SEC Filing | Chatham Lodging Trust

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10-K

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)


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

For the fiscal year ended December 31, 2015


¨	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: 001-34693

CHATHAM LODGING TRUST

(Exact Name of Registrant as Specified in Its Charter)



Maryland		27-1200777
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

222 Lakeview Ave, Suite 200
West Palm Beach, Florida		33401
(Address of Principal Executive Offices)		(Zip Code)

(561) 802-4477

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Name of Each Exchange on Which Registered
Common Shares of Beneficial Interest, par value $0.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). x Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. x Yes ¨ No

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



Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The aggregate market value of the 38,306,743 common shares of beneficial interest held by non-affiliates of the registrant was $1,013,979,487.21 based on the closing sale price on the New York Stock Exchange for such common shares of beneficial interest as of June 30, 2015.

The number of common shares of beneficial interest outstanding as of February 29, 2016 was 38,338,183.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Definitive Proxy Statement for its 2016 Annual Meeting of Shareholders (to be filed with the Securities and Exchange Commission on or before April 29, 2016) are incorporated by reference into this Annual Report on Form 10-K in response to Part III hereof.

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EXPLANATORY NOTE

Chatham Lodging Trust is filing this Amendment No. 1 ("Amendment No. 1") to its Annual Report on Form 10-K (the "Report") for the fiscal year ended December 31, 2015 filed with the Securities and Exchange Commission on February 29, 2016. As disclosed in the Report, the Company had two equity method investments that met the conditions of a significant subsidiary under Rule 1-02(w) as required by Rule 3-09 of Regulation S-X as of December 31, 2015 from 2014.

Amendment No. 1 to the Report is being filed solely to include the separate financial statements of INK Acquisition, LLC & Affiliates ("NewINK JV") and IHP I Owner JV, LLC and Affiliates ("Inland JV"), as provided in Exhibits 99.1 and 99.2, respectively, attached hereto. In connection with the filing of this Amendment No. 1 to the Report and pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, as amended, the currently dated certifications of the principal executive officer and principal financial officer of the Company are attached as exhibits hereto.

Except as otherwise expressly noted herein, this Amendment No. 1 to the Report does not amend any other information set forth in the Report, and we have not updated disclosures therein to reflect any events that occurred at a date subsequent to the date of the Report. Accordingly, this Amendment No. 1 should be read in conjunction with the Report.

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Item 15. Exhibits and Financial Statement Schedules.



1.		Financial Statements
		Included at pages F-1 through F-7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission on February 29, 2016.

2.		Financial Statement Schedules
		The following financial statement schedule is included at pages F-38 through F-39 of the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission on February 29, 2016: Schedule III - Real Estate and Accumulated Depreciation.

		The financial statements of NewINK JV and Inland JV as required by Item 3-09 of Regulation S-X are included in Exhibits 99.1 and 99.2 hereto, respectively, and are incorporated by reference herein.

3.		A list of exhibits required to be filed as part of this report on Form 10-K is set forth in the Exhibit Index, which immediately follows this item.

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Exhibit Index



Exhibit Number		Description of Exhibit


3.1		Articles of Amendment and Restatement of Chatham Lodging Trust⁽¹⁹⁾

3.2		Second Amended and Restated Bylaws of Chatham Lodging Trust⁽¹⁾

10.1*		Chatham Lodging Trust Equity Incentive Plan, Amended and Restated as of May 17, 2013 ⁽²⁾

10.2*		Employment Agreement between Chatham Lodging Trust and Jeffrey H. Fisher⁽¹⁹⁾

10.3*		Employment Agreement between Chatham Lodging Trust and Peter Willis⁽¹⁹⁾

10.4*		Employment Agreement between Chatham Lodging Trust and Dennis M. Craven⁽¹⁹⁾

10.5*		Employment Agreement between Chatham Lodging Trust and Jeremy Wegner⁽³⁾

10.6*		First Amendment to Employment Agreement of Peter Willis dated January 30, 2015⁽⁴⁾

10.7*		First Amendment to Employment Agreement of Dennis Craven dated January 30, 2015⁽⁴⁾

10.8*		Form of Indemnification Agreement between Chatham Lodging Trust and its officers and trustees⁽⁵⁾

10.9*		Form of LTIP Unit Vesting Agreement⁽⁵⁾

10.10*		Form of Share Award Agreement for Trustees⁽⁵⁾

10.11*		Form of Share Award Agreement for Officers⁽⁶⁾

10.12*		Share Award Agreement, dated as of May 17, 2013, between Chatham Lodging Trust and Jeffrey H. Fisher (Performance-Based Share Awards)⁽⁷⁾

10.13*		Share Award Agreement, dated as of May 17, 2013, between Chatham Lodging Trust and Dennis M. Craven (Performance-Based Share Awards)⁽⁷⁾

10.14*		Share Award Agreement, dated as of May 17, 2013, between Chatham Lodging Trust and Peter Willis (Performance-Based Share Awards)⁽⁷⁾

10.15*		Share Award Agreement, dated as of January 31, 2014, between Chatham Lodging Trust and Jeffrey H. Fisher⁽⁸⁾

10.16*		Share Award Agreement, dated as of January 31, 2014, between Chatham Lodging Trust and Dennis M. Craven⁽⁸⁾

10.17*		Share Award Agreement, dated as of January 31, 2014, between Chatham Lodging Trust and Peter Willis⁽⁸⁾

10.18*		Share Award Agreement, dated as of January 31, 2014, between Chatham Lodging Trust and Jeffrey H. Fisher (Performance-Based Share Awards) ⁽⁸⁾

10.19*		Share Award Agreement, dated as of January 31, 2014, between Chatham Lodging Trust and Dennis M. Craven (Performance-Based Share Awards)⁽⁸⁾

10.20*		Share Award Agreement, dated as of January 31, 2014, between Chatham Lodging Trust and Peter Willis (Performance-Based Share Awards)⁽⁸⁾

10.21*		Share Award Agreement, dated as of January 30, 2015, between Chatham Lodging Trust and Jeffrey H. Fisher⁽⁹⁾

10.22*		Share Award Agreement, dated as of January 30, 2015, between Chatham Lodging Trust and Dennis M. Craven⁽⁹⁾

10.23*		Share Award Agreement, dated as of January 30, 2015, between Chatham Lodging Trust and Peter Willis⁽⁹⁾

10.24*		Share Award Agreement, dated as of January 30, 2015, between Chatham Lodging Trust and Jeffrey H. Fisher (Performance-Based Share Awards) ⁽⁹⁾

10.25*		Share Award Agreement, dated as of January 30, 2015, between Chatham Lodging Trust and Dennis M. Craven (Performance-Based Share Awards)⁽⁹⁾

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10.26*		Share Award Agreement, dated as of January 30, 2015, between Chatham Lodging Trust and Peter Willis (Performance-Based Share Awards)⁽⁹⁾

10.27*		Share Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust and Jeremy Wegner⁽¹⁰⁾

10.28*		LTIP Unit Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust, Chatham Lodging, L.P. and Jeffrey Fisher (Outperformance Plan)⁽¹¹⁾

10.29*		LTIP Unit Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust, Chatham Lodging, L.P. and Dennis Craven (Outperformance Plan)⁽¹²⁾

10.30*		LTIP Unit Award Agreement, dated as of June 1, 2015, between Chatham Lodging Trust, Chatham Lodging, L.P. and Peter Willis (Outperformance Plan)⁽¹³⁾

10.31		Agreement of Limited Partnership of Chatham Lodging, L.P.⁽⁵⁾

10.32		First Amendment to the Agreement of Limited Partnership of Chatham Lodging, L.P.⁽¹⁰⁾

10.33		Form of IHM Hotel Management Agreement⁽⁵⁾

10.34		Third Amended and Restated Limited Liability Company Agreement of INK Acquisition LLC, dated as of June 9, 2014, by and between Platform Member-T, LLC and Chatham Lodging, L.P.⁽¹⁴⁾

10.35		Second Amended and Restated Limited Liability Company Agreement of INK Acquisition III, LLC, dated as of June 9, 2014, by and between Platform Member Holdings-T Cam2, LLC and Chatham TRS Holding, Inc.⁽¹⁴⁾

10.36		Loan Agreement, dated as of June 9, 2014, between Grand Prix Sili II, LLC, as borrower, and JP Morgan Chase Bank, National Association, as lender.⁽¹⁴⁾

10.37		Sales Agreement, dated January 31, 2014, by and among Chatham Lodging Trust, Chatham Lodging, L.P. and Cantor Fitzgerald & Co.⁽¹⁵⁾
10.38		Limited Liability Company Agreement of IHP I Owner JV, LLC, dated as of November 17, 2014, by and between Platform Member II-T, LLC and Chatham IHP, LLC.⁽¹⁶⁾

10.39		Limited Liability Company Agreement of IHP I Owner OPs JV, LLC, dated as of November 17, 2014, by and between Platform Member Holdings II-T Cam2, LLC and Chatham TRS Holding, Inc.⁽¹⁶⁾

10.40		Sales Agreement, dated January 13, 2015 by and among Chatham Lodging Trust, Chatham Lodging, L.P. and Barclays Capital Inc.⁽¹⁷⁾

10.41		Credit Agreement, dated as of November 25, 2015, among Chatham Lodging Trust, Chatham Lodging, L.P., the lenders party thereto and Barclays Bank PLC, as administrative agent⁽¹⁸⁾

10.42*		Form of 2016 Time-Based LTIP Unit Award Agreement⁽¹⁹⁾

10.43*		Form of 2016 Performance-Based LTIP Unit Award Agreement⁽¹⁹⁾

12.1		Statement of computation of ratio of earnings to fixed charges and preferred share dividends⁽¹⁹⁾

21.1		List of Subsidiaries of Chatham Lodging Trust⁽¹⁹⁾

23.1		PricewaterhouseCoopers LLP Consent to include Report on Financial Statements of Chatham Lodging Trust⁽¹⁹⁾

23.2		PricewaterhouseCoopers LLP Consent to include Report on Financial Statements of INK Acquisition, LLC & Affiliates and IHP I Owner JV, LLC and Affiliates

23.3		Grant Thornton LLP Consent to include Report on Financial Statements of INK Acquisition, LLC & Affiliates

23.4		Grant Thornton LLP Consent to include Report on Financial Statements of IHP I Owner JV, LLC and Affiliates

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002⁽¹⁹⁾

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002⁽¹⁹⁾

31.3		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.4		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002⁽¹⁹⁾

32.2		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**		XBRL Instance Document

101.SCH**		XBRL Taxonomy Extension Schema Document

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**		XBRL Taxonomy Extension Label Linkbase Document

101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document


*	Denotes management contract or compensation plan or arrangement in which trustees or officers are eligible to participate.

Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31, 2015 and 2014; (ii) Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013; (iii) Consolidated Statements of Equity for the years ended December 31, 2015, 2014 and 2013; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013; and (v) Notes to the Consolidated Financial Statements.

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(1)	Incorporated by reference to the Registrant's Current Report on Form 8-K filed with the SEC on April 21, 2015 (File No. 001-34693).
(2)	Incorporated by reference to the Registrant's Definitive Proxy Statement on Schedule 14A filed on April 15, 2013 (File No. 001-34693).
(3)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on May 5, 2015 (File No. 001-34693).
(4)	Incorporated by reference to the Registrant's Current Report on Form 8-K filed with the SEC on February 5, 2015 (File No. 001-34693).
(5)	Incorporated by reference to Amendment No. 4 to the Registrant’s Registration Statement on Form S-11 filed with the SEC on February 12, 2010 (File No. 333-162889).
(6)	Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 13, 2010 (File No. 001-34693).
(7)	Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 8, 2013 (File No. 001-34693).
(8)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 9, 2014 (File No. 001-34693).
(9)	Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 8, 2015 (File No. 001-34693).
(10)	Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015 (File No. 001-34693).
(11)	Incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015 (File No. 001-34693).
(12)	Incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015 (File No. 001-34693).
(13)	Incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015 (File No. 001-34693).
(14)	Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 11, 2014 (File No. 001-34693).
(15)	Incorporated by reference to the Registrant's Current Report on Form 8-K filed with the SEC on January 31, 2014 (File No. 001-34693).
(16)	Incorporated by reference to the Registrant's Current Report on Form 8-K filed with the SEC on November 20, 2014 (File No. 001-34693).
(17)	Incorporated by reference to the Registrant's Current Report on Form 8-K filed with the SEC on January 15, 2015 (File No. 001-34693).
(18)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on November 30, 2015 (File No. 001-34693).
(19)	Incorporated by reference to the Registrant’s Annual Report on Form 10-K filed with the SEC on February 29, 2016 (File No. 001-34693).

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		CHATHAM LODGING TRUST

Dated:	March 24, 2016	/s/ JEFFREY H. FISHER
		Jeffrey H. Fisher
		Chairman of the Board, President and Chief Executive Officer
		(Principal Executive Officer)

Exhibit



				Exhibit 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-193389 and 333-193390) and S-8 (No. 333-166258) of Chatham Lodging Trust of our reports dated March 24, 2016 and March 31, 2015 relating to the financial statements of INK Acquisition, LLC & Affiliates, and our report dated March 24, 2016 relating to the financial statements of IHP I Owner JV, LLC & Affiliates, which appear in this Form 10-K/A of Chatham Lodging Trust for the year ended December 31, 2015.

/s/ PricewaterhouseCoopers LLP

Fort Lauderdale, Florida

March 24, 2016

Exhibit



				Exhibit 23.3

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated April 2, 2015 with respect to the combined financial statements of INK Acquisition, LLC (a Delaware limited liability company) & Affiliates as of December 31, 2014 (Successor) and the period from June 9, 2014 to December 31, 2014 (Successor) which is included in the Annual Report of Chatham Lodging Trust on Form 10-K/A (Amendment No. 1) for the year ended December 31, 2015. We hereby consent to the incorporation by reference of said report in the Registration Statements of Chatham Lodging Trust on Forms S-3 (Nos. 333-193389 and 333-193390) and Form S-8 (No. 333-166258).

/s/ GRANT THORNTON LLP

New York, New York

March 24, 2016

Exhibit



				Exhibit 23.4

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated April 2, 2015 with respect to the combined financial statements of IHP I Owner JV, LLC (a Delaware limited liability company) and Affiliates as of December 31, 2014 and for the period from November 17, 2014 to December 31, 2014 which is included in the Annual Report of Chatham Lodging Trust on Form 10-K/A (Amendment No. 1) for the year ended December 31, 2015. We hereby consent to the incorporation by reference of said report in the Registration Statements of Chatham Lodging Trust on Forms S-3 (Nos. 333-193389 and 333-193390) and Form S-8 (No. 333-166258).

/s/ GRANT THORNTON LLP

New York, New York

March 24, 2016

Exhibit

EXHIBIT 31.3

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey H. Fisher, certify that:


1.	I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A of Chatham Lodging Trust;


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 trustees (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.



		CHATHAM LODGING TRUST

Dated:	March 24, 2016	/s/ JEFFREY H. FISHER
		Jeffrey H. Fisher
		Chairman, President and Chief Executive Officer
		(principal executive officer)

Exhibit

EXHIBIT 31.4

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeremy B. Wegner, certify that:


1.	I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A of Chatham Lodging Trust;


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 trustees (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.



		CHATHAM LODGING TRUST

Dated:	March 24, 2016	/s/ JEREMY B. WEGNER
		Jeremy B. Wegner
		Senior Vice President and Chief Financial Officer
		(principal executive officer)

Exhibit

EXHIBIT 32.2

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 Amendment No. 1 to the Annual Report on Form 10-K/A of Chatham Lodging Trust (the “Company”) for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey H. Fisher, Chairman, President and Chief Executive Officer of the Company and I, Jeremy B. Wegner, Senior Vice President and Chief Financial Officer of the Company, certify, to our knowledge, 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 the Company.



		CHATHAM LODGING TRUST

Dated:	March 24, 2016	/s/ JEFFREY H. FISHER
		Jeffrey H. Fisher
		Chairman, President and Chief Executive Officer

		/s/ JEREMY B. WEGNER
		Jeremy B. Wegner
		Senior Vice President and Chief Financial Officer

A signed original of this statement has been provided to Chatham Lodging Trust and will be retained by Chatham Lodging Trust and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit



				Exhibit 99.1

INK Acquisition, LLC & Affiliates

Financial Statements

As of December 31, 2015 and 2014 and for the year ended December 31, 2015, periods from June 9, 2014 to December 31, 2014; January 1, 2014 to June 9, 2014, and the year ended December 31, 2013

With Reports of Independent Certified Public Accountants

Report of Independent Certified Public Accountants

To the Partners of

INK Acquisition, LLC & Affiliates

We have audited the accompanying combined financial statements of INK Acquisition, LLC & Affiliates, which comprise the combined balance sheet as of December 31, 2015, and the related combined statements of operations, changes in owners’ equity (deficit), and cash flows for the year then ended.

Management's Responsibility for the Combined Financial Statements

Management is responsible for the preparation and fair presentation of the combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the combined financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of INK Acquisition, LLC & Affiliates as of December 31, 2015, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP

Fort Lauderdale, Florida

March 24, 2016

Report of Independent Certified Public Accountants

To the Partners of

INK Acquisition, LLC & Affiliates

We have audited the accompanying combined financial statements of INK Acquisition, LLC (a Delaware limited liability company) & Affiliates, which comprise the combined balance sheet as of December 31, 2014 (Successor), and the related combined statements of operations, changes in owners' equity, and cash flows for the period June 9, 2014 through December 31, 2014 (Successor), and the related notes to the financial statements.

Management's responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these combined financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor's judgment, including the assessment of risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of INK Acquisition, LLC & Affiliates as of December 31, 2014 (Successor) and the results of their operations and their cash flows for the period from June 9, 2014 through December 31, 2014 (Successor) in accordance with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

April 2, 2015

Report of Independent Certified Public Accountants

To the Partners of

INK Acquisition, LLC & Affiliates

We have audited the accompanying combined financial statements of INK Acquisition, LLC & Affiliates, which comprise the combined balance sheet as of December 31, 2013, and the related combined statements of operations, changes in owners’ equity (deficit), and cash flows for the year ended December 31, 2013 and for the period from January 1, 2014 to June 9, 2014.

Management's Responsibility for the Combined Financial Statements

Auditor's Responsibility

Our responsibility is to express an opinion on the combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of INK Acquisition, LLC & Affiliates as of December 31, 2013, and the results of their operations and their cash flows for the years ended December 31, 2013 and 2012 and for the period from January 1, 2014 to June 9, 2014 in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP

Fort Lauderdale, Florida

March 31, 2015

INK Acquisition, LLC & Affiliates

Combined Balance Sheets

(In thousands)



	December 31, 2015			December 31, 2014
Assets:
Investment in hotel properties, net	$	907,216		$	929,635
Cash and cash equivalents	15,466			9,199
Restricted cash	56,268			80,793
Hotel receivables (net of allowance for doubtful accounts of $389 and $389, respectively)	2,466			5,828
Deferred costs, net	6,599			13,677
Prepaid expenses and other assets	5,113			5,389
Total assets	$	993,128		$	1,044,521

Liabilities and Owner's Equity:
Debt	$	840,000		$	840,000
Accounts payable and accrued expenses	16,763			19,540
Total liabilities	856,763			859,540

Owners' Equity (Deficit)
Contributions	215,282			215,282
Distributions and accumulated deficit	(78,917		)	(30,301		)
Total owners' equity (deficit)	136,365			184,981
Total liabilities and owners' equity (deficit)	$	993,128		$	1,044,521

The accompanying notes are an integral part of these combined financial statements.

