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INNSUITES HOSPITALITY TRUST

INNSUITES HOSPITALITY TRUSTIHTEarnings & Financial Report

NYSE · real estate investment trust

InnSuites Hospitality Trust, based in Phoenix, Arizona, is a real estate investment trust that invests in lodging. While it is formed as a real estate investment trust, it is not classified as a real estate investment trust for tax purposes. The company owns interests in two hotels, operates three hotels, provides management for three hotels, and licenses its InnSuites trademark for five hotels. The company's hotel ownership interests are a 51.01% interest in the Best Western InnSuites Tucson...

What changed in INNSUITES HOSPITALITY TRUST's 10-K — 2024 vs 2025

Top changes in INNSUITES HOSPITALITY TRUST's 2025 10-K

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Item 1. Business

Business — how the company describes what it does

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Supply has been relatively steady in those respective markets. Either an increase in supply or a decline in demand could result in increased competition, which could have an adverse effect on occupancy, room rates and revenues of our Hotels in their respective markets.
Supply has been relatively steady in those respective markets. Either a significant increase in supply or a significant decline in demand could result in increased competition, which could have an adverse effect on occupancy, room rates and revenues of our Hotels in their respective markets.
The Trust may continue to seek further diversification through a merger or reverse merger with a larger non-public entity seeking an NYSE-American public stock market listing.
The Trust may continue to seek further diversification including through a merger or reverse merger with a larger non-public entity seeking an NYSE-American public stock market listing.
Such hotel developments could have an adverse effect on the revenue of our Hotels in their respective markets. The Trust’s hotel investments are located in Arizona and New Mexico. With the completed renovations meeting Best Western standards at our Tucson, Arizona and Albuquerque, New Mexico hotel properties, those hotels are expected to see incremental demand during the next 18 months.
Such hotel developments could have an adverse effect on the revenue of our Hotels in their respective markets. The Trust’s hotel investments are located in Arizona and New Mexico. With the completed renovations meeting Best Western standards at our Tucson, Arizona and Albuquerque, New Mexico hotel properties, those hotels are expected to see incremental demand during the next 24 months.
At January 31, 2024, and currently, the Trust owns a 75.89% sole general partner interest in the Partnership, which controls a 51.62% interest in the InnSuites hotel located in Tucson, Arizona, and a direct 21.90% interest in the InnSuites hotel located in Albuquerque, New Mexico. The Tucson and Albuquerque hotels are sometimes referred to as the “ Hotels ”.
At January 31, 2025, and currently, the Trust owns a 75.89% sole general partner interest in the Partnership, which controls a 51.62% interest in the InnSuites hotel located in Tucson, Arizona, and a direct 21.90% interest in the InnSuites hotel located in Albuquerque, New Mexico. The Tucson and Albuquerque hotels are sometimes referred to as the “ Hotels ”.
Both Class A and Class B Partnership Units are convertible, at the option of the holder, into one newly issued Share of Beneficial Interest of the Trust. MANAGEMENT AND LICENSING CONTRACTS The Trust directly manages the Hotels through the Trust’s majority-owned subsidiary, RRF Limited Partnership. Under the management agreements, RRF manages the daily operations of both Trust Hotels.
Both Class A and Class B Partnership Units are convertible, at the option of the holder, into one newly issued Share of Beneficial Interest of the Trust. MANAGEMENT AND LICENSING CONTRACTS The Trust directly manages the Hotels through the Trust’s majority-owned subsidiary, RRF LLLP. Under the management agreements, RRF manages the daily operations of both Trust Hotels.
The Trust also provides the use of the “InnSuites” trademark to the Hotels and stands ready to offer trademark services through the Trust’s majority-owned subsidiary, RRF Limited Partnership, which is included in the management fee. The InnSuites trademark expires in January 2027. 2 MEMBERSHIP AGREEMENTS Each InnSuites Hotel has entered into membership agreements with Best Western International, Inc.
The Trust also provides the use of the “InnSuites” trademark to the Hotels and stands ready to offer trademark services through the Trust’s majority-owned subsidiary, RRF LLLP, which is included in the management fee. The InnSuites trademark expires in January 2027. 2 MEMBERSHIP AGREEMENTS Each InnSuites Hotel has entered into membership agreements with Best Western International, Inc.
The drastic impact of COVID-19 to the world economy and hospitality industry resulted in severely reduced occupancy and significant reduction in room rates, both of which have now fully recovered. Continued competition in corporate, leisure, group, and government business in the markets in which we operate, may affect our ability to maintain room rates and maintain market share.
The impact of COVID-19 to the world economy and hospitality industry resulted in reduced occupancy and reduction in room rates, both of which have now fully recovered. Continued competition in corporate, leisure, group, and government business in the markets in which we operate, may affect our ability to maintain room rates and maintain market share.
The Trust, with its affiliate RRF Limited Partnership, a Delaware limited partnership (the “ Partnership ”), owns interests in two hotels, operates and provides management services, and provides trademark license services, for two hotels.
The Trust, with its affiliate RRF Limited Liability Limited Partnership (RRF LLLP), a Delaware limited liability limited partnership (the “ Partnership ”), owns interests in two hotels, operates and provides management services, and provides trademark license services, for two hotels.
For the Fiscal Year 2025 ahead, February 1, 2024 through January 31, 2025, the Trust’s operations are focused on the Trust’s primary business objective which is to maximize returns to its shareholders through increases in asset value and long-term total returns to shareholders, including profitable hotel operations and sale of assets, along with growth of investments.
For the Fiscal Year 2026 ahead, February 1, 2025 through January 31, 2026, the Trust’s operations are focused on the Trust’s primary business objective which is to maximize returns to its shareholders through hotel operating increases in asset value, and long-term total returns to shareholders, including profitable hotel and diversification operations and sale of assets, along with growth of investments.
We anticipate selling one or both Hotels in the next twelve to thirty-six (12-36) months. RRF Limited Partnership, a 75.89% majority-owned subsidiary of the Trust, provides management services for the two Trust Hotels. The Trust has approximately 52 full-time employees and approximately 27 part-time employees.
We anticipate selling one or both Hotels in the next thirty-six (36) months. RRF Limited Liability Limited Partnership, a 75.89% majority-owned subsidiary of the Trust, provides management services for the two Trust Hotels. The Trust has approximately 52 full-time employees and approximately 27 part-time employees.
Under these arrangements, fees paid for membership fees and reservations were approximately $201,000 and $173,000, recorded in on the Consolidated Statement of Operations, for Fiscal Years ended January 31, 2024, and 2023, respectively. COMPETITION IN THE HOTEL INDUSTRY The hotel industry is highly competitive.
Under these arrangements, fees paid for membership fees and reservations were approximately $209,000 and $201,000, recorded in on the Consolidated Statement of Operations, for Fiscal Years ended January 31, 2025, and 2024, respectively. COMPETITION IN THE HOTEL INDUSTRY The hotel industry is highly competitive.
The two Hotels have an aggregate of 270 hotel suites and operate as moderate-service hotels that apply a value studio and two-room suite operating philosophy formulated in 1980 by Mr. James Wirth, President, the Trust’s Chairman, and Chief Executive Officer.
The two Hotels have an aggregate of 270 hotel suites and operate as moderate-service hotels that apply a value studio and two-room suite operating philosophy formulated in 1980 by Mr. James Wirth, President, the Trust’s Chairman, and Chief Executive Officer. Both hotels offer swimming pools, fitness centers, business centers, and complimentary breakfast.
Both the Tucson and Albuquerque hotels experienced record high Gross Operating Profit (GOP Profits), in Fiscal Year 2024 (February 1, 2023 to January 31, 2024), substantially higher than both Covid and Pre-Covid GOP Profits. This gross operating profit is growing even more due to stringent cost control measures.
Both the Tucson and Albuquerque hotels experienced record high Gross Operating Profit (GOP Profits), in Fiscal Year 2025 (February 1, 2024 to January 31, 2025), substantially higher than both Covid and Pre-Covid GOP Profits. This gross operating profit largely resulted due to cost control measures, and modest room rate increases.
