10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
		FORM 10-Q
T QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2021
		OR
£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from ______ to ______.
		Commission file number: 001-34087
CONDOR HOSPITALITY TRUST, INC.
	(Exact name of registrant as specified in its charter)
Maryland (State or other jurisdiction of incorporation or organization)			52-1889548 (IRS Employer Identification Number)
1800 West Pasewalk Avenue, Ste. 120, Norfolk, NE 68701 (Address of principal executive offices) Telephone number: (301) 861-3305 Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	CDOR	NYSE American

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 T 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 T NO £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of “large accelerated file,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b2 of the Exchange Act.

Large accelerated filer  £	Accelerated filer £
Non-accelerated filer  T	Small reporting company  T
	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 YES £ NO £

Indicate by check mark whether the registrant is a shell company (as described in Rule 12b-2 of the Exchange Act).YES £ NO T

As of August 6, 2021, there were 14,718,085 shares of common stock, par value $0.01 per share, outstanding.

Condor Hospitality Trust, Inc. and Subsidiaries

Table of Contents

			Page Number
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020	3
	Consolidated Statements of Operations (unaudited) for the Three and Six Months ended June 30, 2021 and 2020	4
	Consolidated Statements of Equity (unaudited) for the Three and Six Months ended June 30, 2021 and 2020	5
	Consolidated Statements of Cash Flows (unaudited) for the Six Months ended June 30, 2021 and 2020	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	51

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PART I. FINANCIAL INFORMATION

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

	As of
	June 30, 2021 (unaudited)		December 31, 2020
Assets
Investment in hotel properties, net	$	261,036	$	265,831
Cash and cash equivalents		6,419		3,686
Restricted cash, property escrows		5,342		3,794
Accounts receivable, net		1,175		652
Prepaid expenses and other assets		1,765		1,230
Total Assets	$	275,737	$	275,193
Liabilities and Equity
Liabilities
Accounts payable, accrued expenses, and other liabilities	$	8,096	$	5,372
Dividends and distributions payable		1,091		762
Land option liability		8,497		8,497
Derivative liabilities, at fair value		632		880
Convertible debt, at fair value		25,369		16,875
Long-term debt, net of deferred financing costs		167,795		166,526
Total Liabilities		211,480		198,912
Equity
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized:
6.25% Series E, 925,000 shares authorized, $0.01 par value, 925,000 shares outstanding, liquidation preference of $10,341 and $10,012		10,050		10,050
Common stock, $0.01 par value, 200,000,000 shares authorized; 12,026,108 and 12,014,743 shares outstanding		120		120
Additional paid-in capital		233,529		233,332
Accumulated deficit		(179,480)		(167,263)
Total Shareholders' Equity		64,219		76,239
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $26 and $17		38		42
Total Equity		64,257		76,281
Total Liabilities and Equity	$	275,737	$	275,193

See accompanying notes to consolidated financial statements.

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Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited - In thousands, except per share data)

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Revenue
Room rentals and other hotel services	$	14,108	$	4,811	$	23,752	$	18,038
Operating Expenses
Hotel and property operations		9,232		5,089		16,911		14,904
Depreciation and amortization		2,648		2,777		5,291		5,487
General and administrative		1,151		1,014		2,411		2,207
Strategic alternatives, net		383		80		423		224
Total operating expenses		13,414		8,960		25,036		22,822
Operating income (loss)		694		(4,149)		(1,284)		(4,784)
Net loss on disposition of assets		(10)		(1)		(13)		(10)
Equity in earnings of joint venture		-		-		-		80
Net gain (loss) on derivatives and convertible debt		(10,234)		19		(8,246)		(740)
Other income (expense), net		2,357		(58)		2,399		(86)
Interest expense		(2,484)		(2,070)		(4,693)		(4,050)
Loss before income taxes		(9,677)		(6,259)		(11,837)		(9,590)
Income tax benefit (expense)		(27)		61		(54)		367
Net loss		(9,704)		(6,198)		(11,891)		(9,223)
Loss attributable to noncontrolling interest		4		2		4		3
Net loss attributable to controlling interests		(9,700)		(6,196)		(11,887)		(9,220)
Dividends undeclared on preferred stock		(166)		(144)		(329)		(289)
Net loss attributable to common shareholders	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Earnings (Loss) per Share
Total - Basic Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)
Total - Diluted Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)
See accompanying notes to consolidated financial statements.

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Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Equity

(Unaudited - In thousands, except per share amounts)

	Three months ended June 30, 2020
	Shares of Preferred stock		Preferred stock		Shares of Common stock		Common stock		Additional paid-in capital		Accumulated deficit		Total Shareholders' equity		Noncontrolling interest		Total equity
Balance at March 31, 2020		925	$	10,050		11,996	$	120	$	233,258	$	(150,751)	$	92,677	$	48	$	92,725
Stock-based compensation		-		-		7		-		77		-		77		-		77
Dividends and distributions undeclared
Series E Preferred		-		-		-		-		-		(144)		(144)		-		(144)
Net loss		-		-		-		-		-		(6,196)		(6,196)		(2)		(6,198)
Balance at June 30, 2020		925	$	10,050		12,003	$	120	$	233,335	$	(157,091)	$	86,414	$	46	$	86,460

	Three months ended June 30, 2021
	Shares of Preferred stock		Preferred stock		Shares of Common stock		Common stock		Additional paid-in capital		Accumulated deficit		Total Shareholders' equity		Noncontrolling interest		Total equity
Balance at March 31, 2021		925	$	10,050		12,020	$	120	$	233,425	$	(169,613)	$	73,982	$	42	$	74,024
Stock-based compensation		-		-		6		-		104		-		104		-		104
Dividends and distributions undeclared
Series E Preferred		-		-		-		-		-		(167)		(167)		-		(167)
Net loss		-		-		-		-		-		(9,700)		(9,700)		(4)		(9,704)
Balance at June 30, 2021		925	$	10,050		12,026	$	120	$	233,529	$	(179,480)	$	64,219	$	38	$	64,257

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Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Equity

(Unaudited - In thousands, except per share amounts)

	Six months ended June 30, 2020
	Shares of Preferred stock		Preferred stock		Shares of Common stock		Common stock		Additional paid-in capital		Accumulated deficit		Total Shareholders' equity		Noncontrolling interest		Total equity
Balance at December 31, 2019		925	$	10,050		11,994	$	120	$	233,189	$	(147,582)	$	95,777	$	49	$	95,826
Stock-based compensation		-		-		9		-		146		-		146		-		146
Dividends and distributions undeclared
Series E Preferred		-		-		-		-		-		(289)		(289)		-		(289)
Net loss		-		-		-		-		-		(9,220)		(9,220)		(3)		(9,223)
Balance at June 30, 2020		925	$	10,050		12,003	$	120	$	233,335	$	(157,091)	$	86,414	$	46	$	86,460

	Six months ended June 30, 2021
	Shares of Preferred stock		Preferred stock		Shares of Common stock		Common stock		Additional paid-in capital		Accumulated deficit		Total Shareholders' equity		Noncontrolling interest		Total equity
Balance at December 31, 2020		925	$	10,050		12,015	$	120	$	233,332	$	(167,263)	$	76,239	$	42	$	76,281
Stock-based compensation		-		-		11		-		197		-		197		-		197
Dividends and distributions undeclared
Series E Preferred		-		-		-		-		-		(330)		(330)		-		(330)
Net loss		-		-		-		-		-		(11,887)		(11,887)		(4)		(11,891)
Balance at June 30, 2021		925	$	10,050		12,026	$	120	$	233,529	$	(179,480)	$	64,219	$	38	$	64,257

See accompanying notes to consolidated financial statements.

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Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited – In thousands)

	Six months ended June 30,
		2021		2020
Cash flows from operating activities:
Net loss	$	(11,891)	$	(9,223)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense		5,291		5,487
Net loss on disposition of assets		13		10
Net loss on derivatives and convertible debt		8,246		740
Equity in earnings of joint venture		-		(80)
Amortization of deferred financing costs		453		545
Principal forgiveness on long-term debt		(2,299)		-
Stock-based compensation expense		211		166
Provision / benefit for deferred taxes		-		(421)
Changes in operating assets and liabilities:
Increase in assets		(1,052)		(520)
Increase in liabilities		2,729		1,435
Net cash provided by (used in) operating activities		1,701		(1,861)
Cash flows from investing activities:
Additions to hotel properties		(520)		(292)
Distributions in excess of cumulative earnings from joint venture		-		480
Hotel acquisitions, net of cash acquired		-		(7,193)
Proceeds from sale of hotel assets		1		2
Net cash used in investing activities		(519)		(7,003)
Cash flows from financing activities:
Deferred financing costs		(50)		(480)
Proceeds from long-term debt		4,584		45,763
Principal payments on long-term debt		(1,419)		(34,832)
Principal payments on finance lease		(2)
Tax withholdings on stock compensation		(14)		(20)
Deposit on strategic alternatives		-		500
Other items		-		(2)
Net cash provided by financing activities		3,099		10,929
Increase in cash, cash equivalents, and restricted cash		4,281		2,065
Cash, cash equivalents, and restricted cash beginning of period		7,480		8,395
Cash, cash equivalents, and restricted cash end of period	$	11,761	$	10,460
Supplemental cash flow information:
Interest paid	$	3,308	$	3,213
Income taxes paid, net of refunds	$	1	$	114
Schedule of noncash investing and financing activities:
Debt assumed in acquisition	$	-	$	34,080
Increase in accrued liabilities related to insurance premium financing agreement	$	478	$	823
Land option liability in acquisition	$	-	$	8,497

See accompanying notes to consolidated financial statements.

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NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Condor Hospitality Trust, Inc. (“Condor”), a Maryland corporation, is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels. As of June 30, 2021, the Company owned 15 hotels in eight states. References to the “Company”, “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

The Company, through its wholly owned subsidiary Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (the “operating partnership”), for which we serve as general partner. The operating partnership, including its various subsidiaries, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of all properties held by TRS Leasing, Inc.) and conducts all of its operations. At June 30, 2021, the Company owned 99.9% of the common operating units (“common units”) of the operating partnership with the remaining common units owned by other limited partners.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, the operating partnership and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements.

On June 21, 2021, the Company announced that its board of directors is evaluating strategic alternatives to enhance shareholder value. The Company has engaged the firm of Hodges Ward Elliott to market for sale the 15 hotels portfolio owned by the Company. Although the Company expects significant interest in the marketing initiative, there can be no assurance that a transaction will occur at the conclusion of the process. The Company may engage additional brokers and financial advisors as it deems appropriate. There can be no assurances that the exploration of strategic alternatives will result in any transaction or, should the board of directors approve a transaction, no assurances of the value to the Company’s shareholders thereof. Condor Hospitality does not intend to discuss or disclose developments with respect to the process unless and until otherwise determined that further disclosure is appropriate or required by regulation or law. No formalized timetable has been established for the completion of the strategic review.

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature. Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of the operating partnership and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

We evaluate each of our investments and contractual relationships to determine whether they meet the guidelines for consolidation. Entities are consolidated if the determination is made that we are the primary beneficiary in a variable interest entity (“VIE”) or we maintain control of the asset through our voting interest or other rights in the operation of the entity. The Company has concluded that our operating partnership meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company consolidates the operating partnership. The Company’s sole significant asset is its investment in the operating partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the operating partnership. All of the Company’s debt is an obligation of the operating partnership.

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The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the consolidated financial statements for the periods presented. Interim results are not necessarily indicative of full-year performance for the year ending December 31, 2021 or any future period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period. Actual results could differ from those estimates. Because the state of the economy and the real estate market can significantly impact hotel operating performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

The novel coronavirus (COVID-19) has reduced travel significantly and adversely affected the hospitality industry in general. The actual and threatened spread of COVID-19 globally or in the regions in which we operate, or future widespread outbreak of infectious or contagious disease, can continue to reduce national and international travel in general. The extent to which the hospitality industry, and thus our business, will be affected by COVID-19 will largely depend on future developments which we cannot accurately predict, and the impact on customer travel, including the duration of the outbreak, the continued spread and treatment of COVID-19, the impact of new virus variants, the pace of vaccination, and new information and developments that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. To the extent that travel activity in the U.S. is and will be materially and adversely affected by COVID-19, business and financial results of the hospitality industry, and thus our business and financial results, could be impacted.

Since late March 2020, similar to the conditions affecting the hospitality industry as a whole, we have experienced occupancy declines at many of our properties which have and will continue to require us to adjust our business operations and will have had and will continue to have an impact on our operating income and may potentially impact future compliance with our debt covenants.

As a result of the above factors, the Company is and has taken actions at the corporate and hotel level, including, but not limited to:

Obtaining significant modifications of its debt agreements, including extension of the Key Bank credit facility (the “credit facility”) to January 2, 2023 with an increase in credit availability and modifications and waivers of debt covenants, from the majority of the Company’s lenders.

Asset management working with hotel management companies to reduce all hotels operating expenses including, but not limited to, closing off multiple floors, staffing reductions and furloughs, utility consumption reductions, purchasing reductions and eliminations, contract services reductions and

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eliminations, food services closures, exercise facilities closures, and certain reduction and elimination of certain marketing expenditures.

Seeking potential alternative revenue sources through health care providers, government agencies, universities and airlines.

Obtaining Paycheck Protection Program (“PPP”) loans authorized under the congressionally approved Coronavirus Aid, Relief, and Economic Security (“CARES”) Act totaling $2,299 (see Note 6), all of which was forgiven by the Small Business Administration (“SBA”) during the second quarter of 2021.

Pursuing corporate cost reductions, including staffing reductions, resulting in an approximately 30% decrease in general and administrative expenses compared to historical operations.

Capital improvement projects have been suspended except for emergency circumstances and will remain on hold for immediate future, with the potential for the suspension to continue through 2021.

The Company determined that it was advisable and the best business practice to cause a temporary closure of two of its hotels, the Solomons Hilton Garden Inn on April 20, 2020 and the Leawood Aloft on April 9, 2020. These hotels were both reopened on July 1, 2020 and no other hotel closures have been deemed necessary.

We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have, a material negative impact on the hospitality industry, and thus on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. While we cannot assure you that the assumptions used to estimate our future liquidity will be correct, the Company believes it can generate the liquidity required to operate through the crisis through a combination of the continued operation of our portfolio with significant cost reduction measures in place, existing availability under our credit facility, and, if necessary, additional debt and equity financings. However, there can be no assurance that the Company will be able to obtain such financing on acceptable terms or at all.

The Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft) were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners, on December 24, 2020 (see Note 6). The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021, or December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic. The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC.

Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6,000 of liquidity.

Based on a the current status of the OSK X, LLC loans and the guidance in U.S. GAAP that requires that, in making a determination for the one year period following the date of the financial statements, the Company cannot consider future fundraising activities or the likelihood of obtaining covenant waivers or amendments, all of which are outside of the Company's sole control, the Company has determined that there is substantial doubt about the Company’s ability to continue as a going concern for the one year period after the date the financial statements are issued. The

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consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.

Effective January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2017-01, Clarifying the Definition of a Business. As such, if substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. When we conclude that an acquisition meets this threshold, acquisition costs will be capitalized as part of our allocation of the purchase price of the acquired hotel properties. We concluded that the Company’s purchase of the remaining 20% of the joint venture that owns the Atlanta Aloft property (the “Atlanta JV”), completed in the first quarter of 2020, was the acquisition of assets and as such acquisition costs were capitalized as part of this transaction (see Note 3).

The Company’s investments in hotel properties are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment.

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method. Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

On an ongoing basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. In the evaluation of impairment of its hotel properties, the Company makes many assumptions and estimates including projected cash flows both from operations and eventual disposition, expected useful life and holding period, future required capital expenditures, and terminal capitalization rates. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s estimated fair value.

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a VIE or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, prior to our acquisition of the remaining 20% interest in the Atlanta JV (see Note 3), allocations of the profits and losses of our Atlanta JV were potentially allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the consolidated statements of cash flows using the cumulative distributions approach. Distributions are classified as cash inflows from operating activities unless

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cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture. Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held for Sale

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year. If a hotel is considered held for sale as of the most recent balance sheet presented or was sold prior to that balance sheet date, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale.

At the end of each reporting period, if the fair value of a held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss. Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required. If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the decision not to sell.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes cash and highly liquid investments with original maturities of three months or less when acquired, and are carried at costs which approximates fair value.

Restricted cash consists of cash held in escrow for the replacement of furniture and fixtures, real estate taxes, property insurance, and debt service as required under certain loan agreements.

Revenue Recognition

Revenue consists of amounts derived from hotel operations, including the sales of rooms, food and beverage, and other ancillary services. Room revenue is recognized over a customer's hotel stay at the daily contract rate. Revenue from food and beverage and other ancillary services is generated when a customer chooses to purchase goods or services separately from a hotel room and revenue is recognized on these distinct goods and services at the contract rate at the point in time or over the time period that goods or services are provided to the customer and the related performance obligations are fulfilled. Certain ancillary services are provided by third parties and the Company assesses whether it is the principal or agent in these arrangements. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. If the Company is the principal, the Company recognizes revenue based upon the gross sales price. Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. The Company maintains an allowance for doubtful accounts sufficient to cover estimated potential credit losses.

Sales, use, occupancy, and similar taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the consolidated statements of operations.

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Hotel operating revenues can be disaggregated into the following categories to demonstrate how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows:

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Rooms	$	13,460	$	4,489	$	22,589	$	17,015
Food and beverage		247		115		363		464
Other		401		207		800		559
Total revenue	$	14,108	$	4,811	$	23,752	$	18,038

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under the applicable provisions of the Internal Revenue Code (the “Code”), as amended. In general, under such Code provisions, an entity which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, will not be subject to federal income tax to the extent of the income currently distributed to shareholders. A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS is subject to federal, state, and local income taxes. We account for the federal income taxes of our TRS using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on the consideration of available evidence, including tax planning strategies and projections for future taxable income over the periods in which the remaining deferred tax assets are deductible. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain liabilities and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

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

Our estimates of fair value are determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different

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market assumptions or valuation techniques may have a material effect on estimated fair value measurements. 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.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings. This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 and November 19, 2020 (see Note 7).

NOTE 2. INVESTMENT IN HOTEL PROPERTIES

Investment in hotel properties consisted of the following at June 30, 2021 and December 31, 2020:

	As of
		June 30, 2021		December 31, 2020
Land		$	34,929		$	34,928
Buildings, improvements, vehicle			244,209			244,041
Furniture and equipment			24,909			24,622
Initial franchise fees			1,784			1,784
Construction-in-progress			111			123
Right of use asset			53			62
Investment in hotel properties			305,995			305,560
Less accumulated depreciation			(44,959)			(39,729)
Investment in hotel properties, net		$	261,036		$	265,831

On January 1, 2019, the Company adopted ASU 842, Leases, and applied it prospectively. At adoption, the Company also elected the practical expedients which permitted it to not reassess its prior conclusions about lease identification, classification, and initial direct costs. Consequently, on January 1, 2019, the Company recognized right-of-use assets and related liabilities related to its operating leases. Since most of the Company's leases do not provide an implicit rate, the Company used incremental borrowing rates. The right-of-use assets and liabilities are amortized to rent expense, included in either Hotel and property operations expenses or General and administrative expenses depending on the nature of the lease, over the term of the underlying lease agreements. The weighted average remaining life of the Company’s operating leases, including options to extend when it is reasonably certain the Company will exercise such options, was 6.4 years at June 30, 2021.

As of June 30, 2021 and December 31, 2020, the Company's right-of-use assets, net of $53 and $62, respectively, are included in Investment in hotel properties, net and its related lease liabilities of $54 and $62, respectively, are presented in Accounts payable, accrued expenses, and other liabilities in the Company's consolidated balance sheets.

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NOTE 3. ACQUISITION OF HOTEL PROPERTIES

The Company did not acquire any properties during the three or six months ended June 30, 2021.

On February 14, 2020, the Company purchased the remaining 20% interest in the Atlanta JV from our joint venture partner (see detailed description of the Atlanta JV in Note 4) for $7,300 as allowed by the purchase option included in the original joint venture agreements. The $7,300 was funded from the Company’s credit facility, and the Company became the primary obligator on the $34,080 New Term Loan (as defined in Note 4) as part of the transaction. As the Atlanta JV was previously accounted for under the equity method and the acquisition was considered the acquisition of assets, the liabilities assumed as part of the transaction were recorded at fair value while the assets purchased in the transaction were recorded based on a pro-rata fair value allocation of the total available basis, which included the fair value of liabilities assumed, the cash purchase price paid, the balance of the investment in the unconsolidated joint venture at the time of the acquisition, and the acquisition costs incurred. The purchase was recognized as follows:

Cash purchase price	$	7,300
Investment in unconsolidated joint venture		3,844
Acquisition costs		122
Total investment in net assets	$	11,266
Cash	$	125
Working capital		(462)
Land		14,728
Buildings, improvements, and vehicle		37,020
Furniture and equipment		2,432
Debt assumed at acquisition		(34,080)
Land option liability (1)		(8,497)
Total allocation to net assets	$	11,266

(1)The purchase agreement includes a provision which permits the seller to purchase the surface parking lot north of the hotel exercisable for approximately seven years at less than market rates.

Included in the consolidated statements of operations for the three and six months ended June 30, 2020 are total revenues of $547 and $1,360, respectively, and total operating losses of $574 and $861, respectively, related to the results of operations for Atlanta Aloft hotel since the date of its acquisition.

All purchase price allocations were determined using Level 3 fair value inputs.

NOTE 4. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

On August 1, 2016, the Company entered into a joint venture, the Atlanta JV, with Three Wall Capital LLC and certain of its affiliates (“TWC”) to acquire an Aloft hotel in downtown Atlanta, Georgia. The Atlanta Aloft acquisition had a total purchase price of $43,550 and closed on August 22, 2016. Prior to the purchase of the remaining interest in the Atlanta JV on February 14, 2020 (see Note 3), the Company accounted for the Atlanta JV under the equity method. Condor owned 80% of the Atlanta JV with TWC owning the remaining 20%. The Atlanta JV was comprised of two companies: Spring Street Hotel Property II LLC, of which the operating partnership indirectly owned an 80% equity interest, and Spring Street Hotel OpCo II LLC, of which our TRS indirectly owned an 80% equity interest. TWC owned the remaining 20% equity interest in these two companies.

The purchase was partially funded with a $33,750 term loan secured by the property. On August 9, 2019, the operating partnership and the owner and lessee of the Aloft Atlanta hotel in the Atlanta JV (Spring Street Hotel Property LLC and Spring Street Hotel OpCo LLC, respectively), as Borrowers, closed on a $34,080 term loan pursuant to a term loan agreement with KeyBank National Association and the other lenders party thereto, as Lenders, and KeyBank National Association, as Agent for the Lenders (the “New Term Loan”). The proceeds of the New Term Loan were used to repay the original term loan, which was terminated following the repayment. The

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New Term Loan was included in full on the balance sheet of the Atlanta JV prior to the acquisition of the remaining interest by the Company in 2020.

The New Term Loan matured upon the earlier to occur of (a) consummation of the merger under the Merger Agreement (see Note 1) and (b) May 8, 2020. The New Term Loan was refinanced in May 2020 with the credit facility. The New Term Loan bore interest, at the Borrower’s option, at either LIBOR plus 2.25% or a base rate plus 1.25%. The New Term Loan required monthly interest payments and principal is due on the maturity date. The Borrowers could, at any time, voluntarily prepay the New Term Loan in whole or in part without premium or penalty (other than customary LIBOR breakage costs). The New Term Loan was secured by a first priority lien and security interest on the Aloft Atlanta hotel and the tangible and intangible personal property used in connection with such hotel, including inventory, equipment, fixtures, accounts and general intangibles. The New Term Loan was guaranteed by the Company and certain of its subsidiaries.

The Atlanta JV agreement also included buy-sell rights for both members (generally after three years of hotel ownership for Condor and after five years for TWC) and Condor had a purchase option for TWC’s Atlanta JV ownership interest exercisable between the third and fifth anniversary of the hotel closing.

Under the Atlanta JV agreement, the Atlanta JV was managed by TWC in accordance with business plans and budgets approved by both partners. Major decisions as detailed in the agreement also required joint approval. Condor could remove TWC as manager of the Atlanta JV and appoint a new manager only upon the occurrence of certain events. The Atlanta Aloft hotel was managed by Boast Hotel Management Company LLC (“Boast”), an affiliate of TWC. The Atlanta JV paid to Boast total management fees of $61 during the first quarter of 2020. The management of the Atlanta Aloft hotel was moved to Aimbridge Hospitality on March 1, 2020 following the acquisition of the remaining interest in the Atlanta JV by Condor.

Net cash flow from the Atlanta JV was distributed each quarter first with a 10% annual preferred return on capital contributions to Condor, second with a 10% annual preferred return on capital contributions to TWC, and third with any remainder distributed to the partners based on their pro-rata equity ownership. Profits were allocated in the same proportion as net cash flow. Losses were allocated based on pro-rata equity ownership. Cash distributions totaling $480 were received from the Atlanta JV in the first quarter of 2020 prior to its acquisition by Condor.

The table below provides the components of net earnings, including the Company’s share of the Atlanta JV, for the first quarter of 2020 prior to its acquisition by the Company.

		For the period of January 1 to February 14,
	2020
Revenue
Room rentals and other hotel services	$	1,522
Operating Expenses
Hotel and property operations		960
Depreciation and amortization		181
Total operating expenses		1,141
Operating income		381
Interest expense		(281)
Net earnings	$	100
Condor allocated earnings	$	80
TWC allocated earnings		20
Net earnings	$	100

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NOTE 5. DISPOSITIONS OF HOTEL PROPERTIES

As of June 30, 2021 and December 31, 2020, the Company had no hotels classified as held for sale.

During the three and six months ended June 30, 2021 and 2020, the Company sold no hotels.

NOTE 6. LONG-TERM DEBT

Long-term debt consisted of the following loans payable at June 30, 2021 and December 31, 2020:

Lender		Balance at June 30, 2021	Interest rate at June 30, 2021	Maturity	Amortization provision	Properties encumbered at June 30, 2021	Balance at December 31, 2020
Fixed rate debt
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18	$	8,356	4.54%	08/2024	25 years	1	$	8,454
OSK X, LLC (1)		13,199	8.33%	12/2023 (5)	25 years	1		13,199
OSK X, LLC (1)		765	8.33%	12/2023 (5)	7 years	-		880
Paycheck Protection Program (7)		-	1.00%	05/2022	(7)	-		2,299
Total fixed rate debt		22,320						24,832
Variable rate debt
Wells Fargo		25,149	2.48% (2)	11/2022 (6)	30 years	3		25,386
KeyBank credit facility (3)		121,729	4.25% (4)	1/2023	Interest only	10		118,114
Total variable rate debt		146,878				15		143,500
Total long-term debt	$	169,198					$	168,332
Less: Deferred financing costs		(1,403)						(1,806)
Total long-term debt, net of deferred financing costs	$	167,795					$	166,526

(1) Both loans are collateralized by Aloft Leawood. These loans were formerly held by Great Western Bank prior to being purchased by OSK X, LLC on December 24, 2020. The current status of these loans and the current interest rate is discussed with Financial Covenants below.

(2) Variable rate of 30-day LIBOR plus 2.39%, effectively fixed at 4.44% after giving effect to interest rate swap (see Note 8).

(3) Total available borrowing capacity is $130,000 of which $4,000 is reserved for the payment of interest under the facility. The ability to borrow under the credit facility is limited to payment of interest and fees under the credit facility and funding any shortfalls to an approved budget. The commitment fee on unused facility is 0.20% when the usage is over 50% of the total commitment and 0.25% when the usage under 50% of the commitment. Total unused availability under this credit facility was $8,271 at June 30, 2021, of which $1,129 remains reserved for the payment of interest.

(4) Borrowings under the facility accrue interest, at the Company’s option, at either LIBOR (with a floor of 0.50%) plus a spread of 3.75% or a base rate plus 2.75%, with an increase to the interest rate spreads of 0.25% to occur on October 2, 2021.

(5) Term was extended for an additional two years on December 2, 2020.

(6) Two one year extension options subject to the satisfaction of certain conditions.

(7) The PPP loans are made up of three separate loans received in April 2020. Monthly payments totaling $121 were scheduled to begin October 2021 if the loan or a portion of it was not forgiven. The entire amount of the loans was used for payroll, utilities, and interest, and was forgiven by the Small Business Association (“SBA”) during the second quarter of 2021.

Aggregate annual principal payments on debt for the remainder of 2021 and thereafter are as follows:

	Total
Remainder of 2021	$	435
2022		25,336
2023		135,587
2024		7,840
Total	$	169,198

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Financial Covenants

We are required to satisfy various financial covenants within our debt agreements, including the following financial covenants within our credit facility with KeyBank:

Borrowing Base Debt Service Coverage Ratio: The ratio of adjusted net operating income from borrowing base properties to debt service for the credit facility (assuming a 30 year amortization) must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending September 30, 2021 and December 31, 2021, (b) 1.25 to 1 as of the end of the fiscal quarters ending March 31, 2022 and June 30, 2022 and (c) 1.50 to 1 as of the end of the fiscal quarter ending September 30, 2022 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2022 when the calculation is based on the most recently ended four fiscal quarters.

Fixed Charge Coverage Ratio: The ratio of adjusted consolidated EBITDA to consolidated fixed charges must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending September 30, 2021 and December 31, 2021, (b) 1.25 to 1 as of the end of the fiscal quarters ending March 31, 2022 and June 30, 2022 and (c) 1.50 to 1 as of the end of the fiscal quarter ending September 30, 2022 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2022 when the calculation is based on the most recently ended four fiscal quarters.

Borrowing Base Leverage Ratio: The ratio of indebtedness outstanding under the credit facility to borrowing base asset value (based on updated as-stabilized appraisals) cannot exceed 65%. The covenant is first tested on March 31, 2022.

Minimum Liquidity: Liquidity must be greater than or equal to $3,000. In addition, the ninth amendment to the credit facility provided that if liquidity is below $6,000, (a) the agent may engage a financial advisor to advise it with respect to the Company and the credit facility, (b) a $2,000 interest reserve must be maintained, (c) certain reporting must be completed on a weekly basis and (d) advances under the credit facility can only be made and applied pursuant to a cash flow waterfall.

Pursuant to the terms of the ninth amendment to the credit facility, an event of default occurred when the convertible notes issued in 2020 (see Note 7) were not converted to common stock or paid in full by July 1, 2021. The tenth amendment to the credit facility (see Note 16) waived this event of default and amended the provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see discussion of Rights Offering in Note 7), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

We are also required to satisfy a debt yield financial covenant within our loan agreement relating to the three properties financed by Wells Fargo Bank. The loan agreement provides that if the Company fails to satisfy a debt yield (adjusted net cash flow / outstanding principal amount of the loan) of 10% at the end of any fiscal quarter, then a cash trap occurs. During a cash trap, the revenue generated from the hotels is directed to an account controlled by the lender and used to pay certain hotel expenses and debt service costs and fund certain reserves. Any excess funds are held by the lender as additional collateral. Failure to satisfy the debt yield and the occurrence of a cash trap do not constitute a default under the loan agreement.

In connection with the first amendment to the loan agreement entered into in May 2020, measurement of the debt yield was suspended until the measurement date occurring on March 31, 2021. The Company did not satisfy the debt yield as of March 31, 2021 or June 30, 2021; however, Wells Fargo has advised us by letter that it will not require implementation of the cash trap. This advice is terminable by Wells Fargo at any time. Any cash trap will expire when the debt yield is equal to or greater than 10.5%.