INK Acquisition, LLC & Affiliates

Combined Statements of Operations

(In thousands)



	Successor						Predecessor
	For the year ended December 31, 2015			Period from June 9, 2014 through December 31, 2014			Period from January 1, 2014 through June 9, 2014			For the year ended December 31, 2013
Revenue:
Room	$	237,545		$	129,138		$	112,588		$	246,931
Food and beverage	12,312			7,112			4,640			11,749
Other	5,584			3,166			2,390			5,518
Total revenue	255,441			139,416			119,618			264,198
Expenses:
Hotel operating expenses:
Room	49,147			26,960			23,049			49,658
Food and beverage	9,211			5,315			3,881			8,794
Telephone	2,146			1,183			957			2,119
Other hotel operating	2,424			1,327			1,067			2,474
General and administrative	24,208			12,629			11,053			24,630
Franchise and marketing fees	19,335			10,385			8,614			19,021
Advertising and promotions	5,486			3,186			3,090			6,856
Utilities	11,153			6,111			5,624			11,670
Repairs and maintenance	13,695			7,087			6,740			14,444
Management fees to related party	7,661			4,797			3,185			6,347
Insurance	1,633			1,036			855			2,082
Total hotel operating expenses	146,099			80,016			68,115			148,095
Depreciation and amortization	47,846			25,214			20,809			50,127
Property taxes and insurance	11,889			6,676			5,834			12,595
General and administrative	2,812			1,798			2,753			4,898
Hotel property acquisition costs and other charges	786			19,868			28			24
Total operating expenses	209,432			133,572			97,539			215,739
Operating income	46,009			5,844			22,079			48,459
Interest and other income	36			35			42			233
Interest expense, including amortization of deferred fees	(37,411		)	(21,180		)	(24,571		)	(55,672		)
Loss on early extinguishment of debt	—			—			—			(8,863		)
Income (loss) from continuing operations	8,634			(15,301		)	(2,450		)	(15,843		)
Loss from discontinued operations	—			—			—			(274		)
Loss on sale of discontinued operations	—			—			—			(2,456		)
Net loss from discontinued operations	—			—			—			(2,730		)
Net income (loss)	$	8,634		$	(15,301	)	$	(2,450	)	$	(18,573	)

The accompanying notes are an integral part of these combined financial statements.

INK Acquisition, LLC & Affiliates

Combined Statements of Owners' Equity (Deficit)

(In thousands)



	Contributions		Accumulated Deficit/Gain			Distributions/Other			Total Equity
Predecessor

Balance at December 31, 2012	360,000		(24,087		)	(206,297		)	129,616
Net loss	—		(18,573		)	—			(18,573		)
Distributions	—		—			(126,394		)	(126,394		)
Balance at December 31, 2013	360,000		(42,660		)	(332,691		)	(15,351		)
Net loss	—		(2,450		)	—			(2,450		)
Distributions	—		—			(4,000		)	(4,000		)
Balance at June 9, 2014	$	360,000	$	(45,110	)	$	(336,691	)	$	(21,801	)


Successor

Balance at June 9, 2014	$	—	$	—		$	—		$	—
Net loss	—		(15,301		)	—			(15,301		)
Contributions	215,282		—			—			215,282
Distributions	—		—			(15,000		)	(15,000		)
Balance, beginning of period, December 31, 2014	$	215,282	$	(15,301	)	$	(15,000	)	$	184,981
Net income	—		8,634			—			8,634
Distributions	—		—			(57,250		)	(57,250		)
Balance, end of period, December 31, 2015	$	215,282	$	(6,667	)	$	(72,250	)	$	136,365

The accompanying notes are an integral part of these combined financial statements.

INK Acquisition, LLC & Affiliates

Combined Statement of Cash Flows

(In thousands)



	Successor						Predecessor
	For the year ended December 31, 2015			Period from June 9, 2014 through December 31, 2014			Period from January 1, 2014 through June 9, 2014			For the year ended December 31, 2013
Cash flow from operating activities:
Net income (loss)	$	8,634		$	(15,301	)	$	(2,450	)	$	(18,573	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	47,589			25,072			20,659			48,869
Loss on early extinguishment of debt	—			—			—			4,381
Amortization of deferred franchise fees	253			142			150			1,264
Amortization of deferred financing costs included in interest expense	6,816			3,775			2,819			3,517
Loss on sale of hotels in discontinued operations	—			—			—			2,456
Changes in assets and liabilities:
Hotel receivables	3,362			(5,828		)	(4,272		)	214
Prepaid expenses and other assets	276			(5,389		)	(1,100		)	1,209
Deferred costs	9			(191		)	(19		)	11
Accounts payable and accrued expenses	(2,240		)	19,540			7,753			(6,895		)
Net cash provided by operating activities	64,699			21,820			23,540			36,453

Cash flows from investing activities:
Investment in hotel properties, net of cash received	—			(911,733		)	—			—
Improvements and additions to hotel properties	(25,707		)	(20,856		)	(17,135		)	(30,133		)
Proceeds from sale of assets	—			—			—			11,300
Payments for franchise fees and intangibles	—			(3,954		)	—			—
Restricted cash	24,525			(80,793		)	521			(32,284		)
Net cash used in investing activities	(1,182		)	(1,017,336		)	(16,614		)	(51,117		)

Cash flows from financing activities:
Proceeds from the issuance of long-term debt	—			840,000			—			950,000
Payments of financing costs	—			(13,450		)	—			(19,111		)
Payments on debt	—			—			—			(792,239		)
Payment of franchise obligation	—			—			—			(1,323		)
Contributions from owners	—			193,165			—			—
Distributions to owners	(57,250		)	(15,000		)	(4,000		)	(126,394		)
Net cash provided by (used in) financing activities	(57,250		)	1,004,715			(4,000		)	10,933

Change in cash and cash equivalents for assets held for sale	—			—			—			27
Net change in cash and cash equivalents	6,267			9,199			2,926			(3,731		)
Cash and cash equivalents, beginning of period	9,199			—			22,850			26,554
Cash and cash equivalents, end of period	$	15,466		$	9,199		$	25,776		$	22,850

Supplemental disclosure of cash flow information:



Cash paid for interest	$	30,447	$	15,628	$	20,076		53,139
Supplemental disclosure of non-cash information:
Accrued improvements and additions to hotel properties	$	319	$	857	$	1,407		$	1,594
Chatham's equity was rolled-over from the Predecessor company	$	—	$	22,117	—			—

	Successor				Predecessor
	For the year ended December 31, 2015		Period from June 9, 2014 through December 31, 2014		Period from January 1, 2014 through June 9, 2014			For the year ended December 31, 2013
Non-cash changes related to distribution of four hotels to predecessor owner and successor recapitalization:
Investment in hotel properties	—		—		$	92,127		—
Net change in operating assets and liabilities	—		—		34,432			—
Debt	—		—		(110,000		)	—

See Note 3 to the financial statements for a description of assets and liabilities acquired in connection with the acquisition of 47 hotels from Old Ink JV (as defined in Note 1 to the financial statements) on June 9, 2014.

The accompanying notes are an integral part of these combined financial statements.

INK Acquisition, LLC & Affiliates

Notes to Financial Statements

(dollars in thousands)


1.	Organization

Predecessor

INK Acquisition, LLC and a series of affiliated limited liability companies (see below) were formed in 2011 to acquire the assets and associated operations of 64 hotels as a result of the bankruptcy reorganization plan of affiliates of Innkeepers USA Trust ("Innkeepers"). The affiliated limited liability companies, which are under common control, combined in these financial statements are as follows:

INK Acquisition II, LLC

INK Acquisition III, LLC

INK Acquisition IV, LLC

INK Acquisition V, LLC

INK Acquisition VI, LLC

INK Acquisition VII, LLC

INK Acquisition, LLC and the affiliated limited liability companies above formed a joint venture (“Old Ink JV”) and were each owned 89.7% by CRE-Ink REIT Member, LLC and its affiliates ("Cerberus") and 10.3% by Chatham Lodging, L.P. ("Chatham"). In addition, an entity owned by Jeffrey H. Fisher, the Chairman and Chief Executive Officer of Chatham Lodging Trust, the sole general partner of Chatham, owned a 0.5% non-voting interest in CRE-Ink REIT Member, LLC. The Old Ink JV had no substantive operations until October 27, 2011 when it acquired the 64 hotels. From 2011 to 2013, the Old Ink JV sold 13 of the 64 hotels.

In connection with a recapitalization transaction which closed on June 9, 2014, INK Acquisition II, LLC was dissolved and INK Acquisition IV, V, VI and VII were contributed to INK Acquisition, LLC. The other four hotels that were part of Old Ink JV were sold to Chatham.

Successor

After June 9, 2014, INK Acquisition, LLC owns 47 hotel properties through various limited liability companies. The properties are leased to INK Acquisition III, LLC (hereinafter referred to as the "Affiliated Lessee"). INK Acquisition, LLC and the Affiliated Lessee are under common control. Through wholly owned subsidiaries, NorthStar Realty Finance Corp. (“NorthStar”) acquired Cerberus’ 89.7% interest in both INK Acquisition, LLC and the Affiliated Lessee, while the remaining 10.3% in these entities are owned by Chatham. The new joint venture is referred to herein collectively as "Successor".