The continued recovery has and is benefiting our hotels in the First Fiscal Quarter of 2025, (February 1, 2024 to April 30, 2024). This improvement and continued upward trend is expected to continue for the balance of Fiscal Year 2025, through January 31, 2025.
The continued recovery has and is benefiting our hotels in the First Fiscal Quarter of 2026, (February 1, 2025 to April 30, 2025). Solid results are expected to continue, while also expecting to obtain an additional Management Agreement for the balance of Fiscal Year 2026, through January 31, 2026.
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The Trust hotels offer services such as free hot breakfast plus amenities, such as microwave ovens, refrigerators, coffee makers, and free high-speed Internet access.
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In addition, the Hotels offer complementary social areas and modest conference facilities. The Tucson hotel has “PJ’s” Pub and Café, as well.

Item 2. Properties

Properties — owned and leased real estate

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The Hotels operate in the following locations: ● Best Western InnSuites Tucson Foothills Hotel & Suites. 6201 N Oracle Rd., Tucson, AZ 85704 ● Best Western InnSuites Albuquerque Airport Hotel & Suites. 2400 Yale Boulevard SE, Albuquerque, NM 87106 In the last four years, we have we remodeled 100% of each property’s available suites and public areas.
The Hotels operate in the following locations: ● Best Western InnSuites Tucson Foothills Hotel & Suites. 6201 N Oracle Rd., Tucson, AZ 85704 ● Best Western InnSuites Albuquerque Airport Hotel & Suites. 2400 Yale Boulevard SE, Albuquerque, NM 87106 In the last four years, we have remodeled 100% of each property’s available suites and public areas.
The Trust owns a direct 21.90% interest in the InnSuites Hotel and Suites Albuquerque Airport Best Western Hotel. The Partnership owns a 51.62% interest in the InnSuites Hotel and Suites Tucson Oracle Best Western Hotel. The Trust owns a 75.98% general partner interest in the Partnership.
The Trust owns a direct 21.90% interest in the InnSuites Hotel and Suites Albuquerque Airport Best Western Hotel. The Partnership owns a 51.62% interest in the InnSuites Hotel and Suites Tucson Oracle Best Western Hotel. The Trust owns a 75.89% general partner interest in the Partnership.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The Trust intends to maintain the current steady conservative dividend policy. The Trust currently is, and has, been paying two semiannual dividends each Fiscal Year totaling $0.02 per share per Fiscal Year. In the Fiscal Years ended January 31, 2024 and 2023, the Trust paid dividends of $0.01 per share per share in each of the first and second quarters.
The Trust intends to maintain the current steady conservative dividend policy. The Trust currently is, and has, been paying two semiannual dividends each Fiscal Year totaling $0.02 per share per Fiscal Year. In the Fiscal Years ended January 31, 2025 and 2024, the Trust paid dividends of $0.01 per share per share in each of the first and second quarters.
These grants were made in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to Section 4(a)(2). No stock option grants were made in Fiscal 2023 or 2024.
These grants were made in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to Section 4(a)(2). No stock option grants were made in Fiscal 2024 or 2025.
See Note 2 to our Consolidated Financial Statements – “Summary of Significant Accounting Policies” for information related to grants of restricted shares made to members of our Board of Trustees during Fiscal Year 2023.
See Note 2 to our Consolidated Financial Statements – “Summary of Significant Accounting Policies” for information related to grants of restricted shares made to members of our Board of Trustees during Fiscal Year 2024.
The Trust has paid uninterrupted annual dividends each Fiscal Year since its inception in 1971. The Trust paid the semiannual dividend of $0.01 on February 5, 2024, and currently intends to pay the scheduled semiannual $0.01 dividend payable on July 31, 2024 at NYSE American. 6 See Part III, Item 12 for information about our equity compensation plans.
The Trust has paid uninterrupted annual dividends each Fiscal Year since its inception in 1971. The Trust paid the semiannual dividend of $0.01 on February 5, 2025, and currently intends to pay the scheduled semiannual $0.01 dividend payable on August 1, 2025 at NYSE American. 6 See Part III, Item 12 for information about our equity compensation plans.
Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Trust’s Shares of Beneficial Interest are traded on the NYSE American under the symbol “IHT.” On January 31, 2024, the Trust had approximately 8,988,804 shares outstanding.
Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Trust’s Shares of Beneficial Interest are traded on the NYSE American under the symbol “IHT.” On January 31, 2025, the Trust had approximately 8,763,485 shares outstanding.
As of April 8, 2024, there were approximately 328 holders of record of our Shares of Beneficial Interest, not including holders who hold their asset positions with banks and brokers. 5 The following table sets forth, for the periods indicated, the high and low sales prices of the Trust’s Shares of Beneficial Interest, as reported on the NYSE American, as well as dividends declared thereon: Fiscal Year 2024 High Low Dividends First Quarter $ 1.83 $ 1.80 - Second Quarter $ 3.82 $ 3.08 $ 0.01 Third Quarter $ 2.33 $ 1.98 - Fourth Quarter $ 1.92 $ 1.69 $ 0.01 Fiscal Year 2023 High Low Dividends First Quarter $ 4.34 $ 3.77 - Second Quarter $ 3.77 $ 2.99 $ 0.01 Third Quarter $ 3.74 $ 2.84 - Fourth Quarter $ 3.71 $ 2.96 $ 0.01 The Trust has declared uninterrupted annual dividends for 54 years, since 1971, when the Trust was founded and first listed on the NYSE.
As of April 30, 2025, there were approximately 329 holders of record of our Shares of Beneficial Interest, not including holders who hold their asset positions with banks and brokers. 5 The following table sets forth, for the periods indicated, the high and low sales prices of the Trust’s Shares of Beneficial Interest, as reported on the NYSE American, as well as dividends declared thereon: Fiscal Year 2025 High Low Dividends First Quarter $ 1.70 $ 1.60 $ 0.01 Second Quarter $ 1.98 $ 1.80 $ 0.01 Third Quarter $ 2.25 $ 2.12 - Fourth Quarter $ 2.70 $ 2.55 - Fiscal Year 2024 High Low Dividends First Quarter $ 1.83 $ 1.80 $ 0.01 Second Quarter $ 3.82 $ 3.08 $ 0.01 Third Quarter $ 2.33 $ 1.98 - Fourth Quarter $ 1.92 $ 1.69 - The Trust has declared uninterrupted annual dividends for 55 years, since 1971, when the Trust was founded and first listed on the NYSE.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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For more information on our strategic plan, including information on our progress in disposing of our hotel properties and expanding energy diversification, see “Future Positioning” in this Management Discussion and Analysis of Financial Condition and Results of Operations.
For more information on our strategic plan, including information on our progress in disposing of our hotel properties and expanding energy diversification, see “Future Positioning” in this Management Discussion and Analysis of Financial Condition and Results of Operations.
Additional sources of cash include intercompany loan repayments, potential future real estate hotel sales, and potential returns on diversified investments. The Partnership’s principal source of revenue is hotel operations for the hotel property it owns in Tucson, Arizona.
Additional sources of cash include potential intercompany loan repayments, potential future real estate hotel sales, and potential returns on diversified investments. The Partnership’s principal source of revenue is hotel operations for the hotel property it owns in Tucson, Arizona.
