UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . SOTHERLY HOTELS INC. (Exact name of registrant as specified in its charter) MARYLAND 001-32379 20-1531029 (State or Other Jurisdiction of Incorporation or Organizat ...

Sotherly Hotels (SOHO) Q1 2025 Earnings Call May 13, 2025 10:00 AM ET Company Participants Scott Kucinski - Executive VP & COOAnthony Domalski - VP & CFODavid Folsom - President & CEO Conference Call Participants Alexander Goldfarb - Managing Director & Senior Analyst Operator Good morning, all, and thank you for joining us for the Suverley Hotels Q1 twenty twenty five Conference Call and Webcast. My name is Carly, and I'll be coordinating the call today. I'd now like to hand over to our host, Scott Kukinsk ...

Sotherly Hotels (SOHO) Q1 2025 Earnings Call May 13, 2025 10:00 AM ET Speaker0 Good morning, all, and thank you for joining us for the Suverley Hotels Q1 twenty twenty five Conference Call and Webcast. My name is Carly, and I'll be coordinating the call today. I'd now like to hand over to our host, Scott Kukinski, Chief Operating Officer of Suvley Hotels. The floor is yours. Speaker1 Thank you, and good morning, everyone. If you've not received a copy of the earnings release, you may access it on our websit ...

Exhibit 99.1 HIGHLIGHTS • RevPAR. Room revenue per available room ("RevPAR") for the Company's composite portfolio, which includes the rooms participating in our rental programs at the Lyfe Resort & Residences (f/k/a Hyde Resort & Residences) and the Hyde Beach House Resort & Residences, increased 5.0% to $129.74, for the three months ended March 31, 2025, from $123.59 in the comparable period in 2024. Changes in RevPAR were driven by a 3.9% increase in occupancy to 68.8% from 64.9% in the comparable 2024 p ...

WILLIAMSBURG, Va., May 13, 2025 (GLOBE NEWSWIRE) -- Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly” or the “Company”), a self-managed and self-administered lodging real estate investment trust (a “REIT”), today reported its consolidated results for the first quarter ended March 31, 2025. The Company’s results include the following*: Three Months Ended March 31, 2025 March 31, 2024 ($ in thousands except per share data) Total revenues$48,312 $46,548 <td style="text-align: left ; vertical-align: midd ...

Company Overview - Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding, and repositioning of upscale to upper-upscale full-service hotels in the Southern United States [3] - The company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs [3] - Sotherly Hotels operates hotels under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels [3] - The company was organized in 2004 and is headquartered in Williamsburg, Virginia [3] Upcoming Financial Results - The company will report financial results for the first quarter of 2025 prior to the market opening on Tuesday, May 13, 2025 [1] - A conference call for investors and other interested parties is scheduled for 10:00 a.m. Eastern Time (ET) on the same day to discuss the results [1] - The earnings release will be available on the company's website in the Investors section under Financial Information [1] Conference Call Details - The conference call will be accessible by telephone at 833-470-1428 (United States) with access code 808300 [2] - Individuals can also participate via webcast by visiting the Investor Relations section on the company's website at least 15 minutes before the call [2] - A taped rebroadcast will be available approximately one hour after the live call through March 20, 2025, accessible by dialing 866-813-9403 with access code 926357 [2]