We are also required to satisfy various financial covenants within our loan agreement with OSK X, LLC relating to the Leawood, Kansas Aloft, including the following:

Property-Specific Pre-Distribution Debt Service Coverage Ratio. The ratio of adjusted net operating income for the Leawood, Kansas Aloft (before distributions) to debt service for the loans must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending March 31, 2021 and June 30, 2021 and (b) 1.35 to 1 as of the end of the fiscal quarter ending September 30, 2021 and each fiscal quarter

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thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2021 when the calculation is based on the most recently ended four fiscal quarters.

Property-Specific Post-Distribution Debt Service Coverage Ratio. The ratio of adjusted net operating income for the Leawood, Kansas Aloft (after distributions) to debt service for the loans must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending March 31, 2021 and June 30, 2021 and (b) 1.35 to 1 as of the end of the fiscal quarter ending September 30, 2021 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2021 when the calculation is based on the most recently ended four fiscal quarters.

Consolidated Debt Service Coverage Ratio. The ratio of consolidated adjusted net operating income for the Company to consolidated debt service must be equal to or greater than 1.05 to 1.

Certain of the terms used in the foregoing descriptions of the financial covenants within our credit facility and loan agreement have the meanings given to them in the credit facility and loan agreement, and certain of the financial covenants are subject to pro forma adjustments for acquisitions and sales of hotel properties and for specific capital events.

As a result of the actual and anticipated unprecedented negative impact of the COVID-19 virus on the hotel industry generally, the Company has received waivers of compliance with financial covenants from various lenders (including Great Western Bank with respect to the Leawood, Kansas Aloft) for the first three quarters of 2020. The Company and certain of its other lenders have also modified various financial covenants by suspending measurements, providing for lower covenants and/or using annualized results (including Great Western Bank with respect to the Leawood, Kansas Aloft).

On December 24, 2020, the Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft), with a June 30, 2021 balance of $13,964, were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners. The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021 and December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). The Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic.

The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions,

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including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6,000 of liquidity.

As indicated above, the Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

As of June 30, 2021, other than with respect to our financial covenants with OSK X, LLC (as discussed above), we are not in default of any of our loans.

NOTE 7. CONVERTIBLE DEBT AT FAIR VALUE

As part of an Exchange Agreement entered into on March 16, 2016 with Real Estate Strategies, L.P. (“RES”, which also includes affiliated entities), the Company issued to RES a Convertible Promissory Note (the “2016 Note”), bearing interest at 6.25% per annum, in the principal amount of $1,012. The 2016 Note is convertible directly into 97,269 shares of common stock at any time at the option of RES or automatically when the 6.25% Series E Cumulative Convertible Preferred Stock (the “Series E Preferred Stock”) is required to be converted or is redeemed in whole (see Note 10). The 2016 Note is not convertible to the extent that a conversion would cause RES, together with its affiliates, to beneficially own more than 49% of the voting stock of the Company at the time of the conversion. Any conversion reduces the principal amount of the 2016 Note proportionally. Pursuant to the terms of the 2016 Note, interest payments are suspended and accumulate whenever dividends on the Series E Preferred Stock are unpaid and accumulate. At June 30, 2021, there was $116 accumulated and unpaid interest on the 2016 Note.

On November 19, 2020, the Company entered into separate Convertible Promissory Notes and Loan Agreements (the “2020 Notes”) in favor of (a) SREP III Flight—Investco 2, L.P. (“SREP”), an affiliate of StepStone Group LP, for $7,220, and (b) Efanur S.A. (“Efanur”), an affiliate of IRSA Inversiones y Representaciones Sociedad Anónima, for $2,780. Pursuant to the 2020 Notes, the Company borrowed $10,000 from SREP and Efanur and used the proceeds to repay loans outstanding under the credit facility. Each of the 2020 Notes mature upon the earliest to occur of (a) the closing of a Rights Offering (as defined below) or a Non-Rights Offering Conversion (as defined below) in an amount equal to the outstanding principal balance of the respective Note, (b) the acceleration of the respective Note on or after the occurrence of an Event of Default (as defined in the respective Note) and (c) January 2, 2023. Pursuant to the terms of the ninth amendment to the credit facility, an event of default occurred when the convertible notes issued in 2020 were not converted to common stock or paid in full by July 1, 2021. The tenth amendment to the credit facility (see Note 16) waived this event of default and amended the provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see discussion of Rights Offering below), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

Each of the 2020 Notes accrues interest at 10.00% per annum (exclusive of any portion of the principal that is used in a Rights Offering and, in the case of the Note in favor of SREP, any backstop commitment), provides for the interest rate to increase to 20% upon an Event of Default or if any amounts under the applicable Note are outstanding after May 31, 2021, provides for the capitalization of interest, and provides for the payment of all accrued and unpaid interest and principal on the maturity date. Each of the Notes also provides, subject to a Make Whole Fee (as defined in the respective Note) payable to SREP and Efanur, as applicable, for the interest rate to increase to 25% upon a determination by the disinterested members of the board of directors of the Company (a) not to proceed with, or to terminate, a Rights Offering, (b) to prohibit a Non-Rights Offering Conversion or (c) not to seek shareholder approval of the transactions contemplated by the Notes, including the issuance of shares of common stock of the Company and the conversion price (“Shareholder Approval”), because the failure to make any such determination would reasonably be expected to constitute a breach of the directors’ duties under Maryland law (a “Board Decision”). Based on these provisions, the interest rate on the 2020 Notes was increased to 20% on May 31, 2021 and to 25% on June 2, 2021. At June 30, 2021, there was $738 accumulated and unpaid interest on the 2020 Notes.

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Subject to receipt of Shareholder Approval or a Board Decision, SREP and Efanur may elect to convert the principal due under the applicable Note into common stock of the Company in connection with any future rights offering commenced by the Company for 4,000,000 shares of common stock of the Company at a price of $2.50 per share (a “Rights Offering”). Pursuant to the Note in favor of SREP, the Company has committed to offer to SREP the option to purchase any shares of common stock of the Company underlying any unexercised rights in any such Rights Offering.

The Company and SREP entered into a backstop commitment agreement related to the Rights Offering on December 7, 2020. Pursuant to the backstop commitment agreement, SREP agreed to backstop the Rights Offering, if commenced on certain conditions, on a standby basis to facilitate the transaction, by the Company selling to SREP pursuant to an exemption from the registration requirements of Section 5 of the Securities Act provided under Section 4(a)(2) thereof and/or Regulation D thereunder and SREP purchasing an aggregate number of shares of common stock equal to (x) $10.0 million, minus (y) the aggregate proceeds of the Rights Offering divided by $2.50, at a price per share equal to $2.50, subject to the terms and conditions of the backstop commitment agreement. The obligations of SREP under the backstop commitment agreement are subject to certain conditions, which, among other conditions, include: (1) that the Rights Offering must occur on or prior to May 31, 2021, and (2) that the Company exempts SREP from the ownership limitation set forth in the Company’s articles of incorporation. The Rights Offering did not occur on or prior to May 31, 2021 and as of June 30, 2021 SREP (1) has not advised the Company if it will waive this condition to its obligation and (2) has not exercised its right to terminate the backstop commitment agreement.

If any amounts remain unpaid on the applicable Note after May 31, 2021 (or, if earlier, the termination, rescission or rejection of the Rights Offering), subject to receipt of Shareholder Approval or a Board Decision, SREP and Efanur may elect to convert the principal due under the applicable Note into 4,000,000 shares of common stock of the Company at a price of $2.50 per share (a “Non-Rights Offering Conversion”).

The issuance of shares in a Rights Offering or Non-Rights Offering Conversion received requisite Shareholder Approval at a special meeting of shareholders on January 18, 2021. On June 1, 2021, SREP an Efanur submitted notice of their election to convert their applicable Notes pursuant to a Non-Rights Offering Conversion, subject to the rights of the Company under the Notes to prohibit the Non-Rights Offering Conversion. On June 2, 2021, pursuant to the rights of the Company under the Notes, the disinterested members of the board of directors of the Company determined pursuant to a Board Decision to prohibit the Non-Rights Offering Conversion.

In the event of a Board Decision in order to accept an unsolicited cash offer for newly issued common stock or securities convertible into common stock of the Company, then upon consummation of any such sale, the Company is required to pay SREP and Efanur a Make Whole Fee as set forth in their respective Note.

The Company has made an irrevocable election to record these notes in their entirety at fair value utilizing the fair value option available under U.S. GAAP in order to more accurately reflect the economic value of the notes. As such, gains and losses on the Note are included in net gain (loss) on derivatives and convertible debt within net earnings (loss) each reporting period. Gains (losses) related to these notes were recognized totaling ($10,347) and $8 during the three months ended June 30, 2021 and 2020, respectively, and ($8,494) and $48 for the six months ended June 30, 2021 and 2020, respectively. The fair value of the 2016 Note is determined using a trinomial lattice-based model, which is a generally accepted computational model typically used for pricing options. The fair value of the 2020 Note is based on the value of the note upon conversion due to the high probability associated with that event. Interest expense related to these notes is recorded separately from other changes in its fair value within interest expense each period.

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The following table represents the difference between the fair value and the unpaid principal balance of the Notes as of June 30, 2021:

	Fair value as of June 30, 2021		Unpaid principal balance as of June 30, 2021		Fair value carrying amount under unpaid principal
2016 Notes	$	1,089	$	1,012	$	(77)
2020 Notes		24,280		10,000		(14,280)
Total	$	25,369	$	11,012	$	(14,357)

NOTE 8. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Our determination of fair value measurements is based on the assumptions that market participants would use in pricing the asset or liability. At June 30, 2021, the Company’s convertible debt (see Note 7) and certain derivative instruments were the only financial instruments measured in the financial statements at fair value on a recurring basis. Nonrecurring fair value measurements were utilized in the determination of the fair value of acquired property in 2020 (see Note 3), and in the valuation of the stock-based compensation grants (see Note 12). No impairments or recoveries of impairment were recognized during the three or six months ended June 30, 2021 or 2020.

Derivative Instruments

Currently, the Company uses derivatives, such as interest rate swaps and caps, to manage its interest rate risk. The fair value of interest rate positions is determined using the standard market methodology of netting discounted expected future cash receipts and payments. Variable interest rates used in the calculation of projected receipts and payments on the positions are based on expectations of future interest rates derived from observable market interest rate curves and volatilities. Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the agreements. The Company believes it minimizes this credit risk by transacting with major creditworthy financial institutions. These interest rate positions at June 30, 2021 and December 31, 2020 are as follows:

Associated debt	Type	Terms	Effective Date	Maturity Date		Notional amount at June 30, 2021		Notional amount at December 31, 2020
Wells Fargo	Swap	Swaps 30-day LIBOR for fixed rate of 2.053%	11/2017	11/2022	$	25,149 (1)	$	25,386 (1)

(1)Notional amount amortizes consistently with the principal amortization of the associated loan.

Additionally, included in the Series E Preferred Stock issued on March 1, 2017 is a redemption right that allows the Company to redeem up to a total of 490,250 shares of Series E Preferred Stock for specific percentages of its liquidation preference (see Note 10). This option requires bifurcation and as such is treated as a separate derivative instrument.

All derivatives recognized by the Company are reported as derivative assets or liabilities on the consolidated balance sheets and are adjusted to their fair value at each reporting date. All gains and losses on derivative instruments are included in net gain (loss) on derivatives and convertible debt and with the exception of realized gains and losses related to the interest rate instruments, which are included in interest expense on the consolidated statements of operations. Net gains (losses) of $113 and $11 for the three months ended June 30, 2021 and 2020, respectively, and $248 and ($788) for the six months ended June 30, 2021 and 2020, respectively, were recognized related to derivative instruments.

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Recurring Fair Value Measurements

The following tables provide the fair value of the Company’s financial assets and (liabilities) carried at fair value and measured on a recurring basis:

	Fair value at
	June 30, 2021		Level 1		Level 2		Level 3
Interest rate derivatives	$	(632)	$	-	$	(632)	$	-
Series E Preferred embedded redemption option		-		-		-		-
Convertible debt		(25,369)		-		-		(25,369)
Total	$	(26,001)	$	-	$	(632)	$	(25,369)

	Fair value at
	December 31, 2020		Level 1		Level 2		Level 3
Interest rate derivatives	$	(880)	$	-	$	(880)	$	-
Series E Preferred embedded redemption option		-		-		-		-
Convertible debt		(16,875)		-		-		(16,875)
Total	$	(17,755)	$	-	$	(880)	$	(16,875)

There were no transfers between levels during the three or six months ended June 30, 2021 or 2020.

The following table presents a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related gains and losses recorded in the consolidated statements of operations during the periods:

	Three months ended June 30,
	2021		2020
	Convertible debt		Convertible debt
Fair value, beginning of period	$	(15,022)	$	(1,040)
Net gains (losses) recognized in earnings		(10,347)		8
Fair value, end of period	$	(25,369)	$	(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	(10,347)	$	8

	Six months ended June 30,
	2021		2020
	Convertible debt		Series E Preferred embedded redemption option		Convertible debt		Total
Fair value, beginning of period	$	(16,875)	$	22	$	(1,080)	$	(1,058)
Net gains (losses) recognized in earnings		(8,494)		(22)		48		26
Fair value, end of period	$	(25,369)	$	-	$	(1,032)	$	(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	(8,494)	$	(22)	$	48	$	26

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Fair Value of Long-Term Debt

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of debt obligations with similar credit risks. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. Both the carrying value and estimated fair value of the Company’s long-term debt are presented net of deferred financing costs in the table below:

	Carrying value as of				Estimated fair value as of
	June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020
Total	$	167,795	$	166,526	$	168,912	$	167,349

NOTE 9. COMMON STOCK

The Company’s common stock is duly authorized, fully paid, and non-assessable.

The Company is prohibited from making dividends on either common or preferred stock under the credit facility; provided, that the Company can (a) make an initial dividend that does not exceed 50% of the funds available for distribution for the prior three fiscal quarters and (b) make subsequent dividends that do not (in the aggregate) exceed 50% of the funds available for distribution for any period of four consecutive fiscal quarters.  Any such dividend is subject to satisfaction of certain conditions, including (a) that no default has occurred and is continuing (or would occur as a result of the dividend), (b) that new appraisals or updates to existing appraisals are obtained with respect to the borrowing base properties, (c) that any preferred dividend must be included in the calculation of fixed charges as if paid in the preceding fiscal quarter, (d) that the Company must maintain at least $10.0 million of liquidity (after the dividend), (e) that the Company must maintain a 1.50 to 1 fixed charge coverage ratio for each of the prior three fiscal quarters and (f) that the Company must maintain a borrowing base leverage ratio of 60% or less.

As discussed below, subsequent to quarter end, on July 29, 2021, the Company redeemed the Series E Preferred Stock with common stock by issuing 2,686,571 shares of common stock (see Note 10).

NOTE 10. PREFERRED STOCK

The Company has 925,000 shares outstanding of Series E Preferred Stock.

The Series E Preferred Stock ranks senior to the Company’s common stock and any other preferred stock issuances and receives preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly of the $10.00 face value per share. If the Company fails to pay a dividend then during the period that dividends are not paid, additional dividends accrue at a rate of 9.50% per annum on the unpaid amount. Dividends on the Series E Preferred Stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, whether or not such dividends are declared, and whether or not such dividends are prohibited by agreement. Under the terms of the credit facility, no cash dividends can currently be paid to common or preferred shareholders. As of June 30, 2021, there are $1,091 of accrued but unpaid dividends related to the Series E Preferred Stock not yet declared by the Board of Directors.

Each share of Series E Preferred Stock is convertible, at the option of the holder, at any time on or after February 28, 2019, into a number of shares of common stock determined by dividing the conversion price of $13.845 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. Upon liquidation, each share of Series E Preferred Stock is entitled to $10.00 per share and accrued and unpaid dividends. The conversion price is subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends. Following a specific equity offering or offerings, from time to time a number of shares of Series E Preferred Stock automatically converts into common stock if the common stock trades at 120% of the conversion price for 60 trading days, and the number of shares converted will be determined by certain trading volumes measures.

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The Company has rights to redeem up to 490,250 shares of the Series E Preferred Stock at prices from 110% to 130% of its liquidation value. The holders have put rights commencing March 16, 2021 to put the Series E Preferred Stock to the Company at 130% of its liquidation preference, which the Company can satisfy with cash or common stock. If the Company uses common stock to satisfy the put rights, the value per share of the common stock used to satisfy the put rights will be the greater of (a) the weighted market sale price average per shares of the common stock for the 30 trading days (or such longer trading period as required to have at least 5 trading days on which trades occurred) preceding the put right notice from or a holder of Series E Preferred Stock, or (b) $4.875 per share of common stock.

The Series E Preferred Stock votes as a class on matters generally affecting the Series E Preferred Stock, and as long as 434,750 shares of Series E Preferred Stock (47% of the originally issued shares of Series E Preferred Stock) remain outstanding, then 75% approval of the Series E Preferred Stock will be required to approve merger, consolidation, liquidation or winding up of Condor, related party transactions exceeding $120, payment of dividends on common stock except from funds from operations or to maintain REIT status, the grant of exemptions from Condor’s charter limitation on ownership of 9.9% of any class or series of its securities (exclusive of persons currently holding exemptions), issuance of preferred stock or commitment or agreement to do any of the foregoing.

The Series E Preferred Stock was determined to have a fair value of $9,900 on the date of issuance as measured using a trinomial lattice-based model.  From this value, the embedded redemption option (see Note 8), which was determined to be an asset with a fair value on the date of issuance of $150 using the same model, was bifurcated and will be accounted for at fair value at each period end.  These are considered Level 3 fair value measurements.

The Company received put right notices from all holders of Series E Preferred Stock of the Company effective June 29, 2021 pursuant to which the holders of the Series E Preferred Stock gave notice of their election to exercise their right to require the Company to redeem all 925,000 shares of the Company’s outstanding Series E Preferred Stock held by them at a value per share equal to 130% of the $10 liquidation preference of the Series E Preferred Stock, plus accrued and unpaid dividends, on July 29, 2021. Subsequent to quarter end, on July 29, 2021, the Company redeemed the Series E Preferred Stock with common stock by issuing 2,686,571 shares of common stock to the holders of the Series E Preferred Shares pursuant to the terms of the shares, based on the weighted market sale price average of the common stock for the 30 trading days through June 29, 2021 of $4.9021 per share. The Common Stock was issued in reliance on the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended.

NOTE 11. NONCONTROLLING INTEREST IN THE OPERATING PARTNERSHIP

Noncontrolling interest in the operating partnership represents the limited partners’ proportionate share of the equity in the operating partnership. Earnings and loss are allocated to noncontrolling interest in accordance with the weighted average percentage ownership of the operating partnership during the period.

Our ownership interest in the operating partnership was 99.9% as of June 30, 2021 and December 31, 2020, with 219,183 common units owned by limited partners were outstanding at both dates. The total redemption value for the common units was $26 and $17 at June 30, 2021 and December 31, 2020, respectively.

Each limited partner of the operating partnership may, subject to certain limitations, require that the operating partnership redeem all or a portion of his or her common units at any time after a specified period following the date the units were acquired, by delivering a redemption notice to the operating partnership. When a limited partner tenders common units for redemption, the Company can, at its sole discretion, choose to purchase the units for either (1) a number of shares of Company common stock at a rate of one share of common stock for each 52 common units redeemed or (2) cash in an amount equal to the market value of the number of shares of Company common stock the limited partner would have received if the Company chose to purchase the units for common stock.

No common units were redeemed during the three or six months ended June 30, 2021 or 2020.

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NOTE 12. STOCK-BASED COMPENSATION

The Company currently has in place the Condor 2016 Stock Plan, which was approved by the Company’s shareholders at the annual shareholders meeting on June 15, 2016. The 2016 Stock Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, deferred stock units, and other forms of stock-based compensation. The maximum number of shares of the Company’s common stock that may be issued under the 2016 Stock Plan is 761,538 following an amendment to the plan to increase the number of available shares by 300,000 that was approved by shareholders on May 17, 2018 at the annual meeting of shareholders. As of June 30, 2021, there were 467,745 common shares available for issuance under the 2016 Stock Plan.

Equity-based compensation is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the requisite service period. Stock-based compensation awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition. Compensation expense will be adjusted when a change in the assessment of achievement of the specific performance condition level is determined to be probable. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of our stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve performance thresholds. We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the point of measurement. Compensation cost is recognized as additional paid-in capital for awards of the Company’s common stock. The Company has elected to account for forfeitures of stock-based compensation as they occur.

Service Condition Share Awards

From time to time, the Company awards restricted shares of common stock to employees, officers, and members of the Board of Directors under the 2016 Stock Plan. These shares generally vest ratably over five years for employees and officers and three years for members of the Board of Directors based on continued service or employment. Dividends paid on these restricted shares during the vesting period are not forfeited in the event that the shares fail to vest. The following table presents a summary of the service condition unvested share activity for the six months ended June 31, 2021 and 2020:

	For the Six months ended June 30,
	2021			2020
	Shares	Weighted-average grant date fair value		Shares	Weighted-average grant date fair value
Unvested at December 31	28,928	$	9.58	46,682	$	10.16
Granted	2,308	$	3.70	2,432	$	7.58
Vested	(11,425)	$	9.65	(10,028)	$	10.18
Unvested at June 30	19,811	$	8.86	39,086	$	9.99

The fair value of the service condition unvested share awards was determined based on the closing price of the Company’s common stock on the grant date.

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Market Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain market share prices of common stock are attained. Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan. The executive officer will earn and be issued 36,692 common shares each time stock market price targets of $11.00 to $18.00 (in one dollar increments) per common share are first achieved prior to March 31, 2022 based on the weighted-average common stock price for 60 consecutive trading days. Additionally, the shares vest to the extent of the value received per share of common stock in connection with a change in control, with the payout in such case to be prorated for the portion of the value above a stock market price target but below the next stock market price target. The $11.00 tranche of this award vested on November 22, 2019.

The compensation cost related to awards that are contingent upon achieving a market based criteria is measured at the fair value of the award on the date of grant using the Monte Carlo simulation, including consideration of the market criteria, and amortized on a straight line basis over the derived performance period which is also estimated using this model. The Monte Carlo simulation method is a generally accepted statistical method used to generate a defined number of stock price paths in order to develop a reasonable estimate of the range of future expected stock prices of the Company and its peer group and minimize standard error. The total grant date fair value of this market based share award, including additional value assessed at the time of subsequent amendment of the award, was $1,380.

Performance Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain operating results of the Company are obtained. Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan. For each of the Company’s fiscal years 2017 through 2021, if the Company achieves between 85% and 101% of budgeted Funds from Operations (“FFO”) as approved by the Board of Directors, the executive shall earn and be issued between 11,741 and 19,569 shares of common stock, determined on a straight-line basis based on the percentage of budgeted FFO achieved. In addition, for any fiscal year in which the Company achieves in excess of 101% of budgeted FFO, an additional 391 shares of common stock will be earned for each two percent actual FFO exceeds 101% of budgeted FFO, up to a total of 3,910 additional shares of common stock per year.

The fair value of the performance based share awards is based on the closing price of the Company’s common stock on the grant date, discounted for estimated common stock dividends to be declared prior to the shares being issued. The grant date occurs on an annual basis when budgeted FFO is approved by the Board of Directors. During the three and six months ended June 30, 2021 and 2020, there were no shares issued related to performance-based share awards.

Director Fully Vested Share Compensation

Independent directors serving as members of the Investment Committee of the Board of Directors receive their monthly Investment Committee fees in the form of shares of the Company’s common stock. Certain independent directors also elect to receive a portion of their director fees in the form of shares of the Company’s common stock.

A total of 6,810 and 6,904 shares during the three months ended June 30, 2021 and 2020, respectively, and 12,083 and 8,102 shares during the six months ended June 30, 2021 and 2020, respectively, were issued to independent directors under the 2016 Stock Plan with respect to these fees.

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Stock-Based Compensation Expense

The expense recognized in the consolidated financial statements for stock-based compensation related to employees and directors for the three months ended June 30, 2021 and 2020 was $112 and $82, respectively, and for the six months ended June 30, 2021 and 2020 was $211 and $166, respectively, all of which is included in general and administrative expense. Total unrecognized compensation cost related to all awards at June 30, 2021 was $267, which is expected to be recognized over a weighted-average remaining service period of 1.1 years.

NOTE 13. INCOME TAXES

During the three months ended June 30, 2021 and 2020, income tax benefit (expense) totaling ($27) and $61, respectively, was recognized primarily related to income (loss) earned by the TRS and certain state and local taxes at CHLP. During the six months ended June 30, 2021 and 2020, income tax benefit (expense) totaled ($54) and $367, respectively. Management believes the combined federal and state income tax rate for the TRS will be approximately 24%.

After consideration of limitations related to a change in control as defined under Code Section 382, the TRS’s net operating loss carryforward at June 30, 2021 as determined for federal income tax purposes was $10,812. The availability of the loss carryforwards will expire from 2027 through 2034, with an indefinite carryforward for losses arising after December 31, 2017. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers projected reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result of this analysis, the Company believes that a full valuation allowance against the net deferred tax asset position was necessary at June 30, 2021, which requires a valuation allowance of $1,893 as of that date.

NOTE 14. EARNINGS PER SHARE

The two-class method is utilized to compute earnings per common share (“EPS”) as our unvested restricted stock awards with non-forfeitable dividends are considered participating securities. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. Our unvested restricted stock is not obligated to absorb Company losses and accordingly is not allocated losses. The following is a reconciliation of basic and diluted EPS:

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Numerator: Basic
Net loss attributable to common shareholders	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Less: Allocation to participating securities		-		-		-		-
Net loss attributable to common shareholders, net of amount allocated to participating securities	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Numerator: Diluted
Net loss attributable to common shareholders, net of amount allocated to participating securities	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Denominator
Weighted average number of common shares - Basic and Diluted		12,003,739		11,961,783		11,998,075		11,956,598
Earnings (Loss) per Share
Basic Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)
Diluted Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)

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The following table summarizes the weighted average number of potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted EPS as they are antidilutive:

	Three months ended June 30,		Six months ended June 30,
	2021	2020	2021	2020
Unvested restricted stock	22,582	38,991	24,611	42,130
Series E Preferred Stock	668,111	668,111	668,111	668,111
2016 Convertible debt	97,269	97,269	97,269	97,269
2020 Convertible debt	4,000,000	-	4,000,000	-
Operating partnership common units (1)	4,215	4,215	4,215	4,215
Total potentially dilutive securities excluded from the denominator	4,792,177	808,586	4,794,206	811,725

(1)Common units of the operating partnership have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS.

NOTE 15. COMMITMENTS AND CONTINGENCIES

Management Agreements

Our TRS engages eligible independent contractors as property managers for each of our hotels in accordance with the requirements for qualification as a REIT. The hotel management agreements provide that the management companies have control of all operational aspects of the hotels, including employee-related matters. The management companies must generally maintain each hotel under their management in good repair and condition and perform routine maintenance, repairs, and minor alterations. Additionally, the management companies must operate the hotels in accordance with the national franchise agreements that cover the hotels, which includes, as applicable, using franchisor sales and reservation systems and abiding by the franchisors’ marketing standards. The management agreements generally require the TRS to fund debt service, working capital needs, and capital expenditures and to fund the management companies’ third-party operating expenses, except those expenses not related to the operation of the hotels. The TRS also is responsible for obtaining and maintaining certain insurance policies with respect to the hotels.

Each of the management companies employed by the TRS at June 30, 2021 receives a base monthly management fee of 3.0% to 3.5% of hotel revenue, with incentives for performance, which increase such fee to a maximum of 5.0% of hotel revenue. Base management fees totaled $424 and $144, respectively, for the three months ended June 30, 2021 and 2020, and $713 and $541, respectively, for the six months ended June 30, 2021 and 2021, all of which was included as hotel and property operations expense. There were $70 and $0 of incentive management fees recognized for the three months ended June 30, 2021 and 2020, respectively, and $98 and $77 recognized for the six months ended June 30, 2021 and 2020, respectively.

The management agreements generally have initial terms of one year to three years and renew for additional terms of one year unless either party to the agreement gives the other party written notice of termination at least 90 days before the end of a term. The Company may terminate a management agreement, subject to cure rights, if certain performance metrics tied to both individual hotel and total managed portfolio performance are not met. The Company may also terminate a management agreement with respect to a hotel at any time without reason, either with or without payment of a termination fee (depending on the agreement). The management agreements terminate with respect to a hotel upon sale of the hotel, subject to certain notice requirements.

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Franchise Agreements

As of June 30, 2021, all of our properties operate under franchise licenses from national hotel companies. Under our franchise agreements, we are required to pay franchise fees generally between 3.3% and 5.5% of room revenue, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenue. The franchise agreements typically have 10 to 25 year terms although certain agreements may be terminated by either party on certain anniversary dates specified in the agreements. Further, each agreement provides for early termination fees in the event the agreement is terminated before the stated term. Franchise fee expense totaled $1,059 and $338 for the three months ended June 30, 2021 and 2020, respectively, and $1,793 and $1,320 for the six months ended June 30, 2021 and 2020, respectively, all of which was included as hotel and property operations expense.

The franchisor of two of our hotels advised us in 2019 that both of the hotels have dropped below the required level for guest satisfaction surveys, and that if the hotels do not achieve compliance, it reserves the right to elect to terminate the relevant franchise agreement. While the Company believes that it has corrected all deficiencies, the franchisor has informed us that they are not reassessing the accountability status of any properties until at the earliest July 2021.

Leases

The Company has no land lease agreements in place related to properties owned at June 30, 2021.

The Company currently leases only one office space on a month-to-month basis. Office lease expense totaled $4 and $5 in the three months ended June 30, 2021 and 2020, respectively, and $9 and $13 in the six months ended June 30, 2021 and 2020, respectively, and is included in general and administrative expense. The Company also has in place operating leases for miscellaneous equipment at its hotel properties.

The maturity of the lease liabilities for the Company’s operating leases is as follows:

Maturity of lease liabilities
Year ended December 31,
Remainder of 2021	$	10
2022		20
2023		4
2024		4
2025		4
Thereafter		22
Total lease payments	$	64
Less: Imputed interest		(10)
Present value of lease liabilities	$	54

Litigation

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties. We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us. The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

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NOTE 16. SUBSEQUENT EVENTS

As previously discussed (see Note 10), on July 29, 2021, the Company redeemed the Series E Preferred Shares with 2,686,571 shares of common stock.

On August 12, 2021, the Company entered into the tenth amendment to its credit facility with KeyBank which, among other things:

Provides that the Company may borrow up to $500 under the credit facility without lender approval, which is exclusive of the ability of the Company to borrow additional amounts with lender approval.

Increased the interest rate for the credit facility to LIBOR plus 4.00% or a base rate plus 3.00% as of August 31, 2021. The LIBOR rate is subject to a floor of 0.50%.

Waives the event of default that occurred as a result of the convertible notes issued in 2020 (see Note 7) not being converted to common stock or paid in full by July 1, 2021.

Amends the foregoing event of default provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see Note 7), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

Provides that the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6,000 of liquidity.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020 and our unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q.

References to “we,” “our,” “us,” and the “Company” refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

Forward-Looking Statements

Certain information both included and incorporated by reference in this Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on assumptions that management has made in light of experience in the business in which we operate, as well as management’s perceptions of historical trends, current conditions, expected future developments, and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control), and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions.

Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies, and expectations are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative thereof or other variations thereon or comparable terminology. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of capital, risks associated with debt financing, interest rates, competition, supply and demand for hotel rooms in our current and proposed market areas, policies and guidelines applicable to real estate investment trusts, risks related to uncertainty and disruption in global economic markets as a result of COVID-19 (commonly referred to as the coronavirus), and other risks and uncertainties described herein, and in our filings with the Securities and Exchange Commission (“SEC”) from time to time. These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein. We caution readers not to place undue reliance on any forward-looking statements included in this report which speak only as of the date of this report.

Background

Condor Hospitality Trust, Inc. (“Condor” or the “Company”), a Maryland corporation, is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high quality select service, limited service, extended stay, and compact full service hotels. As of June 30, 2021, the Company owned 15 hotels, representing 1,908 rooms, in eight states.

We conduct our business through a traditional umbrella partnership REIT, or UPREIT, in which our hotel properties are owned by our operating partnership, Condor Hospitality Limited Partnership and its subsidiaries (the “operating partnership”), for which we serve as general partner. As of June 30, 2021, we owned approximately 99.9% of the common operating units (“common units”) in the operating partnership. In the future, the operating partnership may issue limited partnership interests to third parties from time to time in connection with our acquisition of hotel properties or the raising of capital.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, the operating partnership and its subsidiaries

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lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements.

On June 21, 2021, the Company announced that its board of directors is evaluating strategic alternatives to enhance shareholder value. The Company has engaged the firm of Hodges Ward Elliott to market for sale the 15 hotels portfolio owned by the Company. Although the Company expects significant interest in the marketing initiative, there can be no assurance that a transaction will occur at the conclusion of the process. The Company may engage additional brokers and financial advisors as it deems appropriate. There can be no assurances that the exploration of strategic alternatives will result in any transaction or, should the board of directors approve a transaction, no assurances of the value to the Company’s shareholders thereof. Condor Hospitality does not intend to discuss or disclose developments with respect to the process unless and until otherwise determined that further disclosure is appropriate or required by regulation or law. No formalized timetable has been established for the completion of the strategic review.

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature. Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.

COVID-19 Pandemic

The novel coronavirus (COVID-19) has reduced travel significantly and adversely affected the hospitality industry in general. The actual and threatened spread of COVID-19 globally or in the regions in which we operate, or future widespread outbreak of infectious or contagious disease, can continue to reduce national and international travel in general. The extent to which the hospitality industry, and thus our business, will be affected by COVID-19 will largely depend on future developments which we cannot accurately predict, and the impact on customer travel, including the duration of the outbreak, the continued spread and treatment of COVID-19, the impact of new virus variants, the pace of vaccination, and new information and developments that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. To the extent that travel activity in the U.S. is and will be materially and adversely affected by COVID-19, business and financial results of the hospitality industry, and thus our business and financial results, could be impacted.

Since late March 2020, similar to the conditions affecting the hospitality industry as a whole, we have experienced occupancy declines at many of our properties which have and will continue to require us to adjust our business operations and will have had and will continue to have an impact on our operating income and may potentially impact future compliance with our debt covenants.

As a result of the above factors, the Company is and has taken actions at the corporate and hotel level, including, but not limited to:

Obtaining significant modifications of its debt agreements, including extension of the credit facility to January 2, 2023 with an increase in credit availability and modifications and waivers of debt covenants, from the majority of the Company’s lenders.

Asset management working with hotel management companies to reduce all hotels operating expenses including, but not limited to, closing off multiple floors, staffing reductions and furloughs, utility consumption reductions, purchasing reductions and eliminations, contract services reductions and eliminations, food services closures, exercise facilities closures, and certain reduction and elimination of certain marketing expenditures.

Seeking potential alternative revenue sources through health care providers, government agencies, universities and airlines.

Obtaining Paycheck Protection Program (“PPP”) loans authorized under the recently congressionally approved Coronavirus Aid, Relief, and Economic Security (“CARES”) Act totaling $2.3 million. The entire amount of the loans was used for payroll, utilities, and interest, and therefore the loans were forgiven by the Small Business Administration (“SBA”) during the second quarter of 2021.

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Pursuing corporate cost reductions, including staffing reductions, resulting in an approximately 30% decrease in general and administrative expenses compared to historical operations.

Capital improvement projects have been suspended except for emergency circumstances and will remain on hold for immediate future, with the potential for the suspension to continue through 2021.

The Company determined that it was advisable and the best business practice to cause a temporary closure of two of its hotels, the Solomons Hilton Garden Inn on April 20, 2020 and the Leawood Aloft on April 9, 2020. These hotels were both reopened on July 1, 2020 and no other hotel closures have been deemed necessary.

We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have, a material negative impact on the hospitality industry, and thus on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. While we cannot assure you that the assumptions used to estimate our future liquidity will be correct, the Company believes it can generate the liquidity required to operate through the crisis through a combination of the continued operation of our portfolio with significant cost reduction measures in place, existing availability under our credit facility, and, if necessary, additional debt and equity financings. However, there can be no assurance that the Company will be able to obtain such financing on acceptable terms or at all.

The Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft) were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners, on December 24, 2020 (see Note 6). The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021, or December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic. The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC

Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6.0 million of liquidity.

Based on a the current status of the OSK X, LLC loans and the guidance in U.S. GAAP that requires that, in making a determination for the one year period following the date of the financial statements, the Company cannot consider future fundraising activities or the likelihood of obtaining covenant waivers or amendments, all of which are outside of the Company's sole control, the Company has determined that there is substantial doubt about the Company’s ability to continue as a going concern for the one year period after the date the financial statements are issued. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Portfolio Activity

The Company’s investment strategy is to assemble a portfolio of premium-branded, select-service hotels in the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on MSAs ranked between 20 to 60. Since restarting its portfolio transformation in 2015, the Company has acquired 14 high-quality select-service hotels

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representing 1,808 rooms in its target markets for a total purchase price of $276.6 million. Additionally, during this time, the Company has sold 55 legacy assets for a total gross sales price of $169.9 million. Additionally, on February 14, 2020, the Company purchased our joint venture partner’s 20% interest in the joint venture owning the Atlanta Aloft property (the “Atlanta JV”) for $7.3 million. The purchase price was funded with cash drawn from the credit facility.

Hotel Property Portfolio and Activity

Hotel Property Portfolio

The following table sets forth certain information with respect to the hotels owned by us as of June 30, 2021:

Hotel Name	City	State	Rooms	Acquisition Date	Purchase Price ‎(in thousands)
Hilton Garden Inn	Dowell/Solomons	MD	100	05/25/2012	$11,500
SpringHill Suites	San Antonio	TX	116	10/01/2015	$17,500
Courtyard by Marriott	Jacksonville	FL	120	10/02/2015	$14,000
Hotel Indigo	College Park	GA	142	10/02/2015	$11,000
Aloft (1)	Atlanta	GA	254	08/22/2016	$43,550
Aloft	Leawood	KS	156	12/14/2016	$22,500
Home2 Suites	Lexington	KY	103	03/24/2017	$16,500
Home2 Suites	Round Rock	TX	91	03/24/2017	$16,750
Home2 Suites	Tallahassee	FL	132	03/24/2017	$21,500
Home2 Suites	Southaven	MS	105	04/14/2017	$19,000
Hampton Inn & Suites	Lake Mary	FL	130	06/19/2017	$19,250
Fairfield Inn & Suites	El Paso	TX	124	08/31/2017	$16,400
Residence Inn	Austin	TX	120	08/31/2017	$22,400
TownePlace Suites	Austin	TX	122	01/18/2018	$19,750
Home2 Suites	Summerville	SC	93	02/21/2018	$16,325
	Totals		1,908		$287,925

(1)Represents the purchase statistics from the purchase of this hotel by the originally 80% owned unconsolidated Atlanta JV. The Company purchased the remaining 20% interest in the Atlanta JV from our joint venture partner on February 14, 2020 for $7.3 million.

All of our properties are encumbered by either our credit facility or by mortgage debt at June 30, 2021.

Acquisitions

On February 14, 2020, the Company purchased the remaining 20% interest in the Atlanta JV from our joint venture partner for $7.3 million as allowed by the purchase option included in the original joint venture agreements. The $7.3 million was funded from the Company’s credit facility, and the Company became the primary obligator on the $34.08 million New Term Loan (defined below) as part of the transaction.

The New Term Loan matured upon the earlier to occur of (a) consummation of the merger under the Merger Agreement (see Note 1) and (b) May 8, 2020. The New Term Loan was refinanced in May 2020 through use of the credit facility. The New Term Loan bore interest, at the Borrower’s option, at either LIBOR plus 2.25% or a base rate plus 1.25% and required monthly interest payments and principal is due on the maturity date. The Borrowers could, at any time, voluntarily prepay the New Term Loan in whole or in part without premium or penalty (other than customary LIBOR breakage costs). The New Term Loan was secured by a first priority lien and security interest on the Aloft Atlanta hotel and the tangible and intangible personal property used in connection with such hotel, including inventory, equipment, fixtures, accounts and general intangibles and was guaranteed by the Company and certain of its subsidiaries.

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As the Atlanta JV was previously accounted for under the equity method and the acquisition was considered the acquisition of assets, the liabilities assumed as part of the transaction were recorded at fair value while the assets purchased in the transaction were recorded based on a pro-rata fair value allocation of the total available basis, which included the fair value of liabilities assumed, the cash purchase price paid, the balance of the investment in unconsolidated joint venture at the time of the acquisition, and the acquisition costs incurred. The purchase was recognized as follows (in thousands):

Cash purchase price	$	7,300
Investment in unconsolidated joint venture		3,844
Acquisition costs		122
Total investment in net assets	$	11,266
Cash	$	125
Working capital		(462)
Land		14,728
Buildings, improvements, and vehicle		37,020
Furniture and equipment		2,432
Debt assumed at acquisition		(34,080)
Land option liability (1)		(8,497)
Total allocation to net assets	$	11,266

(1)The purchase agreement includes a provision which permits the seller to purchase the surface parking lot north of the hotel exercisable for approximately seven years at less than market rates.

Dispositions

There were no dispositions during the three or six months ended June 30, 2021.

Operating Performance Metrics

The following tables present our same-store occupancy, average daily rate (“ADR”), and RevPAR for all our hotels owned on June 30, 2021. The statistics for the Company’s two hotels that were temporarily closed due to the effects of COVID-19, the Solomons Hilton Garden Inn, which was closed on April 2, 2020 and reopened on July 1, 2020, and the Leawood Aloft, which was closed on April 9, 2020 and reopened on July 1, 2020, include only the periods that the properties were operational. With the exception of these COVID-19 related closures, same-store occupancy, ADR, and RevPAR reflect the performance of hotels during the entire period, regardless of our ownership during the period presented, including 100% of the operating results of the property owned by the Atlanta JV in which the Company had an 80% interest prior to the purchase of the remaining 20% interest on February 14, 2020. Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us or audited or reviewed by our independent auditors.

	Three months ended June 30,
	2021					2020
	Occupancy	ADR		RevPAR		Occupancy	ADR		RevPAR
Total Same-Store Portfolio	72.43%	$	106.62	$	77.22	33.89%	$	87.05	$	29.50

	Six months ended June 30,
	2021					2020
	Occupancy	ADR		RevPAR		Occupancy	ADR		RevPAR
Total Same-Store Portfolio	65.98%	$	98.91	$	65.26	49.94%	$	112.49	$	56.18

Total same-store RevPAR increased by 161.8% in the second quarter of 2021, driven by both an increase in occupancy of 113.7% and an increase in ADR of 22.5% caused by the decreased impact of the COVID-19 pandemic during the second quarter of 2021. The largest increase in RevPAR during this period were at the Leawood Aloft, the Solomons Hilton Garden Inn, the San Antonio SpringHill Suites, and the El Paso Fairfield Inn & Suites.

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Total same-store RevPAR increased by 16.2% during the first half of 2021, driven by an increase in occupancy of 32.1% which was partially offset by a decline in ADR of 12.1%. The Company’s largest increases in RevPAR during this period were at the Southaven Home2 Suites, the Lexington Home2 Suites, and the Austin TownePlace Suites. Three properties, the Leawood Aloft, the Solomons Hilton Garden Inn, and the Atlanta Hotel Indigo, experienced declines in RevPar during the first half of 2021.

Results of Operations

Comparison of the three months ended June 30, 2021 to the three months ended June 30, 2020 (in thousands)

	Three months ended June 30,
	2021		2020		Change
Revenue	$	14,108	$	4,811	$	9,297
Hotel and property operations expense		(9,232)		(5,089)		(4,143)
Depreciation and amortization expense		(2,648)		(2,777)		129
General and administrative expense		(1,151)		(1,014)		(137)
Strategic alternatives, net		(383)		(80)		(303)
Net loss on disposition of assets		(10)		(1)		(9)
Equity in loss of joint venture		-		-		-
Net gain (loss) on derivatives and convertible debt		(10,234)		19		(10,253)
Other income (expense), net		2,357		(58)		2,415
Interest expense		(2,484)		(2,070)		(414)
Income tax (expense) benefit		(27)		61		(88)
Net loss	$	(9,704)	$	(6,198)	$	(3,506)

Revenue

Revenue increased by a total of $9,297, or 193.2%, as a result of the increase in RevPAR resulting from the decreased impact of the COVID-19 pandemic as discussed above.

Operating Expenses and Interest Expense

Hotel and property operations expense increased by $4,143 as a result of the increased occupancy discussed above.

Depreciation and amortization expense and general and administrative expense remained relatively consistent between the second quarters of 2020 and 2021, decreasing by $129 and increasing by $137 between the periods, respectively.

Interest expense increased in total by $414 largely as a result of the issuance of the $10,000 face value 2020 Convertible Notes in November of 2020.

Strategic Alternatives, net

Expenses related to the exploration of strategic alternatives increased during the second quarter of 2021 due to the Company’s exploration of strategic alternatives as previously discussed.

Net Gain / Loss on Derivatives and Convertible Debt

The change in the gain/loss on derivatives and convertible debt was driven by differences in the value of the Company’s 2020 Convertible Notes, which were issued during the fourth quarter of 2020. These liability-classified notes saw an increase in their fair value of $10,360 during the second quarter of 2021.

Other Income / Expense, net

The increase in other income was a result of a gain on the forgiveness of PPP loans totaling $2,299 during the second quarter of 2021.

Income Tax Benefit (Expense)

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Income tax expense in both periods was driven primarily by income (loss) earned by the TRS as well as miscellaneous state taxes owed by the Company.  Management believes the combined federal and state income tax rate for the TRS will be approximately 24%. Beginning with the second quarter of 2020, after an assessment of the realizability of deferred tax assets based on projected reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies, the Company recognized a full valuation allowance against net deferred tax assets, leading to minimal tax expense or benefit being recognized through the second quarter of 2021.

Comparison of the six months ended June 30, 2021 to the six months ended June 30, 2020 (in thousands)

	Six months ended June 30,
	2021		2020		Change
Revenue	$	23,752	$	18,038	$	5,714
Hotel and property operations expense		(16,911)		(14,904)		(2,007)
Depreciation and amortization expense		(5,291)		(5,487)		196
General and administrative expense		(2,411)		(2,207)		(204)
Strategic alternatives, net		(423)		(224)		(199)
Net loss on disposition of assets		(13)		(10)		(3)
Equity in earnings of joint venture		-		80		(80)
Net loss on derivatives and convertible debt		(8,246)		(740)		(7,506)
Other income (expense), net		2,399		(86)		2,485
Interest expense		(4,693)		(4,050)		(643)
Income tax (expense) benefit		(54)		367		(421)
Net loss	$	(11,891)	$	(9,223)	$	(2,668)

Revenue

Revenue increased by a total of $5,714, or 31.7%, as a result of the increase in RevPAR resulting from the decreased impact of the COVID-19 pandemic as discussed above as well as increased revenue resulting from the acquisition of the remaining interest in the Atlanta JV in the first quarter of 2020. 

Operating Expenses and Interest Expense

Hotel and property operations expense increased by $2,007 as a result of the increased occupancy discussed above.

Depreciation and amortization expense and general and administrative expense remained relatively consistent between the first halves of 2020 and 2021, decreasing by $129 and increasing by $204 between the periods, respectively.

Interest expense increased in total by $643 largely as a result of the issuance of the $10,000 face value 2020 Convertible Notes in November of 2020.

Strategic Alternatives, net

Expenses related to the exploration of strategic alternatives increased during the second quarter of 2021 due to the Company’s exploration of strategic alternatives as previously discussed.

Net Gain / Loss on Derivatives and Convertible Debt

The change in the gain/loss on derivatives and convertible debt was driven by differences in the value of the Company’s 2020 Convertible Notes, which were issued during the fourth quarter of 2020. These liability-classified notes saw an increase in their fair value of $8,520 during the first half of 2021.

Other Income / Expense, net

The increase in other income was a result of a gain on the forgiveness of PPP loans totaling $2,299 during the second quarter of 2021.

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Income Tax Benefit (Expense)

Income tax expense in both periods was driven primarily by income (loss) earned by the TRS as well as miscellaneous state taxes owed by the Company.  Management believes the combined federal and state income tax rate for the TRS will be approximately 24%. Beginning with the second quarter of 2020, after an assessment of the realizability of deferred tax assets based on projected reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies, the Company recognized a full valuation allowance against net deferred tax assets, leading to minimal tax expense or benefit being recognized through the second quarter of 2021.

Non-GAAP Financial Measures

Non-GAAP financial measures are measures of our historical financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). We report Funds from Operations (“FFO”), Adjusted FFO (“AFFO”), Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), EBITDA for real estate (“EBITDAre”), Adjusted EBITDAre, and Hotel EBITDA as non-GAAP measures that we believe are useful to investors as key measures of our operating results and which management uses to facilitate a periodic evaluation of our operating results relative to those of our peers. Our non-GAAP measures should not be considered as an alternative to U.S. GAAP net earnings as an indication of financial performance or to U.S. GAAP cash flows from operating activities as a measure of liquidity. Additionally, these measures are not indicative of funds available to fund cash needs or our ability to make cash distributions as they have not been adjusted to consider cash requirements for capital expenditures, property acquisitions, debt service obligations, or other commitments.

Funds from Operations (“FFO”) & Adjusted FFO (“AFFO”)

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net earnings or loss computed in accordance with GAAP, excluding gains or losses from sales of real estate assets, impairment, and the depreciation and amortization of real estate assets. FFO is calculated both for the Company in total and as FFO attributable to common shares and common units, which is FFO reduced by preferred stock dividends. AFFO is FFO attributable to common shares and common units adjusted to exclude items we do not believe are representative of the results from our core operations, including non-cash gains or losses on derivatives and convertible debt, stock-based compensation expense, amortization of certain fees, losses on debt extinguishment, and in-kind dividends above stated rates, and cash charges for acquisition and terminated transaction and strategic alternatives costs, net of related receipts. All REITs do not calculate FFO and AFFO in the same manner; therefore, our calculation may not be the same as the calculation of FFO and AFFO for similar REITs.

We consider FFO to be a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a meaningful indication of our performance. We believe that AFFO provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net earnings and FFO, is beneficial to an investor’s understanding of our operating performance.

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The following table reconciles net earnings (loss) to FFO and AFFO for the three and six months ended June 30, 2021 and 2020 (in thousands). All amounts presented include only our portion of the results of our unconsolidated Atlanta JV prior to our acquisition of the remaining 20% interest from our joint venture partner on February 14, 2020.

	Three months ended June 30,				Six months ended June 30,
Reconciliation of Net loss to FFO and AFFO	2021		2020		2021		2020
Net loss	$	(9,704)	$	(6,198)	$	(11,891)	$	(9,223)
Depreciation and amortization expense		2,648		2,777		5,291		5,487
Depreciation and amortization expense from JV		-		-		-		145
Net loss on disposition of assets		10		1		13		10
FFO		(7,046)		(3,420)		(6,587)		(3,581)
Dividends undeclared on preferred stock		(166)		(144)		(329)		(289)
FFO attributable to common shares and common units		(7,212)		(3,564)		(6,916)		(3,870)
Net (gain) loss on derivatives and convertible debt		10,234		(19)		8,246		740
Strategic alternatives expense, net		383		80		423		224
Stock-based compensation expense		112		82		211		166
Amortization of deferred financing fees		226		270		453		545
Amortization of deferred financing fees from JV		-		-		-		93
AFFO attributable to common shares and common units	$	3,743	$	(3,151)	$	2,417	$	(2,102)

Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), EBITDAre, Adjusted EBITDAre, and Hotel EBITDA

We calculate EBITDA, EBITDAre, and Adjusted EBITDAre by adding back to net earnings or loss certain non-operating expenses and certain non-cash charges which are based on historical cost accounting that we believe may be of limited significance in evaluating current performance. We believe these adjustments can help eliminate the accounting effects of depreciation and amortization and financing decisions and facilitate comparisons of core operating profitability between periods. In calculating EBITDA, we add back to net earnings or loss interest expense, loss on debt extinguishment, income tax expense, and depreciation and amortization expense. NAREIT adopted EBITDAre in order to promote an industry-wide measure of REIT operating performance. We adjust EBITDA by adding back net gain/loss on disposition of assets and impairment charges to calculate EBITDAre. To calculate Adjusted EBITDAre, we adjust EBITDAre to add back acquisition and terminated transactions expense and strategic alternatives expense, net of related receipts, which are cash charges. We also add back stock-based compensation expense and gain/loss on derivatives and convertible debt, which are non-cash charges. EBITDA, EBITDAre, and Adjusted EBITDAre, as presented, may not be comparable to similarly titled measures of other companies.

We believe EBITDA, EBITDAre, and Adjusted EBITDAre to be useful additional measures of our operating performance, excluding the impact of our capital structure (primarily interest expense), our asset base (primarily depreciation and amortization expense), and other items we do not believe are representative of the results from our core operations.

The Company further excludes general and administrative expenses, other non-operating income or expense, and certain hotel and property operations expenses that are not allocated to individual properties in assessing hotel performance (primarily certain general liability and other insurance costs and office and banking fees) from Adjusted EBITDAre to calculate Hotel EBITDA. Hotel EBITDA, as presented, may not be comparable to similarly titled measures of other companies.

Hotel EBITDA is intended to isolate property level operational performance over which the Company’s hotel operators have direct control. We believe Hotel EBITDA is helpful to investors as it better communicates the comparability of our hotels’ operating results for all of the Company’s hotel properties and is used by management to measure the performance of the Company’s hotels and the effectiveness of the operators of the hotels.

The following table reconciles net earnings (loss) to EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA for the three and six months ended June 30, 2021 and 2020 (in thousands). All amounts presented include

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only our portion of the results of our unconsolidated Atlanta JV prior to our acquisition of the remaining 20% interest from our joint venture partner on February 14, 2020.

	Three months ended June 30,				Six months ended June 30,
Reconciliation of Net loss to EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA	2021		2020		2021		2020
Net loss	$	(9,704)	$	(6,198)	$	(11,891)	$	(9,223)
Interest expense		2,484		2,070		4,693		4,050
Interest expense from JV		-		-		-		225
Income tax expense (benefit)		27		(61)		54		(367)
Depreciation and amortization expense		2,648		2,777		5,291		5,487
Depreciation and amortization expense from JV		-		-		-		145
EBITDA		(4,545)		(1,412)		(1,853)		317
Net loss on disposition of assets		10		1		13		10
EBITDAre		(4,535)		(1,411)		(1,840)		327
Net loss (gain) on derivatives and convertible debt		10,234		(19)		8,246		740
Stock-based compensation expense		112		82		211		166
Strategic alternatives expense, net		383		80		423		224
Adjusted EBITDAre		6,194		(1,268)		7,040		1,457
General and administrative expense, excluding stock compensation expense		1,039		932		2,200		2,041
Other (income) expense, net		(2,357)		58		(2,399)		86
Unallocated hotel and property operations expense		89		129		120		223
Hotel EBITDA	$	4,965	$	(149)	$	6,961	$	3,807
Revenue	$	14,108	$	4,811	$	23,752	$	18,038
JV revenue		-		-		-		1,218
Condor and JV revenue	$	14,108	$	4,811	$	23,752	$	19,256
Hotel EBITDA as a percentage of revenue		35.2%		-3.1%		29.3%		19.8%

Liquidity, Capital Resources, and Equity Transactions

Rights Offering

On December 7, 2020, the Company filed a registration statement with the SEC with respect to the Rights Offering. The registration statement has not become effective and the Company has not commenced the Rights Offering.

The Company and SREP entered into a backstop commitment agreement on December 7, 2020. Pursuant to the backstop commitment agreement, SREP agreed to backstop the Rights Offering, if commenced on certain conditions, on a standby basis to facilitate the transaction, by the Company selling to SREP pursuant to an exemption from the registration requirements of Section 5 of the Securities Act provided under Section 4(a)(2) thereof and/or Regulation D thereunder and SREP purchasing an aggregate number of shares of common stock equal to (x) $10.0 million, minus (y) the aggregate proceeds of the Rights Offering divided by $2.50, at a price per share equal to $2.50, subject to the terms and conditions of the backstop commitment agreement. The obligations of SREP under the backstop commitment agreement are subject to certain conditions, which, among other conditions, include: (1) that the Rights Offering must occur on or prior to May 31, 2021, and (2) that the Company exempts SREP from the ownership limitation set forth in the Company’s articles of incorporation. The Rights Offering did not occur on or prior to May 31, 2021 and as of June 30, 2021 SREP (1) has not advised the Company if it will waive this condition to its obligation and (2) has not exercised its right to terminate the backstop commitment agreement.

Significant Equity Transactions

The Company received put right notices from all holders of Series E Preferred Stock of the Company effective June 29, 2021 pursuant to which the holders of the Series E Preferred Stock gave notice of their election to exercise their right to require the Company to redeem all 925,000 shares of the Company’s outstanding Series E Preferred Stock held by them at a value per share equal to 130% of the $10 liquidation preference of the Series E Preferred Stock, plus accrued and unpaid dividends, on July 29, 2021. Subsequent to quarter end, on July 29, 2021, the Company redeemed the Series E Preferred Stock with common stock by issuing 2,686,571 shares of common stock to the

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holders of the Series E Preferred Shares pursuant to the terms of the shares, based on the weighted market sale price average of the common stock for the 30 trading days through June 29, 2021 of $4.9021 per share. The Common Stock was issued in reliance on the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended.

Liquidity Requirements

As previously discussed, due to the COVID-19 pandemic, the hospitality industry has experienced significant drops in demand. We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have, a material negative impact on the hospitality industry, and thus on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. While we cannot assure you that the assumptions used to estimate our future liquidity will be correct, the Company believes it can generate the liquidity required to operate through the crisis through a combination of the continued operation of our portfolio with significant cost reduction measures in place, existing availability under our credit facility, and, if necessary, additional debt and equity financings. However, there can be no assurance that the Company will be able to obtain such financing on acceptable terms or at all.

At June 30, 2021, the Company had $6.4 million of cash and cash equivalents, $5.3 million of restricted cash on hand, and $8.3 million of unused availability under its credit facility, of which $1.1 million is available for use only to pay interest on the credit facility. Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. We also presently expect to invest approximately $0.5 million to $1.5 million in capital expenditures related to hotel properties we currently own through September 30, 2022. As of June 30, 2021, contractual principal payments on our debt outstanding, including normal amortization, totaled $1.1 million through September 30, 2022.

Pursuant to the terms of the ninth amendment to the credit facility, an event of default occurred when the convertible notes issued in 2020 (see Note 7) were not converted to common stock or paid in full by July 1, 2021. The tenth amendment to the credit facility (see Note 16) waived this event of default and amended the provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see discussion of Rights Offering above), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually. In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws. We have a general dividend policy of paying out approximately 100% of annual REIT taxable income. The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Additionally, as discussed in depth in Financial Covenants below, on December 24, 2020, the Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft), with a June 30, 2021 balance of $14.0 million, were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners. The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021 and December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). The Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

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Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic. The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6.0 million of liquidity. As indicated above, the Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

Based on a the current status of the OSK X, LLC loans and the guidance in U.S. GAAP that requires that, in making a determination for the one year period following the date of the financial statements, the Company cannot consider future fundraising activities or the likelihood of obtaining covenant waivers or amendments, all of which are outside of the Company's sole control, the Company has determined that there is substantial doubt about the Company’s ability to continue as a going concern for the one year period after the date the financial statements are issued. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Sources and Uses of Cash

Cash provided by (used in) Operating Activities.  Cash related to operations was $1.7 million and ($1.9) million for the six months ended June 30, 2021 and 2020, respectively.  The increase in operating cash flows was the result of an increase in net income, after adjustment for non-cash items, of $5.1 million due to the decreased impact of the COVID-19 epidemic during the first two quarters of 2021 versus the first two quarters of 2020. Changes in operating assets and liabilities between the periods were individually insignificant.

Cash used in Investing Activities.  Cash used by investing activities was $0.5 million and $7.0 million for the six months ended June 30, 2021 and 2020, respectively.  The decrease in these outflows in 2021 was driven by the $7.2 million in cash, net, spent in the first quarter of 2020 to acquire the remaining interest in the Atlanta JV, partially offset by dividends received from the Atlanta JV before its purchase of $0.5 million during the period.

Cash provided by Financing Activities.  Cash provided by financing activities was $3.1 million and $10.9 million for the six months ended June 30, 2021 and 2020, respectively.  This decrease was primarily the result of cash drawn under the credit facility to acquire the remaining interest in the Atlanta JV during the first quarter of 2020.

Outstanding Indebtedness

Significant Debt Transactionso

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During the three months ended June 30, 2021, the Company’s three PPP loans, with balances totaling $2.3 million, were forgiven by the SBA.

Subsequent to the end of the second quarter, on August 12, 2021, the Company entered into the tenth amendment to its credit facility with KeyBank which, among other things:

Provides that the Company may borrow up to $500,000 under the credit facility without lender approval, which is exclusive of the ability of the Company to borrow additional amounts with lender approval.

Increased the interest rate for the credit facility to LIBOR plus 4.00% or a base rate plus 3.00% as of August 31, 2021. The LIBOR rate is subject to a floor of 0.50%.

Waives the event of default that occurred as a result of the convertible notes issued in 2020 (see Note 7) not being converted to common stock or paid in full by July 1, 2021.

Amends the foregoing event of default provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see Note 7), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

Provides that the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6.0 million of liquidity.

Outstanding Debt

At June 30, 2021, we had long-term debt of $169.2 million, with a weighted average term to maturity of 1.6 years and a weighted average interest rate of 4.34%. Of this total, at June 30, 2021, $22.3 million was fixed rate debt with a weighted average term to maturity of 2.0 years and a weighted average interest rate of 6.91% and $146.9 million was variable rate debt with a weighted average term to maturity of 1.5 years and a weighted average interest rate of 3.95%. At December 31, 2020, excluding the Company’s two issuances of outstanding convertible debt (the 2020 issuance of which is discussed in depth in 2020 Convertible Promissory Notes below) we had long-term debt of $168.3 million with a weighted average term to maturity of 2.1 years and a weighted average interest rate of 3.79%. Of this total, at December 31, 2020, $24.8 million was fixed rate debt with a weighted average term to maturity of 2.3 years and a weighted average interest rate of 4.09% and $143.5 million was variable rate debt with a weighted average term to maturity of 2.0 years and a weighted average interest rate of 3.74%.