At December 31, 2015, the Successor owns 47 hotels with an aggregate of 6,097 (unaudited) rooms located in 16 states. At December 31, 2015, the Successor hotels operate under the following brands: Residence Inn by Marriott (30 hotels), Hampton Inn by Hilton (5 hotels), Hyatt House (5 hotels), Courtyard by Marriott (3 hotels), Four Points by Sheraton (1 hotel), Sheraton (1 hotel), TownePlace Suites (1 hotel), and Westin (1 hotel). As of December 31, 2015, management of all 47 of the Successor's hotels is provided pursuant to management agreements with Island Hospitality Management Inc. ("IHM"), which is 51% owned by Jeffrey H. Fisher, the Chairman of the Board and Chief Executive Officer of Chatham Lodging Trust, which is the sole general partner of Chatham, and 45% owned by affiliates of NorthStar Asset Management Group, Inc.

2. Summary of Significant Accounting Policies

Basis of Presentation

The combined financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The combined financial statements include all of the accounts of INK Acquisition, LLC and its subsidiaries and all of the accounts of the Affiliate Lessee. Combined financial statements of INK Acquisition, LLC and the Affiliate Lessee, which are under common control and common management, have been presented in order to provide more meaningful presentation of the operations of INK Acquisition, LLC. All intercompany accounts and transactions have been eliminated. Due to the change in control on June 9, 2014 described above, the assets and liabilities have been remeasured to fair value in the financial statements of the Successor. See Note 3 for further details.

These financial statements present information for the Old Ink JV under the header "Predecessor" and for the Successor under the header "Successor". References to "Company" hereinafter refers to the accounting policies of both Successor and Old Ink JV.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allocation of the purchase price of hotels, the allowance for doubtful accounts and the fair value of hotels that are held for sale or impaired.

Fair Value of Financial Instruments

Financial Accounting Standards Board ("FASB") guidance on fair value measurements and disclosures defines fair value for GAAP and establishes a framework for measuring fair value as well as a fair value hierarchy based on the quality and nature of inputs used to measure fair value. The term “fair value” in these financial statements is defined in accordance with GAAP. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 Inputs reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2 Inputs represent other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and

Level 3 Inputs are those that are unobservable.

The carrying value of the Company's cash, accounts receivables, accounts payable and accrued expenses approximate fair value because of the relatively short maturities of these instruments. The Company is not required to carry any other assets or liabilities at fair value on a recurring basis other than its interest rate caps. The interest rate caps are valued using Level 3 inputs and are valued at $0 and $144 as of December 31, 2015 and 2014, respectively.

When the Company classifies an asset as held for sale, the Company assesses whether the asset's carrying value is greater than fair value less selling costs. If so, the asset is written down to fair value less selling costs on a nonrecurring basis. The fair value determinations are based on Level 3 inputs as they are generally based on broker quotes or other comparable sales information.

The Company also disclosed the fair value of its variable rate debt based on estimates of current terms the Company would expect to receive under the current market conditions, as compared to the terms and conditions of the Company's debt. The fair value determination is based on Level 3 inputs as they are based on the fair value hierarchy.

Investment in Hotel Properties

The Company allocates the purchase prices of hotel properties acquired based on the fair value of the acquired real estate, furniture, fixtures and equipment, identifiable intangible assets and assumed liabilities. In making estimates of fair value for purposes of allocating the purchase price, the Company utilizes a number of sources of information that are obtained in connection with the acquisition of a hotel property, including valuations performed by independent third parties and information obtained about each hotel property resulting from pre-acquisition due diligence. Hotel property acquisition costs are expensed in the period incurred.

The Company’s investment in hotel properties are carried at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally 15-40 years for buildings, 20 years for land improvements, 15 years for building improvements and three to ten years for furniture, fixtures and equipment. Renovations and replacements at the hotel properties that improve or extend the life of the assets are capitalized and depreciated over their useful lives, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is recognized in the combined statements of operations.

The Company periodically reviews its hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the net proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair market value is recorded and an impairment loss is recognized. No impairment charges on hotels held for use were recorded for any of the periods presented.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and short-term liquid investments with an original maturity when purchased of three months or less. Cash balances in individual banks may exceed federally insurable limits.

Restricted Cash

Restricted cash represents escrows for reserves required pursuant to the Company’s loans or hotel management agreements. Included in restricted cash on the accompanying combined balance sheet at December 31, 2015 and 2014, are renovation, property tax and insurance escrows of $56,268 and $80,793, respectively. The hotel mortgage loan agreements require the Company to fund 4% of gross hotel revenues on a monthly basis for furnishings, fixtures and equipment and general repair maintenance reserves (“Replacement Reserve”), in addition to property tax and insurance reserves, into an escrow account held by the lender.

Hotel Receivables

Hotel receivables consist of amounts owed by guests staying at the Company’s hotels and amounts due from business and group customers. An allowance for doubtful accounts is provided and maintained at a level believed to be adequate to absorb estimated probable losses. At December 31, 2015 and 2014, the allowance for doubtful accounts was $389 and $389, respectively.

Deferred Costs

Deferred costs consisted of the following at December 31, 2015 and 2014:



Deferred costs	December 31, 2015			December 31, 2014

Loan costs	$	13,450		$	13,450
Franchise fees	3,954			3,954
Other	197			202
	17,601			17,606
Less accumulated amortization	(11,002		)	(3,929		)
Deferred costs, net	$	6,599		$	13,677

On June 9, 2014, deferred costs associated with the Old Ink JV were revalued to zero. Loan costs are recorded by the Company at cost and amortized over the term of the respective loan applying the effective interest rate method. Franchise fees are recorded by the Company at cost and amortized over a straight-line basis over the term of the respective franchise agreements. At December 31, 2015 and 2014, other deferred costs primarily relate to liquor licenses in the amounts of $187 and $187, respectively. Amortization expense related to deferred loan costs was $6,816 for the year ended December 31, 2015 (Successor), $3,775 for the Successor period ended December 31, 2014, $2,819 for the Predecessor period ended June 9, 2014, and $3,517 for the year ended December 31, 2013 (Predecessor), which is included in interest expense in the combined statement of operations.

Prepaid Expenses and Other Assets

The Company’s prepaid expenses and other assets consist of prepaid insurance, prepaid property taxes, deposits, hotel supplies inventory and the fair value of the Company’s interest rate caps.

Accounting for derivative instruments

The Company records its derivative instruments on the balance sheet at their estimated fair value. Changes in the fair value of derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship. The Company’s interest rate caps are not designated as a hedge but to eliminate the incremental cost to the Company if one-month LIBOR interest rate were to exceed 2.5% for the Successor year ended December 31, 2015 and period ended December 31, 2014; and 2.75% for the Predecessor period from January 1, 2014 through June 9, 2014 and the Predecessor year ended December 31, 2013. Accordingly, the interest rate caps are recorded on the balance sheet at estimated fair value with realized and unrealized changes in the fair value reported in the combined statements of operations.

Revenue Recognition

Revenue from hotel operations is recognized by the Company when rooms are occupied and when services are provided. Revenue consists of amounts derived from hotel operations, including sales from room, meeting room, restaurants, gift shop, in-room movie and other ancillary amenities. Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenue) in the accompanying combined statements of operations.

Income Taxes

The Company is a limited liability company (“LLC”) and has elected to be taxed as a partnership. Therefore, the Company is solely a pass-through entity and does not have any federal or state income tax liabilities. Accordingly, the Company does not record a provision for income taxes because the members report their share of the Company’s income or loss on their income tax returns.

The Company is required to determine whether its tax positions are more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The recognition of any tax benefit is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. De-recognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces ending members’ capital. Based on its analysis, the Company has determined that it has not recognized any tax benefit nor incurred any liability for unrecognized tax benefits as of December 31, 2015. However, the Company’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, ongoing analyses of and changes to tax laws, regulations and interpretations thereof.

The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of and for the year ended December 31, 2015.

The Company files income tax returns in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states. The Company is subject to income tax examinations by major taxing authorities for all previous income tax returns filed.

Recently Issued Accounting Standards

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance under GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on it financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern, which requires management to perform interim and annual assessments of an entities ability to continue within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity's ability to continue as a going concern. This guidance is effective for the Company on January 1, 2017 and will not have an impact on the Company's financial position, results of operations or cash flows.

In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis, which requires amendments to both the variable interest entity ("VIE") and voting models. The amendments (i) rescind the indefinite deferral of certain aspects of accounting standards relating to consolidations and provide a permanent scope exception for registered money market funds and similar unregistered money market funds, (ii) modify the identification of variable interests (fees paid to a decision maker or service provider), the VIE characteristics for a limited partnership or similar entity and primary beneficiary determination under the VIE model, and (iii) eliminate the presumption within the current voting model that a general partner controls a limited partnership or similar entity. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The amendments may be applied using either a modified retrospective or full retrospective approach. The Company is currently evaluating the effect the guidance will have on its combined financial statements.

On April 7, 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the debt liability. This standard is effective for fiscal years beginning after December 15, 2015 with early adoption permitted and will be applied on a retrospective basis. Supplemental to ASU 2015-03, on August 16, 2015, the FASB issued Accounting Standards Update 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements -Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, which clarifies that debt issuance costs attributable to line-of-credit arrangements can be presented as an asset and amortized ratably over the life of the revolving debt arrangement, regardless of whether there is an outstanding balance thereunder. This methodology is consistent with the Company’s historical treatment of such costs. The new standard will be effective for the Company on January 1, 2016 and will not have a material impact on the Company's financial position, results of operations or cash flows.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, that eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires an entity to recognize the adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined. In addition, the adjustments must be disclosed by income statement line item either on the face of the income statement or in the footnotes as if the adjustment to the provisional amounts had been recorded as of the acquisition date. The amendment is effective prospectively for interim and annual periods beginning after December 15, 2015, with early adoption permitted for financial statements that have not been issued. We do not expect the new standard will have a significant impact on our consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (ASU 2016-02), which will replace most existing lease accounting guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize the rights and obligations resulting from leases as assets and liabilities. ASU 2016-02 requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments. ASU 2016-02 will be effective for the Company beginning in fiscal 2020, and requires the modified retrospective method of adoption. Early adoption is permitted. The Company is in the process of determining the method and timing of adoption and assessing the impact of ASU 2016-02 on its consolidated financial statements.