Portfolio and Acquisition Strategy - As of December 31, 2024, the portfolio consisted of ten full-service hotels with a total of 2,786 hotel rooms located in seven states[28] - The company focuses on acquiring full-service, upscale and upper-upscale hotel properties primarily in the southern United States, with no limitations on the amount invested in any one property[32] - The company intends to pursue acquisitions of underperforming hotels to improve revenue and cash flow, with a focus on achieving total investments substantially less than replacement costs[35] - The company has identified significant barriers to entry in prime locations as a key factor in its acquisition strategy[37] - The company competes for investment opportunities with entities that have greater financial resources, potentially limiting growth prospects[102] Management and Operations - The management strategy aims to maximize revenue per available room (RevPAR) and optimize hotel earnings before interest, taxes, depreciation, and amortization (Hotel EBITDA)[39] - The company’s hotels are managed by an independent contractor, Our Town Hospitality, LLC, which is responsible for day-to-day operations[29] - The company actively monitors operating expenses and seeks ancillary revenue opportunities, such as leasing rooftop space and engaging parking management companies[40] - The company relies on its hotel management company for operations, limiting its ability to influence daily management decisions[90] Financial Performance and Risks - The company faces risks related to increased hotel operating expenses and decreased hotel revenues, which can significantly impact earnings and cash flow[88] - The company’s ability to make distributions is subject to fluctuations in financial performance, operating results, and capital improvement requirements[93] - The company may face significant losses or reduced income in the future due to economic downturns, which could adversely affect cash flow and distributions to stockholders[109] - The company faces significant upcoming debt maturities, with approximately $110.5 million (30.2% of total debt) maturing in 2025 and approximately $111.5 million (30.5% of total debt) maturing in 2026[149] - The company has substantial financial leverage, which may limit its ability to fund operations and could adversely affect its financial results[145] Regulatory and Compliance Issues - The company must distribute at least 90.0% of its taxable income to maintain its REIT status, adhering to this requirement since its formation in 2004[65] - The company is subject to various restrictions as a REIT, which limits its ability to engage in certain business activities and may require conducting some activities through MHI Holding, a taxable C corporation[108] - Compliance with the Americans with Disabilities Act (ADA) and other governmental regulations may require significant modifications to hotel properties, potentially impacting financial results[129] - The company must satisfy a 75.0% gross income test and a 95.0% gross income test each taxable year to qualify as a REIT[202] Environmental and Market Conditions - The company believes its hotels comply with all environmental regulations, with no material noncompliance reported[69] - The company faces risks associated with natural disasters and climate change, including potential increases in storm intensity and rising sea levels, which could lead to significant losses and repair costs[107] - The hotel industry is highly competitive, with brand recognition and location being key competitive factors affecting performance[62][63] Debt and Financing - As of December 31, 2024, the company's total debt obligations amounted to approximately $1.05 billion, with $319.3 million in mortgages and unsecured debt[144] - The company may need to raise capital through debt or equity financing to address maturing debt obligations, which could result in unfavorable terms and impact financial flexibility[150] - The company’s floating rate debt is tied to SOFR and the New York Prime Rate, exposing it to interest rate fluctuations[152] Shareholder and Stock Issues - The company received a deficiency letter from Nasdaq on February 11, 2025, indicating that its common stock closing bid price was below the required $1.00 for 30 consecutive business days[168] - The company has a 9.9% aggregate share ownership limit to maintain its REIT qualification, preventing control by five or fewer individuals[171] - The company’s charter allows the board of directors to issue up to 69 million shares of common stock and 11 million shares of preferred stock without stockholder approval[157] Cybersecurity and Technology - The Company maintains cybersecurity insurance coverage to mitigate financial exposure from potential cybersecurity incidents[224] - As of December 31, 2024, no material cybersecurity threats have affected the Company's business strategy or financial condition[224] - The Company relies on third-party technology providers for cybersecurity risk management and conducts annual reviews with the Audit Committee[223]

Financial Data and Key Metrics Changes - For Q4 2024, total revenue was approximately $44 million, representing an increase of 4.3% over Q4 2023 [20] - Year-to-date total revenue was approximately $182 million, reflecting a 4.6% increase over the full year 2023 [20] - Hotel EBITDA for Q4 was approximately $10.7 million, up 3.6% from the same quarter last year [20] - Year-to-date hotel EBITDA was approximately $46.8 million, representing a 4.5% increase over the full year 2023 [20] - Adjusted FFO for Q4 was approximately $2 million, an increase of about $850,000 from Q4 2023 [21] - Year-to-date adjusted FFO was approximately $14.3 million, a decrease of approximately $250,000 from the prior year [21] Business Line Data and Key Metrics Changes - RevPAR for Q4 increased by 2.9%, driven by a 7% increase in occupancy, despite a 3.7% decrease in ADR [7] - For the full year 2024, RevPAR performance increased by 3.5% over 2023, driven by a 6.1% increase in occupancy and a 2.5% decrease in rate [8] - The DoubleTree Resort in Hollywood, Florida, saw a RevPAR increase of 13.8%, fueled by a 13.4% increase in occupancy [13] - The Whitehall in Houston experienced nearly 50% RevPAR growth, driven by occupancy growth of 46.1% [14] - Hotel Ballast in Wilmington posted a RevPAR increase of 7.1%, supported by a 1.9% increase in occupancy and a 5% increase in rate [15] Market Data and Key Metrics Changes - The portfolio's occupancy growth was particularly strong in slower-to-recover urban markets, indicating normalization of lodging fundamentals post-pandemic [9] - Preliminary January RevPAR showed a 12.8% improvement over the prior year, driven by strong demand in urban and South Florida hotels [35] Company Strategy and Development Direction - The company is planning two upcoming PIP renovations, with a focus on enhancing properties to drive increased profitability [18] - A new ten-year franchise agreement with Hilton for the DoubleTree flag in Philadelphia has been executed, with an $11.5 million renovation budget [18] - The company aims to manage cash and portfolio structure effectively, considering refinancing options and potential asset sales [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the portfolio's performance, highlighting improved operating fundamentals and occupancy growth [27] - Despite challenges in the debt markets, the company is focused on refinancing legacy loans to improve financial outcomes [33] - The company remains cautiously optimistic about the lodging industry, with expectations for continued occupancy growth [34] Other Important Information - Hurricane Helene impacted operations at Hotel Alba, but restoration efforts allowed the hotel to remain operational [11] - The company anticipates routine capital expenditures of approximately $7.2 million for 2025, with significant projects planned for the DoubleTree locations [24] Q&A Session Summary Question: Clarification on FFO trajectory despite revenue and EBITDA growth - Management indicated that rising interest costs from refinancing legacy loans are impacting FFO, despite improvements in revenue and EBITDA [38][39] Question: Thoughts on stock trading below a dollar and potential reverse split - Management confirmed they have 180 days to address the deficiency, potentially through a reverse split or if the stock price rises above a dollar [41] Question: Guidance on insurance recoveries related to hotel repairs - Management stated that guidance assumes normal operations and minimal business interruption impacts, with insurance proceeds already accounted for [44] Question: Consideration of selling assets to improve leverage - Management is exploring options for managing cash and portfolio structure but has not focused heavily on asset sales for this purpose [49][50]

