Risk Factors Update Summary

• The company has aggregate loans payable of $4.2 million and total liabilities of approximately $285 million, impacting financial stability.
• The company has implemented a comprehensive cybersecurity program to mitigate risks, enhancing overall security measures. This change might result in improved protection against potential cyber threats.
• Our financial statements have been prepared on a going concern basis; we must raise additional capital to fund operations. This change might result in significant liquidity challenges.
• The company has total liabilities of $286,791,380 as of December 31, 2023, impacting financial stability.
• In 2023, the company reported no identified cybersecurity threats that materially affected operations, a significant improvement from previous years. This change indicates enhanced cybersecurity resilience.
• We incurred a net loss of $78,523,377 in 2023, indicating worsening financial performance. This loss raises concerns about our sustainability and ability to attract investors.
• The company currently has defaults across certain properties totaling 216 keys, which may lead to lease terminations.
• The company may face increased scrutiny from third parties, potentially harming reputation and financial performance due to negative reviews.
• Noncompliance with environmental laws could result in material cleanup costs, adversely affecting financial condition and operations.
• The market price of Series A Preferred Stock may decrease due to higher market interest rates affecting dividend yield.
• Disruptions in financial markets could adversely affect our ability to obtain sufficient third-party financing. This change may limit our capital for expansion and operational needs.
• The company agreed to a settlement with the City of New York, incurring a fine of $1,200,000, payable in installments. This change reflects ongoing regulatory compliance efforts.
• Labor shortages could significantly increase operating costs or decrease revenues, impacting overall financial performance.
• Our Chairman has been required to provide personal guarantees for certain leases and loans. This situation could expose him to personal financial risk and impact company operations.
• If distributions on Series A Preferred Stock do not qualify as dividends, market value may decline significantly.
• The company surrendered four underperforming hotels, reducing its leased properties from 18 to 14, impacting 193 units. This change may streamline operations and improve profitability.
• The increasing use of Internet travel intermediaries may materially affect our profitability. This trend could lead to lower room rates and reduced brand loyalty among consumers.
• The company recorded a write-off of $2,961,058 in security deposits due to lease terminations, indicating financial adjustments in response to market conditions.
• The company’s working capital deficit improved slightly from $13,892,020 to $13,404,684, reflecting ongoing financial management efforts. This change may enhance liquidity in the near term.