3. Recapitalization

On June 9, 2014, wholly owned subsidiaries of NorthStar acquired Cerberus' 89.7% interest in INK Acquisition, LLC and the Affiliated Lessee, which resulted in Successor acquiring 47 hotels from Old Ink JV. Prior to the recapitalization, the Successor was funded with member contributions of $193,083. The Successor funded the acquisition with available cash, the issuance of debt of $840,000 and the assumption of other liabilities of $2,405. The Successor incurred acquisition costs of $19,868 during 2014 related to the acquisition, of which $10,503 are based on debt breakage fees. The transaction resulted in a change in control of Old Ink JV; accordingly it has been accounted for as a business combination.

Hotel Purchase Price Allocation

The following table presents the allocation of the purchase price of the assets acquired and the liabilities assumed by the Successor, based on the fair value on the date of its acquisition (in thousands):



Land and improvements	$	167,106
Building and improvements	685,645
Acquired intangibles	3,954
Other assets acquired	181,258
Total assets acquired	$	1,037,963

Accounts payable and accrued expenses assumed	$	(2,405	)
Debt issued	(840,000		)
Total liabilities	$	(842,405	)

The value of the assets acquired was primarily based on a sales comparison approach (for land) and a depreciated replacement cost approach (for building and improvements and furniture, fixtures and equipment). The sales comparison approach uses inputs of recent land sales in the respective hotel markets. The depreciated replacement cost approach uses inputs of both direct and indirect replacement costs using a nationally recognized authority on replacement cost information as well as the age, square footage and number of rooms of the respective assets. Operating assets and liabilities are recorded at carrying value because of the liquid nature of the assets and relatively short maturities of the obligations.

4. Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts at a level believed to be adequate to absorb losses and is based on past loss experience, current economic and market conditions and other relevant factors. The allowance for doubtful accounts was $389 and $389 as of December 31, 2015 and 2014, respectively.

5. Investment in Hotel Properties

Investment in hotel properties as of December 31, 2015 and 2014 consisted of the following:



	December 31, 2015			December 31, 2014
Land and improvements	$	167,181		$	167,150
Building and improvements	711,146			688,922
Furniture, fixtures and equipment	99,280			86,983
Renovations in progress	2,252			11,635
	979,859			954,690
Less accumulated depreciation	(72,643		)	(25,055		)
Investment in hotel properties, net	$	907,216		$	929,635

6. Debt

Debt is comprised of the following at December 31, 2015 and 2014:



Collateral	Interest Rate		Maturity Date	12/31/15 Property Carrying Value		Balance Outstanding as of
Collateral	Interest Rate		Maturity Date	12/31/15 Property Carrying Value		December 31, 2015		December 31, 2014
JPM Chase Loan-Successor⁽¹⁾	3.72	%	December 9, 2016	$	904,963	$	840,000	$	840,000
Total				$	904,963	$	840,000	$	840,000

(1) In connection with the recapitalization, the Successor refinanced the existing debt with a new $840.0 million, non-recourse loan from JP Morgan Chase Bank, National Association, collateralized by the 47 hotels (the "Loan agreement"). The new loan is a five year interest only loan comprised of a two year loan with three, one year extension options. The Company can extend the loan provided that 1) no event of default shall have occurred and be continuing at the time the applicable extension option is exercised and extended, 2) it obtains an interest rate cap, and 3) it provides certain notices as required in the loan agreement. With respect to the third extension option, the Company must meet a minimum debt yield of 8.5% on the total amount outstanding or prepay a portion of the debt to attain an 8.5% debt yield. Interest only payments are due monthly. The interest rate is based on one-month LIBOR plus 3.39% (3.72% at December 31, 2015). Monthly payments are based on the number of days outstanding during each period and the loan balance during the period. Payments are based on the weighted average rate. In connection with entering into the loan, Chatham and NorthStar could be required under its unconditional guaranty to repay portions of this indebtedness.

The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with similar maturity and is classified within Level 3 of the fair value hierarchy. The Company’s only variable rate debt is under its JP Morgan Chase Bank, National Association loan. The estimated fair value of the variable rate debt as of December 31, 2015 and 2014 was $840,074 and $840,102, respectively.

As of December 31, 2015, the Successor was in compliance with all of its financial covenants including, but not limited to, the following:

(1) Chatham Guarantor (as defined in the Loan agreement) shall collectively maintain a Net Worth (as defined in the Loan agreement) of not less than $225,000 in the aggregate; and

(2) Chatham Guarantor shall maintain Unencumbered Liquid Assets (as defined in the Loan agreement) of not less than $25,000 of which (i) not less than $10,000 of Unencumbered Liquid Cash Assets (as defined in the Loan agreement) and (ii) not less than $15,000 in Unencumbered Credit Line Capacity (as defined in the Loan agreement).

Future scheduled principal payments of Successor's debt obligations as of December 31, 2015, for each of the next five calendar years and thereafter is as follows:



	Amount
2016	$	840,000
2017	—
2018	—
2019	—
2020	—
Thereafter	—
	$	840,000

7. Owners' Equity (Deficit)

The ownership of Successor at December 31, 2015 and 2014 was as follows:



	December 31, 2015		December 31, 2014
Owners' Name
Platform Member-T LLC	89.72	%	89.72	%
Chatham Lodging, L.P.	10.28	%	10.28	%
Total	100.00	%	100.00	%

Under the terms of the Company's operating agreement, available cash from operations (as defined in the Company's operating agreement) is to be distributed pari passu to the partners through the date of dissolution. In addition, available cash from a capital event (as defined in the Company's operating agreement) is to be distributed to the partners subject to specified internal rate of return tiers that could result in disproportionately greater distributions to Chatham upon meeting certain established thresholds. Distributions paid by the Company during the periods ended December 31, 2015 and 2014 were $57,250 and $15,000, respectively.

8. Concentration of Credit Risk

Cash is maintained with high-quality financial institutions and is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per financial institution. At times, cash balances may exceed the FDIC insured limits. Due to the highly liquid nature of cash and the use of high-quality financial institutions, management believes that it has limited the Company's credit exposure.

9. Commitments and Contingencies

Litigation

The nature of the operations of the hotels exposes the hotels and the Company to the risk of claims and litigation in the normal course of their business. The Company is not presently subject to any material litigation nor, to the Company’s knowledge, is any material litigation threatened against the Company or its properties.

An affiliate of the Company is currently a defendant, along with IHM, in a class action lawsuit filed in the San Diego County Superior Court. The lawsuit alleges various wage and hour law violations concerning fifteen hotels operated by IHM in the state of California and owned by affiliates of the Company, its Managing Member and/or certain third parties. All parties are defending the case vigorously. As of December 31, 2015, the Company has not recorded a liability as all litigation relates to wage and hour claims prior to the recapitalization event in June of 2014 and as such, the entire liability of Old Ink JV was subsequently satisfied by the predecessor owners, and therefore should not impact the Successor.

Hotel Ground Rent

The Courtyard by Marriott in Ft. Lauderdale, FL hotel is subject to a ground lease with an expiration date of August 1, 2034. Rent is equal to approximately $9 per month, with minimum rent subject to annual increase based on increases in the consumer price index.

The following is a schedule of the minimum future obligation payments required under the ground leases:



	Amount
2016	$	112
2017	113
2018	114
2019	114
2020	115
Thereafter	1,564
Total	$	2,132

Hotel Management Agreements

As of December 31, 2015, all of the Successor hotels are managed by IHM. The management agreements with IHM have an initial term of five years and may be extended subject to approval by both IHM and the Successor. Each of the IHM management agreements provides for a base management fee of 3% of the managed hotel’s gross revenues. The Successor and Predecessor management agreements with IHM also provide for accounting fees up to $1.20 per month per hotel as well a revenue management fee of $0.75 per month per hotel. Each of the IHM management agreements may be terminated without cause by giving not less than a 30 days prior written notice and upon the assignment of the of lessees interests in the related hotel or upon sale or transfer of such hotel. If terminated without cause, the termination fee is equal to the average monthly base, accounting, and revenue management fees paid since commencement of the agreement multiplied by the number of months remaining in the initial term or the number of months remaining in the first year of any renewal term. The IHM management agreements may be terminated for cause, including the failure of the managed hotels to meet specified performance levels.

Hotel Franchise Agreements

The Affiliated Lessee has entered into franchise agreements with Marriott International, Inc. (“Marriott”), relating to 30 Residence Inns, three Courtyards by Marriott and one TownePlace Suites. These franchise agreements expire between 2027 and 2034. Each of the Marriott franchise agreements provide for franchise fees ranging from 5% to 5.5% of the respective hotel’s gross room sales plus marketing fees ranging from 1.5% to 2.5% of the respective hotel’s gross room sales. Each of the Marriott franchise agreements is terminable by Marriott in the event that the applicable franchisee fails to cure an event of default or, in certain circumstances such as the franchisee’s bankruptcy or insolvency, are terminable by Marriott at will. The Marriott franchise agreements provide that, in the event of a proposed transfer of the hotel, the Company’s Affiliated Lessee’s interest in the agreement or more than a specified amount of the Company’s Affiliated Lessee to a competitor of Marriott, Marriott has the right to purchase or lease the hotel under terms consistent with those contained in the respective offer and may terminate if the Company’s Affiliated Lessee elects to proceed with such a transfer.

The Affiliated Lessee has entered into franchise agreements with Hampton Inns Franchise LLC (“Hampton Inns”), relating to five Hampton Inns. The franchise agreements expire in 2029. Each of the Hampton Inns franchise agreements provides for a monthly program fee equal to 4% of the hotel’s gross rooms revenue plus royalty fees equal to 6% of the hotel’s gross rooms revenue. Hampton Inns may terminate a franchise agreement in the event that the franchisee under that franchise agreement fails to cure an event of default or, in certain circumstances such as the franchisee’s bankruptcy or insolvency.