Examples of such uncertainties include, but are not limited to: ● Virus Pandemic and its effect on the Travel Industry; ● potential risk of investments, including the investment in UniGen; ● inflation and economic recession; ● terrorist attacks or other acts of war; ● political instability; ● available cash, supply chain issues, and increased labor costs for diversified clean energy development and production; ● fluctuations in hotel occupancy rates; ● changes in room rental rates that may be charged by InnSuites in response to market changing demand and rental rate changes or otherwise; ● seasonality of our hotel operations business; ● collectability of all receivables ● our ability to sell any of our Hotels at market value, or at all; ● interest rate fluctuations; ● changes in, or reinterpretations of, governmental regulations, including, but not limited to, environmental and other regulations, the Americans with Disability Act, Covid-19 restrictions, and federal income tax laws and regulations; ● competition including supply and demand for hotel rooms and hotel properties; ● availability of credit or other financing; ● our ability to meet present and future debt service obligations; ● our ability to refinance or extend the maturity of indebtedness at, prior to, or after the time it matures; ● any changes in our financial condition or operating results due to acquisitions or dispositions of hotel properties; ● insufficient resources to pursue our current strategy; ● concentration of our investments in the InnSuites ® brand; ● loss of membership contracts; 17 ● the financial condition of franchises, brand membership companies, travel related companies, and receivables from travel related companies; ● ability to develop and maintain positive relations with “Best Western” and potential future franchises or brands; ● real estate and hospitality market conditions; ● hospitality industry factors; ● our ability to carry out our strategy, including our strategy regarding diversification and investments; ● the Trust’s ability to remain listed on the NYSE American; ● effectiveness and security of the Trust’s software program; ● the need to periodically repair and renovate our Hotels at a cost at or in excess of our standard 4% reserve; ● tariffs and health travel restrictions may affect trade and travel; ● our ability to cost effectively integrate any acquisitions with the Trust in a timely manner; ● increases in the cost and availability of labor, energy, healthcare, insurance and other operating expenses as a result of inflation, or changed or increased regulation, or otherwise; ● presence of drugs or outbreaks of communicable diseases attributed to our hotels or impacting the hotel industry in general; ● natural disasters, including adverse climate changes in the areas where we have or serve hotels; ● airline strikes; ● transportation and fuel price increases; ● adequacy of property and liability insurance coverage including liability coverage, and increases in cost for property, liability, and health care coverage for employees and potential government regulation with respect to health care coverage; ● data breaches or cybersecurity attacks, including breaches impacting the integrity and security of employee and guest data; and ● loss of key personnel and uncertainties in the interpretation and application of tax laws, and other legislation.
Examples of such uncertainties include, but are not limited to: ● Virus Pandemic and its effect on the Travel Industry; ● potential risk of investments, including the investment in UniGen; ● Inflation, tariffs, and economic recession; ● terrorist attacks or other acts of war; ● political instability, and potentially reduced government travel; ● available cash, supply chain issues, and increased labor costs for diversified clean energy development and production; ● fluctuations in hotel occupancy rates; ● changes in room rental rates that may be charged by InnSuites in response to market changing demand and rental rate changes or otherwise; ● seasonality of our hotel operations business; ● collectability of all receivables; ● our ability to sell any of our Hotels at market value, or at all; ● interest rate fluctuations; 17 ● changes in, or reinterpretations of, governmental regulations, including, but not limited to, environmental and other regulations, the Americans with Disability Act, Covid-19 restrictions, and federal income tax laws and regulations; ● competition including supply and demand for hotel rooms and hotel properties; ● availability of credit or other financing; ● our ability to meet present and future debt service obligations; ● our ability to refinance or extend the maturity of indebtedness at, prior to, or after the time it matures; ● any changes in our financial condition or operating results due to acquisitions or dispositions of hotel properties; ● insufficient resources to pursue our current strategy; ● concentration of our investments in the InnSuites ® brand; ● loss of membership contracts; ● the financial condition of franchises, brand membership companies, travel related companies, and receivables from travel related companies; ● ability to develop and maintain positive relations with “Best Western” and potential future franchises or brands; ● real estate and hospitality market conditions; ● hospitality industry factors; ● our ability to carry out our strategy, including our strategy regarding diversification and investments; ● the Trust’s ability to remain listed on the NYSE American; ● effectiveness and security of the Trust’s software program; ● the need to periodically repair and renovate our Hotels at a cost at or in excess of our standard 4% reserve; ● tariffs and health travel restrictions may affect trade and travel; ● our ability to cost effectively integrate any acquisitions with the Trust in a timely manner; ● increases in the cost and availability of labor, energy, healthcare, insurance and other operating expenses as a result of inflation, or changed or increased regulation, or otherwise; ● presence of drugs or outbreaks of communicable diseases attributed to our hotels or impacting the hotel industry in general; ● natural disasters, including adverse climate changes in the areas where we have or serve hotels; ● airline strikes, and variations in airline travel demand; ● transportation and fuel price increases; ● adequacy of property and liability insurance coverage including liability coverage, and increases in cost for property, liability, and health care coverage for employees and potential government regulation with respect to health care coverage; ● data breaches or cybersecurity attacks, including breaches impacting the integrity and security of employee and guest data; and ● loss of key personnel and uncertainties in the interpretation and application of tax laws, and other legislation.
Our strategic plan is to continue to obtain the full benefit of our real estate equity, by ultimately obtaining full market value for our two Hotels at market value, which is believed by management to be substantially higher than lower book values, over the next 12-36 months.
Our strategic plan is to continue to obtain the full benefit of our real estate equity, by ultimately obtaining full market value for our two Hotels at market value, which is believed by management to be substantially higher than lower book values, over the next 36 months.
For information relating to such related party transactions see the following: ● For a discussion of management and licensing agreements with certain related parties, see “Item 1 – Business – Management and Licensing Contracts.” ● For a discussion of guarantees of our mortgage notes payable by certain related parties, see Note 11 to our Consolidated Financial Statements – “Mortgage Notes Payable.” ● For a discussion of our equity sales and restructuring agreements involving certain related parties, see Notes 3, and 4 to our Consolidated Financial Statements – “Sale of Ownership Interests in Albuquerque Subsidiary,” and “Sale of Ownership Interests in Tucson Hospitality Properties Subsidiary,” respectively. ● For a discussion of other related party transactions, see Note 19 to our Consolidated Financial Statements – “Other Related Party Transactions.” Results of operations of the Trust for the Fiscal Year ended January 31, 2024 compared to the Fiscal Year ended January 31, 2023.
For information relating to such related party transactions see the following: ● For a discussion of management and licensing agreements with certain related parties, see “Item 1 – Business – Management and Licensing Contracts.” ● For a discussion of guarantees of our mortgage notes payable by certain related parties, see Note 11 to our Consolidated Financial Statements – “Mortgage Notes Payable.” ● For a discussion of our equity sales and restructuring agreements involving certain related parties, see Notes 3, and 4 to our Consolidated Financial Statements – “Sale of Ownership Interests in Albuquerque Subsidiary,” and “Sale of Ownership Interests in Tucson Hospitality Properties Subsidiary,” respectively. ● For a discussion of other related party transactions, see Note 19 to our Consolidated Financial Statements – “Other Related Party Transactions.” Results of operations of the Trust for the Fiscal Year ended January 31, 2025 compared to the Fiscal Year ended January 31, 2024.
Over time, we expect our UniGen diversification efficient clean energy generation investment to grow and provide a substantial source of income in the future.
Over time, we expect our UniGen diversification efficient clean energy generation investment to grow and potentially provide a substantial source of income in the future.
Operators of hotels in general, and InnSuites in particular, can change and do change room rates often and quickly, but competitive pressures may limit InnSuites ability to raise rates as fast as or faster than inflation. During Fiscal Year 2024, ended January 31, 2024, InnSuites did experience substantial increases in rates to offset the inflationary increase labor and other expenses.
Operators of hotels in general, and InnSuites in particular, can change and do change room rates often and quickly, but competitive pressures may limit InnSuites ability to raise rates as fast as or faster than inflation. During Fiscal Year 2025, ended January 31, 2025, InnSuites did experience substantial increases in rates to offset the inflationary increase labor and other expenses.
FORWARD-LOOKING STATEMENTS Certain statements in this Form 10-Q, including statements containing the phrases “believes,” “intends,” “expects,” “anticipates,” “predicts,” “projects,” “will be,” “should be,” “looking ahead,” “may” or similar words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
FORWARD-LOOKING STATEMENTS Certain statements in this Form 10-K, including statements containing the phrases “believes,” “intends,” “expects,” “anticipates,” “predicts,” “projects,” “will be,” “should be,” “looking ahead,” “may” or similar words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Management believes that with an additional extension repayment term, that the future collectability of the current carrying value of the note is probable and not subject to further impairment, or allowance for the Fiscal Year ended January 31, 2024. Refer to Note 6 – “Note Receivable” for information related to the Sale of IBC Hospitality Technologies (IBC).
