CLDT-PA

MKT CAP $882.5MP/E 236.9DIV YIELD 2.01%FCF YIELD —REV TTM $301.5M −3.1%NET INCOME $12.1M +27.5%NET DEBT $403M52W 18.95 – 20.97SEC XBRL · TTM TO Invalid Date

How CLDT-PA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

90%

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new sentences

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+389

words, now 14,974

New in FY2025

SUMMARY Risks Related to Our Business • The COVID-19 pandemic had, and a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance. • Our investment policies are subject to revision from time to time at our Board of Trustees' discretion. • We depend on the efforts and expertise of our key executive officers whose continued service is not guaranteed. • Our future growth depends on obtaining new financing. • We must rely on third-party management companies to operate our hotels in order to qualify as a REIT. • The management of the hotels in our portfolio is currently concentrated in one hotel management company. • Our franchisors could cause us to expend additional funds on upgraded operating standards. • Our franchisors may cancel or fail to renew our existing franchise licenses. • Fluctuations in our financial performance, capital expenditure requirements and excess cash flow could adversely affect our ability to make distributions. • Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties. • If we are unable to repay our debt obligations in the future, we may be forced to refinance debt or dispose of or encumber our assets, which could adversely affect distributions to shareholders. • Interest expense on our debt may limit our cash available to fund growth strategies and shareholder distributions. • Failure to hedge effectively against interest rate changes may adversely affect us. • Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our joint-venture partners. • We may from time to time make distributions to our shareholders in the form of our common shares, which could result in shareholders incurring tax liability without receiving sufficient cash to pay such tax. • Our conflict of interest policy may not be successful in eliminating the influence of future conflicts of interest that may arise between us and our trustees, officers and employees. • There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer. • Hotel development is subject to timing, cost, and other risks. • Inflation and price volatility could impact our business and results of operations.
Risks Related to the Lodging Industry • The lodging industry has experienced significant declines in the past and failure of the lodging industry to exhibit improvement may adversely affect our ability to execute our business strategy. • Our ability to make distributions to our shareholders may be affected by operating risks in the lodging industry. • Competition for acquisitions may reduce the number of properties we can acquire. • Competition for guests may lower our hotels' revenues and profitability. • The cyclical nature of the lodging industry may adversely affect the return on our investments. • Due to our concentration therein, a downturn in the lodging industry would adversely affect our business. • The ongoing need for capital expenditures at our hotel properties may adversely affect our business. • The increasing use by consumers of Internet travel intermediaries and alternative lodging market places may adversely affect our profitability. • The need for business-related travel may be adversely affected by the use of business-related technology. • Risks related to information technology. • Risks related to artificial intelligence. • Future terrorist attacks, rumors or threats of war, or changes in terror alert levels could adversely affect travel and hotel demand. • We may assume liabilities in connection with the acquisition of hotel properties, including unknown liabilities. • Uninsured and underinsured losses could adversely affect our operating results. • We face risks associated with natural disasters and the direct and indirect physical effects of climate change, which may include more frequent and more severe storms, hurricanes, flooding, droughts and wildfires, any of which could have a material adverse effect on our hotel properties, operations, cash flows and financing options. • Noncompliance with environmental laws and governmental regulations could adversely affect our business. • Compliance with the ADA and other changes in governmental rules and regulations could substantially increase our cost of doing business. • The outbreak of widespread contagious disease, such as COVID-19, could reduce travel. • A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could reduce travel.
Risks Related to Our Business The COVID-19 pandemic had, and a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance.
The COVID-19 pandemic had a severe and negative impact on both the U.S. economy and the global economy.
Financial markets experienced significant volatility as a result of the COVID-19 pandemic.
