat "qualified foreign pension funds" and "international organizations" as foreign persons for this purpose. The look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will not apply to a REIT for a period of up to ten years if the REIT is able to satisfy certain requirements during that time, including not undergoing a significant change in its ownership and not acquiring a significant amount of new U.S. real property interests, in each case since April 24, 2024, the date the Final Regulations were issued. If a REIT fails to satisfy such requirements during the ten-year period, the

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look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will apply to such REIT beginning on the day immediately following the date of such failure. We cannot predict when we will commence being subject to such look-through rule in the Final Regulations and we may not be able to satisfy the applicable requirements for the duration of the ten-year period. Prospective investors are urged to consult with their tax advisors regarding the application and impact of these rules. If we were to fail to qualify as a domestically controlled REIT, and if a separate exemption did not apply, gain realized by a non-United States investor on a sale of its shares would be subject to FIRPTA unless our shares of common stock were traded on an established securities market and the non-United States investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock.

#### Complying with the REIT requirements may limit our ability to hedge effectively.
The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate, inflation and/or currency risks, including gain from the disposition of certain hedging transactions, will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the instrument hedges (i) interest rate risk on liabilities incurred to carry or acquire real estate, (ii) risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the REIT 75% or 95% gross income tests or (iii) risks associated with the extinguishment of certain indebtedness or the disposition of certain property related to prior hedging transactions described in (i) or (ii) above and each such instrument is properly identified under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally constitute nonqualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous, which could result in greater risks associated with interest rate or other changes than we would otherwise incur.

***If we were considered to actually or constructively pay a "preferential dividend" to certain of our stockholders, our status as a REIT could be adversely affected.***

In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. For so long as we are not a publicly offered REIT (defined below), in order for distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions must not be "preferential dividends." A dividend is generally not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the preferences among different classes of stock as set forth in the REIT's organizational documents. There is no de minimis exception with respect to preferential dividends. However, the preferential dividend rules do not apply to a "publicly offered REIT." A publicly offered REIT is defined as a REIT that is required to file annual and periodic reports with the SEC under the Securities and Exchange Act of 1934. We are required to file annual and periodic reports with the SEC.

#### Changes made to the U.S. tax laws could have a negative impact on our business.
The federal income tax laws, regulations, and administrative interpretations applicable to REITs are subject to ongoing review and may be amended at any time. Legislative, administrative, or judicial changes to U.S. tax laws, potentially with retroactive effect, could materially and adversely affect our business, financial condition, results of operations, cash flows, or the tax treatment of an investment in our common stock.

The U.S. Congress, the U.S. Treasury Department, and the Internal Revenue Service regularly consider and implement changes to federal tax policy, including changes affecting the taxation of real estate, REIT qualification requirements, income tax rates, deductions, credits, and other tax benefits. We cannot predict whether, when, or to what extent any such changes will be enacted or become effective. Future tax legislation or regulatory guidance could increase our tax liability, reduce cash available for distribution to stockholders, limit our ability to maintain REIT qualification, or otherwise adversely affect us or our stockholders.

Prospective and existing stockholders are encouraged to consult their own tax advisors regarding the potential impact of current and future legislative, regulatory, or administrative developments on an investment in our common stock.

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**Retirement Plan Risks**

***If the fiduciary of an employee benefit plan fails to meet the fiduciary requirements and other standards under ERISA and the Code as a result of investment in our shares of common stock, the fiduciary could be subject to criminal and civil penalties.***

Special considerations apply to (i) employee benefit plans subject to ERISA, (ii) plans, IRAs and other arrangements subject to Code Section 4975 (such as an individual retirement account ("IRA")) and (iii) entities deemed under ERISA to hold the "plan assets" of any such employee benefit plans or plans that are investing in our shares of common stock. Fiduciaries investing the assets of such a plan in our shares of common stock should, among other things, consider the following:

● whether the investment is in accordance with the documents and instruments governing such plan;

● the definition of "plan assets" under ERISA and the impact thereof on the plan's investment in the Company;

● whether the investment satisfies the diversification requirements of Section 404(a)(1)(C) of ERISA (or other applicable law);

● whether, under Section 404(a)(1)(B) of ERISA (or other applicable law), the investment is prudent, considering the nature of an investment in the Company and our compensation structure and the fact that there is not expected to be a market created in which our shares of common stock can be sold or otherwise disposed of;

● that we have a limited history of operations;

● whether we or any of our affiliates are a "party-in-interest" (within the meaning of Section 3(14) of ERISA) or "disqualified person" (within the meaning of Code Section 4975) with respect to the plan;

● the need to annually value our shares of common stock; and

● whether an investment in the Company will cause the plan to recognize unrelated business taxable income.

With respect to the annual valuation requirements described above, we will provide an estimated value for our shares of common stock annually beginning after the Initial Valuation Date. We can make no claim whether such estimated value will or will not satisfy the applicable annual valuation requirements under ERISA and the Code. The Department of Labor or the IRS may determine that a plan fiduciary is required to take further steps to determine the value of our shares of common stock. In the absence of an appropriate determination of value, a plan fiduciary may be subject to damages, penalties or other sanctions.

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Code may result in the imposition of criminal and civil penalties and could subject the fiduciary to claims for damages or for equitable remedies. In addition, if an investment in our shares of common stock constitutes a prohibited transaction under ERISA or the Code, the fiduciary who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. In the case of a prohibited transaction involving an IRA owner, the IRA may lose its tax-exempt status and thus, the entire value of the IRA would be considered to be distributed and taxable to the IRA sponsor. Plan fiduciaries should consult with their own legal advisors before making an investment in our shares of common stock.

#### Item 1B. Unresolved Staff Comments.
None

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**Item 1C. Cybersecurity.**

**Risk Management and Strategy**

We have developed and implemented a cybersecurity risk management policy intended to protect the confidentiality, integrity and availability of our critical systems and information. Our policy establishes the framework for managing cybersecurity risks and outlines the measures and protocols to protect our information systems. Our risk management and strategy is managed by our third-party IT Management Service Provider, Network Center, Inc. ("Network Center") with oversight by our VP of Operations. Our policy applies to all employees, contractors, and all third-party partners who have access to our information systems. Our cybersecurity risk management policy is integrated into our overall enterprise risk management processes.

Our risk management policy includes continual monitoring by Network Center, as they manage our technical defenses. Risk assessments and penetration testing are performed on a quarterly basis to identify and mitigate potential threats. Procedures have been implemented for identifying, evaluating and addressing vulnerabilities. Additionally, vulnerability assessments are performed monthly by Network Center. An additional part of our risk management strategy is having a clear process for reporting cybersecurity incidents and the development and maintenance of an incident response plan to address and mitigate the impact of cybersecurity incidents.

A key component of our risk management and strategy surrounds data protection. We have implemented strict access controls for each individual employee to ensure only authorized personnel can access sensitive and confidential data. All digital communication is pre-screened for potentially malicious actions through a dedicated email security provider. For additional protection, we have implemented multi-factor authentication along with email encryption to ensure data is protected while at rest and in transit. We are also protected through a multilayered approach to security through the ESET Protection Platform, which provides formidable defense through cyber threat prevention, detection and response.

In addition, we provide regular cybersecurity training to all employees on a quarterly basis and conduct ongoing awareness programs to keep employees informed about cybersecurity best practices. Employees have been trained, enabling them to detect and report on any malicious intrusions or social engineering attempts to infiltrate our systems. They are also regularly trained, tested and reported on through KnowB4 spear-phishing email campaigns to ensure our training is effective.

We maintain cyber liability insurance coverage through our insurance provider that we believe is appropriate for our operations.

**Governance**

Our board of directors is responsible for overseeing our policies and practices related to corporate governance including cybersecurity risks. On an annual basis, management receives a report from Operations Management on our cybersecurity threat risk, management processes, and strategies. In addition to annual meetings, our board of directors, management and Audit Committee are notified of any cybersecurity incident, its threat level and the response. The threat level and response are evaluated and documented in a report by Operations leadership and our IT Services Provider. Based on our board of directors and Audit Committee review of the incident report, they determine if the findings require disclosure to the SEC.

The Company's Operations Management team, led by the Chief Operating Officer, is responsible for assessing and managing cybersecurity risks on a day-to-day basis. The team oversees the Company's IT Services Provider, who manages network security, access controls, and incident response protocols. The Chief Operating Officer reports cybersecurity matters to the full board of directors and Audit Committee on at least an annual basis, and on an ad hoc basis in the event of a cybersecurity incident. Members of the Operations Management team have experience overseeing information technology systems and cybersecurity programs in the hospitality industry.

Our cyber security policies and procedures are reviewed and updated annually or as needed to address any emerging threats and changes in regulatory requirements.

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To date, there have been no confirmed cyber security breaches, unauthorized intrusions or threats detected within our mainframe operating systems, our encrypted e-mail servers, or our advanced firewall protections, and we have not identified risks from known cybersecurity threats, that have materially affected or that are reasonably likely to materially affect our business. However, future incidents could have a material impact on our business strategy, results of operations or financial condition. For additional discussion of the risks posed by cybersecurity threats, see "Item 1A. Risk Factors – We and our hotel managers and franchisors rely on information technology in our operations, and any material failure, inadequacy, interruption, cyber-attack or security failure of that technology could harm our business."

#### Item 2. Properties.
Our principal executive offices are located at 1635 43rd Street South, Suite 205, Fargo, North Dakota 58103. Our telephone number is (701) 630-6500. We lease our offices from an unrelated third party.

#### Hotel Properties
As of December 31, 2025, we consolidated fourteen hotel properties, consisting of thirteen hotel properties owned by us and an equity and profits interest in the parent of the entity which holds as leasehold interest in one hotel property. The following table provides summary information regarding the hotel properties owned by us as of December 31, 2025:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**Hotel** | <br>**Property Type** | <br>**Location** | <br>**Date**<br>**Purchased** | **Number**<br>**of Guest**<br>**Rooms** | <br>**Purchase**<br>**Price** | <br>**Transaction**<br>**Costs** | <br>**Total**<br>**Purchase Price** | <br>**%** <br>**Interest** |
| Holiday Inn Express<br>(the "Cedar Rapids Property) | Limited-Service | Cedar Rapids, IA | November 30, 2018 | 83 | $7700000 | $158333 | $7858333 | 100% |
| Hampton Inn<br>(the "Eagan Property") | Limited-Service | Eagan, MN | June 19, 2019 | 122 | 13950000 | 278333 | 14228333 | 100% |
| Home2 Suites<br>(the "Lubbock Home2 Property") | Extended-Stay | Lubbock, TX | December 30, 2019 | 100 | 14150000 | 284776 | 14434776 | 100% |
| Fairfield Inn & Suites <br>(the "Lubbock Property") | Limited-Service | Lubbock, TX | January 8, 2020 | 101 | 15150000 | 496431 | 15646431 | 100% |
| Homewood Suites<br>(the "Southaven Property") | Extended-Stay | Southaven, MS | February 21, 2020 | 99 | 20500000 | 445090 | 20945090 | 100% |
| Courtyard by Marriott <br>(the "Aurora Property") | Select-Service | Aurora, CO | February 4, 2021 | 141 | 23610000 | 458129 | 24068129 | 100% |
| Holiday Inn <br>(the "El Paso HI Property") | Select-Service | El Paso, TX | May 12, 2021 | 175 | 10300000 | 361019 | 10661019 | 100% |
| Hilton Garden Inn <br>(the "Houston Property") | Select-Service | Houston, TX | August 3, 2021 | 182 | 19910000 | 918353 | 20828353 | 100% |
| Sheraton Hotel <br>(the "Northbrook Property") | Full-Service | Northbrook, IL | December 3, 2021 | 160 | 11400000 | 340005 | 11740005 | 100% |
| Courtyard by Marriott <br>(the "El Paso Airport Property") | Select-Service | El Paso, TX | February 8, 2022 | 90 | 15120000 | 333234 | 15453234 | 100% |
| Fairfield Inn & Suites <br>(the "Lakewood Property") | Limited-Service | Lakewood, CO | March 29, 2022 | 142 | 18800000 | 862117 | 19662117 | 100% |
| Residence Inn<br>(the "Fort Collins Property") | Extended-Stay | Fort Collins, CO | August 3, 2022 | 113 | 15800000 | 546009 | 16346009 | 100% |
| Holiday Inn Express<br>(the "Wichita Property") | Limited-Service | Wichita, KS | December 22, 2022 | 84 | 7400000 | 234310 | 7634310 | 100% |
|  |  |  |  | 1592 | $193790000 | $5716139 | $199506139 |  |

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On August 10, 2022, we acquired a 24.9% equity and profits interest in High Desert Garden Holdings, LLC, which is the parent of the entity which holds a leasehold interest in the Hilton Garden Inn, located in El Paso, Texas (the "El Paso University Property") in exchange for a capital contribution of $3.2 million. The El Paso University Property is a select-service hotel with 153 guest rooms. See Note 3 "Investment In Hotel Properties" of the notes to the consolidated financial statements included as part of this Annual Report on Form 10-K for additional information regarding this transaction.

For a description of the debt associated with each of these hotel properties, see Part II. Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt."

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#### Management Agreements
***Hotel Equities Agreement***

As of December 31, 2025, eight of our hotel properties were subject to management agreements with Hotel Equities with an initial term expiring on December 31 of the fifth full calendar year following the effective date of the agreement. The agreement will automatically renew for successive five-year periods unless terminated earlier in accordance with its terms. These properties were previously managed by NHS. On February 10, 2025, we terminated the management agreements with NHS and entered into new agreements with Hotel Equities Group, LLC ("Hotel Equities"). See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations – Subsequent Events".

***Vista Host Agreement***

As of December 31, 2025, our Southaven Property was subject to a management agreement with Vista Host Inc. ("Vista") with an initial term expiring on February 21, 2025 and automatically renewed for additional successive terms of five years each unless terminated earlier in accordance with its terms.

***Aimbridge Agreement***

As of December 31, 2025, each of our Houston Property, El Paso Property, El Paso Airport Property and El Paso University Property was subject to a management agreement with Interstate Management Company, LLC ("Aimbridge"). The Aimbridge agreement for the Houston Property had an initial term expiring on August 3, 2024 and automatically renewed for additional successive terms of one year each unless terminated earlier in accordance with its terms. The Aimbridge agreement for the El Paso Airport Property and the El Paso University Property has an initial term expiring on February 8, 2027 and August 10, 2027, respectively, both of which will automatically renew for one (1) year periods unless terminated earlier in accordance with its terms. The Aimbridge agreement for the El Paso Property has an initial term expiring February 28, 2028, which will automatically renew for one (1) year periods unless terminated earlier in accordance with its terms. The

***KAJ Agreement***

As of December 31, 2025, the Wichita Property was subject to a management agreement with KAJ Hospitality Inc. ("KAJ"), each with an initial term expiring December 22, 2027, of which automatically renews for successive one-year periods, unless terminated in accordance with its terms.

***Franchise Agreements***

As of December 31, 2025, all of our hotel properties were operated under franchise agreements with initial terms of 10 to 18 years. Franchise agreements allow the hotel properties to operate under the respective brands. Pursuant to the franchise agreements, we pay a royalty fee of 5% to 6% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs. Certain hotels are also charged a program fee of generally between 3% and 4% of room revenue. We paid an initial fee of $50,000 to $175,000 at the time of entering into each franchise agreement which is being amortized over the term of each agreement.

#### Item 3. Legal Proceedings.
**We may from time to time be a party to legal proceedings which arise in the ordinary course of our business. See Note 12 "Commitments and Contingencies" of the notes to the consolidated financial statements included as part of this Annual Report on Form 10-K for a discussion of legal proceedings and governmental authority inquiries that were ongoing during the year ended December 31, 2025. As disclosed in Note 14 "Subsequent Events," in January 2026, a receiver was appointed over the El Paso Property in connection with the default on the mortgage loan secured by that property. The Company is cooperating with the receiver and evaluating its options with respect to the property. Other than the foregoing, management is not aware of any current or pending legal proceedings to which we or any of our subsidiaries are a party or to which any of our property is subject, the outcome of which would, in management's judgment based on information currently available, have a material adverse effect on our results of operations or financial condition, nor is management** 

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#### aware of any such legal proceedings contemplated by governmental authorities.

#### Item 4. Mine Safety Disclosures.

#### Not applicable .

#### PART II

#### Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

#### Market Information
No public market currently exists for our shares of common stock, and we currently have no plans to list our shares on a national securities exchange.

#### Share Valuation
We are not required to establish an updated net asset value of the Company ("Company NAV") or an estimated net asset value per share ("Share NAV") in accordance with FINRA Rules 5110 and 2231 as we are not conducting any public offering of our shares. The initial Share NAV was $10.00, the price at which we offered our shares in the Offering from the inception of the Offering through December 31, 2022, which was determined by our board of directors and bears no relationship to any established criteria of value such as book value or earnings per share, is not based on our past earnings, and does not reflect current market value for our assets. Our board of directors approved a revised Company NAV as of December 31, 2022, and a Share NAV of $10.57 per share effective January 6, 2023, determined by dividing the Company NAV by the number of then-outstanding shares of the Company's common stock. The Company NAV and Share NAV were determined by our board of directors taking into account appraisals of the Company's real estate properties and other factors deemed relevant to our board of directors. The Advisor administers our valuation policy and is responsible for the oversight of the valuation process, including the review and approval of the valuation and appraisal processes and methodologies used to determine our Company NAV and Share NAV, the consistency of the valuation and appraisal methodologies with real estate industry standards and practices, and the reasonableness of the assumptions used in the valuations and appraisals.

At any time that a new Company NAV is calculated as provided above prior to the termination of the Offering, we intend to adjust the Offering price of the shares in an amount equal to the Company NAV divided by the number of outstanding shares. Our board of directors will determine a new Share NAV at such times and in conjunction with our determination of the Company NAV, and we will report the new Share NAV to our stockholders.

#### Equity Compensation Plans
Our board of directors has approved the adoption of a phantom stock plan (the "Phantom Stock Plan") for the Company. However, the specific terms of the Phantom Stock Plan have not yet been determined and approved by our board. We intend for the shares designated pursuant to the Phantom Stock Plan (the "Phantom Shares") to be allocated to the Advisor, the TRS subsidiaries and NHS for distribution of the proceeds to their respective employees and service providers in accordance with their compensation plans, however, Corey Maple, Norman Leslie and Samuel Montgomery will not receive any Phantom Shares pursuant to the Phantom Stock Plan.

#### Stockholder Information
As of the date of this filing, we had 10,017,042 shares of our common stock outstanding, held by a total of 1,364 stockholders.

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#### Distribution Information
During our Offering, when we may raise capital more quickly than we acquire income-producing assets, and from time to time after the Offering, we may not pay distributions solely from our cash flow from operating activities, in which case distributions may be paid in whole or in part from proceeds from the Offering or debt financing.

Distributions declared and distributions paid during 2025 and 2024, aggregated by quarter, are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> |
| <br>**Period** | <br>**Distributions**<br>**Declared** <sup>(1)</sup> | **Distribution**<br>**Declared Per**<br>**Share** <sup>(1) (2)</sup> | **Cash** | **Reinvested** | **Total** |
| First Quarter 2025 | $— | $— | $— | $— | $— |
| Second Quarter 2025 |  |  |  |  |  |
| Third Quarter 2025 |  |  |  |  |  |
| Fourth Quarter 2025 |  |  |  |  |  |
|  | $— | $— | $— | $— | $— |
|  |  | **Distribution** |  |  |  |
|  | **Distributions** | **Declared Per** | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> |
|  | **Declared** <sup>(1)</sup> | **Share** <sup>(1) (2)</sup> | **Cash** | **Reinvested** | **Total** |
| First Quarter 2024 | $306065 | $0.029 | $903061 | $109218 | $1012279 |
| Second Quarter 2024 | 1181705 | 0.113 | 820706 | 176589 | 997295 |
| Third Quarter 2024 | 876877 | 0.083 | 1192192 | 193549 | 1385741 |
| Fourth Quarter 2024 |  |  | (1162) | 1162 |  |
|  | $2364648 | $0.225 | $2914797 | $480518 | $3395315 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) No distributions were declared for the period of January 1, 2024 through February 29, 2024. Distributions for the period from March 1, 2024 through August 31, 2024 were payable to each stockholder as 100% in cash. No distributions were declared for the period of September 1, 2024 through December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Assumes share was issued and outstanding each day that was a record date for distributions during the period presented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) In general, distributions for all record dates of a given month during such period are paid on or about the tenth day of the following month. No distributions were declared for the period of January 1, 2024 through February 29, 2024, but resumed for the period of March 1, 2024 through August 31 2024. No distributions were declared for the period of September 1, 2024 through December 31, 2025

For the year ended December 31, 2025, we paid no distributions. For the year ended December 31, 2024, we paid aggregate distributions of $3.4 million, including $2.9 million of distributions paid in cash and $0.5 million of distributions reinvested through our dividend reinvestment plan. Our net loss for the years ended December 31, 2025 and 2024, was $34.4 million and $29.9 million, respectively. Net cash flows used in operations for the years ended December 31, 2025 and 2024, were $3.7 million and $0.9 million, respectively. We funded 100% of our distributions paid, which includes cash distributions and distributions reinvested by stockholders, with proceeds from the Offering.

To the extent that we pay distributions from sources other than our cash flows from operating activities, we will have less funds available for the acquisition of real estate investments, the overall return to our stockholders may be reduced, and subsequent investors will experience dilution.

Going forward we expect our board of directors to continue to authorize and declare distributions, if at all, based on daily record dates. Distributions will be determined by our board of directors based on our financial condition and such other factors as our board of directors deems relevant, and may be paid in cash or in shares pursuant to the DRIP. Our board of directors has not pre-established a percentage rate of return for cash distributions or stock distributions to stockholders. We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders.

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#### Unregistered Sales of Equity Securities
***Initial Offering***

On June 1, 2018, we commenced an offering (the "Offering") of up to $100,000,000 in shares of our common stock, which amount was increased to $150,000,000 in shares of our common stock in December 2021. We are offering these securities in reliance upon exemptions from the registration requirements provided by Section 4(a)(2) of the Securities Act and Regulation D under the Securities Act relating to sales not involving any public offering. The securities are being offered and sold only to purchasers who are "accredited investors," as defined in Rule 501 of Regulation D of the Securities Act, and without the use of general solicitation, as that concept is embodied in Regulation D. In addition to sales of common stock for cash, we have adopted a dividend reinvestment plan, which permits stockholders to reinvest their distributions back into the Company. Except as otherwise provided in the offering memorandum, we are currently offering the shares in the private offering at an offering price of $10.57 per share, with shares purchased in our dividend reinvestment plan at an offering price of $10.04 per share. During the year ended December 31, 2025, we sold 4,568 shares of common stock in the private offering, resulting in gross offering proceeds of $48,280. During the year ended December 31, 2025, aggregate selling commissions of $7,964 and marketing and diligence allowances and other wholesale selling costs and expenses of $1.3 million were paid in connection with the private offering. During the year ended December 31, 2024, aggregate selling commissions of $1,101 and marketing and diligence allowances and other wholesale selling costs and expenses of $1.6 million were paid in connection with the private offering.

***GO II Units Offering***

On April 7, 2023, the Operating Partnership commenced a private placement offering of its Series GO II LP Units, with a maximum offering of $30,000,000, which could be increased to $60,000,000 in the sole discretion of LF REIT III as the General Partner of the Operating Partnership, (the "GO II Unit Offering") to accredited investors only, pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended. The Series GO II LP Units are being offered until the earlier of (i) the sale of $30,000,000 in Series GO II LP Units (which could be increased to $60,000,000 in the Company's sole discretion), (ii) March 31, 2024, which date may be extended for two 1-year extensions until March 31, 2026 in the sole discretion of the Operating Partnership or (iii) the Operating Partnership terminates the GO II Unit Offering at an earlier date in its sole discretion. On March 24, 2025, our board of directors extended the term of the GO II Unit Offering to March 31, 2026. The Operating Partnership is offering these securities in reliance upon exemptions from the registration requirements provided by Section 4(2) of the Securities Act and Regulation D under the Securities Act relating to sales not involving any public offering. The securities are being offered and sold only to purchasers who are "accredited investors," as defined in Rule 501 of Regulation D of the Securities Act, and without the use of general solicitation, as that concept is embodied in Regulation D. Subject to restrictions on ownership in order to comply with rules governing real estate investment trusts and the terms of the partnership agreement of the Operating Partnership, each holder of Series GO II LP Units (a "Series GO II Limited Partner") will have the right to exchange its Series GO II LP Units for, at the option of the Operating Partnership, an equivalent number of shares of common stock of the Company ("Common Shares"), or cash equal to the fair market value of the Common Shares (the "Cash Amount") which would have otherwise been received pursuant to such exchange; provided, however, that until such time as the Series GO II LP Units have been allocated Net Income (including book-up income) such that their positive Capital Account balance is equal to the net asset value of the Company's shares of common stock (the "Share NAV"), the exchange right will be limited and the Series GO II Limited Partners will only be entitled to receive a pro rata portion of a REIT Share equal to the positive Capital Account balance of the Series GO II LP Unit divided by the Share NAV. The exchange right is not available until all of the following have occurred (the "Exchange Date"): (i) the Common Shares are listed on a national securities exchange, the sale of all or substantially all of the GP Units and Interval Units held by the Company or any sale, exchange or merger of the Company or the Operating Partnership or, as determined in the sole discretion of the Company, the occurrence of a similar event; (ii) the Series GO II Limited Partner has held its Series GO II LP Units for at least one year; (iii) the Common Shares to be issued pursuant to the redemption have been registered with the SEC and the registration statement has been declared effective, or an exemption from registration is available; and (iv) the exchange does not result in a violation of the shareholder ownership limitations set forth in the Company's articles of incorporation. Notwithstanding the above, the Company may waive any of the requirements above in its sole discretion other than (ii) or (iv). During the year ended December 31, 2025, the Operating Partnership issued 388,185 Series GO II LP Units. During the year ended December 31, 2025, aggregate selling commissions were $52,025 and marketing and diligence allowances and other wholesale selling costs and expenses of $4,814 were paid in connection

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with the GO II Unit Offering. During the year ended December 31, 2024, the Operating Partnership issued 377,548 Series GO II LP Units. During the year ended December 31, 2024, aggregate selling commissions were $47,570 and marketing and diligence allowances and other wholesale selling costs and expenses of $9,168 were paid in connection with the GO II Unit Offering. As of December 31, 2025, the Operating Partnership had issued and sold 895,520 Series GO II LP Units and received gross aggregate proceeds of $6.7 million.

***Series P Preferred Units***

On December 24, 2024, the Operating Partnership commenced a private offering for the purchase of up to $50,000,000 (which may be increased to $75,000,000 in the sole discretion of the Company) in Series P Preferred Units at a purchase price equal to $10,000 per Series P Preferred Unit to accredited investors only, pursuant to a confidential private placement memorandum. The Operating Partnership is offering these securities in reliance upon exemptions from the registration requirements provided by Section 4(2) of the Securities Act and Rule 506(c) of Regulation D under the Securities Act relating to sales not involving any public offering. The securities are being offered and sold only to purchasers who are "accredited investors," as defined in Rule 501 of Regulation D of the Securities Act, whose accredited investor status has been verified by us. Under Rule 506(c), general solicitation and advertisement of offerings is permitted, however, all purchasers in the offering must be accredited investors and the Operating Partnership must take reasonable steps to verify the accredited investor status of each purchaser, among other requirements. The first $1,250,000 of net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be retained by the Operating Partnership. If the Operating Partnership receives more than $1,250,000 of net proceeds from the sale of the Series P Preferred Units, the next $1,047,000 of net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to (i) pay accrued interest on the Fort Collins Loans and the Courtyard Aurora Loan through December 31, 2024 at or prior to the time of refinancing such loans or (ii) after the time of such refinancing, redeem outstanding Series A Preferred Units issued in exchange for the contribution of such loans. If the Operating Partnership receives more than $2,297,000 of net proceeds from the sale of the Series P Preferred Units, the next $7,550,000 of net proceeds received by the Operating Partnership from the sale of Series P Preferred Units shall be retained by the Operating Partnership. If the Operating Partnership receives more than $9,847,000 of net proceeds from the sale of the Series P Preferred Units, (A) until March 24, 2025, 50% of such additional net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to redeem the Series A Preferred Units and the remaining 50% shall be retained by the Operating Partnership, and (B) from and after March 24, 2025, 75% of such additional net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to redeem the Series A Preferred Units and the remaining 25% shall be retained by the Operating Partnership. As of December 31, 2025, the Operating Partnership has issued and sold 155 Series P Preferred Units, resulting in the receipt of gross offering proceeds of $1.6 million as of the date of this filing.

***Series A Preferred Units***

On December 24, 2024, the Operating Partnership issued 4,067,409 Series A Preferred Units of the Operating Partnership to Access Point Financial, LLC in exchange for all of the remaining $4.6 million of unpaid principal and interest on the Sheraton Northbrook Loan as of December 24, 2024, pursuant to the terms of a loan contribution agreement between the Operating Partnership and the lender. The Series A Preferred Units were issued in reliance upon exemptions from the registration requirements provided by Section 4(2) of the Securities Act and Regulation D under the Securities Act relating to sales not involving any public offering. The securities were sold to an "accredited investor," as defined in Rule 501 of Regulation D of the Securities Act, and without the use of general solicitation, as that concept is embodied in Regulation D.

#### Share Repurchase Plan
The board of directors has adopted a share repurchase plan that may enable our stockholders to have their shares repurchased in limited circumstances. In its sole discretion, the board of directors could choose to terminate or suspend the plan or to amend its provisions without stockholder approval. The repurchase plan may be reviewed and modified by the board of directors as it deems necessary in its sole discretion. The following discussion summarizes the principal terms of our share repurchase plan.

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#### Repurchase Price
Under certain circumstances and subject to the death repurchase described below, the prices at which we will repurchase shares under our repurchase plan are as follows:

● For those shares held by the stockholder for at least one year, 92% of the current share NAV;

● For those shares held by the stockholder for at least two years, 96% of the current share NAV; and

● For those shares held by the stockholder for at least three years, 100% of the current share NAV.

For purposes of determining the time period a stockholder has held each share, the time period begins as of the date the stockholder acquired the share, provided that shares purchased by the stockholder pursuant to our dividend reinvestment plan will be deemed to have been acquired on the same date as the initial shares to which the dividend reinvestment plan shares relate. The board of directors may, in its sole discretion, reject any request for repurchase and may, upon notice to the stockholders, amend, suspend or terminate the repurchase program at any time.

#### Limitations on Repurchase
There are several limitations on our ability to repurchase shares under our share repurchase plan:

● Unless the shares are being repurchased in connection with a stockholder's death, we may not repurchase shares unless the stockholder has held the shares for at least one year.

● During any calendar year, we will repurchase only the number of shares that we could purchase with the amount of net proceeds from the sale of shares under our dividend reinvestment plan during the prior calendar year. However, we may increase or decrease the funding available for the repurchase of shares pursuant to our share repurchase plan upon 10 business days' notice to our stockholders.

● During any calendar year, we will limit the total shares repurchased to no more than 5.0% of the weighted-average number of shares outstanding as of December 31 of the prior calendar year.

● We have no obligation to repurchase shares if the repurchase would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

● We will not repurchase shares if the board of directors determines, in its sole discretion, that the repurchase price determined in accordance with the terms of our share repurchase plan exceeds the then current fair market value of the shares to be repurchased.

#### Procedures for Repurchase
We will repurchase shares within 21 days following the end of a calendar quarter. We must receive a written request for repurchase at least two business days before the end of the calendar quarter in order for us to repurchase a stockholder's shares on the repurchase date. If we cannot repurchase all shares presented for repurchase in any quarter, we will attempt to honor repurchase requests on a pro rata basis. The board of directors may, in its sole discretion, reject any request for repurchase.

If we did not completely satisfy a stockholder's repurchase request on a repurchase date because we did not receive the request in time, because of the limitations on repurchases set forth in our share repurchase plan or because of a suspension of our share repurchase plan, we would treat the unsatisfied portion of the repurchase request as a request for repurchase at the next repurchase date at which funds are available for repurchase unless the stockholder withdraws its request. Any stockholder may withdraw a repurchase request upon written notice to the program administrator if such notice is received at least two business days before the repurchase date.

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All shares to be repurchased must be (i) fully transferable and not be subject to any liens or other encumbrances and (ii) free from any restrictions on transfer. If we determine that a lien or other encumbrance or restriction exists against the shares, we will not repurchase any such shares.

Neither we nor the board of directors will have any liability to any stockholder for any damages resulting from or related to the stockholder's presentment of its shares. Further, stockholders will have complete responsibility for payment of all taxes, assessments and other applicable obligations and third-party costs resulting from or relating to our repurchase of shares. All repurchased shares shall be repurchased as treasury shares and may be made available for purchase to new or existing stockholders.

#### Special Repurchases—Death Repurchase
In the event of the death of a stockholder, we will, upon request and within six months from the date of the request, repurchase such stockholder's shares regardless of the period the deceased stockholder has owned such shares at the following prices:

● 92% of the current share NAV if death occurs less than six months of the purchase;

● 96% of the current share NAV if death occurs from six months to one year of purchase; and

● 100% of the current share NAV if death occurs after one year of purchase.

We will not be obligated to repurchase a deceased stockholder's shares if more than two years have elapsed from the date of death.

#### Amendment, Suspension or Termination of Program and Notice
The board of directors may, at any time and without stockholder approval, upon 10 business days' written notice to the stockholders (i) amend, suspend or terminate our share repurchase plan and (ii) increase or decrease the funding available for the repurchase of shares pursuant to our share repurchase plan.

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***Shares Repurchased***

Pursuant to the terms of our Share Repurchase Plan, we will repurchase shares within 21 days following the end of a calendar quarter. During the year ended December 31, 2025, we repurchased no shares of our common stock. During the year ended December 31, 2025, there were unfulfilled repurchase requests of $2.9 million.

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| | | | |
|:---|:---|:---|:---|
| **Month** | **Total Number of Shares Repurchased** | **Average Price Paid Per Share** | **Approximate Dollar Value of Shares Available That May Yet Be Repurchased Under the Program** |
| January 2025 |  | $— | (1) |
| February 2025 |  | $— | (1) |
| March 2025 |  | $— | (1) |
| Total |  |  |  |
| April 2025 |  | $— | (1) |
| May 2025 |  | $— | (1) |
| June 2025 |  | $— | (1) |
| Total |  |  |  |
| July 2025 |  | $— | (1) |
| August 2025 |  | $— | (1) |
| September 2025 |  | $— | (1) |
| Total |  |  |  |
| October 2025 |  | $— | (1) |
| November 2025 |  | $— | (1) |
| December 2025 |  | $— | (1) |
| Total |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Year Ended December 31, 2025 |  |  |  |

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<sup>(1)</sup> We limit the dollar value of shares that may be repurchased under the plan as described above. One of these limitations is that during each calendar year, our share repurchase plan limits the number of shares we may repurchase to those that we could purchase with the amount of the net proceeds from the sale of shares under our dividend reinvestment plan during the prior calendar year. However, we may increase or decrease the funding available for the repurchase of shares upon ten business days' notice to our stockholders.

The above table is on a cash basis, but we record our shares repurchased, as described below, on an accrual basis. During the years ended December 31, 2025 and 2024, we repurchased no shares of our common stock. Based on the repurchase limits described above, as of December 31, 2025 we had $370,138 available for eligible repurchases during 2025.

#### Item 6. [Reserved]

#### Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
*A discussion regarding our financial condition and results of operations for year-end 2024 compared to year-end 2023 can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on April 28, 2025 ("2024 Form 10-K")*

As used herein, the terms "we," "our," "us" and "the Company" refer to Lodging Fund REIT III, Inc., a Maryland corporation, Lodging Fund REIT III OP, LP, a Delaware limited partnership, which we refer to as the "Operating Partnership," Lodging Fund REIT III TRS, Inc., a Delaware corporation, which we refer to as the "Master TRS" and their subsidiaries, except where the context otherwise requires. The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of the Company and the notes thereto.

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#### Overview
We were formed on April 9, 2018 as a Maryland corporation for the primary purpose of acquiring a diversified portfolio of hotel properties (the "Projects") located primarily in America's Heartland, which we define as the geographic area from North Dakota to Texas and the Appalachian Mountains to the Rocky Mountains. We have elected to be taxed as a real estate investment trust, or REIT, beginning with the taxable year ended December 31, 2018. We conduct substantially all of our business and own substantially all real estate investments through the Operating Partnership. We are the sole general partner of the Operating Partnership. We and the Operating Partnership are advised by the Advisor pursuant to an advisory agreement, as amended, under which the Advisor performs advisory services regarding acquisition, financing and disposition of the Projects and origination of any loans, and is responsible for managing, operating and maintaining the Projects and day-to-day management of the Company. The Advisor may, in its sole discretion, perform these duties through one or more affiliates. Through February 2025, we have engaged National Hospitality Services ("NHS") to manage nine of the Projects acquired as of that date; on February 10, 2025, the Company terminated the contract with NHS and entered into hotel management agreements with Hotel Equities Group, LLC, a third-party property management agency. We have engaged other third-party property management companies with the oversight and property management of the remaining properties within the portfolio. NHS is wholly-owned by Norman Leslie, a director and executive officer of the Company and a principal of the Advisor. The Advisor has no direct employees. The employees of the Sponsor, an affiliate of the Advisor, provide services to the Company related to the negotiations of property acquisitions and financing, asset management, accounting, legal, investor relations, and all other administrative services.

We have invested and continue to invest primarily in 80 to 200 room limited service, select-service, full-service and extended stay hotel properties with strong mid-market brands in America's Heartland. As of December 31, 2025, we consolidated 14 hotel properties, consisting of 13 hotel properties owned by us and an equity and profits interest in the parent of the entity which holds the leasehold interest in one hotel property, with an aggregate of 1,745 rooms located in 8 states. See Part I, Item 1, "Business" of this Annual Report on Form 10-K for more details on our investment objectives and strategy.

We have raised capital through several private offerings conducted by the Company and the Operating Partnership described below.

We are currently conducting an offering (the "Offering") of up to $150,000,000 in shares of our common stock under a private placement to qualified purchasers who meet the definition of "accredited investors," as provided in Regulation D of the Securities Act of 1933, as amended (the "Securities Act"). The Offering commenced on June 1, 2018 and will continue until the earlier of (i) the date when the maximum offering amount is sold, (ii) May 31, 2025, which may be extended by our board of directors in its sole discretion, or (iii) a decision by the Company to terminate the Offering. On March 24, 2025, our board of directors extended the term of the Offering to May 31, 2026. As of December 31, 2025, the Company had issued and sold 10,303,567 shares of common stock, including 1,215,332 shares attributable to our DRIP, and received aggregate proceeds of $100.8 million. After deductions for payments of selling commissions, marketing and diligence allowances, other wholesale selling costs and expenses, we received net offering proceeds of approximately $83.6 million. The net offering proceeds have been used principally to fund property acquisitions and pay distributions and debt service obligations. During the year ended December 31, 2025, we repurchased no shares of our common stock. No public market exists for the shares of our common stock, and none is expected to develop.

On June 15, 2020, the Operating Partnership commenced a private offering of limited partnership units in the Operating Partnership, designated as Series GO LP Units, with a maximum offering of $20,000,000, which could be increased to $30,000,000 in our sole discretion as the General Partner of the Operating Partnership (the "GO Unit Offering") to accredited investors only, pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended. The Series GO LP Units were being offered until the earlier of (i) the sale of $20,000,000 in Series GO LP Units (which could be increased to $30,000,000 in the Company's sole discretion), (ii) June 14, 2022 or (iii) the Operating Partnership terminates the GO Unit Offering at an earlier date in its sole discretion. Our board of directors terminated the GO Unit Offering as of February 14, 2022. Our board of directors approved and ratified additional sales after February 14, 2022 in the GO Unit Offering for sales which were pending as of that date. As of December 31, 2025, the Operating Partnership had issued and sold 3,124,503 Series GO LP Units and received aggregate proceeds of $21.5 million. After deductions for payments of selling commissions, marketing and diligence allowances,

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other wholesale selling costs and expenses, and other offering expenses, we received net offering proceeds of approximately $19.4 million.

The Operating Partnership may issue Series T LP Units or Common LP Units from time to time to persons who contribute direct or indirect interests in real estate to the Operating Partnership. The Series T LP Units will have allocations and distributions that are dictated by the Partnership Agreement of the Operating Partnership and the applicable contribution agreement for the real estate. Certain Series T LP Units may have different allocations and distributions than other Series T LP Units. The amount of the allocations and distributions will be determined by the General Partner in its sole discretion at the time of issuance of the Series T LP Units and any future distributions are dependent on the financial performance of the contributed real estate. The Series T LP Units are eligible for conversion into Common LP Units beginning 24 or 36 months, or longer in some instances, after their issuance and will automatically convert into Common LP Units upon a Termination Event as described in the Partnership Agreement of the Operating Partnership. The conversion of Series T LP Units into Common LP Units may vary with each issuance and is generally based on a formula that applies an applicable capitalization rate to the then current trailing twelve months net operating income of the hotel property less the loan balance outstanding as of the contribution date as assumed by the Operating Partnership, and less other amounts incurred by the Operating Partnership including but not limited to certain closing costs, loan assumption fees and defeasance costs, Property Improvement Plan ("PIP") and capital expenditures, operating cash infused by the Operating Partnership, and any shortfall of certain minimum cumulative investment yield. There is no guarantee that the future financial performance of the contributed hotel property will be sufficient to result in the issuance of Common LP Units resulting from the application of the conversion formula applicable to the issuance Series T LP Units. As of December 31, 2025, the Company had issued an aggregate of 5,073,506 Series T LP Units and 612,100 Common LP Units in connection with such property contributions.

On December 3, 2021, the Operating Partnership commenced a private placement offering of its Common LP Units. As of December 31, 2025, the Operating Partnership had issued and sold 612,100 Common LP Units, with a value of $10.00 per unit, at the time of issuance, in connection with property contributions.

On April 7, 2023, the Operating Partnership commenced a private offering of the Series GO II LP Units, with a maximum offering of $30,000,000, which could be increased to $60,000,000 in the sole discretion of the Company as the General Partner of the Operating Partnership, (the "GO II Unit Offering") to accredited investors only, pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended. The Series GO II LP Units are being offered until the earlier of (i) the sale of $30,000,000 in Series GO II LP Units (which could be increased to $60,000,000 in the Company's sole discretion), (ii) March 31, 2024, which date may be extended for two 1-year extensions until March 31, 2026 in the sole discretion of the Operating Partnership or (iii) the Operating Partnership terminates the GO II Unit Offering at an earlier date in its sole discretion. On April 17, 2024, our board of directors extended the term of the GO II Unit Offering to March 31, 2025. On March 24, 2025, our board of directors extended the term of the GO II Unit Offering to March 31, 2026. As of December 31, 2025, the Operating Partnership had issued and sold 895,520 Series GO II LP Units and received gross aggregate proceeds of $6.7 million.