Management believes that with an additional extension repayment term, that the future collectability of the current carrying value of the note is probable and not subject to further impairment, or allowance for the Fiscal Year ended January 31, 2025. Refer to Note 6 – “Note Receivable” for information related to the Sale of IBC Hospitality Technologies (IBC).
At January 31, 2024, and currently, the Trust owns a 75.89% sole general partner interest in the Partnership, which controls a 51.62% interest in the InnSuites hotel located in Tucson, Arizona, and a direct 21.90% interest in the InnSuites hotel located in Albuquerque, New Mexico. Trust operations consist of one reportable segment – Hotel Ownership & Hotel Management Services.
At January 31, 2025, and currently, the Trust owns a 75.89% sole general partner interest in the Partnership, which controls a 51.62% interest in the InnSuites hotel located in Tucson, Arizona, and a direct 21.90% interest in the InnSuites hotel located in Albuquerque, New Mexico. Trust operations consist of one reportable segment – Hotel Ownership & Hotel Management Services.
Our management is analyzing other strategic options available to us, including raising additional funds, asset sales, and benefiting from clean energy investment cash flow as our diversification investment matures. However, such transactions may not be available on terms that are favorable to us, or at all.
Our management is analyzing other strategic options available to us, including raising additional funds, asset sales, and benefiting from clean energy investment cash flow as our diversification investment progresses. However, such transactions may not be available on terms that are favorable to us, or at all.
In cases where we do not expect to recover the carrying cost of hotel properties held for use, we will reduce the carrying value to the fair value of the hotel, as determined by a current appraisal or other acceptable valuation methods. We did not recognize a hotel properties impairment loss in Fiscal Years 2024 or 2023.
In cases where we do not expect to recover the carrying cost of hotel properties held for use, we will reduce the carrying value to the fair value of the hotel, as determined by a current appraisal or other acceptable valuation methods. We did not recognize a hotel properties impairment loss in Fiscal Years 2025 or 2024.
As of January 31, 2024, our management does not believe that the carrying values of any of our hotel properties are impaired. 14 Sale of Hotel Assets Management believes that our currently owned Hotels are valued at prices that are reasonable in relation to their current fair market value.
As of January 31, 2025, our management does not believe that the carrying values of any of our hotel properties are impaired. 14 Sale of Hotel Assets Management believes that our currently owned Hotels are valued at prices that are reasonable in relation to their current fair market value.
At January 31, 2024, the Trust had two moderate-service hotels, one in Tucson, Arizona and one in Albuquerque, New Mexico with 270 hotel suites. Both of our Trust Hotels are branded through membership agreements with Best Western, and both are also trademarked as InnSuites Hotels and Suites.
At January 31, 2025, the Trust had two moderate-service hotels, one in Tucson, Arizona and one in Albuquerque, New Mexico with 270 hotel suites. Both of our Trust Hotels are branded through membership agreements with Best Western, and both are also trademarked as InnSuites Hotels and Suites.
As a result, the Trust quantifiably placed an amount equal to approximately 12% per Fiscal Quarter of this total as a Tax Credit Receivable and Tax Refund on the Balance Sheet and Income statement, respectively, for the Fiscal Years ended January 31, 2024 and 2023, respectively.
As a result, the Trust quantifiably placed an amount equal to approximately 12% per Fiscal Quarter of this total as a Tax Credit Receivable and Tax Refund on the Balance Sheet and Income statement, respectively, for the Fiscal Years ended January 31, 2025 and 2024, respectively.
Based on a 96 core “super computer “ simulated test together with advanced software, UniGen has confirmed that the UPI 1000TA engine with the addition of recent potential technological advancements, is approximately 33% more fuel efficient than first estimated and will emit only approximately 25% of the maximum admissions allowed by CARB, the strictest of the regulatory standards issued by the state of California.
Based on a 96 core “super computer” simulated test together with advanced software, UniGen has confirmed that the UPI 1000TA engine with the addition of recent potential technological advancements, is approximately 33% more fuel efficient than first estimated and will emit only approximately 25% of the maximum admissions allowed by CARB, the strictest of the regulatory standards issued by the state of California.
At this time, the Trust is unable to predict when, and if, either of its Hotel properties will be sold. The Trust seeks to sell both hotels over the next 12-36 months. We believe that each of the assets is available at a price that is reasonable in relation to its current fair market value.
At this time, the Trust is unable to predict when, and if, either of its Hotel properties will be sold. The Trust seeks to sell one or both hotels over the next 36 months. We believe that each of the assets is available at a price that is reasonable in relation to its current fair market value.
In addition, the Trust is seeking a larger private reverse merger partner that may benefit from a merger that would afford that partner access to our listing on the NYSE AMERICAN. In the process of reviewing merger opportunities, the Trust identified in December 2019, and invested $1 million in UniGen Power, Inc.
In addition, the Trust is seeking further diversification including a larger private reverse merger partner that may benefit from a merger that would afford that partner access to our listing on the NYSE AMERICAN. In the process of reviewing merger opportunities, the Trust identified in December 2019, and invested $1 million in UniGen Power, Inc.
The increase was primarily due to an increase in room expenses and general and admirative expenses. Specific expense comparisons to the prior Fiscal Year are detailed in the following categories.
The increase was primarily due to an increase in room expenses, general and admirative expenses, and property taxes. Specific expense comparisons to the prior Fiscal Year are detailed in the following categories.
Our long-term strategic plan is to obtain the full benefit of our real estate equity, to benefit from our UniGen Power, Inc., (UniGen) clean energy operation diversified investment, and to pursue a merger with another company, likely a private larger entity that seeks to go public to list on the NYSE AMERICAN Exchange.
Our long-term strategic plan is to obtain the full benefit of our real estate equity, to benefit from our UniGen Power, Inc., (UniGen) clean energy operation diversified investment, to benefit from a potential operations and branding diversification, and to pursue a merger with another company, likely a private larger entity that seeks to go public to list on the NYSE AMERICAN Exchange.
We believe that each of the assets, the Tucson and Albuquerque hotels, have an estimated market asking price that is reasonable in relation to its current fair market value. We plan to sell our remaining two Hotel properties within 12-36 months.
We believe that each of the assets, the Tucson and Albuquerque hotels, have an estimated market asking price that is reasonable in relation to its current fair market value. We plan to sell one or both of our remaining two Hotel properties within 36 months.
We believe that we have positioned the Hotels to remain competitive through our now fully completed Tucson and Albuquerque hotel refurbishments, by offering fully refurbished studios and two-room suites at each location, and by maintaining complementary guest items, including complimentary hot breakfast and free high-speed Internet access. 7 Our strategic plan is to continue to obtain the full benefit from hotel operations, and from our real estate equity, by marketing the remaining two Hotels over the next 12-36 months.
We believe that we have positioned the Hotels to remain competitive through our now fully completed Tucson and Albuquerque hotel refurbishments, by offering fully refurbished studios and two-room suites at each location, and by maintaining complementary guest items, including complimentary hot breakfast and free high-speed Internet access. 7 Our strategic plan is to continue to obtain the full benefit from hotel operations, and from our real estate equity, by selling one or both Hotels over the next 36 months.
They have two of the seven UniGen Board of Directors seats or 28% and were elected in December 2019 to serve on the board of UniGen to monitor and assist in the success of this potentially power industry disruptive relatively clean energy generation innovation.
They have two of the five UniGen Board of Directors seats or 40% and were elected in December 2019 to serve on the board of UniGen to monitor and assist in the success of this potentially power industry disruptive relatively clean energy generation innovation.
On the Trust’s balance sheet, the investment of the $1,633,750 consists of approximately $700,000 in note receivables, approximately $300,000 as the fair value of the warrants issued with the Trust’s investment in UniGen, and $633,750 of UniGen Common Stock (540,000 shares), at cost.