The Affiliated Lessee has entered into franchise agreements with The Sheraton, LLC (“Sheraton”), relating to the Fort Walton Beach - Sheraton Four Points, Fort Walton Beach, Florida hotel and the Rockville Sheraton, Rockville, Maryland hotel. The franchise agreements have initial terms of 20 years and expire in 2034. Neither of the agreements has a renewal option. Each of the Sheraton franchise agreements provides for royalty fees ranging from 5.50% to 6.0% of gross rooms sales plus royalty fees of 2% of gross food and beverage sales for one of the Sheratons. Each of the agreements also provides for marketing fees of 1.0% of gross rooms sales. Sheraton may terminate a franchise agreement in the event that the franchisee under that franchise agreement fails to cure an event of default or, in certain circumstances such as franchisee’s bankruptcy or insolvency.

The Affiliated Lessee has entered into a franchise agreement with Westin Hotel Management, Inc. (“Westin”) relating to the Morristown-Westin Governor Morris hotel. The franchise agreement has an initial term of 20 years and expires in 2034. It has no renewal option. The Westin franchise agreement provides for royalty fees of 7% of gross rooms sales plus 3% of gross food and beverage sales. The agreement also provides for marketing fees of 1.32% of gross rooms sales. Westin may terminate the franchise agreement in the event that the franchisee fails to cure an event of default or, in certain circumstances such as franchisee’s bankruptcy or insolvency.

The Affiliated Lessee has entered into franchise agreements with Hyatt House Franchising, LLC (“Hyatt House”) relating to five Hyatt House hotels. The franchise agreements have an initial term of 20 years and expire in 2034. Each has a renewal option of 10 years. The Hyatt House franchise agreements provide for royalty fees ranging from 3% to 5% of gross rooms revenue plus marketing fees of 3.5% of gross rooms revenue. Hyatt may terminate the franchise agreements in the event that the franchisee fails to cure an event of default or, in certain circumstances such as franchisee’s bankruptcy or insolvency.

10. Discontinued Operations

As of December 31, 2015 and 2014, the Successor had no hotel property classified as held for sale. During the year ended December 31, 2013, Old Ink JV recognized a net loss on sale of the four hotels for $2,456.

The following table sets forth the components of discontinued operations for the Predecessor year ended December 31, 2013:



	Predecessor
	2013
Hotel operating revenue	$	1,854
Hotel operating expenses	(1,933		)
Amortization of franchise fees	(6		)
Property tax and insurance	(187		)
General and administrative	(2		)
Impairment on hotels classified as held for sale	—
Loss from discontinued operations	(274		)
Loss on sale of assets from discontinued operations	(2,456		)
Net loss from discontinued operations	$	(2,730	)

11. Related Party Transactions

As of December 31, 2015, all 47 hotels owned by Successor are managed by IHM. Management, revenue management and accounting fees paid by Old Ink JV to IHM for the Predecessor period January 1, 2014 through June 9, 2014 and for the year ended December 31, 2013 were $4,797 and $6,347, respectively. Management, revenue management and accounting fees incurred by Successor for the year ended December 31, 2015 and period from June 9, 2014 through December 31, 2014 were $8,761 and $4,797, respectively. At December 31, 2015 and 2014, amounts due to IHM were ($993) and $714, respectively, and were included in accounts payable and accrued expenses on the combined balance sheets.

The Company has additional related party transactions through cost reimbursements relating primarily to corporate payroll where Chatham is the employer. As the Company records cost reimbursements based upon costs incurred with no added markup, the revenue and related expense has no impact on the Company's operating income or net income. Cost reimbursements from the related parties are recorded based upon the occurrence of a reimbursed activity.

Various shared office expenses and rent are paid by Chatham and allocated to the Company based on the amount of square footage occupied by the entity. Insurance expenses for medical, workers compensation and general liability are paid by the Company and allocated to the hotel properties or the appropriate related party.

12. Subsequent Events

The Company has performed an evaluation of subsequent events as of the balance sheet date through March 24, 2016, the date of the issuance of the financial statements and determined there are no subsequent events.

Exhibit



				Exhibit 99.2

IHP I Owner JV, LLC and Affiliates

Financial Statements

As of December 31, 2015 and 2014 and for the year ended December 31, 2015, and period from November 17, 2014 through December 31, 2014

With Report of Independent Certified Public Accountants

Report of Independent Certified Public Accountants

To the Partners of

IHP I Owner JV, LLC & Affiliates

We have audited the accompanying combined financial statements of IHP I Owner JV, LLC & Affiliates, which comprise the combined balance sheet as of December 31, 2015, and the related combined statements of operations, changes in owners’ equity, and cash flows for the year then ended.

Management's Responsibility for the Combined Financial Statements

Auditor's Responsibility

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of IHP I Owner JV, LLC & Affiliates as of December 31, 2015, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP

Fort Lauderdale, Florida

March 24, 2016

Report of Independent Certified Public Accountants

To the Partners of

IHP I Owner JV, LLC

We have audited the accompanying combined financial statements of IHP I Owner JV, LLC ( a Delaware limited liability company) and Affiliates, which comprise the combined balance sheet as of December 31, 2014, and the related combined statements of operations, owners' equity, and cash flows for the period November 17, 2014 through December 31, 2014, and the related notes to the financial statements.

Management's responsibility for the financial statements

Auditor's responsibility

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of IHP I Owner JV, LLC and Affiliates as of December 31, 2014 and the results of their operations and their cash flows for the period November 17, 2014 through December 31, 2014 in accordance with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

April 2, 2015

IHP I Owner JV, LLC and Affiliates

Combined Balance Sheet

(In thousands)



	December 31, 2015			December 31, 2014
Assets:
Investment in hotel properties, net	$	950,282		$	946,418
Cash and cash equivalents	10,111			18,237
Restricted cash	77,022			84,281
Hotel receivables (net of allowance for doubtful accounts of $96 and $0)	7,245			5,869
Deferred costs, net	9,160			15,181
Intangibles, net	13,257			14,135
Prepaid expenses and other assets	4,185			3,623
Total assets	$	1,071,262		$	1,087,744

Liabilities:
Debt	$	817,000		$	817,000
Accounts payable and accrued expenses	19,043			14,947
Total liabilities	836,043			831,947

Owners' Equity:
Contributions	278,515			278,515
Distributions and accumulated deficit	(43,296		)	(22,718		)
Total owners' equity	235,219			255,797
Total liabilities and owners' equity	$	1,071,262		$	1,087,744

The accompanying notes are an integral part of these combined financial statements.

IHP I Owner JV, LLC and Affiliates

Combined Statement of Operations

(In thousands)



	Year Ended December 31, 2015			Period from November 17, 2014 through December 31, 2014
Revenue:
Room	$	215,357		$	19,598
Food and beverage	9,792			863
Other	5,065			500
Total revenue	230,214			20,961
Expenses:
Hotel operating expenses:
Room	50,256			5,160
Food and beverage	7,722			680
Telephone	2,183			232
Other hotel operating	1,532			129
General and administrative	22,513			2,384
Franchise and marketing fees	12,784			1,281
Advertising and promotions	7,350			745
Utilities	9,614			931
Repairs and maintenance	12,730			1,134
Management fees	10,021			1,006
Insurance	1,033			72
Total hotel operating expenses	137,738			13,754
Depreciation and amortization	31,183			3,781
Amortization of intangibles	878			108
Property taxes and insurance	13,232			1,602
General and administrative	1,850			895
Hotel property acquisition costs and other charges	352			18,877
Total operating expenses	185,233			39,017
Operating income (loss)	44,981			(18,056		)
Interest and other income	29			—
Interest expense, including amortization of deferred fees	(37,138		)	(4,580		)
Net income (loss)	$	7,872		$	(22,636	)

The accompanying notes are an integral part of these combined financial statements.

IHP I Owner JV, LLC and Affiliates

Combined Statement of Owners' Equity

(In thousands)



	Contributions		Distributions and Accumulated Deficit			Total Owners' Equity
Balance at November 17, 2014	$	—	$	—		$	—
Contributions	278,515		—			278,515
Net loss	—		(22,636		)	(22,636		)
Distributions	—		(82		)	(82		)
Balance at December 31, 2014	$	278,515	$	(22,718	)	$	255,797
Net income	—		7,872			7,872
Distributions	—		(28,450		)	(28,450		)
Balance at December 31, 2015	$	278,515	$	(43,296	)	$	235,219

The accompanying notes are an integral part of these combined financial statements.

IHP I Owner JV, LLC and Affiliates

Combined Statement of Cash Flows

(In thousands)



	Year Ended December 31, 2015			Period from November 17, 2014 through December 31, 2014
Cash flow from operating activities:
Net income (loss)	$	7,872		$	(22,636	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	30,795			3,735
Amortization of deferred franchise fees	388			46
Amortization of deferred financing costs included in interest expense	5,640			697
Amortization of intangibles	878			108
Changes in assets and liabilities:
Hotel receivables	(1,376		)	(5,869		)
Prepaid expenses and other assets	(562		)	(3,623		)
Deferred costs	(7		)	—
Accounts payable and accrued expenses	3,272			14,947
Net cash provided by (used in) operating activities	46,900			(12,595		)

Cash flows from investing activities:
Investment in hotel properties, net of cash received	—			(950,017		)
Improvements and additions to hotel properties	(33,835		)	(137		)
Payments for franchise fees and intangibles	—			(18,757		)
Restricted cash	7,259			(84,280		)
Net cash used in investing activities	(26,576		)	(1,053,191		)

Cash flows from financing activities:
Proceeds from issuance of debt	—			817,000
Payments of financing costs	—			(11,410		)
Contributions	—			278,515
Distributions	(28,450		)	(82		)
Net cash provided by (used in) financing activities	(28,450		)	1,084,023

Net change in cash and cash equivalents	(8,126		)	18,237
Cash and cash equivalents, beginning of period	18,237			—
Cash and cash equivalents, end of period	$	10,111		$	18,237

Supplemental disclosure of cash flow information:
Cash paid for interest	$	31,350		$	2,386
Supplemental disclosure of non-cash information:
Accrued improvements and additions to hotel properties	$	826		$	2

See Note 3 to the financial statements for a description of assets and liabilities acquired in connection with the acquisition of 48 hotels.