On December 24, 2024, the Operating Partnership commenced a private offering for the purchase of up to $50,000,000 (which may be increased to $75,000,000 in the sole discretion of the Company) in Series P Preferred Units at a purchase price equal to $10,000 per Series P Preferred Unit. The first $1,250,000 of net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be retained by the Operating Partnership. If the Operating Partnership receives more than $1,250,000 of net proceeds from the sale of the Series P Preferred Units, the next $1,047,000 of net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to (i) pay accrued interest on the Fort Collins Loans and the Courtyard Aurora Loan through December 31, 2024 at or prior to the time of refinancing such loans or (ii) after the time of such refinancing, redeem outstanding Series A Preferred Units issued in exchange for the contribution of such loans. If the Operating Partnership receives more than $2,297,000 of net proceeds from the sale of the Series P Preferred Units, the next $7,550,000 of net proceeds received by the Operating Partnership from the sale of Series P Preferred Units shall be retained by the Operating Partnership. If the Operating Partnership receives more than $9,847,000 of net proceeds from the sale of the Series P Preferred Units, (A) until March 24, 2025, 50% of such additional net proceeds received by the Operating Partnership from the sale of the Series P Preferred Units shall be used to redeem the Series A Preferred Units and the remaining 50% shall be retained by the Operating Partnership, and (B) from and after March 24, 2025, 75% of such additional net proceeds received by the

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Operating Partnership from the sale of the Series P Preferred Units shall be used to redeem the Series A Preferred Units and the remaining 25% shall be retained by the Operating Partnership. As of December 31, 2025, the Operating Partnership has issued and sold 155 Series P Preferred Units, resulting in the receipt of gross offering proceeds of $1.6 million as of the date of this filing.

On December 24, 2024, the Operating Partnership entered into an amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership to establish the terms of a new limited partner unit designated as Series A Preferred Units. Concurrently, the Company entered a loan contribution agreement (the "Contribution Agreement") to restructure four of its loans with Access Point Financial, LLC (the "Access Point Lender") – 1) the mortgage loan secured by the Sheraton – Northbrook ("Sheraton Northbrook Loan") with unpaid principal balance of approximately $4.0 million, 2) the loans secured by the Residence Inn - Fort Collins Loan ("Fort Collins Loans") with collective unpaid principal balance of approximately $13.0 million, 3) the mortgage loan secured by the Courtyard by Marriott – Aurora ("Courtyard Aurora Loan") with unpaid principal balance of approximately $14.9 million. With respect to the Sheraton Northbrook Loan, the Access Point Lender received 4,067,409 Series A Preferred Units in exchange for all of the remaining unpaid principal and interest on the Sheraton Northbrook Loan. With respect to the Fort Collins Loans and the Courtyard Aurora Loan, the Company is required to refinance each such loan within 90 days of the date of the Contribution Agreement, and to the extent there is remaining unpaid principal and interest on such loans after such refinancing, the Operating Partnership is required to enter into a contribution agreement with the Access Point Lender through which the Access Point Lender will receive Series A Preferred Units in exchange for all of such remaining unpaid principal and interest.

***Significant 2025 Events***

*Sale of Charlotte Property and Pineville HGI Property*

On May 14, 2025, we sold the Pineville HGI Property and Charlotte Property to an unaffiliated purchaser for $22,775,000 in cash, subject to customary prorations and adjustments. The mortgage loans secured by the Pineville HGI Property and Charlotte Property were repaid in full at closing from sale proceeds. All guaranties in connection with such loans and collateral with respect to such loans have been terminated or released, and all commitments with respect to such loans have been terminated or released.

*Sale of Fargo Property*

On December 17, 2025, we sold the Fargo Property to an unaffiliated purchaser for $10,500,000 in cash, subject to customary prorations and adjustments. The mortgage loan secured by the Fargo Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released. In connection with the sale, $500,000 of the proceeds was held back by the purchaser and subsequently converted into a promissory note with Arcade Fargo LLC bearing interest at 16.0% per annum, with monthly principal and interest payments maturing on January 1, 2027.

*Sale of Prattville Property*

On December 30, 2025, we sold the Prattville Property to an unaffiliated purchaser for $16,700,000 in cash, subject to customary prorations and adjustments. The mortgage loan secured by the Prattville Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loans have been terminated or released.

*Conversion and Elimination of Series T LP Units*

During the fourth quarter of 2025, all remaining conversion anniversary dates for the outstanding Series T LP Units elapsed. Upon application of the contractual conversion formula, the General Partner determined that none of the 5,073,506 outstanding Series T LP Units qualified for any value, and accordingly zero Common LP Units were issued upon conversion. The carrying amount of the Series T LP Unit noncontrolling interest of $45.5 million was reclassified

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to additional paid-in capital within stockholders' equity. This reclassification had no impact on total equity, net loss, or cash flows.

*No Acquisitions*

During the year ended December 31, 2025, we acquired no hotel properties.

***Significant 2024 Events***

*Exit Strategy*

On May 7, 2024, our board of directors authorized management to pursue an exit strategy and position the Company for a sale or merger of the Company in 2025, provided that the economic environment is conducive to such a transaction, and to prepare the Company's portfolio of hotel properties for a transaction through strategic acquisitions and dispositions with the objective of maximizing profitability at the hotel property level. There can be no assurances that we will achieve an exit strategy within the time period and in the manner anticipated. The process of exploring strategic alternatives and marketing our assets could be time consuming and disruptive to our business operations and could divert management's attention from our business, and we could incur substantial expenses associated with identifying and evaluating potential transactions. Further, any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us and the availability of financing to potential buyers on favorable terms. There can be no assurance that we will successfully implement our strategy, or that any potential transaction or other strategic alternative will result in stockholder liquidity or provide a return to stockholders that equals or exceeds our estimated value per share.

*Sale of Pineville Property*

On July 23, 2024, the Company sold the Pineville Property to an unaffiliated purchaser for $8,850,000 in cash. The mortgage loan secured by the Pineville Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released.

*No Acquisitions*

During the year ended December 31, 2024, we acquired no hotel properties.

**Key Indicators of Operating Performance**

In evaluating financial condition and operating performance, important indicators on which we focus are revenue measurements, such as occupancy, ADR and RevPAR, and expenses, such as property operations expenses, general and administrative expenses and other expenses described below. Occupancy is the total number of rooms occupied for the period divided by the total number of available rooms for the period. ADR is equal to the total gross room revenue divided by the total number of rooms rented for the period. RevPAR is equal to the total gross room revenue divided by the total number of available rooms for the period.

#### Market Outlook
The U.S. hotel industry experienced a challenging 2025, with full-year occupancy and RevPAR declining year over year for the first time since 2020. According to CoStar, national occupancy fell 1.2% year over year to 62.3%, while RevPAR declined 0.3% to $100.02. ADR rose modestly at 0.9% to $160.54, but rate growth remained below the rate of inflation, putting additional pressure on operating margins.

Performance was uneven across hotel segments throughout the year. Luxury and upper-upscale properties outperformed, while select-service and economy hotels faced continued downward pressure on ADR and occupancy. This bifurcation

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reflects broader macroeconomic conditions, as economic uncertainty disproportionately impacted lower-income households and reduced discretionary travel spending. ADR growth in midscale and economy segments continued to lag inflation, squeezing profit margins even as operating costs rose.

Multiple headwinds contributed to the industry's underperformance in 2025. Rising operating expenses, including labor, insurance, and food and beverage costs, pressured margins throughout the year. Job market softening, policy uncertainty, and tariff-related costs weighed on consumer spending. The STR/Tourism Economics forecast was downgraded multiple times during the year, with the final November 2025 revision projecting full-year RevPAR to decline 0.4%, reflecting what STR President Amanda Hite characterized as an environment where "unemployment and prices continue to rise" and "ADR is growing well below the rate of inflation."

Reduced federal government travel activity and government workforce reductions created additional uncertainty for properties in markets with significant government-related demand, including certain of our Heartland markets. Declining international inbound visitation, particularly from Canada, further constrained demand.

The Company's portfolio was not immune to these trends. For the year ended December 31, 2025, total room revenue declined to $60.6 million from $69.5 million in 2024. While the sale of four hotel properties during the year contributed to this decrease, same-property performance also reflected the broader industry softness. Routine shareholder distributions have been suspended since September 2024, and the Company continues to evaluate distribution capacity in light of liquidity, cash flow, and strategic capital allocation priorities.

The outlook for 2026 remains cautious. The February 2026 STR/Tourism Economics forecast projects full-year RevPAR growth of just 0.6%, characterizing 2025's decline as the first non-recessionary RevPAR decline ever recorded in the U.S. hotel industry. Select-service and economy hotels are expected to continue facing flat to slightly negative RevPAR, while improvement is projected to be concentrated in upper-tier segments. The forecast noted that the same headwind pressures of broad economic uncertainty, geopolitical instability, government cutbacks, and rising domestic tensions persist into early 2026.

Evolving governmental policies may also adversely impact our financial condition and results of operations, specifically with the uncertainty surrounding tariffs and their potential material impact on operating costs and consumer travel behavior. Any increase in inflation could have an adverse impact on our expenses, which could increase at a rate higher than revenue. Additionally, elevated inflation could cause increases in variable interest rates, further impacting our debt service obligations. Continued improvement in our operating results will be dependent on moderating inflation and interest rates, stabilization of government policy, and sustained leisure travel demand across our Heartland markets.

Additionally, if in the future there is a pandemic, epidemic, or outbreak of another highly infectious or contagious disease or other health concern affecting states or regions in which we operate, we and our properties may be subject to similar risks and uncertainties as posed by COVID-19.

**Liquidity and Capital Resources**

***Overview***

Our short-term liquidity requirements consist primarily of funds necessary to pay our scheduled debt service, operating expenses, including payments to our Advisor and property managers, capital expenditures directly associated with our hotels, distributions to our stockholders and expenses related to implementing our exit strategy, to the extent market conditions are favorable to pursue such a strategy in the near-term. Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotels, renovations, and other capital expenditures that need to be made periodically to our hotels, scheduled debt payments, debt maturities, operating expenses, including payments to our Advisor and property managers, making distributions to our stockholders and continued expenses related to implementing our exit strategy if such implementation is delayed. We expect to meet our long-term liquidity requirements through various sources of capital, including cash provided by operations, borrowings, issuances of additional equity, including OP units, and proceeds from property dispositions. Lenders in connection with several recent refinancings and extensions of debt obligations have required increased interest rates, increasing our debt service obligations. Our interest

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expense could increase in the future as a result of these recent refinancings and extensions and as we continue to refinance our maturing debt. Our ability to incur additional debt is dependent upon a number of factors, including the state of the credit markets, our degree of leverage, the value of our unencumbered assets and borrowing restrictions imposed by existing lenders. Our ability to raise capital through the issuance of additional equity is also dependent on a number of factors including the current state of the capital markets, investor sentiment and intended use of proceeds. We may need to raise additional capital if we identify acquisition opportunities that meet our investment objectives and require liquidity in excess of existing cash balances. Our ability to raise funds through the issuance of equity securities depends on, among other things, general market conditions for hotel companies and REITs and market perceptions about us. The distribution rate for distributions declared during 2023 was equal to an annualized rate of 7.00% per share based on our initial offering price of $10.00. In an effort to conserve cash, our board of directors reduced the distribution rates for distributions beginning in April 2024 to annualized rates ranging from 3.50% to 5.00% per share based on our initial offering price of $10.00. Our board of directors will determine whether to authorize and declare distributions in such amounts or if at all based on our financial conditions and such other factors as our board of directors deems relevant.

As of December 31, 2025, the Company has incurred recurring net losses, used cash in operating activities, and has several debt obligations that have matured or are approaching maturity for which extensions are being negotiated. In addition, the El Paso HI Property is subject to a receivership proceeding (see Note 14). Management has evaluated these conditions and believes that the Company's planned property dispositions pursuant to its exit strategy, combined with ongoing negotiations with lenders to extend or refinance near-term maturities and available proceeds from its securities offerings, provide sufficient liquidity to meet its obligations as they come due for at least the next twelve months from the date of issuance of these financial statements. However, there can be no assurance that the Company will be successful in completing planned dispositions or obtaining extensions or refinancings on acceptable terms.

We are dependent upon the net proceeds from our Offering and offerings of our Operating Partnership to conduct our proposed operations. The Offering will continue until the earlier of (i) the date when the maximum offering amount is sold, (ii) May 31, 2025, which may be extended by our board of directors in its sole discretion, or (iii) a decision by the Company to terminate the Offering. On March 24, 2025, our board of directors extended the term of the Offering to May 31, 2026. We had also used the net proceeds from the GO Unit Offering to conduct our operations. Our board of directors terminated the GO Unit Offering as of February 14, 2022. Our board of directors approved and ratified additional sales after February 14, 2022 in the GO Unit Offering for sales which were pending as of that date. We intend to obtain the capital required to make real estate and real estate-related investments and conduct our operations from the proceeds of our Offering, GO II Unit Offering and Series P Preferred Unit Offering, from secured or unsecured financings from banks and other lenders and from any undistributed funds from our operations. As of December 31, 2025, we had raised approximately $100.8 million in gross offering proceeds from the sale of shares of our common stock in the Offering, approximately $21.5 million in gross offering proceeds from the sale of the Series GO LP Units in our GO Unit Offering, approximately $6.7 million in gross offering proceeds from the sale of the Series GO II LP Units in our GO II Unit Offering and approximately $1.6 million in gross offering proceeds from the sale of the Series P Preferred Units in our Series P Preferred Unit Offering. If we are unable to raise substantial funds in the Offering and the Operating Partnership offerings, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate more significantly with the performance of the specific assets we acquire. There may be a delay between the sale of shares of our common stock and units and our purchase of assets, which could result in a delay in the benefits to our stockholders, if any, of returns generated from our investment operations. Further, we will have certain fixed operating expenses regardless of whether we are able to raise substantial funds in the Offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and cash flow and limiting our ability to make distributions to our stockholders.

As of December 31, 2025, we consolidated fourteen hotel properties, consisting of thirteen hotel properties owned by us and an equity and profits interest in the parent of the entity which holds a leasehold interest in one hotel property. We acquired these investments with the proceeds from the sale of our common stock in the Offering, proceeds from the GO Unit Offering and debt financing and, for all but one of the properties acquired in 2022 and the equity and profits interest acquired in 2022, the issuance of Series T LP Units to the contributor as part of the consideration. Operating cash needs during the year ended December 31, 2025 were met through cash flow generated by these real estate investments and with proceeds from our Offering, the GO Unit Offering, the GO II Unit Offering, and the Series P Preferred Unit Offering.

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Our investments in real estate generate cash flow in the form of hotel room rentals and guest expenditures, which are reduced by operating expenditures, debt service payments and corporate general and administrative expenses. Each of our current properties is owned and future properties will be owned by a direct special purpose entity subsidiary of the Operating Partnership, which leases the properties to direct special purpose entity subsidiaries of the Master TRS, referred to as "TRS Lessees." The TRS Lessees are or will be required to make rent payments to the owners of the properties pursuant to the lease agreements relating to each property. Such TRS Lessees' ability to make rent payments to the owner subsidiaries and our liquidity, including our ability to make distributions to our stockholders, are dependent upon the TRS Lessees ability to generate cash flow from the operations of the hotel properties. The TRS Lessees are dependent upon the management companies with whom they have entered or will enter into management agreements with to operate the hotel properties.

Cash flow from operations from real estate investments will be primarily dependent upon the occupancy level and average daily rate, or "ADR", of our portfolio, and how well we manage our expenditures.

We anticipate that our aggregate loan-to-value ratio will be between 35% and 65%, however, there can be no assurance that we will achieve this ratio. We target a loan-to-value ratio for the Projects of between 35% and 70%, based on the purchase price of the Projects, however, we may obtain financing that is less than or higher than such loan-to-value ratio for an individual Project at the discretion of the board of directors. Though this is our estimated leverage, our charter does not limit us from incurring debt in excess of this amount. As of December 31, 2025, our aggregate loan-to-value ratio, based on the aggregate purchase price of the Projects, was approximately 56%.

In addition to making investments in accordance with our investment objectives and potential expenditures in connection with the implementation of our exit strategy, we expect to use capital resources to make certain payments to the Advisor and its affiliates and NHS. These payments include the various fees and expenses to be paid to the Advisor and its affiliates in connection with the selection, acquisition and management of Projects, as well as reimbursement of certain organization and other offering expenses described below. The Advisor earns a one-time acquisition fee of up to 1.4% of the hotel purchase price including funds allocated for any property improvement plan ("PIP") at the time of each hotel property acquisition, a financing fee of up to 1.4% of the hotel purchase price including funds allocated for any PIP at the time of closing the initial financing, and an annual asset management fee of up to 0.75% of the gross assets of the Company, which is payable on a monthly basis. The Advisor may also be paid a refinancing fee of up to 0.75% of the principal amount of any refinancing at the time of closing the refinancing. The Advisor may also be paid a disposition fee equal to between 0.0% and 4.0% of the hotel sales price, payable at the closing of the disposition, which disposition fee in connection with a sale of all or substantially all of the Company's assets, merger or similar transaction, shall be equal to between 0.0% and 4.0% of the gross consideration received (grossed up for liabilities of the Company), with the percentage dependent on the total return per share and timing of such transaction, payable at the closing of such sale, merger or transaction. The Advisor may also be paid real estate commissions of up to 3.0% of the hotel purchase price in connection with the sale of a hotel property in which the Advisor or its affiliates provided substantial services, but in no event greater than one-half of the total commissions paid with respect to such property if a commission is paid to a third-party as well as the Advisor, and in no event will total commissions exceed 5.0% of the hotel sales price. Certain affiliates of the Advisor may receive an annual guarantee fee equal to 1.0% of the guaranty amount, paid on a monthly basis, for debt obligations of the hotel properties personally guaranteed by such affiliates. The Advisor may earn an annual subordinated performance fee equal to 20% of the distributions after the common stockholders and Operating Partnership limited partners (other than the Series B LP Unit holders) have received a 6% cumulative, but not compounded, return per annum. Per the terms of the Operating Partnership's operating agreement, the Advisor receives distributions from the Operating Partnership in connection with their ownership of non-voting Series B LP Units. The Advisor's ownership of Series B LP Units is presented as non-controlling interest on the accompanying consolidated financial statements.

The Advisor and its affiliates may be reimbursed by us for certain organization and offering expenses in connection with the Offering, the GO Unit Offering and the GO II Unit Offering, including legal, printing, marketing and other offering-related costs and expenses. Following the termination of the Offering, the Advisor will reimburse us for any such amounts incurred by us in excess of 15% of the gross proceeds of the Offering. In addition, we may pay directly or reimburse the Advisor and its affiliates for certain costs incurred in connection with its provision of services to us, including certain acquisition costs, financing costs, and sales and marketing costs, as well as an allocable share of general and administrative overhead costs. All reimbursements are paid to the Advisor and its affiliates at cost.

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Through February 10, 2025, NHS earned a monthly base management fee for property management services, including overseeing the day-to-day operations of the nine hotel properties for which it served as the property manager, in an amount up to 4% of gross revenue, plus additional fees and expense reimbursements. Effective as of February 10, 2025, all of the NHS management agreements have been terminated and Hotel Equities, LLC ("Hotel Equities"), a third-party management company, now manages those properties. The Company did not incur any material early termination penalties in connection with such terminations.

Pursuant to the Agreements, Hotel Equities will receive a management fee equal to 3.00% of gross revenues of the Properties. Hotel Equities will also receive an accounting services fee of $2,500 per month, a revenue management fee of $2,000 per month, and a technology fee of $1,000 per month for accounting, data intelligence and budget forecast system costs, each with annual escalations of 3% or as set forth in the hotel operating budget. Hotel Equities will also receive a quarterly incentive fee equal to 0.45% of gross revenues of each of the Properties to the extent certain key performance indicators are achieved with respect to such quarter for such Property. Hotel Equities will also be reimbursed for its out-of-pocket expenses incurred in accordance with the hotel operating budget that are directly related to the performance of the hotel management functions. Each Agreement has a five-year initial term, which will be automatically renewed for additional 3-year terms unless earlier terminated by the parties. Except for certain circumstances described in the Agreement or otherwise agreed to by the parties, if Hotel Equities is not retained by the new property owner after a sale of the Property, Hotel Equities is entitled to an off-boarding fee equal to the management fees paid during the 12-month period immediately preceding the date of sale, subject to a 10% reduction following each 12-month period following the effective date of the Agreement. Hotel Equities is also entitled to a termination fee if Hotel Equities terminates the Agreement due to the Company failing to cure certain defaults under the Agreement or if the Company terminates the Agreement other than for cause, which fee is equal to the trailing 12 months of management fees paid to Hotel Equities immediately preceding the date of termination. Further, the Company is required to pay Hotel Equities an annual portfolio incentive fee of 15% of the combined gross operating profit for the Properties which is in excess of the budgeted gross operating profit for such calendar year, provided that total annual management fees, quarterly incentive fees, and portfolio incentive fees shall not exceed 4.5% of the total gross revenue for the calendar year.

Our other hotel properties are managed by Vista Host Inc., Interstate Management Company, LLC ("Aimbridge") and KAJ Hospitality Inc. These management companies earn a base management fee in an amount between 2.0% and 3.0% of gross revenue, plus monthly accounting fees and in some cases a monthly fee for customized accounting services, revenue management and digital marketing. They also may earn an incentive management fee if certain performance metrics are achieved. We also reimburse the management companies for certain costs of operating the hotel properties on our behalf. All reimbursements are paid to such management companies at cost.

One Rep, a related party, provides construction oversight, project management, and other related services to the Company. For the services provided, One Rep is paid a construction management fee equal to 6% or 7% of the total project costs. The Company also reimburses One Rep for certain costs incurred on behalf of the Company, and all reimbursements are paid to One Rep at cost.

The franchise agreements for certain of our hotels require that we provide property improvement plans to cover, among other things, replacing and repairing furniture, fixtures and equipment at our hotels and other routine capital expenditures. As of December 31, 2025, we set aside $3.9 million for capital projects in property improvement funds, which are included in restricted cash.

We spent approximately $3.5 million on capital improvements at our operating hotels during the year ended December 31, 2025.

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**Debt**

*Mortgage Debt*

At December 31, 2025 and December 31, 2024, our mortgage debt obligations consists of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Hotel Property** | &nbsp;&nbsp;&nbsp;&nbsp;<br>**Interest**<br>**Rate** | &nbsp;&nbsp;&nbsp;&nbsp;<br>**Maturity**<br>**Date** | **Outstanding**<br>**Balance as of**<br>**December 31,** <br>**2025** | **Outstanding**<br>**Balance as of**<br>**December 31,** <br>**2024** |
| Holiday Inn Express - Cedar Rapids<sup>(1)</sup> |  |  | $— | $5619577 |
| Hampton Inn - Eagan<sup>(7)</sup> | 9.50% | 10/1/2025 | 8468346 | 8672347 |
| Home2 Suites - Prattville<sup>(2)</sup> |  |  |  | 9164964 |
| Home2 Suites - Lubbock | 4.69% | 10/6/2026 | 6586836 | 6851578 |
| Fairfield Inn & Suites - Lubbock | 4.93% | 4/6/2029 | 8535009 | 8639616 |
| Homewood Suites - Southaven | 7.77% | 12/6/2029 | 17796388 | 18000000 |
| Courtyard by Marriott - Aurora<sup>(3)(4)</sup> | 9.95% | 2/5/2025 | 14935816 | 14935816 |
| Holiday Inn - El Paso<sup>(1)</sup> |  |  |  | 7600000 |
| Hilton Garden Inn - Houston | 3.85% | 9/2/2026 | 13116014 | 13484482 |
| Hampton Inn - Fargo<sup>(5)</sup> |  |  |  | 6966110 |
| Courtyard by Marriott - El Paso | 6.01% | 5/13/2027 | 9800349 | 9800349 |
| Fairfield Inn & Suites - Lakewood<sup>(1)</sup> |  |  |  | 12000000 |
| Fairfield Inn & Suites - Lakewood - A-1<sup>(1)(6)</sup> | 14.50% | 3/27/2026 | 4896801 | 4896801 |
| Residence Inn - Fort Collins<sup>(7)(8)</sup> | 10.25% | 5/4/2025 | 11200000 | 11200000 |
| Residence Inn - Fort Collins - CapEx<sup>(7)(9)</sup> | 11.50% | 5/4/2025 | 1806143 | 1806143 |
| Residence Inn - Fort Collins - A-1<sup>(4)</sup> | 7.00% | 8/2/2028 | 501465 | 501465 |
| Hilton Garden Inn - El Paso<sup>(7)</sup> | 4.94% | 8/6/2025 | 11843539 | 12033256 |
| Holiday Inn Express - Wichita | 6.41% | 12/21/2027 | 5485172 | 5589430 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Mortgage Debt |  |  | 114971878 | 157761934 |
| Premium on assumed debt, net |  |  | 246579 | 234911 |
| Deferred financing costs, net |  |  | (1365446) | (1639867) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Mortgage |  |  | $113853011 | $156356978 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Asset is listed as held for sale as of December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Asset was sold on December 30, 2025 and the loan was repaid on the closing date.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Variable interest rate equal to 30-day SOFR plus 6.00%, provided that SOFR shall not be less than 1.00%. The Company and the lender are working to finalize an extension of these loans as of the date of this filing.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Loan is interest-only until maturity.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Asset was sold on December 17, 2025 and the loan was repaid on the closing date

&nbsp;&nbsp;&nbsp;&nbsp;(6) This debt is held at the Operating Partnership

&nbsp;&nbsp;&nbsp;&nbsp;(7) The Company and the lender are working to finalize an extension of these loans as of the date of this filing.

&nbsp;&nbsp;&nbsp;&nbsp;(8) Variable interest rate equal to SOFR Index plus 6.25%.

&nbsp;&nbsp;&nbsp;&nbsp;(9) Variable interest rate equal to SOFR Index plus 7.50%.

*Lines of Credit & Corporate Loans*

*Line of Credit – Western State Bank*

On February 10, 2020, we entered into a line of credit with Western State Bank ("Western Line of Credit") with a $5.0 million credit limit and an interest rate equal to the U.S. Prime Rate, plus 0.50% (8.50 % as of December 31, 2025 and December 31, 2024). Throughout 2021 and 2022, the Company amended the Western Line of Credit whereby the maturity was extended to April 15, 2023 and established a rate floor of 4.00%. Further the Western Line of Credit is secured by the Company's Hampton Inn hotel property in Eagan, Minnesota, the Company's Holiday Inn Express hotel property in Cedar Rapids, Iowa, the Company's Hampton Inn hotel property in Fargo, North Dakota and limited partnership units of the Operating Partnership.

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During 2023, the Company amended the Western Line of Credit several times which added an additional 200,000 limited partnership units of the Operating Partnership as collateral for the loan, for a total of 300,000 limited partnership units, extended the maturity date of the Western Line of Credit to November 15, 2023, and reduced the maximum credit to $4.67 million and required the Operating Partnership to pay Western State Bank a principal curtailment of $0.3 million. On December 27, 2023, the Operating Partnership, the Company, Corey Maple, LF3 Fargo Med, LLC, LF3 Eagan, LLC, and LF3 Cedar Rapids, LLC entered into a Change in Terms Agreement in connection with the Western Line of Credit, which extended the maturity date of the Western Line of Credit from November 15, 2023 to April 30, 2024 and increased the interest rate to U.S. Prime Rate, plus 1.00%, with a rate floor of 8.25%. On May 10, 2024, the Operating Partnership, the Company, Corey Maple, LF3 Fargo Med, LLC, LF3 Eagan, LLC, and LF3 Cedar Rapids, LLC entered into a Change in Terms Agreement in connection with the Western Line of Credit, which extended the maturity date of the Western Line of Credit from April 30, 2024 to June 5, 2024. In addition, the Operating Partnership was required to make a principal payment in the amount of $250,000. The interest rate as of December 31, 2025 was 8.50%. The Company and Western State Bank are working to finalize an extension of the Western Line of Credit as of the date of this filing, however, there can be no assurance that an extension will be granted.

The Western Line of Credit includes cross-collateralization and cross-default provisions such that the existing mortgage loan agreements with respect to the Cedar Rapids Property, the Eagan Property, and the Fargo Property as well as future loan agreements that we may enter into with this lender, are cross-defaulted and cross-collateralized with each other. The Western Line of Credit, including all cross-collateralized debt, is guaranteed by Corey Maple. As of December 31, 2025 and, 2024, there was a $0.3 million and $4.2 million balance outstanding on the Western Line of Credit, respectively.

*Revolving Line of Credit – Legendary A-1 Bonds, LLC*

On August 10, 2022, the Operating Partnership entered into a $5.0 million revolving line of credit loan agreement (the "A-1 Line of Credit") with Legendary A-1 Bonds, LLC ("A-1 Bonds"), which is an affiliate of the Advisor which is owned by Norman Leslie, a director and officer of the Company and principal of the Advisor and Corey Maple, a director of the Company and principal of the Advisor. The A-1 Revolving Line of Credit requires monthly payments of interest only, with all outstanding principal and interest amounts being due and payable at maturity. Outstanding amounts under the A-1 Revolving Line of Credit may be prepaid in whole or in part without penalty.

During 2023, the A-1 Revolving Line of Credit was amended twice to increase the line of credit to $13.3 million, to increase the number of Common LP Units of the Operating Partnership securing the A-1 Revolving Line of Credit to 1,330,000 unissued Common LP Units and extend the maturity date to December 31, 2023. At December 31, 2023, the A-1 Revolving Line of Credit had a fixed interest rate of 7.00% per annum.

On December 20, 2024, the Operating Partnership, the Company and A-1 Bonds amended the A-1 Line of Credit to extend the maturity date to December 31, 2027, increase the interest rate to 17.5% per annum, increase the A-1 Line of Credit to $20.0 million and increase the number of Common LP Units of the Operating Partnership securing the A-1 Revolving Line of Credit to 2,000,000 unissued Common LP Units.

As of December 31, 2025 and 2024, there was $13.5 million and $14.3 million balance outstanding on the A-1 Line of Credit, respectively.

*NHS Loan*

On March 6, 2023, we entered into a $600,000 loan agreement (the "NHS Loan") with NHS. The NHS Loan requires the payment of monthly interest beginning on April 6, 2023, with all outstanding principal and interest amounts being due and payable at maturity on July 6, 2023. On December 28, 2023, we entered into a Change in Terms Agreement with the Operating Partnership and NHS in connection with the NHS Loan to extend the maturity date of the NHS Loan to January 31, 2024. This amendment also provided that in lieu of monthly interest payments, all accrued interest shall be due and payable on the maturity date with the full principal balance. On August 21, 2024, we entered into a Change in Terms Agreement with the Operating Partnership and NHS in connection with the NHS Loan to extend the maturity date of the NHS Loan to September 30, 2025. The NHS Loan has a fixed interest rate of 7.0% per annum. Outstanding amounts under the NHS Loan may be prepaid in whole or in part without penalty. The NHS Loan is secured by 60,000 partnership units

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of the Operating Partnership. The Company and NHS are working to finalize an extension of the NHS Loan as of the date of this filing, however there can be no assurance that an extension will be granted.

As of December 31, 2025 and 2024, there was a $600,000 balance outstanding on the NHS Loan.

*Arcade Loan*

On December 16, 2025, in connection with the sale of the Hampton Inn - Fargo property, the Operating Partnership entered into a promissory note with Arcade Fargo LLC in the principal amount of $500,000 (the "Arcade Loan"). The Arcade Loan bears interest at a fixed rate of 16.0% per annum, with monthly principal and interest payments of approximately $45,365 commencing February 1, 2026 and maturing on January 1, 2027. The Arcade Loan requires mandatory payments from net proceeds of any capital transaction with respect to the Company's remaining properties, and restricts distributions to the Company's equity holders until the note is repaid in full. The Arcade Loan is guaranteed by Lodging Fund REIT III TRS, Inc., Legendary Capital, LLC, Legendary Capital REIT III, LLC, Norman Leslie, and Corey Maple.

As of December 31, 2025, there was a $500,000 balance outstanding on the Arcade Loan.

*Mortgage Debt*

*El Paso HI Loan Modifications*

On May 15, 2024, the El Paso HI Borrower, the Operating Partnership and Corey R. Maple entered into a second loan modification agreement with EPH, which extended the maturity date to November 15, 2024. As a condition to the extension, the El Paso HI Borrower agreed to pay a $76,000 extension fee. With the second modification agreement, the El Paso HI Borrower is entitled to an additional six-month extension, if requested. In addition, the Holiday Inn El Paso Loan has a new interest rate of 9.00%.

*Lakewood Loan Extension, Termination and New Loans* 

The subsidiaries of the Operating Partnership and A-1 Bonds entered into a loan agreement in the amount of $12.6 million secured by the Lakewood Property (the "Original Lakewood Loan"). Per the terms of the agreement, the subsidiaries of the Operating Partnership executed the option to extend the maturity date of the loan to March 28, 2024.

On March 27, 2024, the subsidiaries of the Operating Partnership entered into a new $12.0 million loan with Bluebird Credit EM LLC (the "New Lakewood Loan") secured by the Lakewood Property. The New Lakewood Loan is evidenced by a promissory note and has an adjustable interest rate based on the SOFR Index plus 7.0% (increasing to 7.5% during the extension of the loan), with an initial interest rate of 12.327%; provided, however, in no event will the interest rate be adjusted to less than 11.0%. The maturity date of the New Lakewood Loan is October 5, 2025, with an option to extend the term for an additional 6 months through April 6, 2026, upon payment of a $60,000 extension fee and satisfaction of certain other conditions. The New Lakewood Loan requires monthly interest-only payments throughout the term, with the outstanding principal and interest due at maturity. The Borrower has the right to prepay the New Lakewood Loan in whole but not in part at any time, subject to a 30-day prior notice to the New Lakewood Lender and payment of an exit fee equal to $120,000 and a prepayment premium calculated pursuant to the terms of the New Lakewood Loan Agreement.

Pursuant to the New Lakewood Loan Agreement, Norman Leslie, a director and executive officer of the Company, entered into a Guaranty (the "New Lakewood Guaranty") with the New Lakewood Lender to guarantee payment when due of the principal amount of indebtedness outstanding, including accrued interest and collection costs and expenses, as further described in the New Lakewood Guaranty.

Additionally, on March 27, 2024, the Operating Partnership entered into a new loan in an amount up to $4,896,801 (the "New A-1 Lakewood Loan") with the A-1 Lender, an affiliate of the Company's Advisor. The New A-1 Lakewood Loan is evidenced by a promissory note and has a fixed interest rate of 14.5% per annum and a maturity date of March 27, 2026. The New A-1 Lakewood Loan requires monthly interest-only payments throughout the term, with the outstanding principal and interest due at maturity. The Operating Partnership has the right to prepay the New A-1 Lakewood Loan in whole or in part without charge, penalty or premium. The A-1 Lender received an origination fee of $73,452 on the effective date

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of the New A-1 Lakewood Loan and will receive an exit fee equal to 1.5% of the full amount of the New A-1 Lakewood Loan upon the earlier of (a) full repayment (whether on the maturity date or prior thereto or any other date), and (b) the maturity date. Pursuant to a Pledge and Security Agreement entered into by the Company with the A-1 Lender, the New A-1 Lakewood Loan is secured by 489,680 unissued common limited partnership units of the Operating Partnership.

On March 27, 2024, the proceeds from the New Lakewood Loan and the New A-1 Lakewood Loan were used to refinance the Original Lakewood Loan, and the outstanding obligations under Original Lakewood Loan were repaid in full. At the closing of the refinancing, an unpaid extension fee in the amount of $138,450 was paid to the A-1 Lender under the Original Lakewood Loan which was due but not paid in connection with the prior March 2023 extension of the Original Lakewood Loan. All guaranties in connection and collateral with respect to the Original Lakewood Loan have been terminated or released, and all commitments with respect to the Original Lakewood Loan have been terminated or released.

*Southaven Refinance*

On December 6, 2024, the subsidiaries of the Operating Partnership (the "New Southaven Borrower") entered into a new $18.0 million loan (the "New Southaven Loan") with UBS AG. (the "New Southaven Lender") secured by the Southaven Property. The New Southaven Loan is evidenced by a promissory note and has a fixed interest rate that is equal to the five-year United States Treasury rate plus 3.58%, resulting in an interest rate of 7.77%. The maturity date of the New Southaven Loan is December 6, 2029. The New Southaven Loan requires monthly interest-only payments for the life of the loan, with the outstanding principal balance due at maturity. Prepayment is not permitted during the first year of the New Southaven Loan, but prepayment is permissible with certain stipulations laid out in the loan agreement.

On December 6, 2024, the proceeds from the New Southaven Loan were used to refinance the Original Southaven Loan, and the outstanding obligations under the Original Southaven Loan were repaid in full. All guarantees in connection and collateral with respect to the Original Southaven Loan have been terminated or released, and all commitments with respect to the Original Southaven Loan have been terminated or released.

*Northbrook, Fort Collins and Aurora Contribution Agreement*

On December 24, 2024, the Company entered a loan contribution agreement (the "Contribution Agreement") to restructure four of its loans with Access Point Financial, LLC (the "Access Point Lender") – 1) the mortgage loan secured by the Sheraton – Northbrook ("Sheraton Northbrook Loan") with unpaid principal balance of approximately $4.0 million, 2) the loans secured by the Residence Inn - Fort Collins Loan ("Fort Collins Loans") with collective unpaid principal balance of approximately $13.0 million, 3) the mortgage loan secured by the Courtyard by Marriott – Aurora ("Courtyard Aurora Loan") with unpaid principal balance of approximately $14.9 million. With respect to the Sheraton Northbrook Loan, the Access Point Lender received 4,067,409 Series A Preferred Units in exchange for all of the remaining unpaid principal and interest on the Sheraton Northbrook Loan. With respect to the Fort Collins Loans and the Courtyard Aurora Loan, the Company is required to refinance each such loan within 90 days of the date of the Contribution Agreement, and to the extent there is remaining unpaid principal and interest on such loans after such refinancing, the Operating Partnership is required to enter into a contribution agreement with the Access Point Lender through which the Access Point Lender will receive Series A Preferred Units in exchange for all of such remaining unpaid principal and interest

See "– Subsequent Events" below for a description of changes to mortgage debt occurring subsequent to December 31, 2025.

**Contracts for Purchase and Sale of Hotel Properties**

*Contribution Agreements*

As of December 31, 2024, we had two properties under contract pursuant to Legendary Equity Preservation UPREIT (Pat. Pend.) Contribution Agreements entered into on April 15, 2024:

1) the Hampton Inn Stow – the contribution of an 84-room Hampton Inn hotel in Stow, Ohio to the Operating Partnership. The aggregate consideration for this hotel under the Hampton Stow Contribution Agreement is $10.2 million, with a majority of the consideration consisting of the assumption by the Operating Partnership 

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of existing debt secured by the hotel and the remaining consideration consisting of the issuance of Series T LP Units of the Operating Partnership.

2) the Staybridge Suites Stow – the contribution of a 92-room Staybridge Suites hotel in Stow, Ohio to the Operating Partnership. The aggregate consideration for this hotel under the Staybridge Stow Contribution Agreement is $10.9 million, with a majority of the consideration consisting of the assumption by the Operating Partnership of existing debt secured by the hotel and the remaining consideration consisting of the issuance of Series T LP Units of the Operating Partnership and cash at closing.

As required by the Contribution Agreements, the Operating Partnership deposited $100,000 in aggregate

($50,000 for each hotel) into an escrow as earnest money pending the closing or termination of each Contribution Agreement. Except in certain circumstances described in each Contribution Agreement, if the Operating Partnership fails to perform its obligations under either Contribution Agreement, it will forfeit the earnest money for the respective acquisition.

We terminated the Hampton Stow Contribution Agreement and the Staybridge Stow Contribution Agreement on March 1, 2025. The earnest money deposits were fully refunded to the Operating Partnership.

***Agreement to Sell Pineville HGI Property and Charlotte Property***

On December 2, 2024, we entered into two purchase and sale agreements for the Pineville HGI Property and the Charlotte Property. The agreements are subject to closing conditions. There can be no assurance we will complete any or all of these pending property dispositions on the contemplated terms, or at all. We recorded impairment losses of approximately $4.0 million in connection with the pending sales of the Pineville HGI Property and the Charlotte Property.

#### Cash Flows
The following table provides a breakdown of the net change in our cash, cash equivalents, and restricted cash:

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(3702826) | $(853562) |
| Net cash provided by investing activities | 43478753 | 4375111 |
| Net cash used in financing activities | (37947966) | (6104036) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $1827961 | $(2582487) |

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#### Cash Flows From Operating Activities
***As of December 31, 2025, we owned thirteen hotel properties and an equity and profits interest in the parent of the entity which holds a leasehold interest in one hotel property, and during the year ended December 31, 2025, net cash used in operating activities was $3.7 million. As of December 31, 2024, we owned seventeen hotel properties and an equity and profits interest in the parent of the entity which holds a leasehold interest in one hotel property, and net cash used in operating activities was $0.9 million. Our cash flows used in operating activities generally consist of the net cash generated by our hotel operations, partially offset by the cash paid for corporate expenses, certain acquisition-related expenses, property management fees, and other working capital changes. The increase in cash used in operating activities during 2025 was primarily attributable to reduced revenue from the sale of hotel properties during the year and increased amounts due to related parties, partially offset by lower property operating expenses associated with a smaller portfolio. See "– Results of Operations" below for further discussion of our operating results for the years ended December 31, 2025 and 2024.***

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***Cash Flows From Investing Activities***

Net cash provided by investing activities was $43.5 million for the year ended December 31, 2025, primarily driven by $47.0 million in aggregate proceeds from the sales of the Charlotte Property, Pineville HGI Property, Fargo Property, and Prattville Property, partially offset by approximately $3.5 million used for improvements and additions to hotel properties. Net cash provided by investing activities was $4.4 million for the year ended December 31, 2024, primarily driven by $8.9 million in proceeds from the sale of the Pineville Property offset by $4.5 million used for improvements and additions to hotel properties.

#### Cash Flows From Financing Activities
During the year ended December 31, 2025, net cash used in financing activities was $37.9 million and consisted primarily of the following:

● $1.7 million of net cash provided by offering proceeds related to our Offering, including $2.9 million net cash related to the GO II Unit Offering and $1.1 million net cash related to the Series P Preferred Unit Offering, which was net of payments of commissions and other offering costs of $2.4 million

● $39.6 million of net cash used in debt financing as a result of proceeds from debt financing of $5.5 million and $1.5 million in draws on our line of credit, offset by principal payments on debt financing of $39.3 million, $6.1 million in payments on our line of credit, $0.6 million in payments on finance lease liabilities and payments of financing costs of $0.5 million; and

● Less than $0.1 million of net cash distributions.

During the year ended December 31, 2024, net cash used in financing activities was $6.1 million and consisted primarily of the following:

● $0.7 million of net cash provided by offering proceeds related to our Offering, including $2.9 million net cash related to the GO II Unit Offering and $0.2 million net cash related to the Series P Preferred Unit Offering, which was net of payments of commissions and other offering costs of $2.4 million;

● $3.3 million of net cash used in debt financing as a result of proceeds from debt financing of $45.9 million and $5.5 million in draws on our line of credit, offset by principal payments on debt financing of $47.7 million, $5.0 million in payments on our line of credit, $0.6 million in payments on finance lease liabilities and payments of financing costs of $1.5 million; and

● $3.5 million of net cash distributions, after giving effect to distributions reinvested by stockholders of $0.5 million.