On the Trust’s balance sheet, the investment of the $1,668,750 consists of approximately $700,000 in note receivables, approximately $300,000 as the fair value of the warrants issued with the Trust’s investment in UniGen, and $668,750 of UniGen Common Stock (575,000 shares), at cost.
Adjusted EBITDA does not represent cash generated from operating activities determined in accordance with GAAP and should not be considered as an alternative to (a) GAAP net income or loss as an indication of our financial performance or (b) GAAP cash flows from operating activities as a measure of our liquidity. 12 A reconciliation of Adjusted EBITDA to net loss attributable to controlling interests for the Fiscal Years ended January 31, 2024 and 2023 approximate follows: For the Years Ended January 31, 2024 2023 Net income attributable to controlling interests $ 204,000 $ 523,000 Add back: Depreciation 679,000 702,000 Interest expense 502,000 530,000 Less: Interest Income (50,000 ) (68,000 ) Adjusted EBITDA $ 1,335,000 $ 1,687,000 FFO is calculated on the basis defined by the National Association of Real Estate Investment Trusts (“ NAREIT ”), which is net income (loss) attributable to common shareholders, computed in accordance with GAAP, excluding gains or losses on sales of properties, asset impairment adjustments, and extraordinary items as defined by GAAP, plus non-cash depreciation and amortization of real estate assets, and after adjustments for unconsolidated joint ventures and non-controlling interests in the operating partnership.
Adjusted EBITDA does not represent cash generated from operating activities determined in accordance with GAAP and should not be considered as an alternative to (a) GAAP net income or loss as an indication of our financial performance or (b) GAAP cash flows from operating activities as a measure of our liquidity. 12 A reconciliation of Adjusted EBITDA to net loss attributable to controlling interests for the Fiscal Years ended January 31, 2025 and 2024 approximate follows: For the Years Ended January 31, 2025 2024 Net (loss) income attributable to controlling interests $ (1,391,000 ) $ 204,000 Add back: Depreciation 706,000 679,000 Interest expense 476,000 502,000 Less: Interest Income (15,000 ) (97,000 ) Adjusted EBITDA $ (224,000 ) $ 1,288,000 FFO is calculated on the basis defined by the National Association of Real Estate Investment Trusts (“ NAREIT ”), which is net income (loss) attributable to common shareholders, computed in accordance with GAAP, excluding gains or losses on sales of properties, asset impairment adjustments, and extraordinary items as defined by GAAP, plus non-cash depreciation and amortization of real estate assets, and after adjustments for unconsolidated joint ventures and non-controlling interests in the operating partnership.
Consolidated net income was approximately $277,000 for the twelve months ended January 31, 2024 as compared to consolidated net income for the twelve months ended January 31, 2023 of approximately $737,000. Explanation of the differences between these Fiscal Years are explained above in the results of operations of the Trust.
Consolidated net loss was approximately $1,392,000 for the twelve months ended January 31, 2025 as compared to consolidated net income for the twelve months ended January 31, 2024 of approximately $277,000. Explanation of the differences between these Fiscal Years are explained above in the results of operations of the Trust.
Having completed the property improvements at our Tucson, Arizona hotel Management anticipates the improvements which complies with the increasing Best Western standards, will (after the adverse effects of travel restrictions and slowdown), lead to improvement in guest satisfaction and will drive additional revenue growth through increased occupancy and increased rates in the year ahead.
Having completed the property improvements at our Tucson, Arizona hotel Management anticipates the improvements which complies with the increasing Best Western standards, will lead to improvement in guest satisfaction and will drive additional revenue growth through increased occupancy and increased rates in the year ahead.
The Debenture Warrants are exercisable at an exercise price of $1.00 per share of Class A Common Stock. UniGen, also, issued the Trust additional common stock purchase warrants (“Additional Warrants”) to purchase up to 500,000 shares of Class A Common Stock. The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.
The Debenture Warrants, if the expiration dates are extended are exercisable at an exercise price of $1.00 per share of Class A Common Stock. UniGen, also, issued the Trust additional common stock purchase warrants (“Additional Warrants”) to purchase up to 500,000 shares of Class A Common Stock.
With approximately $1,325,000 of cash as of January 31, 2024 and the availability of a $250,000 bank lines of credit, an up to $2,000,000 related party Demand/Revolving Line of Credit/Promissory Note, and the availability of repayment of Advances to Affiliate credit facilities and available Bank line of Credit, we believe that we will have enough cash on hand to meet all of our financial obligations as they become due for at least the next twelve months and beyond, from the issuance date of the these consolidated financial statements.
With approximately $93,000 of cash as of January 31, 2025 and the availability of three $250,000 bank lines of credit, and approximately $850,000 available from the $2,000,000 related party Demand/Revolving Line of Credit/Promissory Note, and the availability of Advances to Affiliate credit facilities and available Bank line of Credit, we believe that we will have enough cash on hand to meet all of our financial obligations as they become due for at least the next twelve months from the issuance date of the these consolidated financial statements.
A reconciliation of FFO to net income (loss) attributable to controlling interests for Fiscal Year ended January 31, 2024 and 2023 are as follows: For the Years Ended January 31, 2024 2023 Net income attributable to controlling interests $ 204,000 $ 523,000 Add back: Depreciation 679,000 702,000 Non-controlling interest 73,000 214,000 FFO $ 956,000 $ 1,439,000 The Trust reported Consolidated Net Loss from operations of approximately $721,000 for the Fiscal Year ended January 31, 2024 compared to Consolidated Net Loss from operations before other income, interest expense, and the Employee Retention Credit of approximately $297,000 for the Fiscal Year ended January 31, 2023.
A reconciliation of FFO to net income (loss) attributable to controlling interests for Fiscal Year ended January 31, 2025 and 2024 are as follows: For the Years Ended January 31, 2025 2024 Net (loss) income attributable to controlling interests $ (1,391,000 ) $ 204,000 Add back: Depreciation 706,000 679,000 Non-controlling interest (1,000 ) 73,000 FFO $ (686,000 ) $ 956,000 The Trust reported Consolidated Net Loss from operations of approximately $743,000 for the Fiscal Year ended January 31, 2025 compared to Consolidated Net Loss from operations before other income, interest expense, and the Employee Retention Credit of approximately $721,000 for the Fiscal Year ended January 31, 2024.
We expect the current Fiscal Year 2025 to continue strong for the travel industry, with a stable high level occupancy and room rates, as well as continuation of current cost control all leading to improved profitability of our hotels.
We expect the current Fiscal Year 2026 to continue steadily for the domestic travel industry, with a stable high-level occupancy and room rates, as well as continuation of current cost control all leading to steady profitability of our hotels.
The Trust has invested $1 million debentures convertible into 1 million shares of UniGen Power Inc., has purchased approximately 540,000 UniGen shares, and in addition has acquired warrants to purchase approximately an additional 2 million UniGen shares over the next three years, which could result up to 20% or more ownership in UniGen.
The Trust has invested $1 million in debentures convertible into 1 million shares of UniGen Power Inc; the Trust has invested in 575,000 UniGen shares, and in addition acquired warrants to purchase up to approximately an additional 2 million UniGen shares over time, which could result in up to 15-20% or more ownership in UniGen.
Fiscal 2024 and 2023 Consolidated Net Loss from operations included non-cash depreciation of approximately $679,000 and $702,000, respectively.
Fiscal 2025 and 2024 Consolidated Net Loss from operations included non-cash depreciation of approximately $706,000 and $679,000, respectively.
If we are unable to raise additional or replacement funds, we may be required to sell certain of our assets to meet our liquidity needs, which may not be on terms that are favorable. 11 We anticipate limited additional new-build hotel supply in our markets during the current Fiscal Year 2025, and accordingly we anticipate a continued increase of revenues and operating margins.