The accompanying notes are an integral part of these combined financial statements.

IHP I Owner JV, LLC and Affiliates

Notes to Financial Statement

(dollars in thousands)


1.	Organization

IHP I Owner JV, LLC, a Delaware limited liability company, was formed on November 17, 2014, as a joint venture between affiliates of NorthStar Realty Finance Corp. (“NorthStar”) and Chatham Lodging, L.P. (“Chatham”) to acquire a portfolio of 48-hotels (hereinafter referred to as the "Inland Acquisition"). IHP I Owner JV, LLC wholly owns various limited liability companies which individually own the properties acquired. The properties are leased to IHP I OPS, LLC and IHP I OPS-II, LLC (hereinafter referred to as the "Affiliate Lessees"). Through wholly-owned subsidiaries, Northstar owns a 90.0% interest and Chatham owns a 10.0% interest in IHP I Owner JV, LLC and Affiliates. Together, the IHP I Owners JV, LLC and the Affiliate Lessees' are referred to herein as collectively “we,” “us,” or the “Company".

On December 31, 2015, the Company owned 48 hotels with an aggregate of 6,401 (unaudited) rooms located in 20 states. The hotels operate under the following brands: Residence Inn by Marriott (13 hotels), Hampton Inn by Hilton (7 hotels), Hyatt House (1 hotel), Courtyard by Marriott (16 hotels), Homewood Suites by Hilton (8 hotels), Aloft (2 hotels) and Springhill Suites by Marriott (1 hotel). As of December 31, 2015, management of 34 of the hotels is provided pursuant to management agreements with Island Hospitality Management Inc. ("IHM"), which is 51% owned by Jeffrey H. Fisher, the Chairman of the Board and Chief Executive Officer of Chatham Lodging Trust, which is the sole general partner of Chatham, and 45% owned by affiliates of NorthStar Asset Management Group, Inc. Fourteen of the hotels are managed by Marriott International, Inc. (“Marriott”).

The affiliated limited liability companies combined in these financial statements are IHP I Owner JV, LLC and IHP I OPS JV, LLC.

2. Summary of Significant Accounting Policies

Basis of Presentation

The combined financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated and combined financial statements include all of the accounts of IHP I Owner JV, LLC and its subsidiaries and all of the accounts of the Affiliate Lessees. Combined financial statements of IHP I Owner JV, LLC and the Affiliate Lessees, which are under common control and common management, have been presented in order to provide a more meaningful presentation of the operations of IHP I Owner JV, LLC. All intercompany accounts and transactions have been eliminated.

Revision to Previously Issued Financial Statements

In connection with the preparation of the Company's financial statements for the year ended December 31, 2015, Management determined that the Combined Balance Sheet, Statement of Owners' Equity, and Statement of Cash Flows for the period ended December 31, 2014 contained an error in the presentation of distributions due from Marriott. This error understated the Company's hotel receivables and equity balances by $804, as well as cash flows used in operating activities and cash flows provided by financing activities. Accordingly, the Company has revised these balances in the accompanying financial statements for the period ended December 31, 2014. The Company concluded that the corrections are not material to any of its previously issued combined financial statements. The adjustment does not affect the Company’s Combined Statement of Operations or cash balance for the reporting period. Additionally, the revision does not affect the Company’s compliance with any financial covenants.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of and disclosures of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates include the allocation of the purchase price of hotels, the allowance for doubtful accounts and the fair value of hotels that are held for sale or impaired.

Fair Value of Financial Instruments

Level 1 Inputs reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2 Inputs represent other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and

Level 3 Inputs are those that are unobservable.

The carrying value of the Company's cash, accounts receivables, accounts payable and accrued expenses approximate fair value because of the relatively short maturities of these instruments. The Company is not required to carry any other assets or liabilities at fair value on a recurring basis other than its interest rate caps. The interest rate caps are valued using Level 3 inputs and are valued at $1 and $173 as of December 31, 2015 and 2014, respectively.

The Company also disclosed the fair value of its variable rate debt based estimates on current terms the Company would expect to receive under the current general market conditions, as compared to the actual terms and conditions of the Company's debt. The fair value determination is based on Level 3 inputs as they are based on the fair value hierarchy.

Investment in Hotel Properties

The Company’s investment in hotel properties are carried at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally 40 years for buildings, 20 years for land improvements, 15 years for building improvements and three to ten years for furniture, fixtures and equipment. Renovations and replacements at the hotel properties that improve or extend the life of the assets are capitalized and depreciated over their useful lives, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of property and equipment, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is recognized in the combined statements of operations.

The Company periodically reviews its hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows, without interest charges, from operations and the net proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount, an adjustment to reduce the carrying amount to the related hotel property's estimated fair market value is recorded and an impairment loss is recognized. For the period November 17, 2014 through December 31, 2014 and for the year ended December 31, 2015, no impairment charges on hotels held for use were recorded.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and short term liquid investments with an original maturity when purchased of three months or less. Cash balances in individual banks may exceed federally insurable limits.

Restricted Cash

Restricted cash represents escrows for reserves required pursuant to the Company’s loans or hotel management agreements. Included in restricted cash on the accompanying combined balance sheet at December 31, 2015 and 2014, are renovation, property tax and insurance escrows of $77,022 and $84,281, respectively. The hotel mortgage loan agreements require the Company to fund 4% of gross hotel revenues on a monthly basis for furnishings, fixtures and equipment and general repair maintenance reserves (“Replacement Reserve”), in addition to property tax and insurance reserves, into an escrow account held by the lender.

Hotel Receivables

Hotel receivables consist of amounts owed by guests staying at the Company’s hotels and amounts due from business and group customers. An allowance for doubtful accounts is provided and maintained at a level believed to be adequate to absorb estimated probable losses. At December 31, 2015 and 2014, allowance for doubtful accounts was $96 and $0, respectively.

Deferred Costs

Deferred costs consisted of the following at December 31, 2015 and 2014:



	December 31, 2015			December 31, 2014
Loan costs	$	11,411		$	11,411
Franchise fees	4,513			4,513
Other	7			—
	15,931			15,924
Less accumulated amortization	(6,771		)	(743		)
Deferred costs, net	$	9,160		$	15,181

Loan costs are recorded at cost and amortized over the term of the loan applying the effective interest rate method. Franchise fees are recorded at cost and amortized over a straight-line basis over the term of the franchise agreements. For the periods ended December 31, 2015 and 2014, amortization expense related to franchise fees of $388 and $46, respectively, was included in depreciation and amortization in the combined statement of operations. Amortization expense of $5,633 and $697 related to loan costs for the periods ended December 31, 2015 and 2014, respectively, is included in interest expense in the combined statement of operations.

Intangibles

Intangibles, consisting of identifiable intangibles acquired in the Inland Acquisition are as follows:



	December 31, 2015			December 31, 2014
Intangible assets	$	14,243		$	14,243
Less accumulated amortization	(986		)	(108		)
Intangibles, net	$	13,257		$	14,135

Based on the third party valuations, the Company ascribed $14,243 of value related to the difference in Lieu of Taxes (Pilot) and the real estate taxes over the life of the lease agreements associated with the following hotels:

IHP Elizabeth I (NJ) Owner, LLC - $6,191

IHP Elizabeth II (NJ) Owner, LLC - $8,052

The intangible assets will be amortized over 181 months from December 31, 2015, which corresponds to the term of the land leases as follows:



	Amount
2016	$	879
2017	879
2018	879
2019	879
2020	879
Thereafter	8,862
Total	$	13,257

Prepaid Expenses and Other Assets

The Company’s prepaid expenses and other assets consist of prepaid insurance, prepaid property taxes, deposits, hotel supplies inventory and the fair value of the company’s interest rate caps.

Accounting for derivative instruments

The Company records its derivative instruments on the balance sheet at their estimated fair value. Changes in the fair value of derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship. The Company’s interest rate caps are not designated as a hedge but to eliminate the incremental cost to the Company if one-month LIBOR were to exceed 3.5% during the periods ending December 31, 2015 and 2014. Accordingly, the interest rate caps are recorded on the balance sheet at estimated fair value with realized and unrealized changes in the fair value reported in the combined statement of operations.

Revenue Recognition

Revenue from hotel operations is recognized when rooms are occupied and when services are provided. Revenue consists of amounts derived from hotel operations, including sales from room, meeting room, restaurants, gift shop, in-room movie and other ancillary amenities. Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenue) in the accompanying combined statement of operations.

Income Taxes

Recently Issued Accounting Standards

3. Acquisition of Hotel Properties

On November 17, 2014, the Company acquired 48 hotels. Prior to the acquisition, the Company was funded with member contributions of $278,515. The Company funded the acquisition with available cash, the issuance of debt of $817,000 and the assumption of other liabilities of $2,712. The Company incurred acquisition costs of $352 and $18,877 during the year ended December 31, 2015 and period from November 17, 2014 through December 31, 2014, respectively, related to the Inland Acquisition.

Hotel Purchase Price Allocation

The following table presents the allocation of the purchase price of the assets acquired and the liabilities assumed, based on the fair value on the date of its acquisition (in thousands):



Land and improvements	$	107,412
Building and improvements	796,823
Acquired intangibles	18,756
Other assets acquired	153,407
Total assets acquired	$	1,076,398

Accounts payable and accrued expenses assumed	$	(2,712	)
Debt issued	(817,000		)
Total liabilities	$	(819,712	)

4. Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts at a level believed to be adequate to absorb losses and is based on past loss experience, current economic and market conditions and other relevant factors. Allowance for doubtful accounts was $96 and $0 at December 31, 2015 and 2014, respectively.