See Part II. Item 5. "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Distribution Information" for details regarding our distribution history as well as sources used to pay our distributions.

#### Results of Operations
We expect that revenue, operating expenses, maintenance costs, real estate taxes and insurance, interest expense and management fees will each increase in future periods as a result of anticipated future acquisitions of real estate investments. Interest expenses are also expected to increase in future periods as a result of higher interest rates on recently financed or extended loans as well as future refinancings of maturing debt. Future operating results could be impacted by changing market and industry factors, see " – Market Outlook" above.

*Our results of operations for the years ended December 31, 2025 and December 31, 2024 are not indicative of those expected in future periods. As of December 31, 2025 and 2024, we consolidated fourteen and eighteen properties, respectively. During the year ended December 31, 2025, we sold four hotel properties (the Charlotte Property and Pineville* 

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*HGI Property in May 2025, the Fargo Property in December 2025, and the Prattville Property in December 2025), which impacts the comparability of our results between periods.*

*In evaluating financial condition and operating performance, we believe Revenue per Available Room ("RevPAR"), which we calculate by dividing total gross room revenue by the total number of available rooms for the period, is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for properties. We also believe occupancy and average daily rate ("ADR"), which are components of calculating RevPAR, are meaningful indicators of our performance. Occupancy, which we calculate by dividing occupied rooms by total rooms available, measures the utilization of a property's available capacity. ADR, which we calculate by dividing total gross room revenue by the total number of rooms rented for the period, measures average room price and is useful in assessing pricing levels.*

*Comparison of the year ended December 31, 2025 versus the year ended December 31, 2024*

#### Revenue
Room revenues totaled $60.6 million and $69.5 million for the years ended December 31, 2025 and December 31, 2024, respectively. The $8.9 million decrease was primarily due to the sale of four hotel properties during 2025 and the sale of one hotel property during 2024, resulting in fewer properties contributing revenue for the full year. Other revenue, which consists primarily of hotel food and beverage revenues as well as revenues from other hotel services, was $3.9 million and $4.8 million for the years ended December 31, 2025 and December 31, 2024, respectively. Hotel occupancy, ADR, and RevPAR were 65.15%, $127.10, and $82.80, respectively, for the year ended December 31, 2025. Hotel occupancy, ADR, and RevPAR were 67.46%, $127.90, and $86.29, respectively, for the year ended December 31, 2024.

#### Property Operations Expenses
***Property operations expenses were $32.7 million and $35.8 million for the years ended December 31, 2025 and December 31, 2024, respectively. The $3.1 million decrease was primarily due to fewer properties in the portfolio following the sale of four hotel properties during 2025. Property operations expenses consist primarily of hotel personnel costs, property taxes, insurance, repair and maintenance, and other costs of operating our hotel properties.***

#### General and Administrative Expenses
***General and administrative expenses were $10.5 million and $12.0 million for the years ended December 31, 2025 and December 31, 2024, respectively. The $1.5 million decrease was primarily attributable to reduced overhead costs associated with a smaller portfolio and ongoing cost management efforts. General and administrative expenses consist primarily of administrative personnel costs, rent, professional fees and the cost of office supplies and equipment.***

#### Sales and Marketing Expenses
***Sales and marketing expenses were $4.6 million and $4.9 million for the years ended December 31, 2025 and December 31, 2024, respectively. The decrease was primarily due to the reduction in properties in the portfolio following dispositions during 2025. Sales and marketing expenses consist primarily of sales and marketing personnel costs, hotel brand loyalty program costs, advertising and other marketing costs.***

#### Franchise Fees
***Franchise fees were $5.6 million and $6.5 million for the years ended December 31, 2025 and December 31, 2024, respectively. The $0.9 million decrease was primarily due to fewer properties in the portfolio. Franchise fees include the amortization of initial franchise fees, as well as monthly fees paid to franchisors for royalty, marketing, reservation fees and other related costs.***

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#### Management Fees
***Management fees were $4.1 million and $5.1 million for the years ended December 31, 2025 and December 31, 2024, respectively. The $1.0 million decrease was primarily due to fewer properties in the portfolio. Management fees include asset management fees paid to the Advisor and management fees paid to property management service providers who manage the day-to-day operations of our hotel properties.***

#### Acquisition Expenses
Acquisition expenses were $40,000 and $34,353 for the years ended December 31, 2025 and December 31, 2024, respectively. Acquisition expenses include acquisition-related and due diligence costs that relate to a property that was not ultimately acquired, as well as costs related to hotel property acquisition activities that are not attributable to specific property acquisitions, along with any acquisition costs associated with the acquisition of a VIE.

#### Depreciation and Amortization
Depreciation and amortization expense was $9.0 million and $10.4 million for the years ended December 31, 2025 and December 31, 2024, respectively. The $1.4 million decrease was primarily due to fewer depreciable assets in the portfolio following the sale of hotel properties during 2025.

#### Impairment Loss
Impairment loss was $10.1 million and $4.0 million for the years ended December 31, 2025 and December 31, 2024, respectively. The 2025 impairment loss was recorded in connection with the evaluation of hotel properties classified as held for sale and other properties for which indicators of impairment were identified. The 2024 impairment loss was recorded in connection with the evaluation of the Pineville HGI Property and Charlotte Property, both of which were concluded to be held for sale as of December 31, 2024.

#### Gain (Loss) From Sale of Hotel Property
Gain from sale of hotel property was $0.6 million for the year ended December 31, 2025, resulting from the aggregate net gains on the sales of the Charlotte Property, Pineville HGI Property, Fargo Property, and Prattville Property. Loss from sale of hotel property was $4.6 million for the year ended December 31, 2024, resulting from the sale of the Pineville Property in July 2024.

#### Other Expense, net
Other expense, net was $3.4 million for each of the years ended December 31, 2025 and December 31, 2024. The 2025 amount includes costs related to the write-off of disposed fixed assets and other non-recurring charges. The 2024 amount was primarily due to writing off uncompleted projects.

#### Interest Expense
Interest expense was $19.6 million and $17.5 million for the years ended December 31, 2025 and December 31, 2024, respectively. The $2.1 million increase in interest expense was primarily due to the continued impact of elevated interest rates on variable rate debt and the issuance of Series A Preferred Units in lieu of cash interest, partially offset by the reduction in outstanding mortgage debt from property dispositions during 2025.

#### Critical Accounting Estimates
Below is a discussion of the accounting estimates that management believes are or will be critical to our operations. We consider these estimates critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during

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the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

#### Acquisition of Hotel Properties
We evaluate whether each hotel property acquisition should be accounted for as an asset acquisition or a business combination. If substantially all of the fair value of the gross assets acquired is concentrated in a single asset or a group of similar identifiable assets, then the transaction is considered to be an asset acquisition. All of our acquisitions since inception have been determined to be asset acquisitions. Transaction costs associated with asset acquisitions will be capitalized and transaction costs associated with business combinations will be expensed as incurred.

Our acquisitions generally consist of land, land improvements, buildings, building improvements, and furniture, fixtures and equipment ("FF&E"). We may also acquire intangible assets or liabilities related to in-place leases, management agreements, debt, and advanced bookings. For transactions determined to be asset acquisitions, we allocate the purchase price among the assets acquired and the liabilities assumed based on their respective fair values at the date of acquisition. For transactions determined to be business combination, we record the assets acquired and the liabilities assumed at their respective fair values at the date of acquisition. We determine the fair value by using market data and independent appraisals available to us and making numerous estimates and assumptions.

The difference between the relative fair value and the face value of debt assumed in connection with an acquisition is recorded as a premium or discount and amortized to interest expense over the remaining term of the debt assumed. The valuation of assumed liabilities is based on our estimate of the current market rates for similar liabilities in effect at the acquisition date.

#### Impairment of Hotel Properties
We assess the carrying value of our hotel properties whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The recoverability is measured by comparing the carrying amount to the estimated future undiscounted cash flows which take into account current market conditions and our intent with respect to holding or disposing of the hotel properties. If our analysis indicates that the carrying value is not recoverable on an undiscounted cash flow basis, we will recognize an impairment loss for the amount by which the carrying value exceeds the fair value. The fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions or third-party appraisals.

The use of projected future cash flows is based on assumptions that are consistent with a market participant's future expectations for the travel industry and the economy in general and our expected use of the underlying hotel properties. The assumptions and estimates related to the future cash flows and the capitalization rates are complex and subjective in nature. Changes in economic and operating conditions that occur subsequent to a current impairment analysis and our ultimate use of the hotel property could impact the assumptions and result in future impairment losses to the hotel properties. We recorded a $10.1 million impairment charge for the year ended December 31, 2025 and a $4.0 million impairment charges for the year ended December 31, 2024.

***Assessment of Variable Interest Entities***

We use judgment when evaluating whether we have a controlling financial interest in an entity, including the assessment of the importance of rights and privileges of the partners based on voting rights, as well as financial interests in an entity that are not controllable through voting interests. If the entity is considered to be a variable interest entity ("VIE"), we use judgment in determining whether we are the primary beneficiary, and then consolidate those VIEs for which we have determined we are the primary beneficiary. If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interest in the entity. Changes to judgments used in evaluating our partnerships and other investments could materially affect our consolidated financial statements.

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#### Fair Value Measurement
We establish fair value measures based on the fair value definition and hierarchy levels established by GAAP. These fair values are based on a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

***Level 1** Observable inputs such as quoted prices in active markets.*

***Level 2*** Directly or indirectly observable inputs, other than quoted prices in active markets.

***Level 3*** Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions.

Our estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

#### Off-Balance Sheet Arrangements
As of December 31, 2025 and 2024, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

#### Seasonality
Depending on a hotel's location and market, operations for the hotel may be seasonal in nature. This seasonality can be expected to cause fluctuations in our quarterly operating performance. Based on historic trends, for hotels located in non-resort markets, demand is generally lower in the winter months due to decreased travel and higher in the spring and summer months during the peak travel season. Accordingly, we generally would expect to have lower revenue, operating income and cash flow in the first and fourth quarters and higher revenue, operating income and cash flow in the second and third quarters.

#### Subsequent Events
***Mortgage Loan Modifications***

*El Paso Airport Loan Modification*

In January 2026, the Company entered into a Loan Modification Agreement with PCF IV NP El Paso, LLC, the successor lender to Western Alliance Bank, with respect to the mortgage loan secured by the Courtyard by Marriott - El Paso Airport (the "El Paso Airport Loan"). The loan had been assigned to the new lender in March 2025. Under the modification, the interest rate was amended to SOFR plus 4.50% (with a SOFR floor of 4.00%), monthly payments were converted to interest-only, and the financial covenants were waived. The Company incurred a modification fee and an exit fee, each of approximately $98,000. The Company is also required to fund an interest reserve equal to three months of debt service from excess property cash flow and is subject to Fund Liquidity Event provisions that require application of net proceeds from any disposition of Fund Assets toward the loan obligations. Failure to satisfy Fund Liquidity Event payment obligations constitutes full recourse to the Guarantor under the guaranty agreement.

*El Paso Receivership*

On January 19, 2026, the District Court of El Paso County, Texas entered an Agreed Order Appointing Receiver in connection with the lawsuit filed by EPH Development Fund LLC against LF3 El Paso, LLC and LF3 El Paso TRS, LLC relating to the Holiday Inn - El Paso property. A receiver was appointed over the specific assets of the Borrower, including the hotel property located at 900 Sunland Park Drive, El Paso, Texas. Under the order, the Borrower was directed to deliver possession of the property, all cash collateral, accounts, records, contracts, and other assets to the Receiver, and is prohibited from collecting rents or proceeds or taking any actions that would adversely impact the value of the property.

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As of December 31, 2025, the Holiday Inn - El Paso property was classified as held for sale on the Company's consolidated balance sheet. The Company is evaluating the impact of the receivership on the carrying value and disposition of the property.

*Lubbock Expo Forbearance Agreement*

On February 5, 2026, the Company entered into a Limited Forbearance Agreement (the "Lubbock Expo Forbearance Agreement") with K-Star Asset Management LLC, as Special Servicer and attorney-in-fact for Wells Fargo Bank, National Association, as Trustee, with respect to the mortgage loan secured by the Fairfield Inn & Suites - Lubbock (the "Lubbock Fairfield Loan"). The Lubbock Fairfield Loan had been transferred to special servicing in October 2025 following the Borrowers' failure to timely remit monthly debt service payments beginning in August 2025, among other noticed defaults. Under the Lubbock Expo Forbearance Agreement, the Lender has agreed to forbear from exercising certain remedies through the earlier of (a) March 31, 2026 if a final purchase and sale agreement is not executed by February 28, 2026, (b) April 30, 2026 if such agreement is executed by February 28, 2026, or (c) the occurrence of an incurable Forbearance Termination Event. As a condition of the Lubbock Expo Forbearance Agreement, the Borrowers paid a forbearance fee of approximately $85,000, outstanding special servicing fees, legal fees, and resumed monthly debt service payments at the default interest rate of 5.00%.

On April 1, 2026, the Company entered into a First Amended Limited Forbearance Agreement (the "Lubbock Expo Amended Forbearance Agreement") with K-Star Asset Management LLC, as Special Servicer, with respect to the Lubbock Fairfield Loan. The Borrowers did not execute a final purchase and sale agreement by the February 28, 2026 deadline under the original Lubbock Expo Forbearance Agreement, which triggered an incurable Forbearance Termination Event as of March 31, 2026. Under the Lubbock Expo Amended Forbearance Agreement, the Lender has agreed to forbear from exercising remedies through the earlier of (a) June 30, 2026, (b) the occurrence of an incurable Forbearance Termination Event, or (c) the closing of a sale of the property satisfying the loan obligations in full. The Borrowers continue to remit monthly debt service payments at the default interest rate, and are required to pay an additional monthly forbearance fee of $15,000 during the forbearance period, provide bi-weekly liquidation status updates, and comply with cash management and operational reporting requirements. Special servicing fees continue to accrue.

***New Northbrook Loan***

On February 13, 2026, the Company, through its indirect wholly-owned subsidiaries LF3 Northbrook, LLC and LF3 Northbrook TRS, LLC (collectively, the "Northbrook Borrowers"), entered into a Business Loan Agreement and related promissory note with Town Center Bank (the "Northbrook Loan") in the principal amount of $2,250,000. The Northbrook Loan bears interest at a fixed rate of 6.75% per annum and matures on February 15, 2031, at which time the remaining principal balance will be due as a balloon payment. The loan is secured by the Sheraton Chicago Northbrook Hotel and related collateral, and is guaranteed by Norman H. Leslie pursuant to an unlimited personal guaranty. The Northbrook Borrowers are subject to customary affirmative and negative covenants, including a minimum 1.20x debt service coverage ratio and ongoing financial reporting requirements.

***Sale of Lakewood Property***

On March 19, 2026, the Company sold the Lakewood Property to an unaffiliated purchaser for $12,400,000 in cash. The mortgage loan secured by the Lakewood Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released.

***Status of the Offering***

As of the date of this filing, the Company's private offering remained open for new investment, and since the inception of the offering the Company had issued and sold 10,304,567 shares of common stock, including 1,215,332 shares issued pursuant to the DRIP, resulting in the receipt of gross offering proceeds of $100.8 million.

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***GO II Unit Offering***

On March 31, 2026, the GO II Unit Offering terminated in accordance with its terms. The Operating Partnership has issued and sold 901,827 Series Go II LP Units, resulting in the receipt of gross offering proceeds of $6.8 million as of the date of termination.

***Engagement of Financial Advisor***

On April 24, 2026, the Company announced that a Special Committee of its Board of Directors, comprised solely of independent directors, engaged Piper Sandler & Co. as financial advisor to assist in the exploration and evaluation of potential strategic alternatives available to the Company. Faegre Drinker Biddle & Reath LLP is serving as legal counsel to the Special Committee. No timetable has been established, and there can be no assurance that the process will result in any particular transaction or strategic outcome.

#### Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

#### Quantitative and qualitative disclosures about market risk have been omitted as permitted under rules applicable to smaller reporting companies.

#### Item 8. Financial Statements and Supplementary Data.

#### See the Index to Financial Statements at page F-1 of this report.

#### Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

#### None.

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#### Item 9A. Controls and Procedures.

#### Evaluation of Disclosure Controls and Procedures
Based on the evaluation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) required by Securities Exchange Act of 1934 Rules 13a-15(b) or 15d-15(b), our Chief Executive Officer and our Chief Financial Officer have concluded that as of the end of the period covered by this report, December 31, 2025, our disclosure controls and procedures were effective (i) to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms; and (ii) to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

***Management's Assessment of Internal Control Over Financial Reporting***

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: (1) pertain to maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on our financial statements. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In connection with the preparation of our Form 10-K, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control–Integrated Framework* (2013). A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Based on its assessment, our management believes that, as of December 31, 2025, our internal control over financial reporting was effective based upon those criteria.

This Annual Report on Form 10-K does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company, as a non-accelerated filer, to provide only management's report in this Annual Report on Form 10-K.

***Changes in Internal Control Over Financial Reporting***

There have been no changes in our internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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#### Item 9B. Other Information.
(a) Amendment to Code of Conduct and Ethics

**On April 25, 2025, we amended our Code of Conduct and Ethics to adopt insider trading policies and procedures governing the purchase, sale and/or other dispositions of our securities by our directors and officers and the managers, officers and employees of our advisor and its affiliates who provide services to us, which policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to us. We also updated the person who will serve as the Compliance Officer.**

(b) None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended December 31, 2025.

#### Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

#### Not applicable.

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#### PART III

#### Item 10. Directors, Executive Officers and Corporate Governance.
**Executive Officers and Directors** 

The following table sets forth certain information about our executive officers and directors as of May 15, 2026.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name andAddress**<sup>(1)</sup> | **Position(s)** | **Age** | **Year FirstBecame aDirector** | **Class** |
| &nbsp;&nbsp;Corey R. Maple | Chairman of the Board and Director | 60 | 2018 | Class I |
| &nbsp;&nbsp;Norman H. Leslie | President, Chief Executive Officer, Secretary, Chief Investment Officer, Treasurer, and Director | 59 | 2018 | Class II |
| &nbsp;&nbsp;Samuel C. Montgomery | Chief Financial Officer and Director | 44 | 2025 | Class III |
| &nbsp;&nbsp;Perry M. Rynders | Independent Director | 68 | 2019 | Class II |
| &nbsp;&nbsp;Jeffrey T. Leighton | Independent Director | 56 | 2018 | Class III |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) The address of each named executive officer and director is 1635 43rd Street South, Suite 205, Fargo, North Dakota 58103.

**Corey R. Maple**

Corey R. Maple serves as Chairman of our board of directors and a director, positions he has held since April 2018. From April 2018 to May 2023, Mr. Maple served as the Company's Chief Executive Officer and Secretary. He also served as the Chief Executive Officer and Secretary of the Advisor, positions he held from April 2018 to May 2023. Mr. Maple has also served as Managing Member of the Sponsor since 2018. In 1992, Mr. Maple served as manager of a branch office of Maier Engineering in St. Paul, Minnesota. In 1993, Mr. Maple and three partners purchased Maier from its principal, Gordon Maier. In 1996, Mr. Maple founded MiniMax Software Corp. to build engineering applications for the electric utility market. Also in 1996, Mr. Maple acquired a 100% interest in Maier by buying out the interests of his other three partners in the company. In 2005, MiniMax merged with Powel, ASA, a privately held Norwegian company. In 2006, Mr. Maple helped lead a successful public offering of the combined entity on the Oslo Bourse. Mr. Maple served as the President of U.S. operations and member of the board of directors for the next two years until the company was purchased by a Scandinavian conglomerate. In 2008, Mr. Maple founded Cordonco.com, an online transaction processing service. Also in 2008, Mr. Maple served as a founder of Lodging Opportunity Fund, an investment fund sponsored by an affiliate of our Advisor that purchased distressed, limited-service hotels, and currently serves as an officer and director of that entity. Mr. Maple also owns or has an interest in Seven Sisters Spirits, a large full-service liquor store near Detroit Lakes MN, and MapleTree LLC, an investment company. Mr. Maple holds a Bachelor of Science degree in Electrical Engineering from North Dakota State University. We believe that Mr. Maple's experience as a founder of Lodging Opportunity Fund and his private board experience make him well qualified to serve as a member of our board of directors.

On August 28, 2023, Mr. Maple, the Advisor and an affiliated manager of another REIT sponsored by our Sponsor, Legacy Hospitality II, LLC ("Legacy"), agreed to an administrative cease-and-desist order filed by the Securities and Exchange Commission (the "SEC") relating to matters previously discussed in our prior public filings. A copy of the order can also be found on the SEC's website at https://www.sec.gov/files/litigation/admin/2023/33-11227.pdf. The SEC's order states that Mr. Maple, the Advisor and Legacy violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, as amended, through the improper reimbursement of and financial accounting for certain expenses incurred by the Advisor and Legacy as well as the adequacy of disclosures to investors related to those policies and practices. As part of the settlement, the Advisor paid disgorgement of $463,900, prejudgment interest of $85,431.50 and a civil monetary penalty of $225,000, Legacy agreed to disgorgement of $2,283,000, prejudgment interest of $4,359,012.67 and a civil monetary penalty of $1,150,000, and Mr. Maple paid a civil monetary penalty of $100,000. The Advisor, Legacy and Mr. Maple did not admit or deny the findings contained in the order, except that solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, the findings in the order are true and admitted by Mr. Maple.

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**Norman H. Leslie**

Norman H. Leslie serves as Chief Executive Officer and Secretary of the Company, positions he has held since May 19, 2023. In addition, he serves as the President of the Company, a position he has held since August 2019, and Chief Investment Officer, Treasurer and director of the Company, positions he has held since April 2018. Mr. Leslie also serves as the President, Chief Investment Officer and Treasurer of the Advisor, positions he has held since April 2018. Mr. Leslie has also served as the Managing Member of the Sponsor since 2018. Mr. Leslie has 33 years of real estate experience and has worked extensively in the hotel industry starting at the age of 13, working in his family's roadside inn, where he developed an in-depth understanding of hotel operations. Mr. Leslie organized NHS, LLC (dba National Hospitality Services) in 2001. Today, NHS manages 48 hotels across the United States and is recognized as a Top 200 management company in the United States by size. NHS operates hotels franchised through IHG®, Marriott®, Hilton®, Hyatt®, Radisson®, Choice Hotels® and Wyndham®. As co-founder of Bridge Hospitality LLC and other development companies, he was instrumental in the multiple new-build IHG and Marriott hotels in the United States. Mr. Leslie has also led the development of commercial properties including Grade A offices and retail centers in North Dakota. He was also a co-founder of Heritage Homes, a premiere homebuilder in the Fargo-Moorhead market.

Mr. Leslie co-founded Lodging Opportunity Fund LLLP, Lodging Opportunity Fund Real Estate Investment Trust, the Company and their corresponding sponsor entities. These entities acquired over 40 hotels between 2011 and today. Mr. Leslie served on the IHG Owners Association Global Board of Directors (2018-present) and was elected as Chair of the Board for 2022. He has served on the board of directors of the Fargo-Moorhead-West Fargo Chamber of Commerce, Ramada Inns National Association (RINA), and four Owner Association panels for IHG.

Mr. Leslie holds a Bachelor of Commerce Degree (Honors) from the University of Manitoba. We believe that Mr. Leslie's significant experience in the real estate and hotel industry makes him well qualified to serve as a member of the Company's board of directors.

**Samuel C. Montgomery**

Samuel C. Montgomery serves as Chief Financial Officer of the Company, a position he has held since October 2020, and director, a position he has held since September 2025. Mr. Montgomery also serves as Chief Operating Officer of our Sponsor, a position he has held since December 2016. Mr. Montgomery oversees every aspect of Legendary Capital's operations. He is a certified public accountant in North Dakota, Florida and Tennessee and has more than a decade of experience serving asset managers in the REIT and private equity sectors. He spent the first six years of his career with Ernst & Young LLP, primarily with its Chicago, Illinois, financial services group. In this role, he served as a business advisor to several of the country's largest REITs on tax consulting, mergers and acquisitions and public offerings. He also contributed to the growth of the company's financial services practice with a rotation in Bangalore, India, to help develop Ernst & Young's outsourced tax compliance functions for financial services clients. In 2011, Montgomery transferred to PricewaterhouseCoopers LLP, where he spent five years serving financial services clients primarily from the Tampa, Florida, office. As one of two individuals tasked with developing a financial services practice in western and central Florida, he helped broaden the footprint to cover the entire state. Upon relocating to Fargo, North Dakota in June 2016, Mr. Montgomery joined Eide Bailly LLP's tax practice serving a variety of real estate clients. He holds a Bachelor's degree in Business Administration-Accounting from the University of Miami and a Master's degree in Taxation from Nova Southeastern University.

**Perry M. Rynders**

Perry M. Rynders is one of our independent directors and is the Chairman of the Audit Committee of our board of directors, positions he has held since April 2019. Mr. Rynders is also the Chairman of the Audit Committee of Lodging Opportunity Fund REIT, an affiliate of the Company. Mr. Rynders was the Chief Executive Officer and member of the Board of Governors of A'viands, LLC, a food services management company, from 2005 through September of 2014. In August of 2011, A'viands was sold to TrustHouse Services Group, LLC. In April of 2013, TrustHouse Services Group, LLC was sold to Elior, a publicly traded company out of France. Mr. Rynders continued as a consultant to A'viands, LLC through March of 2018. Mr. Rynders is a 50% owner, CEO and Chairman of the Board of Governors of Best Development Company, LLC. Best Development Company, LLC's primary asset is approximately 80 acres of land in Dakota County,

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MN which is currently farmed. Mr. Rynders is a 50% owner, CEO and Chairman of the Board of Governors of Best Holding Company, LLC. Best Holding Company, LLC's primary asset is a 30,000 square foot office building in Roseville, MN. Mr. Rynders is a 50% owner, CEO and Chairman of the Board of Governors of Best Investment Company II, LLC. Best Investment Company II, LLC's primary asset is an investment in Tamarack Aerospace Group, Inc. Mr. Rynders is also an investor in Lodging Opportunity Fund REIT, an affiliate of the Company. Mr. Rynders is a Certified Public Accountant (Inactive). We believe that Mr. Rynders' experience as Chairman of the Audit Committee of Lodging Opportunity Fund REIT and other business experience make him well qualified to serve as a member of our board of directors and the Chairman of our Audit Committee.

**Jeffrey T. Leighton**

Jeffrey T. Leighton is one of our independent directors, a position he has held since August 2018. Jeffrey T. Leighton currently is Vice President and a board member of Leighton Broadcasting, a second-generation radio broadcast company. Mr. Leighton has spent most of his life in Central Minnesota. Beginning in 1992 he worked as a financial advisor for American Express and attained a Series 7, 63 and 65 license for investments. In 1996, Mr. Leighton joined Leighton Broadcasting as Sales Manager for their Detroit Lakes, Minnesota market and in 2003, he was promoted to Market Manager for this same market. Mr. Leighton has led the Company in its completion of two acquisitions within this market since 2010. Mr. Leighton served on the Essentia Health Foundation and was a driving force in its creation of the Business Relations committee. Mr. Leighton has also served in various positions with the Detroit Lakes Chamber of Commerce, Rotary and Health Resource Center. He holds a Bachelor of Arts degree in Finance and Marketing from The University of St. Thomas in St. Paul, Minnesota. We believe that Mr. Leighton's finance and acquisitions experience makes him well qualified to serve as a member of our board of directors.

**Board Composition** 

We currently have five seats on our board of directors. Pursuant to our charter, our board of directors is currently divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. We did not hold an annual meeting of stockholders in 2023, 2024 or 2025 and, as of the date of filing, we did not hold an annual meeting of stockholders in 2026. As a result, all of our directors are continuing to serve because their successors have not yet been elected. We anticipate that we will hold an annual meeting during 2026 to elect directors. The board of directors is divided into three classes as follows:

● Class I directors. The sole Class I director is Corey R. Maple, whose term expires at the annual meeting of stockholders to be held in 2026 or until his successor is elected and qualified;

● Class II directors. The Class II directors are Norman H. Leslie and Perry M. Rynders. The Class II directors ' terms were scheduled to expire at the annual meeting of stockholders in 2023, but since neither that meeting nor the annual meeting of stockholders in 2024 or 2025 was held, the Class II directors ' terms will expire at the annual meeting of stockholders to be held in 2026 or until their successors are elected and qualified; and

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Each director will hold office until his or her successor is duly elected and qualified at the next annual meeting of stockholders. Due to the fact that no annual meetings of stockholders were held in 2023, 2024, or 2025, the staggered expiration schedule has effectively converged and all directors' terms will expire at the next annual meeting of stockholders, which the Company anticipates holding during 2026. Following that meeting, the board intends to re-establish staggered three-year terms for each class. There is no limit on the number of times a director may be elected to office.

**Code of Conduct and Ethics**

We have adopted a Code of Conduct and Ethics, which includes insider trading policies and procedures and which applies to all of our officers and directors. The Code of Conduct and Ethics is reasonably designed to promote compliance with applicable insider trading laws, rules, and regulations, and the Company's insider trading policies and procedures governing the purchase, sale, and other dispositions of the Company's securities by its directors, officers, and employees. The full text of our Code of Conduct and Ethics is posted on our website at https://legendarycap.com/sec-info/ and is filed as an exhibit to this Annual Report on Form 10-K. If any substantive amendments are made to the Code of Conduct and Ethics or any waiver is granted, we intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding such amendment to, or waiver from, a provision of this Code of Conduct and Ethics by posting such information on our website, at the address and location specified above.

**Audit Committee**

The board of directors established an Audit Committee currently composed of two directors. Perry M. Rynders, an independent director, is the Chairman of the Audit Committee. Jeffrey Leighton, an independent director, is a member of the Audit Committee. The board of directors has determined that Mr. Rynders and Mr. Leighton are "financially literate," and have "accounting or related financial management expertise," as such qualifications are interpreted by the board of directors in its business judgment and has determined that Mr. Rynders and Mr. Leighton are each an "audit committee financial expert" as that term is defined by the SEC. The Audit Committee is responsible for the oversight of (i) our accounting and financial reporting processes, (ii) the integrity of our financial statements, (iii) our compliance with legal and regulatory requirements, and (iv) our independent registered public accounting firm's qualifications, performance and independence. The audit committee fulfills these responsibilities primarily by carrying out the activities enumerated in the audit committee charter. The audit committee charter is available on our website at https://legendarycap.com/sec-info/. To assist the Audit Committee with its responsibilities, we created an advisory committee (the "Audit Advisory Committee"). Todd Fisher is currently the sole member of the Audit Advisory Committee. Mr. Rynders was a member of the Audit Advisory Committee prior to being appointed to the board of directors in April 2019.

**Conflicts Committee**

The board of directors established a conflicts committee of the board of directors (the "Conflicts Committee") composed of all of the independent directors. The members of the Conflicts Committee are Jeffrey T. Leighton and Perry M. Rynders. The Conflicts Committee may act on any matter permitted under Maryland law. Both the board of directors and the Conflicts Committee must act upon those conflicts of interest matters that cannot be delegated to a committee under Maryland law. The Conflicts Committee may also retain its own legal and financial advisors at our expense when appropriate. Among the matters that the Conflicts Committee may act upon are the following:

● the continuation, renewal or enforcement of our agreements with the Advisor and its affiliates, including the Advisory Agreement;

● specific known and disclosed conflicts including the approval of any management agreements between NHS, LLC dba National Hospitality Services ("NHS") and the TRS subsidiaries who are lessees of the properties;

● transactions with affiliates;

● the offering of any of the Company's securities;

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● whether and when we seek to list our common stock on a national securities exchange;

● whether and when we seek to become self-managed; and

● whether and when we seek to sell the Company or substantially all of its assets.

In addition, all purchases and sales of hotel properties and third-party borrowings require the approval of at least a majority of the Conflicts Committee. The Conflicts Committee does not have a separate committee charter.

**Nominating Committee**

In April 2023, our board of directors established a nominating committee of the board of directors (the "Nominating Committee"), composed of all of the independent directors, as well as Corey R. Maple. The current members of the Nominating Committee are Corey R. Maple, Jeffrey T. Leighton and Perry M. Rynders. The Nominating Committee is responsible for, among other things, assisting the board of directors in identifying individuals to become members of the board of directors and officers of the Company and providing recommendations to the board of directors for director nominees for the annual meeting of stockholders, filling director vacancies, and officers of the Company.

There have been no material changes to the procedures by which shareholders may recommend nominees to our board of directors since last disclosed to shareholders.

**Delinquent Section 16(a) Reports** 

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires executive officers, directors and persons who beneficially own any class of a company's common stock, to file reports of ownership and changes in ownership with the SEC. To our knowledge, based solely on a review of the copies of reports or written representations from such persons, we believe that our executive officers and directors have complied in a timely manner with all applicable Section 16(a) filing requirements for the year ended December 31, 2025 to the date of this filing.

#### Item 11. Executive Compensation.
**Compensation of Executive Officers**

Our executive officers do not receive compensation directly from us for services rendered to us. Our executive officers are officers and/or employees of, or hold an indirect ownership interest in, the Advisor, and/or its affiliates, and our executive officers are compensated by these entities, in part, for their services to us. Samuel C. Montgomery, our Chief Financial Officer, is an employee of an affiliate of the Advisor and we reimburse the affiliate, at cost, for an allocated portion of his compensation to the extent he provides services to us. See Item 13 of this Annual Report on Form 10-K for the year ended December 31, 2025, "Certain Relationships and Related Transactions, and Director Independence" for a discussion of the fees and expense reimbursements paid to the Advisor and its affiliates. The Conflicts Committee will discharge the board of directors' responsibilities relating to the compensation of our executives to the extent applicable.

**Compensation of Directors**

If a director is also one of our executive officers or is otherwise affiliated with our Sponsor or Advisor, we do not pay any compensation to that person for services rendered as a director. Our current policy, effective as of March 31, 2022, is to pay $2,500 in cash and issue 500 shares of our common stock on the last day of each calendar quarter, valued at fair value at the date of issuance, to each independent director who is qualified and acting as an independent director on such date. Prior to 2022, we paid our independent directors $500 for each regularly scheduled board of directors or board of directors committee meeting the director attended in person and $250 for each meeting the director attended virtually or by telephone. If there was a meeting of the board of directors and one or more board of directors committees in a single day, the fees were limited to $500 or $250 per day, as applicable. The members of the Audit Advisory Committee will receive the same pay described above for independent directors. In addition, effective as of March 31, 2022, the chairman of the

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Audit Committee will also receive $5,000 per year and $500 per calendar quarter as compensation for the additional duties performed as chairman of the Audit Committee. The other members of the Audit Committee will receive $500 per calendar quarter as compensation for the additional duties performed as a member of the Audit Committee. Prior to 2022, the chairman of the Audit Committee received $2,500 each year and $500 per Audit Committee meeting as compensation for the additional duties performed as chairman of the Audit Committee. This compensation policy may be modified by the board of directors from time to time.

We have provided below certain information regarding compensation earned by or paid to our directors during fiscal year 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Name** | **Fees Earned or Paid in**<br>**Cash in 2025**<sup>(1)</sup> | <br>**Stock Awards**<sup>(2)</sup> | **All Other**<br>**Compensation**<sup>(4)</sup> | <br>**Total** |
| Corey R. Maple<sup>(3)</sup> | $— | $— | $— | $— |
| Norman H. Leslie<sup>(3)</sup> |  |  |  |  |
| David G. Ekman<sup>(5)</sup> |  |  |  |  |
| Jeffrey T. Leighton | 12000 | 21140 |  | 33140 |
| Perry M. Rynders | 17000 | 21140 |  | 38140 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Fees Earned in 2025 or Paid in Cash include meeting fees earned in: (i) 2024 but paid or reimbursed in the first quarter of 2025 as follows: $0; and (ii) 2025 and to be paid in 2026 as follows: $29,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Beginning in the first quarter of 2022, each independent member of the Board of Directors received 500 shares of our common stock every quarter, valued at fair value at the date of issuance. The fair value of the stock for all four quarters of 2025 was $10.57 per share as determined in accordance with FASB ASC Topic 718.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Directors who are also our executive officers do not receive compensation for services rendered as a director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Represents dividends paid on stock awards. Messrs. Leighton and Rynders reinvested dividends pursuant to our dividend reinvestment plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Mr. Ekman resigned from the board of directors as of September 9, 2025.

**Phantom Stock Plan**

The board of directors has approved the adoption of a phantom stock plan (the "Phantom Stock Plan") for the Company. However, the specific terms of the Phantom Stock Plan have not yet been determined and approved by our board. The Company intends for the shares designated pursuant to the Phantom Stock Plan (the "Phantom Shares") to be allocated to the Advisor, the Company's taxable REIT subsidiaries collectively and NHS for distribution of the proceeds to their respective employees and service providers in accordance with their compensation plans; however, none of Corey R. Maple, Norman H. Leslie or Samuel C. Montgomery will receive any Phantom Shares pursuant to the Phantom Stock Plan.

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#### Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table shows, as of May 15, 2026, the amount of our common stock beneficially owned (unless otherwise indicated) by any person who is known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock, and the amount of our common stock and Operating Partnership units beneficially owned (unless otherwise indicated) by (1) our directors, (2) our executive officers, and (3) all of our directors and executive officers as a group.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock Beneficially Owned**<sup>(2)</sup> | **Common Stock Beneficially Owned**<sup>(2)</sup> | **Common Stock, Series GO LP Units and Series GO II LP Units Beneficially Owned**<sup>(2)</sup> | **Common Stock, Series GO LP Units and Series GO II LP Units Beneficially Owned**<sup>(2)</sup> | **Common Stock, Series GO LP Units and Series GO II LP Units Beneficially Owned**<sup>(2)</sup> | **Series B Units Beneficially Owned** <sup>(2)</sup> | **Series B Units Beneficially Owned** <sup>(2)</sup> |
| <br>**Name and Address of Beneficial Owner** <sup>(1)</sup> | **Number of Shares** | **Percent**<sup>(3)</sup> | **Number of Shares and Units** | **Percent**<sup>(4)</sup> | **Percent**<sup>(3)</sup> | **Number of Units** | **Percent**<sup>(5)</sup> |
| ***Ownership in Excess of 5% of Outstanding Common Stock*** |  |  |  |  |  |  |  |
| N/A |  |  |  |  |  |  |  |
| ***Directors and Executive Officers*** |  |  |  |  |  |  |  |
| Corey R. Maple | 57318.6 | \* | 116761.9<br><sup>(6)</sup> | \* | 1.17% | 1000.0<br><sup>(9)</sup> | 100% |
| Norman H. Leslie | 57318.6 | \* | 101400.9<br><sup>(7)</sup> | \* | 1.01% | 1000.0<br><sup>(9)</sup> | 100% |
| Samuel C. Montgomery |  |  | 6781.9<br><sup>(8)</sup> | \* | \* |  |  |
| Jeffrey T. Leighton | 20785.6 | \* | 20785.6 | \* | \* |  |  |
| Perry M. Rynders | 8867.3<br><sup>(10)</sup> | \* | 8867.3 | \* | \* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**All directors and executive officers as a group** | 144290.1 | 1.44% | 254597.6 | 1.81% | 2.54% | 1000.0 | 100% |

---

<sup>\*</sup> Less than 1% of the outstanding shares of common stock

&nbsp;&nbsp;&nbsp;&nbsp;(1) The address of each named beneficial owner is 1635 43rd Street South, Suite 205, Fargo, North Dakota 58103.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Beneficial ownership is determined in accordance with the rules of the SEC. Under SEC rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote, or to direct the voting of, such security, or "investment power," which includes the right to dispose of or to direct the disposition of such security. A person also is deemed to be a beneficial owner of any securities which that person has a right to acquire within 60 days. Except as otherwise indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. None of the shares or units is pledged as security.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Based on a total of 10,017,042 shares of common stock issued and outstanding as of May 15, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Based on a total of 10,017,042 shares of common stock, 3,124,503 Series GO LP Units, and 901,827 Series GO II LP Units issued and outstanding as of May 15, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Based on a total of 1,000.0 Series B partnership units of the Operating Partnership issued and outstanding as of May 15, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;(6) Includes 15,361 Series GO LP Units and 44,082.3 Series GO II LP Units

&nbsp;&nbsp;&nbsp;&nbsp;(7) Includes 44,082.3 Series GO II LP Units

&nbsp;&nbsp;&nbsp;&nbsp;(8) Includes 6,781.9 Series GO II LP Units

&nbsp;&nbsp;&nbsp;&nbsp;(9) Includes 1,000.0 Series B partnership units of the Operating Partnership owned by Legendary Capital REIT III, LLC, which is owned and controlled by Messrs. Maple and Leslie.

&nbsp;&nbsp;&nbsp;&nbsp;(10) Mr. Rynders owns all shares through the Rynders Family Trust, with respect to which he shares voting and investment power with Leah K. Rynders, Trustee.

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#### Item 13. Certain Relationships and Related Transactions, and Director Independence.
***Policy Regarding Transactions with Related Persons***

The Conflicts Committee will review and approve all matters our board of directors believes may involve a conflict of interest, including all transactions between the Company and affiliates of the Company and the Advisor. If we decide to acquire a property in which the Advisor, one of our directors or their respective affiliates owns an interest, a majority of members of the Conflicts Committee must first make a determination that such transaction is fair and reasonable to us and the purchase price is no greater than the price of the property to the affiliated seller, unless there is substantial justification for the excess amount and such excess amount is reasonable. Notwithstanding the foregoing, in no event will we acquire any property from an affiliated seller at an amount in excess of its current appraised value as determined by an independent third-party appraiser.

In addition, our Code of Conduct and Ethics lists examples of types of transactions with related parties that would create prohibited conflicts of interest and requires our officers and directors to be conscientious of actual and potential conflicts of interest with respect to our interests and to seek to avoid such conflicts or handle such conflicts in an ethical manner at all times consistent with applicable law. Our executive officers and directors are required to report potential and actual conflicts to the Chairman of the Audit Committee.

***Certain Transactions with Related Persons***

The Conflicts Committee has reviewed the material transactions between our affiliates and us since January 1, 2023, as well as any such currently proposed material transactions. Set forth below is a description of such transactions.

*Our Relationship with Legendary Capital REIT III, LLC.* Substantially all of our business is managed by the Advisor and its affiliates, pursuant to the Advisory Agreement. The Advisor is co-owned by Corey R. Maple and Norman H. Leslie. The Company has no direct employees. The employees of Legendary Capital, LLC, our sponsor and an affiliate of the Advisor (the "Sponsor"), provide services to us related to the negotiations of property acquisitions and financing, asset management, accounting, legal, investor relations, and all other administrative services. Pursuant to the terms of the Advisory Agreement, the Advisor is entitled to specified fees upon the provision of certain services, including acquisition fees, asset management fees, debt financing and refinancing fees, and disposition fees and real estate commissions. We also reimburse the Advisor and its affiliates, at cost, for certain expenses incurred on our behalf, including offering expenses, acquisition expenses and operating expenses. The Advisory Agreement has a term of 10 years. Pursuant to the terms of the Operating Partnership's operating agreement, the Advisor also receives distributions from the Operating Partnership in connection with its ownership of non-voting Series B Limited Partnership Units ("Series B LP Units") in certain circumstances.

