1066138--3/16/2006--LODGIAN

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{debt, indebtedness, cash}

{condition, economic, financial}

{stock, price, share}

{personnel, key, retain}

{competitive, industry, competition}

{acquisition, growth, future}

{loan, real, estate}

{tax, income, asset}

{operation, natural, condition}

{investment, property, distribution}

{loss, insurance, financial}

{capital, credit, financial}

{cost, regulation, environmental}

{cost, contract, operation}

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Risks Related to Our Business We may not be able to meet the requirements imposed by our franchisors in our franchise agreements and therefore could lose the right to operate one or more hotels under a national brand. Hotels require a high level of capital expenditures, maintenance and repairs, and if we are not able to meet these requirements of our hotels appropriately, our business and operating results will suffer. Most of our hotels are pledged as collateral for mortgage loans, and we have a significant amount of debt that could limit our operational flexibility or otherwise adversely affect our financial condition. The terms of our debt instruments place many restrictions on us, which reduce operational flexibility and create default risks. Rising interest rates could have an adverse effect on our cash flow and interest expense. To service our indebtedness, we require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and a cash shortfall could adversely affect our ability to fund our operations, planned capital expenditures and other needs. The value of our hotels and our ability to repay or refinance our debt are dependent upon the successful operation and cash flows of the hotels. If we are not able to implement our growth strategy, we may not be able to improve our financial performance. Our current joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on joint venture partners financial condition and performance, and any disputes that may arise between us and our joint venture partners. We have a history of significant losses and we may not be able to successfully improve our performance to achieve profitability. Acts and threats of terrorism, the ongoing war against terrorism, military conflicts and other factors have had and may continue to have a negative effect on the lodging industry and our results of operations. We may be unable to sell real estate, including our assets held for sale, in a timely manner or at expected prices. Our expenses may remain constant or increase even if revenues decline. We may make acquisitions or investments that are not successful and that adversely affect our ongoing operations. Losses may exceed our insurance coverage or estimated reserves, which could impair our results of operations, financial condition and liquidity. Competition in the lodging industry could have a material adverse effect on our business and results of operations. Adverse conditions in major metropolitan markets in which we do substantial business could negatively affect our results of operations. The lodging business is seasonal. We are exposed to potential risks of brand concentration. We have experienced significant changes in our senior management team. Our success is dependent on recruiting and retaining high caliber key personnel. The increasing use of third-party travel websites by consumers may adversely affect our profitability. We may be unable to utilize all of our net operating loss carryforwards. Many aspects of our operations are subject to government regulations, and changes in these regulations may adversely affect our results of operations and financial condition. Costs of compliance with environmental laws and regulations could adversely affect operating results. A downturn in the economy due to high energy costs and gasoline prices could negatively impact our financial performance, our customer guest satisfaction scores and customer service levels. Risks Related to Our Common Stock Our common stock could be de-listed from the American Stock Exchange if its listing standards are not maintained. Our stock price may be volatile.

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1066138--3/16/2006--LODGIAN_INC