5. Investment in Hotel Properties

Investment in hotel properties as of December 31, 2015 and 2014 consisted of the following:



	December 31, 2015			December 31, 2014
Land and improvements	$	107,413		$	107,412
Building and improvements	805,039			796,825
Furniture, Fixtures and equipment	49,914			45,781
Renovations in progress	22,445			135
	984,811			950,153
Less accumulated depreciation	(34,529		)	(3,735		)
Investment in hotel properties, net	$	950,282		$	946,418

6. Debt

Debt is comprised of the following at December 31, 2015 and 2014:



Collateral	Interest Rate		Maturity Date	12/31/15 Property Carrying Value		Balance Outstanding as of
Collateral	Interest Rate		Maturity Date	12/31/15 Property Carrying Value		December 31, 2015		December 31, 2014
Bank of America Loan ⁽¹⁾	3.93	%	December 9, 2016	$	927,836	$	817,000	$	817,000
Total				$	927,836	$	817,000	$	817,000

(1) During the period from November 17, 2014 through December 31, 2014, the Company received a $817,000, non-recourse loan from Bank of America, National Association, collateralized by the Company's 48 hotels (the "Loan agreement"). The loan is a five year, interest only loan comprised of a two year loan with three, one year extension options. The Company can extend the loan provided that 1) no event of default shall have occurred and be continuing at the time the applicable extension option is exercised and extended, 2) it obtains an interest rate cap, and 3) it provides certain notices as required in the loan agreement. With respect to the third extension option, the Company, must meet a minimum debt yield of 8.75% on the total amount outstanding or prepay a portion of the debt to attain an 8.75% debt yield. Interest only payments are due monthly. The interest rate is based on one month LIBOR plus 3.6% (3.93% at December 31, 2015). Monthly payments are based on the number of days and loan balance during the period. Payments are based on the average weighted rate. In connection with entering into the loan, Chatham and NorthStar could be required under its unconditional guaranty to repay portions of this indebtedness.

The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with similar maturity and is classified within Level 3 of the fair value hierarchy. The Company's only variable rate debt is the mortgage loan from Bank of America, National Association referenced above. The estimated fair value of the Company’s variable rate debt as of December 31, 2015 was $816,950.

As of December 31, 2015, the Company was in compliance with all of its financial covenants including but not limited to the following:



(1)	Chatham shall collectively maintain a Net Worth (as defined in the Loan agreement) of not less than $260,000 in the aggregate; and

(2)	Chatham shall maintain Unencumbered Liquid Assets (as defined in the Loan agreement) of not less than $28,000 of which not less than $10,000 of Unencumbered Liquid Cash Assets (as defined in the Loan agreement).

Future scheduled principal payments of debt obligations as of December 31, 2015, and for each of the next five calendar years and thereafter is as follows:



	Amount
2016	$	817,000
2017	—
2018	—
2019	—
2020	—
Thereafter	—
Total	$	817,000

7. Owners' Equity

The ownership of the Company at December 31, 2015 and 2014 was as follows:



Owners' Name	December 31, 2015		December 31, 2014
Platform Member - II-T LLC	90	%	90	%
Chatham IHP, LLC	10	%	10	%
Total	100	%	100	%

8. Concentration of Credit Risk

9. Commitments and Contingencies

Litigation

Hotel Ground Rent

The subsidiary owners of the Courtyard by Marriott Elizabeth, NJ and the Residence Inn Elizabeth, NJ are lessees under a ground lease, as amended. Under the ground lease, no lease payments are due and the lease expires on the earlier of the day on which any Payment in Lieu of Tax (“PILOT”) Bonds are repaid in their entirety or June 4, 2048. At lease expiration, the lessee may acquire the land for $1. The subsidiary owners are also party to Allocation Agreements which require the lessee to make quarterly PILOT payments through the end of the PILOT program in February 2031. The payments required under the Allocation Agreements are expensed as incurred. PILOT payments are equal to approximately $352 and $383 per year for the Courtyard by Marriott Elizabeth, NJ and the Residence Inn Elizabeth, NJ, respectively.

The following is a schedule of future PILOT payments required under the Allocation Agreements:



	Amount
2016	$	736
2017	736
2018	736
2019	736
2020	809
Thereafter	8,874
Total	$	12,627

Hotel Management Agreements

As of December 31, 2015, 34 of the 48 hotels are managed by IHM. The management agreements with IHM have an initial term of five years and may be extended subject to approval by both IHM and the Company. Each of the IHM management agreements provides for a base management fee of 3% for the managed hotel’s gross revenues. Each of the management agreements with IHM also provides for accounting fees up to $1.20 per month per hotel as well a revenue management fee of $0.75 per month per hotel. Marriott manages 14 of the hotels under a management and franchise agreement. These agreements expire in 2033. The Marriott agreements may be renewed on the same terms and conditions for one successive period of ten years. Each of the Marriott agreements may be terminated for cause, including the failure of the managed hotel to meet specified performance levels. Under the Marriott agreements, the combined management and franchise fee is 7% of gross revenue plus an incentive management fee equal to 25% of available cash in any year, as defined in the agreements. Each of the IHM management agreements may be terminated without cause by giving not less than a 30 days prior written notice and upon the assignment of the of lessee's interests in the related hotel or upon sale or transfer of such hotel. If terminated without cause, the termination fee is equal to the average monthly base, accounting, and revenue management fees paid since commencement of the agreement multiplied by the number of months remaining in the initial term or the number of months remaining in the first year of any renewal term. Each of the IHM management agreements may be terminated for cause, including the failure of the managed hotel to meet specified performance levels.

Hotel Franchise Agreements

The Affiliated Lessee has entered into franchise agreements with Marriott relating to six Residence Inn hotels and ten Courtyards by Marriott. These franchise agreements expire between 2021 and 2030. These Marriott franchise agreements provide for franchise fees ranging from 5.5% to 6% of the applicable hotel’s gross room sales plus marketing fees ranging from 2% to 2.5% of the applicable hotel’s gross room sales. The Marriott franchise agreements are terminable by Marriott in the event that the applicable franchisee fails to cure an event of default or, in certain circumstances such as the franchisee’s bankruptcy or insolvency, are terminable by Marriott at will. The Marriott franchise agreements provide that, in the event of a proposed transfer of the hotel, the Affiliated Lessee’s interest in the agreement or more than a specified amount of the Affiliated Lessee to a competitor of Marriott, Marriott has the right to purchase or lease the hotel under terms consistent with those contained in the respective offer and may terminate if the Affiliated Lessee elects to proceed with such a transfer.

The Affiliated Lessee has entered into franchise agreements with Hampton Inns Franchise LLC (“Hampton Inn”), relating to seven Hampton Inn hotels. The franchise agreements expire in 2029. The Hampton Inn franchise agreements provide for a monthly program fee equal to 4% of the hotel’s gross rooms revenue plus a royalty fee equal to 6% of the hotel’s gross rooms revenue. Hampton Inn may terminate a franchise agreement in the event that the applicable franchisee fails to cure an event of default or, in certain circumstances such as the franchisee’s bankruptcy or insolvency.

The Affiliated Lessee has entered into franchise agreements with Homewood Suites Franchise LLC (“Homewood Suites”), relating to eight Homewood Suites hotels. The franchise agreements expire in 2029. The Homewood Suites franchise agreements provide for a monthly program fee ranging from 3.5% to 4.3% of the applicable hotel’s gross rooms revenue plus royalty fees equal to 5.5% of the applicable hotel’s gross rooms revenue. Homewood Suites may terminate a franchise agreement in the event that the franchisee fails to cure an event of default or, in certain circumstances such as the applicable franchisee’s bankruptcy or insolvency.

The Affiliated Lessee has entered into franchise agreements with The Sheraton, LLC (“Sheraton”), relating to the Birmingham Aloft and Chapel Hill Aloft hotels. The franchise agreements have terms of 20 years and expire in 2034. Neither of the agreements has a renewal option. The Sheraton franchise agreements provide for royalty fees of 5% of the applicable hotel's gross rooms sales. Sheraton may terminate a franchise agreement in the event that the applicable franchisee fails to cure an event of default or, in certain circumstances such as franchisee’s bankruptcy or insolvency.

The Affiliated Lessee has entered into a franchise agreement with Hyatt House Franchising, LLC (“Hyatt House”) relating to one Hyatt House hotel. The franchise agreement expires in 2032. The Hyatt House franchise agreement provides for royalty fees of 5% of gross rooms revenue plus marketing fees of 3.5% of gross rooms revenue. Hyatt may terminate the franchise agreement in the event that the franchisee fails to cure an event of default or, in certain circumstances such as franchisee’s bankruptcy or insolvency.

10. Related Party Transactions

As of December 31, 2015, 34 hotels are managed by IHM. Management, revenue management and accounting fees incurred by the Company for the 34 hotels managed by IHM for the years ended December 31, 2015 and 2014 were $4,695 and $536, respectively. At December 31, 2015 and 2014, the amount due to IHM was $816 and $229, respectively, and is included in accounts payable and accrued expenses on the combined balance sheets.

Various shared office expenses and rent are paid by Chatham and allocated to the Company based on the amount of square footage occupied by the entity. Insurance expenses for medical, workers compensation and general liability are paid by INK Acquisition, LLC, a related party joint venture wholly owned by NorthStar and Chatham, and allocated back to the hotel properties or the Company.

11. Subsequent Events

The Company has performed an evaluation of subsequent events since the balance sheet date through March 24, 2016, the date of the issuance of the financial statements and determined there are no subsequent events.