We pay the Advisor a one-time acquisition fee of up to 1.4% of the hotel purchase price including funds allocated for any PIP at the time of each hotel property acquisition, and a financing fee of up to 1.4% of the hotel purchase price including funds allocated for any PIP at the time of closing the initial financing and a refinancing fee of up to 0.75% of the principal amount of any refinancing at the time of closing the refinancing. We also pay an annual asset management fee of up to 0.75% of the gross assets of the Company, which is payable on a monthly basis. We also pay a disposition fee equal to between 0.0% and 4.0% of the hotel sales price, payable at the closing of the disposition, which disposition fee in connection with a sale of all or substantially all of the Company's assets, merger or similar transaction, shall be equal to between 0.0% and 4.0% of the gross consideration received (grossed up for liabilities of the Company), with the percentage dependent on the total return per share and timing of such transaction, payable at the closing of such sale, merger or transaction. We may also pay real estate commissions of up to 3.0% of the hotel purchase price in connection with the sale of a hotel property in which the Advisor or its affiliates provided substantial services, but in no event greater than one half of the total commissions paid with respect to such property if a commission is paid to a third party as well as the Advisor, and in no event will total commissions exceed 5.0% of the hotel sales price. Certain affiliates of the Advisor may receive an annual guarantee fee equal to 1.0% of the guaranty, paid on a monthly basis, for debt obligations of the hotel properties personally guaranteed by such affiliates. The Advisor may also receive an annual subordinated performance fee equal to 20% of the distributions after the common stockholders and Operating Partnership limited partners (other than the Series B LP Unit holders) have received a 6% cumulative, but not compounded, return per annum.

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Per the terms of the Operating Partnership's operating agreement, the Advisor receives distributions from the Operating Partnership in connection with its ownership of non-voting Series B LP Units. In years other than the year of liquidation, after the Company's common stockholders have received a 6% cumulative but not compounded return on their original capital contributions, the Advisor receives distributions equal to 5% of the total distributions made. In the year of liquidation, termination, merger or other cessation of the general partner, or the liquidation of the Operating Partnership, holders of the Series B LP Units shall be distributed an amount equal to 5% of the limited partner's capital contributions after the common stockholders and the limited partners have received a return of their capital contributions plus a 6% cumulative but not compounded return. In the year of liquidation, termination, merger or other cessation of the general partner, or the liquidation of the Operating Partnership, holders of the Series B LP Units shall also be distributed an amount equal to 20% of the net proceeds from the sale of the properties, after the common stockholders and the limited partners have received a return of their original capital contributions plus a 6% cumulative but not compounded return from all distributions.

The Advisor and its affiliates may be reimbursed by the Company for certain organization and offering expenses in connection with the Company's securities offerings, including legal, printing, marketing and other offering-related costs and expenses. Following the termination of the Offering, the Advisor will reimburse the Company for any such amounts incurred by the Company in excess of 15% of the gross proceeds of the Offering. In addition, the Company may pay directly or reimburse the Advisor and its affiliates for certain costs incurred in connection with its provision of services to the Company, including certain acquisition costs, financing costs, and sales and marketing costs, as well as an allocable share of general and administrative overhead costs. All reimbursements are paid to the Advisor and its affiliates at cost.

Fees and reimbursements earned and payable to the Advisor and its affiliates for the years ended December 31, 2025 and 2024, were as follows:

---

| | | |
|:---|:---|:---|
|  | **Incurred** | **Incurred** |
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** |
| Fees: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing fees | $645614 | $90000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset management fees | 2232285 | 2451957 |
|  | $2877899 | $2541957 |
| Reimbursements: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Offering costs | $1530562 | $1901538 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 3167907 | 3631895 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 62687 | 57574 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition costs | 40146 | 185115 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 992614 | 113982 |
|  | $5793916 | $5890104 |

---

For the years ended December 31, 2025 and 2024, the Operating Partnership recognized distributions payable to the Advisor in the amounts of $0 and $118,232, respectively, in connection with the Advisor's ownership of Series B LP Units.

Samuel C. Montgomery, the Company's Chief Financial Officer, is an employee of the Sponsor, and the Company reimburses the Sponsor, at cost, for an allocated portion of his compensation to the extent he provides services to the Company. For the years ended December 31, 2025 and 2024, the total amount of executive compensation expenses reimbursed by the Company for Samuel C. Montgomery was $0.1 million and $0.1 million, respectively. For the years ended December 31, 2025 and 2024, the Company paid Corey Maple and Norman Leslie distributions in the amount of $0 in connection with their ownership of 57,319 shares and $16,240 in connection with their ownership of 57,319 shares, respectively, each, of the Company's common stock. Additionally, for the years ended December 31, 2025 and 2024, the

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Company paid Corey Maple distributions in amount of $0 and $4,532, respectively, in connection with his ownership of 15,361 Series GO LP Units.

*Our Relationship with NHS, LLC dba National Hospitality Services*. NHS is wholly-owned by Norman Leslie, a director and executive officer of the Company and a principal of the Advisor.

**Property Management Services**

Through February 2025, NHS provided property management and hotel operations management services for our hotel properties, pursuant to individual management agreements. The agreements had an initial term expiring on December 31st of the fifth full calendar year following the effective date of the agreement, which automatically renewed for a period of five years on each successive five-year period, unless terminated in accordance with its terms.

Pursuant to the management agreements, NHS earned a monthly base management fee for property management services, including overseeing the day-to-day operations of the hotel properties, equal to up to 4% of gross revenue. NHS may also earn an accounting fee of $14.00 per room for accounting services, payable monthly, and an administrative fee equal to 0.60% of gross revenues for administrative and other services. We reimbursed NHS for certain costs of operating the properties incurred on behalf of the Company. All reimbursements are paid to NHS at cost.

NHS also earns a flat fee of $5,000 per hotel property for due diligence services, including analyzing, evaluating, and reporting on documentation and information received by sellers or contributors during the period of due diligence. Such fee is waived if, upon acquisition by us, NHS is selected as the management company for the hotel property. NHS is also reimbursed for actual out-of-pocket costs incurred in providing the due diligence services.

In February 2025, we terminated all property management agreements with NHS and entered into new property management agreements for those hotels with Hotel Equities Group, LLC a third party (See Note 8 "Related Party Transactions" of the notes to the consolidated financial statements included as part of this Annual Report on Form 10-K).

**Loan Agreement**

We have a $600,000 loan (the "NHS Loan") with NHS (see Note 6 "Debt" of the notes to the consolidated financial statements included as part of this Annual Report on Form 10-K). The NHS Loan requires interest only payments, with all outstanding principal and interest amounts being due and payable at maturity. The NHS Loan has a fixed interest rate of 7.0% and a maturity date on September 30, 2025. We are working with NHS to extend this loan as of the date of this filing.

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Fees and reimbursements earned and payable to, NHS for the years ended December 31, 2025 and 2024, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Incurred** | **Incurred** | **Payable as of** | **Payable as of** |
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Fees: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Management fees | $— | $761201 | $103070 | $321408 |
| &nbsp;&nbsp;&nbsp;&nbsp;Administrative fees |  | 80118 | 5615 | 31950 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounting fees |  | 100992 | 9600 | 47616 |
|  | $— | $942311 | $118285 | $400974 |
| Reimbursements | $(260177) | $672472 | $(19140) | $421333 |

---

*Our Relationship with One Rep Construction, LLC ("One Rep").* One Rep is a related party through common management and ownership, as Corey Maple, Norman Leslie, and David Ekman, each hold a 33.33% ownership interest in One Rep. One Rep is a construction management company which provided construction management services to the Company during 2025 and 2024 related to the renovation construction activities at certain hotel properties. For the services provided, One Rep is paid a construction management fee equal to 6% or 7% of the total project costs. The Company reimburses One Rep for certain costs incurred on behalf of the Company, and all reimbursements are paid to One Rep at cost. For the years ended December 31, 2025 and 2024, the Company incurred $78,352 and $8,278 of construction management fees and reimbursements payable to One Rep, respectively. As of December 31, 2025 and 2024, the amounts outstanding and due to One Rep were $3,690 and $44,474 respectively, which is included in due to related parties on the accompanying consolidated balance sheets.

*Our Relationship with Legendary A-1 Bonds, LLC ("A-1 Bonds")*. A-1 Bonds is an affiliate of the Advisor which is owned by Mr. Leslie a director and executive officer of the Company and principal of the Advisor and Mr. Maple a director of the Company and principal of the Advisor. As of December 31, 2025 and 2024, the Company has an outstanding balance on its line of credit (the "A-1 Revolving Line of Credit") amounting to $13.5 million and $14.3 million, respectively (see Note 6). As of December 31, 2025, the A-1 Revolving Line of Credit was a $20.0 million line of credit with a fixed interest rate of 17.50% and a maturity of December 31, 2027.

*Loan Guarantees.* The members of the Advisor personally guaranty certain loans of the Company and may receive a guarantee fee of up to 1.0% per annum of the guaranty amount. As of December 31, 2025, Corey Maple is a guarantor of 50% of the loan secured by the Houston Property, which had an original loan amount of $13.9 million, is a guarantor of 50% of the loan secured by the Wichita Property, is a guarantor of the new loan secured by the Fort Collins Property, which had an original loan amount of $11.2 million and is a guarantor of the Company's $5.0 million line of credit which is secured by the hotel properties located in Cedar Rapids, Iowa and Eagan, Minnesota, and 100,000 Common LP Units of Lodging Fund REIT III OP, LP. Mr. Maple is also a guarantor of the loan secured by the El Paso University Property, which had an original principal loan amount of $14.4 million. Mr. Maple was a guarantor of the Company's loan secured by the Company's hotel property in Fargo, North Dakota, which had an original loan amount of $7.4 million. That loan was repaid in full and the guaranty terminated on December 17, 2025. As of December 31, 2025, Norman Leslie is a guarantor of the Company's new loan secured by the Fort Collins Property, which had an original loan amount of $11.2 million, and is a guarantor under the Company's new loan secured by the Lakewood Property, which had an original loan amount of $12.0 million. Mr. Leslie was a guarantor of the Company's loan secured by the Company's hotel property in Pineville, North Carolina, which had an original loan amount of $9.3 million. That loan was repaid in full and the guaranty terminated on July 23, 2024. Mr. Leslie was also a guarantor of the Company's loan secured by the Prattville Property, which had an original loan amount of $11.0 million. That loan was repaid in full and the guaranty terminated on December 30, 2025. For the years ended December 31, 2025 and 2024, the Company accrued guarantee fees in the amount of $0.1 million and $0.1 million respectively to each Mr. Maple and Mr. Leslie. In addition, during the second quarter of 2025, the Company recorded approximately $0.9 million of previously unrecorded guarantee fees relating to certain loans for the periods from October 1, 2021 through December 31, 2024. The Company evaluated this matter under SEC Staff Accounting Bulletins No. 99 and No. 108 and concluded that the omission of these fees was not material to any prior annual or interim period, nor to the current period. Accordingly, the cumulative amount was recorded as an out-of-period

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adjustment during the second quarter of 2025 and did not result in a restatement of previously issued financial statements. The guarantee fees are presented within Other Expense in the accompanying consolidated statements of operations. The total amount accrued of $2.9 million remained unpaid at December 31, 2025 and is included in Due to Related Party on the accompanying consolidated balance sheet.

As of December 31, 2025 and 2024, the Company had amounts due and payable to the Advisor and its affiliates of $21.6 million and $12.7 million respectively, which is included in due to related parties on the accompanying consolidated balance sheets.

*Currently Proposed Transactions.* There are no currently proposed transactions in which we were or are to be a participant and the amount involved exceeded $120,000 and in which any related person had or will have a direct or indirect material interest.

**Director Independence** 

Two members of our board of directors, Jeffrey T. Leighton and Perry M. Rynders, are "independent" as defined by the rules of the New York Stock Exchange. The New York Stock Exchange standards provide that to qualify as an independent director, in addition to satisfying certain bright-line criteria, the board of directors must affirmatively determine that a director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). The board of directors has affirmatively determined that Jeffrey T. Leighton and Perry M. Rynders each satisfies the New York Stock Exchange independence standards. Neither of these directors has ever served as (or is related to) an employee of ours or any of our predecessors or acquired companies (if applicable) or received or earned any compensation from us or any such entities except for compensation directly related to service as a director of us. Therefore, we believe that both of these directors are independent directors. Accordingly, all of the members of the Audit Committee and the Conflicts Committee are "independent" as defined by the New York Stock Exchange.

#### Item 14. Principal Accountant Fees and Services.

#### Independent Registered Public Accounting Firm
**On May 1, 2025, based on the approval of our Audit Committee, we dismissed Marcum LLP ("Marcum") as the Company's independent registered public accounting firm, effective immediately. The reports issued by Marcum on the Company's financial statements for the fiscal years ended December 31, 2024 and 2023 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. On May 1, 2025, based on the approval of our Audit Committee, the Company engaged RJI International CPAs ("RJI") as the Company's new independent registered public accounting firm. RJI has audited the financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2025. See the Company's Current Report on Form 8-K filed with the SEC on May 7, 2025 for additional information regarding the change in the Company's independent registered public accounting firm.**

**The Audit Committee reviewed the audit and non-audit services performed by RJI and Marcum, as well as the fees charged for such services. In its review of the non-audit service fees, the Audit Committee considered whether the provision of such services is compatible with maintaining the auditor's independence.**

#### Pre-Approval Policies
**In order to ensure that the provision of such services does not impair the independent registered public accounting firm's independence, the Audit Committee charter imposes a duty on the Audit Committee to pre-approve all auditing services performed for us by our independent registered public accounting firm, as well as all permitted non-audit services. In determining whether or not to pre-approve services, the Audit Committee considers whether the service is a permissible service under the rules and regulations promulgated by the SEC. The Audit Committee may, in its discretion, delegate to one or more of its members the authority to pre-approve any audit or non-audit services to be performed by our independent registered public accounting firm, provided any such approval is presented to and approved by the full Audit Committee at its next scheduled meeting.**

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For the years ended December 31, 2025 and 2024, all services rendered by RJI and Marcum were pre-approved in accordance with the policies and procedures described above.

***Principal Independent Registered Public Accounting Firm Fees***

*Fees Paid to Independent Registered Public Accounting Firm*

The aggregate fees billed to us for professional accounting services, including the audit of our annual financial statements for the years ended December 31, 2025 and 2024, by RJI are set forth in the table below.

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Fees: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Audit fees | $400000 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Audit-related fees | 20563 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $420563 | $— |

---

The aggregate fees billed to us for professional accounting services, including the audit of our annual financial statements for the years ended December 31, 2025 and 2024, by Marcum are set forth in the table below.

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Fees: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Audit fees | $35000 | $605000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Audit-related fees | 2450 | 18150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax fees | 127630 | 100000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $165080 | $723150 |

---

For purposes of the preceding table, Marcum's professional fees are classified as follows:

● Audit fees – These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements and other procedures performed by Marcum in order for them to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent registered public accounting firms in connection with statutory and regulatory filings or engagements.

● Audit-related fees – These are fees for assurance and related services that traditionally are performed by independent registered public accounting firms that are reasonably related to the performance of the audit or review of our financial statements, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, subscription to an online accounting research tool and internal control reviews and consultation concerning financial accounting and reporting standards.

● Tax fees – These are fees for all professional services performed by professional staff in our independent registered public accounting firm's tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice, including federal, state and local issues. Services may also include assistance with tax audits and appeals before the U.S. Internal Revenue Service (the "IRS") and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.

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#### PART IV

#### Item 15. Exhibits and Financial Statement Schedules.
(a) Financial Statement Schedules

See the Index to Financial Statements at page F-1 of this report.

The following financial statement schedule is included herein at page F-43 of this report:

Schedule III – Real Estate Assets and Accumulated Depreciation

**(b) Exhibits**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [Articles of Amendment and Restatement, dated as of June 1, 2018 (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020006572/lfr-20200331ex31f58ddd8.htm) |
| 3.2 | [Articles Supplementary for Interval Common Stock (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020006572/lfr-20200331ex326660f82.htm) |
| 3.3 | [Bylaws, dated as of April 9, 2018, as amended by Amendment No. 1 dated as of November 12, 2019 (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed November 12, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-3_2.htm) |
| 3.4 | [Limited Partnership Agreement of the Operating Partnership, dated as of April 11, 2018 (incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-3_3.htm)  |
| 3.5 | [First Amendment to Limited Partnership Agreement of the Operating Partnership, effective as of April 29, 2020 (incorporated by reference to Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020006572/lfr-20200331ex1017d4799.htm)  |
| 3.6 | [Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of June 15, 2020 (incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q filed August 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020010654/lfr-20200630ex1012655b5.htm)  |
| 3.7 | [First Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of February 4, 2021 (incorporated by reference to Exhibit 3.7 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex37248301c.htm) |
| 3.8 | [Second Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of May 12, 2021 (incorporated by reference to Exhibit 3.5 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021011697/tmb-20210630xex3d5.htm)<br>|
| 3.9 | [Third Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of August 3, 2021 (incorporated by reference to Exhibit 3.6 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021011697/tmb-20210630xex3d6.htm) |
| 3.10 | [Fourth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of December 3, 2021 (incorporated by reference to Exhibit 3.10 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex3d10.htm) |

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3.11 [Fifth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of January 18, 2022 (incorporated by reference to Exhibit 3.11 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex3d11.htm)

3.12 [Sixth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of March 24, 2022 (incorporated by reference to Exhibit 3.12 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex3d12.htm)

3.13 [Seventh Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of March 29, 2022 (incorporated by reference to Exhibit 3.13 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex3d13.htm)

3.14 [Eighth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of August 3, 2022 (incorporated by reference to Exhibit 3.14 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex3d14.htm)

3.15 [Ninth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of August 25, 2022 (incorporated by reference to Exhibit 3.15 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex3d15.htm)

3.16 [Tenth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of August 25, 2022 (incorporated by reference to Exhibit 3.16 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex3d16.htm)

3.17 [Eleventh Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of December 22, 2022 (incorporated by reference to Exhibit 3.17 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex3d17.htm)

3.18 [Twelfth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership, effective as of January 10, 2023 (incorporated by reference to Exhibit 3.18 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex3d18.htm)

3.19 [Thirteenth Amendment to the Amended and Restated Limited Partnership Agreement of Lodging Fund REIT III OP, LP, effective as of April 7, 2023 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 13, 2023)](https://www.sec.gov/Archives/edgar/data/1745032/000155837023005878/lfr-20230407xex10d1.htm)

3.20 [Fourteenth Amendment to the Amended and Restated Limited Partnership Agreement of Lodging Fund REIT III OP, LP, effective as of December 24, 2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 3, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025000020/lfr-20241224xex10d1.htm)

3.21 [Fifteenth Amendment to the Amended and Restated Limited Partnership Agreement of Lodging Fund REIT III OP, LP, effective as of December 24, 2024 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed January 3, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025000020/lfr-20241224xex10d2.htm)

4.1 [Dividend Reinvestment Plan of the Registrant (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-4_1.htm)

4.2 [Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex42e527e1a.htm)

[**Table of Contents**](#TOC)

10.1 [Amended and Restated Advisory Agreement among the Registrant, the Operating Partnership and the Advisor, effective as of June 1, 2018 (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_1.htm)

10.2 [Form of Management Agreement with Hotel Equities Group, LLC (incorporated by reference to Exhibit 10.2 to the Company's Annual Report on Form 10-K filed April 28, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025005729/lfr-20241231xex10d2.htm)

10.3 [Form of TRS Lease Agreement (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_3.htm)

10.6 [Business Loan Agreement for the Cedar Rapids Property with Western State Bank, dated March 5, 2019 (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_6.htm)

10.7 [Promissory Note issued to Western State Bank relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_7.htm)

10.8 [Mortgage relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_8.htm)

10.9 [Assignment of Rents relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.9 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_9.htm)

10.10.1 [Commercial Security Agreement (Fixtures) relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.10.1 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_101.htm)

10.10.2 [Commercial Security Agreement (Inventory) relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.10.2 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_102.htm)

10.10.3 [Commercial Security Agreement (Franchise) relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.10.3 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_103.htm)

10.11.1 [Commercial Guaranty relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.11.1 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_111.htm)

10.11.2 [Commercial Guaranty relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.11.2 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_112.htm)

10.12.1 [Agreement to Provide Insurance (Property) relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.12.1 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_121.htm)

[**Table of Contents**](#TOC)

10.12.2 [Agreement to Provide Insurance (Fixtures) relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.12.2 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_122.htm)

10.12.3 [Agreement to Provide Insurance (Franchise) relating to the Cedar Rapids Property, dated March 5, 2019 (incorporated by reference to Exhibit 10.12.3 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_123.htm)

10.15 [Business Loan Agreement with Western State Bank relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_15.htm)

10.16 [Promissory Note issued to Western State Bank relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_16.htm)

10.17 [Mortgage to Western State Bank relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.17 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_17.htm)

10.18 [Assignment of Rents relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.18 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_18.htm)

10.19.1 [Commercial Security Agreement (Fixtures) relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.19.1 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_191.htm)

10.19.2 [Commercial Security Agreement (Inventory) relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.19.2 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_192.htm)

10.19.3 [Commercial Security Agreement (Franchise) relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.19.3 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_193.htm)

10.20.1 [Commercial Guaranty relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.20.1 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_201.htm)

10.20.2 [Commercial Guaranty relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.20.2 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_202.htm)

10.21 [Agreements to Provide Insurance relating to the Eagan Property, dated June 19, 2019 (incorporated by reference to Exhibit 10.21 to the Company's Registration Statement on Form 10 filed August 8, 2019)](http://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-10_21.htm)

10.54.1 [Assumption Agreement relating to the Lubbock Home2 Suites loan, dated as of December 30, 2019 (incorporated by reference to Exhibit 10.54.1 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105412c04.htm)

[**Table of Contents**](#TOC)

10.54.2 [Joinder by and Agreement of New Indemnitor relating to the Lubbock Home2 Suites, effective as of December 30, 2019 (incorporated by reference to Exhibit 10.54.2 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10542ede4.htm)

10.54.3 [Assignment and Subordination of Management Agreement relating to the Lubbock Home2 Suites, dated as of December 30, 2019 (incorporated by reference to Exhibit 10.54.3 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10543d85e.htm)

10.54.4 [Promissory Note relating to the Lubbock Home2 Suites, dated as of October 4, 2016 (incorporated by reference to Exhibit 10.54.4 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex1054484c9.htm)

10.54.5 [Loan Agreement relating to the Lubbock Home2 Suites, dated as of October 4, 2016 (incorporated by reference to Exhibit 10.54.5 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105456ac1.htm)

10.54.6 [Deed of Trust relating to the Lubbock Home2 Suites, dated as of October 4, 2016 (incorporated by reference to Exhibit 10.54.6 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105464edf.htm)

10.54.7 [Assignment of Leases and Rents relating to the Lubbock Home2 Suites, dated as of October 4, 2016 (incorporated by reference to Exhibit 10.54.7 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10547ff40.htm)

10.54.8 [Guaranty of Recourse Obligations relating to the Lubbock Home2 Suites, dated as of October 4, 2016 (incorporated by reference to Exhibit 10.54.8 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10548fb99.htm)

10.55.1 [Consent, Amendment and Assumption Agreement relating to the Lubbock Fairfield Inn loan, dated as of January 8, 2020 (incorporated by reference to Exhibit 10.55.1 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10551bf64.htm)

10.55.2 [Promissory Note relating to the Lubbock Fairfield Inn, dated as of April 4, 2019 (incorporated by reference to Exhibit 10.55.2 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10552b5c0.htm)

10.55.3 [Loan Agreement relating to the Lubbock Fairfield Inn, dated as of April 4, 2019 (incorporated by reference to Exhibit 10.55.3 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105537c1c.htm)

10.55.4 [Assignment of Leases and Rents relating to the Lubbock Fairfield Inn, dated as of April 4, 2019 (incorporated by reference to Exhibit 10.55.4 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10554c59f.htm)

10.55.5 [Deed of Trust relating to the Lubbock Fairfield Inn, dated as of January 8, 2020 (incorporated by reference to Exhibit 10.55.5 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105553226.htm)

10.55.6 [Guaranty of Recourse Obligations relating to the Lubbock Fairfield Inn, dated as of January 8, 2020 (incorporated by reference to Exhibit 10.55.6 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10556eb5b.htm)

10.55.7 [Environmental Indemnity Agreement relating to the Lubbock Fairfield Inn, dated as of January 8, 2020 (incorporated by reference to Exhibit 10.55.7 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105577a4e.htm)

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10.55.8 [Acknowledgement of Property Manager and Borrower relating to the Lubbock Fairfield Inn, dated as of January 8, 2020 (incorporated by reference to Exhibit 10.55.8 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105584256.htm)

10.56.1 [Business Loan Agreement for Revolving Line of Credit with Western State Bank, dated February 10, 2020 (incorporated by reference to Exhibit 10.3.1 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10561f6a7.htm)

10.56.2 [Promissory Note issued to Western State Bank, dated February 10, 2020 (incorporated by reference to Exhibit 10.3.2 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105628c3a.htm)

10.56.3 [Mortgage granted to Western State Bank relating to the Cedar Rapids Property, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.3 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex1056363be.htm)

10.56.4 [Mortgage granted to Western State Bank relating to the Eagan Property, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.4 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10564f8d6.htm)

10.56.5 [Assignment of Rents granted to Western State Bank relating to the Cedar Rapids Property, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.5 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105654a7b.htm)

10.56.6 [Assignment of Rents granted to Western State Bank relating to the Eagan Property, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.6 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10566979d.htm)

10.56.7 [Commercial Security Agreement relating to the Cedar Rapids Property, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.7 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10567f7e6.htm)

10.56.8 [Commercial Security Agreement relating to the Eagan Property, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.8 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10568ede7.htm)

10.56.10 [Commercial Guaranty by Corey R. Maple to Western State Bank, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.10 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex105610d62.htm)

10.56.11 [Commercial Guaranty by the Registrant to Western State Bank, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.11 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex1056118b2.htm)

10.56.13 [Agreement to Provide Insurance relating to the Eagan Property, dated February 10, 2020 (incorporated by reference to Exhibit 10.56.13 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex1056138b8.htm)

10.59 [Hotel Management Agreement between LF Southaven TRS, LLC and Vista Host Inc. relating to the Southaven Homewood Suites, dated as of February 21, 2020 (incorporated by reference to Exhibit 10.59 to the Company's Annual Report on Form 10-K filed March 25, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020003087/lfr-20191231ex10593e5da.htm)

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10.66.1 [Change in Terms Agreement with Western State Bank, dated April 17, 2020, relating to the loan dated March 5, 2019 related to the Cedar Rapids Property (incorporated by reference to Exhibit 10.13.1 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020006572/lfr-20200331ex101319d18.htm)

10.66.2 [Modification of Mortgage, dated April 17, 2020 relating to the mortgage dated March 5, 2019 related to the Cedar Rapids Property (incorporated by reference to Exhibit 10.13.2 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020006572/lfr-20200331ex101324b80.htm)

10.67.1 [Change in Terms Agreement with Western State Bank, dated April 17, 2020, relating to the loan dated June 19, 2019 related to the Eagan Property (incorporated by reference to Exhibit 10.14.1 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020006572/lfr-20200331ex1014187e8.htm)

10.67.2 [Modification of Mortgage, dated April 17, 2020 relating to the mortgage dated June 19, 2019 related to the Eagan Property (incorporated by reference to Exhibit 10.14.2 to the Company's Quarterly Report on Form 10-Q filed May 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020006572/lfr-20200331ex1014262cb.htm)

10.74 [Form of Services Agreement with One Rep Construction (incorporated by reference to Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q filed August 14, 2020)](https://www.sec.gov/Archives/edgar/data/1745032/000155837020010654/lfr-20200630ex1017c245b.htm)

10.85.1 [Loan Agreement by and among LF3 Aurora, LLC, LF3 Aurora TRS, LLC and Access Point Financial, LLC, relating to the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.1 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex10851be8d.htm)

10.85.2 [Promissory Note issued by LF3 Aurora, LLC and LF3 Aurora TRS, LLC to Access Point Financial, LLC, relating to the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.2 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex10852acde.htm)

10.85.3 [Fee and Leasehold Deed of Trust and Security Agreement by and among LF3 Aurora, LLC, LF3 Aurora TRS, LLC and Access Point Financial, LLC, relating to the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.3 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex108535ea8.htm)

10.85.4 [Guaranty Agreement, by and among Access Point Financial, LLC, LF3 Aurora, LLC, LF3 Aurora TRS, LLC and the Company, relating to the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.4 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex108548cbb.htm)

10.85.5 [Environmental Indemnity Agreement, by and among LF3 Aurora, LLC, LF3 Aurora TRS, LLC, and the Company, to Access Point Financial, LLC, relating to the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.5 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex108559b02.htm)

10.85.6 [Assignment of Leases and Rents by and among LF3 Aurora, LLC, LF3 Aurora TRS, LLC and Access Point Financial, LLC, relating to the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.6 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex10856835a.htm)

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10.85.7 [Agreement for Subordination of Payments to Related Parties by and among LF3 Aurora, LLC, LF3 Aurora TRS, LLC and Access Point Financial, LLC, relating to the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.7 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex108573588.htm)

10.85.8 [Pledge Agreement by and between Lodging Fund REIT III OP, LP and Access Point Financial, LLC relating to LF3 Aurora, LLC and the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.8 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex1085842b9.htm)

10.85.9 [Pledge Agreement by and between Lodging Fund REIT III TRS, Inc. and Access Point Financial, LLC relating to LF3 Aurora TRS, LLC and the Aurora Property, dated as of February 4, 2021 (incorporated by reference to Exhibit 10.85.9 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex108593f2c.htm)

10.85.10 [Acknowledgement of CoPACE Assessment by and between LN Hospitality Denver, LLC and LF3 Aurora, LLC to Twain Funding I, LLC, relating to the Aurora Property, dated as of February 3, 2021 (incorporated by reference to Exhibit 10.85.10 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex108510db6.htm)

10.87 [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of January 19, 2021 (incorporated by reference to Exhibit 10.87 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex108738801.htm)

10.97 [Letter Agreement between Midland Loan Services, LF3 Lubbock Expo, LLC and LF3 Lubbock Expo TRS, LLC regarding the Lubbock Fairfield Inn loan, dated as of March 2, 2021 (incorporated by reference to Exhibit 10.97 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex1097b72ff.htm)

10.101 [Consent to PPP Loan Agreement, dated March 5, 2021 between Wells Fargo Bank, National Association, LF3 Lubbock Expo, LLC, Lodging Fund REIT III, Inc., and Lodging Fund REIT III OP, LP regarding to the Lubbock Fairfield Inn loan (incorporated by reference to Exhibit 10.101 to the Company's Annual Report on Form 10-K filed March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021003829/c032-20201231ex1010199fa.htm)

10.105 [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of May 6, 2021 (incorporated by reference to Exhibit 10.22 to the Company's Quarterly Report on Form 10-Q filed May 17, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021007429/c032-20210331ex10227c0c8.htm)

10.107 [Loan Agreement between LF3 El Paso, LLC, LF3 El Paso TRS, LLC, and EPH Development Fund LLC, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.24 to the Company's Quarterly Report on Form 10-Q filed May 17, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021007429/c032-20210331ex102457a4c.htm)

10.108 [Special Warranty Deed between HD Sunland Park Property LLC and LF3 El Paso, LLC, relating to the EL Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.25 to the Company's Quarterly Report on Form 10-Q filed May 17, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021007429/c032-20210331ex1025e4dac.htm)

10.109 [Continuing Guaranty by Lodging Fund REIT III OP, LP in favor of EPH Development Fund LLC, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.26 to the Company's Quarterly Report on Form 10-Q filed May 17, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021007429/c032-20210331ex1026fc53e.htm)

[**Table of Contents**](#TOC)

10.110 [Assignment, Consent and Subordination of Management Agreement by and among LF3 El Paso, LLC, LF3 El Paso TRS, LLC, Elevation Hotel Management, LLC and EPH Development Fund LLC, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.27 to the Company's Quarterly Report on Form 10-Q filed May 17, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021007429/c032-20210331ex10271f0c6.htm)

10.111 [Assignment and Assumption of Management Agreement, by and between HD Sunland Park Property, LLC and LF3 El Paso TRS, LLC, and LF3 El Paso, LLC, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.28 to the Company's Quarterly Report on Form 10-Q filed May 17, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021007429/c032-20210331ex10283fef1.htm)

10.113 [Loan Assumption Agreement by and among HD Sunland Park Property, L.L.C., LF3 El Paso, LLC, LF3 El Paso TRS, LLC, and EPH Development Fund LLC, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.30 to the Company's Quarterly Report on Form 10-Q filed May 17, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021007429/c032-20210331ex10302380f.htm)

10.114 [Carve Out Guaranty by Corey R. Maple in favor of EPH Development Fund LLC, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.31 to the Company's Quarterly report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/1745032/000155837021011697/tmb-20210630xex10d31.htm)

10.115 [Deposit Account Control Agreement by and among LF3 El Paso TRS, LLC, EPH Development Fund LLC and Wells Fargo Bank, National Association, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.32 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d32.htm)

10.116 [Continuing Guaranty by Lodging Fund REIT III OP, LP in favor of EPH Development Fund LLC, relating to the El Paso Property, dated as of May 12, 2021 (as amended) (incorporated by reference to Exhibit 10.33 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d33.htm)

10.118 [Hotel Management Agreement between HD Sunland Park Property, L.L.C. and Elevation Hotel Management, L.L.C., relating to the El Paso Property, dated as of November 29, 2018 (incorporated by reference to Exhibit 10.35 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d35.htm)

10.119 [First Amendment to the Hotel Management Agreement between HD Sunland Park Property, L.L.C. and Elevation Hotel Management, L.L.C., relating to the El Paso Property, dated as of December 19, 2020 (incorporated by reference to Exhibit 10.36 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d36.htm)

10.123 [Loan Agreement between LF3 Houston, LLC, LF3 Houston TRS, LLC, and Legendary A-1 Bonds, LLC relating to the Houston Hilton Garden Inn Property, dated as of August 3, 2021 (incorporated by reference to Exhibit 10.40 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d40.htm)

10.124 [Continuing Guaranty by Lodging Fund REIT III, OP, LP in favor of Legendary A-1 Bonds, LLC, relating to the Houston Hilton Garden Inn, dated as of August 3, 2021 (incorporated by reference to Exhibit 10.41 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d41.htm)

[**Table of Contents**](#TOC)

10.125 [Assignment of Leases and Rents by LF3 Houston, LLC and LF3 Houston TRS, LLC in favor of Legendary A-1 Bonds, LLC, relating to the Houston Hilton Garden Inn, dated as of August 3, 2021 (incorporated by reference to Exhibit 10.42 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d42.htm)

10.126 [Deed of Trust, Security Agreement and Financing Statement by LF3 Houston, LLC and LF3 Houston TRS, LLC in favor of Legendary A-1 Bonds, LLC, relating to the Houston Hilton Garden Inn, dated as of August 3, 2021 (incorporated by reference to Exhibit 10.43 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d43.htm)

10.127 [Environmental Indemnity Agreement by LF3 Houston, LLC and LF3 Houston TRS, LLC in favor of Legendary A-1 Bonds, LLC, relating to the Houston Hilton Garden Inn, dated as of August 3, 2021 (incorporated by reference to Exhibit 10.44 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d44.htm)

10.128 [Management Agreement by and between LF3 Houston TRS, LLC and Interstate Management Company, LLC, relating to the Houston Hilton Garden Inn, dated as of August 3, 2021 (incorporated by reference to Exhibit 10.45 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d45.htm)

10.130 [Promissory Note issued by LF3 Houston, LLC and LF3 Houston TRS, LLC in favor of Legendary A-1 Bonds, LLC relating to the Houston Hilton Garden Inn Property, dated as of August 3, 2021 (incorporated by reference to Exhibit 10.47 to the Company's Quarterly Report on Form 10-Q filed August 13, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021011697/tmb-20210630xex10d47.htm)

10.131 [Business Loan Agreement between LF3 Houston, LLC and LF3 Houston TRS, LLC and Choice Financial Group relating to the Houston Hilton Garden Inn Property, dated as of September 2, 2021 (incorporated by reference to Exhibit 10.48 to the Company's Quarterly Report on Form 10-Q filed November 12, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021015808/tmb-20210930xex10d48.htm)

10.133 [Commercial Guaranty by Lodging Fund REIT III OP, LP in favor of Choice Financial Group, relating to the Houston Hilton Garden Inn Property, dated as of September 2, 2021 (incorporated by reference to Exhibit 10.50 to the Company's Quarterly Report on Form 10-Q filed November 12, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021015808/tmb-20210930xex10d50.htm)

10.134 [Commercial Guaranty by Corey Maple in favor of Choice Financial Group, relating to the Houston Hilton Garden Inn Property, dated as of September 2, 2021 (incorporated by reference to Exhibit 10.51 to the Company's Quarterly Report on Form 10-Q filed November 12, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021015808/tmb-20210930xex10d51.htm)

10.135 [Deed of Trust by LF3 Houston, LLC and LF3 Houston TRS, LLC in favor of Choice Financial Group, relating to the Houston Hilton Garden Inn, dated as of September 2, 2021 (incorporated by reference to Exhibit 10.52 to the Company's Quarterly Report on Form 10-Q filed November 12, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021015808/tmb-20210930xex10d52.htm)

10.136 [Agreement to Provide Insurance between LF3 Houston, LLC and LF3 Houston TRS, LLC in favor of Choice Financial Group, relating to the Houston Hilton Garden Inn, dated as of September 2, 2021 (incorporated by reference to Exhibit 10.53 to the Company's Quarterly Report on Form 10-Q filed November 12, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021015808/tmb-20210930xex10d53.htm)

[**Table of Contents**](#TOC)

10.143 [Letter Agreement dated as of October 20, 2021, by and between the Operating Partnership and ELP MC Venture, LLC for the Courtyard El Paso Property (incorporated by reference to Exhibit 10.60 to the Company's Quarterly Report on Form 10-Q filed November 12, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021015808/tmb-20210930xex10d60.htm)

10.145 [First Amendment to the Continuing Guaranty by Lodging Fund REIT III OP, LP in favor of EPH Development Fund LLC, relating to the El Paso Property, dated as of May 12, 2021 (incorporated by reference to Exhibit 10.62 to the Company's Quarterly Report on Form 10-Q filed November 12, 2021)](https://www.sec.gov/Archives/edgar/data/0001745032/000155837021015808/tmb-20210930xex10d62.htm)

10.155 [Contribution Agreement by and between the Operating Partnership and RLC V RIFC, LLC for the Residence Inn by Marriott Fort Collins, dated as of February 1, 2022 (incorporated by reference to Exhibit 10.155 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex10d155.htm)

10.157 [Amended & Restated Contribution Agreement by and between the Operating Partnership and ELP MC Ventures, LLC related to the El Paso Airport Property, dated as of February 8, 2022 (incorporated by reference to Exhibit 10.157 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex10d157.htm)

10.158 [Management Agreement by and between LF3 El Paso Airport TRS, LLC and Aimbridge Hospitality, LLC related to the El Paso Airport Property, dated as of February 8, 2022 (incorporated by reference to Exhibit 10.158 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex10d158.htm)

10.182 [First Amendment to the Contribution Agreement by and between the Operating Partnership and RLC-VI Lakewood, LLC for the Fairfield Inn & Suites Denver Southwest Lakewood, dated as of February 23, 2022 (incorporated by reference to Exhibit 10.182 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex10d182.htm)

10.183 [Second Amendment to the Contribution Agreement by and between the Operating Partnership and RLC-VI Lakewood, LLC for the Fairfield Inn & Suites Denver Southwest Lakewood, dated as of March 3, 2022 (incorporated by reference to Exhibit 10.183 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex10d183.htm)

10.184 [Third Amendment to the Contribution Agreement by and between the Operating Partnership and RLC-VI Lakewood, LLC for the Fairfield Inn & Suites Denver Southwest Lakewood, dated as of March 15, 2022 (incorporated by reference to Exhibit 10.184 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex10d184.htm)

10.192 [Fourth Amendment to the Contribution Agreement by and between the Operating Partnership and RLC-VI Lakewood, LLC for the Fairfield Inn & Suites Denver Southwest Lakewood, dated as of March 24, 2022 (incorporated by reference to Exhibit 10.192 to the Company's Annual Report on Form 10-K filed March 31, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022004948/tmb-20211231xex10d192.htm)

10.193 [Change in Terms by and between the Operating Partnership and Western State Bank related to the revolving line of credit loan agreement, dated as of May 5, 2022 (incorporated by reference to Exhibit 10.193 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d193.htm)

10.196 [Agreement of Sublease by and between FCL Founders Drive, LLC and Northbrook Hotel Group L.P. regarding the Northbrook Sheraton, dated as of January 24, 2007 (incorporated by reference to Exhibit 10.196 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d196.htm)

[**Table of Contents**](#TOC)

10.197 [Assignment of Ground Lease by and between BSPRT Northbrook, LLC and APF – Northbrook, LLC regarding the Northbrook Sheraton, dated as of October 28, 2020 (incorporated by reference to Exhibit 10.197 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d197.htm)

10.198 [First Amendment to Amended and Restated Declaration by and between Five Seasons Country Club of Northbrook, Inc., Willow Festival LLC, North Shore Ice Arena, LLC, Meadow Ridge Condominium Association, Northbrook Greens Condominium Association, and Riverpark Office Condominium Association regarding the Northbrook Sheraton, dated as of December 31, 2008 (incorporated by reference to Exhibit 10.198 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d198.htm)

10.199 [Special Amendment to Amended and Restated Declaration by and between Society of the Divine Word and Divine Word Techny Community Corporation regarding the Northbrook Sheraton, dated as of July 11, 2019 (incorporated by reference to Exhibit 10.199 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d199.htm)

10.200 [Declaration by FCL Founders Drive, LLC regarding the Northbrook Sheraton, dated as of August 3, 2006 (incorporated by reference to Exhibit 10.200 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d200.htm)

10.201 [Amended and Restated Declaration by Society of the Divine Word and Divine Word Techny Community Corporation regarding the Northbrook Sheraton, dated September 15, 2005 (incorporated by reference to Exhibit 10.201 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d201.htm)

10.202 [Loan Agreement by and between LF3 El Paso Airport, LLC, LF3 El Paso Airport TRS, LLC and Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.202 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d202.htm)

10.203 [Guaranty by the Operating Partnership for the benefit of Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.203 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d203.htm)

10.204 [Operating Lease Subordination Agreement by and between LF3 El Paso Airport, LLC, LF3 El Paso Airport TRS, LLC and Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.204 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d204.htm)

10.205 [Deed of Trust by and between LF3 El Paso Airport, LLC and Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.205 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d205.htm)

10.206 [Security Agreement by and between LF3 El Paso Airport, LLC, LF3 El Paso Airport TRS, LLC and Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.206 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d206.htm)

10.207 [Term Loan Note by and between LF3 El Paso Airport, LLC, LF3 El Paso Airport TRS, LLC and Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.207 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d207.htm)

[**Table of Contents**](#TOC)