If we are unable to raise additional or replacement funds, we may be required to sell certain of our assets to meet our liquidity needs, which may not be on terms that are favorable. 11 We anticipate steady leisure travel demand, modestly increased hotel rates, and limited additional new-build hotel supply in our markets during the current Fiscal Year 2026, and accordingly we anticipate a continued solid revenues.
In addition, the Trust is seeking a larger private reverse merger partner that may benefit from a merger that would afford that partner access to our listing on the NYSE AMERICAN. In the process of reviewing merger opportunities, the Trust identified and invested $1 million in UniGen Power, Inc. (“UniGen”), an innovative efficient clean energy power generation company.
In addition, the Trust is seeking further diversification including seeking a larger private reverse merger partner that may benefit from a merger that would afford that partner access to our listing on the NYSE AMERICAN. In the process of reviewing merger opportunities, the Trust identified and invested $1 million in UniGen Power, Inc.
We expect the current Fiscal Year 2025 to be continued growth of the travel industry, stable high level Hotel occupancy, continued recovery and increases of room rates, as well as continuation of current cost control all leading to improved profitability of our hotels.
We expect the current Fiscal Year 2026 to be stable in the domestic travel industry, stable high level Hotel occupancy, continued modest increases of room rates, as well as continuation of current cost control all leading to stable profitability of our hotels.
Fiscal 2024 Consolidated Net Income from operations before non-cash depreciation was approximately $883,000 as compared to Consolidated Net Income from operations before non-cash depreciation of approximately $1,226,000 for Fiscal 2023. 13 FUTURE POSITIONING In viewing the hotel industry cycles, reconfirmed by the recent disruption of travel and hospitality, the Board of Trustees determined that it was appropriate to continue to actively seek buyers for our two remaining Hotel properties.
Fiscal 2025 Consolidated Net Loss from operations before non-cash depreciation was approximately $685,000 as compared to Consolidated Net Income from operations before non-cash depreciation of approximately $883,000 for Fiscal 2024. 13 FUTURE POSITIONING In viewing the hotel industry cycles, the Board of Trustees determined that it was appropriate to continue to actively seek buyers for our two remaining Hotel properties.
Room expenses consisting of salaries and related employment taxes for property management, front office, housekeeping personnel, reservation fees and room supplies were approximately $2,525,000 for the Fiscal Year ended January 31, 2024 compared to approximately $2,222,000 in the prior year period for an increase of approximately $303,000, or 14%.
Room expenses consisting of salaries and related employment taxes for property management, front office, housekeeping personnel, reservation fees and room supplies were approximately $2,614,000 for the Fiscal Year ended January 31, 2025 compared to approximately $2,525,000 in the prior year period for an increase of approximately $89,000, or 4%. Room expenses increased due to rising economic costs.
Positive cash provided by operating activities totaled approximately $1,432,000 during the twelve months ended January 31, 2024 as compared to net cash provided of approximately $54,000 during the twelve months ended January 31, 2023.
Cash used in operating activities totaled approximately $1,059,000 during the twelve months ended January 31, 2025 as compared to net cash provided of approximately $1,432,000 during the twelve months ended January 31, 2024.
We expect challenges for the remaining Fiscal Year to be the economy, inflation, and cost control. Travel, leisure, corporate, group, and government business continued to grow and further increase room rates while maintaining and/or building market share in Fiscal Year 2024.
We expect challenges for the remaining Fiscal Year to be the economy, tariffs, inflation, and cost control. Travel, leisure, corporate, and group business may further increase room rates while maintaining and/or building market share in Fiscal Year 2026. Government travel levels are uncertain for the remainder of the current 2026 Fiscal Year.
The value of the premium related to the fair value of the warrant will accrete over the life of the debentures. 16 Privately held UniGen Power, Inc. (UniGen) is developing a patented high profit potential new efficient clean energy generation innovation. The investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements.
The value of the premium related to the fair value of the warrant will accrete over the life of the debentures. 16 Privately held UniGen Power, Inc. (UniGen) is developing a patented high profit potential (high risk), new efficient clean energy generation innovation.
Hotel operations were positively affected by increased room rates at the Hotels in the Fiscal Years 2023 and 2024, respectively, as the travel industry continued to rebound.
Hotel operations were positively affected by increased room rates at the Hotels in the Fiscal Years 2024 and 2025, respectively.
The initial investment was made December 16, 2019, with positive progress to date despite the virus, economic setbacks, international vendor travel disruptions, cost overruns, and delays. The investment includes convertible bonds, stocks, and warrants to purchase UniGen stock upon election of the Trust.
UniGen is in the process of developing a patented high profit potential new efficient clean energy generation innovation. The initial investment was made December 16, 2019, with positive progress to date despite the virus, setbacks, international vendor travel disruptions, cost overruns, and delays. The investment includes convertible bonds, stocks, and warrants to purchase UniGen stock upon election of the Trust.
We can provide no assurance that we will be able to sell either or both of the Hotel properties on terms favorable to us or within our expected time frame, or at all.
We can provide no assurance that we will be able to sell either or both of the Hotel properties on terms favorable to us or within our expected time frame, or at all. Although believed feasible, we may be unable to realize the asking price for the individual Hotel properties or to sell and/or refinance one or both.
IHT and InnDependent Boutique Collections Hotels (IBC), agreed to extend the payment schedule on IBC’s note receivable to allow IBC to fully use its revenues to build market share as the hotel industry rebounds.
IHT and InnDependent Boutique Collections Hotels (IBC), previously agreed to extend the payment schedule on IBC’s note receivable to allow IBC to rebuild operations as the hotel industry rebounds.
Utility expenses decreased approximately $5,000, or 1%, to approximately $423,000 reported for the twelve months ended January 31, 2024 from approximately $428,000 for the twelve months ended January 31, 2023. Hotel property depreciation expenses decreased by approximately $23,000 to approximately $679,000 for the twelve months ended January 31, 2024 from approximately $702,000 for the twelve months ended January 31, 2023.
Utility expenses decreased approximately $22,000, or 5%, to approximately $402,000 reported for the twelve months ended January 31, 2025 from approximately $423,000 for the twelve months ended January 31, 2024. Hotel property depreciation expenses increased by approximately $27,000 to approximately $706,000 for the twelve months ended January 31, 2025 from approximately $679,000 for the twelve months ended January 31, 2024.
Hotel Property Book Value Mortgage Balance Estimated Market Asking Price Albuquerque $ 987,000 $ 1,204,000 9,500,000 Tucson Oracle 6,028,000 8,046,000 18,500,000 $ 7,015,000 $ 9,250,000 $ 28,000,000 The “Estimated Market Asking Price” is the amount at which we believe we may sell each of the Hotels and is adjusted to reflect hotel sales in the Hotels’ areas of operation and projected upcoming strong 12 month earnings of each of the Hotels.
Hotel Property Book Value Mortgage Balance Estimated Market Asking Price Albuquerque $ 940,421 $ 1,156,433 9,500,000 Tucson Oracle 5,847,864 7,888,013 18,500,000 $ 6,788,285 $ 9,044,446 $ 28,000,000 The “Estimated Market Asking Price” is the amount at which we believe we may be able to sell each of the Hotels and is adjusted to reflect hotel sales in the Hotels’ areas of operation and projected upcoming 12 month earnings of each of the Hotels.
Asset Impairment We believe that the policies we follow for the valuation of our hotel properties, which constitute the majority of our assets, are our most critical policies.
See Note 2 of the unaudited consolidated financial statements for discussion on UniGen. Asset Impairment We believe that the policies we follow for the valuation of our hotel properties, which constitute the majority of our assets, are our most critical policies.
Repairs and maintenance expense increased by approximately $54,000, or 13%, to approximately $466,000 for the twelve months ended January 31, 2024 from approximately $413,000 for the twelve months ended January 31, 2023.
Repairs and maintenance expense decreased by approximately $36,000, or 8%, to approximately $430,000 for the twelve months ended January 31, 2025 from approximately $466,000 for the twelve months ended January 31, 2024.