Sotherly Hotels (SOHO) came out with quarterly funds from operations (FFO) of $0.08 per share, beating the Zacks Consensus Estimate of $0.03 per share. This compares to FFO of $0.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 166.67%. A quarter ago, it was expected that this real estate investment trust would post FFO of $0.01 per share when it actually produced a loss of $0.04, delivering a surprise of -500%.Over the last four ...

Financial Performance - Total revenues for Q4 2024 increased to approximately $44.0 million, up 4.3% from $42.1 million in Q4 2023[3] - Net loss attributable to common stockholders for Q4 2024 was approximately $3.0 million, compared to a loss of approximately $2.7 million in Q4 2023, representing a 12.9% increase in loss[4] - Adjusted FFO attributable to common stockholders and unitholders decreased 30.3% to approximately $2.0 million in Q4 2024 from approximately $2.8 million in Q4 2023[7] - Net loss attributable to common stockholders for the twelve months ended December 31, 2024, was $(6,674,881), compared to $(4,035,829) in 2023[19] - The company reported a net loss per share attributable to common stockholders of $(0.34) for the twelve months ended December 31, 2024, compared to $(0.22) in 2023[19] - The net loss for the three months ended December 31, 2024, was $1,117,578 compared to a net loss of $769,646 for the same period in 2023[29] Revenue Metrics - RevPAR for the composite portfolio increased 2.6% to $108.99 in Q4 2024, driven by a 4.1% increase in occupancy to 64.1%[3] - Total revenue for the three months ended December 31, 2024, was $43,951,508, an increase of 4.3% compared to $42,148,085 for the same period in 2023[19] - Net operating income for the twelve months ended December 31, 2024, was $20,643,462, up from $18,925,431 in 2023, reflecting a growth of 9.6%[19] - Revenue per Available Room (RevPAR) for the actual portfolio increased to $107.68 for the three months ended December 31, 2024, compared to $104.69 in 2023, an increase of 2.8%[22] - Revenue per available room (RevPAR) increased to $108.99 in Q4 2024, up from $106.25 in Q4 2023, reflecting a year-over-year growth of 2.6%[27] Operational Metrics - Hotel EBITDA for the full year 2024 increased by $2.0 million to approximately $46.8 million, a 4.5% increase compared to 2023[5] - Hotel EBITDA for the three months ended December 31, 2024, was $10,667,747, compared to $10,299,762 in the same period of 2023, showing an increase of approximately 3.6%[30] - The company projects a 2025 EBITDA guidance range of $41,879 to $42,704, indicating a stable outlook for operational performance[31] - The 2025 guidance for Hotel EBITDA is projected to be between $48,829 and $49,619, suggesting continued growth in hotel operations[31] Cash and Assets - The company had approximately $28.7 million in available cash as of December 31, 2024, with $21.4 million reserved for various expenses[6] - Total assets as of December 31, 2024, were $414,375,920, an increase from $393,443,480 as of December 31, 2023[17] - Cash and cash equivalents decreased to $7,327,880 as of December 31, 2024, from $17,101,993 as of December 31, 2023[17] Debt and Expenses - Total liabilities increased to $372,777,154 as of December 31, 2024, compared to $345,544,821 in 2023, reflecting a growth of 7.9%[17] - Interest expense increased to $5,651,055 for the three months ended December 31, 2024, compared to $4,719,497 in the same period of 2023, representing a rise of about 19.7%[30] - Corporate general and administrative expenses for the three months ended December 31, 2024, were $1,819,995, compared to $1,619,882 in the same period of 2023, an increase of approximately 12.3%[30] - The company experienced a loss on early debt extinguishment of $241,878 during the year ended December 31, 2024, indicating potential restructuring efforts[30] Future Projections - For 2025, the company projects total revenues between $183.4 million and $188.2 million, with a net loss attributable to common stockholders ranging from $8.7 million to $7.8 million[8] - Adjusted FFO attributable to common stockholders and unitholders is projected to range from $11,544 to $12,349 for 2025, reflecting a positive outlook for cash flow generation[32] Market Performance - The company is encouraged by ongoing improvements in demand in key markets such as Houston, Atlanta, and Philadelphia as it transitions into Q1 2025[5] - The average occupancy rate for The DeSoto in Savannah, Georgia, improved to 71.2% in Q4 2024 from 63.9% in Q4 2023, an increase of 7.3 percentage points[25] - The ADR for The DeSoto decreased to $198.93 in Q4 2024 from $213.38 in Q4 2023, a drop of 6.8%[26] - The RevPAR for The DeSoto increased to $141.57 in Q4 2024, up from $136.46 in Q4 2023, reflecting a growth of 3.2%[27]