10.208 [Assignment of Management Agreement by and between LF3 El Paso Airport TRS, LLC, Aimbridge Hospitality, LLC and Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.208 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d208.htm)

10.209 [Environmental Indemnity Agreement by and between LF3 El Paso Airport, LLC, LF3 El Paso Airport TRS, LLC and Western Alliance Bank related to the El Paso Airport Property, dated as of May 13, 2022 (incorporated by reference to Exhibit 10.209 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d209.htm)

10.210 [First Amendment to Contribution Agreement by and between the Operating Partnership and RLC V RIFC, LLC for the Residence Inn by Marriott Fort Collins, dated as of March 24, 2022 (incorporated by reference to Exhibit 10.210 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d210.htm)

10.211 [Second Amendment to Contribution Agreement by and between the Operating Partnership and RLC V RIFC, LLC for the Residence Inn by Marriott Fort Collins, dated as of April 29, 2022 (incorporated by reference to Exhibit 10.211 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d211.htm)

10.212 [Third Amendment to Contribution Agreement by and between the Operating Partnership and RLC V RIFC, LLC for the Residence Inn by Marriott Fort Collins, dated as of May 10, 2022 (incorporated by reference to Exhibit 10.212 to the Company's Quarterly Report on Form 10-Q filed May 16, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022009002/tmb-20220331xex10d212.htm)

10.219 [Loan Agreement by and among LF3 RIFC, LLC, LF3 RIFC TRS, LLC, and Legendary A-1 Bonds, LLC related to the Residence Inn Fort Collins Property, dated as of August 3, 2022 (incorporated by reference to Exhibit 10.219 to the Company's Quarterly Report on Form 10-Q filed August 11, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022013328/tmb-20220630xex10d219.htm)

10.222 [Tranche 3 Promissory Note by LF3 RIFC, LLC, LF3 RIFC TRS, LLC, and Legendary A-1 Bonds, LLC related to the Residence Inn Fort Collins Property, dated as of August 3, 2022 (incorporated by reference to Exhibit 10.222 to the Company's Quarterly Report on Form 10-Q filed August 11, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022013328/tmb-20220630xex10d222.htm)

10.227 [Contribution Agreement by and between the Operating Partnership and Wichita Airport Hospitality, LLC for the Holiday Inn Express & Suites Wichita Airport, dated as of August 5, 2022 (incorporated by reference to Exhibit 10.227 to the Company's Quarterly Report on Form 10-Q filed August 11, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022013328/tmb-20220630xex10d227.htm)

10.228 [Loan Agreement for Revolving Line of Credit by and among Lodging Fund REIT III OP, LP and Legendary A-1 Bonds, LLC, dated August 9, 2022 (incorporated by reference to Exhibit 10.228 to the Company's Quarterly Report on Form 10-Q filed August 11, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022013328/tmb-20220630xex10d228.htm)

10.229 [Promissory Note by Lodging Fund REIT III OP, LP and Legendary A-1 Bonds, LLC, dated August 9, 2022 (incorporated by reference to Exhibit 10.229 to the Company's Quarterly Report on Form 10-Q filed August 11, 2022)](https://www.sec.gov/Archives/edgar/data/1745032/000155837022013328/tmb-20220630xex10d229.htm)

10.248 [Loan Modification and Reinstatement Agreement among Wilmington Trust, National Association, as Trustee, High Desert Investors, LP, the Operating Partnership, the original indemnitors, and Corey R. Maple, related to the El Paso University Property, dated as of August 10, 2022](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d248.htm)

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| | |
|:---|:---|
|  | [(incorporated by reference to Exhibit 10.248 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d248.htm) |
| 10.249 | [Reorganization and Membership Interest Purchase Agreement between Lodging Fund REIT III OP, LP and High Desert Investors, LP, dated as of August 10, 2022 (incorporated by reference to Exhibit 10.249 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d249.htm) |
| 10.250 | [Amended and Restated Guaranty of Recourse Obligations by Corey R. Maple for the benefit of Wilmington Trust, National Association, as Trustee, related to the El Paso University Property, dated as of August 10, 2022 (incorporated by reference to Exhibit 10.250 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d250.htm) |
| 10.251 | [Amended and Restated Environmental Indemnity Agreement by Corey R. Maple and High Desert Investors, LP in favor of Wilmington Trust, National Association, as Trustee, related to the El Paso University Property, dated as of August 10, 2022 (incorporated by reference to Exhibit 10.251 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d251.htm) |
| 10.252 | [First Amendment to Fourth Amended and Restated Limited Liability Company Operating Agreement of High Desert Garden Holdings, LLC, between ASI Capital, LLC, High Desert Hospitality, LP, High Desert Hospitality, LLC, Roma Commercial, Inc., VB Hotel Group A, LLC, and the Operating Partnership, related to the El Paso HGI Hotel Property, dated as of August 10, 2022 (incorporated by reference to Exhibit 10.252 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d252.htm) |
| 10.253 | [Membership Interest Transfer Agreement between Roma Commercial, Inc., ASI Capital, LLC, VB Hotel Group A, LLC, and the Operating Partnership, related to the El Paso HGI Hotel Property, dated as of August 10, 2022 (incorporated by reference to Exhibit 10.253 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d253.htm) |
| 10.254 | [Completion Guaranty Agreement by the Operating Partnership for the benefit of Wilmington Trust, N.A., related to the El Paso HGI Hotel Property, dated as of August 10, 2022 (incorporated by reference to Exhibit 10.254 to the Company's Quarterly Report on Form 10-Q filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004049/lfr-20220930xex10d254.htm) |
| 10.259 | [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of December 15, 2022 (incorporated by reference to Exhibit 10.259 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d259.htm) |
| 10.260 | [Amendment to Loan Agreement for Revolving Line of Credit with A-1 Legendary Bonds, LLC, dated as of December 22, 2022 (incorporated by reference to Exhibit 10.260 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d260.htm) |
| 10.261 | [Second Amendment to Contribution Agreement between the Operating Partnership and Wichita Airport Hospitality LLC for the Wichita Property, dated as of December 21, 2022 (incorporated by reference to Exhibit 10.261 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d261.htm) |
| 10.262 | [Business Loan Agreement between LF3 Wichita Airport, LLC, LF3 Wichita Airport TRS, LLC and Choice Financial Group dated as of December 21, 2022 (incorporated by reference to Exhibit 10.262 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d262.htm) |

---

[**Table of Contents**](#TOC)

10.263 [Promissory Note issued to Choice Financial Group in connection with the Wichita Property, dated as of December 21, 2022 (incorporated by reference to Exhibit 10.263 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d263.htm)

10.264 [Mortgage related to the Wichita Property, dated as of December 21, 2022 (incorporated by reference to Exhibit 10.264 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d264.htm)

10.265 [Assignment of Rents related to the Wichita Property, dated as of December 21, 2022 (incorporated by reference to Exhibit 10.265 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d265.htm)

10.266 [Guaranty by Corey Maple related to the Wichita Property, dated as of December 21, 2022 (incorporated by reference to Exhibit 10.266 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d266.htm)

10.267 [Guaranty by the Operating Partnership related to the Wichita Property, dated as of December 21, 2022 (incorporated by reference to Exhibit 10.267 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d267.htm)

10.268 [Management Agreement with KAJ Hospitality, Inc. related to the Wichita Property (incorporated by reference to Exhibit 10.268 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d268.htm)

10.269 [Amendment to Loan Agreement for Revolving Line of Credit with A-1 Legendary Bonds, LLC, dated as of January 12, 2023 (incorporated by reference to Exhibit 10.269 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d269.htm)

10.271 [Loan Agreement between the Operating Partnership and NHS, LLC dba National Hospitality Services, dated as of March 6, 2023 (incorporated by reference to Exhibit 10.271 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d271.htm)

10.272 [Amendment to Loan Agreement for Revolving Line of Credit with A-1 Legendary Bonds, LLC, dated as of April 18, 2023 (incorporated by reference to Exhibit 10.272 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d272.htm)

10.273 [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of April 15, 2023 (incorporated by reference to Exhibit 10.273 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d273.htm)

10.274 [Loan Agreement between LF3 RIFC, LLC, LF3 RIFC TRS, LLC and Access Point Financial, LLC regarding the Ft. Collins Property, dated as of April 18, 2023 (incorporated by reference to Exhibit 10.274 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d274.htm)

10.275 [Promissory Note issued to Access Point Financial, LLC related to the Ft. Collins Property, dated as of April 18, 2023 (incorporated by reference to Exhibit 10.275 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d275.htm)

10.276 [Guaranty of Payment, Carry and Completion between Corey Maple, Norman Leslie and Access Point Financial, LLC, dated as of April 18, 2023 (incorporated by reference to Exhibit 10.276 to the Company's Annual Report on Form 10-K filed March 27, 2024](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d276.htm)

[**Table of Contents**](#TOC)

10.277 [Loan Modification Agreement between LF3 El Paso, LLC, LF3 El Paso TRS LLC, the Operating Partnership, Corey Maple and EPH Development Fund LLC, dated as of May 15, 2023 relating to the El Paso HI Property (incorporated by reference to Exhibit 10.276 to the Company's Annual Report on Form 10-K filed March 27, 2024](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d277.htm)

10.278 [Amendment to the Amended and Restated Contribution Agreement regarding the El Paso HI Property (incorporated by reference to Exhibit 10.278 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d278.htm)

10.279 [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of July 31, 2023 (incorporated by reference to Exhibit 10.279 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d279.htm)

10.280 [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of October 9, 2023 (incorporated by reference to Exhibit 10.280 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d280.htm)

10.281 [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of December 27, 2023 (incorporated by reference to Exhibit 10.281 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d281.htm)

10.282 [Change in Terms Agreement for Loan Agreement with NHS, LLC dba National Hospitality Services, dated as of December 28, 2023 (incorporated by reference to Exhibit 10.282 to the Company's Annual Report on Form 10-K filed March 27, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004065/lfr-20221231xex10d282.htm)

10.283 [Fourth Amendment to the Revolving Line of Credit Loan Agreement between the Operating Partnership and Legendary A-1 Bonds, LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d1.htm)

10.284 [Fourth Amended and Restated Promissory Note entered into by the Operating Partnership in favor of Legendary A-1 Bonds, LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.10 to the Company's Current Report on Form 8-K filed April 5, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004769/lfr-20240327xex10d10.htm)

10.285 [Loan Agreement between the Borrower and Bluebird Credit EM LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d2.htm)

10.286 [Promissory Note entered into by Borrower in favor of Bluebird Credit EM LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d3.htm)

10.287 [Pledge and Security Agreement entered into by the Operating Partnership in favor of Bluebird Credit EM LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d4.htm)

10.288 [Pledge and Security Agreement entered into by Lodging Fund REIT III TRS, Inc. in favor of Bluebird Credit EM LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d5.htm)

[**Table of Contents**](#TOC)

10.289 [Guaranty of Payment Norman H. Leslie for the benefit of Bluebird Credit EM LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d6.htm)

10.290 [Loan Agreement between the Operating Partnership and Legendary A-1 Bonds, LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d7.htm)

10.291 [Promissory Note entered into by the Operating Partnership in favor of Legendary A-1 Bonds, LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.8 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d8.htm)

10.292 [Pledge and Security Agreement entered into by the Company in favor of the Legendary A-1 Bonds, LLC, dated as of March 27, 2024 (incorporated by reference to Exhibit 10.9 to the Company's Current Report on Form 8-K filed April 2, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024004592/lfr-20240327xex10d9.htm)

10.293 [Second Loan Modification Agreement between LF3 El Paso, LLC, LF3 El Paso TRS LLC, the Operating Partnership, Corey Maple and EPH Development Fund LLC, dated as of May 15, 2024 relating to the El Paso HI Property (incorporated by reference to Exhibit 10.293 to the Company's Annual Report on Form 10-K filed December 17, 2024)](https://www.sec.gov/Archives/edgar/data/1745032/000155837024016328/lfr-20231231xex10d293.htm)

10.295 [Change in Terms Agreement for Revolving Line of Credit with Western State Bank, dated as of May 10, 2024 (incorporated by reference to Exhibit 10.295 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed April 15, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025004856/lfr-20240630xex10d295.htm)

10.296 [Change in Terms Agreement for Loan Agreement with NHS LLC dba National Hospitality Services, dated as of August 21, 2024 (incorporated by reference to Exhibit 10.296 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed April 15, 2025](https://www.sec.gov/Archives/edgar/data/1745032/000155837025004857/lfr-20240930xex10d296.htm)

10.297 [Fifth Amendment to the Revolving Line of Credit Loan Agreement between the Operating Partnership and Legendary A-1 Bonds, LLC, dated as of December 20, 2024 (incorporated by reference to Exhibit 10.297 to the Company's Annual Report on Form 10-K filed April 28, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025005729/lfr-20241231xex10d296.htm)

10.298 [Loan Contribution Agreement by and between Access Point Financial, LLC, Lodging Fund REIT III OP, LP, Legendary Capital REIT III, LLC and Legendary Capital, LLC, dated as of December 24, 2024 (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed January 3, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025000020/lfr-20241224xex10d3.htm)

10.299 [Change in Terms Agreement with Western State Bank, dated February 26, 2025, relating to the loan dated March 5, 2019 related to the Cedar Rapids Property (incorporated by reference to Exhibit 10.299 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed June 2, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025008347/lfr-20250331xex10d299.htm)

10.300 [Change in Terms Agreement with Western State Bank, dated February 26, 2025, relating to the loan dated June 19, 2019 related to the Eagan Property (incorporated by reference to Exhibit 10.300 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed June 2, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025008347/lfr-20250331xex10d300.htm)

10.301 [Forbearance Agreement with Choice Financial Group dated March 27, 2025 related to the loans related to the Houston Property and Wichita Property (incorporated by reference to Exhibit 10.301](https://www.sec.gov/Archives/edgar/data/1745032/000155837025008347/lfr-20250331xex10d301.htm)

[**Table of Contents**](#TOC)

---

| | |
|:---|:---|
|  | [to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed June 2, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025008347/lfr-20250331xex10d301.htm) |
| 10.302\* | [Arcade Fargo Promissory Note, dated as of December 16, 2025](lfr-20251231xex10d302.htm) |
| 14.1 | [Code of Conduct and Ethics (incorporated by reference to Exhibit 14.1 to the Company's Annual Report on Form 10-K filed April 28, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025005729/lfr-20241231xex14d1.htm) |
| 16.1 | [Letter from Marcum LLP re: change in auditor (incorporated by reference to Exhibit 16.1 to the Company's Current Report on Form 8-K filed May 7, 2025)](https://www.sec.gov/Archives/edgar/data/1745032/000155837025006700/lfr-20250501xex16d1.htm) |
| 21.1\* | [Subsidiaries of the Registrant](lfr-20251231xex21d1.htm) |
| 31.1\* | [Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](lfr-20251231xex31d1.htm) |
| 31.2\* | [Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](lfr-20251231xex31d2.htm) |

| 99.1 | [Share Repurchase Plan of the Registrant (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form 10 filed August 8, 2019)](https://www.sec.gov/Archives/edgar/data/1745032/000104746919004643/a2239418zex-4_2.htm) |
| 101.INS | XBRL Instance Document |
| 101.SCH | XBRL Taxonomy Extension Schema |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

**\*** Filed herewith.

**\*\*** Furnished herewith.

#### Item 16. Form 10-K Summary.
None.

#### INDEX TO FINANCIAL STATEMENTS

#### LODGING FUND REIT III, INC. & SUBSIDIARIES

---

| | |
|:---|:---|
| [Reports of Independent Registered Public Accounting Firm](#PLACEHOLDERFORRJI2025_748943) (PCAOB ID's 820 & 668 respectively) | F-2 |
| [Consolidated Financial Statements](#PARTIFINANCIALINFORMATION_188850) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Balance Sheets as of December 31, 2025 and 2024](#BALANCESHEETS_710064) | F-4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Statements of Operations for the years ended December 31, 2025 and 2024](#STATEMENTSOFOPERATIONS_536342) | F-5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Statements of Changes in Stockholders' Equity for the years ended December 31, 2025 and 2024](#EQUITY_435292) | F-6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Statements of Cash Flows for the years ended December 31, 2025 and 2024](#CASHFLOWS_52863) | F-7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Notes to the Consolidated Financial Statements](#NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS_8) | F-9 |
| [Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2025](#ScheduleIII) | F-37 |

---

[**Table of Contents**](#TOC)

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Lodging Fund REIT III, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of Lodging Fund REIT III, Inc. and Subsidiaries (the Company) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders' equity and cash flows for the year ended December 31, 2025, and the related notes and schedules listed in the Index at Item 15(a) (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and the results of its operations and its cash flows for the year ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Company as of and for the year ended December 31, 2024 were audited by other auditors whose report dated April 28, 2025 expressed an unmodified opinion. That report is not presented here.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

---

| |
|:---|
| /s/ Ramirez Jimenez International CPAs |
| We have served as the Company's auditor since 2025. |
| Irvine, California |
| May 15, 2026<br>PCAOB ID 820 |

---

[**Table of Contents**](#TOC)

**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors of

Lodging Fund REIT III, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of Lodging Fund REIT III, Inc. (the "Company") as of December 31, 2024, the related consolidated statements of operations, changes in stockholders' equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company's auditor from 2023 through 2024.

New York, NY

April 28, 2025

[**Table of Contents**](#TOC)

#### PART I. FINANCIAL INFORMATION

#### Item 1. Financial Statements

#### LODGING FUND REIT III, INC.

#### CONSOLIDATED BALANCE SHEETS

---

| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2025** | **December 31,** <br>**2024** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in hotel properties, net of accumulated depreciation and amortization of $30,989,984 and $33,318,590 | $176399858 | $241973045 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 4889888 | 2354025 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 5732099 | 7986767 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 932754 | 1092900 |
| &nbsp;&nbsp;&nbsp;&nbsp;Franchise fees, net | 1064264 | 1616447 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 1046368 | 2007058 |
| &nbsp;&nbsp;&nbsp;&nbsp;Assets held for sale | 29278922 | 21829784 |
| **Total Assets (variable interest entities - $21,140,527 and $22,117,277)** | $219344153 | $278860026 |
| **Liabilities and Equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt, net | $128733353 | $175362117 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance lease liabilities | 13265854 | 13185884 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 4089950 | 6101337 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 8760085 | 9133344 |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions payable | 263182 | 276408 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 22651428 | 13821435 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 4373735 | 3791457 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mandatorily redeemable Series P preferred units, net | 1335037 | 203575 |
| &nbsp;&nbsp;&nbsp;&nbsp;Liabilities related to assets held for sale | 28029661 | 16512618 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities (variable interest entities - $17,465,166 and $17,011,733)** | 211502285 | 238388175 |
| Commitments and contingencies (See Note 12) |  |  |
| **Equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $0.01 par value, 100,000,000 shares authorized; no shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.01 par value, 900,000,000 shares authorized; 10,016,043 and 10,011,475 shares issued and outstanding | 100160 | 100114 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 143371621 | 97847449 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (137978273) | (112066946) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' equity** | 5493508 | (14119383) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest – Series B LP Units | (7202288) | (5482556) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest – Series GO LP Units | 403936 | 5606139 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest – Series GO II LP Units | 3785966 | 2639750 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest – Series T LP Units |  | 45475938 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest – Series Pref A Units | 4555739 | 4067409 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest – Common LP Units | 805007 | 2284554 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total equity** | 7841868 | 40471851 |
| **Total Liabilities and Equity** | $219344153 | $278860026 |

---

*See accompanying notes to consolidated financial statements.*

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#### LODGING FUND REIT III, INC.

#### CONSOLIDATED STATEMENTS OF OPERATIONS

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **2024** |
| **Revenues** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Room revenue | $60553580 | $69484481 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revenue | 3946211 | 4761914 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenue** | 64499791 | 74246395 |
| **Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property operations | 32702737 | 35825468 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 10490043 | 12025473 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 4593254 | 4886032 |
| &nbsp;&nbsp;&nbsp;&nbsp;Franchise fees | 5632663 | 6526117 |
| &nbsp;&nbsp;&nbsp;&nbsp;Management fees | 4134629 | 5105511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition expense | 39998 | 34353 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 8973573 | 10425161 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total expenses** | 66566897 | 74828115 |
| **Other Income (Expense)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss | (10055803) | (3992772) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) from sale of hotel property | 591880 | (4638883) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expense, net | (3424850) | (3412933) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (19622508) | (17500036) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other expense, net** | (32511281) | (29544624) |
| **Net Loss Before Income Taxes** | (34578387) | (30126344) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax benefit | 170403 | 210060 |
| **Net Loss** | (34407984) | (29916284) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interest - Series B LP Units | (1719732) | (1494865) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interest - Series GO LP Units | (5202203) | (4624151) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interest - Series GO II LP Units | (1630484) | (817934) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interest - Common LP Units | (1479547) | (1315144) |
| **Net Loss Attributable to Common Stockholders** | $(24376018) | $(21664190) |
| **Basic and Diluted Net Loss Per Share of Common Stock** | $(2.43) | $(2.17) |
| **Weighted-average Shares of Common Stock Outstanding, Basic and Diluted** | 10013509 | 9985964 |

---

*See accompanying notes to consolidated financial statements.*

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#### LODGING FUND REIT III, INC.

#### CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Common Stock** | | |  |  |  |  |  |  | |
|  | | | | | | **Non-controlling Interest** | **Non-controlling Interest** | **Non-controlling Interest** | **Non-controlling Interest** | **Non-controlling Interest** | **Non-controlling Interest** | |
|  | | | | | | **Series B** | **Series GO** | **Series GO 2** | **Series T** | **Series Pref** | **Common** | |
|  | <br>**Shares** | <br>**Par**<br>**Value** | **Additional**<br>**Paid-In**<br>**Capital** | <br>**Accumulated**<br>**Deficit** | <br>**Total**<br>**Stockholders'**<br>**Equity** | **LP Units** | **LP Units** | **LP Units** | **LP Units** | **A Units** | **LP Units** | <br>**Total**<br>**Equity** |
| **Balance at December 31, 2023** | 9955668 | $99556 | $97285211 | $(86154207) | $11230560 | $(3869459) | $10933302 | $765162 | $45524201 | $— | $3720284 | $68304050 |
| &nbsp;&nbsp;&nbsp;Issuance of common stock | 4069 | 40 | 39958 |  | 39998 |  |  |  |  |  |  | 39998 |
| &nbsp;&nbsp;&nbsp;Issuance of stock-based compensation | 4000 | 40 | 42240 |  | 42280 |  |  |  |  |  |  | 42280 |
| &nbsp;&nbsp;&nbsp;Issuance of Pref A Units |  |  |  |  |  |  |  |  |  | 4067409 |  | 4067409 |
| &nbsp;&nbsp;&nbsp;Issuance of GO II Units |  |  |  |  |  |  |  | 2850000 |  |  |  | 2850000 |
| &nbsp;&nbsp;&nbsp;Offering costs |  |  |  | (2002133) | (2002133) |  | (6) | (157478) |  |  |  | (2159617) |
| &nbsp;&nbsp;&nbsp;Distributions declared ($0.225 per share) |  |  |  | (2246416) | (2246416) | (118232) | (703006) |  | (48263) |  | (120586) | (3236503) |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 47738 | 478 | 480040 |  | 480518 |  |  |  |  |  |  | 480518 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  | (21664190) | (21664190) | (1494865) | (4624151) | (817934) |  |  | (1315144) | (29916284) |
| **Balance at December 31, 2024** | 10011475 | $100114 | $97847449 | $(112066946) | $(14119383) | $(5482556) | $5606139 | $2639750 | $45475938 | $4067409 | $2284554 | $40471851 |
| &nbsp;&nbsp;&nbsp;Issuance of common stock | 568 | 6 | 5994 |  | 6000 |  |  |  |  |  |  | 6000 |
| &nbsp;&nbsp;&nbsp;Issuance of stock-based compensation | 4000 | 40 | 42240 |  | 42280 |  |  |  |  |  |  | 42280 |
| &nbsp;&nbsp;&nbsp;Issuance of Pref A Units |  |  |  |  |  |  |  |  |  | 488330 |  | 488330 |
| &nbsp;&nbsp;&nbsp;Issuance of GO II Units |  |  |  |  |  |  |  | 2938576 |  |  |  | 2938576 |
| &nbsp;&nbsp;&nbsp;Conversion/Elimination of Series T LP Units |  |  | 45475938 |  | 45475938 |  |  |  | (45475938) |  |  |  |
| &nbsp;&nbsp;&nbsp;Offering costs |  |  |  | (1535309) | (1535309) |  |  | (161876) |  |  |  | (1697185) |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  | (24376018) | (24376018) | (1719732) | (5202203) | (1630484) |  |  | (1479547) | (34407984) |
| **Balance at December 31, 2025** | 10016043 | $100160 | $143371621 | $(137978273) | $5493508 | $(7202288) | $403936 | $3785966 | $— | $4555739 | $805007 | $7841868 |

---

*See accompanying notes to consolidated financial statement*

[**Table of Contents**](#TOC)

#### LODGING FUND REIT III, INC.

#### CONSOLIDATED STATEMENTS OF CASH FLOWS

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **2024** |
| **Cash Flows from Operating Activities:** |  |  |
| &nbsp;&nbsp;Net loss | $(34407984) | $(29916284) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 8973573 | 10425161 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 42280 | 42280 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of franchise fees | 129730 | 105000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs and debt premiums | 476303 | 1766446 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of fixed assets | 213782 | 685490 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sale of hotel property | (591880) | 4638883 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss | 10055803 | 3992772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets, net | (307184) | (341912) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest accretion of finance lease liability | 704082 | 690011 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (18887) | 316162 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise fees |  | 175000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 363610 | (381934) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (1739952) | 2539323 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 1660966 | 1485414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 9311554 | 2926851 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 1431378 | (2225) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (3702826) | (853562) |
| **Cash Flows from Investing Activities:** |  |  |
| &nbsp;&nbsp;Proceeds from sale of hotel property | 47025966 | 8850000 |
| &nbsp;&nbsp;Improvements and additions to hotel properties | (3547213) | (4474889) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | 43478753 | 4375111 |
| **Cash Flows from Financing Activities:** |  |  |
| &nbsp;&nbsp;Proceeds from mortgage debt | 5478432 | 45881801 |
| &nbsp;&nbsp;Proceeds from lines of credit | 1497302 | 5534593 |
| &nbsp;&nbsp;Principal payments on mortgage debt | (39293802) | (47707441) |
| &nbsp;&nbsp;Principal payments on lines of credit | (6122099) | (4957400) |
| &nbsp;&nbsp;Payments of deferred financing costs | (546535) | (1464638) |
| &nbsp;&nbsp;Proceeds from issuance of common stock | 6000 | 39998 |
| &nbsp;&nbsp;Proceeds from issuance of GO II Units | 2938576 | 2850000 |
| &nbsp;&nbsp;Proceeds from issuance of Series P Preferred Units | 1550000 | 350000 |
| &nbsp;&nbsp;Payments of offering costs related to Series P Preferred Units | (418538) | (146425) |
| &nbsp;&nbsp;Payments of offering costs | (2399964) | (2364042) |
| &nbsp;&nbsp;Payments of finance lease liability | (624112) | (610237) |
| &nbsp;&nbsp;Distributions paid | (13226) | (3510245) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (37947966) | (6104036) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in cash, cash equivalents, and restricted cash | 1827961 | (2582487) |
| **Beginning Cash, Cash Equivalents, and Restricted Cash** | 10361842 | 12944329 |
| **Ending Cash, Cash Equivalents, and Restricted Cash** | $12189803 | $10361842 |

---

*See accompanying notes to consolidated financial statements.*

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#### LODGING FUND REIT III, INC.

#### CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **2024** |
| **Supplemental Disclosure of Cash Flow Information:** |  |  |
| &nbsp;&nbsp;Interest paid | $18510076 | $11829054 |
| **Supplemental Disclosure of Non-Cash Investing and Financing Activities:** |  |  |
| &nbsp;&nbsp;Debt issued for refinance of Lakewood Property | $— | $4896801 |
| &nbsp;&nbsp;Series A Preferred Units issued in exchange for forgiveness of mortgage loan and interest on Northbrook Property | $488330 | $4067409 |
| &nbsp;&nbsp;Reclassification of Series T LP Unit noncontrolling interest to additional paid-in capital upon conversion | $45475938 | $— |
| &nbsp;&nbsp;Offering costs included in accounts payable | $(140690) | $47032 |
| &nbsp;&nbsp;Offering costs included in due to related parties | $(562089) | $(251457) |
| &nbsp;&nbsp;Distributions included in due to related parties | $— | $(18389) |
| &nbsp;&nbsp;Reinvested distributions | $— | $480518 |
| &nbsp;&nbsp;ROU asset in exchange for lease liability | $679038 | $— |
| **Reconciliation of Cash, Cash Equivalents, and Restricted Cash:** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents, end of period | $4889888 | $2354025 |
| &nbsp;&nbsp;Restricted cash, end of period | 5732099 | 7986767 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash, cash equivalents, and restricted cash, end of period | $10621987 | $10340792 |
| &nbsp;&nbsp;Cash and cash equivalents, end of period included in assets held for sale | 386116 | 21050 |
| &nbsp;&nbsp;Restricted cash, end of period included in assets held for sale | 1181700 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash, cash equivalents, and restricted cash, end of period (including cash, cash equivalents and restricted cash held for sale) | $12189803 | $10361842 |

---

*See accompanying notes to consolidated financial statements.*

[**Table of Contents**](#TOC)

#### LODGING FUND REIT III, INC.

#### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION

Lodging Fund REIT III, Inc. ("LF REIT III"), was formed on April 9, 2018 as a Maryland corporation. LF REIT III, together with its subsidiaries (the "Company"), was formed for the principal purpose of acquiring, through purchase or contribution, direct or indirect ownership interests in a diverse portfolio of limited-service, select-service, full-service and extended-stay hotel properties located primarily in "America's Heartland," which the Company defines as the geographic area from North Dakota to Texas and the Appalachian Mountains to the Rocky Mountains. LF REIT III has elected to be treated as a real estate investment trust, or REIT, for federal income tax purposes beginning with the taxable year ended December 31, 2018. The Company's business activities are directed and managed by Legendary Capital REIT III, LLC (the "Advisor") and its affiliates, which are related parties through common management, pursuant to the Amended and Restated Advisory Agreement (the "Advisory Agreement"), dated June 1, 2018. The Company has no foreign operations or assets and its operating structure includes only one operating and reportable segment. See Note 13 "Reportable Segments".

Substantially all of the Company's assets and liabilities are held by, and substantially all of its operations are conducted through, Lodging Fund REIT III OP, LP (the "Operating Partnership," or "OP"), a subsidiary of LF REIT III. The OP has three voting classes of partnership units, Common General Partnership Units ("GP Units"), Interval Units and Common Limited Partnership Units ("Common LP Units"), and six classes of non-voting partnership units, Series B Limited Partnership Units ("Series B LP Units"), Series Growth & Opportunity ("GO") Limited Partnership Units ("Series GO LP Units"), Series Growth & Opportunity II ("GO II") Limited Partner Units ("Series GO II LP Units"), Series T Limited Partnership Units ("Series T LP Units"), Series P Preferred Units ("Series P Preferred Units"), and Series A Preferred Units ("Series A Preferred Units"). LF REIT III was the sole general partner of the OP, as of December 31, 2025 and 2024. As of December 31, 2025, there were 612,100 outstanding Common LP Units, no outstanding Interval Units, there were 1,000 outstanding Series B LP Units, all of which were owned by the Advisor, 3,124,503 Series GO LP Units, 895,520 Series GO II LP Units, no outstanding Series T LP Units, 155 Series P Preferred Units, and 4,555,739 Series A Preferred Units.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

**Basis of Presentation and Principles of Consolidation**— The accompanying consolidated financial statements and related notes have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules and regulations of the SEC applicable to annual financial information. The consolidated financial statements include the accounts of LF REIT III, the OP, its wholly-owned subsidiaries and entities in which the Company has a controlling financial interest, including variable interest entities ("VIEs") where the Company is the primary beneficiary. The determination of a controlling financial interest is based upon the terms of the governing agreements of the respective entities, including the evaluation of the rights held by other interests. If the entity is considered to be a VIE, the Company determines whether the Company is the primary beneficiary, and then consolidates those VIEs for which the Company has determined that the Company is the primary beneficiary. If the entity in which the Company holds an interest does not meet the definition of a VIE, the Company evaluates whether the Company has a controlling financial interest through the Company's voting interest in the entity. The Company consolidates entities when the Company owns more than 50 percent of the voting shares of a company or otherwise has a controlling financial interest. References in these financial statements to the net loss attributable to stockholders do not include non-controlling interests, which represent the outside ownership interests of the Company's consolidated, non-wholly owned entities and are presented separately in the consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation.

**Use of Estimates**—The preparation of the Company's consolidated financial statements and the accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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**Revenue Recognition**—Revenues consist of amounts derived from hotel operations, including room sales and other hotel revenues, and are presented on a disaggregated basis in the Company's consolidated statements of operations. These revenues are recorded net of any sales and occupancy taxes collected from the hotel guests. All revenues are recorded on an accrual basis as they are earned. Any cash received prior to a guest's arrival is recorded as an advance deposit from the guest and recognized as revenue at the time of the guest's occupancy at the hotel property. Advance deposits are included in other liabilities on the accompanying consolidated balance sheets.

**Investment in Hotel Properties**—The Company evaluates whether each hotel property acquisition should be accounted for as an asset acquisition or a business combination. If substantially all of the fair value of the gross assets acquired is concentrated in a single asset or a group of similar identifiable assets, then the transaction is considered to be an asset acquisition. All of the Company's acquisitions since inception have been determined to be asset acquisitions. Transaction costs associated with asset acquisitions are capitalized and transaction costs associated with business combinations would be expensed as incurred.

The Company's acquisitions generally consist of land, land improvements, buildings, building improvements, and furniture, fixtures and equipment ("FF&E"). The Company may also acquire intangible assets or liabilities related to in-place leases, management agreements, debt, and advanced bookings. For transactions determined to be asset acquisitions, the Company allocates the purchase price among the assets acquired and the liabilities assumed on a relative fair value basis at the date of acquisition. The Company determines the fair value of assets acquired and liabilities assumed with the assistance of third-party valuation specialists, using cash flow analysis as well as available market and cost data. The determination of fair value includes making numerous estimates and assumptions.

For the years ended December 31, 2025 and 2024, there were no acquisitions in hotel properties.

The Company's investments in hotel properties are carried at cost and are depreciated using the straight-line method over the estimated useful lives of 15 years for land improvements, 40 years for buildings and building improvements and 3 to 7 years for FF&E. Maintenance and repair costs are expensed in the period incurred and major renewals or improvements to the hotel properties are capitalized.

The Company evaluates its hotel properties for indicators of impairment. If there are indicators of impairment and we determine that the asset is not recoverable from future undiscounted cash flows to be received through the asset's remaining life (or, if earlier, the expected disposal date), we record an impairment charge to the extent the carrying amount exceeds the asset's estimated fair value or net proceeds from expected disposal. Other than the Cedar Rapids Property, the El Paso Property and the Lakewood Property (see Note 3), there were no indicators of impairment to the hotel properties and no impairment charges were recorded as of December 31, 2025. As of December 31, 2024, the Company recorded impairment losses of approximately $4.0 million in connection with the pending sales of the Pineville HGI Property and the Charlotte Property.

**Assets Held for Sale -** The Company classifies assets as held for sale when management has committed to a plan to sell the property, the property is available for immediate sale in its present condition, an active program to locate a buyer has been initiated, the sale is probable and expected to be completed within one year, and the property is being actively marketed at a price that is reasonable in relation to its current fair value. Assets classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell. If these criteria are met, the Company will cease recording depreciation and amortization and will record an impairment charge if the fair value less costs to sell is less than the carrying amount of the disposal group. The Company will generally classify the impairment charge, together with the related operating results, as continuing operations in the Company's consolidated statements of operations and classify the assets and related liabilities as held for sale in the Company's consolidated balance sheets. If the Company's plan of sale changes and the Company subsequently decides not to sell a property that is classified as held for sale, the property will be reclassified as held and used in the period the change occurs. As of December 31, 2025, the Company had three hotels classified as held for sale, all of which are expected to be sold to unrelated third parties in the first half of 2026, as discussed further in Note 3.

**Advertising Costs**—The Company expenses advertising costs as incurred. These costs represent the expense for franchise advertising and reservation systems under the terms of the hotel management and franchise agreements and expenses that are directly attributable to advertising and promotion. Advertising expense was $2.5 million and $2.8 million for the years

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ended December 31, 2025 and 2024, respectively, and is included in sales and marketing in the consolidated statements of operations.

**Non-controlling Interest**—Non-controlling interests represent the portion of equity in a subsidiary held by owners other than the Company. Non-controlling interests are reported in the consolidated balance sheets within equity, separate from stockholders' equity. Revenue and expenses attributable to both the Company and the non-controlling interests are reported in the consolidated statements of operations, with net income or loss attributable to non-controlling interests reported separately from net income or loss attributable to the Company.

Consistent with the terms of the Partnership Agreement, no net income or loss is allocated to the Series T LP Unit holders, as allocations and distributions for the Series T LP Units are determined by the General Partner in its sole discretion based on the financial performance of the contributed real estate. During the year ended December 31, 2025, the Series T LP Units were converted and eliminated (see Note 11).

**Cash and Cash Equivalents**—Cash and cash equivalents include cash in bank accounts as well as highly liquid investments with an original maturity of three months or less. The Company deposits cash with several high-quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation ("FDIC") up to an insurance limit of $250,000. At times, the Company's cash and cash equivalents may exceed federally insured levels.

**Restricted Cash**—Restricted cash primarily consists of earnest money deposits related to hotel property acquisitions, as well as certain funds maintained in escrow accounts to fund future payments for insurance, property tax obligations, and reserves for future capital expenditures, as required by our debt agreements.

**Accounts Receivable**—Accounts receivable consist primarily of receivables due from hotel guests for room stays and meeting and banquet room rentals, which are uncollateralized customer obligations. Management determines the likelihood of collectability of receivables on an individual customer basis, based on the amount of time the balance has been outstanding, likelihood of collecting, and the customer's current economic status. The carrying amount of the accounts receivables is reduced by an allowance for credit losses that reflects management's best estimate of the amounts that will not be collected. As of December 31, 2025 and 2024, there was no allowance for credit losses.

**Deferred Financing Costs**—Deferred financing costs represent origination fees, legal fees, and other costs associated with obtaining financing. Deferred financing costs are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability. These costs are amortized to interest expense over the terms of the respective financing agreements using the straight-line method, which approximates the effective interest method. The Company expenses unamortized deferred financing costs when the associated financing agreement is refinanced or repaid before maturity unless certain criteria are met that would allow for the carryover of such costs to the refinanced agreement. Costs incurred in connection with potential financial transactions that are not completed are expensed in the period in which it is determined the financing will not be completed.

**Offering Costs**—The Company has incurred certain costs related directly to the Company's private offerings consisting of, among other costs, commissions, legal, due diligence costs, printing, marketing, filing fees, postage, data processing fees, and other offering related costs. These costs are capitalized and recorded as a reduction of equity proceeds on the accompanying consolidated balance sheets.

**Property Operations Expenses**—Property operations expenses consist of expenses related to room rental, food and beverage sales, telephone usage, and other miscellaneous service costs, as well as all costs of operating the Company's hotel properties such as building repairs, maintenance, property taxes, utilities, and other related costs.

**Property Management Fees**—Property management fees include expenses incurred for management services provided for the day-to-day operations of our hotel properties, which are generally charged at a rate of 4% of gross revenues. Property management fees also include asset management fees, which may be charged at an annual rate of up to 0.75% of gross assets and are paid to the Advisor.

**Franchise Fees**—The Company pays initial fees related to hotel franchise rights prior to acquiring a hotel property. The fees are included in prepaid expenses and other assets until the time the related hotel property is acquired. Initial franchise fees related to hotel properties that are acquired are amortized on a straight-line basis over the life of the agreement. Initial

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franchise fees related to hotel properties that are not acquired are refunded to the Company, net of any associated fees, and any fees are expensed as incurred. Franchise fees on the accompanying consolidated statements of operations include the amortization of initial franchise fees, as well as monthly fees paid to franchisors for royalty, marketing, and reservation fees and other related costs.

**Acquisition Costs**—The Company incurs costs during the review of potential hotel property acquisitions including legal fees, environmental reviews, market studies, financial advisory services, and other professional service fees. If the Company does complete a property acquisition, an acquisition fee of up to 1.4% is charged by the Advisor, based on the purchase price of the property plus any estimated PIP costs. For transactions determined to be asset acquisitions, these costs are capitalized as part of the overall cost of the project. For transactions determined to be business combinations, these costs would be expensed in the period incurred. Acquisition-related and acquisition due diligence costs that relate to a property that is not acquired, are expensed and included in acquisition costs on the accompanying consolidated statements of operations. Prior to the ultimate determination of whether a property will be acquired or not, acquisition-related and acquisition due diligence costs are recorded as, and included in, prepaid expenses and other assets on the accompanying consolidated balance sheets.

**Net Loss Per Share of Common Stock**—Basic net loss per common share is computed based upon the weighted average number of shares outstanding during the period. Diluted net loss per common share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the period. Basic and diluted net loss per common share were the same for the periods presented.

**Preferred Stock -** On December 24, 2024, the Company entered into two separate amendments to the Amended and Restated Limited Partnership Agreement of the Operating Partnership to establish the terms of a new series of limited partner units designated as Series P Preferred Units ("Series P Preferred Units") and Series A Preferred Units ("Series A Preferred Units"). See Note 10.

The Company accounts for both the Series P Preferred Units and Series A Preferred Units pursuant to the guidance within ASC 480 – Distinguishing Liabilities from Equity.

**Stock-Based Compensation**—During 2022, the Company began compensating its independent directors with stock-based compensation as approved by and administered under the supervision of our Board of Directors. The awards are fully vested at issuance and the Company recognizes stock-based compensation expense based on the award's fair value at the grant date. Compensation expense related to stock awards is determined on the grant date based on the offering price of our common stock and is charged to earnings when issued. Stock-based compensation expense was $42,280 and $42,280 for the years ended December 31, 2025 and 2024, respectively, and is included in general and administrative expense in the consolidated statements of operations.

**Income Taxes**—The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, to stockholders. The Company's intention is to adhere to the REIT qualification requirements and to maintain its qualification for taxation as a REIT.

As a REIT, the Company is generally not subject to U.S. federal corporate income tax on the portion of taxable income that is distributed to stockholders. If the Company fails to qualify for taxation as a REIT in any taxable year, the Company will be subject to U.S. federal income taxes at regular corporate rates and it may not be able to qualify as a REIT for four subsequent taxable years. As a REIT, the Company may be subject to certain state and local taxes on its income and property, and to U.S. federal income and excise taxes on undistributed taxable income. Taxable income from non-REIT activities managed through the Company's taxable REIT subsidiary ("TRS") is subject to U.S. federal, state, and local income taxes at the applicable rates.

The TRS accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax basis, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income

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tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company performs periodic reviews for any uncertain tax positions and, if necessary, will record the expected future tax consequences of uncertain tax positions in the consolidated financial statements.