Fisher, our Chairman and Chief Executive Officer, controls IHM, a hotel management company that, as of December 31, 2025, managed all of our hotels and may manage additional hotels that we acquire in the future.
As of December 31, 2025, IHM managed all 33 of our hotels.
Fisher, owned 100% of IHM, a hotel management company that, as of December 31, 2025, managed all of our hotels and may manage additional hotels that we acquire or own (wholly or through a joint venture) in the future.
These capital improvements may give rise to the following risks: • possible environmental problems; • construction cost overruns and delays including those caused by supply chain disruptions and tariffs; • possibility that revenues will be reduced temporarily while rooms or restaurants offered are out of service due to capital improvement projects; • a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available on affordable terms; • uncertainties as to market demand or a loss of market demand after capital improvements have begun; and • disputes with franchisors/managers regarding compliance with relevant management/franchise agreements.
We may face challenges managing rapidly advancing artificial intelligence in our business which could adversely affect our competitive position.
The development and evolution of artificial intelligence is occurring at a rapid pace.
Artificial intelligence may present an opportunity to create meaningful efficiencies and improve our business performance, but it could present similar opportunities for our competitors, and the use of artificial intelligence by us or our hotel manager, franchisors or vendors may pose new and more severe cybersecurity challenges.
The use of artificial intelligence by hotel guests may change the way they find and purchase lodging or other hotel services.
If we or our hotel manager, franchisors or vendors are unable to apply artificial intelligence to our business successfully or our competitors gain competitive advantages over us through their application of artificial intelligence, our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.
Future terrorist attacks, rumors or threats of war, or changes in terror alert levels could adversely affect travel and hotel demand.
Previous terrorist attacks, rumors or threats of war, and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries, often disproportionately to the effect on the overall economy.
The impact that terrorist attacks in the U.S. or elsewhere could have on domestic and international travel and our business in particular cannot be determined but any such attacks, rumors, or the threat of such attacks could have a material adverse effect on our business, financial condition and results of operations and our ability to finance our business, to insure our properties and to make distributions to our shareholders.
A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal government, failure to raise the borrowing limit for the federal government, and other legislative changes and governmental disruptions could affect travel directly and indirectly and may thereby negatively impact our revenues and cash available for distributions.
The delay in approving a budget and continuing appropriation legislation to fund the federal government's operations caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018 and the third quarter of 2025.
There can be no assurance that similar action or inaction by federal or state government agencies, or other efforts to reduce government expenditures or growth, will not occur again in future periods, resulting in difficulties and discouraging travel or meetings and conferences.
The reduction in income from both businesses and federal government employees and the possibility of another federal government impasse may adversely affect consumer confidence or may discourage both business and leisure travel, resulting in the deferral or cancellation of travel and a negative effect on our group and transient revenues in the future.
Such impacts could have a material adverse impact on our consolidated financial statements.
Under our credit facility, consisting of an unsecured revolving credit facility and an unsecured term loan facility, our distributions may not exceed the greater of (i) 95% of adjusted funds from operations (as defined in our credit agreement) for the preceding four-quarter period or (ii) the amount required for us to maintain our status as a REIT.
As a result, if we do not generate sufficient adjusted funds from operations during the four quarters preceding any common share dividend payment date, we would not be able to pay dividends to our common shareholders consistent with our past practice without causing a default under our credit agreement.
In the event of a default under our credit agreement, we would be unable to borrow under our revolving credit facility or term loan and any amounts we have borrowed thereunder could become due and payable.
Our Equity Incentive Plan provides for grants of equity based awards up to an aggregate of 6,750,000 common shares and we may seek to increase shares available under our Equity Incentive Plan in the future.