Aggregate annual principal payments on debt for the remainder of 2021 and thereafter are as follows (in thousands):

	Total
Remainder of 2021	$	435
2022		25,336
2023		135,587
2024		7,840
Total	$	169,198

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Financial Covenants

We are required to satisfy various financial covenants within our debt agreements, including the following financial covenants within our credit facility with KeyBank:

Borrowing Base Debt Service Coverage Ratio: The ratio of adjusted net operating income from borrowing base properties to debt service for the credit facility (assuming a 30 year amortization) must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending September 30, 2021 and December 31, 2021, (b) 1.25 to 1 as of the end of the fiscal quarters ending March 31, 2022 and June 30, 2022 and (c) 1.50 to 1 as of the end of the fiscal quarter ending September 30, 2022 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2022 when the calculation is based on the most recently ended four fiscal quarters.

Fixed Charge Coverage Ratio: The ratio of adjusted consolidated EBITDA to consolidated fixed charges must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending September 30, 2021 and December 31, 2021, (b) 1.25 to 1 as of the end of the fiscal quarters ending March 31, 2022 and June 30, 2022 and (c) 1.50 to 1 as of the end of the fiscal quarter ending September 30, 2022 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2022 when the calculation is based on the most recently ended four fiscal quarters.

Borrowing Base Leverage Ratio: The ratio of indebtedness outstanding under the credit facility to borrowing base asset value (based on updated as-stabilized appraisals) cannot exceed 65%. The covenant is first tested on March 31, 2022.

Minimum Liquidity: Liquidity must be greater than or equal to $3,000. In addition, the ninth amendment to the credit facility provided that if liquidity is below $6,000, (a) the agent may engage a financial advisor to advise it with respect to the Company and the credit facility, (b) a $2,000 interest reserve must be maintained, (c) certain reporting must be completed on a weekly basis and (d) advances under the credit facility can only be made and applied pursuant to a cash flow waterfall.

Pursuant to the terms of the ninth amendment to the credit facility, an event of default occurred when the convertible notes issued in 2020 (see Note 7) were not converted to common stock or paid in full by July 1, 2021. The tenth amendment to the credit facility (see Note 16) waived this event of default and amended the provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see discussion of Rights Offering above), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

We are also required to satisfy a debt yield financial covenant within our loan agreement relating to the three properties financed by Wells Fargo Bank. The loan agreement provides that if the Company fails to satisfy a debt yield (adjusted net cash flow / outstanding principal amount of the loan) of 10% at the end of any fiscal quarter, then a cash trap occurs. During a cash trap, the revenue generated from the hotels is directed to an account controlled by the lender and used to pay certain hotel expenses and debt service costs and fund certain reserves. Any excess funds are held by the lender as additional collateral. Failure to satisfy the debt yield and the occurrence of a cash trap do not constitute a default under the loan agreement.

In connection with the first amendment to the loan agreement entered into in May 2020, measurement of the debt yield was suspended until the measurement date occurring on March 31, 2021. The Company did not satisfy the debt yield as of March 31, 2021 or June 30, 2021; however, Wells Fargo has advised us by letter that it will not require implementation of the cash trap. This advice is terminable by Wells Fargo at any time. Any cash trap will expire when the debt yield is equal to or greater than 10.5%.

We are also required to satisfy various financial covenants within our loan agreement with OSK X, LLC relating to the Leawood, Kansas Aloft, including the following:

Property-Specific Pre-Distribution Debt Service Coverage Ratio. The ratio of adjusted net operating income for the Leawood, Kansas Aloft (before distributions) to debt service for the loans must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending March 31, 2021 and June 30, 2021 and (b) 1.35 to 1 as of the end of the fiscal quarter ending September 30, 2021 and each fiscal quarter

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thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2021 when the calculation is based on the most recently ended four fiscal quarters.

Property-Specific Post-Distribution Debt Service Coverage Ratio. The ratio of adjusted net operating income for the Leawood, Kansas Aloft (after distributions) to debt service for the loans must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending March 31, 2021 and June 30, 2021 and (b) 1.35 to 1 as of the end of the fiscal quarter ending September 30, 2021 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2021 when the calculation is based on the most recently ended four fiscal quarters.

Consolidated Debt Service Coverage Ratio. The ratio of consolidated adjusted net operating income for the Company to consolidated debt service must be equal to or greater than 1.05 to 1.

Certain of the terms used in the foregoing descriptions of the financial covenants within our credit facility and loan agreement have the meanings given to them in the credit facility and loan agreement, and certain of the financial covenants are subject to pro forma adjustments for acquisitions and sales of hotel properties and for specific capital events.

As a result of the actual and anticipated unprecedented negative impact of the COVID-19 virus on the hotel industry generally, the Company has received waivers of compliance with financial covenants from various lenders (including Great Western Bank with respect to the Leawood, Kansas Aloft) for the first three quarters of 2020. The Company and certain of its other lenders have also modified various financial covenants by suspending measurements, providing for lower covenants and/or using annualized results (including Great Western Bank with respect to the Leawood, Kansas Aloft).

On December 24, 2020, the Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft), with a June 30, 2021 balance of $13,964, were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners. The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021 and December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). The Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic.

The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions,

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including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6.0 million of liquidity. As indicated above, the Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

As of June 30, 2021, other than with respect to our financial covenants with OSK X, LLC (as discussed above), we are not in default of any our loans.

Contractual Obligations

Below is a summary of our contractual obligations as of June 30, 2021 and the effect such obligations are expected to have on our future liquidity and cash flows (in thousands):

			Payments due by period
Contractual obligations	Total		Remainder of 2021		2022-2023		2024-2025		2026 and After
Long-term debt including interest (1)	$	182,643	$	4,369	$	170,195	$	8,079	$	-
Equipment leases		64		10		24		8		22
Total contractual obligations	$	182,707	$	4,379	$	170,219	$	8,087	$	22

(1)Interest rate payments on our variable rate debt have been estimated using interest rates in effect at June 30, 2021.

We have various standing or renewable contracts with vendors. These contracts are all cancelable with immaterial or no cancellation penalties. Contract terms are generally one year or less. We also have management agreements in place for the management and operation of our hotel properties.

Off Balance Sheet Financing Transactions

We have not entered into any off balance sheet financing transactions.

Critical Accounting Policies

Our consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that effect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances.

Critical accounting policies are those that are both important to the presentation of our financial condition and results of operations and require management’s most difficult, complex, or subjective judgments.  All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that effect market-sensitive instruments. At June 30, 2021, our market risk arises primarily from interest rate risk relating to variable rate that fair value will fluctuate following changes in interest rates.

Interest Rate Sensitivity

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We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs by closely monitoring our variable rate debt and converting such debt to fixed rates when we deem such conversion advantageous. From time to time, we may enter into interest rate swap agreements or other interest rate hedging agreements. At June 30, 2021, we have an interest rate swap in place which effectively locks the variable interest rate on our Wells Fargo debt (June 30, 2021 balance of $25.1 million) at 4.44%. We do not intend to enter into derivative or interest rate transactions for speculative purposes.

The table below provides information about financial instruments that are sensitive to changes in interest rates. The table presents scheduled maturities, including the amortization of principal and related weighted-average interest rates for the debt maturing in each specified period (dollars in thousands) as of June 30, 2021. For the purposes of this presentation, the Wells Fargo debt is considered fixed rate debt as the variable interest rate is effectively locked with the previously discussed interest rate swap.

	2021			2022			2023			2024			2025			Total
Fixed rate debt	$	435		$	25,336		$	13,859		$	7,840		$	-		$	47,470
Average fixed interest rate		5.37	%		4.47	%		8.27	%		4.54	%		-	%		5.60	%
Variable rate debt	$	-		$	-		$	121,728		$	-		$	-		$	121,728
Average variable interest rate		-	%		-	%		4.25	%		-	%		-	%		4.25	%
Total debt	$	435		$	25,336		$	135,587		$	7,840		$	-		$	169,198
Total average interest rate		5.37	%		4.47	%		4.66	%		4.54	%		-	%		4.63	%

At June 30, 2021, approximately 28% of our outstanding debt is subject to fixed interest rates or effectively locked with an interest rate swap, while 72% of our debt is subject to floating rates. Assuming no increase in the level of our variable debt outstanding at June 30, 2021 and after giving effect to our interest rate swap, if interest rates increased by 1.0% our cash flow related to hotel properties would decrease by approximately $1.2 million per year.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation was performed under the supervision of management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 of the rules promulgated under the Securities and Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2021, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 was (a) accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosures and (b) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control Over Financial Reporting

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

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties. We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us. The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

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ITEM 1A.  RISK FACTORS

The Company’s Annual Report on Form 10-K for the year ended December 31, 2020 includes detailed discussions of the Company’s risk factors under the heading “Risk Factors.” Set forth below are certain changes from the risk factors previously disclosed in the Annual Report on Form 10-K, which the Company is including in this Quarterly Report on Form 10-Q.

On June 21, 2021, we announced that our Board is evaluating strategic alternatives to enhance shareholder value; this process may not result in a transaction or other action at all.

On June 21, 2021, our board announced that it is evaluating strategic alternatives and has engaged a firm to market for sale the 15 hotels portfolio owned by the Company. This strategic review process, including the announcement thereof, could expose us and our operations to risks and uncertainties, including the disruption to our business resulting in declines in our operating results, the incurrence of significant expenses associated with the retention of legal, financial and other advisors as a result of the review of strategic alternatives, the potential negative impact on our management companies’ ability to attract, retain and motivate hotel and key employees, and exposure to potential litigation in connection with this process and effecting any strategic alternative.

If a strategic alternative is identified, we may be affected by factors related to the feasibility and timing of consummating a transaction, including our ability to obtain required third-party consents and any adverse regulatory developments or determinations or adverse changes in, or interpretations of, the U.S. or foreign tax and other laws, rules or regulations that could materially impact, delay or prevent completion of any transaction or other action.

Speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of our Company could cause our stock price to fluctuate significantly. There can be no assurances that the exploration of strategic alternatives will result in any transaction or, should our board of directors approve a transaction, no assurances of the value to the Company’s shareholders thereof. The Company does not intend to discuss or disclose developments with respect to the process unless and until otherwise determined that further disclosure is appropriate or required by regulation or law. No formalized timetable has been established for the completion of the strategic review.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Because this Quarterly Report on Form 10-Q is being filed within four business days after the applicable triggering event, the information below is being disclosed under this Item 5 instead of under Item 1.01 (Entry into a Material Definitive Agreement) of Form 8-K.

Credit Facility Amendment

On August 12, 2021, the Company entered into a Tenth Amendment to Credit Agreement among the operating partnership, as borrower, the Company and the subsidiary guarantors party thereto, as guarantors, KeyBank National Association and the other lenders party thereto, as lenders, and KeyBank National Association, as administrative agent (the "Tenth Amendment"). The Tenth Amendment amends the Credit Agreement dated as of March 1, 2017,

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as amended by the First Amendment dated as of May 11, 2017, Second Amendment dated as of December 13, 2017, Third Amendment dated as of March 8, 2019, Fourth Amendment dated as of May 3, 2019, Fifth Amendment dated as of August 9, 2019, Sixth Amendment dated as of March 30, 2020, Seventh Amendment dated as of May 13, 2020, Eighth Amendment dated as of November 16, 2020 and Ninth Amendment dated as of November 18, 2020 (collectively, the “Credit Agreement”). The Credit Agreement is described in the Company’s Current Reports on Form 8-K dated March 1, 2017, May 11, 2017, December 13, 2017, March 5, 2019 and November 18, 2020, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019, March 31, 2020 and September 30, 2020 and Annual Report on Form 10-K for the year ended December 31, 2019, and is incorporated herein by reference.

On August 12, 2021, the Company entered into the Tenth Amendment to its credit facility with KeyBank which, among other things:

Provides that the Company may borrow up to $500,000 under the credit facility without lender approval, which is exclusive of the ability of the Company to borrow additional amounts with lender approval.

Increased the interest rate for the credit facility to LIBOR plus 4.00% or a base rate plus 3.00% as of August 31, 2021. The LIBOR rate is subject to a floor of 0.50%.

Waives the event of default that occurred as a result of the convertible notes issued in 2020 (see Note 7) not being converted to common stock or paid in full by July 1, 2021.

Amends the foregoing event of default provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see discussion of Rights Offering above), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

Provides that the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6.0 million of liquidity.

Some of the lenders in the Credit Agreement and /or their affiliates have other business relationships with the Company involving the provision of financial and bank-related services, including cash management and treasury services, and have participated in the Company's prior debt financings and sales of securities.

The foregoing summary of the Tenth Amendment does not purport to be complete and is qualified in its entirety by reference to the Tenth Amendment, a copy of which is attached as Exhibit 10.1 and is incorporated herein by reference.

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ITEM 6. EXHIBITS

10.1*	Tenth Amendment to Credit Agreement dated as of August 12, 2021 among Condor Hospitality Limited Partnership, as Borrower, the Company and the subsidiary guarantors party thereto, as Guarantors, KeyBank National Association and the other lenders party thereto, as Lenders, and KeyBank NationalAssociation, as Administrative Agent.
31.1*	Section 302 Certificate of Chief Executive Officer
31.2*	Section 302 Certificate of Chief Financial Officer
32.1*	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer
101.1*	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements.
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith

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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.

	Condor Hospitality Trust, Inc.
August 12, 2021
	/s/ J. William Blackham
	J. William Blackham
	Chief Executive Officer
	/s/ Jill Burger
	Jill Burger
	Chief Financial Officer and Chief Accounting Officer

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EX-10.1

TENTH AMENDMENT TO CREDIT AGREEMENT

THIS TENTHAMENDMENT TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS (this “Amendment”), dated as of August 12, 2021, by and among CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginialimited partnership (“Borrower”), the undersigned parties to this Amendment executing as “Guarantors” (hereinafter referred to individually as “Guarantor” and collectively as “Guarantors”), KEYBANK NATIONAL ASSOCIATION (“KeyBank”), THE HUNTINGTON NATIONAL BANK (“Huntington”), BMO HARRIS BANK N.A. (“BMO”; KeyBank, Huntington and BMO collectively, the “Lenders”), and KeyBank as Agent for itself and the other Lenders from time to time a party to the Credit Agreement (as hereinafter defined) (KeyBank, in its capacity as Agent, is hereinafter referred to as “Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, Agent, KeyBank and the lenders party thereto are parties to that certain Credit Agreement dated as of March 1, 2017, as amended by that certain First Amendment to Credit Agreement and Other Loan Documents dated as of May 11, 2017 (the “First Amendment”), as amended by that certain Second Amendment to Credit Agreement dated as of December 13, 2017 (the “Second Amendment”), as amended by that certain Third Amendment to Credit Agreement dated as of March 8, 2019 (the “Third Amendment”), as amended by that certain Fourth Amendment to Credit Agreement dated as of May 3, 2019 (the “Fourth Amendment”), as amended by that certain Fifth Amendment to Credit Agreement dated as of August 9, 2019 (the “Fifth Amendment”), as amended by that certain Sixth Amendment to Credit Agreement and Other Loan Documents dated as of March 30, 2020 (the “Sixth Amendment”), as amended by that certain Seventh Amendment to Credit Agreement and Other Loan Documents dated as of May 13, 2020 (the “Seventh Amendment”), as amended by that certain Eighth Amendment to Credit Agreement dated as of November 16, 2020 (the “Eighth Amendment”), and as amended by that certain Ninth Amendment to Credit Agreement and other Loan Documents dated as of November 18, 2020 (the “Ninth Amendment”) (such Credit Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment and the Ninth Amendment, may be further varied, extended, supplemented, consolidated, replaced, increased, renewed, modified or amended from time to time, the “Credit Agreement”);

WHEREAS, certain of the Guarantors executed and delivered to Agent that certain Unconditional Guaranty of Payment and Performance dated as of March 1, 2017, as amended by the First Amendment, the Sixth Amendment and the Seventh Amendment (as such Guaranty, as amended by the First Amendment, the Sixth Amendment and the Seventh Amendment, may be further varied, extended, supplemented, consolidated, replaced, increased, renewed, modified or amended from time to time, the “Guaranty”);

WHEREAS, Borrower and certain of the Guarantors executed and delivered to Agent that certain Cash Collateral Account Agreement dated as of March 1, 2017, as amended by that certain First Amendment to Cash Collateral Account Agreement dated as of March 24, 2017, as amended by the First Amendment, as amended by that certain Second Amendment to Cash Collateral Account Agreement dated as of June 21, 2017, as amended by that certain Third Amendment to Cash Collateral Account Agreement dated as of August 31, 2017, as amended by that certain Fourth Amendment to Cash Collateral Account Agreement dated as of January 17, 2018, and as

amended by that certain Fifth Amendment to Cash Collateral Account Agreement dated as of February 21, 2018, as amended by the Sixth Amendment, and as amended by the Sixth Amendment to Cash Collateral Account Agreement dated as of May 13, 2020 (as the same may be further varied, extended, supplemented, consolidated, replaced, increased, renewed, modified or amended from time to time, the “Cash Collateral Agreement”);

WHEREAS, CDOR TLH Magnolia, LLC, TRS TLH Magnolia, LLC, CDOR LEX Lowry, LLC, TRS LEX Lowry, LLC, CDOR AUS Louis, LLC and TRS AUS Louis, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated March 24, 2017; and

WHEREAS CDOR MCO Village, LLC and TRS MCO Village, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated June 21, 2017; and

WHEREAS, CDOR ELP Edge, LLC, TRS ELP Edge, LLC, CDOR AUS Casey, LLC and TRS AUS Casey, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated August 31, 2017; and

WHEREAS, CDOR AUS Tech, LLC and TRS AUS Tech, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated January 17, 2018; and

WHEREAS, CDOR CHS Holiday, LLC and TRS CHS Holiday, LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated February 21, 2018; and

WHEREAS, Spring Street Hotel Property LLC and Spring Street Hotel OPCO LLC have become a party to the Guaranty and the Cash Collateral Agreement pursuant to that certain Joinder Agreement dated May 13, 2020; and

WHEREAS, the Borrower and the Guarantors have requested that the Agent and the Lenders make certain modifications to the Credit Agreement, and Agent and the undersigned Lenders have consented to such modifications, subject to the execution and delivery of this Amendment.

NOW, THEREFORE, for and in consideration of the sum of TEN and NO/100 DOLLARS ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby covenant and agree as follows:

Definitions

.  Capitalized terms used in this Amendment, but which are not otherwise expressly defined in this Amendment, shall have the respective meanings given thereto in the Credit Agreement.

Modifications of the Credit Agreement

.  The Borrower, Agent and the Lenders do hereby modify and amend the Credit Agreement as follows:

(a) By inserting the following new definitions into §1.1 of the Credit Agreement, in the appropriate alphabetical order:

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“Borrowing Availability Limit. $122,228,812.00, as reduced from time to time pursuant to §3.2(d).”;

“Exit Fees. Collectively, the fees due to the Agent, for the pro rata accounts of all the Lenders, pursuant to (i) Section 2(c) of that certain Agreement Regarding Fees dated November 18, 2020 among Borrower, KCM, Agent and the Lenders in connection with the Ninth Amendment to Credit Agreement, as amended, modified or supplemented from time to time (“Exit Fee 1”), and (ii) Section 2(c) of that certain Agreement Regarding Fees executed on or about the date of the Tenth Amendment to Credit Agreement among Borrower, the Lenders and KCM, as amended, modified or supplemented from time to time (“Exit Fee 2”).”;

“Leawood Borrowers.  Collectively, TRS KCI LOFT, LLC and CDOR KCI LOFT, LLC.”;

“Leawood Lender. OSK X, LLC, its successors and/or assigns.”;

“Leawood Loan.  The mortgage loan(s) to the Leawood Borrowers held by Leawood Lender in the aggregate original principal amount of $15,925,000, and secured by the Leawood Property.”;

“Leawood Property.  The Real Estate located at 11620 Ash Street, Leawood, Kansas, commonly known as the Aloft Leawood-Overland Park.”;

“Potential Leawood Default.  The occurrence of an Event of Default arising under §12(f)(i) of this Agreement as a result a breach or default by or on behalf of the Leawood Borrowers or any other obligor with respect to the Leawood Loan under any of the agreements, instruments or documents now or hereafter evidencing, securing or otherwise executed, delivered and/or entered into in connection with the Leawood Loan and/or the acceleration of the Indebtedness evidenced thereby.”;

“Sales Process.  See §8.8.”;

“Sales Process Broker.  Hodges Ward Elliot.”;

“Standstill Conditions. The continued satisfaction of each of the following conditions:

(i) The Borrowers and Guarantors shall be in compliance in all material respects with all of the terms, conditions and provisions of this Agreement and the other Loan Documents and no Default or Event of Default shall have occurred, other than the Potential Leawood Default;

(ii) REIT and the Leawood Borrowers shall be actively and diligently pursuing any and all good faith defenses with respect to any breaches, defaults or claims alleged or asserted by or on behalf of the Leawood Lender

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after any acceleration of the indebtedness evidenced by the Leawood Loan, the commencement of any enforcement action on account of such indebtedness or the exercise of any remedy with respect to such indebtedness (or, in each case, the written threat of such acceleration or other enforcement), or shall have entered into a standstill or forbearance agreement with the Leawood Lender in respect of all such breaches, defaults and claims in form and substance acceptable to Agent;

(iii) No litigation, suit, arbitration, dispute resolution or other action shall have been filed or commenced (A) against REIT, the Leawood Borrowers, any other obligor of the Leawood Loan or any of their respective Subsidiaries or Affiliates in connection with the Leawood Loan and/or (B) seeking the enforcement of any collateral securing the Leawood Loan, in each case, with respect to which a trial, foreclosure sale or auction or other similar proceeding has been scheduled or otherwise occurs on or prior to November 1, 2021;

(iv) None of REIT, the Leawood Borrowers, any other obligor of the Leawood Loan or any of their respective Subsidiaries or Affiliates shall have (A) filed a voluntary petition or application for relief under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect (a “Bankruptcy Law”), become subject to the filing of an involuntary petition or application for relief under any Bankruptcy Law, or been adjudicated as bankrupt or insolvent, (B) filed any petition, application for relief or answer seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any present or future Bankruptcy Law or taken any action in furtherance of any of the foregoing, (C) petitioned or applied for, or consented or acquiesced to, the appointment of any trustee, custodian, conservator, receiver or liquidator with respect to such Person or any substantial part of its assets, (D) made any general assignment for the benefit of creditors, or admitted in writing its general inability to pay or generally failed to pay its debts as they mature or become due;

(v) REIT, Borrower or any of their respective Subsidiaries shall not be in breach or default in any material respect of any of their respective obligations under any agreement or contract entered into in connection with the Sales Process (beyond any applicable notice and cure period), and such Persons shall not have terminated the Sales Process and shall continue to use good faith commercially reasonable efforts to complete the Sales Process;

(vi) No litigation, other proceeding or order (whether temporary, preliminary or permanent) of a court of competent jurisdiction shall have been filed or threatened in writing that could or does in effect prevent, restrain or enjoin the undertaking of the Sales Process or the consummation of any of the asset sales contemplated thereby;

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(vii) The Liquidity of Borrower shall not be less than $6,000,000.00.”; and

“Standstill Period. The period commencing on August 12, 2021 and expiring on the earliest to occur of (i) November 1, 2021 or (ii) the date on which any of the Standstill Conditions fails to be satisfied, as determined by Agent.”;

(b) By deleting in its entirety the table appearing in the definition of “Applicable Margin” in §1.1 of the Credit Agreement and inserting in lieu thereof the following new table:

Period:	Applicable Margin for LIBOR Rate Loans	Applicable Margin for Base Rate Loans
From October 2, 2020 through and including April 1, 2021	3.50%	2.50%
From April 2, 2021 through and including August 30, 2021	3.75%	2.75%
For the period from August 31, 2021 and thereafter	4.00%	3.00%

(c) By deleting in its entirety the last sentence of the definition of “Borrowing Availability” in §1.1 of the Credit Agreement.

(d) By deleting in its entirety the definition of “Liquidity” in §1.1 of the Credit Agreement and inserting in lieu thereof the following new definition:

“Liquidity.  As of any date of determination, the sum of (i) Unrestricted Cash and Cash Equivalents of the REIT and its Subsidiaries plus (ii) the Borrowing Availability as of such date.”;

(e) By deleting in its entirety the definition of “Interest Holdback” in §1.1 of the Credit Agreement.

(f) By deleting in its entirety the definition of “Permitted Borrowings” in §1.1 of the Credit Agreement and inserting in lieu thereof the new definition:

“Permitted Borrowings.  The uses for which the Borrowing Availability may be used by Borrower, which shall be limited to budgeted capital expenditures and other items, in each case, set forth in the Approved Budget; provided, however, that any advance of a Revolving Credit Loan in excess of the Borrowing Availability Limit shall be subject to the prior approval of the Required Lenders.  Permitted Borrowings shall be further subject to the terms of §7.23.”;

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(g) By inserting the following new sentence at the end of §2.1(a) of the Credit Agreement:

“Notwithstanding anything in this Agreement to the contrary, from and after the effectiveness of the Tenth Amendment to Credit Agreement, without the prior approval of the Required Lenders, Borrower shall not be entitled to request or obtain an advance of a Revolving Credit Loan in an amount which, when taken together with the outstanding principal balance of all other advances of Revolving Credit Loans made from and after the effectiveness of the Tenth Amendment to Credit Agreement, would exceed the Borrowing Availability Limit in effect as of the date.” 

(h) By deleting in its entirety §3.2(d) of the Credit Agreement and inserting in lieu thereof the following new §3.2(d):

“(d)Any prepayment of principal pursuant to §3.2(b), §3.2(c)(i) or §5.5 shall result in a dollar-for-dollar permanent reduction of the Borrowing Availability Limit and the Commitments (provided that any prepayment pursuant to §3.2(c)(i) solely as a result of a new Equity Offering shall only result in a permanent reduction of the Borrowing Availability Limit and the Commitments in an amount equal to fifty percent (50%) of the net proceeds of such new Equity Offering), which reduction of Commitments shall be allocated to the Lenders pro rata in accordance with their respective Commitment Percentages.”;

(i) By inserting the following new §3.2(f) into the Credit Agreement:

“(f)Notwithstanding anything contained in this Agreement to the contrary, together with any prepayment required by Borrower pursuant to §3.2(c)(i) or §5.5 on account of the sale or other permanent disposition of an asset (including, without limitation, a Borrowing Base Asset), Borrower shall pay to Agent, for the pro rata account of the Lenders, an amount equal to the product of (X) the net proceeds of such asset sale divided by $130,000,000, multiplied by (Y) the aggregate amount of Exit Fees accrued as of the date of such prepayment, or such lesser amount to which the Required Lenders agree in writing, which payment shall reduce the total amount of Exit Fees payable by Borrower on a dollar-for-dollar basis (such reduction to be pro rata among the accrued amounts Exit Fee 1 and Exit Fee 2 as of such date).  For the avoidance of doubt, such payment of Exit Fees shall be made from the net proceeds of such asset sale and shall reduce the amount of such net proceeds that are applied as a prepayment to the Loans pursuant to §3.2(c)(i) or §5.5.”;

(j) By deleting in its entirety the first (1st) sentence of §4.2 of the Credit Agreement and inserting in lieu the following new sentence:

“The Borrower agrees to pay to KeyBank, the Agent and KCM for their own account certain fees for services rendered or to be rendered in connection with the Loans as provided pursuant to the fee letter or letters

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among the Borrower, KeyBank and KCM, the Agreement Regarding Fees executed on November 18, 2020 in connection with the Ninth Amendment to Credit Agreement among Borrower, the Lenders and KCM, and the Agreement Regarding Fees executed on or about the date of the Tenth Amendment to Credit Agreement among Borrower, the Lenders and KCM (collectively, the “Agreement Regarding Fees”).”;

(k) By deleting in its entirety the last sentence of §5.2 of the Credit Agreement.

(l) By inserting the following parenthetical at the end of §7.4(k) of the Credit Agreement:

“(Notwithstanding the foregoing, within ten (10) Business Days after Borrower’s selection of best and final bids for the Hotel Properties to be sold in the Sales Process, if any such selection is made, Borrower shall provide to Agent an updated budget of the REIT and its Subsidiaries for the remainder of calendar year 2021 (the “Post-Sales Process Budget”), which budget (and each subsequent budget delivered pursuant to this §7.4(k)) shall include for such period, without limitation, line item detail for (i) fees and expenses to be incurred in connection with the Sales Process (including, without limitation, legal fees and expenses, brokerage fees and other third-party costs) and subsequent winding down of operations, (ii) salary and other compensation for senior management of the REIT and its Subsidiaries by position (including, without limitation, detail regarding anticipated attrition or additional roles resulting from the Sales Process or subsequent winding down of operations), (iii) termination fees in respect of management, employment, franchise or other contracts anticipated as result of the Sales Process or subsequent winding down of operations, and (iv) legal and other material third-party consultant expenses to be incurred by the REIT and its Subsidiaries, and upon the approval of such Post-Sales Process Budget by the Required Lenders, such Post-Sales Process Budget shall constitute the Approved Budget for calendar year 2021)”;

(m) By deleting in its entirety §7.23(b) of the Credit Agreement and inserting in lieu thereof the words “Intentionally Omitted;”

(n) By inserting the following new sentence at the end of §8.8 of the Credit Agreement.

“Notwithstanding the foregoing, Borrower and Lenders acknowledge and agree that (i) Borrower has engaged Sales Process Broker to market for sale to third parties all of Borrower’s Hotel Properties (either individually or collectively) pursuant to an arm’s length bidding process, which may result in the sale of all or substantially all of such Hotel Properties (the “Sales Process”), and (ii) so long as Borrower remains in compliance with the terms and conditions hereof (including, without limitation, §3.2(c)(i), §3.2(f) and §5.5 with respect to prepayments required on account of any asset sales resulting from the Sales Process), such sale of Hotel Properties pursuant to the Sales Process shall be excluded from the limitation on the

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sale or disposition of all or substantially all of the assets of the Borrower and its Subsidiaries set forth in this §8.8.”;

(o) By inserting the following new §8.18  into the Credit Agreement:

“§8.18  Permitted Expenditures.  From and after the approval of the Post-Sales Process Budget in accordance with §7.4(k), Borrowers shall not, without the prior written approval of the Required Lenders, modify or amend the Approved Budget or make (or permit to be made) any expenditure other than for payment of actual operating expenses of the Borrowing Base Properties and the other Hotel Properties, payment of debt service as permitted hereunder, the corporate overhead and general and administrative expense of the REIT and its Subsidiaries, costs and expenses associated with the Sales Process and subsequent winding down of operations, and any budgeted capital expenditures with respect to Borrowing Base Properties and the other Hotel Properties, in each case, exclusively as set forth in the Approved Budget; provided, however, that Borrower may make (or permit to be made) expenditures contemplated under the Approved Budget in excess of the applicable budgeted amount for the related line item category so long as such expenditure, in the aggregate with all other expenditures falling under the same line item category in the Approved Budget, does not exceed the applicable budgeted amount for such line item category for the applicable period by more than five percent (5%).”;

(p) By deleting in its entirety §12.1(s) appearing in the Credit Agreement and inserting in lieu thereof the following new §12.1(s):

“(s)The Initial Subordinate Debt is not converted to common stock of the REIT or paid in full as permitted by the Initial Subordination and Standstill Agreement on or before October 31, 2021”; and

(q) By inserting the following new §12.7 into the Credit Agreement:

“§12.7Temporary Standstill for Potential Leawood Default.  Notwithstanding anything to the contrary contained herein or in the other Loan Documents, so long as each of the Standstill Conditions are and continue to be satisfied, Agent and the Lenders hereby agree to refrain during the Standstill Period from exercising any of their respective rights and remedies under this Agreement or the Loan Documents that exist by virtue of the Potential Leawood Default.  Borrower shall immediately notify Agent in the event Borrower becomes aware that any of the Standstill Conditions is not at any time satisfied during the Standstill Period.  In addition, Borrower shall immediately provide Agent with a copy of any notice received from or given to the Leawood Lender (or any nominee, designee, servicer and/or agent thereof) in respect of the Leawood Loan during the Standstill Period.  From and after the expiration of the Standstill Period, and without further notice to the Borrower, any Guarantor, or any other party to this Agreement or other Loan Document, Agent and the

8

Lender shall be immediately entitled to fully enforce the Loan Documents, including, without limitation, immediately exercising all their respective rights and remedies under this Agreement and the other Loan Documents, whether arising under law or equity, arising from the Potential Leawood Default. Borrower and the Guarantors unconditionally and irrevocably waive further notice and any and all grace or cure periods that may be required prior to the exercise by Agent and the Lenders of any rights or remedies they may have, whether under this Agreement, the other Loan Documents, at law or in equity, with respect to the Potential Leawood Default.  The Agent and the Lenders hereby expressly reserve all of their respective rights and remedies under this Agreement, the other Loan Documents and under applicable law with respect to the Potential Leawood Default, except as expressly limited in this §12.7.” 