**Fair Value Measurement**—The Company establishes fair value measures based on the fair value definition and hierarchy levels established by GAAP. These fair values are based on a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

***Level 1***—Observable inputs such as quoted prices in active markets.

***Level 2***—Directly or indirectly observable inputs, other than quoted prices in active markets.

***Level 3***—Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions.

The Company's estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

The Company's financial instruments as of December 31, 2025 and 2024 consisted of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, lines of credit, and mortgage debt. With the exception of the Company's mortgage debt, the carrying amounts of the financial instruments presented in the consolidated financial statements approximate their fair value as of December 31, 2025.

**Leases**— The Company determines if an arrangement is a lease at inception. The Company's lease arrangements consist of operating leases for office space and ground leases, and finance leases related to certain hotel properties. Right-of-use ("ROU") assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company has elected the practical expedient to not separate lease and non-lease components for all classes of underlying assets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Finance lease ROU assets are amortized on a straight-line basis over the shorter of the useful life of the asset or the lease term, with interest expense on the finance lease liability recognized using the effective interest method. The Company has elected not to recognize ROU assets and lease liabilities for leases with an initial term of twelve months or less.

**Recent Accounting Pronouncements**— In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period.

**Recent Accounting Pronouncements Not Yet Adopted**— In November 2024, the FASB issued ASU No. 2024-03, *Disaggregation of Income Statement Expenses*, which provides for enhanced disclosures for public business entities on certain income statement items by: i) presenting the following within tabular format - a) purchases of inventory, b) employee compensation, c) depreciation, d) intangible asset amortization, e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities - ii) providing a qualitative description of amounts remaining in

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relevant expense captions that are not separately disaggregated quantitatively and iii) disclosing the definition of selling expenses in addition to disclosing the total amount of selling expenses. The new standard is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is evaluating the impact the adoption this ASU will have on the Company's consolidated financial statements.

In May 2025, the FASB issued ASU No. 2025-03, *Business Combinations (Topic 805): Determining the Accounting Acquirer in a Business Combination Involving a Variable Interest Entity*, which amends the guidance for identifying the accounting acquirer in business combinations involving a VIE that meets the definition of a business and where the primary form of consideration is equity interests. The new standard requires entities to apply the existing guidance under ASC 805-10-55-12 through 55-15 to determine the accounting acquirer, rather than defaulting to the primary beneficiary of the VIE as the acquirer. The amendments are intended to improve consistency and comparability in financial reporting across business combinations involving both VIEs and voting interest entities. The new standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact the adoption of this ASU will have on the Company's consolidated financial statements.

**Reclassifications**—Certain amounts included in the December 31, 2024 consolidated financial statements have been reclassified to conform to the December 31, 2025 presentation.

3. INVESTMENT IN HOTEL PROPERTIES

Investment in hotel properties as of December 31, 2025 and 2024 consisted of the following:

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| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2025** | **December 31,** <br>**2024** |
| Land and land improvements | $17919835 | $27154255 |
| Building and building improvements | 163698168 | 217125199 |
| Furniture, fixtures, and equipment | 16502547 | 23228076 |
| Right-of-use asset - ground lease | 7942324 | 7340868 |
| Construction in progress | 1326968 | 443237 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in hotel properties, at cost | 207389842 | 275291635 |
| Less: accumulated depreciation and amortization | (30989984) | (33318590) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in hotel properties, net | $176399858 | $241973045 |

---

As of December 31, 2025, the Company consolidated fourteen hotel properties, consisting of thirteen hotel properties owned by the Company and an equity and profits interest in the parent of the entity which holds a leasehold interest in one hotel property, with an aggregate of 1,745 rooms located in eight states. As of December 31, 2024, the Company consolidated eighteen hotel properties, consisting of seventeen hotel properties owned by the Company and an equity and profits interest in the parent of the entity which holds a leasehold interest in one hotel property, with an aggregate of 2,150 rooms located in ten states.

***Properties Under Contract***

On April 15, 2024, the Operating Partnership and Stow Hotel Associates, LLC (the "Stow Contributor") entered into Legendary Equity Preservation UPREIT (Pat. Pend.) Contribution Agreements (the "Hampton Stow Contribution Agreement" and the "Staybridge Stow Contribution Agreement") for the acquisition of two hotels:

1) the Hampton Inn Stow – the contribution of an 84-room Hampton Inn hotel in Stow, Ohio to the Operating Partnership. The aggregate consideration for this hotel under the Hampton Stow Contribution Agreement is $10.2 million, with a majority of the consideration consisting of the assumption by the Operating Partnership of existing debt secured by the hotel and the remaining consideration consisting of the issuance of Series T LP Units of the Operating Partnership.

2) the Staybridge Suites Stow – the contribution of a 92-room Staybridge Suites hotel in Stow, Ohio to the Operating Partnership. The aggregate consideration for this hotel under the Staybridge Stow Contribution Agreement is

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$10.9 million, with a majority of the consideration consisting of the assumption by the Operating Partnership of existing debt secured by the hotel and the remaining consideration consisting of the issuance of Series T LP Units of the Operating Partnership and cash at closing.

As required by the Contribution Agreements, the Operating Partnership deposited $100,000 in aggregate ($50,000 for each hotel) into an escrow as earnest money pending the closing or termination of each Contribution Agreement. Except in certain circumstances described in each Contribution Agreement, if the Operating Partnership fails to perform its obligations under either Contribution Agreement, it will forfeit the earnest money for the respective acquisition.

The Company terminated the Hampton Stow Contribution Agreement and the Staybridge Stow Contribution Agreement on March 1, 2025. The earnest money deposits were fully refunded to the Operating Partnership.

***Sale of Pineville Property***

On July 23, 2024, the Company sold the Pineville Property to an unaffiliated purchaser for $8,850,000 in cash. The mortgage loan secured by the Pineville Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released. During the year ended December 31, 2024, the Company recognized a loss of $4,638,883 related to this sale.

***Sale of Pineville HGI Property and Charlotte Property***

On May 14, 2025, the Company sold the Pineville HGI Property and Charlotte Property to an unaffiliated purchaser for $22,775,000 in cash. The mortgage loans secured by the Pineville HGI Property and Charlotte Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loans and collateral with respect to such loans have been terminated or released, and all commitments with respect to such loans have been terminated or released. In connection with the classification of these properties as held for sale, the Company recognized an impairment loss of $3,992,772 during the year ended December 31, 2024. During the year ended December 31, 2025, the Company recognized a net gain on sale of $361,796 related to these dispositions.

***Sale of Fargo Property***

On December 17, 2025, the Company sold the Fargo Property to an unaffiliated purchaser for $10,500,000 in cash, subject to customary prorations and adjustments. The mortgage loan secured by the Fargo Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released. In connection with the sale, $500,000 of the proceeds was held back by the purchaser and converted into a promissory note with Arcade Fargo LLC bearing interest at 16.0% per annum, with monthly principal and interest payments of approximately $45,365 maturing on January 1, 2027. During the year ended December 31, 2025, the Company recognized a loss of $1,135,173 related to this sale.

***Sale of Prattville Property***

On December 30, 2025, the Company sold the Prattville Property to an unaffiliated purchaser for $16,700,000 in cash. The mortgage loan secured by the Prattville Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released. During the year ended December 31, 2025, the Company recognized a gain of $1,365,256 related to this sale.

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***Variable Interest Entity***

On August 10, 2022, the Company consolidated a variable interest entity ("VIE") that owns one hotel in El Paso, Texas (the "El Paso University Property"). The Company is the primary beneficiary of this VIE as the Company has the power to direct the activities that most significantly affect its economic performance. Additionally, the Company has the obligation to absorb its losses and the right to receive benefits that could be significant to it. Accordingly, the Company initially recognized the VIE's assets, liabilities, and noncontrolling interest at fair value. The Company's consolidated balance sheet includes the following assets and liabilities of this entity:

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| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2025** | **December 31,** <br>**2024** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in hotel properties, net of accumulated depreciation of $2,610,929 and $2,015,865 | $20001056 | $20710000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 201051 | 262857 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 417740 | 573748 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 428188 | 502570 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 92492 | 68102 |
| **Total Assets** | $21140527 | $22117277 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt, net | $11843539 | $11917800 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance lease liability | 4525812 | 4638771 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 160124 | 411057 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 675169 | 130668 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 260522 | (86563) |
| **Total liabilities** | $17465166 | $17011733 |

---

#### Acquisitions of Hotel Properties
The Company did not acquire any properties during the years ended December 31, 2025 and 2024.

#### Ground Leases
The Company has ground leases on two of its Hotel Properties in which a right-of-use asset and corresponding finance lease liability is recognized pursuant to ASU 2016-02:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Sheraton Northbrook - matures in 2067 and has a yearly base rent that increases 3% every year through maturity. As of December 31, 2025, this finance lease had a discount rate of 7.75% .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) El Paso University - matures in 2054 and has annual rentals comprised of a base rent due at the beginning of the year plus, if applicable, a percent of revenue in excess of the base rent. The annual base rent of the El Paso ground lease is adjusted every five years by an average of a percent of the annual revenue in preceding years. If revenue remains below the previous five-year base rent, then there is no change to base rent. As of December 31, 2025, the finance lease had a discount rate of 9.00% .

For the years ended December 31, 2025 and 2024, the Company recognized aggregate interest expense of $704,082 and $690,011, respectively, which is included within "Interest expense" on the consolidated statement of operations and right-of-use amortization expense of $205,828 and $205,828, respectively related to the finance lease, which is included within "Depreciation and amortization" on the consolidated statements of operations.

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The following table reconciles the undiscounted cash flows for each of the next five years and total of the remaining years to the finance lease liability included in the Company's consolidated balance sheet as of December 31, 2025.

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| | |
|:---|:---|
| 2026 | $645791 |
| 2027 | 660511 |
| 2028 | 675672 |
| 2029 | 691288 |
| 2030 | 707372 |
| Thereafter | 41942465 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total finance lease payments | 45323099 |
| Interest | (32057245) |
| &nbsp;&nbsp;&nbsp;&nbsp;Present value of finance lease liabilities | $13265854 |

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*Assets Held for Sale*

The Company had the following pending transactions as of December 31, 2025:

- On August 26, 2025, the Company entered into an Auction Marketing Agreement and on October 16, 2025, the Company attempted to complete an auction sale of the Holiday Inn Express – Cedar Rapids (the "Cedar Rapids Property"); however the purchaser could not provide funding to complete the sale.

During the second half of 2025, the Company entered into a Marketing Agreement in order to sell the Holiday Inn – El Paso (the "El Paso Property") through an auction process. Although this did not come to completion as of December 31, 2025, the Company was actively marketing the El Paso Property for sale and having concurrent correspondence with the Lender with regard to this property. Effectively, on October 6, 2025, the Company entered into a Compromise and Settlement Agreement with the lender of the El Paso Property for the sale of the El Paso Property and other requirements.

- On November 20, 2025, the Company entered into a Hotel Purchase and Sale Agreement ("PSA") for the sale of the Lakewood Property.

Depreciation and amortization ceased for each of these properties as of the date each of the assets were deemed held for sale and these assets held for sale are measured at lower of their carrying amount or fair value less costs to sell. Since each of these hotels individually did not represent a strategic shift that has (or will have) a major effect on the Company's operations or financial results, its results of operations were not reported as discontinued operations in the consolidated financial statements.

On December 2, 2024, the Company entered into two purchase and sale agreements for the Hilton Garden Inn – Pineville (the "Pineville HGI Property") and the Hilton Garden Inn – Charlotte (the "Charlotte Property") and as of December 31, 2024, the Pineville HGI Property and the Charlotte Property were classified as held for sale. These properties were sold for an aggregate sales price of $22,775,000 and both of these sales closed on May 15, 2025.

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The major classes of assets and liabilities related to assets held for sale included in the consolidated balance sheet at December 31, 2025 were as follows:

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| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2025** | **December 31,** <br>**2024** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in hotel properties, net | $26695206 | $21257017 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 386116 | 21050 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 1181700 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 163688 | 57817 |
| &nbsp;&nbsp;&nbsp;&nbsp;Franchise fees, net | 179236 | 293611 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 672976 | 200289 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Assets held for sale** | $29278922 | 21829784 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt, net | $25061252 | $15921605 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 493743 | 362998 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 1686556 | 160188 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 788110 | 67827 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Liabilities related to assets held for sale** | $28029661 | 16512618 |

---

Investments in hotel properties classified as held for sale are carried at the lower of carrying value or fair value less costs to sell. Accumulated depreciation reflects amounts recorded prior to held for sale classification, at which point depreciation ceased in accordance with ASC 360-10-35-43.

*Impairment*

During the year ended December 31, 2025, the Company recorded impairment losses of approximately $10.1 million in connection with the pending sales of the Cedar Rapids Property, the El Paso Property, and the Lakewood Property. During the year ended December 31, 2024, the Company recorded impairment losses of approximately $4.0 million in connection with the pending sales of the Pineville HGI Property and the Charlotte Property.

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4. PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consisted of the following:

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| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2025** | **December 31,** <br>**2024** |
| Insurance | $627179 | 856646 |
| Other | 419189 | 1150412 |
|  | $1046368 | $2007058 |

---

5. ACCRUED EXPENSES

Accrued expenses consisted of the following:

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| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2025** | **December 31,** <br>**2024** |
| Property taxes | $2265762 | $2612022 |
| Interest | 5768598 | 5477122 |
| Other | 725725 | 1044200 |
|  | $8760085 | $9133344 |

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6. DEBT

At December 31, 2025 and December 31, 2024, debt, net on the consolidated balance sheets consists of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Interest**<br>**Rate as of**<br>**December 31,** <br>**2025** | <br>**Maturity**<br>**Date** | **Outstanding**<br>**Balance as of**<br>**December 31,** <br>**2025** | **Outstanding**<br>**Balance as of**<br>**December 31,** <br>**2024** |
| Holiday Inn Express - Cedar Rapids<sup>(1)</sup> |  |  | $— | $5619577 |
| Hampton Inn - Eagan<sup>(7)</sup> | 9.50% | 10/1/2025 | 8468346 | 8672347 |
| Home2 Suites - Prattville<sup>(2)</sup> |  |  |  | 9164964 |
| Home2 Suites - Lubbock | 4.69% | 10/6/2026 | 6586836 | 6851578 |
| Fairfield Inn & Suites - Lubbock | 4.93% | 4/6/2029 | 8535009 | 8639616 |
| Homewood Suites - Southaven | 7.77% | 12/6/2029 | 17796388 | 18000000 |
| Courtyard by Marriott - Aurora<sup>(3)(4)</sup> | 9.95% | 2/5/2025 | 14935816 | 14935816 |
| Holiday Inn - El Paso<sup>(1)</sup> |  |  |  | 7600000 |
| Hilton Garden Inn - Houston | 3.85% | 9/2/2026 | 13116014 | 13484482 |
| Hampton Inn - Fargo<sup>(5)</sup> |  |  |  | 6966110 |
| Courtyard by Marriott - El Paso | 6.01% | 5/13/2027 | 9800349 | 9800349 |
| Fairfield Inn & Suites - Lakewood<sup>(1)</sup> |  |  |  | 12000000 |
| Fairfield Inn & Suites - Lakewood - A-1<sup>(1)(6)</sup> | 14.50% | 3/27/2026 | 4896801 | 4896801 |
| Residence Inn - Fort Collins<sup>(7)(8)</sup> | 10.25% | 5/4/2025 | 11200000 | 11200000 |
| Residence Inn - Fort Collins - CapEx<sup>(7)(9)</sup> | 11.50% | 5/4/2025 | 1806143 | 1806143 |
| Residence Inn - Fort Collins - A-1<sup>(4)</sup> | 7.00% | 8/2/2028 | 501465 | 501465 |
| Hilton Garden Inn - El Paso<sup>(7)</sup> | 4.94% | 8/6/2025 | 11843539 | 12033256 |
| Holiday Inn Express - Wichita | 6.41% | 12/21/2027 | 5485172 | 5589430 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Mortgage Debt |  |  | 114971878 | 157761934 |
| Premium on assumed debt, net |  |  | 246579 | 234911 |
| Deferred financing costs, net |  |  | (1365446) | (1639867) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Mortgage |  |  | 113853011 | 156356978 |
| $5.0 million line of credit - Western<sup>(7)(10)</sup> | 8.50% | 6/15/2024 | 292040 | 4151139 |
| $20.0 million revolving line of credit - A-1 Bonds | 17.50% | 12/31/2027 | 13488302 | 14254000 |
| $0.6 million loan - NHS<sup>(7)</sup> | 7.00% | 9/30/2025 | 600000 | 600000 |
| $0.5 million loan - Arcade | 16.00% | 12/17/2026 | 500000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Lines of Credit and Other Corporate Debt |  |  | 14880342 | 19005139 |
| Debt, net |  |  | $128733353 | $175362117 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Asset is listed as held for sale as of December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Asset was sold on December 30, 2025 and the loan was repaid on the closing date.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Variable interest rate equal to 30-day SOFR plus 6.00% , provided that SOFR shall not be less than 1.00% . The Company and the lender are working to finalize an extension of these loans as of the date of this filing.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Loan is interest-only until maturity.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Asset was sold on December 17, 2025 and the loan was repaid on the closing date

&nbsp;&nbsp;&nbsp;&nbsp;(6) This debt is held at the Operating Partnership

&nbsp;&nbsp;&nbsp;&nbsp;(7) The Company and the lender are working to finalize an extension of these loans as of the date of this filing.

&nbsp;&nbsp;&nbsp;&nbsp;(8) Variable interest rate equal to SOFR Index plus 6.25% .

&nbsp;&nbsp;&nbsp;&nbsp;(9) Variable interest rate equal to SOFR Index plus 7.50% .

&nbsp;&nbsp;&nbsp;&nbsp;(10) Variable interest rate equal to U.S. Prime plus 1.00%

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*Mortgage Debt*

The fair value of the Company's mortgage debt was estimated by discounting each loan's future cash flows over the remaining term of the mortgage using current borrowing rates for debt instruments with similar terms and maturities, which are Level 3 inputs in the fair value hierarchy. As of December 31, 2025, the estimated fair value of the Company's mortgage debt was $113.9 million, compared to the gross carrying value $115.0 million. As of December 31, 2024, the estimated fair value of the Company's mortgage debt was $158.6 million, compared to the gross carrying value $157.8 million. The carrying values of the Company's lines of credit, the NHS Loan, and the Arcade Loan approximate their fair values due to the short-term nature or variable interest rates of these instruments. The A-1 Revolving Line of Credit is a related-party instrument with terms that may not be representative of market terms; accordingly, it is not practicable to estimate the fair value of this instrument without incurring excessive cost.

***Western Line of Credit Amendments***

The Company and Western State Bank are working to finalize an extension of the Western Line of Credit as of the date of this filing, however there can be no assurance that an extension will be granted. Historically, the Company has successfully negotiated extensions, including in instances where the maturity date had passed.

***Arcade Loan***

On December 16, 2025, in connection with the sale of the Hampton Inn - Fargo property, the Operating Partnership entered into a promissory note with Arcade Fargo LLC in the principal amount of $500,000 (the "Arcade Loan"). The Arcade Loan bears interest at a fixed rate of 16.0% per annum, with monthly principal and interest payments of approximately $45,365 commencing February 1, 2026 and maturing on January 1, 2027. The Arcade Loan requires mandatory payments from net proceeds of any capital transaction with respect to the Company's remaining properties, and restricts distributions to the Company's equity holders until the note is repaid in full. The Arcade Loan is guaranteed by Lodging Fund REIT III TRS, Inc., Legendary Capital, LLC, Legendary Capital REIT III, LLC, Norman Leslie, and Corey Maple.

***Mortgage Loan Modifications***

From time to time, the Company may amend or refinance its existing mortgages. The Company follows guidance prescribed by FASB ASC 470, Debt, in order to determine whether a change in terms or an amendment would be accounted for as a modification or an extinguishment of debt. Under modification accounting, no gain or loss is recorded in connection with the debt, any new lender related fees are capitalized and amortized pursuant to the term of the related debt facility and any fees paid to the third parties are expensed as incurred. Under extinguishment accounting, a gain or loss may derive based on the difference between the fair value of the new debt and the carrying amount of the old debt, any fees paid to the existing lender are expensed as incurred and new fees are capitalized and amortized pursuant to the term of the related debt facility.

*Contribution Agreement – Sheraton Northbrook, Residence Inn - Fort Collins and Courtyard by Marriot - Aurora* 

On December 24, 2024, the Company entered into a Contribution Agreement (the "Contribution Agreement"), to restructure four of its loans with Access Point Financial, LLC (the "Lender") – 1) the mortgage loan secured by the Sheraton – Northbrook ("Sheraton Northbrook Loan") with unpaid principal balance of approximately $4.0 million, 2) the loans secured by the Residence Inn - Fort Collins Loan ("Fort Collins Loans") with collective unpaid principal balance of approximately $13.0 million, 3) the mortgage loan secured by the Courtyard by Marriott – Aurora ("Courtyard Aurora Loan") with unpaid principal balance of approximately $14.9 million. With respect to the Sheraton Northbrook Loan, the Lender received 4,067,409 Series A Preferred Units (See Note 10) amounting to $4,067,409 in exchange for all of the remaining unpaid principal and interest on the Sheraton Northbrook Loan. In accordance with ASC 470, Debt, the Company accounted for this exchange as an extinguishment of debt. Management concluded that the fair value of the unpaid principal and interest was the same as the fair value of the Series A Preferred Units issued and accordingly, no gain or loss was recorded in connection with this transaction.

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With respect to the Fort Collins Loans and the Courtyard Aurora Loan, the Company is required to refinance each such loan within 90 days of the date of the Contribution Agreement, and to the extent there is remaining unpaid principal and interest on such loans after such refinancing, the Operating Partnership is required to enter into a contribution agreement with the Lender through which the Lender will receive Series A Preferred Units in exchange for all of such remaining unpaid principal and interest. The Company and the Lender have been in communication as the Company works to finalize refinancing.

*El Paso HI Property*

On January 16, 2025, the Company modified the mortgage loan secured by the El Paso Holiday Inn, which increased the interest to 12.00% and extended the maturity date to May 31, 2025, provided certain conditions are met. The Company and lender entered into a Compromise and Settlement Agreement (the "Settlement Agreement") on October 6, 2025, which provides direction for the sale of the El Paso Property and certain other conditions as described within the Settlement Agreement.

*Cedar Rapids Property and Eagan Property* 

On February 26, 2025, the Company entered into a Change in Terms Agreement with Western State Bank to amend the existing loans secured by the Cedar Rapids Property and the Eagan Property to extend the maturity date of each loan to March 31, 2025 and to increase the interest rate of each loan to a fixed rate of 9.50%. On May 2, 2025, the Company entered into a Change in Terms Agreement with Western State Bank to amend the existing loans secured by the Cedar Rapids Property and the Eagan Property to extend the maturity date of each loan to June 30, 2025.

On July 25, 2025, the Company entered into a Change in Terms Agreement with Western State Bank to amend the existing loans secured by the Cedar Rapids Property and the Eagan Property to extend the maturity date of each loan to October 1, 2025.

The Company and Western State Bank are working to finalize an extension of the loans secured by the Eagan property as of the date of this filing, however there can be no assurance that an extension will be granted. Historically, the Company has successfully negotiated extensions, including in instances where the maturity date had passed. As aforementioned in Note 3, the Cedar Rapids Property was recorded as a property held for sale as of December 31, 2025.

*Houston Property and Wichita Property*

On March 27, 2025, the Company entered into a Forbearance Agreement with Choice Financial Group for the Houston Property and the Wichita Property whereby the Company is required to make payments in the amount aggregating approximately $204,000, accrue interest on each loans secured by the Houston Property and the Wichita Property at a rate of Prime Rate plus 0.50%, and the assignment of sale proceeds from the completion of the pending sale of Pineville HGI in payment for various obligations on the Houston Property and Wichita Property. In addition, Corey Maple is required to guarantee 50% of each of the indebtedness of the Houston Property and the Wichita Property.

*El Paso Courtyard Property, Charlotte Property and Pineville HGI Property Mortgage Loan Modifications*

On March 27, 2025, the mortgage loans secured by the El Paso Airport Property, the Charlotte Property and the Pineville HGI Property (collectively, the "Western Alliance Loans") were sold to a new lender. From January 2025 through the date of this filing, the Company was not in compliance with the payment obligations under the Western Alliance Loans. However, as discussed above, the sales of the properties are anticipated to close in the near future, and the proceeds are expected to be utilized toward various corporate purposes, including the repayment of these loans. The Company plans to engage in discussions with the new lender to defer the payment of principal and interest, similar to the terms previously discussed with the old lender. However, there can be no assurance that the new lender will approve these new payment terms, which could have a material adverse impact on the Company's financial condition and liquidity. Historically, the Company has successfully negotiated new payment terms, including in instances where the maturity date had passed.

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*Charlotte Property and Pineville HGI Property Sale and Loan Termination*

On May 14, 2025, the Company sold the Pineville HGI Property and Charlotte Property to an unaffiliated purchaser for $22,775,000 in cash, subject to customary prorations and adjustments. The mortgage loans secured by the Pineville HGI Property and Charlotte Property were repaid in full at closing from sale proceeds. All guaranties in connection with such loans and collateral with respect to such loans have been terminated or released, and all commitments with respect to such loans have been terminated or released.

*Lubbock Expo Special Servicing*

In October 2025, the mortgage loan secured by the Fairfield Inn & Suites - Lubbock (the "Lubbock Fairfield Loan") was transferred to special servicing. As of December 31, 2025, the outstanding principal balance on the Lubbock Fairfield Loan was approximately $8.5 million, with a fixed interest rate of 4.93% and a maturity date of April 6, 2029. The Company is in discussions with the special servicer regarding the status of the loan. There can be no assurance that these discussions will result in a favorable outcome.

*Fargo Property Sale and Loan Termination*

On December 17, 2025, the Company sold the Fargo Property to an unaffiliated purchaser for $10,500,000 in cash, subject to customary prorations and adjustments. The mortgage loan secured by the Fargo Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released.

*Prattville Property Sale and Loan Termination*

On December 30, 2025, the Company sold the Prattville Property to an unaffiliated purchaser for $16,700,000 in cash, subject to customary prorations and adjustments. The mortgage loan secured by the Prattville Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loans have been terminated or released.

*Future Minimum Payments*

As of December 31, 2025, the future minimum principal payments on the Company's debt were as follows:

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| | |
|:---|:---|
| 2026 | $74977477 |
| 2027 | 15434532 |
| 2028 | 14470937 |
| 2029 | 8258172 |
| 2030 | 16711102 |
|  | 129852220 |
| &nbsp;&nbsp;&nbsp;&nbsp;Premium on assumed debt, net | 246579 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred financing costs, net | (1365446) |
|  | $128733353 |

---

The $75.0 million of future minimum principal payments due in 2026 includes the maturities of the mortgage debt secured individually by the Eagan Property, Lubbock Home2 Property, Lakewood Property, Houston Property, Fort Collins Property, El Paso University Property, and Aurora Property, as well as the maturities of the Western Line of Credit, the NHS Line of Credit, and the Arcade Loan. The future minimum principal payments do not include the assets classified as held for sale as of December 31, 2025.

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7. INCOME TAXES

The Company's earnings (losses), other than those generated by the Company's TRS, are not generally subject to federal corporate and state income taxes due to the Company's REIT election. The Company did not pay any federal taxes for the years ended December 31, 2025 and 2024. For the year ended December 31, 2025, the Company adopted ASU-2023-09, Improvements to Income tax Disclosures, which expands and disaggregates income tax disclosures, including a more detailed rate reconciliations and disaggregation of income taxes paid by jurisdiction.

The Company paid state franchise taxes only to Texas in the amount of $136,781 and $131,851 for the years ended December 31, 2025 and 2024, respectively. The Company did not have any uncertain tax positions as of December 31, 2025 and 2024, respectively and as of December 31, 2025, the tax years 2018 through 2025 remain subject to examination by the U.S. Internal Revenue Service ("IRS") and various state tax jurisdictions. For the years ended December 31, 2025 and 2024, all distributions paid were determined to be 100% returns of capital contributions.

The Company's TRS generated a net operating loss ("NOL") for both the years ended December 31, 2025 and 2024, each of which can be carried forward to offset future taxable income. As of December 31, 2025 and 2024, the Company's deferred tax assets and liabilities consisted of the following:

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| | | |
|:---|:---|:---|
|  | **December 31,**  | **December 31,**  |
|  | **2025** | **2024** |
| Deferred Tax Assets: |  |  |
| Net operating loss carryforwards - Federal | $10947140 | $8912921 |
| Net operating loss carryforwards - State | 1733868 | 1554141 |
| Valuation Allowance | (12681008) | (10467062) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax assets, net | - | - |
| Deferred Tax Liabilities: |  |  |
| Tax FF&E basis less than book basis - Federal | (2044780) | (2278523) |
| Tax FF&E basis less than book basis - State | (323864) | (397305) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities, net | (2368644) | (2675828) |
| Deferred tax liabilities, net | $(2368644) | $(2675828) |

---

As of December 31, 2025, the Company's TRS had federal net operating loss carryforwards of approximately $10.9 million, which may be carried forward indefinitely subject to an annual limitation of 80% of taxable income under the Tax Cuts and Jobs Act of 2017. State net operating loss carryforwards of approximately $1.7 million have varying expiration periods depending on the applicable state tax jurisdiction.

The components of the Company's income tax benefit are as follows:

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **2024** |
| Federal: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred | $233743 | $183690 |
| State: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | (136781) | (131851) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred | 73441 | 158221 |
| Income tax benefit | $170403 | $210060 |

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The provision for income taxes is derived from the income tax expense that is determined by applying the applicable U.S. statutory federal income tax rate to pretax income as a result of the following differences:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **%** | **2024** | **%** |
| Expected income tax benefit at U.S. Federal statutory rate | $7263982 | -21.0% | $6326532 | -21.0% |
| Tax impact of REIT election | (4995877) | 14.4% | (4289317) | 14.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;Expected tax benefit at TRS | 2268105 | -6.6% | 2037215 | -6.8% |
| Valuation Allowance | (2378584) | 6.9% | (2041087) | 6.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross tax expense | (110479) |  | (3872) |  |
| State income tax expense, net | 258290 | -0.7% | 355140 | -1.2% |
| Temporary differences - deprecation | 42868 | -0.1% | (133260) | 0.4% |
| Permanent differences | (20276) | 0.1% | (7948) | 0.0% |
| Income tax benefit | $170403 | -0.5% | $210060 | -0.7% |

---

8. RELATED PARTY TRANSACTIONS

**Legendary Capital REIT III, LLC**—Substantially all of the Company's business is managed by the Advisor and its affiliates, pursuant to the Advisory Agreement. The Advisor is owned by Corey R. Maple and Norman H. Leslie. The Company has no direct employees. The employees of Legendary Capital, LLC (the "Sponsor"), an affiliate of the Advisor, provide services to the Company related to the negotiations of property acquisitions and financing, asset management, accounting, legal, investor relations, and all other administrative services. The Company reimburses the Advisor and its affiliates, at cost, for certain expenses incurred on behalf of the Company, as described in more detail below. The Advisory Agreement has a term of 10 years, ending in December 2028.

The Advisor earns a one-time acquisition fee of up to 1.4% of the hotel purchase price including funds allocated for any PIP at the time of each hotel property acquisition, a financing fee of up to 1.4% of the hotel purchase price including funds allocated for any PIP at the time of closing the initial financing, and an annual asset management fee of up to 0.75% of the gross assets of the Company, which is payable on a monthly basis. The Advisor will also be paid a refinancing fee of up to 0.75% of the principal amount of any refinancing at the time of closing the refinancing, and a disposition fee equal to between 0.0% and 4.0% of the hotel sales price, payable at the closing of the disposition, which disposition fee in connection with a sale of all or substantially all of the Company's assets, merger or similar transaction, shall be equal to between 0.0% and 4.0% of the gross consideration received (grossed up for liabilities of the Company), with the percentage dependent on the total return per share and timing of such transaction, payable at the closing of such sale, merger or transaction. The Advisor may also be paid real estate commissions of up to 3.0% of the hotel purchase price in connection with the sale of a hotel property in which the Advisor or its affiliates provided substantial services, but in no event greater than one-half of the total commissions paid with respect to such property if a commission is paid to a third-party as well as the Advisor, and in no event will total commissions exceed 5.0% of the hotel sales price. Certain affiliates of the Advisor may receive an annual guarantee fee equal to 1.0% of the guaranty amount, paid on a monthly basis, for debt obligations of the hotel properties personally guaranteed by such affiliates. The Advisor may earn an annual subordinated performance fee equal to 20% of the distributions after the common stockholders and Operating Partnership limited partners (other than the Series B Limited Partnership Unit ("Series B LP Unit") holders) have received a 6% cumulative, but not compounded, return per annum.

Per the terms of the Operating Partnership's operating agreement, the Advisor receives distributions from the Operating Partnership in connection with their ownership of non-voting Series B LP Units. The Advisor's ownership of Series B LP Units is presented as non-controlling interest on the accompanying consolidated financial statements. In years other than the year of liquidation, after the Company's common stockholders have received a 6% cumulative but not compounded return on their original capital contributions, the Advisor receives distributions equal to 5% of the total distributions made. In the year of liquidation, termination, merger or other cessation of the general partner, or the liquidation of the Operating

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Partnership, holders of the Series B LP Units shall be distributed an amount equal to 5% of the limited partners' capital contributions after the common stockholders and the limited partners have received a return of their original capital contributions plus a 6% cumulative but not compounded return. In the year of liquidation, termination, merger or other cessation of the general partner, or the liquidation of the Operating Partnership holders of the Series B LP Units shall also be distributed an amount equal to 20% of the net proceeds from the sale of the properties, after the common stockholders and the limited partners have received a return of their original capital contributions plus a 6% cumulative but not compounded return from all distributions.

The Advisor and its affiliates may be reimbursed by the Company for certain organization and offering expenses in connection with the Company's securities offerings, including legal, printing, marketing and other offering-related costs and expenses. Following the termination of the Offering, the Advisor will reimburse the Company for any such amounts incurred by the Company in excess of 15% of the gross proceeds of the Offering. In addition, the Company may pay directly or reimburse the Advisor and its affiliates for certain costs incurred in connection with its provision of services to the Company, including certain acquisition costs, financing costs, and sales and marketing costs as well as an allocable share of general and administrative overhead costs. All reimbursements are paid to the Advisor and its affiliates at cost.

Fees and reimbursements earned and payable to the Advisor and its affiliates, for the years ended December 31, 2025 and 2024, were as follows:

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| | | |
|:---|:---|:---|
|  | **Incurred** | **Incurred** |
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **2024** |
| Fees: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing fees | $645614 | $90000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset management fees | 2232285 | 2451957 |
|  | $2877899 | $2541957 |
| Reimbursements: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Offering costs | $1530562 | $1901538 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 3167907 | 3631895 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 62687 | 57574 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition costs | 40146 | 185115 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expense, net | 992614 | 113982 |
|  | $5793916 | $5890104 |

---

For the years ended December 31, 2025 and 2024, the Operating Partnership recognized distributions payable to the Advisor in the amount of $0 and $118,232 respectively, in connection with the Advisor's ownership of Series B LP Units. For the years ended December 31, 2025 and 2024, the Company paid distributions in the amount of $0 and $16,240 respectively, to Corey Maple and Norman Leslie in connection with their ownership of 57,319 shares each, of the Company's common stock. For the years ended December 31, 2025 and 2024, the Company paid Corey Maple distributions in an amount of $0 and $4,352, respectively, in connection with his ownership of 15,361 Series GO LP Units.

The members of the Advisor personally guaranty certain loans of the Company and may receive a guarantee fee of up to 1.0% per annum of the guaranty amount. As of December 31, 2025, Corey Maple is a guarantor of 50% of the loan secured by the Houston Property, which had an original loan amount of $13.9 million, is a guarantor of 50% of the loan secured by the Wichita Property, is a guarantor of the new loan secured by the Fort Collins Property, which had an original loan amount of $11.2 million and is a guarantor of the Company's $5.0 million line of credit which is secured by the hotel properties located in Cedar Rapids, Iowa and Eagan, Minnesota, and 100,000 Common LP Units of Lodging Fund REIT III OP, LP. Mr. Maple is also a guarantor of the loan secured by the El Paso University Property, which had an original principal loan amount of $14.4 million. Mr. Maple was a guarantor of the Company's loan secured by the Company's hotel property in Fargo, North Dakota, which had an original loan amount of $7.4 million. That loan was repaid in full and the guaranty terminated on December 17, 2025. As of December 31, 2025, Norman Leslie is a guarantor of the Company's new loan secured by the Fort Collins Property, which had an original loan amount of $11.2 million, and is a guarantor under the Company's new loan secured by the Lakewood Property, which had an original loan amount of $12.0 million.

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Mr. Leslie was a guarantor of the Company's loan secured by the Company's hotel property in Pineville, North Carolina, which had an original loan amount of $9.3 million. That loan was repaid in full and the guaranty terminated on July 23, 2024. Mr. Leslie was also a guarantor of the Company's loan secured by the Prattville Property, which had an original loan amount of $11.0 million. That loan was repaid in full and the guaranty terminated on December 30, 2025. For the years ended December 31, 2025 and 2024, the Company accrued guarantee fees in the amount of $0.1 million and $0.1 million respectively to each Mr. Maple and Mr. Leslie. In addition, during the second quarter of 2025, the Company recorded approximately $0.9 million of previously unrecorded guarantee fees relating to certain loans for the periods from October 1, 2021 through December 31, 2024. The Company evaluated this matter under SEC Staff Accounting Bulletins No. 99 and No. 108 and concluded that the omission of these fees was not material to any prior annual or interim period, nor to the current period. Accordingly, the cumulative amount was recorded as an out-of-period adjustment during the second quarter of 2025 and did not result in a restatement of previously issued financial statements. The guarantee fees are presented within Other Expense in the accompanying consolidated statements of operations. The total amount accrued of $2.9 million remained unpaid at December 31, 2025 and is included in Due to Related Party on the accompanying consolidated balance sheet.

As of December 31, 2025 and 2024, the Company had amounts due and payable to the Advisor and its affiliates of $21.6 million and $12.7 million respectively, which is included in due to related parties on the accompanying consolidated balance sheets.

**NHS, LLC dba National Hospitality Services**—NHS is wholly-owned by Norman Leslie, a director and executive officer of the Company and a principal of the Advisor.

*Property Management Services*

NHS provides property management and hotel operations management services for the Company's hotel properties, pursuant to individual management agreements. The agreements have an initial term expiring on December 31st of the fifth full calendar year following the effective date of the agreement, which automatically renews for a period of five years on each successive five-year period, unless terminated in accordance with its terms. In February 2025, the Company terminated all property management agreements with NHS and entered into new property management agreements for those hotels with Hotel Equities Group, LLC a third party.

Prior to its termination, NHS earned the following:

● a monthly base management fee for property management services, including overseeing the day-to-day operations of the hotel properties, equal to up to 4% of gross revenue.

● an accounting fee of $14.00 per room for accounting services, payable monthly,

● an administrative fee equal to 0.60% of gross revenues for administrative and other services.

● a flat fee of $5,000 per hotel property for due diligence services, including analyzing, evaluating, and reporting on documentation and information received by sellers or contributors during the period of due diligence.

*Loan Agreement*

The Company has a $600,000 loan (the "NHS Loan") with NHS (see Note 6). The NHS Loan requires interest only payments, with all outstanding principal and interest amounts being due and payable at maturity. The NHS Loan has a fixed interest rate of 7.0% and a maturity date on September 30, 2025. The Company and NHS are working to finalize an extension of this loan as of the date of this filing.

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Fees and reimbursements earned and payable to, NHS for the years ended December 31, 2025 and 2024, were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Incurred** | **Incurred** | **Payable as of** | **Payable as of** |
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  | | |
|  | **2025** | **2024** | **December 31,** <br>**2025** | **December 31,** <br>**2024** |
| Fees: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Management fees | $— | $761201 | $103070 | $321408 |
| &nbsp;&nbsp;&nbsp;&nbsp;Administrative fees |  | 80118 | 5615 | 31950 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounting fees |  | 100992 | 9600 | 47616 |
|  | $— | $942311 | $118285 | $400974 |
| Reimbursements | $(260177) | $672472 | $(19140) | $421333 |

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**One Rep Construction, LLC ("One Rep")—**One Rep is a related party through common management and ownership, as Corey Maple, Norman Leslie, and David Ekman, each hold a 33.33% ownership interest in One Rep. One Rep is a construction management company which provided construction management services to the Company during 2025 and 2024 related to the renovation construction activities at certain hotel properties. For the services provided, One Rep is paid a construction management fee equal to 6% or 7% of the total project costs. The Company reimburses One Rep for certain costs incurred on behalf of the Company, and all reimbursements are paid to One Rep at cost. For the years ended December 31, 2025 and 2024, the Company incurred $78,352 and $8,278 of construction management fees and reimbursements payable to One Rep, respectively. As of December 31, 2025 and 2024, the amounts outstanding and due to One Rep were $3,690 and $44,474 respectively, which is included in due to related parties on the accompanying consolidated balance sheets.

**Legendary A-1 Bonds, LLC ("A-1 Bonds") –** A-1 Bonds is an affiliate of the Advisor which is owned by Mr. Leslie a director and executive officer of the Company and principal of the Advisor and Mr. Maple a director of the Company and principal of the Advisor. As of December 31, 2025 and 2024, the Company has an outstanding balance on its line of credit (the "A-1 Revolving Line of Credit") amounting to $13.5 million and $14.3 million, respectively (see Note 6). As of December 31, 2025, the A-1 Revolving Line of Credit was a $20.0 million line of credit with a fixed interest rate of 17.50% and a maturity of December 31, 2027.

9. FRANCHISE AGREEMENTS

**As of December 31, 2025 and 2024, all of the Company's hotel properties were operated under franchise agreements with initial terms of 10 to 18 years. Franchise agreements allow the hotel properties to operate under the respective brands. Pursuant to the franchise agreements, the Company pays a royalty fee of 5% to 6% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs. Certain hotels are also charged a program fee of generally between 3% and 4% of room revenue. The Company paid an initial fee of $50,000 to $175,000 at the time of entering into each franchise agreement which is being amortized over the term of each agreement. For the year ended December 31, 2025 and 2024, amortization in connection with these agreements was $129,730 and $105,000 respectively and is included within "Franchise fees, net" on the consolidated balance sheet.**

**10. MANDATORILY REDEEMABLE SERIES P PREFERRED UNITS**

On December 24, 2024, the Company commenced a private offering of limited partnership units in the OP, designated as Series P Preferred Units, with a maximum offering of $50,000,000 (which may be increased to $75,000,000 in the sole discretion of the General Partner) at a purchase price equal to $10,000 per Series P Preferred Unit. Subject to the rights of the holders of the Series A Preferred Units described below, holders of the Series P Preferred Unit are entitled to receive $10,000 per Series P Preferred Unit plus an amount equal to all distributions accrued and unpaid on the Series P Preferred Unit, in the event of liquidation, dissolution or winding up of the Company. Subject to the rights of the holders of the Series A Preferred Units described below, the Series P Preferred Unit holders are entitled to receive a distribution payable equal to 7.50% cumulative but not compounded annual return on the Series P Preferred Unit purchase price and may receive a bonus distribution based on the timing and amount of each holder's investment as defined within the Partnership

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Agreement. The Series P Preferred Units will be redeemed by the Partnership on the occurrence of the earlier of the following: a) in connection with a hardship on the Partnership, b) in connection with a listing of LF REIT III's shares of common stock on a national securities exchange, a liquidation event or approval for a strategic transaction, c) at any point on or after December 31, 2025 or d) December 31, 2034. The Series P Preferred Unit holders are not permitted to take part in the management or control of the business of the Operating Partnership; however, they have the right to approve amendments to the Partnership Agreement that impact the allocations and distributions of the Series P Preferred Units, except for the issuance of additional interests to the Operating Partnership. Gross income and gains are allocated to the holder of the Series P Preferred Units for any fiscal year to the extent that the holder of the Series P Preferred Units receives a distribution.