Gone since FY2024

SUMMARY Risks Related to Our Business • The COVID-19 pandemic has had, and may continue to have, or a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance. • Our investment policies are subject to revision from time to time at our Board of Trustees' discretion. • We depend on the efforts and expertise of our key executive officers whose continued service is not guaranteed. • Our future growth depends on obtaining new financing. • We must rely on third-party management companies to operate our hotels in order to qualify as a REIT. • The management of the hotels in our portfolio is currently concentrated in one hotel management company. • Our franchisors could cause us to expend additional funds on upgraded operating standards. • Our franchisors may cancel or fail to renew our existing franchise licenses. • Fluctuations in our financial performance, capital expenditure requirements and excess cash flow could adversely affect our ability to make distributions. • Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties. • If we are unable to repay our debt obligations in the future, we may be forced to refinance debt or dispose of or encumber our assets, which could adversely affect distributions to shareholders. • Interest expense on our debt may limit our cash available to fund growth strategies and shareholder distributions. • Failure to hedge effectively against interest rate changes may adversely affect us. • Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our joint-venture partners. • We may from time to time make distributions to our shareholders in the form of our common shares, which could result in shareholders incurring tax liability without receiving sufficient cash to pay such tax. • Our conflict of interest policy may not be successful in eliminating the influence of future conflicts of interest that may arise between us and our trustees, officers and employees. • There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer. • Hotel development is subject to timing, cost, and other risks. • Inflation and price volatility could impact our business and results of operations.
Risks Related to the Lodging Industry • The lodging industry has experienced significant declines in the past and failure of the lodging industry to exhibit improvement may adversely affect our ability to execute our business strategy. • Our ability to make distributions to our shareholders may be affected by operating risks in the lodging industry. • Competition for acquisitions may reduce the number of properties we can acquire. • Competition for guests may lower our hotels' revenues and profitability. • The cyclical nature of the lodging industry may adversely affect the return on our investments. • Due to our concentration therein, a downturn in the lodging industry would adversely affect our business. • The ongoing need for capital expenditures at our hotel properties may adversely affect our business. • The increasing use by consumers of Internet travel intermediaries and alternative lodging market places may adversely affect our profitability. • The need for business-related travel may be adversely affected by the use of business-related technology. • Risks related to information technology. • Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand. • We may assume liabilities in connection with the acquisition of hotel properties, including unknown liabilities. • Uninsured and underinsured losses could adversely affect our operating results. • We face risks associated with natural disasters and the direct and indirect physical effects of climate change, which may include more frequent and more severe storms, hurricanes, flooding, droughts and wildfires, any of which could have a material adverse effect on our hotel properties, operations, cash flows and financing options. • Noncompliance with environmental laws and governmental regulations could adversely affect our business. • Compliance with the ADA and other changes in governmental rules and regulations could substantially increase our cost of doing business. • The outbreak of widespread contagious disease, such as COVID-19, could reduce travel.
Risks Related to Our Business The COVID-19 pandemic has had, and may continue to have, or a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance.
The COVID-19 pandemic has had a severe and negative impact on both the U.S. economy and the global economy.
Financial markets have experienced significant volatility as a result of the COVID-19 pandemic.
The rapid development and fluidity of the COVID-19 pandemic made it extremely difficult to assess the pandemic's full adverse economic impact, and future impact, on our financial condition, results of operations, cash flows and performance.
Fisher, our Chairman and Chief Executive Officer, controls IHM, a hotel management company that, as of December 31, 2024, managed all of our hotels and may manage additional hotels that we acquire in the future.
As of December 31, 2024, IHM managed all 37 of our hotels.
Fisher, owned 100% of IHM, a hotel management company that, as of December 31, 2024, managed all of our hotels and may manage additional hotels that we acquire or own (wholly or through a joint venture) in the future.
These capital improvements may give rise to the following risks: • possible environmental problems; • construction cost overruns and delays; • possibility that revenues will be reduced temporarily while rooms or restaurants offered are out of service due to capital improvement projects; • a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available on affordable terms; • uncertainties as to market demand or a loss of market demand after capital improvements have begun; and • disputes with franchisors/managers regarding compliance with relevant management/franchise agreements.
Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.
Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries, often disproportionately to the effect on the overall economy.
The impact that terrorist attacks in the U.S. or elsewhere could have on domestic and international travel and our business in particular cannot be determined but any such attacks or the threat of such attacks could have a material adverse effect on our business, financial condition and results of operations and our ability to finance our business, to insure our properties and to make distributions to our shareholders.
Under our revolving credit facility and term loan, our distributions may not exceed the greater of (i) 95% of adjusted funds from operations (as defined in our senior unsecured revolving credit facility and term loan) for the preceding four-quarter period or (ii) the amount required for us to maintain our status as a REIT.
As a result, if we do not generate sufficient adjusted funds from operations during the four quarters preceding any common share dividend payment date, we would not be able to pay dividends to our common shareholders consistent with our past practice without causing a default under our revolving credit facility and term loan.
In the event of a default under our revolving credit facility or term loan, we would be unable to borrow under our revolving credit facility or term loan and any amounts we have borrowed thereunder could become due and payable.
Our Equity Incentive Plan provides for grants of equity based awards up to an aggregate of 4,600,000 common shares and we may seek to increase shares available under our Equity Incentive Plan in the future.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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