Limited Waiver

.  Subject to the execution and delivery of this Amendment by the Borrower and the Guarantors, the Agent and the Lenders hereby agree that any Default or Event of Default that may have occurred under §12.1(s) of the Credit Agreement prior to the effectiveness of this Amendment shall be waived.  The aforesaid waiver shall only be applicable to the limited circumstances described in the immediately preceding sentence (and without limiting the foregoing, such limited waiver shall not in any event apply to any Default or Event of Default arising under §12.1(s) after the effectiveness of this Amendment), and except as expressly provided in this Amendment, Borrower and Guarantors shall be required to strictly comply with the provisions of the Credit Agreement and the other Loan Documents (as amended hereby). 

References to Credit Agreement

.  All references in the Loan Documents to the Credit Agreement shall be deemed a reference to the Credit Agreement as modified and amended herein.

Consent of Guarantors

.  By execution of this Amendment, Guarantors  hereby expressly consent to the modifications and amendments relating to the Credit Agreement as set forth herein and the execution and delivery of and any other agreements contemplated in hereby, and Borrower and Guarantors hereby acknowledge, represent and agree that the Credit Agreement, as modified and amended herein, and the other Loan Documents, as the same may be modified in connection with this Amendment, remain in full force and effect and constitute the valid and legally binding obligation of Borrower and Guarantors, respectively, enforceable against such Persons in accordance with their respective terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and the effect of general principles of equity, and that the Guaranty extends to and applies to the foregoing documents as modified and amended.

Representations

.  Borrower and Guarantors represent and warrant to Agent and the Lenders as follows as of the date of this Amendment:

Authorization

.  The execution, delivery and performance by the Borrower and the Guarantors of this Amendment and any other agreements contemplated hereby and the transactions contemplated hereby and thereby (i) are within the authority of Borrower and Guarantors, (ii) have been duly authorized by all necessary proceedings on the part of such Persons, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any of such Persons is subject or any

9

judgment, order, writ, injunction, license or permit applicable to such Persons, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement, operating agreement, articles of incorporation or other charter documents or bylaws of, or any agreement or other instrument binding upon, any of such Persons or any of its properties, (v) do not and will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of such Persons other than the liens and encumbrances in favor of the Agent contemplated by this Amendment and the other Loan Documents, and (vi) do not require any approval or consent of any Person other than those already obtained and delivered to the Agent.

Enforceability

.  This Amendment and each other document executed and delivered in connection with this Amendment are the valid and legally binding obligations of Borrower and Guarantors, enforceable in accordance with the respective terms and provisions hereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and the effect of general principles of equity.

Approvals

.  The execution, delivery and performance by the Borrower and the Guarantors of this Amendment and any other agreements contemplated hereby and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing or registration with, or the giving of any notice to, any court, department, board, governmental agency or authority other than those already obtained.

Reaffirmation

.  Each of the representations and warranties made by or on behalf of Borrower, Guarantors or any of their respective Subsidiaries contained in this Amendment, the Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Credit Agreement or this Amendment are true in all material respects as of the date as of which they were made and are true in all material respects as of the date hereof, with the same effect as if made at and as of that time, except to the extent of changes resulting from transactions permitted by the Loan Documents (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date).

No Default.  By execution hereof, the Borrower and Guarantors certify that the Borrower and Guarantors are and will be in compliance with all covenants under the Loan Documents immediately after the execution and delivery of this Amendment and the other documents executed in connection herewith (other than the Potential Leawood Default), and that no Default or Event of Default has occurred and is continuing (other than the Potential Leawood Default).  Borrower and Guarantors certify that the Standstill Conditions are satisfied as of the Effective Date.

Waiver of Claims

.  Borrower and Guarantors acknowledge, represent and agree that Borrower and Guarantors as of the date hereof have no defenses, setoffs, claims, counterclaims or causes of action of any kind or nature whatsoever with respect to the Loan Documents, the administration or funding of the Loans or Letters of Credit or with respect to any acts or omissions of Agent or any Lender, or any past or present officers, agents or employees of Agent or any Lender, and each of Borrower and Guarantors does hereby expressly waive, release and relinquish any and all such defenses, setoffs, claims, counterclaims and causes of action, if any.

10

Ratification

.  Except as hereinabove set forth, all terms, covenants and provisions of the Credit Agreement and the other Loan Documents remain unaltered and in full force and effect, and the parties hereto do hereby expressly ratify and confirm the Credit Agreement and the other Loan Documents.  Nothing in this Amendment or any other document executed in connection herewith shall be deemed or construed to constitute, and there has not otherwise occurred, a novation, cancellation, satisfaction, release, extinguishment or substitution of the indebtedness evidenced by the Notes or the other obligations of Borrower and Guarantors under the Loan Documents (including without limitation the Guaranty).  This Amendment shall constitute a Loan Document.  By execution hereof, Borrowers and Guarantors acknowledge that Agent and the Lenders have made no agreement, and are in no way obligated, to grant any future modification, amendment, waiver, standstill, forbearance, indulgence or consent. 

Counterparts

.  This Amendment may be executed in any number of counterparts which shall together constitute but one and the same agreement.

Miscellaneous

.  THIS AMENDMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors, successors-in-title and assigns as provided in the Credit Agreement.

Amendments of Other Loan Documents

.  The Lenders authorized Agent to execute and deliver amendments to the other Loan Documents as Agent deems appropriate contemporaneously with the execution and delivery of this Amendment.

Effective Date

.  This Amendment shall be deemed effective and in full force and effect (the “Effective Date”) upon confirmation by the Agent of the satisfaction of the following conditions:

(r) the execution and delivery of this Amendment by Borrower, Guarantors, Agent, and the Lenders;

(s) the execution and delivery of that certain Agreement Regarding Fees by Borrower, KCM, Agent, and the Lenders with respect to this Amendment;

(t) delivery to Agent of a current Compliance Certificate and Borrowing Base Certificate acceptable to Agent;

(u) receipt by Agent of such other consents, resolutions, certificates, documents, instruments, amendments to Loan Documents and agreements as the Agent may reasonably request; and

(v) the Borrower shall have paid the reasonable fees and expenses of Agent in connection with this Amendment and the transactions contemplated hereby (provided that Borrower shall have paid the reasonable attorneys’ fees and costs of Agent and the Lenders, if any, in connection with this Amendment and the transactions contemplated hereby).

2. Amendment as a Loan Document.  The Amendment shall constitute a Loan Document. 

11

12

IN WITNESS WHEREOF, the parties hereto, acting by and through their respective duly authorized officers and/or other representatives, have duly executed this Amendment under seal as of the day and year first above written.

BORROWER:

CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership

By:Condor Hospitality REIT Trust, a Maryland real estate investment trust, its general partner

By:/s/ Jill Burger
Name: Jill Burger
Title: Vice President

GUARANTORS:

CONDOR HOSPITALITY REIT TRUST, a
Maryland real estate investment trust

By: /s/ Jill Burger
Name: Jill Burger
Title: Vice President

CONDOR HOSPITALITY TRUST, INC., a
Maryland corporation

By: /s/ Jill Burger
Name: Jill Burger

Title: Interim Chief Financial Officer

TRS LEASING, INC., a Virginia corporation

By: /s/ Jill Burger
Name: Jill Burger
Title: Vice President

(Signatures Continued On Next Page)

Signature Page to Tenth Amendment to Credit Agreement - KeyBank/Condor

CDOR AUS LOUIS, LLC, a Delaware

limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

CDOR LEX LOWRY, LLC, a Delaware limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

CDOR TLH MAGNOLIA, LLC, a Delaware limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

TRS AUS LOUIS, LLC, a Delaware limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

TRS LEX LOWRY, LLC, a Delaware limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

(Signatures Continued On Next Page)

Signature Page to Tenth Amendment to Credit Agreement - KeyBank/Condor

TRS TLH MAGNOLIA, LLC, a Delaware limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

CDOR MCO VILLAGE, LLC, a Delaware
limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

TRS MCO VILLAGE, LLC, a Delaware
limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

CDOR ELP EDGE, LLC, a Delaware

limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

TRS ELP EDGE, LLC, a Delaware limited

liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

CDOR AUS CASEY, LLC, a Delaware

limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

(Signatures Continued On Next Page)

Signature Page to Tenth Amendment to Credit Agreement - KeyBank/Condor

TRS AUS CASEY, LLC, a Delaware limited

liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

CDOR AUS TECH, LLC, a Delaware

limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

TRS AUS TECH, LLC, a Delaware limited

liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

CDOR CHS HOLIDAY, LLC, a Delaware

limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

TRS CHS HOLIDAY, LLC, a Delaware limited

liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

(Signatures Continued On Next Page)

Signature Page to Tenth Amendment to Credit Agreement - KeyBank/Condor

SPPR-DOWELL, LLC, a Delaware limited liability company

By:  SPPR-Dowell Holdings, Inc., a Delaware corporation, its manager

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

SPPR-DOWELL TRS SUBSIDIARY, LLC, a Delaware limited liability company

By:  Condor Hospitality REIT Trust, a Maryland real estate investment trust, its manager

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

SPPR-DOWELL HOLDINGS, INC., a Delaware corporation

By: /s/ Jill Burger
Name: Jill Burger
Title:   Vice President

(Signatures Continued On Next Page)

Signature Page to Tenth Amendment to Credit Agreement - KeyBank/Condor

SPRING STREET HOTEL PROPERTY LLC, a Delaware limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

SPRING STREET HOTEL OPCO LLC, a Delaware limited liability company

By: /s/ Jill Burger

Name: Jill Burger

Title: Vice President

(Signatures Continued On Next Page)

Signature Page to Tenth Amendment to Credit Agreement - KeyBank/Condor

LENDERS:

KEYBANK NATIONAL ASSOCIATION, individually and as Agent

By:/s/ Daniel Stegemoeller
Name:  Daniel Stegemoeller
Title:  Senior Vice President

THE HUNTINGTON NATIONAL BANK

By: /s/ Joshua A. Castro
Name:  Joshua A. Castro
Title:  Assistant Vice President

BMO HARRIS BANK N.A.

By: /s/ Megan Loos
Name:  Megan Loos
Title:  Assistant Vice President

Signature Page to Tenth Amendment to Credit Agreement - KeyBank/Condor

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, J. William Blackham, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period endedJune 30, 2021 of Condor Hospitality Trust, Inc.;

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;

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;

4. The registrant’s other certifying officer(s) 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:

(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;

(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;

(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

(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

5. The registrant’s other certifying officer(s) 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):

(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

(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.

August 12, 2021	/s/ J. William Blackham
	J. William Blackham
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, JillBurger, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2021 of Condor Hospitality Trust, Inc.;

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;

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;

4. The registrant’s other certifying officer(s) 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:

(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;

(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;

(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

(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

5. The registrant’s other certifying officer(s) 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):

(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

(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.

August 12, 2021	/s/ Jill Burger
	Jill Burger
	Chief Financial Officer and Chief Accounting Officer

EX-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

In connection with the Quarterly Report of Condor Hospitality Trust, Inc. on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, J. William Blackham, Chief Executive Officer of Condor Hospitality Trust Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 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 Condor Hospitality Trust, Inc. at the dates and for the periods indicated.

August 12, 2021	/s/ J. William Blackham
	J. William Blackham
	Chief Executive Officer

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Condor Hospitality Trust, Inc., on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission (the “Report”), I, JillBurger, Chief Financial Officer and Chief Accounting Officer of Condor Hospitality Trust, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 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 Condor Hospitality Trust, Inc. at the dates and for the periods indicated.

August 12, 2021	/s/ Jill Burger
	Jill Burger
	Chief Financial Officer and Chief Accounting Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 06, 2021
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Transition Report	false
Entity File Number	001-34087
Entity Registrant Name	CONDOR HOSPITALITY TRUST, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-1889548
Entity Address, Address Line One	1800 West Pasewalk Avenue
Entity Address, Address Line Two	Ste. 120
Entity Address, City or Town	Norfolk
Entity Address, State or Province	NE
Entity Address, Postal Zip Code	68701
City Area Code	301
Local Phone Number	861-3305
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	CDOR
Security Exchange Name	NYSE
Entity Interactive Data Current	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,718,085
Amendment Flag	false
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000929545

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Assets
Investment in hotel properties, net	$ 261,036,000	$ 265,831,000
Cash and cash equivalents	6,419,000	3,686,000
Restricted cash, property escrows	5,342,000	3,794,000
Accounts receivable, net	1,175,000	652,000
Prepaid expenses and other assets	1,765,000	1,230,000
Total Assets	275,737,000	275,193,000
Liabilities
Accounts payable, accrued expenses, and other liabilities	8,096,000	5,372,000
Dividends and distributions payable	1,091,000	762,000
Land option liability	8,497,000	8,497,000
Derivative liabilities, at fair value	632,000	880,000
Convertible debt, at fair value	25,369,000	16,875,000
Long-term debt, net of deferred financing costs	167,795,000	166,526,000
Total Liabilities	211,480,000	198,912,000
Shareholders' Equity
Common stock, $0.01 par value, 200,000,000 shares authorized; 12,026,108 and 12,014,743 shares outstanding	120,000	120,000
Additional paid-in capital	233,529,000	233,332,000
Accumulated deficit	(179,480,000)	(167,263,000)
Total Shareholders' Equity	64,219,000	76,239,000
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $26 and $17	38,000	42,000
Total Equity	64,257,000	76,281,000
Total Liabilities and Equity	275,737,000	275,193,000
Series E Preferred Stock [Member]
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized: 6.25% Series E, 925,000 shares authorized, $0.01 par value, 925,000 shares outstanding, liquidation preference of $10,341 and $10,012	$ 10,050,000	$ 10,050,000

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Preferred stock, shares authorized	40,000,000	40,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares outstanding	12,026,108	12,014,743
Noncontrolling interest in consolidated partnership, redemption value	$ 26	$ 17
Series E Preferred Stock [Member]
Preferred stock, annual dividend rate	6.25%	6.25%
Preferred stock, shares authorized	925,000	925,000
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares outstanding	925,000	925,000
Preferred stock, liquidation preference	$ 10,341	$ 10,012

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue
Room rentals and other hotel services	$ 14,108,000	$ 4,811,000	$ 23,752,000	$ 18,038,000
Operating Expenses
Hotel and property operations	9,232,000	5,089,000	16,911,000	14,904,000
Depreciation and amortization	2,648,000	2,777,000	5,291,000	5,487,000
General and administrative	1,151,000	1,014,000	2,411,000	2,207,000
Strategic alternatives, net	383,000	80,000	423,000	224,000
Total operating expenses	13,414,000	8,960,000	25,036,000	22,822,000
Operating income (loss)	694,000	(4,149,000)	(1,284,000)	(4,784,000)
Net loss on disposition of assets	(10,000)	(1,000)	(13,000)	(10,000)
Equity in earnings of joint venture				80,000
Net gain (loss) on derivatives and convertible debt	(10,234,000)	19,000	(8,246,000)	(740,000)
Other income (expense), net	2,357,000	(58,000)	2,399,000	(86,000)
Interest expense	(2,484,000)	(2,070,000)	(4,693,000)	(4,050,000)
Loss before income taxes	(9,677,000)	(6,259,000)	(11,837,000)	(9,590,000)
Income tax benefit (expense)	(27,000)	61,000	(54,000)	367,000
Net loss	(9,704,000)	(6,198,000)	(11,891,000)	(9,223,000)
Loss attributable to noncontrolling interest	4,000	2,000	4,000	3,000
Net loss attributable to controlling interests	(9,700,000)	(6,196,000)	(11,887,000)	(9,220,000)
Dividends undeclared on preferred stock	(166,000)	(144,000)	(329,000)	(289,000)
Net loss attributable to common shareholders	$ (9,866,000)	$ (6,340,000)	$ (12,216,000)	$ (9,509,000)
Earnings (Loss) per Share
Total - Basic Earnings (Loss) per Share	$ (0.82)	$ (0.53)	$ (1.02)	$ (0.80)
Total - Diluted Earnings (Loss) per Share	$ (0.82)	$ (0.53)	$ (1.02)	$ (0.80)

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Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2019	$ 10,050	$ 120	$ 233,189	$ (147,582)	$ 95,777	$ 49	$ 95,826
Balance, shares at Dec. 31, 2019	925	11,994
Stock-based compensation			146		146		146
Stock-based compensation, shares		9
Dividends and distributions undeclared
Series E Preferred				(289)	(289)		(289)
Net loss				(9,220)	(9,220)	(3)	(9,223)
Balance at Jun. 30, 2020	$ 10,050	$ 120	233,335	(157,091)	86,414	46	86,460
Balance, shares at Jun. 30, 2020	925	12,003
Balance at Mar. 31, 2020	$ 10,050	$ 120	233,258	(150,751)	92,677	48	92,725
Balance, shares at Mar. 31, 2020	925	11,996
Stock-based compensation			77		77		77
Stock-based compensation, shares		7
Dividends and distributions undeclared
Series E Preferred				(144)	(144)		(144)
Net loss				(6,196)	(6,196)	(2)	(6,198)
Balance at Jun. 30, 2020	$ 10,050	$ 120	233,335	(157,091)	86,414	46	86,460
Balance, shares at Jun. 30, 2020	925	12,003
Balance at Dec. 31, 2020	$ 10,050	$ 120	233,332	(167,263)	76,239	42	76,281
Balance, shares at Dec. 31, 2020	925	12,015
Stock-based compensation			197		197		197
Stock-based compensation, shares		11
Dividends and distributions undeclared
Series E Preferred				(330)	(330)		(330)
Net loss				(11,887)	(11,887)	(4)	(11,891)
Balance at Jun. 30, 2021	$ 10,050	$ 120	233,529	(179,480)	64,219	38	64,257
Balance, shares at Jun. 30, 2021	925	12,026
Balance at Mar. 31, 2021	$ 10,050	$ 120	233,425	(169,613)	73,982	42	74,024
Balance, shares at Mar. 31, 2021	925	12,020
Stock-based compensation			104		104		104
Stock-based compensation, shares		6
Dividends and distributions undeclared
Series E Preferred				(167)	(167)		(167)
Net loss				(9,700)	(9,700)	(4)	(9,704)
Balance at Jun. 30, 2021	$ 10,050	$ 120	$ 233,529	$ (179,480)	$ 64,219	$ 38	$ 64,257
Balance, shares at Jun. 30, 2021	925	12,026

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities:
Net loss	$ (11,891)	$ (9,223)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	5,291	5,487
Net loss on disposition of assets	13	10
Net loss on derivatives and convertible debt	8,246	740
Equity in earnings of joint venture		(80)
Amortization of deferred financing costs	453	545
Principal forgiveness on long-term debt	(2,299)
Stock-based compensation expense	211	166
Provision / benefit for deferred taxes		(421)
Changes in operating assets and liabilities:
Increase in assets	(1,052)	(520)
Increase in liabilities	2,729	1,435
Net cash provided by (used in) operating activities	1,701	(1,861)
Cash flows from investing activities:
Additions to hotel properties	(520)	(292)
Distributions in excess of cumulative earnings from joint venture		480
Hotel acquisitions, net of cash acquired		(7,193)
Proceeds from sale of hotel assets	1	2
Net cash used in investing activities	(519)	(7,003)
Cash flows from financing activities:
Deferred financing costs	(50)	(480)
Proceeds from long-term debt	4,584	45,763
Principal payments on long-term debt	(1,419)	(34,832)
Principal payments on finance lease	(2)
Tax withholdings on stock compensation	(14)	(20)
Deposit on strategic alternatives		500
Other items		(2)
Net cash provided by financing activities	3,099	10,929
Increase in cash, cash equivalents, and restricted cash	4,281	2,065
Cash, cash equivalents, and restricted cash beginning of period	7,480	8,395
Cash, cash equivalents, and restricted cash end of period	11,761	10,460
Supplemental cash flow information:
Interest paid	3,308	3,213
Income taxes paid, net of refunds	1	114
Schedule of noncash investing and financing activities:
Debt assumed in acquisition		34,080
Increase in accrued liabilities related to insurance premium financing agreement	$ 478	823
Land option liability in acquisition		$ 8,497

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Organization and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Organization and Summary of Significant Accounting Policies [Abstract]

Organization and Summary of Significant Accounting Policies

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Condor Hospitality Trust, Inc. (“Condor”), a Maryland corporation, is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels. As of June 30, 2021, the Company owned 15 hotels in eight states. References to the “Company”, “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

The Company, through its wholly owned subsidiary Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (the “operating partnership”), for which we serve as general partner. The operating partnership, including its various subsidiaries, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of all properties held by TRS Leasing, Inc.) and conducts all of its operations. At June 30, 2021, the Company owned 99.9% of the common operating units (“common units”) of the operating partnership with the remaining common units owned by other limited partners.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, the operating partnership and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements.

On June 21, 2021, the Company announced that its board of directors is evaluating strategic alternatives to enhance shareholder value. The Company has engaged the firm of Hodges Ward Elliott to market for sale the 15 hotels portfolio owned by the Company. Although the Company expects significant interest in the marketing initiative, there can be no assurance that a transaction will occur at the conclusion of the process. The Company may engage additional brokers and financial advisors as it deems appropriate. There can be no assurances that the exploration of strategic alternatives will result in any transaction or, should the board of directors approve a transaction, no assurances of the value to the Company’s shareholders thereof. Condor Hospitality does not intend to discuss or disclose developments with respect to the process unless and until otherwise determined that further disclosure is appropriate or required by regulation or law. No formalized timetable has been established for the completion of the strategic review.

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature. Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of the operating partnership and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

We evaluate each of our investments and contractual relationships to determine whether they meet the guidelines for consolidation. Entities are consolidated if the determination is made that we are the primary beneficiary in a variable interest entity (“VIE”) or we maintain control of the asset through our voting interest or other rights in the operation of the entity. The Company has concluded that our operating partnership meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company consolidates the operating partnership. The Company’s sole significant asset is its investment in the operating partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the operating partnership. All of the Company’s debt is an obligation of the operating partnership.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the consolidated financial statements for the periods presented. Interim results are not necessarily indicative of full-year performance for the year ending December 31, 2021 or any future period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period. Actual results could differ from those estimates. Because the state of the economy and the real estate market can significantly impact hotel operating performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

The novel coronavirus (COVID-19) has reduced travel significantly and adversely affected the hospitality industry in general. The actual and threatened spread of COVID-19 globally or in the regions in which we operate, or future widespread outbreak of infectious or contagious disease, can continue to reduce national and international travel in general. The extent to which the hospitality industry, and thus our business, will be affected by COVID-19 will largely depend on future developments which we cannot accurately predict, and the impact on customer travel, including the duration of the outbreak, the continued spread and treatment of COVID-19, the impact of new virus variants, the pace of vaccination, and new information and developments that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. To the extent that travel activity in the U.S. is and will be materially and adversely affected by COVID-19, business and financial results of the hospitality industry, and thus our business and financial results, could be impacted.

Since late March 2020, similar to the conditions affecting the hospitality industry as a whole, we have experienced occupancy declines at many of our properties which have and will continue to require us to adjust our business operations and will have had and will continue to have an impact on our operating income and may potentially impact future compliance with our debt covenants.

As a result of the above factors, the Company is and has taken actions at the corporate and hotel level, including, but not limited to:

Obtaining significant modifications of its debt agreements, including extension of the Key Bank credit facility (the “credit facility”) to January 2, 2023 with an increase in credit availability and modifications and waivers of debt covenants, from the majority of the Company’s lenders.

Asset management working with hotel management companies to reduce all hotels operating expenses including, but not limited to, closing off multiple floors, staffing reductions and furloughs, utility consumption reductions, purchasing reductions and eliminations, contract services reductions and

eliminations, food services closures, exercise facilities closures, and certain reduction and elimination of certain marketing expenditures.

Seeking potential alternative revenue sources through health care providers, government agencies, universities and airlines.

Obtaining Paycheck Protection Program (“PPP”) loans authorized under the congressionally approved Coronavirus Aid, Relief, and Economic Security (“CARES”) Act totaling $2,299 (see Note 6), all of which was forgiven by the Small Business Administration (“SBA”) during the second quarter of 2021.

Pursuing corporate cost reductions, including staffing reductions, resulting in an approximately 30% decrease in general and administrative expenses compared to historical operations.

Capital improvement projects have been suspended except for emergency circumstances and will remain on hold for immediate future, with the potential for the suspension to continue through 2021.

The Company determined that it was advisable and the best business practice to cause a temporary closure of two of its hotels, the Solomons Hilton Garden Inn on April 20, 2020 and the Leawood Aloft on April 9, 2020. These hotels were both reopened on July 1, 2020 and no other hotel closures have been deemed necessary.

We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have, a material negative impact on the hospitality industry, and thus on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. While we cannot assure you that the assumptions used to estimate our future liquidity will be correct, the Company believes it can generate the liquidity required to operate through the crisis through a combination of the continued operation of our portfolio with significant cost reduction measures in place, existing availability under our credit facility, and, if necessary, additional debt and equity financings. However, there can be no assurance that the Company will be able to obtain such financing on acceptable terms or at all.

The Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft) were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners, on December 24, 2020 (see Note 6). The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021, or December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic. The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC.

Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6,000 of liquidity.

Based on a the current status of the OSK X, LLC loans and the guidance in U.S. GAAP that requires that, in making a determination for the one year period following the date of the financial statements, the Company cannot consider future fundraising activities or the likelihood of obtaining covenant waivers or amendments, all of which are outside of the Company's sole control, the Company has determined that there is substantial doubt about the Company’s ability to continue as a going concern for the one year period after the date the financial statements are issued. The

consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.

Effective January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2017-01, Clarifying the Definition of a Business. As such, if substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. When we conclude that an acquisition meets this threshold, acquisition costs will be capitalized as part of our allocation of the purchase price of the acquired hotel properties. We concluded that the Company’s purchase of the remaining 20% of the joint venture that owns the Atlanta Aloft property (the “Atlanta JV”), completed in the first quarter of 2020, was the acquisition of assets and as such acquisition costs were capitalized as part of this transaction (see Note 3).

The Company’s investments in hotel properties are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment.

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method. Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

On an ongoing basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. In the evaluation of impairment of its hotel properties, the Company makes many assumptions and estimates including projected cash flows both from operations and eventual disposition, expected useful life and holding period, future required capital expenditures, and terminal capitalization rates. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s estimated fair value.

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a VIE or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, prior to our acquisition of the remaining 20% interest in the Atlanta JV (see Note 3), allocations of the profits and losses of our Atlanta JV were potentially allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the consolidated statements of cash flows using the cumulative distributions approach. Distributions are classified as cash inflows from operating activities unless

cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture. Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held for Sale

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year. If a hotel is considered held for sale as of the most recent balance sheet presented or was sold prior to that balance sheet date, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale.

At the end of each reporting period, if the fair value of a held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss. Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required. If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the decision not to sell.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes cash and highly liquid investments with original maturities of three months or less when acquired, and are carried at costs which approximates fair value.

Restricted cash consists of cash held in escrow for the replacement of furniture and fixtures, real estate taxes, property insurance, and debt service as required under certain loan agreements.

Revenue Recognition

Revenue consists of amounts derived from hotel operations, including the sales of rooms, food and beverage, and other ancillary services. Room revenue is recognized over a customer's hotel stay at the daily contract rate. Revenue from food and beverage and other ancillary services is generated when a customer chooses to purchase goods or services separately from a hotel room and revenue is recognized on these distinct goods and services at the contract rate at the point in time or over the time period that goods or services are provided to the customer and the related performance obligations are fulfilled. Certain ancillary services are provided by third parties and the Company assesses whether it is the principal or agent in these arrangements. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. If the Company is the principal, the Company recognizes revenue based upon the gross sales price. Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. The Company maintains an allowance for doubtful accounts sufficient to cover estimated potential credit losses.

Sales, use, occupancy, and similar taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the consolidated statements of operations.

Hotel operating revenues can be disaggregated into the following categories to demonstrate how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows:

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Rooms	$	13,460	$	4,489	$	22,589	$	17,015
Food and beverage		247		115		363		464
Other		401		207		800		559
Total revenue	$	14,108	$	4,811	$	23,752	$	18,038

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under the applicable provisions of the Internal Revenue Code (the “Code”), as amended. In general, under such Code provisions, an entity which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, will not be subject to federal income tax to the extent of the income currently distributed to shareholders. A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS is subject to federal, state, and local income taxes. We account for the federal income taxes of our TRS using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on the consideration of available evidence, including tax planning strategies and projections for future taxable income over the periods in which the remaining deferred tax assets are deductible. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain liabilities and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

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

Our estimates of fair value are determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different

market assumptions or valuation techniques may have a material effect on estimated fair value measurements. 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.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings. This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 and November 19, 2020 (see Note 7).

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Investment in Hotel Properties

6 Months Ended

Jun. 30, 2021

Investment in Hotel Properties [Abstract]

Investment in Hotel Properties

NOTE 2. INVESTMENT IN HOTEL PROPERTIES

Investment in hotel properties consisted of the following at June 30, 2021 and December 31, 2020:

	As of
		June 30, 2021		December 31, 2020
Land		$	34,929		$	34,928
Buildings, improvements, vehicle			244,209			244,041
Furniture and equipment			24,909			24,622
Initial franchise fees			1,784			1,784
Construction-in-progress			111			123
Right of use asset			53			62
Investment in hotel properties			305,995			305,560
Less accumulated depreciation			(44,959)			(39,729)
Investment in hotel properties, net		$	261,036		$	265,831

On January 1, 2019, the Company adopted ASU 842, Leases, and applied it prospectively. At adoption, the Company also elected the practical expedients which permitted it to not reassess its prior conclusions about lease identification, classification, and initial direct costs. Consequently, on January 1, 2019, the Company recognized right-of-use assets and related liabilities related to its operating leases. Since most of the Company's leases do not provide an implicit rate, the Company used incremental borrowing rates. The right-of-use assets and liabilities are amortized to rent expense, included in either Hotel and property operations expenses or General and administrative expenses depending on the nature of the lease, over the term of the underlying lease agreements. The weighted average remaining life of the Company’s operating leases, including options to extend when it is reasonably certain the Company will exercise such options, was 6.4 years at June 30, 2021.

As of June 30, 2021 and December 31, 2020, the Company's right-of-use assets, net of $53 and $62, respectively, are included in Investment in hotel properties, net and its related lease liabilities of $54 and $62, respectively, are presented in Accounts payable, accrued expenses, and other liabilities in the Company's consolidated balance sheets.