The Company has classified the Series P Preferred Units as a liability in accordance with ASC 480 due to the mandatory redemption feature. The accretion of the Series P Preferred Units is recorded as interest expense in the consolidated statement of operations. From the inception of the offering through December 31, 2025, the Company issued 155 units of Series P Preferred Units in an amount of $1,550,000. This amount is included as a liability as within the line item of Mandatorily redeemable preferred units, Series P, net of unamortized offering costs of $1,335,037. For the year ended December 31, 2025, the Company recorded $76,505 of distributions which are included within interest expense within the consolidated statements of operations. At December 31, 2025, this amount is payable and included within distributions payable in the consolidated balance sheets. As of the date of this filing these have remained unpaid.

11. STOCKHOLDERS' EQUITY

The Company is authorized to issue 900,000,000 shares of common stock and 100,000,000 shares of preferred stock. Each share of common stock entitles the holder to one vote per share on all matters upon which stockholders are entitled to vote and to receive distributions as authorized by the Company's board of directors. The rights of the holders of shares of preferred stock may be defined at such time any series of preferred shares are issued.

***Common Stock***

***Initial Offering***

On June 1, 2018, the Company commenced a private offering of shares of common stock, $0.01 par value per share, at a price of $10.00 per share, with a maximum offering of $100,000,000, which was increased to $150,000,000 in December 2021, to accredited investors only pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended. As of December 31, 2025, the Company had issued and sold 10,303,567 shares of common stock, including 1,215,332 shares attributable to our DRIP, and received aggregate proceeds of $100.8 million.

***Stock-Based Compensation***

The Company compensates its independent directors with quarterly grants of shares of common stock, which are fully vested upon issuance. During the years ended December 31, 2025 and 2024, each independent director received 2,000 shares (500 shares per quarter), valued at the estimated share NAV of $10.57 per share at the date of issuance. Total stock-based compensation expense recognized was $42,280 and $42,280 for the years ended December 31, 2025 and 2024, respectively, and is included in general and administrative expenses in the consolidated statements of operations. As of December 31, 2025, there was no unrecognized compensation cost related to these awards as all shares are fully vested upon grant. The Company has assessed the additional disclosure requirements under ASC 718 and determined that they are not material to the consolidated financial statements given the limited nature and size of the stock-based compensation program

***Dividend Reinvestment Plan***

The Company has adopted a dividend reinvestment plan ("DRIP"), which permits stockholders to reinvest their distributions back into the Company, purchasing shares of common stock at 95% of the then-current share net asset value ("NAV").

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***Distributions***

Distributions are determined by the board of directors based on the Company's financial condition and other relevant factors.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> |
| <br>**Period** | <br>**Distributions**<br>**Declared** <sup>(1)</sup> | **Distribution**<br>**Declared Per**<br>**Share** <sup>(1) (2)</sup> | **Cash** | **Reinvested** | **Total** |
| First Quarter 2025 | $— | $— | $— | $— | $— |
| Second Quarter 2025 |  |  |  |  |  |
| Third Quarter 2025 |  |  |  |  |  |
| Fourth Quarter 2025 |  |  |  |  |  |
|  | $— | $— | $— | $— | $— |
|  |  | **Distribution** |  |  |  |
|  | **Distributions** | **Declared Per** | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> | **Distributions Paid** <sup>(3)</sup> |
|  | **Declared** <sup>(1)</sup> | **Share** <sup>(1) (2)</sup> | **Cash** | **Reinvested** | **Total** |
| First Quarter 2024 | $306065 | $0.029 | $903061 | $109218 | $1012279 |
| Second Quarter 2024 | 1181705 | 0.113 | 820706 | 176589 | 997295 |
| Third Quarter 2024 | 876877 | 0.083 | 1192192 | 193549 | 1385741 |
| Fourth Quarter 2024 |  |  | (1162) | 1162 |  |
|  | $2364648 | $0.225 | $2914797 | $480518 | $3395315 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) No distributions were declared for the period of January 1, 2024 through February 29, 2024. Distributions for the period from March 1, 2024 through August 31, 2024 were payable to each stockholder as 100 % in cash. No distributions were declared for the period of September 1, 2024 through December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Assumes share was issued and outstanding each day that was a record date for distributions during the period presented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) In general, distributions for all record dates of a given month during such period are paid on or about the tenth day of the following month. No distributions were declared for the period of January 1, 2024 through February 29, 2024, but resumed for the period of March 1, 2024 through August 31 2024. No distributions were declared for the period of September 1, 2024 through December 31, 2025

***Share Repurchase Plan***

The board of directors has adopted a share repurchase plan that may enable its stockholders to have their shares repurchased in limited circumstances. In its sole discretion, the board of directors could choose to terminate or suspend the plan or to amend its provisions without stockholder approval. The repurchase plan may be reviewed and modified by the board of directors as it deems necessary in its sole discretion. The price at which the Company will repurchase shares is dependent on the amount of time the holder has owned the shares, and the then current value of the shares. There are several limitations on the Company's ability to repurchase shares under the share repurchase plan, including, but not limited to, a limitation that during any calendar year, the maximum number of shares potentially eligible for repurchase can only be the number of shares that the Company could purchase with the amount of net proceeds from the sale of shares under the Company's dividend reinvestment plan during the prior calendar year. The board of directors may, in its sole discretion, reject any request for repurchase and may, at any time and without stockholder approval, upon 10 business days' written notice to the stockholders (i) amend, suspend or terminate its share repurchase plan and (ii) increase or decrease the funding available for the repurchase of shares pursuant to our share repurchase plan. The Company repurchased no shares during the years ended December 31, 2025 and 2024. As of December 31, 2025, all redemption proceeds had been paid. As of December 31, 2025, the Company had $370,138 available for eligible repurchases.

***Update to Offering Price and Share NAV***

The Company's board of directors approved a revised NAV of the Company's assets as of December 31, 2022. As a result, the price per share of the Company's common stock, $0.01 par value per share (each, a "Share"), in the Offering and the Share NAV were adjusted from $10.00 to $10.57 effective January 6, 2023. The issue price of the Common LP Unit and the Series T LP Unit of the Operating Partnership also increased to $10.57. The Offering price was determined by the board of directors taking into account appraisals of the Company's real estate properties and other factors deemed relevant by the board of directors. The board of directors has not determined the NAV of the Company's assets since December

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31, 2022. As a result, the current Share NAV and Offering price per Share may not reflect an accurate estimation of the Company's enterprise value. The Company makes no representations, whether express or implied, as to the value of the Shares offered in the Offering. In the event the Offering price per Share is increased or decreased, the number of Shares subject to the Offering will be adjusted to reflect such change and the maximum offering amount will remain unchanged.

***Non-Controlling Interests***

As of December 31, 2025, the Operating Partnership had seven classes of Limited Partner Units – 1) the Common LP Units, 2) the Series B LP Units, 3) the Series T LP Units, 4) the Series GO LP Units, 5) the Series GO II LP Units, 6) Series P Preferred Units, and 7) Series A Preferred Units. The Series B LP Units are issued to the Advisor and entitle the Advisor to receive annual distributions and an incentive distribution based on the net proceeds received from the sale of the Projects (as defined below).

***Non-Controlling Interest – Common LP Units***

On December 3, 2021, the Operating Partnership commenced a private placement offering of its Common LP Units. As of December 31, 2025, the Operating Partnership had issued and sold 612,100 Common LP Units, with a value of $10.00 per unit at the time of issuance, in connection with the Northbrook Property acquisition and El Paso Airport Property acquisition.

***Non-Controlling Interest – Series B LP Units***

Under the Operating Partnership Agreement, the Advisor, as the Series B Limited Partner, will receive, from the Operating Partnership, distributions as follows: (a) for all years, an amount equal to 5.0% of the total of (i) the total distributions made to the Partners (other than the Series B Limited Partner) and (ii) the total distributions made to the Series B Limited Partner, after the Partners (other than the Series B Limited Partner) have received a 6.0% cumulative, but not compounded, return on their original capital contributions, and (b) for the year of liquidation or other cessation of the General Partner or the Partnership, an amount equal to 5.0% of the original capital contributions made by the Partners, after the Partners (other than the Series B Limited Partner) have received a return of their capital contributions plus a six percent (6%) cumulative, but not compounded return from all distributions.

As of December 31, 2025, the Operating Partnership has issued 1,000 Series B LP Units to the Advisor.

***Non-Controlling Interest – Series T LP Units***

The Series T LP Units are expected to be issued to persons who contribute their property interests in certain Projects to the Partnership in exchange for Series T LP Units. The Series T LP Units will have allocations and distributions as determined by the General Partner in its sole discretion at the time of issuance of the Series T LP Units, and any future distributions are dependent on the financial performance of the contributed real estate based on a mathematical formula. The Series T LP Units are eligible for conversion into Common LP Units beginning 24 or 36 months, or longer in some instances, after their issuance and will automatically convert into Common LP Units upon other events. There is no guarantee that the future financial performance of the contributed hotel property will be sufficient to result in the issuance of Common LP Units resulting from the application of the conversion formula applicable to the issuance of the Series T LP Units at the time of conversion. As of December 31, 2025, the Company had recorded an aggregate value of $45.7 million to the Series T LP Units in connection with such property contributions. During the years ended December 31, 2025 and 2024, the Company declared distributions of $0 and $48,263, respectively, for the Series T LP Units.

*Conversion of Series T LP Units*

During the year ended December 31, 2025, all remaining anniversary dates triggering conversion of the outstanding Series T LP Units under the Partnership Agreement elapsed. Upon application of the Series T Value formula to each outstanding series of T-Units, the General Partner determined that the cumulative deductions from the capitalized net operating income — including mortgage debt assumed, property improvement plan and capital expenditures, operating cash infused by the Operating Partnership, and the agreed-upon specified return — exceeded or equaled the capitalized value for all

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outstanding series. Accordingly, the Series T Value for all 5,073,506 outstanding Series T LP Units was determined to be zero, and no Common LP Units were issued upon conversion. The Series T LP Units were cancelled and extinguished upon conversion.

The elimination of the Series T LP Unit noncontrolling interest was accounted for as an equity transaction in accordance with ASC 810-10-45-23. Because the Company, as sole General Partner, retained its controlling financial interest in the Operating Partnership, the carrying amount of the Series T LP Unit noncontrolling interest of $45,475,938 was reclassified to additional paid-in capital within stockholders' equity. No gain or loss was recognized in the consolidated statement of operations. Following the conversion, no further allocations of net income or loss will be made to the Series T LP Unit noncontrolling interest.

***Non-Controlling Interest – Series GO LP Units***

The holders of Series GO LP Units will not receive any distributions from the Operating Partnership until after they have held their Series GO LP Units for a period of 18 months. Thereafter, the Series GO Limited Partners will receive the same distributions payable to the holders of the Common LP Units and GP Units (together with the Series GO LP Units and Interval Units, the "Participating Partnership Units"), other than with respect to proceeds received upon the sale or exchange of a property which are not reinvested in additional properties.

Upon the sale of all or substantially all of the GP Units held by LF REIT III or any sale, exchange or merger of LF REIT III or the Operating Partnership (each, a "Termination Event"), or with respect to proceeds received upon the sale or exchange of a property which are not reinvested in additional properties, distributions will be made between the Series GO LP Units and the other Participating Partnership Units as follows: (i) first, to the Participating Partnership Units in proportion to their Partnership Units until the GP Units (the Common LP Units and the Interval Units) have received 70% of their original capital contributions (determined on a grossed-up basis) reduced by any prior distributions received in connection with the sale of a property in which the sale proceeds are not reinvested in additional properties; (ii) second, to the Participating Partnership Units in proportion to their Partnership Units until each Participating Partnership Unit has received a Participating Amount ($1.00 for any period after December 31, 2020, $2.00 for any period after December 31, 2021 and $3.00 for any period after December 31, 2022, determined as a singular determination and not a cumulative determination); (iii) third, to the Participating Partnership Units (other than the Series GO LP Units) in proportion to their Partnership Units until the GP Units have received any remaining unreturned original capital contributions; (iv) fourth, to the Series GO Limited Partners in proportion to their Series GO LP Units until the amount distributed to the Series GO Limited Partners per Series GO LP Unit is equal to the amount distributed to the Participating Partnership Units per Participating Partnership Unit (other than the Series GO Limited Partners) pursuant to (iii); and (v) thereafter, to the Participating Partnership Units in proportion to their Participating Partnership Units.

On June 15, 2020, the Operating Partnership commenced a private offering of limited partnership units in the OP, designated as Series GO LP Units, with a maximum offering of $20,000,000, which could be increased to $30,000,000 in the sole discretion of LF REIT III as the General Partner of the Operating Partnership (the "GO Unit Offering") to accredited investors only, pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended. The Series GO LP Units were being offered until the earlier of (i) the sale of $20,000,000 in Series GO LP Units (which could be increased to $30,000,000 in the Company's sole discretion), (ii) June 14, 2022 or (iii) the Operating Partnership terminates the GO Unit Offering at an earlier date in its sole discretion. The Company's board of directors terminated the GO Unit Offering as of February 14, 2022. The Company's board of directors approved and ratified additional sales after February 14, 2022 in the GO Units Offering for sales which were pending as of that date. As of December 31, 2025, the Operating Partnership had issued and sold 3,124,503 Series GO LP Units and received aggregate proceeds of $21.5 million.

***Non-Controlling Interest – Series GO II LP Units***

The holders of Series GO II LP Units will not receive any distributions from the Operating Partnership until after they have held their Series GO II LP Units for a period of 18 months. Thereafter, the Series GO II Limited Partners will receive the same distributions payable to the holders of the Common LP Units, the Series GO LP Units and GP Units (together with the Series GO II LP Units and Interval Units, the "Participating Partnership Units"), other than with respect to

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proceeds received upon the sale or exchange of a property which are not reinvested in additional properties provided, however, that upon any event in which capital is distributed to the Participating Partnership Units, the Series GO II LP Units will only be distributed an amount equal to their positive Capital Account balances. Once the Series GO II LP Units have received income allocations of Net Income (including book-up income) such that their Capital Accounts are equal to the other Participating Partnership Units, distributions will be made in proportion to their Units.

Upon the sale of all or substantially all of the GP Units held by LF REIT III or any sale, exchange or merger of LF REIT III or the Operating Partnership (each, a "Termination Event"), or with respect to proceeds received upon the sale or exchange of a property which are not reinvested in additional properties, distributions will be made between the Series GO LP Units and the other Participating Partnership Units (including the Series GO II LP Units) as follows: (i) first, to the Participating Partnership Units in proportion to their Partnership Units until the GP Units (the Common LP Units and the Interval Units) have received 70% of their original capital contributions (determined on a grossed-up basis) reduced by any prior distributions received in connection with the sale of a property in which the sale proceeds are not reinvested in additional properties; (ii) second, to the Participating Partnership Units in proportion to their Partnership Units until each Participating Partnership Unit has received a Participating Amount ($1.00 for any period after December 31, 2020, $2.00 for any period after December 31, 2021 and $3.00 for any period after December 31, 2022, determined as a singular determination and not a cumulative determination); (iii) third, to the Participating Partnership Units (other than the Series GO LP Units) in proportion to their Partnership Units until the GP Units have received any remaining unreturned original capital contributions; (iv) fourth, to the Series GO Limited Partners in proportion to their Series GO LP Units until the amount distributed to the Series GO Limited Partners per Series GO LP Unit is equal to the amount distributed to the Participating Partnership Units per Participating Partnership Unit (other than the Series GO Limited Partners) pursuant to (iii); and (v) thereafter, to the Participating Partnership Units in proportion to their Participating Partnership Units.

On April 7, 2023, the Operating Partnership commenced a private offering of limited partnership units in the OP, designated as Series GO II LP Units, with a maximum offering of $30,000,000, which could be increased to $60,000,000 in the sole discretion of LF REIT III as the General Partner of the Operating Partnership, (the "GO II Unit Offering") to accredited investors only, pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended. The purchase price of the Series GO II LP Units in the offering is equal to 75% of the Share NAV and, based on the current Share NAV, is $7.93 per Series GO II LP Unit. The Series GO II LP Units will be specially allocated all Net Income (including book up income) in proportion to the 25% issue price shortfall, until the positive Capital Account balance of each Series GO II LP Unit is equal to the Share NAV. As a result, the issuance of the Series GO II LP Units will be dilutive to the General Partner Units and therefore, to the shares of common stock of the Company. The Series GO II LP Units are being offered until the earlier of (i) the sale of $30,000,000 in Series GO II LP Units (which could be increased to $60,000,000 in the Company's sole discretion), (ii) March 31, 2024, which date may be extended for two 1-year extensions until March 31, 2026 in the sole discretion of the Operating Partnership or (iii) the Operating Partnership terminates the GO II Unit Offering at an earlier date in its sole discretion. On April 17, 2024, the Company's Board of Directors extended the term of the GO II Unit Offering to March 31, 2025. On March 24, 2025, the Company's Board of Directors extended the term of the GO II Unit Offering to March 31, 2026. As of December 31, 2025, the Operating Partnership had issued and sold 895,520 Series GO II LP Units and received aggregate proceeds of $6.7 million.

*Non-Controlling Interest – Series A Units*

On December 24, 2024, the Company created a series of limited partnership units the OP designated as Series A Preferred Units, and may issue up to 40,000,000 Series A Preferred Units in accordance with the Partnership Agreement. Holders of the Series A Preferred Unit are entitled to receive distributions either in the form of cash distributions or in-kind distributions based on the terms outlined in the Partnership Agreement. The Series A Units will be redeemed by the Partnership on the occurrence of the earlier of the following: a) at the option of the OP, b) upon receiving proceeds from a refinancing or disposition from certain hotels as named or to be named in the Contribution Agreement, or c) in connection with a listing of LF REIT III's shares of common stock on a national securities exchange, a liquidation event or approval for a strategic transaction. The Series A Preferred Unit holders are not permitted to take part in the management or control of the business of the Operating Partnership; however, there are certain protective provisions with regard to the Series A Preferred Units that could be impactful to the stature or preference of the Series A Preferred Unit holders as defined within the Partnership Agreement. No income or loss is allocated to the Series A Preferred Unit holders.

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The Company has classified the Series A Preferred Units as permanent equity in accordance with ASC 480 since there are several conditions, all within the Company's control, that could cause the Company to require mandatory redemption of the Series A Preferred Units.

In connection with the establishment of both the Series P Preferred Units and the Series A Preferred Units, there are special provisions added to the Partnership Agreement with regard to the Series P Preferred Units:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) the first $1,250,000 of net proceeds received by the Partnership from the sales of Series P Preferred Units will be retained by the Partnership,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) remaining proceeds between $1,250,000 and $2,297,000 from the sales of Series P Preferred Units will be used to pay (i) accrued interest on the loans of the Fort Collins Property and the Courtyard Aurora Property through December 31, 2024 prior to refinancing those loans or (ii) redeem outstanding Series A Preferred Units in exchange for contribution of those loans pursuant to the Contribution Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) remaining proceeds between $2,297,000 and $9,847,000 from the Sale of Series P Preferred Units will be retained by the Partnership

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) remaining proceeds greater than $9,847,000 from the Sale of Series P Preferred Units: (i) until March 24, 2025, 50% of such additional net proceeds will be used to redeem the Series A Preferred Units and the remaining 50% will be retained by the Partnership, and (ii) after March 24, 2025, 75% of the additional proceeds will be used to redeem the Series A Preferred Units and the remaining 25% will be retained by the Partnership.

Concurrently, the Company entered into the Contribution Agreement to restructure four of its loans (See Note 6 – Debt.) As of December 31, 2025, the Company issued 4,555,739 Series A Preferred Units amounting to $4,555,739. As of December 31, 2025, there were distributions of 488,330 Series A Preferred Units amounting to $488,330.

12. COMMITMENTS AND CONTINGENCIES

**Legal Matters** — From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. After consulting with legal counsel, management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company's results of operations, cash flows or financial condition, which would require accrual or disclosure of the contingency and possible range of loss, other than the matter described below.

*El Paso HI Receivership* — In January 2026, a receiver was appointed over the Holiday Inn — El Paso property in connection with the default on the mortgage loan secured by that property. The Company is cooperating with the receiver and evaluating its options with respect to the property. See Note 14 "Subsequent Events" for further details regarding this matter.

13. REPORTABLE SEGMENTS

As of December 31, 2025, we have one operating segment, our consolidated hotel properties. Our CODM, who is our chief executive officer, evaluates our consolidated hotel properties primarily based on house profit when deciding how to allocate resources, in making other day-to-day operating decisions and evaluating our operating performance against other companies within our industry.

House Profit, presented herein, is calculated as revenues generated through hotel operations (room revenue and food & beverage revenue) less total segment expenses in connection with operating the hotels, which includes all department expenses incurred in connection with supporting the operations (i.e. franchise fees, management fees, sales and marketing and certain general and administrative expenses). The Company believes House Profit is useful to investors because it helps the Company and its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). The Company further excludes the following items that are not reflective of its ongoing operating performance or incurred in

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the normal course of business, and thus not utilized in the CODM's analysis to allocate resources and assess operating performance of the Company's business:

● gains or losses from sales of hotel properties

● real estate related impairments

● actual corporate-level expenses, which includes property taxes and insurance and other owner-level expenses and any acquisition expenses

● other corporate income, including interest income.

The following table presents our reportable segment revenues reconciled to our consolidated amounts, reportable segment expenses and House Profit reconciled to net loss:

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| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,**  | **For the Years Ended December 31,**  |
|  | **2025** | **2024** |
| **Revenues** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Room revenue | $60553580 | $69484481 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revenue | 3946211 | 4761914 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total segment revenue** | 64499791 | 74246395 |
| **Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Room Expense | 15415350 | 17272363 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other departmental and support expense | 10924134 | 12191460 |
| &nbsp;&nbsp;&nbsp;&nbsp;Franchise fees | 5491243 | 6368166 |
| &nbsp;&nbsp;&nbsp;&nbsp;Management fees | 1902344 | 2323728 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 4526134 | 4823461 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and Administrative | 6254600 | 6878498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total segment expenses** | 44513805 | 49857676 |
| **House Profit** | 19985986 | 24388719 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other (income) | (82102) | (84428) |
| &nbsp;&nbsp;&nbsp;&nbsp;Property taxes and insurance | 6363252 | 6361645 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate general and administrative expense | 4235443 | 5146975 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate sales and marketing expense | 67121 | 62572 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate asset management fees | 2232285 | 2451957 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition expense | 39998 | 34353 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on assets held for sale | 10055803 | 3992772 |
| &nbsp;&nbsp;&nbsp;&nbsp;Owner expenses | 3506952 | 3827187 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 9114993 | 10583112 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 19622508 | 17500036 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax benefit | (170403) | (210060) |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) Loss from sale of hotel property | (591880) | 4638883 |
| **Net Loss** | $(34407984) | $(29916284) |

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14. SUBSEQUENT EVENTS

***Mortgage Loan Modifications***

*El Paso Airport Loan Modification*

In January 2026, the Company entered into a Loan Modification Agreement with PCF IV NP El Paso, LLC, the successor lender to Western Alliance Bank, with respect to the mortgage loan secured by the Courtyard by Marriott - El Paso Airport (the "El Paso Airport Loan"). The loan had been assigned to the new lender in March 2025. Under the modification, the interest rate was amended to SOFR plus 4.50% (with a SOFR floor of 4.00%), monthly payments were converted to interest-only, and the financial covenants were waived. The Company incurred a modification fee and an exit fee, each of approximately $98,000. The Company is also required to fund an interest reserve equal to three months of debt service from excess property cash flow and is subject to Fund Liquidity Event provisions that require application of net proceeds

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from any disposition of Fund Assets toward the loan obligations. Failure to satisfy Fund Liquidity Event payment obligations constitutes full recourse to the Guarantor under the guaranty agreement.

*El Paso Receivership*

On January 19, 2026, the District Court of El Paso County, Texas entered an Agreed Order Appointing Receiver in connection with the lawsuit filed by EPH Development Fund LLC against LF3 El Paso, LLC and LF3 El Paso TRS, LLC relating to the Holiday Inn - El Paso property. A receiver was appointed over the specific assets of the Borrower, including the hotel property located at 900 Sunland Park Drive, El Paso, Texas. Under the order, the Borrower was directed to deliver possession of the property, all cash collateral, accounts, records, contracts, and other assets to the Receiver, and is prohibited from collecting rents or proceeds or taking any actions that would adversely impact the value of the property. As of December 31, 2025, the Holiday Inn - El Paso property was classified as held for sale on the Company's consolidated balance sheet. The Company is evaluating the impact of the receivership on the carrying value and disposition of the property.

*Lubbock Expo Forbearance Agreement*

On February 5, 2026, the Company entered into a Limited Forbearance Agreement (the "Lubbock Expo Forbearance Agreement") with K-Star Asset Management LLC, as Special Servicer and attorney-in-fact for Wells Fargo Bank, National Association, as Trustee, with respect to the mortgage loan secured by the Fairfield Inn & Suites - Lubbock (the "Lubbock Fairfield Loan"). The Lubbock Fairfield Loan had been transferred to special servicing in October 2025 following the Borrowers' failure to timely remit monthly debt service payments beginning in August 2025, among other noticed defaults. Under the Lubbock Expo Forbearance Agreement, the Lender has agreed to forbear from exercising certain remedies through the earlier of (a) March 31, 2026 if a final purchase and sale agreement is not executed by February 28, 2026, (b) April 30, 2026 if such agreement is executed by February 28, 2026, or (c) the occurrence of an incurable Forbearance Termination Event. As a condition of the Lubbock Expo Forbearance Agreement, the Borrowers paid a forbearance fee of approximately $85,000, outstanding special servicing fees, legal fees, and resumed monthly debt service payments at the default interest rate of 5.00%.

On April 1, 2026, the Company entered into a First Amended Limited Forbearance Agreement (the "Lubbock Expo Amended Forbearance Agreement") with K-Star Asset Management LLC, as Special Servicer, with respect to the Lubbock Fairfield Loan. The Borrowers did not execute a final purchase and sale agreement by the February 28, 2026 deadline under the original Lubbock Expo Forbearance Agreement, which triggered an incurable Forbearance Termination Event as of March 31, 2026. Under the Lubbock Expo Amended Forbearance Agreement, the Lender has agreed to forbear from exercising remedies through the earlier of (a) June 30, 2026, (b) the occurrence of an incurable Forbearance Termination Event, or (c) the closing of a sale of the property satisfying the loan obligations in full. The Borrowers continue to remit monthly debt service payments at the default interest rate, and are required to pay an additional monthly forbearance fee of $15,000 during the forbearance period, provide bi-weekly liquidation status updates, and comply with cash management and operational reporting requirements. Special servicing fees continue to accrue.

***New Northbrook Loan***

On February 13, 2026, the Company, through its indirect wholly-owned subsidiaries LF3 Northbrook, LLC and LF3 Northbrook TRS, LLC (collectively, the "Northbrook Borrowers"), entered into a Business Loan Agreement and related promissory note with Town Center Bank (the "Northbrook Loan") in the principal amount of $2,250,000. The Northbrook Loan bears interest at a fixed rate of 6.75% per annum and matures on February 15, 2031, at which time the remaining principal balance will be due as a balloon payment. The loan is secured by the Sheraton Chicago Northbrook Hotel and related collateral, and is guaranteed by Norman H. Leslie pursuant to an unlimited personal guaranty. The Northbrook Borrowers are subject to customary affirmative and negative covenants, including a minimum 1.20x debt service coverage ratio and ongoing financial reporting requirements.

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***Sale of Lakewood Property***

On March 19, 2026, the Company sold the Lakewood Property to an unaffiliated purchaser for $12,400,000 in cash. The mortgage loan secured by the Lakewood Property was repaid in full at closing from sale proceeds. All guaranties in connection with such loan and collateral with respect to such loan have been terminated or released, and all commitments with respect to such loan have been terminated or released.

***Status of the Offering***

As of the date of this filing, the Company's private offering remained open for new investment, and since the inception of the offering the Company had issued and sold 10,304,567 shares of common stock, including 1,215,332 shares issued pursuant to the DRIP, resulting in the receipt of gross offering proceeds of $100.8 million.

***GO II Unit Offering***

On March 31, 2026, the GO II Unit Offering terminated in accordance with its terms. The Operating Partnership has issued and sold 901,827 Series Go II LP Units, resulting in the receipt of gross offering proceeds of $6.8 million as of the date of termination.

***Engagement of Financial Advisor***

On April 24, 2026, the Company announced that a Special Committee of its Board of Directors, comprised solely of independent directors, engaged Piper Sandler & Co. as financial advisor to assist in the exploration and evaluation of potential strategic alternatives available to the Company. Faegre Drinker Biddle & Reath LLP is serving as legal counsel to the Special Committee. No timetable has been established, and there can be no assurance that the process will result in any particular transaction or strategic outcome.

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**LODGING FUND REIT III, INC. - SCHEDULE III**

**Real Estate and Accumulated Depreciation** 

**As of December 31, 2025**

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Initial Cost** | **Initial Cost** | **Costs**<br>**Capitalized**<br>**Subsequent to**<br>**Acquisition** | **Gross Amounts at End of Year** | **Gross Amounts at End of Year** | | | |
| <br>**Description** | <br>**Date**<br>**Acquired** | <br>**Number**<br>**of Rooms** | <br>**Encumbrances** | <br>**Land and**<br>**Land**<br>**Improvements** | **Building,**<br>**Building**<br>**Improvements** <br>**and FF&E** | **Building,**<br>**Building**<br>**Improvements** <br>**and FF&E** | <br>**Land and**<br>**Land**<br>**Improvements** | **Building,**<br>**Building**<br>**Improvements** <br>**and FF&E** | <br>**Total**<sup>(1)</sup> | <br>**Accumulated** <br>**Depreciation** | <br>**Depreciable**<br>**Lives** |
| Holiday Inn Express - <br>Cedar Rapids, IA | Nov - 2018 | 83 | $5619577 | $1536966 | $6321367 | $1009320 | $1547077 | $7330687 | $8877764 | $(2121137) | 3 - 40 yrs. |
| Hampton Inn - <br>Eagan, MN | Jun - 2019 | 122 | 8672347 | 1691813 | 12536520 | 396607 | 1691813 | 12933127 | 14624940 | (3297532) | 3 - 40 yrs. |
| Home2 Suites - <br>Lubbock, TX | Dec - 2019 | 100 | 6851578 | 803229 | 13906502 | 2651119 | 803229 | 16557621 | 17360850 | (3443020) | 3 - 40 yrs. |
| Fairfield Inn & Suites - <br>Lubbock, TX | Jan - 2020 | 101 | 8639616 | 982934 | 15261162 | 273311 | 982934 | 15534473 | 16517407 | (3782916) | 3 - 40 yrs. |
| Homewood Suites - <br>Southaven, MS | Feb - 2020 | 99 | 18000000 | 1593232 | 19351858 | 351636 | 1593232 | 19703494 | 21296726 | (3875157) | 3 - 40 yrs. |
| Courtyard by Marriott - <br>Aurora, CO | Feb - 2021 | 141 | 14935816 | 4400098 | 19668031 | 403329 | 4400098 | 20071360 | 24471458 | (3610231) | 3 - 40 yrs. |
| Holiday Inn - <br>El Paso, TX | May - 2021 | 175 | 7600000 | 1747553 | 8913467 | 3899280 | 1747553 | 12812747 | 14560300 | (2303927) | 3 - 40 yrs. |
| Hilton Garden Inn - <br>Houston, TX | Aug - 2021 | 182 | 13484507 | 3168376 | 17659977 | 5103522 | 3168376 | 22763499 | 25931876 | (3091512) | 3 - 40 yrs. |
| Sheraton Hotel - <br>Northbrook, IL | Dec - 2021 | 160 |  | 2856747 | 16859016 | 167866 | 2856747 | 17026882 | 19883629 | (2121494) | 3 - 40 yrs. |
| Courtyard by Marriott - <br>El Paso, TX | Feb - 2022 | 90 | 9800349 | 1856428 | 13596806 | 269789 | 1856428 | 13866595 | 15723023 | (2010102) | 3 - 40 yrs. |
| Fairfield Inn & Suites - <br>Lakewood, CO | Mar - 2022 | 142 | 16896801 | 2091051 | 17571066 | 552500 | 2091051 | 18123566 | 20214617 | (2476608) | 3 - 40 yrs. |
| Residence Inn - <br>Fort Collins, Co | Aug - 2022 | 113 | 13507608 | 2402288 | 13943721 | 3138605 | 2402288 | 17082326 | 19484614 | (1680626) | 3 - 40 yrs. |
| Hilton Garden Inn - <br>El Paso, TX | Aug - 2022 | 153 | 12033256 | 4862172 | 17600000 | 149813 | 4862172 | 17749813 | 22611985 | (2610929) | 3 - 40 yrs. |
| Holiday Inn Express - <br>Wichita Property | Dec - 2022 | 84 | 5589430 | 632735 | 7001575 | 1156367 | 632735 | 8157942 | 8790677 | (773807) | 3 - 40 yrs. |
|  |  | 1745 | $141630885 | $30625622 | $200191068 | $19523064 | $30635733 | $219714132 | $250349866 | $(37198998) |  |

---

<sup>(1)</sup> The aggregate cost for federal income tax purposes is approximately $249.5 million at December 31, 2025 (unaudited).

---

| | | |
|:---|:---|:---|
| **Investment in Real Estate:** | **2025** | **2024** |
| Balance at beginning of period | $274826095 | $314816929 |
| Improvements | 5974639 | 4171700 |
| Assets held for sale | (33596877) | (23316095) |
| Impairment | (10055803) | (3992772) |
| Sale of hotel property not held for sale prior year | (29959634) | (16054082) |
| Asset write-offs | (491235) | (799585) |
| Balance at end of period | $206697185 | $274826095 |
| **Accumulated Depreciation:** | **2025** | **2024** |
| Balance at beginning of period | $32853050 | $27469450 |
| Depreciation expense | 6051566 | 10121972 |
| Assets held for sale | (6901672) | (2059078) |
| Sale of hotel property not held for sale prior year | (3487243) | (2565199) |
| Asset write-offs | (277453) | (114095) |
| Balance at end of period | $28238248 | $32853050 |

---

[**Table of Contents**](#TOC)

#### SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **LODGING FUND REIT III, INC.** | **LODGING FUND REIT III, INC.** |
| Date: May 15, 2026 | By: | /s/ Norman H. Leslie |
|  |  | Norman H. Leslie |
|  |  | President, Chief Executive Officer, Secretary, Chief Investment Officer, Treasurer and Director |
|  |  | (principal executive officer) |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated.

---

| | |
|:---|:---|
| **Date** | **Name and Title** |
| May 15, 2026 | /s/ Norman H. Leslie |
|  | Norman H. Leslie, President, Chief Executive Officer, Secretary, Chief Investment Officer, Treasurer and Director <br>(principal executive officer) |
| May 15, 2026 | /s/ Samuel C. Montgomery |
|  | Samuel C. Montgomery, Chief Financial Officer and Director (principal financial officer and principal accounting officer) |
| May 15, 2026 | /s/ Corey R. Maple |
|  | Corey R. Maple, Chairman of the Board and Director |
| May 15, 2026 | /s/ Jeffrey T. Leighton |
|  | Jeffrey T. Leighton, Director |
| May 15, 2026 | /s/ Perry Rynders |
|  | Perry Rynders, Director |

---

## Exhibit 10.302

Exhibit 10.302

EXECUTION DRAFT

**PROMISSORY NOTE**

$500,000.00<sup>December</sup> <u>16</u><u> </u><u>,</u> <sup>2025</sup>

**FOR VALUE RECEIVED,** the undersigned, **LODGING FUND REIT III OP, LP,** a

Delaware limited partnership <u>("Maker"),</u> having an address at 1635 43rd Street South, Suite 205, Fargo, North Dakota 58103, HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of **ARCADE FARGO LLC,** a Delaware limited liability company (together with its successors and assigns, <u>"Holder"),</u> having an address at c/o Arcade Capital LLC, 477 Madison Avenue, 6th Floor, New York, New York 10022, the aggregate principal amount of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) (the <u>"Principal Amount"),</u> together with accrued interest (at the applicable rate) thereon, as the same shall become due and payable in accordance with the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Definitions.</u> For purposes of this Promissory Note (as amended, amended and restated, supplemented or otherwise modified from time to time, this <u>"Note"),</u> the following terms have the meanings set forth below:

<u>"Affiliate"</u> means, as to any Person (for purposes of this definition, the <u>"Subject</u> <u>Person"),</u> any other Person: (i) which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Subject Person; (ii) which, directly or indirectly, beneficially owns or holds ten percent (10%) or more of any class of stock or any other ownership interest in the Subject Person; (iii) ten percent (10%) or more of the direct or indirect ownership of which is beneficially owned or held by the Subject Person; (iv) which is a member of the family (as defined in Section 267(c)(4) of the Code) ofthe Subject Person or which is a trust or estate, the beneficial owners of which are members of the family (as defined in Section 267(c)(4) of the Code) of the Subject Person; or (v) which, directly or indirectly, is a general partner, controlling shareholder, managing member, officer, director, trustee or employee of the Subject Person.

<u>"Business</u><u> </u><u>Day"</u> means any day that is not a Saturday, Sunday or legal holiday in New York, New York.

<u>"Code"</u> means the U.S. Internal Revenue Code of 1986, as amended and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

<u>"Default</u><u> </u><u>Rate"</u> means a rate per annum equal to the lesser of (i) the maximum rate permitted by applicable law, or (ii) five percent (5.0%) above the Interest Rate, compounded monthly.

<u>"Exit</u><u> </u><u>Fee"</u> means with respect to any repayment or prepayment of the Principal Amount, an amount equal to one percent (1.00%) of that portion of Principal Amount being repaid or prepaid.

<u>"Guarantor"</u> means, individually and collectively as required by context,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Lodging Fund REIT III TRS, Inc., a Delaware corporation, (ii) Legendary Capital, LLC, a North Dakota limited liability company, (iii) Lodging Fund REIT III, Inc., a Maryland corporation,

------

Exhibit 10.302

![Graphic](lfr-20251231xex10d302001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Legendary Capital REIT III, LLC, a Delaware limited liability company, (v) Norman H. Leslie, an individual, and (vi) Core R. Maple, an individual.

<u>"Guaranty"</u> means that certain Guaranty dated as of the date hereof, made by Guarantor for the benefit of Holder.

<u>"Interest</u><u> </u><u>Rate"</u> means a rate per annum equal to sixteen percent (16.0%), calculated based upon the actual number of days and a 360-day year.

<u>"Loan Documents"</u> means this Note and all other documents, agreements and instruments no or hereafter evidencing, securing or delivered to Holder in connection with the loan evidenced by this Note including, without limitation, the Guaranty.

<u>"Maturity</u><u> </u><u>Date"</u> means the first to occur of: (i) January 1, 2027, and (ii) such earlier date as this Note shall become due and payable in accordance with its terms, whether by declaration of acceleration or otherwise.

<u>"Offering"</u> means the issuance by Maker after the date hereof of convertible debt or equity; provided that there may be one (I) or more offerings.

<u>"Origination</u><u> </u><u>Fee"</u> means an origination fee payable to Holder as of the date hereof in an amount equal to one percent (1.00%) of Principal Amount.

<u>"Person"</u> means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

<u>"Remaining Properties"</u> means, individually and collectively, as required by context, each real property identified on <u>Exhibit A</u> attached hereto and expressly made a part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Payments</u><u> </u><u>Generally:</u><u> </u><u>Default</u><u> </u><u>Rate:</u><u> </u><u>Late</u><u> </u><u>Payment</u><u> </u><u>Charge:</u><u> </u><u>Making</u><u> </u><u>and</u><u> </u><u>Application</u> <u>of Payments: Origination Fee: Exit Fee:</u><u> </u><u>Prepayments.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Payments Generally,</u> Commencing as of January I, 2026, interest on the outstanding Principal Amount shall accrue at the Interest Rate and be due and payable as hereinafter provided. On February 1, 2026, and on the first day of each calendar month thereafter (each such date, a <u>"Payment Date")</u> through and including the calendar month immediately preceding the Maturity Date, Maker shall pay to Holder the principal and interest thereon at the Interest Rate in equal monthly installments of $45,365.43 (the <u>"Monthly Debt Service Payment</u> <u>Amount"),</u> as reflected on the amortization schedule attached hereto as <u>Schedule 1</u>. All accrued and unpaid interest, the unpaid Principal Amount, the Exit Fee and all other amounts due and owing under this Note shall be paid by Maker to Holder on the Maturity Date. No amount repaid in respect of this Note may be reborrowed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Mandatory Payments.</u> In addition to the Monthly Debt Service Payment Amount, in connection with the closing of any capital transaction with respect to any of the Remaining Properties, Maker shall cause all net payments, repayments, loan proceeds and any other amounts or distributions that would otherwise be received by Maker, any Guarantor or any

------

Exhibit 10.302

Affiliate of Maker or any Guarantor (including, without limitation, distributions and ot er payments in connection with any Offering, interest, property sale or refinance sponsored or otherwise maintained by such entity, but expressly excluding payments or distributions required to be made in connection with any of the Remaining Properties with respect to (x) third-party holders of preferred equity that are not Affiliates of Maker of or any Guarantor, (y) unaffiliated secured first mortgage or line-of-credit lenders and (z) bond holders obligated to receive a payment, distribution and/or return) to be paid directly to Holder by (A) the applicable escrow agent or other payee or (B) solely upon receiving Holder's express prior written consent with respect to any such transaction, Maker, which amount shall be applied by Holder in accordance with the terms and conditions of Section 2(g) of this Note. For the avoidance of doubt, until such time as the indebtedness evidenced by this Note has been repaid in full to Holder, unless expressly waived by Holder in writing, Holder shall be included as a payee on every closing statement with respect to any of the Remaining Properties in connection with any payment to be made to Holder pursuant to this <u>clause</u><u> </u>*(b*<u>),</u> and the failure to so include Holder on any such closing statement shall be an automatic Event of Default under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Origination Fee.</u> On the date hereof, as additional consideration for Holder's agreements hereunder, Maker shall pay the Origination Fee to Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Exit</u><u> </u><u>Fee.</u> Upon the full repayment of the Principal Amount, Maker shall pay to Holder on the date of such repayment the Exit Fee applicable thereto *(i.e.,* $5,000.00). If prior to the Maturity Date, Holder exercises its right of acceleration as permitted hereunder by reason of an Event of Default, then Holder shall be entitled to immediately receive, in addition to the unpaid Principal Amount, accrued and unpaid interest and all other sums due under the Loan Documents, an amount equal to the Exit Fee applicable to that portion of the original Principal Amount so accelerated. All Exit Fees hereunder shall be deemed to be earned by Holder upon the funding of the loan evidenced by this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Default Rate.</u> After the occurrence and during the continuance of an Event of Default, the entire unpaid Principal Amoun, and all other amounts due to Holder shall bear interest at the Default Rate, calculated from the date such payment was due without regard to any grace or cure periods contained herein, and shall be payable upon demand from time to time, to the extent permitted by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Late Payment Charge.</u> If any payment of the Monthly Debt Service Payment Amount or other sum due hereunder or any other Loan Document is not paid by Maker within five (5) days of the date on which it is due, Maker shall pay to Holder upon demand an amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount permitted by applicable law (the <u>"Late</u><u> </u><u>Payment Charge"),</u> in order to defray the expense incurred by Holder in handling and processing such delinquent payment and to compensate Holder for the loss of the use of such delinquent payment. The acceptance of a Late Payment Charge hereunder shall not constitute a waiver by Holder of any Event of Default then existing pursuant to the Loan Documents. Holder's failure to collect a Late Payment Charge at any time shall not constitute a waiver of Holder's right thereafter, at any time and from time to time (including upon acceleration of this Note or upon payment in full of the loan), to collect such previously uncollected Late Payment Charge or to collect subsequently accruing Late Payment Charges.