The increased ADR resulted in an increase in REVPAR of $3.23, or 4.57%, to $73.98 in Fiscal Year 2024 from $70.75 in Fiscal Year 2023. The increase in ADR and REVPAR reflect the increased travel and improved economy. For the Fiscal Year 2024, ending January 31, 2024, we experienced a substantial profit improvement.
The increased ADR resulted in an increase in REVPAR of $0.36, or 0.49%, to $74.34 in Fiscal Year 2025 from $73.98 in Fiscal Year 2024. The increase in ADR and REVPAR reflect the increased travel and improved economy. For the Fiscal Year 2025, ending January 31, 2025, we experienced a revenue improvement.
Sales and marketing expense decreased approximately $43,000, or 9%, to approximately $409,000 for the twelve months ended January 31, 2024 from approximately $451,000 for the twelve months ended January 31, 2023. Vacant positions for sales and marketing resources accounted for the increase.
Sales and marketing expense increased approximately $44,000, or 11%, to approximately $453,000 for the twelve months ended January 31, 2025 from approximately $409,000 for the twelve months ended January 31, 2024. Backfilled positions for sales and marketing resources accounted for the increase.
The Trust has invested $1 million in debentures convertible into 1 million shares of UniGen Power Inc., the Trust has invested in 540,000 UniGen shares, and in addition has acquired warrants to purchase approximately an additional 2 million UniGen shares over the next approximately three years, which could result in 20% or more ownership in UniGen.
The Trust has invested $1 million debentures convertible into 1 million shares of UniGen Power Inc., has purchased approximately 575,000 UniGen shares, and in addition holds warrants to purchase up to approximately an additional 2 million UniGen shares over time, which could result up to approximately 15-20% of fully diluted UniGen equity.
Each room night consumed by a guest with a cancelable reservation represents a contract whereby the Trust has a performance obligation to provide the room night at an agreed upon price. For cancellable reservations, the Trust recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay.
For cancellable reservations, the Trust recognizes revenue as each performance obligation (i.e., each room night) is met. Such contract is renewed if the guest continues their stay.
We realized a 5% increase in room revenues during Fiscal Year 2024 as room revenues were approximately $7,292,000 for the Fiscal Year ending January 31, 2024 as compared to approximately $6,974,000 for the Fiscal Year ending January 31, 2023.
We realized a 1% increase in room revenues during Fiscal Year 2025 as room revenues were approximately $7,336,000 for the Fiscal Year ending January 31, 2025 as compared to approximately $7,292,000 for the Fiscal Year ending January 31, 2024. As room revenue increased, our food and beverage revenue increased for Fiscal Year 2025 at approximately $90,000 during Fiscal Years 2025.
Management fees were approximately $79,000 for the Fiscal Year ending January 31, 2024 as compared to approximately $53,000 for the Fiscal Year ending January 31, 2023. 9 EXPENSES Total expenses before interest expense, employee retention credit, sales and occupancy taxes and income tax provision were approximately $8,205,000 for the twelve months ended January 31, 2024 reflecting an increase of approximately $762,000 compared to total expenses before interest expense, employee retention credit, sales and occupancy taxes and income tax provision of approximately $7,443,000 for the twelve months ended January 31, 2023.
The increase in Other Revenue was primarily due to a focused increase on guest fees. 9 EXPENSES Total expenses before interest expense, employee retention credit, sales and occupancy taxes and income tax provision were approximately $8,336,000 for the twelve months ended January 31, 2025 reflecting an increase of approximately $131,000 compared to total expenses before interest expense, employee retention credit, sales and occupancy taxes and income tax provision of approximately $8,205,000 for the twelve months ended January 31, 2024.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES As a partial balance to the current hotel industry, the Trust looks to benefit from, and expand, its UniGen clean energy operation diversification investments in the years ahead. See Note 7 of the Audited Consolidated Financial Statements for discussion on UniGen.
We do not have any majority-owned or controlled subsidiaries that are not included in our consolidated financial statements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES As a partial balance to the current hotel industry, the Trust looks to benefit from, and expand, its UniGen clean energy operation diversification investments in the years ahead.
In Fiscal Year 2024, as compared with Fiscal 2023, occupancy increased approximately 1.95% to 75.91% from 73.96% in the prior Fiscal Year. ADR increased by $1.80, or 1.88%, to $97.46 in Fiscal Year 2024 from $95.66 in Fiscal Year 2023.
In Fiscal Year 2025, as compared with Fiscal 2024, occupancy decreased approximately 1.75% to 74.58% from 75.91% in the prior Fiscal Year. ADR increased by $2.22, or 2.28%, to $99.68 in Fiscal Year 2025 from $97.46 in Fiscal Year 2024.
UniGen is a high risk investment offering high potential investment return if and when successful.
IHT may participate in an upcoming round of capital raising. UniGen is a high risk investment offering high potential investment return if and when successful.
The investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements. There is no Investment Commitment to UniGen requiring any restriction of cash. The Trust purchased secured convertible debentures (“Debentures”) in the aggregate amount of $1,000,000 (the “Loan Amount”) (the “Loan”) at an annual interest rate of 6% ($15,000 per quarter).
The investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements. There is no Investment Commitment to UniGen requiring any restriction of cash.
For Fiscal 2025, (February 1, 2024 to January 31, 2025), we expect continued increase in rates, and continued increased record profits and revenues compared to both prior levels.
For Fiscal 2026, (February 1, 2025 to January 31, 2026), we expect stable rates, and continued stable revenues compared to both prior levels, in spite of a slowdown in demand based on economic uncertainty.
The plan is to work to sell the remaining two hotel properties over the next 12-36 months, and if needed beyond. Revenue Recognition Revenues are primarily derived from the sources below and are recognized as services are rendered and when collectability is reasonably assured. Amounts received in advance of revenue recognition are considered deferred liabilities and are generally not significant.
Revenue Recognition Revenues are primarily derived from the sources below and are recognized as services are rendered and when collectability is reasonably assured. Amounts received in advance of revenue recognition are considered deferred liabilities and are generally not significant. Revenues primarily consist of room rentals, food and beverage sales, management and trademark fees and other miscellaneous revenues from our properties.
SHARE REPURCHASE PROGRAM For information on the Trust’s Share Repurchase Program, see Part II, Item 5. “Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” We plan to continue the stock and partnership unit buy backs in the current Fiscal Year 2025.
SHARE REPURCHASE PROGRAM For information on the Trust’s Share Repurchase Program, see Part II, Item 5. “Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” OFF-BALANCE SHEET ARRANGEMENTS We do not have any off-balance sheet financing arrangements or liabilities.
For the 2023 Fiscal Year (February 1, 2022 to January 31, 2023), which was a rebound from the previously adversely affected Fiscal Year 2022 (February 1, 2021 to January 31, 2022), by the Covid pandemic, InnSuites and the entire hotel industry in general experienced strong improvements and increased travel, resulting in much higher revenues and profits.
For the 2024 Fiscal Year (February 1, 2023 to January 31, 2024), InnSuites and the entire hotel industry in general experienced strong improvements and increased travel, resulting in much improved revenues and profits. For the 2025 Fiscal Year ended January 31, 2025, InnSuites continued this upward trend achieving record revenues.
The Debentures are convertible into 1,000,000 Class A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share. The Trust has purchased in addition approximately 540,000 shares of UniGen stock. UniGen issued the Trust common stock purchase warrants (the “Debenture Warrants”) including to purchase up to 1,000,000 shares of Class A Common Stock.
The Trust purchased secured convertible debentures (“Debentures”) in the aggregate amount of $1,000,000 (the “Loan Amount”) (the “Loan”) at an annual interest rate of 6% ($15,000 per quarter). The Debentures are convertible into 1,000,000 Class A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share.