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Acquisition of Hotel Properties

6 Months Ended

Jun. 30, 2021

Acquisition of Hotel Properties [Abstract]

Acquisition of Hotel Properties

NOTE 3. ACQUISITION OF HOTEL PROPERTIES

The Company did not acquire any properties during the three or six months ended June 30, 2021.

On February 14, 2020, the Company purchased the remaining 20% interest in the Atlanta JV from our joint venture partner (see detailed description of the Atlanta JV in Note 4) for $7,300 as allowed by the purchase option included in the original joint venture agreements. The $7,300 was funded from the Company’s credit facility, and the Company became the primary obligator on the $34,080 New Term Loan (as defined in Note 4) as part of the transaction. As the Atlanta JV was previously accounted for under the equity method and the acquisition was considered the acquisition of assets, the liabilities assumed as part of the transaction were recorded at fair value while the assets purchased in the transaction were recorded based on a pro-rata fair value allocation of the total available basis, which included the fair value of liabilities assumed, the cash purchase price paid, the balance of the investment in the unconsolidated joint venture at the time of the acquisition, and the acquisition costs incurred. The purchase was recognized as follows:

Cash purchase price	$	7,300
Investment in unconsolidated joint venture		3,844
Acquisition costs		122
Total investment in net assets	$	11,266
Cash	$	125
Working capital		(462)
Land		14,728
Buildings, improvements, and vehicle		37,020
Furniture and equipment		2,432
Debt assumed at acquisition		(34,080)
Land option liability (1)		(8,497)
Total allocation to net assets	$	11,266

(1)The purchase agreement includes a provision which permits the seller to purchase the surface parking lot north of the hotel exercisable for approximately seven years at less than market rates.

Included in the consolidated statements of operations for the three and six months ended June 30, 2020 are total revenues of $547 and $1,360, respectively, and total operating losses of $574 and $861, respectively, related to the results of operations for Atlanta Aloft hotel since the date of its acquisition.

All purchase price allocations were determined using Level 3 fair value inputs.

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Investment in Unconsolidated Joint Venture

6 Months Ended

Jun. 30, 2021

Investment in Unconsolidated Joint Venture [Abstract]

Investment in Unconsolidated Joint Venture

NOTE 4. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

On August 1, 2016, the Company entered into a joint venture, the Atlanta JV, with Three Wall Capital LLC and certain of its affiliates (“TWC”) to acquire an Aloft hotel in downtown Atlanta, Georgia. The Atlanta Aloft acquisition had a total purchase price of $43,550 and closed on August 22, 2016. Prior to the purchase of the remaining interest in the Atlanta JV on February 14, 2020 (see Note 3), the Company accounted for the Atlanta JV under the equity method. Condor owned 80% of the Atlanta JV with TWC owning the remaining 20%. The Atlanta JV was comprised of two companies: Spring Street Hotel Property II LLC, of which the operating partnership indirectly owned an 80% equity interest, and Spring Street Hotel OpCo II LLC, of which our TRS indirectly owned an 80% equity interest. TWC owned the remaining 20% equity interest in these two companies.

The purchase was partially funded with a $33,750 term loan secured by the property. On August 9, 2019, the operating partnership and the owner and lessee of the Aloft Atlanta hotel in the Atlanta JV (Spring Street Hotel Property LLC and Spring Street Hotel OpCo LLC, respectively), as Borrowers, closed on a $34,080 term loan pursuant to a term loan agreement with KeyBank National Association and the other lenders party thereto, as Lenders, and KeyBank National Association, as Agent for the Lenders (the “New Term Loan”). The proceeds of the New Term Loan were used to repay the original term loan, which was terminated following the repayment. The

New Term Loan was included in full on the balance sheet of the Atlanta JV prior to the acquisition of the remaining interest by the Company in 2020.

The New Term Loan matured upon the earlier to occur of (a) consummation of the merger under the Merger Agreement (see Note 1) and (b) May 8, 2020. The New Term Loan was refinanced in May 2020 with the credit facility. The New Term Loan bore interest, at the Borrower’s option, at either LIBOR plus 2.25% or a base rate plus 1.25%. The New Term Loan required monthly interest payments and principal is due on the maturity date. The Borrowers could, at any time, voluntarily prepay the New Term Loan in whole or in part without premium or penalty (other than customary LIBOR breakage costs). The New Term Loan was secured by a first priority lien and security interest on the Aloft Atlanta hotel and the tangible and intangible personal property used in connection with such hotel, including inventory, equipment, fixtures, accounts and general intangibles. The New Term Loan was guaranteed by the Company and certain of its subsidiaries.

The Atlanta JV agreement also included buy-sell rights for both members (generally after three years of hotel ownership for Condor and after five years for TWC) and Condor had a purchase option for TWC’s Atlanta JV ownership interest exercisable between the third and fifth anniversary of the hotel closing.

Under the Atlanta JV agreement, the Atlanta JV was managed by TWC in accordance with business plans and budgets approved by both partners. Major decisions as detailed in the agreement also required joint approval. Condor could remove TWC as manager of the Atlanta JV and appoint a new manager only upon the occurrence of certain events. The Atlanta Aloft hotel was managed by Boast Hotel Management Company LLC (“Boast”), an affiliate of TWC. The Atlanta JV paid to Boast total management fees of $61 during the first quarter of 2020. The management of the Atlanta Aloft hotel was moved to Aimbridge Hospitality on March 1, 2020 following the acquisition of the remaining interest in the Atlanta JV by Condor.

Net cash flow from the Atlanta JV was distributed each quarter first with a 10% annual preferred return on capital contributions to Condor, second with a 10% annual preferred return on capital contributions to TWC, and third with any remainder distributed to the partners based on their pro-rata equity ownership. Profits were allocated in the same proportion as net cash flow. Losses were allocated based on pro-rata equity ownership. Cash distributions totaling $480 were received from the Atlanta JV in the first quarter of 2020 prior to its acquisition by Condor.

The table below provides the components of net earnings, including the Company’s share of the Atlanta JV, for the first quarter of 2020 prior to its acquisition by the Company.

		For the period of January 1 to February 14,
	2020
Revenue
Room rentals and other hotel services	$	1,522
Operating Expenses
Hotel and property operations		960
Depreciation and amortization		181
Total operating expenses		1,141
Operating income		381
Interest expense		(281)
Net earnings	$	100
Condor allocated earnings	$	80
TWC allocated earnings		20
Net earnings	$	100

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Dispositions of Hotel Properties

6 Months Ended

Jun. 30, 2021

Dispositions of Hotel Properties [Abstract]

Dispositions of Hotel Properties

NOTE 5. DISPOSITIONS OF HOTEL PROPERTIES

As of June 30, 2021 and December 31, 2020, the Company had no hotels classified as held for sale.

During the three and six months ended June 30, 2021 and 2020, the Company sold no hotels.

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Long-Term Debt

6 Months Ended

Jun. 30, 2021

Long-Term Debt [Abstract]

Long-Term Debt

NOTE 6. LONG-TERM DEBT

Long-term debt consisted of the following loans payable at June 30, 2021 and December 31, 2020:

Lender		Balance at June 30, 2021	Interest rate at June 30, 2021	Maturity	Amortization provision	Properties encumbered at June 30, 2021	Balance at December 31, 2020
Fixed rate debt
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18	$	8,356	4.54%	08/2024	25 years	1	$	8,454
OSK X, LLC (1)		13,199	8.33%	12/2023 (5)	25 years	1		13,199
OSK X, LLC (1)		765	8.33%	12/2023 (5)	7 years	-		880
Paycheck Protection Program (7)		-	1.00%	05/2022	(7)	-		2,299
Total fixed rate debt		22,320						24,832
Variable rate debt
Wells Fargo		25,149	2.48% (2)	11/2022 (6)	30 years	3		25,386
KeyBank credit facility (3)		121,729	4.25% (4)	1/2023	Interest only	10		118,114
Total variable rate debt		146,878				15		143,500
Total long-term debt	$	169,198					$	168,332
Less: Deferred financing costs		(1,403)						(1,806)
Total long-term debt, net of deferred financing costs	$	167,795					$	166,526

(1) Both loans are collateralized by Aloft Leawood. These loans were formerly held by Great Western Bank prior to being purchased by OSK X, LLC on December 24, 2020. The current status of these loans and the current interest rate is discussed with Financial Covenants below.

(2) Variable rate of 30-day LIBOR plus 2.39%, effectively fixed at 4.44% after giving effect to interest rate swap (see Note 8).

(3) Total available borrowing capacity is $130,000 of which $4,000 is reserved for the payment of interest under the facility. The ability to borrow under the credit facility is limited to payment of interest and fees under the credit facility and funding any shortfalls to an approved budget. The commitment fee on unused facility is 0.20% when the usage is over 50% of the total commitment and 0.25% when the usage under 50% of the commitment. Total unused availability under this credit facility was $8,271 at June 30, 2021, of which $1,129 remains reserved for the payment of interest.

(4) Borrowings under the facility accrue interest, at the Company’s option, at either LIBOR (with a floor of 0.50%) plus a spread of 3.75% or a base rate plus 2.75%, with an increase to the interest rate spreads of 0.25% to occur on October 2, 2021.

(5) Term was extended for an additional two years on December 2, 2020.

(6) Two one year extension options subject to the satisfaction of certain conditions.

(7) The PPP loans are made up of three separate loans received in April 2020. Monthly payments totaling $121 were scheduled to begin October 2021 if the loan or a portion of it was not forgiven. The entire amount of the loans was used for payroll, utilities, and interest, and was forgiven by the Small Business Association (“SBA”) during the second quarter of 2021.

Aggregate annual principal payments on debt for the remainder of 2021 and thereafter are as follows:

	Total
Remainder of 2021	$	435
2022		25,336
2023		135,587
2024		7,840
Total	$	169,198

Financial Covenants

We are required to satisfy various financial covenants within our debt agreements, including the following financial covenants within our credit facility with KeyBank:

Borrowing Base Debt Service Coverage Ratio: The ratio of adjusted net operating income from borrowing base properties to debt service for the credit facility (assuming a 30 year amortization) must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending September 30, 2021 and December 31, 2021, (b) 1.25 to 1 as of the end of the fiscal quarters ending March 31, 2022 and June 30, 2022 and (c) 1.50 to 1 as of the end of the fiscal quarter ending September 30, 2022 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2022 when the calculation is based on the most recently ended four fiscal quarters.

Fixed Charge Coverage Ratio: The ratio of adjusted consolidated EBITDA to consolidated fixed charges must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending September 30, 2021 and December 31, 2021, (b) 1.25 to 1 as of the end of the fiscal quarters ending March 31, 2022 and June 30, 2022 and (c) 1.50 to 1 as of the end of the fiscal quarter ending September 30, 2022 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2022 when the calculation is based on the most recently ended four fiscal quarters.

Borrowing Base Leverage Ratio: The ratio of indebtedness outstanding under the credit facility to borrowing base asset value (based on updated as-stabilized appraisals) cannot exceed 65%. The covenant is first tested on March 31, 2022.

Minimum Liquidity: Liquidity must be greater than or equal to $3,000. In addition, the ninth amendment to the credit facility provided that if liquidity is below $6,000, (a) the agent may engage a financial advisor to advise it with respect to the Company and the credit facility, (b) a $2,000 interest reserve must be maintained, (c) certain reporting must be completed on a weekly basis and (d) advances under the credit facility can only be made and applied pursuant to a cash flow waterfall.

Pursuant to the terms of the ninth amendment to the credit facility, an event of default occurred when the convertible notes issued in 2020 (see Note 7) were not converted to common stock or paid in full by July 1, 2021. The tenth amendment to the credit facility (see Note 16) waived this event of default and amended the provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see discussion of Rights Offering in Note 7), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

We are also required to satisfy a debt yield financial covenant within our loan agreement relating to the three properties financed by Wells Fargo Bank. The loan agreement provides that if the Company fails to satisfy a debt yield (adjusted net cash flow / outstanding principal amount of the loan) of 10% at the end of any fiscal quarter, then a cash trap occurs. During a cash trap, the revenue generated from the hotels is directed to an account controlled by the lender and used to pay certain hotel expenses and debt service costs and fund certain reserves. Any excess funds are held by the lender as additional collateral. Failure to satisfy the debt yield and the occurrence of a cash trap do not constitute a default under the loan agreement.

In connection with the first amendment to the loan agreement entered into in May 2020, measurement of the debt yield was suspended until the measurement date occurring on March 31, 2021. The Company did not satisfy the debt yield as of March 31, 2021 or June 30, 2021; however, Wells Fargo has advised us by letter that it will not require implementation of the cash trap. This advice is terminable by Wells Fargo at any time. Any cash trap will expire when the debt yield is equal to or greater than 10.5%.

We are also required to satisfy various financial covenants within our loan agreement with OSK X, LLC relating to the Leawood, Kansas Aloft, including the following:

Property-Specific Pre-Distribution Debt Service Coverage Ratio. The ratio of adjusted net operating income for the Leawood, Kansas Aloft (before distributions) to debt service for the loans must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending March 31, 2021 and June 30, 2021 and (b) 1.35 to 1 as of the end of the fiscal quarter ending September 30, 2021 and each fiscal quarter

thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2021 when the calculation is based on the most recently ended four fiscal quarters.

Property-Specific Post-Distribution Debt Service Coverage Ratio. The ratio of adjusted net operating income for the Leawood, Kansas Aloft (after distributions) to debt service for the loans must be equal to or greater than (a) 1.00 to 1 as of the end of the fiscal quarters ending March 31, 2021 and June 30, 2021 and (b) 1.35 to 1 as of the end of the fiscal quarter ending September 30, 2021 and each fiscal quarter thereafter. For purposes of calculating compliance with the covenant, annualized results are used until June 30, 2021 when the calculation is based on the most recently ended four fiscal quarters.

Consolidated Debt Service Coverage Ratio. The ratio of consolidated adjusted net operating income for the Company to consolidated debt service must be equal to or greater than 1.05 to 1.

Certain of the terms used in the foregoing descriptions of the financial covenants within our credit facility and loan agreement have the meanings given to them in the credit facility and loan agreement, and certain of the financial covenants are subject to pro forma adjustments for acquisitions and sales of hotel properties and for specific capital events.

As a result of the actual and anticipated unprecedented negative impact of the COVID-19 virus on the hotel industry generally, the Company has received waivers of compliance with financial covenants from various lenders (including Great Western Bank with respect to the Leawood, Kansas Aloft) for the first three quarters of 2020. The Company and certain of its other lenders have also modified various financial covenants by suspending measurements, providing for lower covenants and/or using annualized results (including Great Western Bank with respect to the Leawood, Kansas Aloft).

On December 24, 2020, the Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft), with a June 30, 2021 balance of $13,964, were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners. The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021 and December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). The Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic.

The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions,

including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6,000 of liquidity.

As indicated above, the Company is pursuing negotiations with OSK X, LLC to obtain waivers, and if waivers are unable to be obtained, the Company plans to refinance the debt with existing or new lenders which the Company believes it can successfully complete. However, waivers and the ability to refinance are at the discretion of the lenders, and there can be no assurance that the Company will be able to obtain such waivers or refinancing on acceptable terms or at all.

As of June 30, 2021, other than with respect to our financial covenants with OSK X, LLC (as discussed above), we are not in default of any of our loans.

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Convertible Debt at Fair Value

6 Months Ended

Jun. 30, 2021

Convertible Debt at Fair Value [Abstract]

Convertible Debt at Fair Value

NOTE 7. CONVERTIBLE DEBT AT FAIR VALUE

As part of an Exchange Agreement entered into on March 16, 2016 with Real Estate Strategies, L.P. (“RES”, which also includes affiliated entities), the Company issued to RES a Convertible Promissory Note (the “2016 Note”), bearing interest at 6.25% per annum, in the principal amount of $1,012. The 2016 Note is convertible directly into 97,269 shares of common stock at any time at the option of RES or automatically when the 6.25% Series E Cumulative Convertible Preferred Stock (the “Series E Preferred Stock”) is required to be converted or is redeemed in whole (see Note 10). The 2016 Note is not convertible to the extent that a conversion would cause RES, together with its affiliates, to beneficially own more than 49% of the voting stock of the Company at the time of the conversion. Any conversion reduces the principal amount of the 2016 Note proportionally. Pursuant to the terms of the 2016 Note, interest payments are suspended and accumulate whenever dividends on the Series E Preferred Stock are unpaid and accumulate. At June 30, 2021, there was $116 accumulated and unpaid interest on the 2016 Note.

On November 19, 2020, the Company entered into separate Convertible Promissory Notes and Loan Agreements (the “2020 Notes”) in favor of (a) SREP III Flight—Investco 2, L.P. (“SREP”), an affiliate of StepStone Group LP, for $7,220, and (b) Efanur S.A. (“Efanur”), an affiliate of IRSA Inversiones y Representaciones Sociedad Anónima, for $2,780. Pursuant to the 2020 Notes, the Company borrowed $10,000 from SREP and Efanur and used the proceeds to repay loans outstanding under the credit facility. Each of the 2020 Notes mature upon the earliest to occur of (a) the closing of a Rights Offering (as defined below) or a Non-Rights Offering Conversion (as defined below) in an amount equal to the outstanding principal balance of the respective Note, (b) the acceleration of the respective Note on or after the occurrence of an Event of Default (as defined in the respective Note) and (c) January 2, 2023. Pursuant to the terms of the ninth amendment to the credit facility, an event of default occurred when the convertible notes issued in 2020 were not converted to common stock or paid in full by July 1, 2021. The tenth amendment to the credit facility (see Note 16) waived this event of default and amended the provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see discussion of Rights Offering below), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

Each of the 2020 Notes accrues interest at 10.00% per annum (exclusive of any portion of the principal that is used in a Rights Offering and, in the case of the Note in favor of SREP, any backstop commitment), provides for the interest rate to increase to 20% upon an Event of Default or if any amounts under the applicable Note are outstanding after May 31, 2021, provides for the capitalization of interest, and provides for the payment of all accrued and unpaid interest and principal on the maturity date. Each of the Notes also provides, subject to a Make Whole Fee (as defined in the respective Note) payable to SREP and Efanur, as applicable, for the interest rate to increase to 25% upon a determination by the disinterested members of the board of directors of the Company (a) not to proceed with, or to terminate, a Rights Offering, (b) to prohibit a Non-Rights Offering Conversion or (c) not to seek shareholder approval of the transactions contemplated by the Notes, including the issuance of shares of common stock of the Company and the conversion price (“Shareholder Approval”), because the failure to make any such determination would reasonably be expected to constitute a breach of the directors’ duties under Maryland law (a “Board Decision”). Based on these provisions, the interest rate on the 2020 Notes was increased to 20% on May 31, 2021 and to 25% on June 2, 2021. At June 30, 2021, there was $738 accumulated and unpaid interest on the 2020 Notes.

Subject to receipt of Shareholder Approval or a Board Decision, SREP and Efanur may elect to convert the principal due under the applicable Note into common stock of the Company in connection with any future rights offering commenced by the Company for 4,000,000 shares of common stock of the Company at a price of $2.50 per share (a “Rights Offering”). Pursuant to the Note in favor of SREP, the Company has committed to offer to SREP the option to purchase any shares of common stock of the Company underlying any unexercised rights in any such Rights Offering.

The Company and SREP entered into a backstop commitment agreement related to the Rights Offering on December 7, 2020. Pursuant to the backstop commitment agreement, SREP agreed to backstop the Rights Offering, if commenced on certain conditions, on a standby basis to facilitate the transaction, by the Company selling to SREP pursuant to an exemption from the registration requirements of Section 5 of the Securities Act provided under Section 4(a)(2) thereof and/or Regulation D thereunder and SREP purchasing an aggregate number of shares of common stock equal to (x) $10.0 million, minus (y) the aggregate proceeds of the Rights Offering divided by $2.50, at a price per share equal to $2.50, subject to the terms and conditions of the backstop commitment agreement. The obligations of SREP under the backstop commitment agreement are subject to certain conditions, which, among other conditions, include: (1) that the Rights Offering must occur on or prior to May 31, 2021, and (2) that the Company exempts SREP from the ownership limitation set forth in the Company’s articles of incorporation. The Rights Offering did not occur on or prior to May 31, 2021 and as of June 30, 2021 SREP (1) has not advised the Company if it will waive this condition to its obligation and (2) has not exercised its right to terminate the backstop commitment agreement.

If any amounts remain unpaid on the applicable Note after May 31, 2021 (or, if earlier, the termination, rescission or rejection of the Rights Offering), subject to receipt of Shareholder Approval or a Board Decision, SREP and Efanur may elect to convert the principal due under the applicable Note into 4,000,000 shares of common stock of the Company at a price of $2.50 per share (a “Non-Rights Offering Conversion”).

The issuance of shares in a Rights Offering or Non-Rights Offering Conversion received requisite Shareholder Approval at a special meeting of shareholders on January 18, 2021. On June 1, 2021, SREP an Efanur submitted notice of their election to convert their applicable Notes pursuant to a Non-Rights Offering Conversion, subject to the rights of the Company under the Notes to prohibit the Non-Rights Offering Conversion. On June 2, 2021, pursuant to the rights of the Company under the Notes, the disinterested members of the board of directors of the Company determined pursuant to a Board Decision to prohibit the Non-Rights Offering Conversion.

In the event of a Board Decision in order to accept an unsolicited cash offer for newly issued common stock or securities convertible into common stock of the Company, then upon consummation of any such sale, the Company is required to pay SREP and Efanur a Make Whole Fee as set forth in their respective Note.

The Company has made an irrevocable election to record these notes in their entirety at fair value utilizing the fair value option available under U.S. GAAP in order to more accurately reflect the economic value of the notes. As such, gains and losses on the Note are included in net gain (loss) on derivatives and convertible debt within net earnings (loss) each reporting period. Gains (losses) related to these notes were recognized totaling ($10,347) and $8 during the three months ended June 30, 2021 and 2020, respectively, and ($8,494) and $48 for the six months ended June 30, 2021 and 2020, respectively. The fair value of the 2016 Note is determined using a trinomial lattice-based model, which is a generally accepted computational model typically used for pricing options. The fair value of the 2020 Note is based on the value of the note upon conversion due to the high probability associated with that event. Interest expense related to these notes is recorded separately from other changes in its fair value within interest expense each period.

The following table represents the difference between the fair value and the unpaid principal balance of the Notes as of June 30, 2021:

	Fair value as of June 30, 2021		Unpaid principal balance as of June 30, 2021		Fair value carrying amount under unpaid principal
2016 Notes	$	1,089	$	1,012	$	(77)
2020 Notes		24,280		10,000		(14,280)
Total	$	25,369	$	11,012	$	(14,357)

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Fair Value Measurements and Derivative Instruments

6 Months Ended

Jun. 30, 2021

Fair Value Measurements and Derivative Instruments [Abstract]

Fair Value Measurements and Derivative Instruments

NOTE 8. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Our determination of fair value measurements is based on the assumptions that market participants would use in pricing the asset or liability. At June 30, 2021, the Company’s convertible debt (see Note 7) and certain derivative instruments were the only financial instruments measured in the financial statements at fair value on a recurring basis. Nonrecurring fair value measurements were utilized in the determination of the fair value of acquired property in 2020 (see Note 3), and in the valuation of the stock-based compensation grants (see Note 12). No impairments or recoveries of impairment were recognized during the three or six months ended June 30, 2021 or 2020.

Derivative Instruments

Currently, the Company uses derivatives, such as interest rate swaps and caps, to manage its interest rate risk. The fair value of interest rate positions is determined using the standard market methodology of netting discounted expected future cash receipts and payments. Variable interest rates used in the calculation of projected receipts and payments on the positions are based on expectations of future interest rates derived from observable market interest rate curves and volatilities. Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the agreements. The Company believes it minimizes this credit risk by transacting with major creditworthy financial institutions. These interest rate positions at June 30, 2021 and December 31, 2020 are as follows:

Associated debt	Type	Terms	Effective Date	Maturity Date		Notional amount at June 30, 2021		Notional amount at December 31, 2020
Wells Fargo	Swap	Swaps 30-day LIBOR for fixed rate of 2.053%	11/2017	11/2022	$	25,149 (1)	$	25,386 (1)

(1)Notional amount amortizes consistently with the principal amortization of the associated loan.

Additionally, included in the Series E Preferred Stock issued on March 1, 2017 is a redemption right that allows the Company to redeem up to a total of 490,250 shares of Series E Preferred Stock for specific percentages of its liquidation preference (see Note 10). This option requires bifurcation and as such is treated as a separate derivative instrument.

All derivatives recognized by the Company are reported as derivative assets or liabilities on the consolidated balance sheets and are adjusted to their fair value at each reporting date. All gains and losses on derivative instruments are included in net gain (loss) on derivatives and convertible debt and with the exception of realized gains and losses related to the interest rate instruments, which are included in interest expense on the consolidated statements of operations. Net gains (losses) of $113 and $11 for the three months ended June 30, 2021 and 2020, respectively, and $248 and ($788) for the six months ended June 30, 2021 and 2020, respectively, were recognized related to derivative instruments.

Recurring Fair Value Measurements

The following tables provide the fair value of the Company’s financial assets and (liabilities) carried at fair value and measured on a recurring basis:

	Fair value at
	June 30, 2021		Level 1		Level 2		Level 3
Interest rate derivatives	$	(632)	$	-	$	(632)	$	-
Series E Preferred embedded redemption option		-		-		-		-
Convertible debt		(25,369)		-		-		(25,369)
Total	$	(26,001)	$	-	$	(632)	$	(25,369)

	Fair value at
	December 31, 2020		Level 1		Level 2		Level 3
Interest rate derivatives	$	(880)	$	-	$	(880)	$	-
Series E Preferred embedded redemption option		-		-		-		-
Convertible debt		(16,875)		-		-		(16,875)
Total	$	(17,755)	$	-	$	(880)	$	(16,875)

There were no transfers between levels during the three or six months ended June 30, 2021 or 2020.

The following table presents a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related gains and losses recorded in the consolidated statements of operations during the periods:

	Three months ended June 30,
	2021		2020
	Convertible debt		Convertible debt
Fair value, beginning of period	$	(15,022)	$	(1,040)
Net gains (losses) recognized in earnings		(10,347)		8
Fair value, end of period	$	(25,369)	$	(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	(10,347)	$	8

	Six months ended June 30,
	2021		2020
	Convertible debt		Series E Preferred embedded redemption option		Convertible debt		Total
Fair value, beginning of period	$	(16,875)	$	22	$	(1,080)	$	(1,058)
Net gains (losses) recognized in earnings		(8,494)		(22)		48		26
Fair value, end of period	$	(25,369)	$	-	$	(1,032)	$	(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	(8,494)	$	(22)	$	48	$	26

Fair Value of Long-Term Debt

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of debt obligations with similar credit risks. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. Both the carrying value and estimated fair value of the Company’s long-term debt are presented net of deferred financing costs in the table below:

	Carrying value as of				Estimated fair value as of
	June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020
Total	$	167,795	$	166,526	$	168,912	$	167,349

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Common Stock

6 Months Ended

Jun. 30, 2021

Common Stock [Abstract]

Common Stock

NOTE 9. COMMON STOCK

The Company’s common stock is duly authorized, fully paid, and non-assessable.

The Company is prohibited from making dividends on either common or preferred stock under the credit facility; provided, that the Company can (a) make an initial dividend that does not exceed 50% of the funds available for distribution for the prior three fiscal quarters and (b) make subsequent dividends that do not (in the aggregate) exceed 50% of the funds available for distribution for any period of four consecutive fiscal quarters.  Any such dividend is subject to satisfaction of certain conditions, including (a) that no default has occurred and is continuing (or would occur as a result of the dividend), (b) that new appraisals or updates to existing appraisals are obtained with respect to the borrowing base properties, (c) that any preferred dividend must be included in the calculation of fixed charges as if paid in the preceding fiscal quarter, (d) that the Company must maintain at least $10.0 million of liquidity (after the dividend), (e) that the Company must maintain a 1.50 to 1 fixed charge coverage ratio for each of the prior three fiscal quarters and (f) that the Company must maintain a borrowing base leverage ratio of 60% or less.

As discussed below, subsequent to quarter end, on July 29, 2021, the Company redeemed the Series E Preferred Stock with common stock by issuing 2,686,571 shares of common stock (see Note 10).

 

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Preferred Stock

6 Months Ended

Jun. 30, 2021

Preferred Stock [Abstract]

Preferred Stock

NOTE 10. PREFERRED STOCK

The Company has 925,000 shares outstanding of Series E Preferred Stock.

The Series E Preferred Stock ranks senior to the Company’s common stock and any other preferred stock issuances and receives preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly of the $10.00 face value per share. If the Company fails to pay a dividend then during the period that dividends are not paid, additional dividends accrue at a rate of 9.50% per annum on the unpaid amount. Dividends on the Series E Preferred Stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, whether or not such dividends are declared, and whether or not such dividends are prohibited by agreement. Under the terms of the credit facility, no cash dividends can currently be paid to common or preferred shareholders. As of June 30, 2021, there are $1,091 of accrued but unpaid dividends related to the Series E Preferred Stock not yet declared by the Board of Directors.

Each share of Series E Preferred Stock is convertible, at the option of the holder, at any time on or after February 28, 2019, into a number of shares of common stock determined by dividing the conversion price of $13.845 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. Upon liquidation, each share of Series E Preferred Stock is entitled to $10.00 per share and accrued and unpaid dividends. The conversion price is subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends. Following a specific equity offering or offerings, from time to time a number of shares of Series E Preferred Stock automatically converts into common stock if the common stock trades at 120% of the conversion price for 60 trading days, and the number of shares converted will be determined by certain trading volumes measures.

The Company has rights to redeem up to 490,250 shares of the Series E Preferred Stock at prices from 110% to 130% of its liquidation value. The holders have put rights commencing March 16, 2021 to put the Series E Preferred Stock to the Company at 130% of its liquidation preference, which the Company can satisfy with cash or common stock. If the Company uses common stock to satisfy the put rights, the value per share of the common stock used to satisfy the put rights will be the greater of (a) the weighted market sale price average per shares of the common stock for the 30 trading days (or such longer trading period as required to have at least 5 trading days on which trades occurred) preceding the put right notice from or a holder of Series E Preferred Stock, or (b) $4.875 per share of common stock.

The Series E Preferred Stock votes as a class on matters generally affecting the Series E Preferred Stock, and as long as 434,750 shares of Series E Preferred Stock (47% of the originally issued shares of Series E Preferred Stock) remain outstanding, then 75% approval of the Series E Preferred Stock will be required to approve merger, consolidation, liquidation or winding up of Condor, related party transactions exceeding $120, payment of dividends on common stock except from funds from operations or to maintain REIT status, the grant of exemptions from Condor’s charter limitation on ownership of 9.9% of any class or series of its securities (exclusive of persons currently holding exemptions), issuance of preferred stock or commitment or agreement to do any of the foregoing.

The Series E Preferred Stock was determined to have a fair value of $9,900 on the date of issuance as measured using a trinomial lattice-based model.  From this value, the embedded redemption option (see Note 8), which was determined to be an asset with a fair value on the date of issuance of $150 using the same model, was bifurcated and will be accounted for at fair value at each period end.  These are considered Level 3 fair value measurements.