------

Exhibit 10.302

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Making and Application of Payments.</u> All amounts due hereunder are payable in lawful money of the United States and in immediately available funds to Holder at such place as Holder shall designate in writing to Maker, or at Holder's election, by wire transfer to Holder's designated bank account, or at such other place as Holder shall designate in writing to Maker. If any amount payable hereunder shall be due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest payable herewith. Except during the continuance of an Event of Default, all proceeds of any repayment, including any prepayments of this Note, shall be applied by Holder as follows in the following order of priority: *First,* accrued and unpaid interest at the Interest Rate; *Second,* to the Exit Fee and any other fees and expenses due under this Note and the other Loan Documents; *Third,* to any other amounts then due and owing under the Loan Documents; and *Fourth,* to the Principal Amount. During the continuance of an Event of Default, all proceeds of repayment shall be applied in such order and in such manner as Holder shall elect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Prepayments.</u> This Note may be prepaid at any time in whole or in part from time to time, provided that any such prepayments shall be accompanied by: (i) a payment of all accrued (but unpaid) interest on that portion of the Principal Amount being prepaid, and (ii) the Exit Fee applicable thereto, but with no other prepayment fee, interest or penalty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Remaining Property</u> <u>Capital Transactions.</u> In connection with any capital transaction to be undertaken with respect to any of the Remaining Properties (including, without limitation, any Offering, property sale or refinance) where Maker, any Guarantor or any Affiliate of Maker or any Guarantor is entitled to any portion of the proceeds of such capital transaction as provided under Section 2(b) of this Note, Maker shall, or shall cause the applicable owner of such Remaining Property to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Pursuant to Section 2(b) of this Note, make a payment to Holder of all net proceeds paid or that that would otherwise be payable to (i) the owner of such Remaining Property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Maker, (iii) any Guarantor or (iv) any Affiliate of Maker or any Guarantor until such time as the full amount due and payable under this Note to Holder by Maker has been repaid;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Give Holder at least twenty (20) days' prior written notice of any such sale or capital transaction with respect to any Remaining Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)At least fifteen (15) days prior to the closing date of any such sale or capital transaction of any of the Remaining Properties, provide Holder with direct contact information for any escrow or settlement agent with respect to such sale or capital transaction of any of the Remaining Properties (and update Holder immediately upon any change, addition or replacement of any applicable escrow or settlement agent) accompanied by written authorization for Holder to directly contact any such agent, transact with such agent to ensure payment of all amounts due to Holder with respect to any Remaining Properties pursuant to this Note and, as applicable, provide payment instructions for disbursement of any such amounts due and payable to Holder in accordance with the terms and conditions of this Note; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Deliver to Holder a copy of the draft final closing settlement statement for such sale or capital transaction at least three (3) business days prior to the closing of such sale or

------

Exhibit 10.302

capital transaction, which closing settlement statement shall be expressly subject to Ho] er's review and approval.

The breach of any of the requirements under this Section 3 shall be an automatic Event of Default, and the full amount of the loan evidenced by this Note (including unpaid interest, interest at the Default Rate, Late Payment Charges, Exit Fees and any other amounts owing by Maker) shall immediately and automatically become due and payable, without notice or demand, and Maker hereby expressly waives any such notice or demand, anything contained in any Loan Document to the contrary notwithstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Financial</u><u> </u><u>Reporting.</u> Maker shall furnish to Holder: (a) within forty-five (45) days after each calendar quarter or upon the filing of SEC Form 10-Q or Form 10-K, whichever is later, a complete copy of Maker's and each Guarantor's quarterly financial statements, certified as true, correct and complete by Maker and each such Guarantor, (b) within thirty (30) days after the date filed, as applicable, a complete copy of the tax return of Maker and each Guarantor prepared by an independent certified public accountant, certified by such person or entity and in form, content, level of detail and scope reasonably acceptable to Holder, and (c) such other financial information as is reasonably requested by Holder in writing with respect to Maker and any Guarantor.

In addition to the above, Maker shall furnish to Holder a complete copy of the tax return of Guarantor Corey R. Maple for the 2024 tax year within fifteen (15) days after the date filed. Maker's failure to so timely deliver to Holder the tax return of Corey R. Maple shall be an automatic Event of Default, and the full amount of the loan evidenced by this Note (including unpaid interest, interest at the Default Rate, Late Payment Charges, Exit Fees and any other amounts owing by Maker) shall immediately and automatically become due and payable, without notice or demand, and Maker hereby expressly waives any such notice or demand, anything contained in any Loan Document to the contrary notwithstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>No Distributions.</u> Until such time as the loan evidenced by this Note has been repaid in full, other than (x) those specific payment obligations existing as of the date hereof identified on <u>Schedule 2</u> attached hereto or (y) any required expenses incurred and payable hy Maker after the date hereof, as expressly approved by Holder in writing in Holder's reasonable discretion, none of Maker, any Guarantor or any Affiliate of Maker or any Guarantor shall make or receive any distribution(s), fee(s), loan repayment(s) or any other payment(s) (including, without limitation, refinancing fees, disposition fees, incentive fees, promote payments, sponsor payments, management fees, loan repayments (including intercompany, investor or sponsor loans) and/or affiliate payments) to or from its members or direct or indirect equity holders (it being acknowledged and agreed that bondholders and preferred equity participants under obligations existing as of the date hereof are not equity holders for the purposes hereof) at any time or any third parties, including, without limitation, any net proceeds payable with respect to any of the Remaining Properties. Any distribution of funds to Maker, any Guarantor or any Affiliate of Maker or any Guarantor in breach of this section shall be an automatic Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Covenants;</u> <u> </u> <u>Representations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Maker agrees that it will not: (i) grant a consensual lien on, hypothecate or encumber any of its assets in connection with any other indebtedness for borrowed money incurred by Maker without Holder's prior written consent, which shall be granted in Holder's reasonable

------

Exhibit 10.302

discretion, *provided, however,* in the ordinary course of business and on terms which are intrinsically fair, Maker may incur secured indebtedness of up to $10,000,000 in the aggregate from an unrelated third-party lender in which neither Maker nor any Guarantor, nor any Affiliate of Maker or any Guarantor, has any beneficial interest to complete work on a hotel owned directly or indirectly by Maker or otherwise provide seasonal bridge financing with respect to any such hotel; (ii) sell, lease, assign, transfer or otherwise dispose of all or substantiaJly all of its assets,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) dispose of any of its assets outside the ordinary course of its business or (iv) incur any indebtedness for borrowed money which is senior in right of repayment (or pari passu in right of repayment) to this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Maker represents and warrants as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Maker ls a duly formed limited liability company orgariizedi.mder the laws of the State of North Dakota, validly existing, in good standing. Maker has full power and authority to conduct its business as presently conducted, to enter into this Note and the other Loan Documents and to perform all of its duties and obligations hereunder, such execution and performance have been duly authorized by all necessary legal requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Maker has full power and authority to execute and deliver this Note and the other Loan Documents and to perform its obligations hereunder and thereunder. Upon the execution and delivery thereof, this Note and the other Loan Documents will each be valid, binding and enforceable upon Maker in accordance with their terms, except as limited by bankruptcy and creditors rights Jaws and general principles of equity. Execution and delivery of this Note and each of the other Loan Documents will not contravene, conflict with, violate or constitute a default under (i) the certificate of formation and operating agreement governing Maker or (ii) any applicable Jaw, rule, regulation, judgment, decree or order or any agreement, indenture or instrument to which Maker is a party or is bound. Maker has taken all necessary action to authorize the execution, delivery and performance of this Note and each of the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)There are no actions, suits or proceedings at Jaw or in equity by or before any governmental authority or agency now pending or, to Maker's knowledge, threatened in writing against or affecting Maker, which actions, suits or proceedings, if determined against Maker, would reasonably be expected to have a material adverse effect on the financial condition or business of Maker.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Maker has (a) not entered into this transaction or executed this Note or any of the other Loan Documents with the actual intent to hinder, delay or defraud any creditor and (b) received reasonably equivalent value in exchange for its obligations under the Note and the other Loan Documents. Giving effect to the making of the Note (referred to as the <u>"Debt Financing"),</u> the fair saleable value of Maker's assets exceeds and will, immediately following the consummation of the Debt Financing, exceed Maker's total liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Maker's assets is and will, immediately following the closing of the Debt Financing, be greater than Maker's probable liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and matured. Maker's assets do not, and, immediately following the

------

Exhibit 10.302

closing of the Debt Financing, will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Maker does not intend to, and does not believe that it will, incur debt and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debt and liabilities as they mature (taking into account the timing and amounts of cash to be received by Maker and the amounts to be payable on or in respect of obligations of Maker).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Events</u> <u> </u> <u>of</u> <u> </u> <u>Default:</u> <u> </u> <u>Remedies.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The occurrence of any one or more of the following events shall constitute an <u>"Event of Default"</u> hereunder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Makerfailsi:o pay: (AforieacnPiiyinenf ITate, MontlityDebl Service Payment Amount, (B) on the Maturity Date (whether by scheduled maturity, acceleration, demand or otherwise), all accrued and unpaid interest, the unpaid Principal Amount (together with the Exit Fee applicable thereto) and all other amounts due and owing under the Loan Documents or (C) any other amounts payable hereunder within five

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) days' of written notice from Holder as the same shall become due; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Maker shall fail to perform or observe any of the covenants set forth in this Note or in the other Loan Documents, and such noncompliance shall be continuing for a period of more than ten (10) days after Holder provides written notice thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)any representation or warranty made by Maker herein or by Maker or any Guarantor in any other Loan Document shall be false or misleading in any material respect; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)an Event of Default as defined or described elsewhere in this Note or in any other Loan Document occurs or any other event shall occur or condition shall exist, if the effect of such event or condition is to accelerate or to permit Holder to accelerate the maturity of any portion of the indebtedness evidenced by this Note in accordance with the terms hereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)(A) Maker files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any company action in furtherance of any of the foregoing, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) an involuntary petition is filed against Maker (unless such petition is dismissed or discharged within sixty (60) days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of Maker.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Upon the occurrence and during the continuance of an Event of Default, Holder shall have the right to, without notice to or demand on Maker, to declare the outstanding principal (together with the Exit Fee applicable thereto) and all accrued and unpaid interest hereunder immediately due and payable, <u>provided,</u> that, upon the occurrence and continuance of an Event of Default specified in <u>Section 7(a)(v),</u> all amounts owing under this Note shall immediately become due and payable (without any right of presentment, notice, demand and

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Exhibit 10.302

![Graphic](lfr-20251231xex10d302002.jpg)

protest, or notice of acceleration), which shall expressly include all accrued interest <u>and the Exit</u> Fee. In addition to the right of acceleration, and all other rights set forth herein or in the other Loan Documents, upon the occurrence and continuance of an Event of Default, Holder shall have any and all of the rights and remedies available at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Lost or Destroyed Note.</u> Upon receipt by Maker of evidence reasonably satisfactory to Maker of the loss, theft, destruction or mutilation of this Note, and in the case of any such loss, theft or destruction, upon delivery of an indemnity reasonably satisfactory to Maker or, in case of any such mutilation, upon surrender and cancellation of this Note, Maker will issue a new Note of like tenor in lieu of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Severability.</u> <u> </u> <u>\Vherever</u> <u> </u> <u>possible,</u> <u> </u> <u>each</u> <u> </u> <u>provision</u> <u> </u> <u>of</u> this Note shall be interpreted in

such manner as to be effective and <u>valid under apphcable law, burtf</u><u>-</u><u>any--proviston-ofthis-</u><u>-</u><u>Note</u><u>-</u><u>-</u><u>-'-'</u>- ---shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the

extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Notices.</u> Maker and Holder agree that all notices or other communications provided for hereunder shall be in writing and shall be e-mailed (or, if e-mail is not available, sent by regular mail) in the case of Maker, to Lodging Fund REIT III OP, LP, 1635 43rd Street South, Suite 205, Fargo, North Dakota 58103, Attention: Samuel C. Montgomery (smontgomery@legendarycap.com) (or such other address as may hereafter be specified by Maker to Holder in writing), with a copy (which copy shall not constitute notice) to DLA Piper LLP, 4365 Executive Drive, Suite 1100, San Diego, California 92121, Attention: Darryl Steinhause, Esq. (darryl.steinhause@us.dlapiper.com), and in the case of Holder, to Arcade Fargo LLC, c/o Arcade Capital LLC, 477 Madison Avenue, 6<sup>th</sup> Floor, New York, New York 10022, Attention: William

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. Obeid (wobeid@arcadecapial.com), with a copy (which copy shall not constitute notice) to Firsel Ross Gussis & Alexander LLC, 10 Parkway North Blvd., Suite 110, Deerfield, Illinois 60015, Attention: Samuel P. Gussis, Esq. (sgussis@firselross.com). All notices and communications shall be effective (i) if e-mailed, upon delivery (unless notice of non-delivery is received by the sender within 12 hours of delivery) or (ii) if mailed, when received or three (3) days after mailing, whichever is earlier.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Amendment and</u><u> </u><u>Modification.</u> Each of Maker and Holder agrees that no change, waiver, modification or amendment of this Note shall be effective without the prior written approval of Maker and Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Assignments.</u> The obligations hereunder may not be assigned by Maker without the express prior written consent of Holder. Any attempt to assign this Note in contravention of this Section shall be deemed null and void *ipso facto.* Holder shall have the unrestricted right at any time or from time to time to sell this Note. Maker shall execute, acknowledge and deliver any and all instruments reasonably requested by Holder to satisfy such purchasers that the unpaid indebtedness evidenced by this Note is outstanding upon the terms and provisions set out in this Note.

------

Exhibit 10.302

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Waivers.</u> Except as specifically provided in the Loan Documents, Maker does hereby severally waive presentment and demand for payment, notice of dishonor, protest, notice of protest, and non-payment, notice of intent to accelerate the maturity hereof and notice of such

------

Exhibit 10.302

![Graphic](lfr-20251231xex10d302003.jpg)

acceleration. No release of any security for the Loan or extension of time for payment of this Note or any installment hereof, and no alteration, amendment or waiver of any provision of this Note or the other Loan Documents made by agreement between Holder and any other person or party shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of Maker under this Note or the other Loan Documents

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Costs</u><u> </u><u>and</u><u> </u><u>Expenses.</u> Maker agrees to pay on demand all reasonable, out-of-pocket costs and expenses, including reasonable counsel fees and expenses, in connection with the preparation, negotiation, modification and enforcement (whether through negotiations, legal proceedings or otherwise) of this Note and the other Loan Documents. Without limiting the foregoing, cost and expenses associated with the preparation and execution of the Note and the

<u>--</u><u>-</u><u>-----</u>'-'-'<u>o</u><u>=</u><u>th</u><u>�</u><u>r</u><u> </u><u>Loan Documents shall not exceed $10,000 in the aggregate and Maker agrees to promptly</u> reimburse Holder for such amounts.••• • •

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>GOVERNING LAW; WAIVER OF JURY TRIAL.</u> THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES). MAKER AND HOLDER VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH MAKER AND HOLDER MAY BE PARTIES ARISING OUT OF OR IN CONNECTION WITH THIS NOTE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Usury Savings.</u> This Note is subject to the express condition that at no time shall Maker be obligated or required to pay interest on the principal balance of this Note at a rate which could subject Holder to either civil or criminal liability as a result of being in excess of the maximum rate allowed under applicable law. If, by the terms of this Note, Maker is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the maximum rate allowed under applicable law, the interest rate, or the default rate, as the case may be, shall be deemed to be immediately reduced to the maximum rate allowed under applicable law and all previous payments in excess of the maximum rate allowed under applicable law shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Holder for the use, forbearance, or detention of the sums due under this Note, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Note until payment in full so that the rate or amount of interest on account of the Note does not exceed the maximum rate allowed under applicable law of interest from time to time in effect and applicable to the Note for so long as the Note is outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.<u>Successors</u><u> </u><u>and</u><u> </u><u>Assigns.</u> This Note shall be binding upon Maker and its successors, and shall inure to the benefit of Holder and its successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.<u>Conditions</u><u> </u><u>Precedent.</u> The effectiveness of this Note is subject to satisfaction of the following conditions precedent in a manner satisfactory to Holder, unless expressly waived in writing by Holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Holder shall have received this Note duly executed by Maker;

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Exhibit 10.302

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Holder shall have received the Guaranty duly executed by eac ua <sup>rantor;</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Maker shall have delivered to Holder each of the following, in form and substance as reasonably approved by Holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)a certified copy of the Articles of Organization of Maker issued by the Secretary of State of the State ofNorth Dakota;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)a Certificate of Good Standing for Maker issued by the Secretary of State ofthe State of North Dakota;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a complete copy of the limited liability company agreement of

- -- ----Maker;certifted--as-true-,e0ffwt, eompwteand-accurate-by anofficer_of.Maker�

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)a true, complete and accurate organizational chart for Maker illustrating all Persons who have a direct or indirect ownership interest in Maker;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)a schedule of Maker's total debts and liabilities (including the maximum amount of Maker's contingent liabilities on its debts as such debts become absolute and matured), certified as true, correct, complete and accurate in all material respects by an officer of Maker, including, without limitation, any subordinated, unliquidated, disputed and/or contingent liabilities and other commitments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)such other documentation or detailed information with respect to Maker or any Guarantor as shall be reasonably requested by HoIder in connection with this Note;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Maker shall have delivered to Holder a fully completed copy of <u>Exhibit</u><u> </u><u>A</u> attached hereto with all required information included, which shall be subject to Holder's approval in its reasonable discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)the representations and warranties contained in this Note and in the Guaranty and any other Loan Document shall be true and correct in all material respects as of the date thereof and as if made on the date hereof.

*[Remainder ofPage Intentionally Left Blank; Signature Page Follows]*

------

Exhibit 10.302

IN WITNESS WHEREOF, Maker has duly executed this Note as of the date first set

forth above.

<u>Maker:</u>

LODGING FUND REIT III OP, LP,

a Delaware limited partnership

By:Lodging Fund REIT III, Inc.,

<u>_a Delaware</u><u> </u><u>corporation,</u> its General Partner

By: <u>/s/ Samuel C. Montgomery</u>

Name: <u>Samuel C. Montgomery</u>

Its: <u>COO</u>

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Exhibit 10.302

[Promissory Note - Signature Page]

------

Exhibit 10.302

<u>Loan</u><u> </u><u>and</u><u> </u><u>Property</u><u> </u><u>Schedule</u> [see attached page(s)]

------

Exhibit 10.302

**Schedule 1**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Interest Rate |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.00% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.00% |  |  |  |
| Loan Amount |  | $&nbsp;&nbsp;&nbsp;&nbsp;500000 | &nbsp;&nbsp;&nbsp;&nbsp;500000 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amort (Months) |  | &nbsp;&nbsp;&nbsp;&nbsp;12 | &nbsp;&nbsp;&nbsp;&nbsp;12 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>**Pay-a-atec----'-··-·---Beg-Bal** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>**Pay-a-atec----'-··-·---Beg-Bal** | <br>- | <br>**Interest** | &nbsp;&nbsp;<br>**Debt.-Seivice-'--·'·eri.n.cipaL .E.nd..Bal** <u>.</u>  | &nbsp;&nbsp;<br>**Debt.-Seivice-'--·'·eri.n.cipaL .E.nd..Bal** <u>.</u>  | &nbsp;&nbsp;<br>**Debt.-Seivice-'--·'·eri.n.cipaL .E.nd..Bal** <u>.</u>  |
| 2/1/26 | $500000 | &nbsp;&nbsp;&nbsp;&nbsp;$6667 | &nbsp;&nbsp;&nbsp;&nbsp;$6667 | $45365.43 | $38699 | &nbsp;&nbsp;&nbsp;$461301 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3/1/26 | $461301 | &nbsp;&nbsp;&nbsp;&nbsp;$6151 | &nbsp;&nbsp;&nbsp;&nbsp;$6151 | $45365.43 | $39215 | &nbsp;&nbsp;&nbsp;$422086 |
| 4/1/26 | $422086 | &nbsp;&nbsp;&nbsp;&nbsp;$5628 | &nbsp;&nbsp;&nbsp;&nbsp;$5628 | $45365.43 | $39738 | &nbsp;&nbsp;&nbsp;$382349 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5/1/26 | $382349 | &nbsp;&nbsp;&nbsp;&nbsp;$5098 | &nbsp;&nbsp;&nbsp;&nbsp;$5098 | $45365.43 | $40267 | &nbsp;&nbsp;&nbsp;$342081 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6/1/26 | $342081 | &nbsp;&nbsp;&nbsp;&nbsp;$4561 | &nbsp;&nbsp;&nbsp;&nbsp;$4561 | $45,365:43 | $40804 | &nbsp;&nbsp;&nbsp;$301277 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7/1/26 | $301277 | &nbsp;&nbsp;&nbsp;&nbsp;$4017 | &nbsp;&nbsp;&nbsp;&nbsp;$4017 | $45365.43 | $41348 | &nbsp;&nbsp;&nbsp;$259929 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8/1/26 | $259929 | &nbsp;&nbsp;&nbsp;&nbsp;$3466 | &nbsp;&nbsp;&nbsp;&nbsp;$3466 | $45365.43 | $41900 | &nbsp;&nbsp;&nbsp;$218029 |
| 9/1/26 | $218029 | &nbsp;&nbsp;&nbsp;&nbsp;$2907 | &nbsp;&nbsp;&nbsp;&nbsp;$2907 | $45365.43 | $42458 | &nbsp;&nbsp;&nbsp;$175571 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10/1/26 | $175571 | &nbsp;&nbsp;&nbsp;&nbsp;$2341 | &nbsp;&nbsp;&nbsp;&nbsp;$2341 | $45365.43 | $43024 | &nbsp;&nbsp;&nbsp;$132546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11/1/26 | $132546 | &nbsp;&nbsp;&nbsp;&nbsp;$1767 | &nbsp;&nbsp;&nbsp;&nbsp;$1767 | $45365.43 | $43598 | &nbsp;&nbsp;&nbsp;$88948 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/1/26 | $88948 | &nbsp;&nbsp;&nbsp;&nbsp;$1186 | &nbsp;&nbsp;&nbsp;&nbsp;$1186 | $45365.43 | $44179 | &nbsp;&nbsp;&nbsp;$44769 |
| 1/1/27 | $44769 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$597 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$597 | $45365.43 | $44769 | &nbsp;&nbsp;&nbsp;$ |

---

**Monthly Debt Service Payment Amount Amortization Schedule**

------

**EXHIBIT 10.302**

**Schedule 2**

**Existing Maker Payment Obligations**

<sup>[Please</sup> <sup>provide</sup> <sup>a</sup> <sup>schedule</sup> <sup>of</sup> <sup>existing</sup> <sup>payment</sup> <sup>obligations</sup> for approval]

------

Exhibit 10.302

<sup>Schedule</sup> 2-1

------

## Exhibit 14.1

**EXHIBIT 14.1**

**LODGING FUND REIT III, INC. <br>CODE OF CONDUCT AND ETHICS**

Lodging Fund REIT III, Inc. (the "Company") has established this Code of Conduct and Ethics (the "Code") that applies to (i) the Company's officers and directors and (ii) the officers and directors of Legendary Capital REIT III, LLC (the "Advisor"), and (iii) the officers and directors of Legendary Capital, LLC (the "Sponsor") (collectively, the Company, the Advisor, and the Sponsor are "REIT III Entities"). The persons set forth under (i) and (ii) above are "Covered Persons" under the Code. Our affiliates' employees, agents and consultants are also expected to embrace values and standards similar to those reflected in this Code.

The Code does not address every issue that may arise, but it sets out basic principles and a methodology to help guide the Covered Persons in the attainment of their common goal of compliance with the law and the performance of their responsibilities in an ethical manner. If a law conflicts with a policy in this Code, a Covered Person must comply with the law.

**1.** **COMPLIANCE OFFICER**

The Company's Compliance Officer will be responsible for ensuring that the Code is established and effectively communicated to all Covered Persons and will handle the Company's day-to-day compliance matters. The Compliance Officer will be the Company's Director of Operations.

Among the responsibilities of the Compliance Officer are:

● Receiving, reviewing, investigating and resolving concerns and reports on the matters described in the Code;

● Providing guidance on the meaning and application of the Code; and

● Reporting periodically and as matters arise (if deemed necessary by the Compliance Officer) on the implementation and effectiveness of the Code and other compliance matters and recommending any updates or amendments to the Code that the Compliance Officer deems necessary to (i) management of the Company and (ii) the Company's Audit Committee.

The Compliance Officer is the "go to" person for questions and concerns relating to the Code, especially in the event of a potential violation. The Compliance Officer will, with the assistance and cooperation of the Company's

------

**EXHIBIT 14.1**

officers and directors, foster an atmosphere where Covered Persons are comfortable communicating and/or reporting concerns and possible violations of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **REPORTING VIOLATIONS, INVESTIGATIONS, ENFORCEMENT AND WHISTLEBLOWER/NON-RETALIATION POLICY** 

The Company's efforts to ensure observance of, and adherence to, the goals and policies outlined in the Code mandate that Covered Persons promptly report material transactions, relationships, acts, failures to act, occurrences or practices that such Covered Person believes, in good faith, are inconsistent with, in violation of or reasonably could be expected to give rise to a violation of the Code. Covered Persons should report any suspected violations of the Company's financial reporting obligations or any complaints or concerns about questionable accounting or auditing practices in accordance with the procedures of the Code. Covered Persons should note that persons outside the Company may report complaints or concerns about suspected violations or concerns regarding internal accounting controls, accounting or auditing matters. Covered Persons should report these concerns and complaints immediately upon receipt.

Covered Persons are expected to become familiar with and to understand the requirements of the Code. If a Covered Person becomes aware of a suspected violation, he or she should not try to investigate it or resolve it on his or her own. Prompt disclosure to the appropriate parties is vital to ensuring a thorough and timely investigation and resolution. The circumstances should be reviewed by appropriate personnel as promptly as possible, as delay may affect the results of any investigation. A violation of the Code, or of applicable laws and/or governmental regulations, is a serious matter and could have legal implications. Allegations of such behavior are not taken lightly and should not be made to embarrass anyone or put such person in a false light. Reports of suspected violations should always be made in good faith.

***Reporting Violations Generally***

In the event a Covered Person believes a violation of the Code, or a violation of applicable laws and/or governmental regulations has occurred or a Covered Person has observed or becomes aware of conduct that appears to be contrary to the Code, he or she should immediately report the situation to the Compliance Officer, or if the Compliance Officer is the individual responsible for the violation or suspected violation of the Code or if confidentiality and anonymity are needed, then such Covered Person should immediately report the situation to the Audit Committee Chair.

If a Covered Person has or receives notice of a complaint or concern regarding the Company's financial disclosure, accounting practices, internal accounting controls, auditing, or questionable accounting or auditing matters, such Covered Person must immediately advise the Compliance Officer or, if confidentiality and anonymity are needed, then he or she should immediately report the complaint or concern to the Audit Committee Chair.

------

**EXHIBIT 14.1**

***Anonymous Reporting***

If a Covered Person wishes to report any such matters anonymously or confidentially, he or she should report the suspected violation or other complaint or concern by sending a letter to the Audit Committee Chair. All Covered Persons may submit a report by the following:

● Mailing a description of the suspected violation or concern to:

Audit Committee Chair

c/o Lodging Fund REIT III, Inc. <br>1635 43rd Street S, Suite 205 <br>Fargo, ND 58103

***Non-Retaliation Policy***

It is a federal crime for anyone to retaliate intentionally against any person who provides truthful information to a law enforcement official concerning a possible violation of any federal law. Moreover, the Company does not permit any form of intimidation or retaliation against any reporting Covered Person because of any lawful act done by that person to:

● provide information or assist in an investigation regarding any conduct that the reporting person reasonably believes constitutes a violation of laws, rules, regulations, the Code, or any Company policies; or

● file, testify, participate in, or otherwise assist in a proceeding relating to a violation of any law, rule or regulation.

**Any act of intimidation or retaliation against a Covered Person for reporting alleged violations of the Code while acting in good faith is a violation of Company policy and should be reported immediately under the Code.** 

In cases in which a Covered Person reports a suspected violation in good faith and is not engaged in the questionable conduct, the Company will attempt to keep its discussions with the Covered Person confidential to the extent reasonably possible. In the course of its investigation, the Company may find it necessary to share information with others on a "need to know" basis or may be required by law to disclose information.

***Internal Investigation***

------

**EXHIBIT 14.1**

When an alleged violation of the Code is reported, the Company shall take prompt and appropriate action in accordance with the law and regulations and otherwise consistent with good business practice. If the suspected violation appears to involve either a possible violation of law or an issue of significant corporate interest or if the report involves a complaint or concern regarding the Company's financial disclosure, internal accounting controls, questionable auditing or accounting matters or practices or other issues relating to the Company's accounting or auditing, the Compliance Officer or other person receiving the report, as appropriate, shall notify the Audit Committee within two business days and a preliminary investigation of the report will be performed and the outcome presented to the Audit Committee within a reasonable time from the date the complaint was submitted. If a suspected violation involves any Covered Person, any person who received such report should immediately report the alleged violation to the Audit Committee Chair. The Chair of the Audit Committee shall assess the situation and determine the appropriate course of action. At a point in the process consistent with the need not to compromise the investigation, a person who is suspected of a violation shall be apprised of the alleged violation and shall have an opportunity to provide a response to the investigator.

***Disciplinary Actions***

Subject to the following sentence, the Compliance Officer shall be responsible for implementing the appropriate disciplinary action in accordance with the Company's policies and procedures for any person who is found to have violated the Code. If the Compliance Officer is the individual responsible for the violation or suspected violation of the Code, then the Chair of the Audit Committee will be responsible for implementing the appropriate disciplinary action.

***Corrective Action***

Subject to the following sentence, in the event of a violation of the Code, the Compliance Officer should assess the situation to determine whether the violation demonstrates a problem that requires remedial action as to the Company's policies and procedures. If a violation has been reported to the Chair of the Audit Committee, the Audit Committee shall be responsible for determining appropriate remedial or corrective actions. Such corrective action shall be documented, as appropriate.

***Retention of Reports and Complaints***

All notices or reports of suspected violations, complaints or concerns pursuant to this Code shall be considered confidential and shall be recorded in a log, indicating the description of the matter reported, the date of the report and the disposition thereof. The log shall be retained for five years and shall be maintained by the Compliance Officer.

------

**EXHIBIT 14.1**

***Cooperation by Legendary Capital***

The Code is designed to cover reports of suspected violations, complaints or concerns that directly or indirectly affect the Company as a public company. Since the Company does not currently have any employees and its day-to-day operations and asset management are performed by officers and employees of REIT III Entities, this Code shall be formally adopted by each REIT III Entity with respect to the Covered Persons, and each such REIT III Entity shall fully cooperate with the Company in enforcing the provisions of this Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **STANDARDS OF CONDUCT AND ETHICS <br> *Compliance with Laws and Regulations*** 

The Company is committed to compliance with the laws and regulations of the jurisdictions in which it operates. Numerous federal, state and local laws and regulations define and establish obligations to which Covered Persons are subject. Covered Persons must comply with applicable laws, rules and regulations in performing their duties and services for the Company. Covered Persons should consult the Compliance Officer with any questions about the legality of conduct affecting the Company.

If a Covered Person violates these laws or regulations in performing his or her duties or services for the Company, the individual not only risks indictment, prosecution and penalties, and civil actions, such person also subjects the Company to similar risks and penalties.

***Insider Trading***

U.S. securities laws prohibit abuses of material, non-public information (i.e., insider trading). Covered Parties who have access to material, nonpublic information, regardless of its source, are not permitted to use or share that information for their personal benefit for securities trading purposes or for any other purpose except the conduct of the Company's business.

All material, non-public information about the Company should be considered confidential information. It is always illegal to trade in the Company's securities while in possession of material, nonpublic information, and it is also generally illegal to communicate or "tip" such information to others who do not have a legitimate business need for acquiring information.

***Full, Fair, Accurate, Timely and Understandable Disclosure***

------

**EXHIBIT 14.1**

The rules and regulations of the Securities and Exchange Commission require that all disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission, and in other public communications made by the Company is full, fair, accurate, timely and understandable. In addition, the Company has launched a private placement offering to certain accredited investors, pursuant to an offering memorandum dated June 1, 2018, as amended and supplemented, pursuant to which the Company has certain disclosure obligations to avoid material misstatements and omissions. Covered Persons are responsible for the Company's disclosures and must act to ensure compliance with these disclosure requirements by taking the steps available to them, consistent with their role within the Company, to assist the Company in meeting any reporting obligations. In particular, Covered Persons should provide prompt and accurate answers to all inquiries made to them in connection with the Company's preparation of its reports and disclosure.

***Ethical Obligations***

It is important that the Covered Persons promote integrity throughout the Company and foster a culture throughout the Company as a whole that ensures the fair and timely reporting of the Company's results of operations and financial condition and other financial information.

Each Covered Person agrees that he or she will:

● Perform his or her duties in an honest and ethical manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Handle actual or apparent conflicts of interest between his or her personal and professional relationships in an ethical manner; and

● Proactively promote and be an example of ethical behavior in the work environment.

***Conflicts of Interest and Corporate Opportunities***

Covered Persons should be conscientious of actual and potential conflicts of interest with respect to the interests of the Company and seek to avoid such conflicts or handle such conflicts in an ethical manner at all times consistent with applicable law. A "conflict of interest" occurs when a Covered Person's private interest in any material respect interferes with the interests of, or his or her service to, the Company. For example, a conflict of interest would arise if a Covered Person, or a member of his or her family, receives improper personal benefits as a result of his position with or relationship to the Company.

------

**EXHIBIT 14.1**

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationships between the Company and the REIT III Entities, including the advisory agreement with the Advisor. As a result, the Code recognizes that the Covered Persons will, in the normal course of their duties (whether formally for the Company or for REIT III Entities or both), be involved in establishing policies and implementing decisions that may have different effects on REIT III Entities and the Company. The participation of the Covered Persons in such activities is inherent in the contractual relationship among the Company and the REIT III Entities and is consistent with the performance of their duties as officers and directors of the Company and/ or as officers and directors of the REIT III Entities.

The following list provides examples of prohibited conflicts of interest under this Code, but Covered Persons should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Person should not be placed improperly before the interest of the Company.

Each Covered Person must:

● not use his or her personal influence or personal relationships improperly to influence business decisions or financial reporting by the Company whereby the Covered Person would benefit personally to the detriment of the Company;

● not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Person to the detriment of the Company; and

● report at least annually any affiliations or other relationships related to conflicts of interest.

Additionally, federal securities laws prohibit personal loans to directors and executive officers by the Company.

In order to avoid situations in which a conflict of interest involving a Covered Person may result in an improper benefit, all transactions involving a conflict of interest must be approved by a majority of the Company's Independent Directors not otherwise interested in the transaction as fair and reasonable to the Company and on terms no less favorable to the Company than those available from unaffiliated third parties. Conflicts of interest may not always be clear-cut, so if a Covered Person has a question, he or she shall promptly bring it to the attention of the Compliance Officer or, if the Compliance Officer is affected by the conflict of interest, then to the Conflicts Committee.

***Confidentiality Policy***

------

**EXHIBIT 14.1**

*For Complaints and Reports of Violations*

The Company will, to the extent reasonably possible, keep confidential both the information and

concerns reported under the Code, and its discussions and actions in response to these reports and concerns. In the course of its investigation, however, the Company may find it necessary to share information with others on a "need to know" basis or may be required by law to disclose information.

*For Company Information*

All confidential information concerning the Company obtained by Covered Persons is the property of the Company and must be protected. Confidential information includes all non-public information that could be of use to competitors, be harmful to the Company, or impair the value of any asset, if disclosed. Covered Persons must maintain the confidentiality of such information entrusted to them by the Company, except when disclosure is authorized by the Company or required by law. Whenever feasible, Covered Persons should consult with the Compliance Officer or, if the Compliance Officer would be affected by the disclosure, the designated human resources representative, if they believe they have a legal obligation to disclose confidential information.

Examples of confidential information include, but are not limited to: information that could be used by the Company's competitors; business trends identified by the Company; projections; information about financial performance; new marketing plans; information about potential acquisitions, divestitures and investments; public or private securities offerings or changes in dividend policies or amounts; significant personnel changes; and existing or potential major contracts or finance sources or the loss thereof.

This obligation with respect to confidential information extends beyond the workplace. It applies to communications among Covered Persons and their family members and continues to apply even after their affiliation with the Company terminates.

***Fair Dealing***

The Company's goal is to conduct its business with integrity. Covered Persons should endeavor to deal honestly with the Company's competitors, investors, employees, consultants and those with whom the Company conducts its business. Under federal and state laws, the Company is prohibited from engaging in unfair methods of competition, and unfair or deceptive acts and practices. Covered Persons should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing. The Company will not seek competitive advantages through unethical or illegal business practices.

------

**EXHIBIT 14.1**

Examples of prohibited conduct include, but are not limited to:

● bribery or payoffs to induce business or breaches of contracts by others; or

● making false or deceptive claims or comparisons about competitors or their products or services.

Each Covered Person must disclose prior to or at the time of his or her hire or election as a director the existence of any employment agreement, non-compete or non-solicitation agreement, confidentiality agreement or similar agreement with a former employer that in any way restricts or prohibits the performance of any duties or responsibilities of his or her positions with the Company.

***Recordkeeping***

All of the Company's books, records, accounts and financial statements must be maintained in

reasonable detail, must appropriately reflect the Company's transactions and must conform both to applicable legal requirements and to the Company's system of internal controls. Unrecorded or "off the books" funds or assets should not be maintained unless permitted by applicable law or regulation and authorized by the Audit Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **ACCOUNTABILITY** <br> Each Covered Person must:

● upon adoption of the Code (or thereafter, as applicable, upon becoming a Covered Person), affirm to the Company that he or she has received, read and understands the Code;

● annually thereafter affirm to the Company that he or she has complied with the requirements of the Code;

● not retaliate against any other Covered Person or employee of the Company or any REIT III Entity for reports of potential violations that are made in good faith; and

● follow the notification procedures set forth in the Code promptly if he or she knows of any violation of the Code.

**5.** **WAIVER OR AMENDMENT**

------

**EXHIBIT 14.1**

Any waiver or amendment of this Code that applies to any Covered Person must be approved by the Conflicts Committee and, with respect to the Company's principal executive officer, principal financial officer, or controller or persons performing similar functions, disclosed as required by federal securities law.

*The Code is not intended to create, nor does it create, any contractual rights related to employment*

*Amended as of April 25, 2025*

------

## Exhibit 21.1

**EXHIBIT 21.1**

**Subsidiaries of the Registrant**

---

| | |
|:---|:---|
| &nbsp;&nbsp;Name | &nbsp;&nbsp;Jurisdiction of Incorporation |
| &nbsp;&nbsp;Lodging Fund REIT III OP, LP | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;Lodging Fund REIT III TRS, Inc. | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Cedar Rapids, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Cedar Rapids TRS, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Pineville, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Pineville TRS, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Eagan, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Eagan TRS, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Prattville, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Prattville TRS, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Lubbock Casa, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Lubbock Casa TRS, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Lubbock Expo, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Lubbock Expo TRS, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Southaven, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Southaven TRS, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Aurora, LLC | &nbsp;&nbsp;Delaware |
| &nbsp;&nbsp;LF3 Aurora TRS, LLC<br>LF3 El Paso, LLC<br>LF3 El Paso TRS, LLC<br>LF3 Houston, LLC<br>LF3 Houston TRS, LLC<br>LF3 Northbrook, LLC<br>LF3 Northbrook TRS, LLC<br>LF3 Fargo Med, LLC<br>LF3 Fargo Med TRS, LLC<br>LF3 El Paso Airport, LLC<br>LF3 El Paso Airport TRS, LLC<br>LF3 Lakewood, LLC<br>LF3 Lakewood TRS, LLC<br>LF3 RIFC, LLC<br>LF3 RIFC TRS, LLC<br>LF3 Pineville 2, LLC<br>LF3 Pineville 2 TRS, LLC<br>LF3 Charlotte, LLC<br>LF3 Charlotte TRS, LLC<br>LF3 Wichita, LLC<br>LF3 Wichita TRS, LLC<br>High Desert Garden Holdings, LLC | &nbsp;&nbsp;Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware <br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware<br>Delaware |

---

------

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 350)**

I, Norman H. Leslie, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 10-K of Lodging Fund REIT III, Inc. (the "registrant");

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2026

---

| |
|:---|
| &nbsp;&nbsp;/s/ Norman H. Leslie |
| &nbsp;&nbsp;Norman H. Leslie, President, Chief Executive Officer, |
| &nbsp;&nbsp;Secretary, Chief Investment Officer and Treasurer  |
| &nbsp;&nbsp;(principal executive officer) |

---

------

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 350)**

I, Samuel C. Montgomery, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 10-K of Lodging Fund REIT III, Inc. (the "registrant");

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2026

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| |
|:---|
| &nbsp;&nbsp;/s/ Samuel C. Montgomery |
| &nbsp;&nbsp;Samuel C. Montgomery, Chief Financial Officer |
| &nbsp;&nbsp;(principal financial officer) |

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## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

**Certification of Chief Executive Officer and Chief Financial Officer**

In connection with the Annual Report on Form 10-K of Lodging Fund REIT III, Inc. (the "Company") for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Norman H. Leslie, as the Chief Executive Officer of the Company, and Samuel C. Montgomery, as the Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to his or her knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2026

<u>/s/ Norman H. Leslie</u>

Norman H. Leslie, Chief Executive Officer, President, Secretary, Chief Investment Officer and Treasurer

(principal executive officer)

<u>/s/ Samuel C. Montgomery</u>

Samuel C. Montgomery, Chief Financial Officer

(principal financial officer)

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