UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 20, 2019

LODGING FUND REIT III, INC.

(Exact Name of Registrant as Specified in Charter)

Registrant’s telephone number, including area code: (701) 630-6500

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Asset Purchase Agreement

Homewood Suites by Hilton – Southaven, Mississippi

On December 20, 2019, the due diligence period expired under the Asset Purchase Agreement between CVH Airways, LLC (the “Seller”) and Lodging Fund REIT III OP, LP (the “Buyer”), which is the operating partnership subsidiary of Lodging Fund REIT III, Inc. (the “Company”), dated as of November 5, 2019 (the “Purchase Agreement”).  Pursuant to the Purchase Agreement, the Buyer agreed to acquire the 99-room Homewood Suites by Hilton hotel in Southaven, Mississippi (the “Hotel Property”) from the Seller. The contractual purchase price of the Hotel Property is $20.5 million plus closing costs, subject to adjustment as provided in the Purchase Agreement. The Seller is not affiliated with the Company or Legendary Capital REIT III, LLC (the “Advisor”), the Company’s external advisor. As required by the Purchase Agreement, the Buyer has deposited a total of $0.6 million into escrow as earnest money pending the closing or termination of the Purchase Agreement. Except in certain circumstances described in the Purchase Agreement, if the Buyer fails to complete the acquisition, it will forfeit the earnest money.

The Purchase Agreement contains various covenants, representations and warranties from the respective parties. Subject to limitations set forth in the Purchase Agreement, the Seller has agreed to indemnify the Buyer for losses or damages caused by breaches of representations, warranties and covenants by the Seller. The Buyer’s acquisition of the Hotel Property is subject to certain closing conditions. The Company intends to fund the purchase of the Hotel Property with proceeds from the Company’s ongoing private offering and the proceeds of a new term loan. If the agreed upon conditions to closing are satisfied, the closing under the Purchase Agreement will occur on or before January 6, 2020, unless otherwise agreed by the parties. There can be no assurance that the Buyer will complete the acquisition of the Hotel Property.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.