The Company received put right notices from all holders of Series E Preferred Stock of the Company effective June 29, 2021 pursuant to which the holders of the Series E Preferred Stock gave notice of their election to exercise their right to require the Company to redeem all 925,000 shares of the Company’s outstanding Series E Preferred Stock held by them at a value per share equal to 130% of the $10 liquidation preference of the Series E Preferred Stock, plus accrued and unpaid dividends, on July 29, 2021. Subsequent to quarter end, on July 29, 2021, the Company redeemed the Series E Preferred Stock with common stock by issuing 2,686,571 shares of common stock to the holders of the Series E Preferred Shares pursuant to the terms of the shares, based on the weighted market sale price average of the common stock for the 30 trading days through June 29, 2021 of $4.9021 per share. The Common Stock was issued in reliance on the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended.

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Noncontrolling Interest in the Operating Partnership

6 Months Ended

Jun. 30, 2021

Noncontrolling Interest in the Operating Partnership [Abstract]

Noncontrolling Interest in the Operating Partnership

NOTE 11. NONCONTROLLING INTEREST IN THE OPERATING PARTNERSHIP

Noncontrolling interest in the operating partnership represents the limited partners’ proportionate share of the equity in the operating partnership. Earnings and loss are allocated to noncontrolling interest in accordance with the weighted average percentage ownership of the operating partnership during the period.

Our ownership interest in the operating partnership was 99.9% as of June 30, 2021 and December 31, 2020, with 219,183 common units owned by limited partners were outstanding at both dates. The total redemption value for the common units was $26 and $17 at June 30, 2021 and December 31, 2020, respectively.

Each limited partner of the operating partnership may, subject to certain limitations, require that the operating partnership redeem all or a portion of his or her common units at any time after a specified period following the date the units were acquired, by delivering a redemption notice to the operating partnership. When a limited partner tenders common units for redemption, the Company can, at its sole discretion, choose to purchase the units for either (1) a number of shares of Company common stock at a rate of one share of common stock for each 52 common units redeemed or (2) cash in an amount equal to the market value of the number of shares of Company common stock the limited partner would have received if the Company chose to purchase the units for common stock.

No common units were redeemed during the three or six months ended June 30, 2021 or 2020.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2021

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 12. STOCK-BASED COMPENSATION

The Company currently has in place the Condor 2016 Stock Plan, which was approved by the Company’s shareholders at the annual shareholders meeting on June 15, 2016. The 2016 Stock Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, deferred stock units, and other forms of stock-based compensation. The maximum number of shares of the Company’s common stock that may be issued under the 2016 Stock Plan is 761,538 following an amendment to the plan to increase the number of available shares by 300,000 that was approved by shareholders on May 17, 2018 at the annual meeting of shareholders. As of June 30, 2021, there were 467,745 common shares available for issuance under the 2016 Stock Plan.

Equity-based compensation is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the requisite service period. Stock-based compensation awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition. Compensation expense will be adjusted when a change in the assessment of achievement of the specific performance condition level is determined to be probable. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of our stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve performance thresholds. We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the point of measurement. Compensation cost is recognized as additional paid-in capital for awards of the Company’s common stock. The Company has elected to account for forfeitures of stock-based compensation as they occur.

Service Condition Share Awards

From time to time, the Company awards restricted shares of common stock to employees, officers, and members of the Board of Directors under the 2016 Stock Plan. These shares generally vest ratably over five years for employees and officers and three years for members of the Board of Directors based on continued service or employment. Dividends paid on these restricted shares during the vesting period are not forfeited in the event that the shares fail to vest. The following table presents a summary of the service condition unvested share activity for the six months ended June 31, 2021 and 2020:

	For the Six months ended June 30,
	2021			2020
	Shares	Weighted-average grant date fair value		Shares	Weighted-average grant date fair value
Unvested at December 31	28,928	$	9.58	46,682	$	10.16
Granted	2,308	$	3.70	2,432	$	7.58
Vested	(11,425)	$	9.65	(10,028)	$	10.18
Unvested at June 30	19,811	$	8.86	39,086	$	9.99

The fair value of the service condition unvested share awards was determined based on the closing price of the Company’s common stock on the grant date.

Market Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain market share prices of common stock are attained. Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan. The executive officer will earn and be issued 36,692 common shares each time stock market price targets of $11.00 to $18.00 (in one dollar increments) per common share are first achieved prior to March 31, 2022 based on the weighted-average common stock price for 60 consecutive trading days. Additionally, the shares vest to the extent of the value received per share of common stock in connection with a change in control, with the payout in such case to be prorated for the portion of the value above a stock market price target but below the next stock market price target. The $11.00 tranche of this award vested on November 22, 2019.

The compensation cost related to awards that are contingent upon achieving a market based criteria is measured at the fair value of the award on the date of grant using the Monte Carlo simulation, including consideration of the market criteria, and amortized on a straight line basis over the derived performance period which is also estimated using this model. The Monte Carlo simulation method is a generally accepted statistical method used to generate a defined number of stock price paths in order to develop a reasonable estimate of the range of future expected stock prices of the Company and its peer group and minimize standard error. The total grant date fair value of this market based share award, including additional value assessed at the time of subsequent amendment of the award, was $1,380.

Performance Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain operating results of the Company are obtained. Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan. For each of the Company’s fiscal years 2017 through 2021, if the Company achieves between 85% and 101% of budgeted Funds from Operations (“FFO”) as approved by the Board of Directors, the executive shall earn and be issued between 11,741 and 19,569 shares of common stock, determined on a straight-line basis based on the percentage of budgeted FFO achieved. In addition, for any fiscal year in which the Company achieves in excess of 101% of budgeted FFO, an additional 391 shares of common stock will be earned for each two percent actual FFO exceeds 101% of budgeted FFO, up to a total of 3,910 additional shares of common stock per year.

The fair value of the performance based share awards is based on the closing price of the Company’s common stock on the grant date, discounted for estimated common stock dividends to be declared prior to the shares being issued. The grant date occurs on an annual basis when budgeted FFO is approved by the Board of Directors. During the three and six months ended June 30, 2021 and 2020, there were no shares issued related to performance-based share awards.

Director Fully Vested Share Compensation

Independent directors serving as members of the Investment Committee of the Board of Directors receive their monthly Investment Committee fees in the form of shares of the Company’s common stock. Certain independent directors also elect to receive a portion of their director fees in the form of shares of the Company’s common stock.

A total of 6,810 and 6,904 shares during the three months ended June 30, 2021 and 2020, respectively, and 12,083 and 8,102 shares during the six months ended June 30, 2021 and 2020, respectively, were issued to independent directors under the 2016 Stock Plan with respect to these fees.

Stock-Based Compensation Expense

The expense recognized in the consolidated financial statements for stock-based compensation related to employees and directors for the three months ended June 30, 2021 and 2020 was $112 and $82, respectively, and for the six months ended June 30, 2021 and 2020 was $211 and $166, respectively, all of which is included in general and administrative expense. Total unrecognized compensation cost related to all awards at June 30, 2021 was $267, which is expected to be recognized over a weighted-average remaining service period of 1.1 years.

 

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes [Abstract]

Income Taxes

NOTE 13. INCOME TAXES

During the three months ended June 30, 2021 and 2020, income tax benefit (expense) totaling ($27) and $61, respectively, was recognized primarily related to income (loss) earned by the TRS and certain state and local taxes at CHLP. During the six months ended June 30, 2021 and 2020, income tax benefit (expense) totaled ($54) and $367, respectively. Management believes the combined federal and state income tax rate for the TRS will be approximately 24%.

After consideration of limitations related to a change in control as defined under Code Section 382, the TRS’s net operating loss carryforward at June 30, 2021 as determined for federal income tax purposes was $10,812. The availability of the loss carryforwards will expire from 2027 through 2034, with an indefinite carryforward for losses arising after December 31, 2017. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers projected reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result of this analysis, the Company believes that a full valuation allowance against the net deferred tax asset position was necessary at June 30, 2021, which requires a valuation allowance of $1,893 as of that date.

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Earnings per Share

6 Months Ended

Jun. 30, 2021

Earnings per Share [Abstract]

Earnings per Share

NOTE 14. EARNINGS PER SHARE

The two-class method is utilized to compute earnings per common share (“EPS”) as our unvested restricted stock awards with non-forfeitable dividends are considered participating securities. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. Our unvested restricted stock is not obligated to absorb Company losses and accordingly is not allocated losses. The following is a reconciliation of basic and diluted EPS:

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Numerator: Basic
Net loss attributable to common shareholders	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Less: Allocation to participating securities		-		-		-		-
Net loss attributable to common shareholders, net of amount allocated to participating securities	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Numerator: Diluted
Net loss attributable to common shareholders, net of amount allocated to participating securities	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Denominator
Weighted average number of common shares - Basic and Diluted		12,003,739		11,961,783		11,998,075		11,956,598
Earnings (Loss) per Share
Basic Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)
Diluted Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)

The following table summarizes the weighted average number of potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted EPS as they are antidilutive:

	Three months ended June 30,		Six months ended June 30,
	2021	2020	2021	2020
Unvested restricted stock	22,582	38,991	24,611	42,130
Series E Preferred Stock	668,111	668,111	668,111	668,111
2016 Convertible debt	97,269	97,269	97,269	97,269
2020 Convertible debt	4,000,000	-	4,000,000	-
Operating partnership common units (1)	4,215	4,215	4,215	4,215
Total potentially dilutive securities excluded from the denominator	4,792,177	808,586	4,794,206	811,725

(1)Common units of the operating partnership have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies [Abstract]

Commitments and Contingencies

NOTE 15. COMMITMENTS AND CONTINGENCIES

Management Agreements

Our TRS engages eligible independent contractors as property managers for each of our hotels in accordance with the requirements for qualification as a REIT. The hotel management agreements provide that the management companies have control of all operational aspects of the hotels, including employee-related matters. The management companies must generally maintain each hotel under their management in good repair and condition and perform routine maintenance, repairs, and minor alterations. Additionally, the management companies must operate the hotels in accordance with the national franchise agreements that cover the hotels, which includes, as applicable, using franchisor sales and reservation systems and abiding by the franchisors’ marketing standards. The management agreements generally require the TRS to fund debt service, working capital needs, and capital expenditures and to fund the management companies’ third-party operating expenses, except those expenses not related to the operation of the hotels. The TRS also is responsible for obtaining and maintaining certain insurance policies with respect to the hotels.

Each of the management companies employed by the TRS at June 30, 2021 receives a base monthly management fee of 3.0% to 3.5% of hotel revenue, with incentives for performance, which increase such fee to a maximum of 5.0% of hotel revenue. Base management fees totaled $424 and $144, respectively, for the three months ended June 30, 2021 and 2020, and $713 and $541, respectively, for the six months ended June 30, 2021 and 2021, all of which was included as hotel and property operations expense. There were $70 and $0 of incentive management fees recognized for the three months ended June 30, 2021 and 2020, respectively, and $98 and $77 recognized for the six months ended June 30, 2021 and 2020, respectively.

The management agreements generally have initial terms of one year to three years and renew for additional terms of one year unless either party to the agreement gives the other party written notice of termination at least 90 days before the end of a term. The Company may terminate a management agreement, subject to cure rights, if certain performance metrics tied to both individual hotel and total managed portfolio performance are not met. The Company may also terminate a management agreement with respect to a hotel at any time without reason, either with or without payment of a termination fee (depending on the agreement). The management agreements terminate with respect to a hotel upon sale of the hotel, subject to certain notice requirements.

Franchise Agreements

As of June 30, 2021, all of our properties operate under franchise licenses from national hotel companies. Under our franchise agreements, we are required to pay franchise fees generally between 3.3% and 5.5% of room revenue, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenue. The franchise agreements typically have 10 to 25 year terms although certain agreements may be terminated by either party on certain anniversary dates specified in the agreements. Further, each agreement provides for early termination fees in the event the agreement is terminated before the stated term. Franchise fee expense totaled $1,059 and $338 for the three months ended June 30, 2021 and 2020, respectively, and $1,793 and $1,320 for the six months ended June 30, 2021 and 2020, respectively, all of which was included as hotel and property operations expense.

The franchisor of two of our hotels advised us in 2019 that both of the hotels have dropped below the required level for guest satisfaction surveys, and that if the hotels do not achieve compliance, it reserves the right to elect to terminate the relevant franchise agreement. While the Company believes that it has corrected all deficiencies, the franchisor has informed us that they are not reassessing the accountability status of any properties until at the earliest July 2021.

Leases

The Company has no land lease agreements in place related to properties owned at June 30, 2021.

The Company currently leases only one office space on a month-to-month basis. Office lease expense totaled $4 and $5 in the three months ended June 30, 2021 and 2020, respectively, and $9 and $13 in the six months ended June 30, 2021 and 2020, respectively, and is included in general and administrative expense. The Company also has in place operating leases for miscellaneous equipment at its hotel properties.

The maturity of the lease liabilities for the Company’s operating leases is as follows:

Maturity of lease liabilities
Year ended December 31,
Remainder of 2021	$	10
2022		20
2023		4
2024		4
2025		4
Thereafter		22
Total lease payments	$	64
Less: Imputed interest		(10)
Present value of lease liabilities	$	54

Litigation

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties. We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us. The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

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Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

NOTE 16. SUBSEQUENT EVENTS

As previously discussed (see Note 10), on July 29, 2021, the Company redeemed the Series E Preferred Shares with 2,686,571 shares of common stock.

On August 12, 2021, the Company entered into the tenth amendment to its credit facility with KeyBank which, among other things:

Provides that the Company may borrow up to $500 under the credit facility without lender approval, which is exclusive of the ability of the Company to borrow additional amounts with lender approval.

Increased the interest rate for the credit facility to LIBOR plus 4.00% or a base rate plus 3.00% as of August 31, 2021. The LIBOR rate is subject to a floor of 0.50%.

Waives the event of default that occurred as a result of the convertible notes issued in 2020 (see Note 7) not being converted to common stock or paid in full by July 1, 2021.

Amends the foregoing event of default provision to provide that it is an event of default if the convertible notes are not either converted to common stock or paid in full by October 31, 2021. The Company intends to not cause such an event of default by satisfying the convertible notes with the Rights Offering, which has a full backstop commitment (see Note 7), or otherwise satisfying the convertible notes with a sale of equity or negotiating an extension of the October 31, 2021 date with KeyBank.

Provides that the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6,000 of liquidity.

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Organization and Summary of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2021

Organization and Summary of Significant Accounting Policies [Abstract]

Description of Business

Description of Business

Condor Hospitality Trust, Inc. (“Condor”), a Maryland corporation, is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels. As of June 30, 2021, the Company owned 15 hotels in eight states. References to the “Company”, “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

The Company, through its wholly owned subsidiary Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (the “operating partnership”), for which we serve as general partner. The operating partnership, including its various subsidiaries, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of all properties held by TRS Leasing, Inc.) and conducts all of its operations. At June 30, 2021, the Company owned 99.9% of the common operating units (“common units”) of the operating partnership with the remaining common units owned by other limited partners.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, the operating partnership and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements.

On June 21, 2021, the Company announced that its board of directors is evaluating strategic alternatives to enhance shareholder value. The Company has engaged the firm of Hodges Ward Elliott to market for sale the 15 hotels portfolio owned by the Company. Although the Company expects significant interest in the marketing initiative, there can be no assurance that a transaction will occur at the conclusion of the process. The Company may engage additional brokers and financial advisors as it deems appropriate. There can be no assurances that the exploration of strategic alternatives will result in any transaction or, should the board of directors approve a transaction, no assurances of the value to the Company’s shareholders thereof. Condor Hospitality does not intend to discuss or disclose developments with respect to the process unless and until otherwise determined that further disclosure is appropriate or required by regulation or law. No formalized timetable has been established for the completion of the strategic review.

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature. Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.

Basis of Presentation

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of the operating partnership and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

We evaluate each of our investments and contractual relationships to determine whether they meet the guidelines for consolidation. Entities are consolidated if the determination is made that we are the primary beneficiary in a variable interest entity (“VIE”) or we maintain control of the asset through our voting interest or other rights in the operation of the entity. The Company has concluded that our operating partnership meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company consolidates the operating partnership. The Company’s sole significant asset is its investment in the operating partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the operating partnership. All of the Company’s debt is an obligation of the operating partnership.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the consolidated financial statements for the periods presented. Interim results are not necessarily indicative of full-year performance for the year ending December 31, 2021 or any future period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Estimates, Risks and Uncertainties

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period. Actual results could differ from those estimates. Because the state of the economy and the real estate market can significantly impact hotel operating performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

The novel coronavirus (COVID-19) has reduced travel significantly and adversely affected the hospitality industry in general. The actual and threatened spread of COVID-19 globally or in the regions in which we operate, or future widespread outbreak of infectious or contagious disease, can continue to reduce national and international travel in general. The extent to which the hospitality industry, and thus our business, will be affected by COVID-19 will largely depend on future developments which we cannot accurately predict, and the impact on customer travel, including the duration of the outbreak, the continued spread and treatment of COVID-19, the impact of new virus variants, the pace of vaccination, and new information and developments that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. To the extent that travel activity in the U.S. is and will be materially and adversely affected by COVID-19, business and financial results of the hospitality industry, and thus our business and financial results, could be impacted.

Since late March 2020, similar to the conditions affecting the hospitality industry as a whole, we have experienced occupancy declines at many of our properties which have and will continue to require us to adjust our business operations and will have had and will continue to have an impact on our operating income and may potentially impact future compliance with our debt covenants.

As a result of the above factors, the Company is and has taken actions at the corporate and hotel level, including, but not limited to:

Obtaining significant modifications of its debt agreements, including extension of the Key Bank credit facility (the “credit facility”) to January 2, 2023 with an increase in credit availability and modifications and waivers of debt covenants, from the majority of the Company’s lenders.

Asset management working with hotel management companies to reduce all hotels operating expenses including, but not limited to, closing off multiple floors, staffing reductions and furloughs, utility consumption reductions, purchasing reductions and eliminations, contract services reductions and

eliminations, food services closures, exercise facilities closures, and certain reduction and elimination of certain marketing expenditures.

Seeking potential alternative revenue sources through health care providers, government agencies, universities and airlines.

Obtaining Paycheck Protection Program (“PPP”) loans authorized under the congressionally approved Coronavirus Aid, Relief, and Economic Security (“CARES”) Act totaling $2,299 (see Note 6), all of which was forgiven by the Small Business Administration (“SBA”) during the second quarter of 2021.

Pursuing corporate cost reductions, including staffing reductions, resulting in an approximately 30% decrease in general and administrative expenses compared to historical operations.

Capital improvement projects have been suspended except for emergency circumstances and will remain on hold for immediate future, with the potential for the suspension to continue through 2021.

The Company determined that it was advisable and the best business practice to cause a temporary closure of two of its hotels, the Solomons Hilton Garden Inn on April 20, 2020 and the Leawood Aloft on April 9, 2020. These hotels were both reopened on July 1, 2020 and no other hotel closures have been deemed necessary.

We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have, a material negative impact on the hospitality industry, and thus on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. While we cannot assure you that the assumptions used to estimate our future liquidity will be correct, the Company believes it can generate the liquidity required to operate through the crisis through a combination of the continued operation of our portfolio with significant cost reduction measures in place, existing availability under our credit facility, and, if necessary, additional debt and equity financings. However, there can be no assurance that the Company will be able to obtain such financing on acceptable terms or at all.

The Company’s loans with Great Western Bank (financing the Leawood, Kansas Aloft) were purchased by OSK X, LLC, an equity fund affiliate of O’Brien Staley Partners, on December 24, 2020 (see Note 6). The Company did not satisfy the financial covenants for these loans as of June 30, 2021, March 31, 2021, or December 31, 2020, as was the case for the first three quarters of 2020. The Company has been advised by OSK X, LLC that it is in default for failure to comply with the financial covenants as of December 31, 2020 (unlike Great Western Bank that waived the covenants for the first three quarters of 2020). Under the loan documents with OSK X, LLC, (a) the 90-day cure period (ended on May 27, 2021) within which the Company could cure the defaults has expired, (b) default interest at the rate of 8.33% began to accrue on May 27, 2021 and (c) OSK X, LLC is entitled to accelerate the loans and foreclose on the Leawood, Kansas Aloft. However, the Company believes that there are serious questions under applicable law about whether OSK X, LLC has the ability to declare a default, assess interest at the default rate, accelerate the loans or foreclose on the Leawood, Kansas Aloft due to the impossibility of performance of financial covenants during the COVID-19 pandemic. The Company intends to seek any available damages in the event of litigation that may result from the actions of OSK X, LLC.

Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. The above-described defaults under our loan agreement with OSK X, LLC resulted in a cross-default under our credit facility as of May 27, 2021. Pursuant to the terms of the tenth amendment to the credit facility (see Note 16), the lenders will not declare a default, accelerate our indebtedness or otherwise take enforcement action on or before November 1, 2021 as a result of the cross-default that occurred as of May 27, 2021 due to the above-described defaults under our loan agreement with OSK X, LLC, subject to the continuing satisfaction of certain conditions, including no breach or default of certain agreements, active pursuit of good faith defenses, the absence of certain legal proceedings or bankruptcy events and the maintenance of $6,000 of liquidity.

Based on a the current status of the OSK X, LLC loans and the guidance in U.S. GAAP that requires that, in making a determination for the one year period following the date of the financial statements, the Company cannot consider future fundraising activities or the likelihood of obtaining covenant waivers or amendments, all of which are outside of the Company's sole control, the Company has determined that there is substantial doubt about the Company’s ability to continue as a going concern for the one year period after the date the financial statements are issued. The

consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Investment in Hotel Properties

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.

Effective January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2017-01, Clarifying the Definition of a Business. As such, if substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. When we conclude that an acquisition meets this threshold, acquisition costs will be capitalized as part of our allocation of the purchase price of the acquired hotel properties. We concluded that the Company’s purchase of the remaining 20% of the joint venture that owns the Atlanta Aloft property (the “Atlanta JV”), completed in the first quarter of 2020, was the acquisition of assets and as such acquisition costs were capitalized as part of this transaction (see Note 3).

The Company’s investments in hotel properties are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment.

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method. Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

On an ongoing basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. In the evaluation of impairment of its hotel properties, the Company makes many assumptions and estimates including projected cash flows both from operations and eventual disposition, expected useful life and holding period, future required capital expenditures, and terminal capitalization rates. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s estimated fair value.

Investment in Joint Venture

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a VIE or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, prior to our acquisition of the remaining 20% interest in the Atlanta JV (see Note 3), allocations of the profits and losses of our Atlanta JV were potentially allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the consolidated statements of cash flows using the cumulative distributions approach. Distributions are classified as cash inflows from operating activities unless

cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture. Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held for Sale

Assets Held for Sale

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year. If a hotel is considered held for sale as of the most recent balance sheet presented or was sold prior to that balance sheet date, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale.

At the end of each reporting period, if the fair value of a held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss. Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required. If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the decision not to sell.

Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes cash and highly liquid investments with original maturities of three months or less when acquired, and are carried at costs which approximates fair value.

Restricted cash consists of cash held in escrow for the replacement of furniture and fixtures, real estate taxes, property insurance, and debt service as required under certain loan agreements.

Revenue Recognition

Revenue Recognition

Revenue consists of amounts derived from hotel operations, including the sales of rooms, food and beverage, and other ancillary services. Room revenue is recognized over a customer's hotel stay at the daily contract rate. Revenue from food and beverage and other ancillary services is generated when a customer chooses to purchase goods or services separately from a hotel room and revenue is recognized on these distinct goods and services at the contract rate at the point in time or over the time period that goods or services are provided to the customer and the related performance obligations are fulfilled. Certain ancillary services are provided by third parties and the Company assesses whether it is the principal or agent in these arrangements. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. If the Company is the principal, the Company recognizes revenue based upon the gross sales price. Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. The Company maintains an allowance for doubtful accounts sufficient to cover estimated potential credit losses.

Sales, use, occupancy, and similar taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the consolidated statements of operations.

Hotel operating revenues can be disaggregated into the following categories to demonstrate how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows:

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Rooms	$	13,460	$	4,489	$	22,589	$	17,015
Food and beverage		247		115		363		464
Other		401		207		800		559
Total revenue	$	14,108	$	4,811	$	23,752	$	18,038

Income Taxes

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under the applicable provisions of the Internal Revenue Code (the “Code”), as amended. In general, under such Code provisions, an entity which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, will not be subject to federal income tax to the extent of the income currently distributed to shareholders. A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS is subject to federal, state, and local income taxes. We account for the federal income taxes of our TRS using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on the consideration of available evidence, including tax planning strategies and projections for future taxable income over the periods in which the remaining deferred tax assets are deductible. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain liabilities and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

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

Our estimates of fair value are determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different

market assumptions or valuation techniques may have a material effect on estimated fair value measurements. 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.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings. This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 and November 19, 2020 (see Note 7).

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Organization and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2021

Organization and Summary of Significant Accounting Policies [Abstract]

Disaggregation of Operating Revenues

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Rooms	$	13,460	$	4,489	$	22,589	$	17,015
Food and beverage		247		115		363		464
Other		401		207		800		559
Total revenue	$	14,108	$	4,811	$	23,752	$	18,038

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Investment in Hotel Properties (Tables)

6 Months Ended

Jun. 30, 2021

Investment in Hotel Properties [Abstract]

Schedule of Investment in Hotel Properties

	As of
		June 30, 2021		December 31, 2020
Land		$	34,929		$	34,928
Buildings, improvements, vehicle			244,209			244,041
Furniture and equipment			24,909			24,622
Initial franchise fees			1,784			1,784
Construction-in-progress			111			123
Right of use asset			53			62
Investment in hotel properties			305,995			305,560
Less accumulated depreciation			(44,959)			(39,729)
Investment in hotel properties, net		$	261,036		$	265,831

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Acquisition of Hotel Properties (Tables)

6 Months Ended

Jun. 30, 2021

Acquisition of Hotel Properties [Abstract]

Schedule of Purchase Price Allocation

Cash purchase price	$	7,300
Investment in unconsolidated joint venture		3,844
Acquisition costs		122
Total investment in net assets	$	11,266
Cash	$	125
Working capital		(462)
Land		14,728
Buildings, improvements, and vehicle		37,020
Furniture and equipment		2,432
Debt assumed at acquisition		(34,080)
Land option liability (1)		(8,497)
Total allocation to net assets	$	11,266

(1)The purchase agreement includes a provision which permits the seller to purchase the surface parking lot north of the hotel exercisable for approximately seven years at less than market rates.

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Investment in Unconsolidated Joint Venture (Tables)

6 Months Ended

Jun. 30, 2021

Investment in Unconsolidated Joint Venture [Abstract]

Summary of Results of Operations of Unconsolidated Joint Ventures

		For the period of January 1 to February 14,
	2020
Revenue
Room rentals and other hotel services	$	1,522
Operating Expenses
Hotel and property operations		960
Depreciation and amortization		181
Total operating expenses		1,141
Operating income		381
Interest expense		(281)
Net earnings	$	100
Condor allocated earnings	$	80
TWC allocated earnings		20
Net earnings	$	100

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2021

Long-Term Debt [Abstract]

Summary of Long Term Debt

Lender		Balance at June 30, 2021	Interest rate at June 30, 2021	Maturity	Amortization provision	Properties encumbered at June 30, 2021	Balance at December 31, 2020
Fixed rate debt
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18	$	8,356	4.54%	08/2024	25 years	1	$	8,454
OSK X, LLC (1)		13,199	8.33%	12/2023 (5)	25 years	1		13,199
OSK X, LLC (1)		765	8.33%	12/2023 (5)	7 years	-		880
Paycheck Protection Program (7)		-	1.00%	05/2022	(7)	-		2,299
Total fixed rate debt		22,320						24,832
Variable rate debt
Wells Fargo		25,149	2.48% (2)	11/2022 (6)	30 years	3		25,386
KeyBank credit facility (3)		121,729	4.25% (4)	1/2023	Interest only	10		118,114
Total variable rate debt		146,878				15		143,500
Total long-term debt	$	169,198					$	168,332
Less: Deferred financing costs		(1,403)						(1,806)
Total long-term debt, net of deferred financing costs	$	167,795					$	166,526

(1) Both loans are collateralized by Aloft Leawood. These loans were formerly held by Great Western Bank prior to being purchased by OSK X, LLC on December 24, 2020. The current status of these loans and the current interest rate is discussed with Financial Covenants below.

(2) Variable rate of 30-day LIBOR plus 2.39%, effectively fixed at 4.44% after giving effect to interest rate swap (see Note 8).

(3) Total available borrowing capacity is $130,000 of which $4,000 is reserved for the payment of interest under the facility. The ability to borrow under the credit facility is limited to payment of interest and fees under the credit facility and funding any shortfalls to an approved budget. The commitment fee on unused facility is 0.20% when the usage is over 50% of the total commitment and 0.25% when the usage under 50% of the commitment. Total unused availability under this credit facility was $8,271 at June 30, 2021, of which $1,129 remains reserved for the payment of interest.

(4) Borrowings under the facility accrue interest, at the Company’s option, at either LIBOR (with a floor of 0.50%) plus a spread of 3.75% or a base rate plus 2.75%, with an increase to the interest rate spreads of 0.25% to occur on October 2, 2021.

(5) Term was extended for an additional two years on December 2, 2020.

(6) Two one year extension options subject to the satisfaction of certain conditions.

(7) The PPP loans are made up of three separate loans received in April 2020. Monthly payments totaling $121 were scheduled to begin October 2021 if the loan or a portion of it was not forgiven. The entire amount of the loans was used for payroll, utilities, and interest, and was forgiven by the Small Business Association (“SBA”) during the second quarter of 2021.

Aggregate Annual Principal Payments on Debt

	Total
Remainder of 2021	$	435
2022		25,336
2023		135,587
2024		7,840
Total	$	169,198

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Convertible Debt at Fair Value (Tables)

6 Months Ended

Jun. 30, 2021

Convertible Debt at Fair Value [Abstract]

Difference Between Fair Value and Unpaid Principal Balance of Note

	Fair value as of June 30, 2021		Unpaid principal balance as of June 30, 2021		Fair value carrying amount under unpaid principal
2016 Notes	$	1,089	$	1,012	$	(77)
2020 Notes		24,280		10,000		(14,280)
Total	$	25,369	$	11,012	$	(14,357)

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Fair Value Measurements and Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Measurements and Derivative Instruments [Abstract]

Schedule of Interest Rate Swaps and Caps

Associated debt	Type	Terms	Effective Date	Maturity Date		Notional amount at June 30, 2021		Notional amount at December 31, 2020
Wells Fargo	Swap	Swaps 30-day LIBOR for fixed rate of 2.053%	11/2017	11/2022	$	25,149 (1)	$	25,386 (1)

(1)Notional amount amortizes consistently with the principal amortization of the associated loan.