Overview A summary of total Trust operating results for the Fiscal Years ended January 31, 2024 and 2023 is as follows: For Years Ended January 31, 2024 2023 Change % Change Total Revenues $ 7,484,398 $ 7,145,687 $ 338,711 5 % Operating Expenses 8,205,374 7,443,022 762,352 10 % Operating Loss (720,976 ) (297,335 ) (423,641 ) (142 %) Interest Income and Other 96,595 68,072 28,523 42 % Interest Expense (501,707 ) (530,347 ) 28,640 5 % Employee Retention Benefit 1,403,164 1,403,164 - 0 % Income Tax Benefit 100 93,497 (93,397 ) (100 %) Consolidated Net Income 277,176 737,051 (459,875 ) (62 %) REVENUE For the twelve months ended January 31, 2024, we had total revenue of approximately $7,484,000 compared to approximately $7,146,000 for the twelve months ended January 31, 2023, an increase of approximately $339,000, or 5%.
Overview A summary of total Trust operating results for the Fiscal Years ended January 31, 2025 and 2024 is as follows: For the Years Ended January 31, 2025 2024 Change % Change Total Revenues $ 7,593,516 $ 7,484,398 $ 109,118 1 % Operating Expenses 8,336,258 8,205,374 130,884 2 % Operating Loss (742,742 ) (720,976 ) (21,766 ) (3 %) Interest Income and Other 36,269 96,595 (60,326 ) (62 %) Interest Expense (476,046 ) (501,707 ) 25,661 5 % BW Rewards Credit (208,758 ) - (208,758 ) 0 % Employee Retention Benefit - 1,403,164 (1,403,164 ) (100 %) Income Tax Benefits (355 ) 100 (455 ) (455 %) Consolidated Net (Loss) Income (1,391,632 ) 277,176 (1,668,808 ) (602 %) REVENUE For the twelve months ended January 31, 2025, we had total revenue of approximately $7,594,000 compared to approximately $7,484,000 for the twelve months ended January 31, 2024, an increase of approximately $109,000, or 1%.
Real estate and personal property taxes, Insurance and Ground Rent expenses increased approximately $124,000, or 29%, to approximately $553,000 for the twelve months ended January 31, 2024 from approximately $429,000 for the twelve months ended January 31, 2023. 10 Employment Tax Refunds and Credits, for the previously filed calendar years 2021, and 2022, respectively, resulted in the Employment Retention Tax Credit.
Increased depreciation resulted from continued capital expenditure investments in the hotels. Real estate and personal property taxes, Insurance and Ground Rent expenses increased approximately $226,000, or 41%, to approximately $779,000 for the twelve months ended January 31, 2025 from approximately $553,000 for the twelve months ended January 31, 2024.
The total of all stock ownership upon conversion of the debenture and exercise of warrants could total up to 3 million UniGen shares, which amounts to approximately 20% or more of fully diluted UniGen equity.
The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock. The total of all stock ownership upon conversion of the debenture and exercise of warrants could amount to approximately up to 15-20% of fully diluted UniGen equity.
During the current Fiscal 2025, rates continue to increase although at a slower pace than the prior Fiscal Year. INVESTMENT IN UNIGEN POWER, INC. On December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UniGen”).
During the current Fiscal 2026, rates are more stable. INVESTMENT IN UNIGEN POWER, INC. On December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UniGen”). InnSuites Hospitality Trust (IHT) made an initial $1 million diversification investment in late Fiscal Year 2020 and early Fiscal Year 2021.
Hospitality expense increased by approximately $92,000, or 25%, to approximately $459,000 for the twelve months ended January 31, 2024 from approximately $368,000 for the twelve months ended January 31, 2023. The increase was primarily due to the increased occupancy and increased breakfast offerings at the hotel properties due to previous pandemic restrictions no longer in effect.
Hospitality expense increased by approximately $148,000, or 32%, to approximately $608,000 for the twelve months ended January 31, 2025 from approximately $459,000 for the twelve months ended January 31, 2024.
The following table shows certain historical financial and other information for the periods indicated: For the Years Ended Albuquerque January 31, 2024 2023 Change %-Incr/Decr Occupancy 84.86 % 82.27 % 2.59 % 3.15 % Average Daily Rate (ADR) $ 99.97 $ 98.90 $ 1.07 1.08 % Revenue Per Available Room (REVPAR) $ 84.84 $ 81.36 $ 3.48 4.28 % For the Years Ended Tucson January 31, 2024 2023 Change %-Incr/Decr Occupancy 69.56 % 68.07 % 1.49 % 2.19 % Average Daily Rate (ADR) $ 95.29 $ 92.88 $ 2.41 2.59 % Revenue Per Available Room (REVPAR) $ 66.28 $ 63.22 $ 3.06 4.84 % For the Years Ended Combined January 31, 2024 2023 Change %-Incr/Decr Occupancy 75.91 % 73.96 % 1.95 % 2.64 % Average Daily Rate (ADR) $ 97.46 $ 95.66 $ 1.80 1.88 % Revenue Per Available Room (REVPAR) $ 73.98 $ 70.75 $ 3.23 4.57 % 8 No assurance can be given that occupancy, ADR and/or REVPAR will or will not increase or decrease as a result of changes in national or local economic travel, or hospitality industry conditions.
The following table shows certain historical financial and other information for the periods indicated: 8 No assurance can be given that occupancy, ADR and/or REVPAR will or will not increase or decrease as a result of changes in national or local economy and travel, or hospitality industry conditions.
There is no Investment Commitment to UniGen requiring any restriction of cash. Engineering work is largely complete on the prototype and has been placed on hold, while UniGen concentrates on its current round of capital raising. IHT may participate in the upcoming round of capital raising including through the exercise of existing warrants, or purchase of additional convertible debentures.
The investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements. There is no Investment Commitment to UniGen requiring any restriction of cash. Engineering work is 61% complete, according to UniGen, on the prototype. UniGen is currently concentrating on its current round of capital raising.
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For the 2024 Fiscal Year ended January 31, 2024, InnSuites continued this upward trend achieving record profits.
Added
(“UniGen”), an innovative efficient clean energy power generation company.
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We enter into transactions with certain related parties from time to time.
Added
For the Years Ended Albuquerque January 31, 2025 2024 Change %-Incr/Decr Occupancy 86.23 % 84.86 % 1.37 % 1.61 % Average Daily Rate (ADR) $ 101.01 $ 99.97 $ 1.04 1.04 % Revenue Per Available Room (REVPAR) $ 87.10 $ 84.84 $ 2.26 2.66 % For the Years Ended Tucson January 31, 2025 2024 Change %-Incr/Decr Occupancy 66.31 % 69.56 % -3.25 % -4.67 % Average Daily Rate (ADR) $ 98.44 $ 95.29 $ 3.15 3.31 % Revenue Per Available Room (REVPAR) $ 65.28 $ 66.28 $ (1.00 ) -1.51 % For the Years Ended Combined January 31, 2025 2024 Change %-Incr/Decr Occupancy 74.58 % 75.91 % -1.33 % -1.75 % Average Daily Rate (ADR) $ 99.68 $ 97.46 $ 2.22 2.28 % Revenue Per Available Room (REVPAR) $ 74.34 $ 73.98 $ 0.36 0.49 % We enter into transactions with certain related parties from time to time.
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While room revenue increased, our food and beverage revenue remained flat for Fiscal Year 2024 at approximately $114,000 during Fiscal Years 2024.
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Other Revenue was approximately $167,000 for the Fiscal Year ending January 31, 2025 as compared to approximately $114,000 for the Fiscal Year ending January 31, 2024.
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Room expenses increased as occupancy at the hotels increased, and increased expenses were incurred with the increased occupancy. General and administrative expenses include overhead charges for management, accounting, shareholder, and legal services.
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General and administrative expenses include overhead charges for management, accounting, shareholder, and legal services. General and administrative expenses of approximately $2,218,000 for the twelve months ended January 31, 2025, decreased approximately $252,000 from approximately $2,470,000 for the twelve months ended January 31, 2024 primarily due cost cutting initiatives at the Corporate office.
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General and administrative expenses of approximately $2,470,000 for the twelve months ended January 31, 2024, increased approximately $244,000 from approximately $2,227,000 for the twelve months ended January 31, 2023 primarily due to increases in minimum wage laws affecting a majority of our employees, creating higher personnel costs along with increased employment taxes, accordingly.

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