Schedule of Fair Value Assets and (Liabilities) Carried at Fair Value and Measured on Recurring Basis

	Fair value at
	June 30, 2021		Level 1		Level 2		Level 3
Interest rate derivatives	$	(632)	$	-	$	(632)	$	-
Series E Preferred embedded redemption option		-		-		-		-
Convertible debt		(25,369)		-		-		(25,369)
Total	$	(26,001)	$	-	$	(632)	$	(25,369)

	Fair value at
	December 31, 2020		Level 1		Level 2		Level 3
Interest rate derivatives	$	(880)	$	-	$	(880)	$	-
Series E Preferred embedded redemption option		-		-		-		-
Convertible debt		(16,875)		-		-		(16,875)
Total	$	(17,755)	$	-	$	(880)	$	(16,875)

Reconciliation of Items Measured at Fair Value on a Recurring Basis

	Three months ended June 30,
	2021		2020
	Convertible debt		Convertible debt
Fair value, beginning of period	$	(15,022)	$	(1,040)
Net gains (losses) recognized in earnings		(10,347)		8
Fair value, end of period	$	(25,369)	$	(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	(10,347)	$	8

	Six months ended June 30,
	2021		2020
	Convertible debt		Series E Preferred embedded redemption option		Convertible debt		Total
Fair value, beginning of period	$	(16,875)	$	22	$	(1,080)	$	(1,058)
Net gains (losses) recognized in earnings		(8,494)		(22)		48		26
Fair value, end of period	$	(25,369)	$	-	$	(1,032)	$	(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	(8,494)	$	(22)	$	48	$	26

Schedule of Carrying Value and Estimated Fair Value of Long-Term Debt

	Carrying value as of				Estimated fair value as of
	June 30, 2021		December 31, 2020		June 30, 2021		December 31, 2020
Total	$	167,795	$	166,526	$	168,912	$	167,349

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Stock-Based Compensation [Abstract]

Summary of Service Condition Unvested Share Activity

	For the Six months ended June 30,
	2021			2020
	Shares	Weighted-average grant date fair value		Shares	Weighted-average grant date fair value
Unvested at December 31	28,928	$	9.58	46,682	$	10.16
Granted	2,308	$	3.70	2,432	$	7.58
Vested	(11,425)	$	9.65	(10,028)	$	10.18
Unvested at June 30	19,811	$	8.86	39,086	$	9.99

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings per Share [Abstract]

Reconciliation of Basic and Diluted Earnings per Common Share

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Numerator: Basic
Net loss attributable to common shareholders	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Less: Allocation to participating securities		-		-		-		-
Net loss attributable to common shareholders, net of amount allocated to participating securities	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Numerator: Diluted
Net loss attributable to common shareholders, net of amount allocated to participating securities	$	(9,866)	$	(6,340)	$	(12,216)	$	(9,509)
Denominator
Weighted average number of common shares - Basic and Diluted		12,003,739		11,961,783		11,998,075		11,956,598
Earnings (Loss) per Share
Basic Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)
Diluted Earnings (Loss) per Share	$	(0.82)	$	(0.53)	$	(1.02)	$	(0.80)

Schedule of Potentially Dilutive Securities Excluded from Computation of Earnings per Share

	Three months ended June 30,		Six months ended June 30,
	2021	2020	2021	2020
Unvested restricted stock	22,582	38,991	24,611	42,130
Series E Preferred Stock	668,111	668,111	668,111	668,111
2016 Convertible debt	97,269	97,269	97,269	97,269
2020 Convertible debt	4,000,000	-	4,000,000	-
Operating partnership common units (1)	4,215	4,215	4,215	4,215
Total potentially dilutive securities excluded from the denominator	4,792,177	808,586	4,794,206	811,725

(1)Common units of the operating partnership have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS.

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies [Abstract]

Maturity of Operating Lease Liabilities

Maturity of lease liabilities
Year ended December 31,
Remainder of 2021	$	10
2022		20
2023		4
2024		4
2025		4
Thereafter		22
Total lease payments	$	64
Less: Imputed interest		(10)
Present value of lease liabilities	$	54

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Organization and Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands		1 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended
	Feb. 14, 2020	Apr. 30, 2020 property	Mar. 31, 2020	Jun. 30, 2021 USD ($) property state	Dec. 31, 2020 USD ($)	Jun. 21, 2021 property	May 27, 2021
Number of hotels | property				15
Number of states the entity owns hotels | state				8
Number of hotels held for sale | property						15
Percentage of remaining equity interest being acquired	20.00%		20.00%	20.00%
Total fixed rate debt				$ 22,320	$ 24,832
Percentage decrease in non-consulting expenses				30.00%
Number of hotels temporarily closed | property		2
Number of additional hotels closed deemed as necessary | property				0
Liquidity threshold				$ 6,000
Building And Improvements [Member] | Minimum [Member]
Estimated useful life				15 years
Building And Improvements [Member] | Maximum [Member]
Estimated useful life				40 years
Furniture and Equipment [Member] | Minimum [Member]
Estimated useful life				3 years
Furniture and Equipment [Member] | Maximum [Member]
Estimated useful life				12 years
KeyBank Credit Facility [Member]
Maturity date of debt				Jan. 02, 2023
Liquidity threshold				$ 6,000
OSK X, LLC 1 [Member]
Maturity date of debt				Dec. 31, 2023
Total fixed rate debt				$ 13,199	$ 13,199
Default interest rate							8.33%
Cure period					90 days
Cure period expiration				May 27, 2021
Paycheck Protection Program [Member]
Maturity date of debt				May 31, 2022
Total fixed rate debt				$ 2,299	$ 2,299
Condor Hospitality Limited Partnership [Member]
Ownership percentage				99.90%	99.90%

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Organization and Summary of Significant Accounting Policies (Disaggregation of Operating Revenues) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 14,108	$ 4,811	$ 23,752	$ 18,038
Rooms [Member]
Disaggregation of Revenue [Line Items]
Revenue	13,460	4,489	22,589	17,015
Food and Beverage [Member]
Disaggregation of Revenue [Line Items]
Revenue	247	115	363	464
Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 401	$ 207	$ 800	$ 559

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Investment In Hotel Properties (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Investment in Hotel Properties [Abstract]
Weighted average remaining life	6 years 4 months 24 days
Right-of-use asset	$ 53	$ 62
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Real Estate Investment Property, Held-for-use, Net	Real Estate Investment Property, Held-for-use, Net
Lease liability	$ 54	$ 62
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Accounts Payable and Accrued Liabilities	Accounts Payable and Accrued Liabilities

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Investment in Hotel Properties (Schedule of Investment in Hotel Properties) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Investment in hotel properties	$ 305,995	$ 305,560
Less accumulated depreciation	(44,959)	(39,729)
Investment in hotel properties, net	261,036	265,831
Land [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties	34,929	34,928
Building, Improvements, Vehicle [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties	244,209	244,041
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties	24,909	24,622
Initial Franchise Fees [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties	1,784	1,784
Construction-in-Progress [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties	111	123
Right of use Asset [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties	$ 53	$ 62

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Acquisition of Hotel Properties (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
	Feb. 14, 2020	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Business Acquisition [Line Items]
Percentage of remaining equity interest being acquired	20.00%			20.00%	20.00%
Revenue		$ 14,108	$ 4,811		$ 23,752	$ 18,038
Operating income (loss)		$ (9,700)	(6,196)		$ (11,887)	(9,220)
Wholly Owned Properties Acquired [Member]
Business Acquisition [Line Items]
Revenue			547			1,360
Operating income (loss)			$ (574)			$ (861)
Atlanta Joint Venture [Member]
Business Acquisition [Line Items]
Cash purchase price	$ 7,300
Debt assumed at acquisition	$ 34,080

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Acquisition of Hotel Properties (Schedule of Purchase Price Allocation) (Details) - Atlanta Joint Venture [Member] - USD ($) $ in Thousands		6 Months Ended
	Feb. 14, 2020	Jun. 30, 2021
Business Acquisition [Line Items]
Cash purchase price	$ 7,300
Debt assumed at acquisition	$ (34,080)
Remaining Interest in Related Party [Member]
Business Acquisition [Line Items]
Cash purchase price		$ 7,300
Investment in unconsolidated joint venture		3,844
Acquisition costs		122
Total investment in net assets		11,266
Cash		125
Working capital		(462)
Land		14,728
Buildings, improvements, and vehicle		37,020
Furniture and equipment		2,432
Debt assumed at acquisition		(34,080)
Land option liability		(8,497)
Total allocation to net assets		$ 11,266

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Investment in Unconsolidated Joint Venture (Narrative) (Details)			1 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended
	Aug. 12, 2021	Aug. 22, 2016 USD ($)	May 31, 2020	Jun. 30, 2021 USD ($) entity	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2021 USD ($) entity	Jun. 30, 2020 USD ($)	Dec. 31, 2020	Aug. 09, 2019 USD ($)
Schedule of Equity Method Investments [Line Items]
Management fees incurred				$ 424,000	$ 144,000		$ 713,000	$ 541,000
KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Maturity date of debt							Jan. 02, 2023
Spring Street Hotel Property II LLC [Member] | Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity interest percentage				20.00%			20.00%
Spring Street Hotel OpCo II LLC [Member] | Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity interest percentage				20.00%			20.00%
Atlanta Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage							80.00%
Number of companies comprised in joint venture | entity				2			2
Management fees incurred						$ 61,000
Cash distribution received						$ 480,000
Atlanta Joint Venture [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Preferred return on capital contributions							10.00%
Buy-sell rights							3 years
Atlanta Joint Venture [Member] | Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity interest percentage				20.00%			20.00%
Preferred return on capital contributions							10.00%
Buy-sell rights							5 years
Atlanta Joint Venture [Member] | KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Debt issued										$ 34,080,000
Maturity date of debt							May 08, 2020
Atlanta Joint Venture [Member] | Minimum [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Purchase option period							3 years
Atlanta Joint Venture [Member] | Maximum [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Purchase option period							5 years
Condor Hospitality Limited Partnership [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage							99.90%		99.90%
Condor Hospitality Limited Partnership [Member] | Spring Street Hotel Property II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage							80.00%
TRS Leasing, Inc [Member] | Spring Street Hotel OpCo II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage							80.00%
LIBOR [Member] | KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread							3.75%
LIBOR [Member] | Atlanta Joint Venture [Member] | KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread			2.25%
Base Rate [Member] | KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread							2.75%
Base Rate [Member] | Atlanta Joint Venture [Member] | KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread			1.25%
Atlanta, Georgia [Member] | Aloft Hotel [Member] | Atlanta Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Purchase price		$ 43,550,000
Atlanta, Georgia [Member] | Aloft Hotel [Member] | Atlanta Joint Venture [Member] | Term Loan [Member]
Schedule of Equity Method Investments [Line Items]
Debt originated at acquisition		$ 33,750,000
Subsequent Event [Member] | LIBOR [Member] | KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread	4.00%
Subsequent Event [Member] | Base Rate [Member] | KeyBank Credit Facility [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread	3.00%

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Investment in Unconsolidated Joint Venture (Summary of Results of Operations of Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		6 Months Ended
	Feb. 14, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Schedule of Equity Method Investments [Line Items]
Room rentals and other hotel services	$ 1,522
Hotel and property operations	960
Depreciation and amortization	181
Total operating expenses	1,141
Operating income	381
Interest expense	(281)
Net loss	100	$ (9,704)	$ (6,198)	$ (11,891)	$ (9,223)
Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Allocated earnings	80
Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Allocated earnings	$ 20

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Dispositions of Hotel Properties (Narrative) (Details) - property	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels	15		15
Number of properties sold	0	0	0	0
Held For Sale [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels	0		0		0

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Long-Term Debt (Narrative) (Details)	3 Months Ended					6 Months Ended	12 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021 USD ($) property	Dec. 31, 2020	Aug. 12, 2021	May 27, 2021
Debt Instrument [Line Items]
Fixed charge coverage ratio						1.50
Borrowing base leverage ratio						60.00%
Minimum liquidity						$ 10,000,000.0
Liquidity threshold						6,000,000
Debt defaulted						0
KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Interest reserve						4,000,000
Minimum liquidity						3,000,000
Liquidity threshold						6,000,000
KeyBank Credit Facility [Member] | Forecast [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio	1.50	1.25	1.25	1.00	1.00
Debt service coverage ratio	1.50	1.25	1.25	1.00	1.00
KeyBank Credit Facility [Member] | Liquidity below $6,000 [Member]
Debt Instrument [Line Items]
Interest reserve						$ 2,000,000
Wells Fargo [Member]
Debt Instrument [Line Items]
Number of properties financed | property						3
OSK X, LLC 1 [Member]
Debt Instrument [Line Items]
Debt service coverage ratio						1.05
Default interest rate									8.33%
Cure period							90 days
Cure period expiration						May 27, 2021
OSK X, LLC 1 [Member] | Leawood, Kansas Aloft (before distributions) [Member]
Debt Instrument [Line Items]
Debt service coverage ratio						1.00
OSK X, LLC 1 [Member] | Leawood, Kansas Aloft (after distributions) [Member]
Debt Instrument [Line Items]
Debt service coverage ratio						1.00
OSK X, LLC 1 [Member] | Forecast [Member] | Leawood, Kansas Aloft (before distributions) [Member]
Debt Instrument [Line Items]
Debt service coverage ratio					1.35
OSK X, LLC 1 [Member] | Forecast [Member] | Leawood, Kansas Aloft (after distributions) [Member]
Debt Instrument [Line Items]
Debt service coverage ratio					1.35
Great Western Bank [Member]
Debt Instrument [Line Items]
Remaining balance purchased by OSK X, LLC						$ 13,964,000
LIBOR [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Floor rate						0.50%
Subsequent Event [Member] | LIBOR [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Floor rate								0.50%
Minimum [Member] | Wells Fargo [Member]
Debt Instrument [Line Items]
Debt yield						10.00%
Debt yield required for cash trap to expire						10.50%
Maximum [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Borrowing base leverage ratio						65.00%

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Long-Term Debt (Summary of Long Term Debt) (Details)		6 Months Ended
	Aug. 12, 2021 USD ($)	Jun. 30, 2021 USD ($) property item loan	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Total fixed rate debt		$ 22,320,000	$ 24,832,000
Total variable rate debt		146,878,000	143,500,000
Total long-term debt		169,198,000	168,332,000
Less: Deferred financing costs		(1,403,000)	(1,806,000)
Total long-term debt, net of deferred financing costs		$ 167,795,000	166,526,000
Number of hotels | property		15
Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		15
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 [Member]
Debt Instrument [Line Items]
Total fixed rate debt		$ 8,356,000	8,454,000
Fixed rate, interest rate		4.54%
Maturity		Aug. 31, 2024
Amortization provision		25 years
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		1
OSK X, LLC 1 [Member]
Debt Instrument [Line Items]
Total fixed rate debt		$ 13,199,000	13,199,000
Fixed rate, interest rate		8.33%
Maturity		Dec. 31, 2023
Amortization provision		25 years
Extension period		2 years
OSK X, LLC 1 [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		1
OSK X, LLC 2 [Member]
Debt Instrument [Line Items]
Total fixed rate debt		$ 765,000	880,000
Fixed rate, interest rate		8.33%
Maturity		Dec. 31, 2023
Amortization provision		7 years
Extension period		2 years
Paycheck Protection Program [Member]
Debt Instrument [Line Items]
Total fixed rate debt		$ 2,299,000	2,299,000
Fixed rate, interest rate		1.00%
Maturity		May 31, 2022
Monthly payment		$ 121,000
Number of loans | loan		3
Wells Fargo [Member]
Debt Instrument [Line Items]
Total variable rate debt		$ 25,149,000	25,386,000
Fixed rate, interest rate		4.44%
Variable rate, interest rate		2.48%
Maturity		Nov. 30, 2022
Amortization provision		30 years
Number of loan extensions | item		2
Extension period		1 year
Wells Fargo [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		3
Wells Fargo [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Reference rate		30-day LIBOR
Basis spread		2.39%
KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Total variable rate debt		$ 121,729,000	$ 118,114,000
Variable rate, interest rate		4.25%
Maturity		Jan. 02, 2023
Line of credit facility, maximum borrowing capacity		$ 130,000,000
Available borrowing capacity		8,271,000
Interest reserve		4,000,000
Interest reserve, remaining amount available		$ 1,129,000
Commitment fee usage threshold		50.00%
Increase in interest rate spreads		0.25%
KeyBank Credit Facility [Member] | Usage Over 50% of the Commitment [Member]
Debt Instrument [Line Items]
Commitment fee		0.20%
KeyBank Credit Facility [Member] | Usage Under 50% of the Commitment [Member]
Debt Instrument [Line Items]
Commitment fee		0.25%
KeyBank Credit Facility [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		10
KeyBank Credit Facility [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread		3.75%
Floor rate		0.50%
KeyBank Credit Facility [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Basis spread		2.75%
Subsequent Event [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 500,000
Subsequent Event [Member] | KeyBank Credit Facility [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	4.00%
Floor rate	0.50%
Subsequent Event [Member] | KeyBank Credit Facility [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Basis spread	3.00%

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Long-Term Debt (Aggregate Annual Principal Payments on Debt) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Long-Term Debt [Abstract]
Remainder of 2021	$ 435
2022	25,336
2023	135,587
2024	7,840
Total long-term debt	$ 169,198	$ 168,332

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Convertible Debt at Fair Value (Narrative) (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 16, 2016	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Jun. 02, 2021	May 31, 2021	Dec. 07, 2020	Nov. 19, 2020
Debt Instrument [Line Items]
Gain (loss) on derivatives and convertible debt		$ (10,234,000)	$ 19,000	$ (8,246,000)	$ (740,000)
Series E Preferred Stock [Member]
Debt Instrument [Line Items]
Preferred stock, annual dividend rate				6.25%		6.25%
2016 Notes [Member]
Debt Instrument [Line Items]
Interest rate	6.25%
Principal amount	$ 1,012,000
Number of shares of common stock debt can convert into	97,269
Maximum ownership percentage of voting stock upon debt conversion	49.00%
Gain (loss) on derivatives and convertible debt		$ (10,347,000)	$ 8,000	$ (8,494,000)	$ 48,000
Accumulated and unpaid interest				$ 116,000
Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Principal amount										$ 7,220,000
Loan Agreements [Member]
Debt Instrument [Line Items]
Principal amount										2,780,000
2020 Notes [Member]
Debt Instrument [Line Items]
Interest rate		10.00%		10.00%			25.00%	20.00%
Principal amount									$ 10,000,000.0	$ 10,000,000
Number of shares of common stock debt can convert into				4,000,000
Accumulated and unpaid interest				$ 738,000
Maturity date of debt				Jan. 02, 2023
Debt default interest rate				20.00%
Make Whole Fee interest rate				25.00%
Conversion price per share		$ 2.50		$ 2.50					$ 2.50

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Convertible Debt at Fair Value (Difference Between Fair Value and Unpaid Principal Balance of Note) (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Fair value	$ 25,369,000	$ 16,875,000
Unpaid principal balance	11,012,000
Fair value carrying amount under unpaid principal	(14,357,000)
2016 Notes [Member]
Debt Instrument [Line Items]
Fair value	1,089,000
Unpaid principal balance	1,012,000
Fair value carrying amount under unpaid principal	(77,000)
2020 Notes [Member]
Debt Instrument [Line Items]
Fair value	24,280,000
Unpaid principal balance	10,000,000
Fair value carrying amount under unpaid principal	$ (14,280,000)

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Fair Value Measurements and Derivative Instruments (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Mar. 01, 2017
Fair Value Measurements And Derivative Instruments [Line Items]
Impairment recovery, net	$ 0	$ 0	$ 0	$ 0
Fair value, assets, transfers Level 1 to Level 2	0	0	0	0
Fair value, assets, transfers Level 2 to Level 1	0	0	0	0
Fair value, liabilities, transfers Level 1 to Level 2	0	0	0	0
Fair value, liabilities, transfers Level 2 to Level 3	0	0	0	0
Fair value, assets and liabilities, transfers into/(out of) Level 3	0	0	0	0
Interest Rate Derivatives [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Net gain (loss) on interest rate instruments	$ 113,000	$ 11,000	$ 248,000	$ (788,000)
Redemption Rights [Member] | Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Number of shares called by redemption					490,250

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Fair Value Measurements and Derivative Instruments (Schedule of Interest Rate Swaps and Caps) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Wells Fargo [Member]
Derivative [Line Items]
Notional amount		$ 25,386
Wells Fargo [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Effective date	Nov. 01, 2017
Maturity date	Nov. 30, 2022
Notional amount	$ 25,149
LIBOR [Member] | Wells Fargo [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.39%
LIBOR [Member] | KeyBank Credit Facility [Member]
Derivative [Line Items]
Basis spread	3.75%
Federal Funds Effective Swap Rate [Member] | Wells Fargo [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.053%

XML

Fair Value Measurements and Derivative Instruments (Schedule of Fair Value Assets and (Liabilities) Carried at Fair Value and Measured on Recurring Basis) (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Interest rate derivatives	$ (632,000)	$ (880,000)
Convertible debt	(25,369,000)	(16,875,000)
Total	(26,001,000)	(17,755,000)
Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Interest rate derivatives	(632,000)	(880,000)
Total	(632,000)	(880,000)
Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Convertible debt	(25,369,000)	(16,875,000)
Total	$ (25,369,000)	$ (16,875,000)

XML

Fair Value Measurements and Derivative Instruments (Reconciliation of Items Measured at Fair Value on a Recurring Basis) (Details) - Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period				$ (1,058)
Net gains (losses) recognized in earnings				26
Fair value, end of period		$ (1,032)		(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period				26
Series E Preferred Embedded Redemption Option [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period				22
Net gains (losses) recognized in earnings				(22)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period				(22)
Convertible Debt [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	$ (15,022)	(1,040)	$ (16,875)	(1,080)
Net gains (losses) recognized in earnings	(10,347)	8	(8,494)	48
Fair value, end of period	(25,369)	(1,032)	(25,369)	(1,032)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$ (10,347)	$ 8	$ (8,494)	$ 48

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Fair Value Measurements and Derivative Instruments (Schedule of Carrying Value and Estimated Fair Value of Long-Term Debt) (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	$ 167,795,000	$ 166,526,000
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	$ 168,912,000	$ 167,349,000

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Common Stock (Narrative) (Details) - USD ($) $ in Millions		6 Months Ended
	Jul. 29, 2021	Jun. 30, 2021
Class of Stock [Line Items]
Maximum initial dividend, percentage of funds available for prior three quarters		50.00%
Maximum subsequent dividend, percentage of funds available for any four consecutive quarters		50.00%
Minimum liquidity		$ 10.0
Fixed charge coverage ratio		1.50
Borrowing base leverage ratio		60.00%
Subsequent Event [Member]
Class of Stock [Line Items]
Issuance of common stock, shares	2,686,571
Subsequent Event [Member] | Common Stock [Member]
Class of Stock [Line Items]
Issuance of common stock, shares	2,686,571

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Preferred Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands			6 Months Ended	12 Months Ended
	Jul. 29, 2021	Mar. 01, 2017	Jun. 30, 2021	Dec. 31, 2020
Class of Stock [Line Items]
Dividends and distributions payable			$ 1,091	$ 762
Subsequent Event [Member]
Class of Stock [Line Items]
Issuance of common stock, shares	2,686,571
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding			925,000	925,000
Preferred stock, annual dividend rate			6.25%	6.25%
Preferred stock, fixed annual amount of dividend per share			$ 10.00
Preferred stock, dividend rate increase resulting from failure to pay dividend, with equity offerings			9.50%
Redeemable preferred stock, liquidation preference per share			$ 10.00
Preferred stock, percentage of conversion price at which preferred stock automatically converts to common stock			120.00%
Preferred stock, trading days for preferred stock automatically converting to common stock			60 days
Number of shares redeemable by company when market price is within defined range			490,250
Preferred stock, percentage of liquidation value at which holders can sell			130.00%
Common stock used to satisfy put rights, weighted average per share, number of trading days			30 days
Common stock used to satisfy put rights, weighted average per share, minimum number of trading days on which trades occured			5 days
Common stock used to satisfy put rights, price per share			$ 4.875
Threshold of originally issued preferred stock shares outstanding required for approval of certain transactions by preferred shareholders			434,750
Threshold of originally issued preferred stock shares outstanding required for approval of certain transactions by preferred shareholders, percent			47.00%
Percentage of approval required for certain transactions by preferred shareholders			75.00%
Threshold of amount of related party transactions for approval by preferred shareholders			$ 120
Threshold of maximum percentage of shares grantable before shareholder approval required			9.90%
Fair value of common stock sold		$ 9,900
Series E Preferred Stock [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Common stock used to satisfy put rights, price per share	$ 4.9021
Series E Preferred Stock [Member] | On Or After February 28,2019 [Member]
Class of Stock [Line Items]
Conversion price per share			$ 13.845
Minimum [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, percentage of liquidation value at which company can redeem preferred stock			110.00%
Maximum [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, percentage of liquidation value at which company can redeem preferred stock			130.00%
Level 3 [Member] | Redemption Rights [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Assets fair value		$ 150
Common Stock [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Issuance of common stock, shares	2,686,571

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Noncontrolling Interest in the Operating Partnership (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Redeemable Noncontrolling Interest [Line Items]
Redemption value	$ 26		$ 26		$ 17
Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage of operating partnership			99.90%		99.90%
Common units redemption to common stock			0.019
Common Units [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units redeemed	0	0	0	0
Noncontrolling Interest [Member] | Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units outstanding	219,183		219,183		219,183
Redemption value	$ 26		$ 26		$ 17

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Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		6 Months Ended
	Nov. 22, 2019	May 17, 2018	Jun. 28, 2017	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 15, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted						2,308	2,432
Vested in period						11,425	10,028
Unrecognized compensation cost				$ 267		$ 267
Unrecognized compensation cost recognition period						1 year 1 month 6 days
Market price target	$ 11.00
Stock-based compensation				$ 112	$ 82	$ 211	$ 166
2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized								761,538
Number of additional shares authorized		300,000
Shares available for issuance				467,745		467,745
Shares issued to independent directors				6,810	6,904	12,083	8,102
Employees and Officers [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period						5 years
Members of the Board of Directors [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period						3 years
Market Based Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost			$ 1,380
Market Based Share Awards [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration date						Mar. 31, 2022
Market based share award, potential shares earned and issued			36,692
Market price target increments			$ 1
Trading period used to determine award price			60 days
Market Based Share Awards [Member] | Minimum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price target			$ 11.00
Market Based Share Awards [Member] | Maximum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price target			$ 18.00
Performance Based Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted				0	0	0	0
Performance Based Share Awards [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration date						Dec. 31, 2021
Additional shares earned per percentage if actual FFO exceeds budgeted FFO			391
Percentage increment required to earn additional shares			2.00%
Performance Based Share Awards [Member] | Minimum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required percentage of budgeted FFO to achieve performance award			85.00%
Potential shares earned and issued if operating results are obtained			11,741
Performance Based Share Awards [Member] | Maximum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required percentage of budgeted FFO to achieve performance award			101.00%
Potential shares earned and issued if operating results are obtained			19,569
Additional shares earned per percentage if actual FFO exceeds budgeted FFO			3,910

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Stock-Based Compensation (Summary of Service Condition Unvested Share Activity) (Details) - $ / shares	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Stock-Based Compensation [Abstract]
Shares: Unvested at December 31	28,928	46,682
Shares: Granted	2,308	2,432
Shares: Vested	(11,425)	(10,028)
Shares: Unvested at June 30	19,811	39,086
Weighted-average grant date fair value: Unvested at December 31	$ 9.58	$ 10.16
Weighted-average grant date fair value: Granted	3.70	7.58
Weighted-average grant date fair value: Vested	9.65	10.18
Weighted-average grant date fair value: Unvested at June 30	$ 8.86	$ 9.99

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax Disclosure [Line Items]
Income tax benefit (expense)	$ 27	$ (61)	$ 54	$ (367)
Valuation allowance	1,893		1,893
TRS Leasing, Inc [Member]
Income Tax Disclosure [Line Items]
Income tax benefit (expense)	(27)	$ 61	$ (54)	$ 367
Combined federal and state effective tax rate			24.00%
Net operating loss carryforward for federal income tax purposes	$ 10,812		$ 10,812
TRS Leasing, Inc [Member] | Minimum [Member]
Income Tax Disclosure [Line Items]
Loss carryforwards expiration period			Jan. 01, 2027
TRS Leasing, Inc [Member] | Maximum [Member]
Income Tax Disclosure [Line Items]
Loss carryforwards expiration period			Dec. 31, 2034

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Earnings per Share (Reconciliation of Basic and Diluted Earnings per Common Share) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Numerator: Basic
Net loss attributable to common shareholders	$ (9,866,000)	$ (6,340,000)	$ (12,216,000)	$ (9,509,000)
Less: Allocation to participating securities
Net loss attributable to common shareholders, net of amount allocated to participating securities	(9,866,000)	(6,340,000)	(12,216,000)	(9,509,000)
Numerator: Diluted
Net loss attributable to common shareholders, net of amount allocated to participating securities	$ (9,866,000)	$ (6,340,000)	$ (12,216,000)	$ (9,509,000)
Denominator
Weighted average number of common shares - Basic and Diluted	12,003,739	11,961,783	11,998,075	11,956,598
Earnings (Loss) per Share
Basic Earnings (Loss) per Share	$ (0.82)	$ (0.53)	$ (1.02)	$ (0.80)
Diluted Earnings (Loss) per Share	$ (0.82)	$ (0.53)	$ (1.02)	$ (0.80)

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Earnings per Share (Schedule of Potentially Dilutive Securities Excluded from Computation of Earnings per Share) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	4,792,177	808,586	4,794,206	811,725
Unvested Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	22,582	38,991	24,611	42,130
Series E Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	668,111	668,111	668,111	668,111
2016 Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	97,269	97,269	97,269	97,269
2020 Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	4,000,000		4,000,000
Condor Hospitality Limited Partnership [Member] | Partnership Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	4,215	4,215	4,215	4,215

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Commitments and Contingencies (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) property agreement	Jun. 30, 2020 USD ($)
Loss Contingencies [Line Items]
Management fees incurred	$ 424	$ 144	$ 713	$ 541
Incentive management fee	70	0	$ 98	77
Management agreement renewal additional term			1 year
Management agreement written notice of termination period			90 days
Cost of goods and services sold	9,232	5,089	$ 16,911	14,904
Number of hotels that dropped below required level of guest satisfaction | property			2
Number of office spaces leased on month-to-month basis | property			1
Office Building [Member]
Loss Contingencies [Line Items]
Lease expense	4	5	$ 9	13
Minimum [Member]
Loss Contingencies [Line Items]
Management fee percent			3.00%
Management agreement term			1 year
Franchise fee percent			3.30%
Other franchiser programs and service fee percent			2.50%
Franchise agreement term			10 years
Maximum [Member]
Loss Contingencies [Line Items]
Management fee percent			3.50%
Incentive fee percent			5.00%
Management agreement term			3 years
Franchise fee percent			5.50%
Other franchiser programs and service fee percent			6.00%
Franchise agreement term			25 years
Land [Member]
Loss Contingencies [Line Items]
Number of land lease agreements related to properties owned | agreement			0
Franchise [Member]
Loss Contingencies [Line Items]
Cost of goods and services sold	$ 1,059	$ 338	$ 1,793	$ 1,320

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Commitments and Contingencies (Maturity of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Commitments and Contingencies [Abstract]
Remainder of 2021	$ 10
2022	20
2023	4
2024	4
2025	4
Thereafter	22
Total lease payments	64
Less: Imputed interest	(10)
Present value of lease liabilities	$ 54	$ 62

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Subsequent Events (Narrative) (Details) - USD ($)			6 Months Ended
	Aug. 12, 2021	Jul. 29, 2021	Jun. 30, 2021
Subsequent Event [Line Items]
Liquidity threshold			$ 6,000,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Issuance of common stock, shares		2,686,571
KeyBank Credit Facility [Member]
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity			130,000,000
Liquidity threshold			$ 6,000,000
KeyBank Credit Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity	$ 500,000
LIBOR [Member] | KeyBank Credit Facility [Member]
Subsequent Event [Line Items]
Basis spread			3.75%
Floor rate			0.50%
LIBOR [Member] | KeyBank Credit Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Basis spread	4.00%
Floor rate	0.50%
Base Rate [Member] | KeyBank Credit Facility [Member]
Subsequent Event [Line Items]
Basis spread			2.75%
Base Rate [Member] | KeyBank Credit Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Basis spread	3.00%